Taxes & Incentives
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ALABAMA JOBS ACT
Investment Credit
- Tax credit of up to 1.5% annually of the qualified capital investment for a qualifying project for up to 10 years.
- Credit against Alabama income tax liability and/or utility tax liability.
- Credit can be carried forward for 5 years.
- Credit may be transferred, or sold, at 85% or more of face value for the first 3 years. Transferability is at the discretion of the Governor.
- Projects must have a qualifying business activity (Section 40-18-372 of the Code of Alabama, 1975).
- Projects must create at least 50 net new jobs.
Jobs Credit
- Cash rebate of up to 3% annually of the previous year’s gross payroll (not including fringe benefits) for eligible employees for up to 10 years.
- Up to an additional 0.5% rebate on the wages of veterans for companies employing at least 12% veterans in their eligible workforce.
- Projects must have a qualifying business activity (Section 40-18-372 of the Code of Alabama, 1975).
- Projects must create at least 50 net new jobs.
ALABAMA REINVESTMENT & ABATEMENTS ACT
New Facility
- Sales & Use Tax Abatement of non-educational portion of sales and use taxes on construction materials, equipment and other capitalized costs.
- Property Tax Abatement for up to 20 years of the non-educational portion of property tax.
- Projects must have a qualifying business activity (Section 40-9B-3(a)(10) of the Code of Alabama, 1975).
- No job creation requirement (exceptions: data centers must create 20 net new jobs; headquarters must create 50 net new jobs).
- For property tax abatements for years 1 to 10, all property tax is abated at the local level. For years 11 to 20, cities abate city non-educational property taxes, counties abate county non-educational property taxes, and the Governor abates State non-educational property taxes.
Existing Facility
- Sales & Use Tax Abatement of non-educational portion of sales and use taxes on construction materials, equipment and other capitalized costs.
- Property Tax Abatement for up to 20 years of the non-educational portion of the incremental property tax increases.
- Projects must have a qualifying business activity (Section 40-9B-3(a)(10) of the Code of Alabama, 1975).
- No job creation requirement (exceptions: data centers must create 20 net new jobs; headquarters must create 50 net new jobs).
- For property tax abatements for all years, cities abate city non-educational property taxes, counties abate county non-educational property taxes, and the Governor abates State non-educational property taxes.
- Associated capital investment must be at least $2,000,000.
ALABAMA RENEWAL ACT
Port Credit
- One-time tax credit of up to $50 per TEU, $3 per net ton of bulk cargo or $0.04 per net kilogram for air cargo.
- Credit against Alabama income tax liability.
- Credit can be carried forward for 5 years.
- New distribution or warehouse shippers investing at least $20 million and creating at least 75 net new jobs are eligible to receive up to $100 per TEU over a 3-year period if entering into a project agreement with the state.
- Shipper must use an Alabama public port.
- Shipper must be engaged in manufacturing, warehousing or distribution of goods.
- Shipper must increase cargo by at least 5% over the prior year.
- Credit must be approved by the Renewal of Alabama Commission.
Growing Alabama Credit
- Approved projects are funded when taxpayers make contributions to a local economic development organization.
- Taxpayers receive a tax credit equal to their contributions. The tax credit may offset up to 50% of the taxpayer’s income tax liability.
- Credit can be carried forward for 5 years.
- An eligible site must have a deficiency in site preparation or public infrastructure.
- An eligible site must have either (1) a potential project, or (2) an identifiable reason that an industrial prospect did not select the site in the past.
- An eligible site must be owned by a local economic development organization, such as an IDA, IDB, chamber of commerce or other nonprofit economic development organization.
- 25% of the Growing Alabama Funds are earmarked for sites located in Targeted Counties. Projects must be approved by Commerce and the Renewal of Alabama Commission.
ALABAMA FILM INCENTIVES
35% / 25% Program