ANNOUNCEMENT 03 Jul 2015
In July 2015, the State of Alabama announced a new business tax incentive.
NUMBER OF INTERVENTIONS
Governor Bentley signed into law a the Alabama Jobs Act (House Bill 58), which enters into effect on July 3, 2015. The bill provides incentives to businesses for projects that create any number of new employees, for a qualifying project whose predominant activity involves chemical manufacturing, data centers, engineering, design or research; or at least 50 new employees, for all other projects.
It authorizes an incentivized company to claim either or both
(1) a jobs credit against utility taxes equal to 3% of wages paid to eligible employees in the previous year for 10 years, or
(2) an investment credit against income taxes, financial institution excise taxes, insurance premium taxes, utility taxes, or some combination of these taxes in an annual amount of 1.5% of the capital investment for 10 years, based on the terms and conditions of the project agreement entered into between an approved company and the Governor.
To qualify for an incentive, the Secretary of Commerce and the Governor must determine that a project is in fact a qualifying project and that the amount of tax incentives sought are exceeded by the anticipated revenues to the state, including income, property, business privilege, utility and sales and use taxes as they arise from:
(1) construction activities related to the qualifying project;
(2) purchase of building materials and initial equipping of the qualifying project;
(3) subsequent equipping of the qualifying project; and
(4) the operation of the qualifying project.
In addition, the Governor is authorized to decrease the amounts and duration of the incentives to ensure the anticipated revenues to the state will exceed the amount of incentives sought.
The GTA includes state guarantees and other financial incentives thatare likely to affect the restructuring and performance of firms facinginternational competition, whether from imports, in export markets, andfrom foreign subsidiaries.