Source: http://alisondb.legislature.state.al.us/acas/CodeofAlabama/1975/40-18-35.htm
Timestamp: 2014-08-20 04:50:38
Document Index: 506179328

Matched Legal Cases: ['§ 951', '§ 243', '§402', '§1', '§1', '§1', '§1', '§7', '§7', '§16', '§1', '§2', '§9', '§2', '§1', '§1', '§1', '§1', '§1']

Section 40-18-35
Section 40-18-35Deductions allowed to corporations.
(a) The following items shall be deducted from federal taxable income for purposes of computing taxable income under this chapter: (1) Refunds of state and local income taxes.
(3) Interest income earned on obligations of the United States.
(4)a. Interest income earned on obligations of the State of Alabama or its subdivisions or instrumentalities thereof to the extent included in gross income for the purposes of federal income taxation.
(5) The amount of any aid or assistance, whether in the form of property, services or monies, provided to the State Industrial Development Authority pursuant to Section 41-10-44.8(d) in order to induce an approved company to undertake a major project within the state.
(6) Expenses otherwise deductible that were not deducted on the federal income tax return as a result of an election to claim a credit for those expenses.
(7) If the taxpayer owns greater than 20 percent of the stock, by vote or value, of the distributing corporation the following deductions are allowed:
b. Dividend income, including amounts described in 26 U.S.C. § 951, from non-U.S. corporations to the same extent such dividend income would be deductible under 26 U.S.C. § 243 if received from U.S. corporations; and
(8) The portion of total deductible interest expense classified as nonbusiness interest expense not deductible at arriving at apportioned income, but instead allocated to the situs of the related nonbusiness income producing assets, shall be based upon the ratio of the average cost of the corporation's nonbusiness assets to the average cost of the corporation's total assets.
(9) The interest portion of rent paid under lease agreements entered into prior to January 1, 1995, relating to obligations issued by the State of Alabama or subdivisions or instrumentalities thereof, to the extent that such obligations were issued to pay the cost of assets to which subsections (c) through (e) of Section 40-9B-7 apply.
(10) The amount by which the depletion allowance specified in Section 40-18-16(b) exceeds the depletion allowance deducted in calculating federal taxable income.
(2) The corporation shall make the adjustments required in subdivision (1) unless the corporation establishes that the adjustments are unreasonable, or the corporation and the Commissioner of Revenue agree in writing to the application or use of alternative adjustments and computations. Nothing in this section shall be construed to limit or negate the commissioner's authority to otherwise enter into agreements and compromises otherwise allowed by law. (3) The adjustments required in subdivision (1) shall not apply to that portion of interest expenses and costs and intangible expenses and costs if the corporation can establish that the transaction giving rise to the interest expenses and costs or the intangible expenses and costs between the corporation and the related member did not have as a principal purpose the avoidance of any Alabama tax and the related member is not primarily engaged in the acquisition, use, licensing, maintenance, management, ownership, sale, exchange, or any other disposition of intangible property, or in the financing of related entities. If the transaction giving rise to the interest expenses and costs or intangible expenses and costs, as the case may be, has a substantial business purpose and economic substance and contains terms and conditions comparable to a similar arm's length transaction between unrelated parties, the transaction will be presumed to not have as its principal purpose tax avoidance, subject to rebuttal by the Commissioner of the Department of Revenue.
(7) This subsection shall not limit the deduction of the interest portion of rent paid under lease agreements described in subsection (a)(9).
(d) Except with regard to payments described in subsections (a)(4)b and (a)(9), nothing in this section shall be construed to allow any item to be deducted more than once or to allow a deduction for any item that is excluded from income or to allow any item to be included in the Alabama taxable income of more than one taxpayer.
(e) The following credits shall be allowed against the tax levied by Section 40-18-31: (1) the amount provided to an approved company pursuant to Section 41-10-44.8(a)(1), subject however, to the limitations contained in Section 41-10-44.8(c); and
(Acts 1935, No. 194, p. 256; Acts 1939, No. 399, p. 521; Code 1940, T. 51, §402; Acts 1945, No. 317, p. 510; Acts 1963, 2nd Ex. Sess., No. 107, p. 289, §1; Acts 1969, Ex. Sess., No. 24, p. 55, §1; Acts 1969, No. 1136, p. 2115, §1; Acts 1973, No. 1071, p. 1819, §1; Acts 1973, No. 1170, p. 1969; Acts 1982, No. 82-465, p. 759, §7; Acts 1982, 1st Ex. Sess., No. 82-667, p. 85, §7; Acts 1985, No. 85-515, §16; Acts 1985, No. 85-545, §1; Acts 1988, 2nd Ex. Sess., No. 88-954, §2; Acts 1990, No. 90-583, p. 588, §9; Acts 1996, No. 96-550, p. 803, §2; Act 98-502, p. 1083, §1; Act 99-664, 2nd Sp. Sess., p. 124, §1; Act 2000-702, p. 1425, §1; Act 2001-1088, 4th Sp. Sess., p. 1095, §1; Act 2008-543, p. 1175, §1.)