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Incentives

Incentives are designed to attract new and expanding industries to the Mobile area. It is necessary for companies to consider applying for abatements prior to making public announcements to avoid possible difficulties with the abatements being granted.

Jobs Credit


Eligibility

  • Project must create minimum 50 jobs (minimum 25 jobs in targeted county; Mobile County is not targeted county)
  • Following industries must create net new jobs, but are not subject to minimum job requirements:
    • Chemical
    • Manufacturing
    • Data Centers
    • Metal/Machining
    • Engineering, Design and Research

 

Benefits and Restrictions

  • Annual cash rebate up to 3% of the previous year’s gross payroll for eligible employees for up to 10 years
  • If a company employs at least 12% veterans in the eligible workforce, up to an additional 0.5% job credit available for the veterans’ wages
  • In targeted counties, up to additional 1% job credit is available (Mobile County is not a targeted county)
  • Jobs credit is only applicable to employees who are Alabama residents

Investment Credit


 

Eligibility

  • Project must create minimum 50 jobs (minimum 25 jobs in targeted county; Mobile County is not targeted county)
  • Following industries must create net new jobs, but are not subject to minimum job requirements:
    • Chemical
    • Manufacturing
    • Data Centers
    • Metal/Machining
    • Engineering, Design and Research

 

Benefits and Restrictions

  • Credit of up to 1.5% of the qualified capital investment expenses for a qualifying project for up to 10 years.
    • Credit can be used against Alabama income tax liability and/or utility tax liability
  • If a company in a targeted county sells majority of its output within 50 miles, the credit can be extended for up to 15 years
  • Investment credit may be carried forward by the company for 5 years
    • The investment credit may be transferable for the first 3 years to generate cash. The transfers must be at least 85% of face value and are subject to the approval of the Alabama Department of Commerce.

 

Tax Abatements


 

Tax abatements are designed to incentivize new industries to locate and existing industries to expand in Alabama. These abatements are designed for:

  • New facilities and expansions (Section 40-9B-1)
  • Existing facilities: refurbishments, upgrades or placed back in service (Section 40-9G-1)

 

Eligibility

To qualify for abatements of non-educational sales and use taxes and non-educational property taxes, a company’s business activity must constitute an industrial or research enterprise in Alabama.

 

Benefits and Restrictions

  • New facilities and expansions (Section 40-9B-1)
    • Abatement of non-educational sales and use tax on constructive materials
    • Abatement of non-educational ad valorem taxes for up to 20 years
      • For years 11-20, City, County and State non-educational ad valorem taxes must be abated separately by each respective entity
    • AIDT workforce training
  • Existing facilities: refurbishments, upgrades or placed back in service – minimum $2 million (Section 40-9G-1)
    • Abatement of non-educational sales and use tax on construction materials and equipment
    • Abatement of non-educational ad valorem taxes for up to 20 years on the incremental ad valorem tax increases
      • For years 11-20, City, County and State non-educational ad valorem taxes must be abated separately by each respective entity.
    • Exemption from taxes for increased utility services for up to 10 years
    • AIDT workforce training

Local Incentives


 

Industrial Development Bond Financing

Local authorities may issue tax exempt bonds for financing industrial development for new and expanding businesses. There is no ad valorem tax assessment on land, building and/or equipment when financed by bonds. Sales & Use Tax exemptions also apply.

 

Foreign Trade Zone (FTZ)

The Mobile FTZ No. 82 is located through major parts of Mobile County. Approved usages include storage, processing, manufacturing and display of merchandise.

 

State of Alabama Incentives


 

Site Preparation Grant Program

Alabama Act No. 97-645 authorizes the State Industrial Development Authority to sell bonds to offer grants to counties, municipalities, local industrial development boards or authorities, or economic development authorities, airport authorities or public corporations, to pay for site preparation for land owned or possessed by lease by these entities.

 

Enterprise Zone

Alabama’s Enterprise Zone Act of 1987 offers some of the best tax and non-tax incentives in the country. Mobile has three designations including:

  • Employer’s maximum tax credit on operations in the EZ shall not exceed $2,500 per new permanent employee hired (applies to ANY state income tax liability)
  • Exemption from state sales and use tax on building construction materials and machinery and equipment
  • Exemption from state sales and use tax on improvement to housing in an EZ

 

AIDT

AIDT, often referred to as Alabama’s No. 1 incentive, is designed to recruit and train a company’s entire workforce to company specifications at no cost. In Mobile, courses are established in aviation, welding, electro-mechanical maintenance, distribution control systems, instrumentation, office automation desktop publishing and management. Other courses are custom designed for new and expanding Alabama businesses.