SALT Alert: Alabama Edition

By Beau Byrd, James E. Long, Jr, and Jennifer S. Gisi

The original Alabama Historic Tax Credit (“HTC”) program was successful in stimulating the redevelopment of aging properties across Alabama, and was particularly recognized for its role in the revitalization of downtown Birmingham. However, the original Alabama HTC program, enacted in 2012, with an authorized total of $60 million in tax credits, expired in 2016.

On the last day of the 2017 Regular Session, the Alabama legislature passed H.B. 345 (and signed into law as Act 2017-380 — the “New Act”), which establishes a new state HTC program by authorizing $20 million in refundable income tax credits per year for five years, beginning January 1, 2018. Like the original program, the New Act offers a tax credit of up to 25 percent of qualified rehabilitation expenditures for certain historic commercial or residential structures and retains many other aspects of the original program (such as the per project caps of $5 million for commercial and $50,000 for residential projects). However, the New Act contains several important changes to the original program, including the refundable nature of the credit and the manner in which projects are selected for an HTC allocation, which are summarized following the link below.