HDR-Businessclimate

Tax Incentives

Alabama offers many competitive tax incentives and free workforce training programs to help lower the cost of doing business in the state. For new and expanding industries located in certain parts of Coosa and Tallapoosa Counties, even more tax incentives and business assistance programs are available.

For more information about tax rates and available incentives, contact the Lake Martin Area Economic Development Alliance at 256-215-4411.

Enterprise Zone Tax Incentives

Portions of Tallapoosa County are designated as Enterprise Zones. Additional incentives are available to new and expanding industries located in these designated areas. More information about this program can be found in the Enterprise Zone brochure (PDF) from EDPA.

Incentives include:

  • Up to $2,500 in tax credit for each new permanent employee (applied against income and/or business privilege tax liability)
  • Exemptions for income, sales & use, and business privilege tax liability

Favored Geographic Areas Program

This program allows qualifying new and expanding industries to be eligible for the Capital Investment Tax Credit at lower investment and job creation thresholds. All of Coosa County is designated and the enterprise zones in Tallapoosa County are designated as Favored Geographic Areas. More information about this program can be found in the Favored Geographic Areas brochure (PDF) from EDPA.

Corporate Income Taxes

  • Rate is 6.5%
  • Based on net taxable income of business done in Alabama
  • Businesses can deduct all of their federal income taxes apportioned to Alabama

Incentives include:

  • Net operating loss carryforward
  • Deduction for pollution control equipment
  • Income tax capital and Enterprise Zone credit
  • Basic skills educational tax credit

Income Tax Capital Credit

  • Available to new and expanding industries
  • Up to 5% credit for the total capital costs of qualifying projects
  • Available every year for 20 years
  • Lower threshold in all of Coosa and parts of Tallapoosa because of the Favored Geographic Areas program.

Visit the Alabama Department of Revenue website for a full overview of this incentive.

Business Privilege Tax

  • Based on net worth in Alabama and corporation's ability to pay
  • Rate ranges from $.25 to $1.75 for each $1,000 of net worth in Alabama

Incentives include:

  • Deductions for pollution control equipment and air carrier with hub operation
  • Enterprise Zone credit (Tallapoosa only)

State Unemployment Tax

  • Employees do not contribute
  • Employer requirement is based on first $8,000 of each employee’s compensation
  • Rates vary from 0.5% to 5.4% and new employer rate is 2.7%
  • Rates are based on employer’s experience rating

Sales and Use Tax (General)

To find specific sales and use tax rates, visit the Sales and Use Tax section of the Alabama Department of Revenue website.

Incentives Include:

  • Abatements of state and non-educational local construction-related sales and use taxes
  • Discount if sales tax is timely paid
  • Exemption for raw materials, pollution control equipment, quality control testing, and donations to charitable entities
  • Utility gross receipts tax exclusions
  • Enterprise Zone credit (Tallapoosa only)

More information about sales and use tax abatements and incentives can be found in the Abatement Booklet provided by the Alabama Department of Revenue.

Property Tax

To find specific sales and use tax rates, view the 2011 Millage Rates (PDF) provided by the Alabama Department of Revenue.

Incentives:

  • Abatements for noneducational property taxes
  • Exemptions for pollution control equipment and raw material inventory
  • No property taxes on inventory (some restrictions apply)
  • Alexander City (Tallapoosa County) is classified as a Class 6 municipality. Special property tax incentives are available for businesses located in this city.