Alabama Enacts New Markets Tax Credit

The Alabama Legislature has enacted the Alabama New Markets Development Act, effective August 1, 2012, which allows a tax credit for qualified equity investments to acquire stock in a qualified community development entity. Up to 50% of the investment could be taken as tax credit (over a 7-year period) against the state-distributed portion of the Alabama corporate income tax, personal income tax, insurance premium and retaliatory taxes, financial institution excise tax. The credit is administered by the Alabama Development Office (ADO) and the Department of Revenue. The ADO can certify up to a cumulative amount of qualified equity investments that can result in $20 million of tax credits in any tax year.