SPOTLIGHT PROGRAM

Jobs Credit: This discretionary program offers a cash refund to incentivize job creation. Eligible companies may receive up to 3% of the previous year’s gross payroll for new Alabama employees, or up to 4%for projects located in Targeted counties (population under 60,000), Jumpstart counties (declining population and limited Opportunity Zones), under represented companies, technology companies, or companies engaged in biomedical or related R&D. An additional 0.5% rebate is available on veterans’ wages for projects where at least 12% of the eligible workforce are veterans, and for projects located on a former active-duty military base. Refunds may be claimed annually for up to 10 years. Standard projects must create at least 50 net new jobs. Depending on the project classification, a lower requirement of 10 new jobs may apply. Projects in Targeted or Jumpstart counties must also involve at least $2million in capital investment, while no minimum investment is required elsewhere.

TAX CREDITS

Investment Credit: Tax credit of up to 1.5% of qualified capital investment in an eligible new or expansion project. The credit can typically be claimed for up to 10 years; underrepresented companies and projects in Targeted or Jumpstart counties can claim 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 five 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 creditfor increased usage of Alabama public ports. Shippers must be engaged inmanufacturing, warehousing, or distribution of goods. The credit may be valuedup to $50 per TEU, $3 per net ton, $0.04 per net kilogram, or $2.91 per vehicleequivalent unit. The credit may be taken against Alabama income tax liabilityand can be carried forward for 5 years. New distribution or warehouse shippersinvesting at least $20 million and creating at least 75 net new jobs areeligible to receive up to $100 per TEU over a 3-year period if entering into aproject agreement with the state. The credit is not refundable or transferable.

Alabama Enterprise Zones: Alabama’s Enterprise Zone program offers tax incentives to businesses locating or expanding in designated Enterprise Zones. Credit may be up to $2,500 per new permanent employee. Projects are eligible for credits based on their total capital investment, if at least 30% of employees were unemployed for at least 90 days prior to their hiring, and to offset training costs.  Exemptions of sales and use tax, income tax, and business privilege tax are also available.

Data Processing Centers Tax Abatement: Qualifying data center projects can receive a property tax abatement and sales and use taxabatement for up to 30 years, depending on total capital investment andtimeline of investment.

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 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.

LOCAL INCENTIVES

Chapter 9B Tax Abatements

Cities, counties, and public industrial authorities in Alabama may grant tax abatements to encourage new or expanding commercial and industrial projects. Eligible projects can receive abatements on state and local(non-educational) sales and use taxes, non-educational property taxes for up to20 years (up to 30 years for large data processing centers), and certain mortgage and recording taxes associated with property transfer to a public entity. To qualify for an abatement under 9B, the project must be an industrial development property, and any project seeking a new or extended abatement period must make a capital investment equal to the lesser of $2 million or 30%of the property’s original cost.

Chapter 9G Utility Refund/Abatements

Alabama offers utility tax refunds to companies reinvesting in existing industrial or commercial facilities. Qualifying projects may receive an annual refund of utility taxes paid on electricity, natural gas, water, and telecommunications services for up to 10 years. The refund is calculated as the incremental amount of utility taxes paid above the company’s average utility tax payments during the three years prior to the project being placed in service. To qualify, a project must involve a minimum capital investment of $2million and an approved industrial or commercial activity. Eligible activities include manufacturing, logistics and distribution research and development, data processing and technology operations, and other industrial enterprises with significant utility consumption. Projects must be approved by the Alabama Department of Commerce and the Governor, and the company is required to certify investment levels and utility taxes annually to maintain refund eligibility.

Last updated: April 2026