Alabama Bill to Increase State OZ Incentives Advances to Senate
Legislation to give Alabama taxpayers a state capital gains tax reduction for opportunity zone (OZ) investments, as well as to allow state funds to invest into qualified opportunity funds (QOFs) passed the House of Representatives Last week. H.B. 540 now goes to the state Senate. The legislation would create a state capital gains tax reduction for QOF investments if the fund has at least 75 percent of its qualified OZ property located in Alabama. It would also allow the Alabama Department of Economic and Community Affairs to enter into agreements with QOFs to offer impact investment tax credits to investors in case projects undertaken by the QOF are not producing returns provided in the project agreement by the fifth year, with a statewide cap of $50 million. The agreement would require that extraordinary returns are allocated back to the state funds.