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
New Markets Tax Credit Benefits
The NMTC Program incentivizes community development and economic growth through the use of tax credits that attract private investment to distressed communities. As of the end of FY 2016, nationwide, the NMTC Program has:
- Generated $8 of private investment for every $1 of federal funding
- Created 178 million square feet of manufacturing, office, and retail space
- Financed over 5,400 businesses
Several communities inside the Coastal Gateway region are eligible for New Market Tax Credit benefits. For more information, contact Coastal Gateway staff.
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
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.