Alabama offers businesses an attractive taxation environment—one of the nation’s lowest overall tax burdens. In addition, Alabama provides a number of tax incentives designed to assist with a cost-effective start-up and provide continued operational savings.
Alabama offers an annual cash refund up to 3% of the previous year’s gross payroll for up to 10 years. For companies employing at least 12% veterans, up to an additional 0.5% credit is available for the wages of veterans. And up to an additional 1% job credit is available for companies in targeted counties.
Sales & Property Tax
According to the Reinvestment and Abatements Act, with New Facility and Expansion, there is an abatement of non-educational portion of property tax and an abatement of non-educational portion of sales and use taxes on construction materials.
With existing facility refurbishments and upgrades, or facilities placed back in service there is an abatement of non-educational sales and use taxes on construction materials and equipment. There is an abatement of non-educational property taxes of the incremental property tax increases. And an exemption from taxes for increased utility services for up to 10 years, plus, AIDT worker training.
Hailed as one of the nation’s most effective state-sponsored workforce training programs, Alabama Industrial Development Training, or AIDT, has provided state-of-the-art industrial training to thousands of workers of Alabama industries. AIDT’s services are cost-free for qualifying new and expanding industries in Alabama. AIDT was awarded ISO 9001:2015 certification by the International Organization for Standardization.
Opportunity Zones are low-income census tracts with a poverty rate of at least 20 percent and a median family income of less than 80 percent of the statewide or area median income. Census tracts are statistical subdivisions of a county established by the U.S. Census Bureau. Each tract averages between 1,200 and 8,000 in population and the nominated tracts vary in size from 199 acres to 235,352 acres.
Foreign Trade Zones
Five Foreign Trade Zones (FTZs) and numerous sub zones currently operate in Alabama.
Alabama is located in the center of the fastest-growing region in the United States, the Southeast, and is an ideal hub for foreign-based businesses and businesses with an international focus. Currently, more than 425 foreign-based companies from more than 30 nations operate in Alabama. Located on the Gulf of Mexico, Alabama is a gateway to the rapidly growing markets in Mexico, Central America and South America.
Other Incentive Programs
This authorizes the State Industrial Development Authority to sell bonds to make grants to counties, municipalities, local industrial development boards or authorities or economic development councils or authorities, airport authorities, port authorities or public corporations to pay for site preparation for land owned or possessed by lease by these entities.
Growing Alabama Credit
As part of the Alabama Renewal Act, the Growing Alabama Credit is an incentive to provide a source of funds for site preparation and public infrastructure improvements of existing industrial sites. At least 25% of the credit is reserved for Alabama counties targeted to spur economic development in rural areas.
The Port Credit, part of the Alabama Renewal Act, is designed to stimulate new job creation, capital investment and increased cargo shipping at Alabama facilities such as the Port of Mobile and at airports. The 4,000-acre Mobile seaport is one of the nation’s busiest, handling more than 50 million tons of cargo annually.