Tax Incentives
Tax incentives are available for new and expanding companies in Morgan County. A summary of those incentives can be found below. Additional information can be found on the Alabama Department of Revenue website.
In addition to state-level tax incentives, incentives at the local level may be available. For help determining tax rates and finding available incentives, contact the Morgan County Economic Development Association at (256) 353-1213.
Corporate Income Taxes
- Corporate income tax rate is 6.5%
- Based on the net taxable income of business done in Alabama
- Businesses are permitted to deduct all of their federal taxes apportioned to Alabama
Possible incentives include:
- Abatements for non-educational property taxes
- Pollution-control equipment exemptions
- No property taxes on inventory
- Raw materials inventory exemptions
Sales and Use Tax
The state sales and use tax rates are 1.5% for manufacturing machinery, 2% for automobiles and 4% for all others. County rates vary and current rate information can be found in the City and County Tax Rates Section of the ADOR website.
- Abatement of State and non-educational local construction-related taxes
- Raw materials, pollution control equipment, quality control testing, and donations to charitable entities exemptions
- Utility gross receipts tax exclusions
- Discount if sales tax is paid promptly
Available incentives include:
State Unemployment Tax
- Employer requirement for the state unemployment tax is based on the first $8,000 of each employee's compensation
- Rates vary from 0.5% to 5.4%
- New employer rate is 2.7%
- Rates are based on employer's experience rating
- Employees do not contribute
Property Tax
Alabama state property tax rate is 6.5mills (.0065%). County and city rates vary and current rate information can be found in the Property Tax Section of the ADOR website
Possible incentives include:
- Abatements for non-educational property taxes
- Pollution-control equipment exemptions
- No property taxes on inventory
- Raw materials inventory exemptions
Business Privilege Tax
- Based on a company's net worth in Alabama and the company's ability to pay
- Rate ranges from $.25 to $1.75 for each $1,000 of net worth in Alabama
Available incentives include:
- Pollution-control equipment deduction
- Air carrier with hub operations deduction
Jobs Tax Credit
- Cash refund of up to 3% of the previous year's gross payroll (not including fringe benefits) for qualifying new, direct jobs. Incentive period is up to 10 years.
- Up to an additional 0.5% cash refund is available on the wages of veterans, for companies, which employ a workforce composed of at least 12% of veterans.
- Up to an additional 1% cash refund for projects in counties with a population less than 25,000. Two sites per year located outside of these counties can receive this refund at the Governor's discretion.
Investment Tax Credit
- Credit of up to 1.5% of the qualified capital investment costs for a qualifying project each year for up to 10 years (Up to 15 years for projects in counties with populations less than 25,000 selling their output nearby).
- Credits can be used to reduce income tax (or taxes on banks or insurance companies), and taxes for utility services.
- Credits can be carried forward for five years.
- The first three years of the credits may be sold to create cash for projects, with Department of Commerce approval.