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:
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.
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.
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.
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