- 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.
- 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
- 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
- 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