Section 40-18-240 Definitions.
Section 40-18-240
Definitions.
As used in this article, the following terms shall have the following meanings:
(1) CAPITAL COSTS. All costs and expenses incurred by one or more investing companies in connection with the acquisition, construction, installation, and equipping of a qualifying project during the period commencing with the date on which the acquisition, construction, installation, and equipping commences and ending on the date on which the qualifying project is placed in service, including, without limitation, all of the following:
a. The costs of acquiring, constructing, installing, equipping, and financing a qualifying project, including all obligations incurred for labor and to contractors, subcontractors, builders, and materialmen.
b. The costs of acquiring land or rights in land and any cost incidental thereto, including recording fees.
c. The costs of contract bonds and of insurance of all kinds that may be required or necessary during the acquisition, construction, or installation of a qualifying project.
d. The costs of architectural and engineering services, including test borings, surveys, estimates, plans, and specifications, preliminary investigations, environmental mitigation, and supervision of construction, as well as for the performance of all the duties required by or consequent upon the acquisition, construction, and installation of a qualifying project.
e. The costs associated with installation of fixtures and equipment; surveys, including archaeological and environmental surveys; site tests and inspections; subsurface site work; excavation; removal of structures, roadways, cemeteries, and other surface obstructions; filling, grading, paving, and provisions for drainage, storm water retention, installation of utilities, including water, sewer, sewage treatment, gas, electricity, communications, and similar facilities; off-site construction of utility extensions to the boundaries of the property.
f. All other costs of a nature comparable to those described, including, without limitation, all project costs which are required to be capitalized for federal income tax purposes pursuant to 26 U.S.C. §263A.
g. Costs otherwise defined as capital costs that are incurred by the investing company where the investing company is the lessee under a lease that contains a term of not less than five years and is characterized as a capital lease for federal income tax purposes. Capital costs shall not include property owned or leased by the investing company or a related party before the commencement of the acquisition, construction, installation, or equipping of the qualifying project unless such property was physically located outside the state for a period of at least one year prior to the date on which the qualifying project was placed in service.
h. Costs either paid or incurred by the Alabama State Port Authority for the benefit of a qualifying project where the costs are treated as costs paid by an investing company with respect to the qualifying project for federal income tax purposes, except that the costs shall not include amounts contributed by the Alabama State Port Authority to a qualifying project as a capital contribution or gift except to the extent that an investing company has cost basis in the contribution or gift for federal income tax purposes; or a related party to an investing company to the extent the costs are included in or taken into account in determining federal income tax basis of the investing company in the qualifying project, whether or not incurred by an investing company.
(2) CAPITAL CREDIT. An annual amount equal to five percent of the capital costs of the qualifying project, such amount to be credited or allowed in accordance with Section 40-18-243 and other provisions of law, against the state income tax liability generated by or arising out of the qualifying project in each of the 20 years commencing with the year during which the qualifying project is placed in service and continuing for 19 consecutive years thereafter.
(3) DEPARTMENT. The Alabama Department of Revenue.
(4) INDUSTRIAL, WAREHOUSING, OR RESEARCH ACTIVITY. Any trade or business described in the 1997 North American Industry Classification System within Subsector 493 (Warehousing and Storage), Industry Number 488310 (Port and Harbor Operations), or Industry Number 488320 (Marine Cargo Handling), when the trade or business is conducted on premises in which the Alabama State Port Authority has an ownership, leasehold, or other possessory interest and such premises are used as part of the operations of the Alabama State Port Authority, including the above trades and businesses as they may hereafter be reclassified in any subsequent publication of the NAICS or similar classification system developed in conjunction with the United States Department of Commerce or Office of Management and Budget.
(5) INVESTING COMPANY. Any corporation, partnership, limited liability company, proprietorship, trust, or other business entity, regardless of form, making a qualifying investment.
(6) PROJECT. Any land, building, or other improvement, and all real and personal properties deemed necessary or useful in connection therewith, whether or not previously in existence, located or to be located in the state.
(7) QUALIFYING INVESTMENT. The undertaking by one or more investing companies of a qualifying project.
(8) QUALIFYING PROJECT. A project to be sponsored or undertaken by one or more investing companies that have a capital cost of not less than eight million dollars ($8,000,000), and at which the predominant trade or business activity conducted will constitute industrial, warehousing, or research activity.
(9) RELATED PARTY. A person or entity that bears a relationship to an investing company described in Section 267(b), (c), or (e) of the Internal Revenue Code of 1986, as amended.
(10) TAX YEAR. The applicable taxable year as the term is defined in Section 40-18-1.
(Act 2001-503, p. 886, §1.)