Section 40-18-8.1 - Gain or loss - Recognition of gains invested in opportunity zones(a) A qualified employee's gain shall not be recognized upon the disposition of his or her ownership interest in a qualified entity, and a qualified investment fund's gain shall not be recognized upon the disposition of the fund's ownership interest in a qualified entity.(b) Subsection (a) shall be applied as to each of the following taxes: (1) The income tax levied by this chapter, or the estimated income tax payment; and(2) The financial institution excise tax found in Chapter 16.(c) The following terms shall have the following meanings: (1) A company is anyone or anything with the powers to conduct a lawful business.(2) The disposition date is the date on which an ownership interest in a qualified entity is sold or otherwise disposed of, triggering a capital gain.(3) A qualified entity is any company which meets all of the following: a. As of August 5, 2019, Alabama is not the company's headquarters, the place of residence of its top three executives, or the place of residence of at least 75 percent of its employees.b. The company has at least 100 employees on the disposition date.c. For a period of at least three years prior to the disposition date and for a period of at least five years after the disposition date, Alabama is the company's headquarters, the place of residence of its top three executives, and the place of residence of at least 75 percent of its employees.d. From the date that the company makes Alabama its headquarters and continuing until the date which is five years after the disposition date, the company meets all criteria set forth in Section 40-18-376.3(c).(4) A company shall not be eliminated from the definition of a qualified entity merely because the disposition is in the form of a sale of substantially all of the assets of such company to a successor company, or in the form of a merger of such company into a successor company, so long as such successor company itself meets all criteria set forth in paragraphs a., b, and d., and if Alabama is such successor company's headquarters, the place of residence of its top three executives, and the place of residence of at least 75 percent of its employees for a period of at least five years after the disposition date.(5) A qualified employee is any employee of a qualified entity who meets all the following: a. The employee's primary residence is not in Alabama on August 5, 2019.b. The employee's primary residence is in Alabama continuously for the period beginning three years prior to the disposition date and continuing for five years after the disposition date.c. Within three months of the disposition date, the employee ceases employment at the qualified entity.d. Within nine months of the disposition date, the employee begins employment at or ownership or some other company which meets all the criteria set forth in Section 40-18-376.3(c).e. The employee demonstrates to the Alabama Department of Revenue that he or she has an educational degree within the general areas of science, technology, engineering, and mathematics. (6) A qualified investment fund is any company which meets both the following: a. The fund made its investment in the qualified entity after August 5, 2019.b. For a period of five years after the disposition date, the fund invests the moneys resulting from the disposition in another qualified entity.(d) The Department of Revenue may assess a qualified employee for any exclusion from income under this section to which the employee is not ultimately entitled, with allowed interest and penalties, pursuant to the terms of Chapter 2A or 29. The statute of limitations shall be tolled for a period of ten years beginning on the date of the return under which the exclusion from income in this section is claimed. The Department of Revenue may prescribe forms for the enforcement of this section.Ala. Code § 40-18-8.1 (1975)
Added by Act 2019-392,§ 4, eff. 8/5/2019.