TAX CREDITS

Jobs Act Incentives:  This discretionary program offers credits for job creation and capital investment.  To qualify, businesses that operate chemical manufacturing, data center, metal/machining, engineering, design and research facilities must create net new jobs but are not subject to a specific minimum job creation requirement.  Businesses that do not operate within the aforementioned industry sectors must create a minimum of 50 jobs (25 in a targeted county).  Companies approved by the Alabama Department of Commerce may claim the following credits:

  • Jobs Credit: Annual cash refund of up to 3% of the previous year’s gross payroll for eligible employees.   The annual refund may be claimed for up to 10 years.
  • Investment Credit: Tax credit of up to 1.5% of qualified capital investment.  The credit which can be claimed for up to 10 years may be applied to state income tax and/or utility tax liability. Unused credits may be transferred to another Alabama taxpayer.

Full Employment Act of 2011:  Businesses with 50 or fewer employees may receive a one-time, non-refundable tax credit equal to $1,000 for every new job created.

TAX ABATEMENTS 

Sales and Use Tax Abatement:  The state sales and use tax for machinery purchased for manufacturing and farm machinery is reduced from the general rate of 4.0% to 1.5%; qualified businesses may be eligible for an abatement of sales and use taxes for construction materials. 

SPECIAL ZONING 

Enterprise Zone Credit /Exemption:

Businesses that locate in an Enterprise Zone may receive a tax credit or tax exemption for new job creation (up to $2,500 per job), investment tax credits, training grants of up to $1,000 per new employee and an exemption of sales and use tax on purchases of construction materials.  Employers with existing facilities in an Enterprise Zone that create at least 5 new jobs may also receive incentives. 

JOB TRAINING 

Employer Education Credit: Tax credits are available to businesses that provide approved basic skills education to Alabama resident employees. The credit is 20% of the actual costs, limited to the employer’s income tax liability. Certain requirements must be met. 

 

Last updated: April 2016

 


 
BIGGINS LACY SHAPIRO & COMPANY
PRINCETON
47 Hulfish Street, Suite 320
Princeton, NJ 08542
(609) 924-9775
NEW YORK
215 Park Ave South
New York, NY 10003
(646) 652-7555
CHICAGO
30 S. Wacker, Suite 2200
Chicago, IL 60606
(312) 924-2490