Alabama Tax and Incentive Analysis


Alabama Power’s economic development team has assembled a searchable, comprehensive database of tax incentives, non-tax incentives, bonds, grants, loans, and other financing mechanisms that may assist with your project in Alabama. 

We can assist with assembling profiles and comparisons of state, county and city tax structures and can help you identify and utilize the many available tax, non-tax, and financing incentives to make your business successful. We will also make sure the local communities in Alabama know their legal ability to impact a project and ensure what has been committed can be delivered.

Additionally, we can prepare impact analysis studies of statutory incentive programs tailored to your project. Below are some examples of incentives that could be available for your project in Alabama:

  • Income Tax Capital Credit – Alabama offers an annual income tax credit equal to 5 percent of certain projects’ capital costs each year for a 20-year period.
  • Knowledge-based Job Incentives – Capital credits and tax abatements for new and expanding corporate headquarters, data processing centers (including those of financial institutions and insurance companies), inbound call centers and space research and technology facilities.
  • Sales and Use Tax Abatements – All state sales and use tax 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.
  • No Sales and Use Tax on Raw Materials – Raw materials used by manufactures or compounders as an ingredient or component part of a manufactured or compounded product are exempt.
  • Property Tax Abatements – In addition to Alabama’s historically low property tax rates, take advantage of an up to 10-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.
  • Local Property Tax Incentives – Many cities, counties, and industrial authorities offer their own incentives.
  • 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.

Contact us about Alabama incentives that may be available for your project.