Coast Gateway Regional Economic Development Alliance
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Taxes/Incentives

Looking for help locating your business in one of the five Coastal Gateway counties? Tax incentives may be just the thing you need to make your move a reality. Tax incentives are available for new and expanding companies in most counties in Alabama. A summary of those incentives can be found below, while a full list of incentives can be found on the Alabama Department of Revenue website.

Alabama Industrial Development Grant:

  • State grant for site preparation, access and engineering of publicly controlled sites for qualifying industrial projects
  • Grant amount ranges from $10,000 to $150,000
  • Requires company to meet state SIC code criteria

Alabama Industrial Access Road Grant:

State grant to cities and counties to finance construction and improvements of access roads to industrial sites

CDBG Economic Development Grant:

  • Grants available to provide land, facilities and infrastructure such as water lines, sewer lines, rail spurs, docks, cranes, access roads, etc. to facilitate creation and/or retention of jobs by a new or existing business
  • A grant range of $200,000 to $350,000 will apply with local match of at least 20 percent
  • Must be associated with the location of a new business or expansion of an existing business generally creating 15 or more jobs
  • At least 51 percent of the project beneficiaries must be persons of low and moderate income

Non-Educational State and Local Property Tax Abatement:

  • Multi-year abatement of non-educational property taxes for industrial projects up to 10 years
  • For state, county and city property taxes on land, building, machinery and equipment
  • Requires company to meet state SIC code criteria

Non-Educational Sales and Use Tax Abatement:

  • One-time abatement of non-educational construction related sales and use taxes on construction materials and machinery and equipment placed in service at the industrial facility.
  • Requires company meet state SIC code criteria

State and Local Property Tax Exemptions:

Raw materials to be compounded or manufactured for manufacturing purposes are exempt from property taxation.

Waiver of Business License Fees:

Waiver on the cost of a business license for a period of 1-3 years available in select cities

State and Local Sales and Use Tax Exemptions:

Sales tax exemptions are allowed for:

  • Raw materials
  • Materials and equipment for pollution control
  • Quality control testing
  • Donations to charitable organizations

State Corporate Income Tax Deductions:

  • Deductions for net operating losses with a 15-year carry forward
  • Pollution control equipment

State Corporate Income Tax Credits:

  • Corporate income tax rate is 6.5 percent
  • Based on the net taxable income of business done in Alabama
  • Businesses are permitted to deduct all of their federal taxes apportioned to Alabama

Workplace Learning State Income Tax Credit:

Income tax credit up to 20 percent of the cost of an approved Basic Skills Education Program

HUBZone Program:

Federal contract opportunities for qualified small businesses in distressed areas.

The Alabama Tax Credit:

  • Available to qualifying companies to claim tax credit
  • No carryforward, carryback, or retroactivity of tax credits
  • Small Business Criteria includes:
    • 100 or fewer full-time employees
    • Minimum of $1 million investment
    • Create a minimum of 15 new full-time jobs
  • Large business criteria includes:
    • Minimum of $2 million capital investment
    • Creation of at least 20 new full-time jobs

Jobs Tax Credit

  • Cash refund of up to 3% of the previous year's gross payroll (not including fringe benefits) for qualifying new, direct jobs. Incentive period is up to 10 years.
  • Up to an additional 0.5% cash refund is available on the wages of veterans, for companies, which employ a workforce composed of at least 12% of veterans.
  • Up to an additional 1% cash refund for projects in counties with a population less than 25,000. Two sites per year located outside of these counties can receive this refund at the Governor's discretion.

Investment Tax Credit

  • Credit of up to 1.5% of the qualified capital investment costs for a qualifying project each year for up to 10 years (Up to 15 years for projects in counties with populations less than 25,000 selling their output nearby)
  • Credits can be used to reduce income tax (or taxes on banks or insurance companies), and taxes for utility services.
  • Credits can be carried forward for five years.
  • The first three years of the credits may be sold to create cash for projects, with Department of Commerce approval.

CONTACT US

Trustmark Bank Building · 60 Hines Street, Suite 200 · Monroeville, AL 36460
251-248-2143 · USA: 800-915-6576 · contact@coastalgatewayeda.com

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