ALABAMA

Alabama is a prime location for businesses looking to grow and innovate.  The state offers a robust suite of incentives tailored to industries like manufacturing, technology, aerospace, and more.  Here’s a detailed look at Alabama’s business incentives, including eligibility criteria and potential value.

Alabama Jobs Act

Overview

The Alabama Jobs Act incentivizes businesses to locate or expand in the state by offering tax credits tied to job creation and investment.

Eligibility

• Projects must involve a minimum capital investment of $2.5 million in urban areas or $500,000 in rural areas.

• Must create at least 50 jobs (urban areas) or 25 jobs (rural areas).

Incentive Value

• Jobs Credit: 3% of the previous year’s annual wages of eligible employees for up to 10 years.

• Investment Credit: Up to 1.5% of the qualified capital investment annually for up to 10 years.

Application Process

Businesses must apply through the Alabama Department of Commerce and receive approval from the Governor.  Annual performance reporting is required to claim credits.

Growing Alabama Credit

Overview

This program encourages investment in infrastructure projects that promote economic development.

Eligibility

• Open to businesses and individuals making contributions to approved local economic development projects.

• Projects must align with the state’s economic development goals.

Incentive Value

• Tax credits equal to 100% of the contribution amount.

• Annual cap: $35 million statewide.

Application Process

Applications are submitted through the Alabama Department of Commerce for pre-approval.  Contributions must fund projects approved by the Alabama Renewal Commission.

Alabama Industrial Development Training (AIDT)

Overview

AIDT provides workforce training programs and services to support new and expanding businesses in Alabama.

Eligibility

• Open to businesses in manufacturing, distribution, aerospace, and other targeted industries.

• Training programs must align with the state’s workforce development goals.

Incentive Value

• Free pre-employment and on-the-job training services.

• Customized training programs tailored to specific company needs.

Application Process

Businesses must work with AIDT to develop a training plan.  Programs are delivered at no cost to employers.

Alabama Reinvestment and Abatements Act

Overview

This act provides tax abatements for businesses reinvesting in Alabama facilities, helping them modernize and remain competitive.

Eligibility

• Businesses must invest a minimum of $2 million in property upgrades or improvements.

• Applies to manufacturers and certain industrial or commercial enterprises.

Incentive Value

• Abatement of non-educational property taxes for up to 20 years.

• Abatement of construction-related sales and use taxes.

Application Process

Businesses must apply through local industrial development boards and obtain approval from the relevant taxing authority.

Capital Investment Tax Credit

Overview

This credit encourages capital investment in Alabama by offsetting state income tax liabilities.

Eligibility

• Businesses in industries like manufacturing, warehousing, research, or technology.

• Projects must create at least 20 new jobs.

Incentive Value

• 5% of the capital investment annually for up to 20 years.

Application Process

Pre-certification is required through the Alabama Department of Revenue.  Annual reporting on job creation and investment is mandatory.

Port Credit Program

Overview

The Port Credit Program incentivizes businesses that utilize Alabama’s public ports to increase their shipping volume.

Eligibility

• Businesses must ship at least 75 net tons of cargo or 15 twenty-foot equivalent units (TEUs) annually.

• Cargo must pass through qualifying Alabama ports.

Incentive Value

• Tax credits of up to $50 per TEU or 50% of increased port charges, whichever is lower.

Application Process

Applications are submitted to the Alabama Department of Commerce, with annual reporting required to claim credits.

Data Processing Center Sales Tax Exemption

Overview

This program supports the development of data processing centers by providing sales tax exemptions on essential equipment.

Eligibility

• Data centers must invest at least $200 million and create a minimum of 20 jobs.

• Jobs must pay at least 150% of the average hourly wage in the county where the project is located.

Incentive Value

• Exemptions on sales and use taxes for eligible equipment purchases.

Application Process

Businesses must apply for pre-approval through the Alabama Department of Revenue and maintain compliance reporting.

Entertainment Industry Incentive

Overview

This program encourages film, television, and music production in Alabama by offering tax rebates for production-related expenses.

Eligibility

• Productions must incur at least $500,000 in qualified expenses in Alabama.

• A minimum of 35% of the workforce must be Alabama residents.

Incentive Value

• Rebates of up to 25% on qualified production expenses and 35% on resident payroll expenses.

• Program cap: $20 million annually.

Application Process

Pre-certification is required through the Alabama Film Office, with detailed expenditure reporting.

Conclusion

Alabama’s incentive programs are tailored to foster growth in key industries and regions.  From tax credits and abatements to workforce training and infrastructure investments, these programs make Alabama a competitive destination for business.  

Connect with the Hickey Incentives Team to begin exploring the opportunities in the State of Alabama today!