• Corporate Income Tax Rate Is 6.5%.
• Based on the Net Taxable Income of business done In Alabama.
• Businesses are permitted to deduct all of their Federal Taxes apportioned to Alabama.
Potential incentives include:
• Net-Operating Loss Carryforward.
• Pollution-Control Equipment Deduction.
• Income Tax Capital Credit.
• Basic Skills Educational Tax Credit.
• Available to qualifying all new and expanding companies and industries.
• Gives businesses up to 5% credit of capital costs.
• Can be applied to the Alabama Income Liability generated by the project income.
• Available annually for a maximum of 20 years.
Favored Geographical Area
The Favored Geographical Area Program provides Capital Credit Incentives at lower investment rates ($500,000) and New Employee Thresholds to companies located in Enterprise Zones and/or less developed counties. For more information, visit the Economic Development Partnership of Alabama (EDPA).
Additional incentives may be available to new and expanding companies through the Enterprise Zone Program. This incentive includes up to $2,500 tax credit for each new permanent employee, as well as exemptions from income, sales & use, and business privilege tax liability.
• Based on a company's net worth in Alabama and the company's ability to pay.
• Rate ranges from $.25 to $1.75 for each $1,000 of net worth in Alabama.
Available incentives include:
• Pollution Control Equipment Deduction.
• Air Carrier with Hub Operations Deduction.
• Employer requirement for the State Unemployment Tax is based on the first $8,000 of each employee's compensation.
• Rates vary from 0.5% to 5.4%.
• New Employer Rate is 2.7%.
• Rates are based on the employer’s experience rating.
• Employees do not contribute.
Industrial Revenue Bonds
• Administered by local economic development organizations.
• Available for qualifying new and expanding companies.
• Can be used for land, building, and equipment purchases.
• Have lower interest rates and offer tax benefits.
Revolving Loan Funds
• Administered through local economic development organizations.
• Provides gap financing for qualifying new and expanding industries that are creating new permanent jobs.
• Can be used for land, building, and equipment purchases, as well as working capital.
Certified Capital Company Program
• Open to qualifying businesses that are headquartered in Alabama or are moving their headquarters to the state.
• Administered by the Alabama Department of Commerce and provides alternative funding to conventional bank financing.
USDA Rural Development
The USDA provides business assistance programs, including grants and loans for those companies looking to develop in rural areas. More information about these programs, including grant and loan information, can be found at USDA Rural Development – Alabama.
Site & Infrastructure Assistance
Local municipalities are willing and able to apply for site preparation and infrastructure grants to assist new and expanding companies in Alabama.
Industrial Development Grant Program (site preparation)
• Used for land and labor surveys, site preparation, and road construction projects.
• Based on the amount of capital investment.
Alabama Infrastructure Grant Program
• Used to improve infrastructure on a site.
Alabama Industrial Access Road and Bridge Program
• Used to create industrial access to a site.
• Includes construction of roads and bridges.
Grants from the Alabama Department Of Economic and Affairs