HB244 Summary

• Establishes the Alabama Research and Development Act of 2021, creating a tax credit for qualified research expenses conducted in Alabama by eligible companies.

• Provides a 10% credit for in-house and contract research expenses and a 25% credit for consortium research expenses, calculated based on amounts exceeding a rolling three-year average.

• Caps total annual credits at $20 million for major research and development expenses (over $5 million) and $5 million for minor research and development expenses, with no single taxpayer receiving more than 20% in a single tax year.

• Allows credits to offset income tax liability under Chapters 16 and 18, with unused credits carried forward up to five years; credits cannot reduce estimated tax payments before January 1, 2022.

• Requires taxpayer applications filed electronically between March 15 and December 31, with the Department issuing certificates after verifying qualifying expenditures; act sunsets December 31, 2026, unless extended.