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 or toolmaking, 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).  If approved by the Governor, companies may claim the following credits:

  • Jobs Credit: Annual cash refund of up to 3% (4% in a Targeted County) 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 may be claimed for up to 10 years and may be applied against Alabama income tax and/or utility tax liability. Unused credits may be carried forward for five years. If approved by the Governor, the first three years of the credit may be transferred to another Alabama taxpayer for at least 85% or more of face value.

Alabama Renewal Act: Port Credit: This discretionary program offers a one-time tax credit for increased usage of Alabama public ports. The credit is up to $50 per TEU, $3 per net ton or $0.04 per net kilogram. The credit may be taken against Alabama income tax liability and can be carried forward for five years. New distribution or warehouse shippers investing at least $20 million and creating at least 75 net new jobs are eligible to receive up to $100 per TEU over a 3-year period if entering into a project agreement with the state.

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 earning over $10 per hour.

TAX ABATEMENTS 

Sales and Use Tax Abatement:  Discretionary abatement of non-education portion of sales and use taxes on construction materials, equipment and other capitalized costs.

Property Tax Abatement: Discretionary abatement of the non-educational portion of property tax for up to 20 years. 

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 permanent 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 2017

 


 
BIGGINS LACY SHAPIRO & COMPANY
 
PRINCETON
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