Talladega County Economic Development Authority
Tax incentives are available for existing industries, expanding industries, and new industries.

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Alabama Department of Revenue Website
 
P.O. Box 327001
Montgomery, Alabama
36132-7001
(334) 242-1175

Tax Incentives

The Alabama Department of Revenue administers several tax incentives available for existing industries, expanding industries, and new industries locating in Alabama. Tax incentives are created and administered under the Alabama Constitution of 1901 and the Code of Alabama 1975. The statutory basis for Alabama tax incentives gives industry a stable framework for long term investment.

Major Alabama Tax Incentives

Income Tax Capital Credit

The Income Tax Capital Credit has been available since 1995. This legislation is currently codified as Article 7, Chapter 18, Title 40, Code of Alabama 1975. The purpose of this law is to create jobs and to stimulate business and economic growth in the state by providing an income tax capital credit for approved projects.

The capital credit is a credit of five percent (5%) of the capital costs of a qualifying project, to be applied to the Alabama income tax liability generated by the project income, each year for 20 years. This credit cannot be carried forward or back (you use it or lose it), and cannot be used to generate a refund to the taxpayer. The capital credit is used only after all other deductions, losses, or credits permitted under Titles 40 and 41 of the Code of Alabama 1975. The credit will follow the income generated by the project and, therefore, will be allowed to "pass-through" entities such as: S corporations, partnerships, limited liability companies, etc.   More Info >>

Property & Sales Tax Abatements

The Tax Incentive Reform Act of 1992 (Chapter 9B, Title 40, Code of Alabama 1975) gives cities, counties, and public industrial authorities the ability to abate the following:

  • State sales and use taxes;
  • Non-educational county and city sales and use taxes;
  • Non-educational state, county, and city property taxes - up to 10 years;
  • Mortgage and recording taxes.

To receive an abatement for any or all of these taxes, a business must meet certain qualifications and follow certain procedures, as determined by law and regulation.

The Alabama Department of Revenue publishes the "Abatement Booklet", an informative guide to assist with the application and filing procedures for an abatement. The booklet contains the procedures, forms and instructions to apply for an abatement of the taxes mentioned above.   More Info >>

Other Incentives Available in Alabama Business Taxes

Income Tax

Alabma Income Tax law is found in Chapter 18, Title 40, Code of Alabama 1975. Corporations and other business entities pay Alabama income tax based on the net taxable income derived from business conducted within the state. The amount of net income apportioned to Alabama is determined by applying an equally weighted three-factor formula of property, payroll, and sales to total net income. Alabama law offers several income tax incentives for new, existing, or expanding businesses in Alabama.   More Info >>

Property Tax

All real and personal property in Alabama is subject to property tax unless specifically exempted by law. The Alabama Constitution of 1901 and Alabama law contain various property tax provisions that may be considered as industrial incentives.   More Info >>

Sales and Use Tax

Alabama's Sales and Use Tax laws contain several provisions which give Alabama an advantage over other states. The law provides for rate differentials, abatements , exemptions for specific items, and Enterprise Zone credits. The sections of law cited below are found in the Code of Alabama 1975.   More Info >>

Business Privilege Tax

The business privilege tax is an annual tax paid by corporations and limited liability entities (including disregarded entities) for the privilege of conducting business in Alabama. The tax base is the taxpayer's net worth apportioned to Alabama. For business entities new to Alabama, the tax accrues as of the date of organization, qualification, or beginning to do business, and is due 30 days thereafter. The tax for existing entities accrues as of January 1 of every taxable year, and is due March 15.   More Info >>

Talladega County Economic Development Authority