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Assistance & Resources

Doing Business 

 

The Code of Alabama 1975 

Click the link below to view Alabama's "The Code of Alabama" which provides key information about every aspect of the legislature.

http://alisondb.legislature.state.al.us/alison/CodeOfAlabama/1975/Coatoc.htm

 

BUSINESS ENTITIES 

The Business Entity Division operates as a depository for records of domestic entities and foreign entities that have qualified to transact business in Alabama. The types of entities we serve include For-Profit Corporations, Non-Profit Corporations, Limited Liability Companies, Limited Partnerships, Registered Limited Liability Partnerships, and Limited Liability Limited Partnerships.

When we can assist you, drop by our office or give our Business Entities Division a call at 334-242-5324 between 8 a.m. to 5 p.m. (central standard time). The Secretary of State Business Entities Division is located at 770 Washington Avenue in Suite 580. We are here to serve.

Voice: 334-242-5324

Physical Address
770 Washington Avenue, Suite 580
Montgomery, AL 36104

Mailing Address
PO Box 5616
Montgomery, AL 36103-5616

 

BUSINESS ADVANTAGES 

  • Progressive Governmental Leadership
  • Highly Skilled and Motivated Workforce
  • Alabama is a Right-to-Work State
  • Property Tax Abatements on Equipment and Real Estate for up to 15 years
  • Sales and Use Tax Abatements for Equipment and Construction Materials Purchases
  • The Lowest Property Taxes in the Nation
  • No Inventory Taxes
  • No Impact Fees
  • Master Planned Industrial Parks
  • Customized Incentive Packages for New Businesses

 

ECONOMIC DEVELOPMENT RESOURCES 

The following entities can provide economic development information for the state of Alabama.

 

Tax Incentives

 

INCOME TAXES 

 

  • Corporations’ income tax based on net taxable income derived only from business conducted within the state determined by applying a four-factor formula of property, payroll, and double-weighted sales to total net income.
  • Corporate income tax rate of 6.5 percent (individuals taxed at a rate of 5 percent).
  • Full deduction for all federal income taxes apportioned to Alabama creating a significantly reduced net effective rate.
  • 15 year carry forward of net operating loss

 

PROPERTY TAX 

 

  • Constitutional limit of the state mileage rate on both real and personal property to 6.5 mills, of which 3 mills are dedicated to education.
  • Business property, both real and personal, taxed on 20 percent of fair market value.
  • Inventories and goods-in-process are not taxed. Pollution control equipment statutorily exempt from property taxation.
  • Exemption of all tangible personal property being warehoused in Alabama for shipment to a destination outside the state.

 

BUSINESS PRIVILEGE TAX 

 

  • Replaces the former franchise tax.
  • Capped at $15,000 except for financial institutions and insurance companies.

 

Alabama Reinvestments & Abatement ACTS

 

 

 

NEW FACILITIES & EXPANSION 

  • Abatement of a non-educational portion of sales and use taxes on construction materials.
  • Abatement of a non-educational portion of property tax for up to 20 years.
  • Existing Facility: Refurbishments, Upgrades or Placed Back in Service:
  • Abatement of non-educational sales and use taxes on construction materials and equipment.
  • Abatement of non-educational property taxes for up to 20 years of the incremental property tax increases.
  • Exemption from taxes for increased utility services for up to 10 years.

 

AIDT WORKER TRAINING 

  • Consistently one of the top three statewide workforce training agencies in the U.S., Alabama Industrial Development Training is an innovative training program that provides value-added solutions for Alabama’s new and expanding industries. Services are offered at no cost to qualifying companies.
  • Services include:
    • Pre-employment Training
    • Post-employment Training
    • Maintenance Assessments
    • Safety & Assistance Training
    • Leadership Development
    • Process Improvement
    • EMPACT
    • ExTra
    • Comprehensive Training
    • Employee Recruitment

 

Sales & Use Tax

 

 

FOUR STATE RATE DIFFERENTIALS, WHICH INCLUDE: 

 

  • 1.5% rate for manufacturing and farm machinery.
  • 2% rate for automotive vehicles.
  • 3% rate for food sold through vending machines.
  • 4% general rate for all other items.

 

ADDITIONAL CREDITS AND EXEMPTIONS: 

 

  • Raw materials used by manufacturers or compounders specifically exempt from sales and use taxation
    • Pollution control equipment statutorily exempt from taxation
  • Credit for sales and use tax paid to another state and its subdivisions.
  • Exemption for quality control testing and donations to charitable entities.
  • Abatements by cities, counties, and public authorities may include:
    • For qualifying industries, all state and the local non-educational portion of the construction-related transaction (sales and use) taxes associated with construction and equipping a project.
    • For coal mining projects, half of the state sales and use tax may be abated.
  • Utility gross receipts tax exemptions for:
    • Sewer costs
    • Water used in industrial manufacturing in which 50 percent or more is used in industrial processing
    • Exclusions for utility services used in certain types of manufacturing and compounding processes
    • An electrolytic or electrothermal manufacturing or compounding process
    • Natural gas becomes a component of tangible personal property manufactured or compounded, but not used as fuel or energy
    • Natural gas used to chemically convert raw materials prior to the use of such converted raw materials in electrolytic or electrothermal manufacturing or compounding process
    • Increased utility tax for refurbishment, upgrades, or reopening of a facility