Ala. Code § 40-18-473 — Scope and Use of Tax Rebates

(a) A tax rebate from taxes generated within the tourism destination attraction by the certified tourism destination project over a 10-year period from the commencement of operation, which must occur after June 15, 2023, in the amount of up to five million dollars ($5,000,000) may be claimed. No approved company may receive more than one million dollars ($1,000,000) in tourism rebates in a calendar year.
(b)(1) The tax rebates authorized by this article are limited to an aggregate amount for all certified tourism destination projects of ten million dollars ($10,000,000) annually with 10 percent set aside annually for certified tourism destination projects located in targeted or jumpstart counties.
(2) An approved company with a certified tourism destination project may be granted a tax rebate on any combination of the state and local sales and use taxes, lodging taxes, or other transactional taxes generated by or arising within the tourism destination project after June 15, 2023.
(3) An approved company shall have no obligation to refund or otherwise return any amount of taxes authorized for rebate to the persons from whom the taxes were collected.
(4) Rebates authorized under this article shall be for up to 10 years, commencing on the date the tourism attraction opens for business, which must occur after June 15, 2023, and begins to collect taxes generated by, or arising within, the tourism destination project.
(5) Tax rebates may be a combination of state and local retail sales taxes, state and local lodging taxes, and any other taxes generated by, or arising within, the tourism destination project after June 15, 2023. The municipality or the taxing district where the tourism destination project will be located must support and approve the facility. The approval must be in the form of a resolution of the governing authority acknowledging support of the project and acknowledging that a portion no less than 20 percent of the tax rebates will be comprised of municipal taxes.
(6) The Alabama Department of Revenue, in consultation with the Alabama Tourism Department, shall adopt rules and require the filing of a rebate form designed by the Alabama Department of Revenue to reflect the intent of this article. To begin the rebate process, once project phases open for business after June 15, 2023, the approved company must provide a listing of all sales tax accounts and account numbers related to the project. The Alabama Department of Revenue will provide these accounts and will begin making the required diversions into the Tourism Project Sales Tax Incentive Fund the month following notification. Rebate payments from the fund will be made each January and July to the approved company.
(7) No tax rebate shall be granted to an approved company during a tax year that the approved company is simultaneously receiving any other state tax incentive associated with any individual tourism attraction project.
(8) Any tax rebate shall be first applied to any outstanding tax obligation of the approved company which is due and payable to the state.
(9) Rebates under this article shall be made without interest.
(10) Tax rebates authorized under this article are transferrable to future owners of the qualifying tourism destination project.
(11) The tax rebate allowed under this article shall be effective beginning August 1, 2023, for projects placed into service after June 15, 2023, and shall continue through July 31, 2028, unless continued by an act of the Legislature.
(12) Tax rebates for certified tourism destination projects are to be administered by the Alabama Department of Revenue.
(c) Notwithstanding the ten million dollar ($10,000,000) annual aggregate cap on tax rebates allowed, the board may approve an annual one-time designation of an additional two million five hundred thousand dollars ($2,500,000) in tax rebates for one project per calendar year with a minimum capital investment amount of seventy-five million dollars ($75,000,000). Additionally, a company that is awarded the supplemental rebate may claim up to seven million five hundred thousand dollars ($7,500,000) in total, up to one million five hundred thousand dollars annually ($1,500,000), and is not subject to the caps otherwise provided for in this article.
(d) Within three months after the completion date, the approved company shall document the actual cost of the project through certification of the costs by an independent certified public accountant acceptable to the board.
(e) For purposes of determining whether a project has met the minimum capital investment requirements, only bona fide, third-party, arms-length capital expenditures shall be included. The certification of project costs required under this subsection shall expressly verify all of the following:
(1) Each cost included in the capital investment calculation represents an actual expenditure paid to an independent, third-party vendor not related to the applicant, developer, or any affiliate thereof.
(2) No cost included in the calculation consists of any payment, fee, or charge paid directly or indirectly to the project developer, any member, partner, shareholder, manager, officer, affiliate, parent entity, subsidiary, or any entity under common ownership or control, including, but not limited to, developer fees, consulting fees, project-management fees, internal labor allocations, overhead charges, reimbursed salaries, or similar related-party payments.
(3) All costs included are properly capitalizable under the Internal Revenue Code and represent legitimate project expenditures necessary for the acquisition, construction, or completion of the certified tourism destination project.
(4) Any related-party transactions, if disclosed, are excluded from the capital investment amount used to determine eligibility for the supplemental rebate or any other investment-based incentive threshold.