Alabama Reinvestment and Abatement’s Act

Alabama Reinvestment and Abatement’s Act is sponsored by Randolph County Economic Development Authority. Offers tax abatements and incentives for new facilities, expansions, and refurbishments in Randolph County to encourage economic development.

Tax Incentives and Grants - Made in Alabama Tax Incentives and Grants - Made in Alabama The advantage of Alabama. We welcome companies from all around the globe with customized business incentive packages. You might even call our approach “professional hospitality.

” With our strong workforce, prime real estate and welcoming attitude, Alabama offers the ideal environment to thrive. Jobs and Investment Credits Sections 40-18-370 through 40-18-383 of the Code of Alabama 1975 established incentives programs designed to promote job creation and capital investment. These incentives include the Jobs Credit and the Investment Credit, both available to qualifying projects.

Incentives under the Alabama Jobs Act are dependent upon on multiple factors related to the proposed project. A thorough due diligence review and ROI analysis are conducted using information provided through formal applications given by both the company and the finalist community. A commitment of local incentives is required.

The Governor and the Finance Director grant final approval of incentives, following a formal recommendation from the Secretary of Commerce. Eligibility: Project must have a qualifying business activity listed in Code of Alabama Section 40-18-372(1).

Qualifying Business Activities Type of County/Project Job Threshold Requirement Non-Targeted / Non-Jumpstart County 50 net new full-time jobs Targeted 1 or Jumpstart 2 County 10 net new full-time jobs Technology Company 3 10 net new full-time jobs Chemical Manufacturing, Data Center, Renewable Energy Generation, Engineering, Design, or Research, Metal/Machining Technology or Toolmaking Net new full-time job(s) Read Definitions 1 Targeted County is defined as an Alabama County with a population of 60,000 or fewer.

2 Jumpstart County is defined as any Alabama County that does not qualify as a Targeted County, has experienced negative population growth over the last 5 years and contains no more than two Opportunity Zones.

3 Technology Company is defined as any company that meets the following criteria: Alabama is or will become the company’s headquarters; and Alabama is or will become the place of residence for the top 3 executives; and Alabama is or will become the place of residence for at least 75% of employees; and Company must earn at least 75% of its revenue from one of the following business activities: 5112 (Software Publishers) 5121 (other than 51213) (Motion Picture & Video Industries (other than Motion Picture Video Exhibition)) 518 (Data Processing, Hosting, & Related Services) 51913 (Internet Publishing & Broadcasting & Web Search Portals) 5415 (Computer Systems Design & Related Services) 5417 (Scientific Research & Development Services) The use of technology to develop new coding or processes for the creation or delivery of goods or services in at least one of these fields: Education, Nutrition, Aerospace, Automotive, Financial Services, STEM, Robotics, Healthcare, Energy, Agriculture, Infrastructure Educating and mentoring early-stage Technology Companies recruited to Alabama, with the goal of accelerating their development and growth.

Capital Investment Threshold Type of County Capital Investment Threshold Requirement Non-Targeted / Non-Jumpstart County None Targeted or Jumpstart County $2,000,000, direct or indirect Targeted and Jumpstart County Map The Jobs Credit is a cash rebate of up to 3% annually of the previous year’s gross payroll (not including fringe benefits) for eligible employees who are Alabama residents.

The Jobs Credit is available for up to 10 years. Enhanced benefits include: Up to 4% rebate for qualifying projects locating in a Targeted 1 or Jumpstart 2 County. Up to 4% rebate for qualifying projects by a Technology Company 3 .

Up to 4% for qualifying projects of companies engaged in pharmaceutical, biomedical, medical technology or medical supplies or related research and development activities. In addition to the maximum percentages provided above, an additional 0. 5% rebate is available on the wages of the following: Eligible employees who are veterans, for a company whose eligible workforce is at least 12% veterans.

All eligible employees, for qualifying projects locating within a former active-duty military installation closed by the Base Realignment and Closure process (BRAC). The Investment Credit is an Alabama tax credit of up to 1.

5% annually of the qualified capital investment in a qualifying project for up to 10 years; or up to 15 years for Qualifying projects locating in a Targeted or Jumpstart County The Investment Credit may be taken against Alabama income tax, financial institution excise tax, insurance premium tax, utility tax and/or utility license tax liability. The credit can be carried forward for five years.

At the discretion of the Governor, the first 5 years of the Investment Credit may be transferred to another taxpayer for at least 85% of its face value.

Under Section 40-9B-1 through Section 40-9B-13, Code of Alabama 1975, Alabama cities, counties and public industrial authorities can grant the following tax abatements for qualifying new or expanding projects: Sales & use taxes (portions of non-educational state and local) Property taxes (portions of non-educational state and local) for up to 20 years (up to 30 years for data centers) Mortgage and recording taxes tied to property transfers Qualifying Business Activities Type of Project Capital Investment Requirement New company locating in Alabama None Existing company expanding or upgrading 30% of the original cost of the currently existing industrial property (sum total of the original facilities and equipment and any expansions and additions prior to the current addition); Governing Body for Abatement of Taxes Years 1 – 10 (Initial Abatement Period): Counties, cities, and public industrial authorities may grant abatements for certain state, county, and city taxes.

Years 11 – 20 (Extended Property Tax Only): Each taxing authority must independently approve its portion of the abatement.

For more Information: Chapter 9B Abatements Abatements for Data Centers Under Chapter B, data processing centers with a total peak demand of less than 100 megawatts are eligible to receive abatements as follows: Project Capital Investment Investment Timing Requirement 1 State and Local Property Tax Abatement 2 State and Local Sales & Use Tax Abatement Up to $200M Within 10 years 10 years 10 years $200M – $400M Within 10 years 20 years 20 years 1 From commencement of project 2 From and after the date the private use property becomes owned for federal tax purposes Projects may qualify for up to 10 additional years of abatements, for a maximum total of 30 years, if they: Meet capital investment thresholds Enter into binding written agreement with the Alabama Departments of Revenue and Commerce, and the affected local governing body Under Chapter B, for data processing centers with a total peak demand of 100 megawatts or greater: Abatement of state ad valorem tax is not allowed.

Abatement of state sales tax is not allowed after project is placed in service. The Governor may abate state sales tax for the maximum exemption period for data centers that locate in a Targeted County. Industrial Access Program Industrial access funds are intended to provide adequate public access for eligible projects as defined in Section 23-6-1(5) of the Code of Alabama.

These funds are not intended for use in providing access to retail operations. The industry must be committed to new investment and the creation of new jobs. The new access must be on public right-of-way (state, city or county), must allow normal public use and must comply with standards for design and construction accompanying the use of state funds.

The project sponsor (city or county) will assume maintenance responsibilities for the completed facility consistent with the use of state funds, unless the improvements occur on facilities currently maintained by the state.

Counties, municipalities, local industrial development boards or authorities, economic development councils or authorities, airport authorities, port authorities or public corporations, or certain state agencies or departments (Grantees) may apply to the State Industrial Development Authority (SIDA) for industrial development grants.

Grant funds provided to a Grantee for use in the preparation of a Project Site may be used for: Other work relative to site preparation deemed necessary or appropriate Preparation of a means of access to the site Provision for adequate drainage of the site to prevent the accumulation of excess natural waters thereon Boundary and topographical surveying, clearing and grubbing, and excavating The reasonable rehabilitation of buildings and other structures The amount of funds provided through the grant will be a percentage of the Capital Costs involved in the Qualifying Project: Capital Costs % of Capital Cost or Limit (Grant Amount) Less than $200,000 5.

0% $200, 000 – $499,999 3. 5% (minimum $10,000) $500,000 – $999,999 2. 5% (minimum $20,000) $1,000,000 – $1,999,999 1.

5% (minimum $28,000) $2,000,000 – $9,999,999 1% (minimum $32,000) $10,000,000+ . 75% (minimum $100,000; maximum $150,000) Industrial Grant Application The Growing Alabama Act, found in Article 19a, Chapter 18, Title 40, Code of Alabama (1975), gives a funding mechanism to Economic Development Organizations (EDOs) to undertake certain projects for the purpose of stimulating economic growth.

Alabama taxpayers can make cash contributions to EDOs for approved qualifying projects and receive a Growing Alabama tax credit equal to their cash contribution.

The credit can offset up to 50% of the tax liability for the following tax types: State utility license tax State portion of the financial institution excise tax The credit may be passed through to individual owners, shareholders, partners or members of an LLC and may be carried forward for up to five years.

Qualifying Projects/Uses of the Funds: Site work and public infrastructure at an industrial site, industrial park, research park or in a low-income community Capital improvements and economic development activities at an intermodal facility or inland port Construction and maintenance at an agricultural center Applications must be submitted to the Alabama Department of Commerce and approved by the Renewal of Alabama Commission.

The Growing Alabama Credit for calendar year 2026 is capped at $29 million. Growing Alabama Credit Application Sections 40-18-400 through 40-18-403 of the Code of Alabama 1975 provide for an incentive to stimulate economic growth through new job creation, capital investment and increased cargo shipping.

The Port Credit is a one-time Alabama state income tax credit of up to: Increase in Cargo Volume over Base Cargo Volume TEU (twenty-foot equivalent unit) Net Ton Kilogram for Air Freight VEU (vehicle equivalent unit) Under 4. 99% $50 $3. 00 $0.

04 $2. 91 5% – 14. 99% $75 $4.

50 $0. 06 $4. 37 15% – 24.

99% $100 $6. 00 $0. 08 $5.

82 25% + $125 $7. 50 $0. 10 $7.

28 The Port Credit is calculated on new cargo above 105% of the prior year’s cargo. The credit can be carried forward for five years. Applications must be submitted to the Alabama Department of Commerce and approved by the Renewal of Alabama Commission.

New warehouse or distribution facilities with associated investment of at least $20,000,000 and creation of at least 75 net new jobs are eligible to receive up to $100 per TEU over a 3-year period. A shipper meeting these requirements must enter into a project agreement with the state. Eligible shippers must be engaged in manufacturing, warehousing or distribution and must use a publicly owned port in the state.

The Renewal of Alabama Commission must approve credit allocation. Applications are accepted on a rolling-basis. Chief Officer of Business Intelligence and Incentives What are you waiting for?

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