Competitive Taxes
- State Corporate Income Tax
- Provided by state constitution at a maximum of 5% with
federal income taxes paid (or accrued) deductible when computing state income tax.
- Capital Investment Tax Credit incentive program allows
qualified companies to claim tax credit against state income tax liability: 5% of capital
investment per year for up to 20 years for qualified companies.
- Inventory Tax
- Property tax exemption on all business inventory,
including all materials used in manufacturing, goods in process, stored manufacturing
goods and goods in transit.
- Sales and Use Tax
- Reduced rate of 1 1/2 percent on new machinery in
manufacturing; may be exempted.
- General rate of 4 percent on other equipment and
construction materials not used in manufacturing.
- Property Tax
- Industrial projects may be exempted from ad valorem
(property) taxes for up to 10 years (except school taxes) with fixed assessment ratio
established at 20% of appraised value for manufacturers.
- Enterprise Zones
- Twenty-seven designated areas throughout the state offer
special tax incentives to new or expanding industries hiring targeted employment groups.
- Education
- Employers who provide or sponsor an approved basic skills
education program qualify to receive a 20% credit on state corporate income tax liability.
- Pollution Control Equipment
- Tax exemptions and deductions are available for pollution
control equipment, construction materials and facilities.
- Utilities
- Non-taxable exemption of 4% utility gross receipts tax for
certain manufacturing processes.
For additional information, go to www.ado.state.al.us/taxes.htm.
Source: Alabama Development Office