|
Contact the CDF
Executive Director: David Graham
POB 2105 | Hamilton, Alabama 35570
Office: 205.952.9264 | Cell: 205.412.1144
Fax: 205.921.2794 | eMail: dgraham@cdfal.org
INCENTIVES
MAJOR ALABAMA TAX INCENTIVES
(from the ADOR)
Capital Credit Incentives
The Income Tax Capital Credit has been available since 1995. This
legislation is currently codified as Article 7, Chapter 18, Title
40, Code of Alabama 1975. The purpose of this law is to create jobs
and to stimulate business and economic growth in the state by providing
an income tax capital credit for approved projects. The capital credit
is a credit of five percent (5%) of the capital costs of a project,
to be applied to the income tax liability generated by the project
income, each year for 20 years. This credit cannot be carried forward
or back (you use it or lose it), and cannot be used to generate a
refund to the taxpayer. The capital credit is used only after all
other deductions, losses, or credits permitted under Titles 40 and
41 of the Code of Alabama 1975. The credit will follow the income
generated by the project and, therefore, will be allowed to "pass-through"
entities such as: S corporations, partnerships, limited liability
companies, etc.
Tax Incentive Reform Act & Property
Tax Abatements
The Tax Incentive Reform Act of 1992 (Chapter 9B, Title
40, Code of Alabama 1975) gives cities, counties, and public industrial
authorities the ability to abate the following: noneducational state,
county and city property taxes; state sales and use taxes; noneducational
county and city sales and use taxes; and mortgage and recording
taxes. To receive an abatement for any or all of these taxes, a
business must meet certain qualifications and follow certain procedures,
as determined by law and regulation.
Alabama Tax Incentives for New Industry
The variety of tax incentives available in Alabama contributes
to the state’s attractiveness forbusiness investment. Stability
of the tax environment is exhibited through Alabama’s Constitution
and the various tax laws. The Alabama Tax Incentive PDF provides
a brief summary of the major tax areas of interest to prospective
investors, outline the tax incentives available within these areas,
and address the various filing requirements.
Other Incentives
Alabama Income Tax law is found in Chapter 18, Title 40, Code of
Alabama 1975. Corporations and other business entities pay Alabama
income tax based on the net taxable income derived from business
conducted within the state. The amount of net income apportioned
to Alabama is determined by applying an equally weighted three-factor
formula of property, payroll, and sales to total net income. Alabama
law offers several income tax incentives for new, existing, or expanding
businesses in Alabama.
Office of the Commissioner
| Alabama Department of Revenue
P.O. Box 327001 | Montgomery, AL
36132-7001
334-242-1175 voice | 334-242-0550 fax
|
