SPOTLIGHT PROGRAMS

Jobs Credit: This discretionary program offers incentives for job creation.  Eligible companies may receive an annual cash refund of up to 3% of the previous year’s gross payroll for new eligible employees. Companies in targeted/jumpstart counties, underrepresented companies, technology companies, and companies engaged in pharmaceutical, biomedical, medical technology or medical supplies, or related R&D can receive up to a 4% cash refund. The annual refund may be claimed for up to 10 years. Eligible companies include those with a qualifying business activity that create at least 50 net new jobs. Additionally, companies in Targeted Counties (population less than 50,000) must create at least 10 net new jobs; companies in Jumpstart Counties (population greater than 50,000 that contain no more than 2 Opportunity Zones, and has had negative population growth over last 5 years) must create at least 10 net new jobs; Underrepresented Companies and Technology Companies must create at least 10 net new jobs; projects in Targeted or Jumpstart counties must have at least $2 million in capital investment. Non-targeted or non-jumpstart counties must create 50 net new jobs and do not have a minimum investment threshold.

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TAX CREDITS

Investment Credit: Tax credit of up to 1.5% of qualified capital investment in an eligible new or expansion project. The credit may be claimed for up to 10 years. Underrepresented Companies and projects in Targeted/Jumpstart counties can receive the credit for up to 15 years. The credit may be applied against Alabama income tax, financial institution excise tax, insurance premium tax, utility tax, and/or utility license tax liability. Unused credits may be carried forward for 5 years. If approved by the Governor, the first three years of the credit may be transferred to another Alabama taxpayer for at least 85% of face value. Eligibility requirements are the same as the Jobs Credit program.

Port Credit: This discretionary program offers a one-time tax credit for increased usage of Alabama public ports. Shippers must be engaged in manufacturing, warehousing, or distribution of goods. The credit is up to $50 per TEU, $3 per net ton, $0.04 per net kilogram, or $2.91 per vehicle equivalent unit. The credit may be taken against Alabama income tax liability and can be carried forward for 5 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. The credit is not refundable or transferable.

Growing Alabama Credit: The Growing Alabama program provides an incentive mechanism to provide a source of funds to Economic Development Organizations (EDOs) to stimulate economic growth for various qualifying activities. Alabama taxpayers who make cash contributions to EDOs for approved qualifying projects receive a Growing Alabama tax credit that can offset up to 50% of Alabama income tax, the state portion of the financial institution excise tax, insurance premium tax, and/or state utility license tax liability. Taxpayers donating to EDOs for approved projects receive a credit equal to their donation and may carry the credit forward for up to five years. The credit may be passed through to individual owners, shareholders, partners, or members of an LLC. All Growing Alabama Credit funding allocations must be approved by the Renewal of Alabama Commission. Funding is capped at $20 million per calendar year.

Alabama Enterprise Zones: Alabama’s Enterprise Zone program offers tax incentives to businesses locating in qualifying areas. They are calculated in the following ways. 35% of the company’s new full-time employees if they were unemployed 90 days prior to employment. These credits are claimed in increments over a five-year period. Year 1 80%, Year 2 60%, Year 3 40%, and Years 4 & 5 20%. They may also be taken from the company’s capital investment 10% of the first $10,000, 5% of the next $90,000, and 2% of the rest of their investment. The company may also claim a credit of up to $1,000 for the training of new permanent employees in new skills. There is a maximum credit of $2,500 per new permanent employee. Exemptions of sales and use tax, income tax, and business privilege tax are also available.

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JOB TRAINING

AIDT Workforce Development Services: AIDT provides new and expanding companies with workforce recruitment and training needed for success. It consistently ranks in the top 5 among all US state workforce training programs. Training is provided at no cost to employers or trainees. It includes recruitment, assessment, and training of potential employees, development and production of job-related training materials, provision of training facilities, and delivery of job-specific services for pre-employment and on-the-job training.

Apprenticeship Tax Credit: State income tax credit for employers in the amount up to

$1,250 per qualifying apprentice for up to 10 apprentices employed. An additional credit of up to $500 is available to the employer for each apprentice who is 18 years old or younger and meets certain youth-registered or industry-recognized apprenticeship criteria at the time the credit is claimed.

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LOCAL INCENTIVES

Sales and Use Tax Abatement: Discretionary abatement of the non-educational 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; qualified data processing centers may qualify for an abatement term up to 30 years.

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Last Updated: May 2023