To amend Sections 40-16-4, 40-16-6, 40-18-16, 40-18-31, 40-18-32, 40-18-33, 40-18-34, and 40-18-35; to repeal Sections 40-18-31.1, 40-18-36, and 40-18-38 of the Code of Alabama, 1975; to revise Alabama corporate income tax law to conform to the federal corporate tax system and to increase the Financial Institution Excise Tax rate to 6.5% in the event a Constitutional Amendment increasing the corporate income tax rate to 6.5% is ratified and proclaimed by the Governor; and to provide that the additional revenue generated by the Financial Institution Excise Tax rate increase will be distributed to the State General Fund.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Sections 40-16-4, 40-16-6, 40-18-16, 40-18-31, 40-18-32, 40-18-33, 40-18-34, and 40-18-35 are hereby amended as follows:
"40-16-4.
(a) (1) Every such financial institution shall pay to the state annually for each taxable year an excise tax for the privilege of engaging in this state in the business of banking and of conducting a financial institution, as in this chapter defined, and of conducting a business employing moneyed capital coming into competition with the business of national banks measured by its net income for such taxable year at the rate of six percent of such net income. engaging in any of the following businesses
(i) Banking;
(ii) Conducting the business of a financial institution as defined in this chapter;
(iii) Conducting a credit card business through the issuance of credit cards to Alabama residents or businesses; or
(iv) Conducting a business employing moneyed capital coming into competition with the business of national banks shall pay to the state annually for each taxable year an excise tax measured by its net income allocated and apportioned for the taxable year at the rate of six and one-half percent of the net income.
(2) For purposes of the excise tax imposed by this chapter, any financial institution which has income from business activity that is taxable both within and without this state shall allocate and apportion its net income as provided in regulations which shall be prescribed by the Department of Revenue and which shall be substantially the same as the allocation and apportionment formula for financial institutions recommended from time to time by the Multistate Tax Commission, provided that such regulations shall not conflict with any provision of this chapter. The Department of Revenue shall proceed expeditiously to adopt such regulations after the foregoing provisions of this subsection shall become law. Until such regulations are adopted and effective, the apportionment formula for financial institutions recommended by the Multistate Tax Commission shall be used to the extent not inconsistent with the provisions hereof.
(3) The amount of such the excise tax shall not be in excess of any limit fixed thereon by any present or future federal statute relating to the taxation of national banks by this state. Under no circumstances will any dividends paid from a financial institution, as in this chapter defined, to the common parent corporation of a controlled group of corporations, as defined in Section 40-16-3, be subject to excise tax.
(b) The excise tax provided in this chapter shall be reported under blanks in the form to be prescribed by the Department of Revenue. The amount shown to be due by the taxpayer's return shall constitute and create a prima facie liability for such the amount on which taxes shall be paid as hereinafter provided. The mailing of the excise tax blank to persons liable for the tax herein provided shall be the only notice required to be given, except where the department assesses an additional amount due. The failure to receive such blank shall not relieve any persons required to make a return from making such return or the penalties for failure to do so or liability for tax. Where the Department of Revenue determines that the amount due is different from that shown by the taxpayer's return or where no return is filed, the department may determine the correct amount due pursuant to the procedures set forth in Chapter 2A of this title.
40-16-6.
(a) The remittance of the excise tax herein required shall be made to the Department of Revenue at Montgomery, Alabama, with checks payable to the State Treasurer of Alabama.
(b) The proceeds of the excise tax herein imposed by this chapter shall be, without delay, covered deposited into the state treasury to the credit of the Financial Institution Excise Tax Fund. Such The amount of money as shall be appropriated for each fiscal year by the legislature to the Department of Revenue with which to pay the salaries, the cost of operation, and the management of the said department shall be deducted, as a first charge thereon, from the taxes collected under and pursuant to Section 40-16-4; provided, that the expenditure of said sum money so appropriated shall be budgeted and allotted pursuant to Article 4 of Chapter 4 of Title 41 and limited only to the amount appropriated with which to defray the expenses of operating said the department for each fiscal year.
(c) The excess of the tax levied by this chapter computed using a rate of six and one-half percent and the tax computed using a rate of six percent shall be deposited in the General Fund. The balance of the tax collected, after the payment of refunds, under and pursuant to said Section 40-16-4, shall, on September 1 in each year, be distributed as follows: On certificate of the Department of Revenue the comptroller shall draw his a warrant on the State Treasurer payable to the county treasurer of each of the several counties in which such the financial institutions are located for an amount equal to one fourth of the tax received from the institutions located in such that county, after deducting the proportionate part of the expenses incurred in the administration of this chapter. On similar certificate the comptroller shall draw his a warrant on the State Treasurer in favor of the treasurer of each of the several municipalities in which such the financial institutions are located for an amount equal to one half of the tax received from the institutions located in such those municipalities, after deducting the proportionate part of the expenses incurred in the administration of this chapter. The amount remaining in such the financial institution excise tax fund, after the payment of the expenses as heretofore in this chapter provided, and after the distribution to the counties and municipalities of their proportionate part of the said tax, shall be covered deposited into the general fund of the State of Alabama.
(d) Any financial institution which conducts its business in more than one municipality or in more than one county in this state shall, in making the return required by this chapter, report in detail the percentage of its total business in the state conducted in each such municipality and in each such county, and the portions of tax paid by each such financial institution due to be distributed to the municipality and county shall be distributed pro rata according to the percentage so reported to the several municipalities and counties where such a business is conducted instead of solely to the one where the principal place of business of such a financial institution is located in this state.
(e) A financial institution that does not maintain an office in Alabama, but is subject to the tax imposed by Section 40-16-4, is deemed not to be located in any particular county or municipality of the State. Any taxes collected from that institution, after payment of refunds, and after deduction for a proportionate part of the expense incurred in the administration of this chapter, shall be deposited into the State General Fund on or before September 1 of each year.
(f) No municipality or county within the state shall have the right to may levy or assess any such excise tax for the privilege of engaging in such a business in addition to that hereby levied and to be distributed to it as herein provided, except license taxes. However, license taxes on banks shall not be levied in excess of those which may be legally levied pursuant to Section 11-51-130, provided however, that the license authorized by subdivisions (1) through to (12), inclusive, of subsection (a) of Section 11-51-130 may be levied only by the municipality where the bank has its principal place of business."
40-18-16. Depreciation.
(a) Basis for depreciation. - The basis upon which exhaustion, wear and tear, depreciation and obsolescence are to be allowed shall be such reasonable allowance as may be determined by the Department of Revenue on the adjusted basis provided in Section 40-18-6 for the purpose of determining the gain or loss upon sale or other disposition of such property.
(b) Basis for depletion.
(1) General rule. - The basis upon which depletion is to be allowed shall be such reasonable allowance as may be determined by the Department of Revenue on the adjusted basis provided in Section 40-18-6 for the purpose of determining the gain or loss upon the sale or other disposition of such property, except as provided in subdivision (2) or (3) of this subsection.
(2) Discovery value in the case of mines, oil and gas wells. - In the case of mines, oil and gas wells discovered by the taxpayer on or after January 1, 1933, not acquired as the result of a purchase of a proven tract or lease, where the fair and reasonable market value of the property is materially disproportionate to the cost, the depletion allowance shall be based upon the fair and reasonable market value of the property at the time of the discovery or within 30 days thereafter. In the case of leases the deductions allowed by this subsection shall be equitably apportioned between the lessor and the lessee.
(3) (2) Amount. - In the case of oil and gas wells, the allowance for depletion shall be 27 1/2 12 percent of the gross income from the property during the taxable year, excluding from such gross income an amount equal to any rents or royalties paid or incurred by the taxpayer in respect to the property. Such amounts shall not exceed 50 percent of the net income of the taxpayer, computed without allowance for depletion, from the property, except that in no case shall the depletion allowance under Section 40-18-15 or Section 40-18-35 be less than it would be if computed without reference to this paragraph. the amount allowable under federal income tax law. In the case of leases the deductions allowed by this paragraph shall be equitably apportioned between the lessor and the lessee.
Any person owning an oil or gas well, or any interest therein, may elect to come under the provisions of either subdivision (2) or (3) of this subsection, but such election shall be irrevocable and exclusive of the right to claim any benefit or benefits under the other subdivision of this subsection.
40-18-31. Corporate income tax; generally.
(a) A corporation subject to the tax imposed by Section 40-18-2 shall pay a tax equal to five six and one-half percent of the taxable income of the corporation, as defined in this chapter and Chapter 27.
(b) If the taxpayer elects to file an Alabama consolidated return under Section 40-18-39, the tax shall be assessed, collected, and paid annually for each taxable year at the rate specified in subsection (a), upon and with respect to the taxable income of the Alabama affiliated group.
40-18-32. Corporate income tax; exemptions.
With the exception of unrelated business taxable income determined in accordance with 26 U.S.C. § 512, the tax imposed by Section 40-18-31 shall not apply to the organizations referred to in 26 U.S.C. § 501(c), and the following entities:
(a) The following organizations shall be exempt from taxation under this chapter:
(1) Labor, agricultural, or horticultural organizations;
(2) Fraternal beneficiary societies, orders, or associations operating under the lodge system or for the exclusive benefit of the members of a fraternity itself operating under the lodge system and providing for the payment of life, sick, accident, or other benefits to the members of such society, order or association, or their dependents;
(3) Business league, chambers of commerce, or boards of trade, not organized for profit, and no part of the net earnings of which inures to the benefit of any private stockholder or individual;
(4) Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare;
(5) Clubs organized and operated exclusively for pleasure, recreation, and other nonprofitable purposes, no part of the earnings of which inures to the benefit of any private stockholder or members;
(6) (1) Farmers and other mutual hail, cyclone, or fire insurance companies, mutual ditch or irrigation companies or like organizations of a purely local character, the income of which consists solely of assessments, dues, and fees collected from members for the sole purpose of meeting expenses;
(7) (2) Farmers, fruit growers, or like associations organized and operated as sales agents for the purpose of marketing the products of members and turning back the proceeds of sales, less the necessary selling expenses, on the basis of quantity of produce furnished by them;
(8) (3) Federal land banks and national farm loan associations as provided in 12 U.S.C.A. § 2055;
(9)(4) All national banks and national banking associations and all corporations engaged in the business of banking and of conducting a financial business employing moneyed capital coming into competition with the business of national banks during and for the periods during which such national banks and corporations are subject to an excise tax imposed by this state on or with respect to their respective incomes; and
(10)(5) Building and loan associations, substantially all the business of which is confined to making loans to members and insurance companies upon which the statutes of Alabama impose a tax upon their premium income.
(6) Counties, municipalities, municipal corporations, political subdivisions of the state, instrumentalities of counties, municipalities, municipal corporations, the State of Alabama, and corporations or associations owned solely by counties, municipalities or the State of Alabama.
(11) Organizations which are exempt from federal income tax pursuant to 26 U.S.C. § 501(c)(3), as modified by 26 U.S.C. ' 501(h), as such provisions are in effect from time to time, and
(12) Organizations which are exempt from federal income tax pursuant to 26 U.S.C. § 501(c)(2), as in effect from time to time.
(b) The foregoing exemption shall not apply to any entity which, by reason of 26 U.S.C. § 502 or 26 U.S.C. § 503, as such sections are in effect from time to time, is not exempt from federal income tax.
(c) In the case of organizations enumerated in subdivisions (1), (2), (3), (4), (5), (6), (7), (11), and (12) of subsection (a), any income of such organization which would constitute "unrelated business taxable income" determined in accordance with 26 U.S.C. § 512, as in effect from time to time, shall not be exempt from tax under this chapter. Each corporation which receives unrelated business taxable income determined in accordance with said 26 U.S.C. § 512 shall report such income and pay the tax thereon as required by this chapter of corporations which are not exempt from the tax imposed by this chapter.
40-18-33. Corporate income tax; net taxable income.
In the case of a corporation subject to the tax imposed by Section 40-18-31, the term "net income" or "taxable income" means the gross income as defined in Section 40-18-34 federal taxable income without the benefit of federal net operating losses plus the additions prescribed and less the deductions and adjustments allowed corporations by this chapter and as allocated and apportioned to Alabama. The taxable income shall be computed on the basis provided in Section 40-18-13.
40-18-34. Corporate income tax; gross income. Additions required by corporations.
(a) In the case of a corporation subject to the tax imposed by Section 40-18-31, which files or is required to file a separate return, the term "gross income" means the gross income as defined in Section 40-18-14 and classified as either business or nonbusiness income under Chapter 27; except, that mutual marine insurance companies shall include in gross income the gross premiums collected and received by them, less amounts paid for reinsurance.
(b) In the case of a corporation subject to the tax imposed by Section 40-18-31, which files or has elected to file an Alabama consolidated return, the term "gross income" means the gross income as defined in Section 40-18-14, and classified as either business or nonbusiness income under Chapter 27 and as modified by Section 40-18-39.
The following items shall be added to federal taxable income for purposes of computing taxable income under this chapter:
(a) State and local income taxes that are deductible in computing federal taxable income.
(b) Interest on obligations of state or local governments other than Alabama that is excludable from gross income for federal income tax purposes.
(c) Refunds of federal income taxes deducted.
(d) Dividends received from a corporation in which the taxpayer owns less than 20% of the stock (by vote and value).
40-18-35. Corporate income tax; computation of income. Deductions allowed to corporations.
(a) In computing the taxable income of corporations subject to the tax imposed by Section 40-18-31, there shall be allowed as deductions the items described in the following numbered subdivisions of this section. The proper apportionment and allocation of deductions of corporations with respect to the income from sources within and outside the State of Alabama shall be determined under the rules and regulations prescribed by the Department of Revenue pursuant to Chapter 27. For corporations doing business partly within and partly outside of Alabama where income and deductions are apportioned and allocated to Alabama as provided in Chapter 27, the deductions allowed by subdivision (13) of this section shall not be subject to any apportionment or allocation and shall be allowed in full. Subject to the above limitations, there shall be allowed as deductions in computing the taxable income of corporations:
(1) All ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business as determined in accordance with 26 U.S.C. § 162;
(2) All interest paid or accrued within the taxable year on its indebtedness as determined in accordance with 26 U.S.C. § 163, 264, and 265. In the case of a corporation not commercially domiciled in Alabama, the amount of interest otherwise deductible under this subdivision shall be reduced by the amount that bears the same ratio to the total interest expense as the average value of the corporation's assets producing nonbusiness income bears to the average value of the corporation's total assets; provided that (1) in lieu of the reduction in interest expense required by the formula contained in the first clause of this sentence, the taxpayer may elect to reduce the interest expense deduction by the method used by the taxpayer under this section prior to its amendment by Act 98-502, and (2) the amount of the reduction in interest expense under this subdivision shall not exceed the amount of nonbusiness income. In the case of a corporation commercially domiciled in Alabama, the rules prescribed by Chapter 27 of this title and the regulations promulgated thereunder by the Department of Revenue shall govern;
(3) Taxes paid or accrued within the taxable year imposed from time to time (i) by the authority of the United States; (ii) by authority of any of its possessions; or (iii) by the authority of any state or territory, or any county, school district, municipality, or other taxing subdivision of any state or territory not including income tax and not including those assessed for local benefits of a kind tending to increase the value of the property assessed but excluding the income taxes levied and imposed under this title; provided, however, that any tax not specified in one of the numbered paragraphs of 26 U.S.C. § 164(a) which is paid or accrued in connection with the acquisition or disposition of property shall be treated as part of the cost of the acquired property or, in the case of a disposition, as a reduction in the amount realized on the disposition. The amount of federal income tax which shall be deductible by such corporation shall be determined by the ratio that the taxable income, as computed without any deduction for any applicable federal, state, or local taxes on net income or any federal or state or local taxes measured by net income, of the corporation on business done within Alabama bears to its taxable income, as computed without any deduction for any applicable federal, state, or local taxes on net income or any federal or state, or local taxes measured by net income, from business done both within and without the State of Alabama;
(4) Losses as determined in accordance with 26 U.S.C. ' 165;
(5) Losses from debts which become wholly or partially worthless during the taxable year determined in accordance with 26 U.S.C. § 166;
(6) A reasonable allowance for the exhaustion, wear and tear of property used in the trade or business, including a reasonable allowance for obsolescence, to the extent provided by 26 U.S.C. § 167 and 168, and an allowance for the amortization of intangibles determined in accordance with 26 U.S.C. § 197;
(7) In the case of mines, oil and gas wells, other natural deposits, and timber, a reasonable allowance for depletion and for depreciation of improvements, according to the peculiar conditions in each case, based upon the cost, including cost of development not otherwise deducted, such reasonable allowance in all cases to be made under rules and regulations to be prescribed by the Department of Revenue; in the case of leases the deductions allowed by this subsection shall be equitably apportioned between the lessor and the lessee;
(8) In the case of marine insurance companies, there shall be allowed amounts repaid to policyholders on account of premiums previously paid by them and interest paid on such amounts between the ascertainment and the payment thereof;
(9) In the case of mutual insurance companies, other than mutual life or mutual marine insurance companies requiring their members to make premium deposits to provide for losses and expenses, there shall be allowed the amount of premium deposits returned to their policyholders and the amount of premium deposits retained for the payment of losses, expenses and reinsurance reserves;
(10) Charitable contributions determined in accordance with 26 U.S.C. § 170;
(11) The deduction allowed for federal income tax purposes by 26 U.S.C. § 404;
(12) A deduction for any expense not exceeding $35,000 actually incurred during the taxable year in removing from any facility or structure in operation in the State of Alabama any architectural or transportation barriers to handicapped persons with nonambulatory or semiambulatory disabilities; provided, however, that any improvements resulting from such expense shall not be eligible to be capitalized for depreciation;
(13) All amounts invested during the taxable year in all devices, facilities or structures and all identifiable components thereof or materials for use therein, used or placed in operation in the State of Alabama, or to be used or placed in operation in the State of Alabama, acquired or constructed primarily for the control, reduction, or elimination of air or water pollution; provided, that in lieu of deducting such amounts, the corporation may elect to amortize all such amounts over such period, not exceeding the useful life of devices, facilities, or structures for which such amounts were expended, as it specifies in its tax return respecting the taxable year during which such amounts were expended, in which case it shall be entitled to appropriate deductions for the taxable years so specified; and provided further, that the taking of any deduction authorized by this subdivision shall be optional with the corporation; and that if any such deduction is taken with respect to such devices, facilities, or structures, such corporation shall not be permitted any allowance for depreciation or obsolescence thereof otherwise allowable under this section;
(14) The amounts received as dividends, including liquidating dividends, whether received in cash or property or both, from a corporation or any subsidiary corporation which is either taxable under this chapter upon its net income or exempt from taxation under this chapter by virtue of being an insurance company upon which the statutes of Alabama impose a tax upon, measured by, or with respect to its premium income, if at the time of the receipt of the dividends the corporation receiving the dividends is the owner of stock in the corporation distributing the dividends: a. Possessing at least 50 percent of the total combined voting power of all classes of stock entitled to vote; and b. Constituting at least 50 percent of the total number of shares of all classes of stock other than classes of stock which are limited and preferred as to dividends; Neither the dividends deductible by reason of this subdivision nor the value of the assets of the corporation paying the dividends shall be taken into account in determining the amount of interest or other expenses attributed to nonbusiness income pursuant to the second sentence of subdivision (2) of this subsection.
(15) The amounts received in taxable years beginning after July 31, 1995, by corporate taxpayers commercially domiciled outside of Alabama on each day of their taxable year, as dividends, including liquidating dividends, whether received in cash or property or both, or as deemed dividends, including amounts included in gross income under 26 U.S.C. § 78 and 951, from a corporation or any subsidiary corporation, if at the time of the receipt or deemed receipt of the dividends the corporation receiving the dividends is the owner of stock in the corporation distributing such dividends: a. Possessing at least 20 percent of the total combined voting power of all classes of stock entitled to vote; and b. Constituting at least 20 percent of the total number of shares of all classes of stock other than classes of stock which are limited and preferred as to dividends; Neither the dividends deductible by reason of this subdivision nor the value of the assets of the corporation paying the dividends shall be taken into account in determining the amount of interest or other expenses attributed to nonbusiness income pursuant to the second sentence of subdivision (2) of this subsection.
(16) Organizational expenses ratably over a period of not less than 60 months determined in accordance with 26 U.S.C. 248;
(17) The deduction allowed by 26 U.S.C. § 179 (relating to expensing certain depreciable property); provided that no deduction shall be allowed by subdivision (6) for any amount allowed as a deduction under this subdivision;
(18) Notwithstanding subdivision (1), the deduction for expenses of travel, entertainment and meals shall be determined in accordance with 26 U.S.C. § 274; and
(19) In the case of a personal service corporation that is subject to the minimum distribution requirements of 26 U.S.C. § 280H, the deductions otherwise allowed by this section shall be limited in accordance with 26 U.S.C. § 280H.
The following items shall be deducted from federal taxable income under this chapter:
(1) Refunds of state and local income taxes.
(2) Federal income tax paid or accrued during the taxpayer's taxable year.
(3) Interest income earned on obligations of the United States.
(4) 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. or such obligations are issued to pay the cost of assets to which subsections (c) through (e) of Section 40-9B-7 apply.
(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) Dividend income, including amounts described in 26 U.S.C. §78 and 26 U.S.C. §951, with respect to which the taxpayer elected to claim a foreign tax credit rather than a deduction in determining federal taxable income; dividend income received from foreign sales corporations as defined in 26 U.S.C. §922; and dividend income from foreign (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, except for dividends received from a corporation in which the taxpayer owns less than 20% of the stock (by vote and value). The Department shall promulgate a regulation regarding the allowable amount of interest expense related to the production of nonbusiness income, which shall be based upon a formula using the average value of the corporation's assets producing nonbusiness income as compared to the average value of the corporation's total assets.
(8) The interest portion of rent paid under lease agreements entered into prior to December 31, 1994, relating to obligations issued by the State of Alabama or subdivisions or instrumentalities thereof, to the extent that such obligations are issued to pay the cost of assets to which subsections (c) through (e) of Section 40-9B-7 apply.
(b) Notwithstanding any provision of subsection (a), no deduction shall be allowed for any losses, expenses, or interest deferred or disallowed pursuant to 26 U.S.C. § 267 (with respect to transactions between related taxpayers), or any cost required to be capitalized in accordance with 26 U.S.C. § 263 or 263A.
(b) 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
(2) the amount provided in Section 41-10-44.9 to an approved company for a payment by such company into a tax increment fund.
Section 2. The Department of Revenue shall have the authority to promulgate rules and regulations to transition the provisions of this act, including but not limited to net operating losses attributable to Alabama.
Section 3. In addition to all other appropriations heretofore or hereinafter made, there is hereby appropriated to the Department of Revenue for the fiscal year ending September 30, 2000, such amount as is reasonably required to offset its conversion costs as a first charge against the revenues from the tax levied by this act. For all subsequent years, there shall be appropriated to the Department of Revenue as a first charge against the revenues from the tax levied by this act an amount that will offset its actual costs in the administration and regulation of this tax.
Section 4. The provisions of this act are severable. If any part of this act is declared invalid or unconstitutional, that declaration shall not affect the part which remains.
Section 5. All laws or parts of laws which conflict with this act are hereby repealed and specifically repealed are Sections 40-18-31.1, 40-18-36, and 40-18-38, of the Code of Alabama, 1975.
Section 6. (a) The increased tax rates provided for in this act shall apply for all taxable years beginning after December 31, 2000, if the constitutional amendment proposed by HB 3 of the 1999 Second Special Session is ratified by the qualified electors of the state and proclaimed by the Governor as provided in Sections 284 and 285 of the Constitution of Alabama of 1901.
(b) If the constitutional amendment proposed by HB 3 of the 1999 Second Special Session is ratified by the qualified electors of the state and proclaimed by the Governor as provided in Sections 284 and 285 of the Constitution of Alabama of 1901, the shares tax levied by Article 3 of the Business Privilege and Corporate Shares Tax Act of 1999 enacted by HB 1 of the Second Special Session shall not apply to any year beginning after December 31, 2001.
(c) If the corporate income tax levied by this act becomes effective as provided in subsection (a) the maximum amount of privilege tax provided in Section 40-14A-22(d)(2) levied by Article 2 of the Business Privilege and Corporate Shares Tax Act of 1999 enacted by HB 1 of the Second Special Session shall be inapplicable to any taxpayer who is subject to the corporate income tax levied by this act and the maximum tax provided in Section 40-14A-22(d)(1) shall apply to such taxpayers.
The provisions of this act shall become effective for all taxable years beginning after December 31, 2000, if the constitutional amendment proposed by House Bill 3 of the 1999 Second Special Session is ratified by the qualified electors of the State and proclaimed by the Governor as provided in Sections 284 and 285 of the Constitution of Alabama of 1901.
Section 7. Except as provided in Section 6, this act shall become effective for all taxable years beginning after December 31, 1999, upon its passage and approval by the Governor or its otherwise becoming law.