The bill aims to decouple Alabama's income tax regulations from the federal Tax Cuts and Jobs Act (TCJA) concerning the amortization of research and experimental expenditures. Specifically, it allows taxpayers to either currently deduct these expenditures or treat them as deferred expenses, following the provisions of 26 U.S.C. § 174 as they existed prior to tax year 2022. This change will take effect for tax years beginning on or after January 1, 2024, and is intended to provide taxpayers with more favorable options regarding their research and experimental spending.

Additionally, the bill grants the Alabama Department of Revenue the authority to adopt rules for the implementation and administration of this act. The language inserted into the current law includes provisions for the retroactive effect of these changes, while the bill deletes the requirement for Alabama to adhere to the TCJA amendments regarding the treatment of research and experimental expenditures. The act is set to become effective immediately upon passage.