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Income Tax Capital Credit
The capital credit is a statutory incentive that gives credit of five percent (5%) of the capital costs of a qualifying project, to be applied to the Alabama income tax liability generated by the project income, each year for 20 years. Learn more about the Capital Credit on the State of Alabama web site.
Property and Sales Tax Abatements
This statutory incentive gives cities, counties, and public industrial authorities the ability to abate the following:
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State sales and use taxes;
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Non-educational county and city sales and use taxes;
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Non-educational state, county, and city property taxes - up to 10 years;
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Mortgage and recording taxes.
To receive an abatement for any or all of these taxes, a business must meet certain qualifications such as capital investment, SIC code requirements and follow certain procedures, as determined by law and regulation. Learn more about the Property and Sales Tax Abatements on the State of Alabama web site.
Income Tax Incentives
The rate of corporate income taxation is 6.5%. With a net effective rate (after the federal income tax deduction) of 4.42%, Alabama still maintains one of the lowest corporate income tax rates in the nation and includes incentives such as the net operating loss carry-forward and educational credits. Learn more about Income Tax Incentives on the State of Alabama web site.
Sales and Use Tax Incentives
Incentives for Sales and Use Tax are available to qualifying industries to receive abatements of state and non-educational county and city construction-related sales and use taxes. In Addition incentives are available for the purchase of pollution control equipment and raw materials. Learn more about Sales and Use Tax Incentives on the State of Alabama web site.
Property Tax
Property taxes for all real and personal business property are assessed at 20% of fair market value. Millage rates vary throughout Morgan County with the average rate of 41 mills. For real and personal business property with a fair market value of $1,000,000 the average property tax would be only $8,200 ($1,000,000 * 20% * .041).
State law allows qualified industries (based on capital investment and NAICS code) to receive abatements of non-educational property taxes for new businesses locating to Alabama, and for expansions of existing facilities in Alabama. These abatements are granted locally on an individual basis and can be granted for a period of 10 years.
Additional exemptions are available for pollution control equipment, raw materials, finished goods, and inventory. Click here for details.
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