Financing & Incentives

With the location of such well-known companies as Mercedes Benz, Honda, Boeing, Toyota, and ThyssenKrupp in recent years, Alabama has succeeded in raising its profile in the economic development community while, at the same time, improving the standard of living for its residents.  These successes are only the most visible results of the efforts of a number of citizens, public officials, and economic development organizations over many years to make Alabama an attractive place for new and expanding businesses.

Alabama Power’s economic development team can help you identify and utilize the many available tax, non-tax, and financing incentives to make your business successful.  We hope that you find the following summary of such incentives helpful.



Tax Incentives

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.

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.

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.

Green Job Incentives – Economic incentives available to new and expanding producers of electricity or natural gas from biomass or renewable energy resources, cellulosic biofuel producers (e.g. wood waste, garbage, and rubber), and other “green” employers.

Net Operating Loss Carryforward – Net operating losses can be carried forward 15 consecutive years to offset Alabama income.

State Docks Capital Credit – Eligible companies that locate or expand operations on property which is owned or leased by the Alabama State Port Authority enjoy specific tax advantages.

Income Tax Education Credit – An income tax credit of 20 percent of the actual costs of education is provided to an employer who provides or sponsors programs to enhance basic skills of employees, up to and including the 12th grade functional level.

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.

Vendor Discounts on Sales Taxes – Retailers who submit sales taxes in a timely manner enjoy a discount on taxes due.

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.

State Enterprise Zones – A variety of tax credits are available for eligible businesses locating in certain areas of Alabama.

Non-Tax Incentives

Alabama Industrial Development Training (“AIDT”) – AIDT administers employee-screening, hiring, and training programs to new and expanding industries located in Alabama.

Certified Capital Company (“CAPCO”) Program - This program, administered by the Alabama Development Office, is designed to promote investment in Alabama-based businesses by creating several venture capital funds required to invest in Alabama companies.

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.

Federal Renewal Communities – An array of federal incentives are available for qualifying companies that locate in federal Renewal Communities.

Financing Incentives

Industrial Revenue Bonds (“IRBs”) – IRBs may be used to finance the acquisition, construction, and installation of land, buildings, and equipment.

Site Preparation Grants – Grants are available to defray a portion of the cost of site preparation and other expenditures for certain qualifying projects.

Alabama Industrial Access Road and Bridge Program – Provides financial assistance to communities for access to industrial projects.

Federal Financing Programs – Attractive federal financing programs, including those administered by the Small Business Administration and USDA Rural Development, are available to eligible businesses.

 

Call us at 1-800-718-2726 or send us an e-mail today to start learn more about amazing Alabama.