Sales and Use Tax Savings
Ad Valorem Tax Savings
Miscellaneous Tax Benefits
Enterprise Zone
Capital Investment Tax Credit
Utility Tax Credit
Industrial Grants
Free Employee Training
Tennessee Valley Authority (TVA)
- 100% tax-free financing at a fixed rate of 75-80% of prime for up to 20 years
via industrial revenue bonds for qualified projects
- Ad valorem taxes in Alabama are the lowest in the nation.
- Sales and Use Tax Savings -The State of Alabama allows for the exemption of sales and use taxes (except for the portion earmarked for schools) on the initial costs of building and equipping a new facility. This covers all purchases of materials, equipment and furnishings related to putting a manufacturing facility into operation or for major expansions. Of course the labor portion is not taxed by this method. Equipment is taxed at 4% with 2.5% eligible for the exemption.
Ad Valorem Tax Savings -Property taxes, for both real and personal property, may also be abated for 10 years from the date that the project facility is operational (placed in service). This would offer savings on the taxable amount of total fixed assets for the first year with a declining amount available in the second through the tenth year, due to depreciation. New or used equipment when included in the total expenditures would increase the available savings. This abatement also applies only to the portion not earmarked for schools. *The tax incentive programs described above are available to your company regardless of the method of financing.
Miscellaneous Tax Benefits -Alabama is one of only six states that allow federal income tax to be deducted before computing state income tax resulting in an effective tax rate of approximately 3.5%.
- All raw materials, goods in process and finished goods are exempt from inventory (ad valorem) tax.
- Alabama law provides for deductions or exemptions on corporate income tax, ad valorem tax, franchise tax, and sales tax for the amount invested in pollution control equipment.
- In Alabama, state and local taxes per capita are only 67% of the average paid in the nation.
Enterprise Zone -Jackson County has been designated as a State Enterprise Zone. This program offers state franchise and income tax credits of up to $2,500 per employee annually to approved companies within the zone boundaries. As administrator of the zone, the Jackson County E.D.A. will make the application to the State and County to include your company thereby offering these benefits.
Capital Investment Tax Credit -The State of Alabama allows a corporate income tax credit of 5% of capital invested in a single project for twenty years for new and expanding industries. Certain job, investment, and wage minimums do apply, varying from creating 5-20 new employees, an investment of $500,000 - $2million, and wages from $12.00 - $14.88 per hour depending on your location in the county.
Utility Tax Credit -Under specific conditions, industries may be excluded from the state sales tax levied on electricity and natural gas if it is used by the manufacturer or compounder in an electrolytic or electro-thermal manufacturing or compounding process to convert raw materials prior to the use of the raw material. And from the sales tax levied on water, if at least 51% of the water consumed is used in the manufacturing process.
Industrial Grants -Grants are available up to $150,000 to reimburse your company for costs associated with the preparation of a means to access a site as well as clearing, excavating, grading, drainage, and reasonable rehabilitation costs of buildings and other structures. The actual amount of the grant is based on the capital investment for the project.
Free Employee Training -No summary would be complete without offering the services of The Alabama Industrial Development Training Institute which is one of the premier recruitment and retention tools in the nation. Their mission is to screen, train, and offer a workforce that will surpass the productivity of your company's (any company's) workers in other states. Their slogan "Our attitude is priceless. Our training is free." suggests that they will furnish potential employees (you choose from a group of trainees) that not only have the skills that you require but also have the outlook you desire. This all-inclusive, fully-customized training program is available at no cost. Absenteeism and turnover rates of less than 2% have been experienced throughout the first year by the 500+ companies that have utilized the AIDT system. Management seminars and expansion support are also available in future years.
Tennessee Valley Authority (TVA) -Along with one of the most reliable power systems in the nation, TVA Economic Development provides support and financial resources to existing businesses and industries in the Valley to help them grow and be more efficient and profitable. These resources include technical assistance, low-interest loans, small manufacturers’ credits, and the newest program, the Valley Investment initiative. The Valley Investment Initiative is an economic development incentive program which offers competitive incentives to eligible customers who make multi-year commitments to invest in the Tennessee Valley. More information can be found on TVAED.com.
| Copyright 2012 Jackson County Economic Development Authority, 817 S. Broad St., Scottsboro, AL 35768 |