Incentives for Business
Tax Abatements (See Taxes for millage and tax rates)
Property Tax Abatements
The Opelika City Council has the ability to grant property tax abatements on real and personal property for up to a ten year period for qualifying companies, excluding taxes allocated for schools. Commercial and industrial property in Alabama is assessed at 20% of fair market value.
Sales and Use Tax
The City Council also has the authority to grant sales and use tax exemptions for purchases of machinery and equipment (M&E) and construction materials. M&E purchases are taxed at a rate of 3.125%, which is a combination of city, county, and state taxes. The City Council can abate 2.875% of the 3.125%. Construction materials are taxed at the general rate of 9.0%, while the City Council has the discretion to abate 8.0% of the total. This initial sales tax exemption could save a company a substantial amount in up front expenditures.
Guidelines for property tax abatements and sales and use tax exemptions, as well as applicapble forms and contacts can be obtained from the Alabama Department of Revenue website at http://www.ador.state.al.us/, or download the Alabama Abatement Booklet from this site.
Alabama Jobs Act
Jobs Credit- A Jobs Credit of up to 3% of the previous year's annual wages for eligible employees is available to qualifying projects for 10 years. This jobs credit can be applied against utility taxes. Any unused credit can be carried forward for up to 5 years.
Investment Credit- An Investment Credit of up to 1.5% of a companies capital investment incurred is available to qualifying projects for 10 years. This investment credit can be used to offset income tax, financial institution excise tax, insurance premium tax, utility tax, or some combination of the taxes listed above. Unused portions of this credit may be carried forward for up to 5 years. All or part of the first 3 years of this credit can be transferred by the incentivized company to another company provided the credit is sold at a value of at least 85 percent of its present value.
Guidelines for the Alabama Jobs Act incentives, as well as applicapble forms and contacts can be obtained from the Alabama Department of Revenue website at http://www.ador.state.al.us/.
Utility Gross Receipts Tax Exemptions. There are several exemptions from the utility gross receipts tax. Sewer costs are not taxed. Water used in industrial manufacturing in which 50 percent or more is used in industrial processing is also exempt from the utility gross receipts tax. Additionally, Alabama law allows exclusions from the utility gross receipts tax and the utility service use tax for utility services used in certain types of manufacturing and compounding processes. The law allows exemptions for:
· The furnishing of electricity to a manufacturer or compounder for use in an electrolytic or electrothermal manufacturing or compounding process,
· Natural gas which becomes a component of tangible personal property manufactured or compounded (but not used as fuel or energy), and
· Natural gas used by a manufacturer or compounder to chemically convert raw materials prior to the use of such converted raw materials in an electrolytic or electrothermal manufacturing or compounding process.
Alabama Industrial Development Training (AIDT) is rated as one of the Top 10 State training programs in the United States. AIDT provides comprehensive and customized free training to new and expanding companies, Southern Union State Community College, and the Alabama State Employment Service offer a variety of workforce recruitment and training opportunities. Specific pre-employment recruiting and training programs can be highlighted further during the site selection process. On the job training (OJT) and management training are also available. Learn more about AIDT at www.aidt.edu.
Site Preparation Grant Program
Alabama Act No. 91-635, as amended by ActNo.'s 97-645, 99-590; authorizes the State Industrial Development Authority to sell bonds to make grants to counties, municipalities, local industrial development boards or authorities or economic development councils or authorities to pay for site preparation for land owned or possessed by lease by these entities. Certain SIC codes apply.
Licensed Public Warehouse
Personal property manufactured, compounded, or processed remaining property of the manufacturer held by a licensed public warehouseman for distribution by the warehouseman is exempted from ad valorem taxation (Act 75-838).
Goods in Transit in Interstate Commerce (No Situs)
Alabama's no situs law exempts for a period of 36 months, goods moving through the state to a final destination outside the state. Such goods may be stored, repackaged, assembled, or otherwise modified without gaining situs or becoming subject to ad valorem taxes (Act 75-788).
Pollution Control, Reduction, or Elimination
Alabama law provides for deductions or exemptions for the amount invested by the taxpayer in all devices, facilities or structures, and all identifiable components thereof or materials for use therein, acquired or constructed primarily for the control, reduction or elimination of air and water pollution. These tax deductions or exemptions may apply to Alabama income tax, property tax and sales and use taxes (Section 40-18-35(a) 13).
Educational Tax Credit
Tax credit of 20% of the actual program costs for an employer that provides or sponsors an educational program which enhances basic skills of employees up to and including the 12th grade level. Program must receive written approval from the Alabama Department of Education.
Alabama Infrastructure Grant Program
Infrastructure funds are available for extension of water, sewer and road facilities. Funding is through the Alabama Department of Economic and Community Affairs, Community Development Block Grants and state/federal governments.
Alabama Industrial Access Road and Bridge Program
Provides financial assistance to communities for industrial access to new and expanding industries. The program allows for the construction of roads, bridges etc. on public right-of-ways in conjunction with industrial projects.