Tax Credits
By utilizing state tax credit programs, qualified companies or individuals can divert part of their state tax liability to the following programs to help build Alabama’s research and technology opportunities or attract new and expanding industry.
Donation Based Tax Credits
Growing Alabama Tax Credits
- Supports the development of infrastructure on publicly owned industrial sites which is necessary to recruit companies interested in expansion or relocation to Alabama.
- Qualifying activities may include clearing a site, upgrading infrastructure, etc. that are tied to a project.
Innovate Alabama Tax Credits
- Supports start-up business accelerators focused on the commercialization of research and technology.
- Supports business programs designed to advance entrepreneurial ventures and directed at underserved populations (minorities and rural areas).
- Qualifying activities may include staffing, office space, and program support.
A company or individual with state tax liability may opt to make a donation to an Economic Development Organization (EDO) and receive a tax credit for the amount of their donation ($1-for-$1). The credit can offset up to 50% of the tax liability for the following tax types:
- Alabama income tax
- State portion of the financial institution excise tax (FIET)
- State insurance premium tax
- State public utility license tax (SPULT)
Investment Based Tax Credits
Investment Tax Credits (ITC)
- Alabama’s primary incentives platform.
- Tax credits for new or expanding businesses for qualified capital investment expenses.
A company or individual with state tax liability may purchase a transferable credit at or above $0.85 per $1.00 of credit. The investment credit may be taken against 100% of the following tax types:
- Alabama income tax
- State portion of the financial institution excise tax (FIET)
- State insurance premium tax
- State utility tax
- State public utility license tax (SPULT)
For More Information on Tax Credit Programs:
EDPA
Partner organization responsible for education and outreach to ensure successful implementation of programs.
Innovate Alabama
Administering agency for Innovate Alabama Tax Credits. Contact for inquiries regarding eligibility and qualifications for prospective projects.
Alabama Department of Commerce
Administering agency for Growing Alabama Tax Credits and Investment Tax Credits. Contact for inquiries regarding eligibility and qualifications for prospective projects.
Alabama Department of Revenue
Granting agency for tax credits. Contact for inquiries regarding award letters, tax provisions, and questions on MyAlabamaTaxes.alabama.gov.