Made in Alabama Jobs Credit
Annual cash rebate of up to 3% of the previous year’s gross payroll (not including fringe benefits) for new, direct jobs, for up to 10 years.
- Job Creation Requirement: 50 new jobs, except for: Chemical Manufacturing, Data Centers, Metal/Machining Engineering, Design and Research projects
- Veteran Workforce: An extra 0.5% is available on the wages of veterans for companies that employ a workforce of at least 12%.
- Targeted Counties: Counties identified by the Alabama Department of Labor as having a population of less than 25,000 can reduce the job requirement to 25 new jobs (reduced from 50) and are eligible for an extra 1% of the previous year’s gross payroll.
- Made in Alabama Jobs Credit: Tax credit of up to 1.5% of the qualified capital investment expenses for a project for up to 10 years. Credits can be used to reduce income tax, utility tax services, or taxes on banks or insurance companies.
- First three years of credits can be sold for cash to a third party. This requires Alabama Department of Commerce approval.
- Credits can be carried forward five years.
- Targeted Counties: Counties identified by the Alabama Department of Labor requires 25 new jobs (reduced from 50) to be eligible and can extend the period to 15 years (extended from 10) if the project is selling output nearby.
Property Tax Abatements
In addition to Alabama’s historically low property tax rates, take advantage of an up to 20-year abatement on the non-educational portion of property taxes on both real and personal property acquired to establish or expand certain industrial and research enterprises.
- Lowest property taxes in the country
- Assessment value chart of surrounding states
- Average property tax bill
Alabama Reinvestment Act
If you are an existing Alabama company and are investing at least $2 million on refurbishment, upgrades or placing equipment back in service but are not creating any jobs, you could qualify for the following:
- Property Tax Abatements: Non-educational property tax abatements – and non-educational incremental increases – on property and equipment can be extended from 10-20 years.
- Sales and Use Tax Abatements: Non-educational portion on construction materials
- Exemption from taxes for increased utility services, for up to 10 years
- AIDT training
Alabama Data Process Center Economic Incentive Act of 2012
This program allows for abatement of the non-educational portion of state, county, and municipal sales and use taxes and property taxes on real and personal property.
This includes the “refreshment” of eligible equipment, including computers, software and other eligible infrastructure purchased during the applicable 10-, 20- or 30- year abatement period.
Capital Investment Qualifications:
- $1 million–$200 million qualifies for a 10-year abatement period.
- $200 million–$400 million qualifies for a 20-year abatement if the total capital investment is at least $200 million within 10 years from the start of construction.
- $400 million+ qualifies for a 30-year abatement if total capital investment is at least $200 million within 10 years from the start of construction and at least $400 million within 20 years from the start of construction.
Other Qualifying Factors:
- Creation of 20 new Jobs
- Average annual total compensation of each new job must be at least $40,000 (including benefits).
Tax abatements are available for:
- Construction materials
Sales and Use Tax Abatements – All state sales and use taxes and the local non-educational portion of sales and use tax on equipment, materials and other tangible personal property purchased for the construction and equipping of certain qualifying facilities may be abated.
Federal Income Tax Deduction – Corporate taxpayers can deduct their full apportioned Alabama amount of federal income taxes paid, thereby significantly lowering their effective state income tax rate.
No Sales and Use Tax on Raw Materials – Raw materials used by manufacturers or compounders as an ingredient or component of a manufactured or compounded product are exempt.
Vendor Discounts on Sales Taxes – Retailers who submit sales taxes in a timely manner enjoy a discount on taxes due.
No Property Tax on Inventory – Alabama levies no property tax on inventories.
Pollution Control Exemption – All equipment and materials purchased primarily for the control, reduction or elimination of air or water pollution are exempt from property tax and sales and use tax.
State Enterprise Zones – A variety of tax credits are available for eligible businesses locating in certain areas of Alabama.
Utility Gross Receipts Tax – This tax is excluded under Alabama law (Sections 40-21-83 and 40-21-103), which allows exclusions from the receipts tax and the use tax if electricity or natural gas is used in an electrolytic or electro-thermal manufacturing or compounding process.
Alabama Industrial Development Training (AIDT) – AIDT administers employee-screening, hiring and training programs to new and expanding industries located in Alabama.
Foreign Trade Zones – With five Foreign Trade Zones and numerous sub-zones located across the state, eligible companies can postpone, reduce or even eliminate duties and tariffs.
Airplane Maintenance Parts Exemption – Alabama provides a sales tax exemption for any parts, components and systems that become a part of a fixed or rotary wing military aircraft or that are used in the conversion, reconfiguration or general maintenance of an aircraft certified as a transport category airplane. The exemption does not apply to any local sales tax unless specifically exempted by local law.