Skip to main content

 mceda@mceda.org   (256) 353-1213

tax incentives hdr

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.

    Available incentives include:

    • 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

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.