Note: Within the county there may be additional municipal taxes.
Business Privilege Tax-State
Minimum Tax: $100.00 Maximum Tax: $15,000.00
Corporate Income Tax- State
6.5% (Deduction allowed for federal income tax paid or accrued making Alabama's effective rate approximately 4.8%)
Corporate Income Tax-Local
Personal Income Tax-State
Married filing jointly: 2% - First $1,000 taxable income 4% - Next $5,000 taxable income 5% - all taxable income over $6,000
Personal Income Tax-Local
Motor Vehicle Sales Tax - State and Local
3.5% which includes a 0.25% temporary education tax (6/1/01 through 5/31/04)
Unemployment Compensation Tax
New Employers: 2.7% Established Employers: 0.20% to 5.40% of first $8,000 of wage paid to each employee in calendar year
Use Tax (Manufacturing) State and Local
3.375% which includes a 0.375% temporary education tax (6/1/01 through 5/31/04)
Source: Tuscaloosa County Industrial Development Authority, 2003
Sales, Use, And Property Tax Abatements
A new or expanding industry may apply to the Tuscaloosa County Industrial Development Authority for an abatement of the following:
– noneducational state, county and city property taxes – state sales and use taxes – noneducational county and city sales and use taxes – mortgage and recording taxes
Property tax abatement available for up to 10 years;
Sales and use tax abatements available during construction phase of project.
Predominate activity conducted at the project must constitute an "industrial or research enterprise.” Qualifying projects include any trade or business designated within Standard Industrial Classification (SIC) Code classifications Major Groups 20 to 39 inclusive, Major Groups 50 and 51, Industrial Group number 737, and Industry numbers 0724, 4613, 8731, 8733, 8734.
Capital Income Tax Credits
The capital credit is a credit of five percent (5%) of capital costs of a project, to be applied to Alabama income tax liability generated by project income, each year for 20 years.
The qualifying project must constitute either a "headquarters facility" (national, regional, or state headquarters), or an "industrial, warehousing, or research activity."
Qualifying projects include any trade or business designated within SIC Code classifications Major Groups 20 to 39 inclusive, Major Groups 50 and 51, Industrial Group number 737, and Industry numbers 8731, 8733, 8734.
A New project, expansion project or headquarters facility must represent a capital investment of at least $2,000,000 and 20 new employees.
A small business addition must represent a capital investment of at least $1,000,000 and 15 new employees.
Average hourly wage of new employees must represent not less than eight dollars ($8) per hour; or average hourly compensation, including benefits, of not less than ten ($10) per hour.
Tax Exempt Industrial Revenue Bonds
Tax Exempt Industrial Revenue Bonds (IRBs) may be issued by the Tuscaloosa County Industrial Development Authority.
IRBs provide financing for land, building and equipment for new and expanding manufacturing facilities.
Generally, total project investment must be less than $10,000,000.
Other criteria/requirements apply.
Taxable Industrial Revenue Bonds
Taxable industrial revenue bond issues may be issued by the Tuscaloosa County Industrial Development Authority for transactions that do not qualify for tax exempt bond financing.
Taxable IRBs continue as one of the mainstays of industrial finance because they may be issued with fewer restrictions and in unlimited amounts while the user maintains tax savings.
Solid Waste And Sewage Disposal Bonds
Bond issues can be structured to the extent an engineering study justifies treating a portion of plant costs as attributable to solid waste or sewage disposal.
Pollution Control Facilities
Air and water pollution control facilities automatically exempt from sales, use, and property taxes, if taxpayer claims the exemption.
Alabama offers a number of non-tax incentives that assist in the start-up of a new or expanding project. These inducements include training assistance and financial assistance. The following summarizes the most significant programs:
Alabama Industrial Development Training
Training services offered in many areas, and are free of charge to new and expanding industries throughout the State.
Program extremely flexible and custom-designed for each industry.
Site Preparation Grants (also known as Industrial Development Grants)
The State Industrial Development Authority (SIDA) issues grants for the preparation of project sites.
Qualifying projects include any trade or business designated in SIC Code classifications Major Groups 20 through 39, Major Groups 50 and 51, Industrial group 737, and Industry Numbers 0724, 8731, 8733 and 8734.
Grants based on the following scale:
Less than $200,000
$200,000 - $499,999
3.5% (minimum $10,000)
2.5% (minimum $20,000)
1.5% (minimum $28,000)
1.0% (minimum $32,000)
0.75% (minimum $100,000; maximum $150,000)
$25,000,000 or greater
Effective: October 1999
Alabama State Employment Service (“ASES”)
ASES works with AIDT to provide job screening and testing, at no charge.
Alabama Plan for Linked Deposits
The Alabama Plan for Linked Deposits allows the State Treasurer to make deposits in state banks on which banks pay 2% below the normal interest rate paid to the state for its funds. The reduction in the interest rate paid by the bank must be passed on to the borrowers on loans qualifying for this program. It amounts to a 2% subsidy on the borrower's interest rates for two years to help stimulate economic growth in the state.
Small Business Administration
The Small Business Act of 1953, Section 7(a), as amended, guarantees loans to small businesses which are unable to obtain financing in the private credit marketplace, but can demonstrate an ability to repay loans granted.
Small Business Investment Act of 1958, as amended, Title V, Section 504 and 505, assists small business concerns by providing long-term, fixed-rate financing for fixed assets through the sale of debentures to private investors.
Alabama Industrial Access Road and Bridge Program
The Alabama Industrial Access Road & Bridge Corporation provides funding for industrial access road and bridge construction in Alabama. The Tuscaloosa County Industrial Development Authority can sponsor an entity for an Industrial Access Project.
Eligible industrial access projects may be new road construction or road improvement to assist new or expanding industry (example: turn-lane, deceleration lane, pave unimproved road, widening, resurfacing, bridge replacement, etc.).
Proposed road projects must be a public right-of-way and, if funded, shall constitute part of the public highway and street system of the state.
Alabama Infrastructure Grants
The State Economic Development Grant program administers a pool of funds available for infrastructure grants.
These grants are made to a governmental body to facilitate the expansion or development of new industry by funding public infrastructure projects, including water and sewer lines, and access roads.
Qualifying projects include any trade or business designated in SIC Code Major Groups 20 through 39, or consisting of major warehouse or distribution centers.
At least 15 jobs must be created.
Generally, grants do not exceed $200,000 per project.
Source of funds include Alabama Department of Economic and Community Affairs (ADECA), Community Development Block Grants (CDBG), and State and Federal Governments.
Other criteria/requirements apply.
Rural Economic and Community Development Loan and Grants
A business can qualify if not located in MSA.
Loans guaranteed up to 75-80% of the loan.
Small grants up to $100,000.00 also available.
The information presented is general in nature and may not apply to your specific situation. Legal advice should be sought before taking action based on the information provided.
Source: Information provided by the Tuscaloosa County Industrial Development Authority