Made In Alabama Tax & Incentives Programs
About the Program
The Alabama Department of Revenue administers tax incentives for existing industries, expanding industries, and new industries locating in Alabama. There are a wide variety of programs including:
2017 Alabama Historic Rehabilitation Tax Credit
The 2017 Alabama Historic Rehabilitation Tax Credit provides for a refundable income tax credit against the tax liability of the taxpayer for the rehabilitation, preservation, and development of historic structures. The program provides $20 million in tax credits each calendar year from 2018-2027. The credit is equal to 25 percent of the qualified rehabilitation expenditures for certified historic structures.
Alabama Workforce Housing Tax Credit
Act 2024-302 provides a one-time annual credit of up to $2 million per project for up to 10 years that will be awarded to qualified taxpayers that have a qualified workforce housing project. The Alabama Housing Finance Authority (AHFA) is the administering agency for determining the qualifying projects. If you have questions about eligibility and qualifications for the tax credit, email ahfa.au.audit@ahfa.com or call 334-244-9200.
Provisions of the Alabama Workforce Housing Tax Credit:
The tax credit is available for qualified workforce housing projects, which include the construction, rehabilitation, or both, of multifamily housing units located in Alabama for tax years beginning on or after January 1, 2025.
To qualify for the Alabama Workforce Housing Tax Credit, the project owner must first qualify as a federal low-income housing project and receive an eligibility certificate from the Alabama Housing Finance Authority (AHFA). This certificate will specify the annual credit amount and the award period, which can extend up to 10 years. A qualified taxpayer is eligible to receive the tax credit up to $2 million per project that can be applied against:
-Income taxes;
-State portion of the financial institution excise tax; or
-Insurance premiums tax.
Enterprise Zone Program
The Alabama Enterprise Zone Program provides certain tax incentives to corporations, partnerships, and proprietorships that locate or expand within designated Enterprise Zones. In addition to state-level tax incentives, businesses may also receive local tax and non-tax incentives for locating or expanding within a designated Enterprise Zone.
The qualifying Enterprise Zones have been updated pursuant to the Alabama Incentives Modernization Act, Act 2019-392, to include any targeted or jumpstart county.
Updated List on the Qualifying Enterprise Zones
Section 5 of the Alabama Enterprise Zone Program offers the following tax incentives:
- Maximum credit of up to $2,500 per new permanent employee and is calculated using one or more of the following:
- Five-year incentive
- Thirty percent of the company’s new permanent employees if they were unemployed 90 days or longer prior to the employment.
- Credit is taken in increments: Yr. 1 = 80%, Yr. 2 = 60%, Yr. 3 = 40%, Yrs. 4 and 5 = 20%.
Capital Investment
- Ten percent of the first $10,000
- Five percent of the next $90,000
- Two percent of the remaining investment
- Training - The company may claim a credit of up to $1,000 for training new permanent employees in new skill areas.
Film Rebate
Section 41-7A-43 authorizes the Alabama Entertainment Office to award up to $20 million each year in incentives to qualified production companies which will increase to $22 million for fiscal year ending Sept. 30, 2026. Qualified productions include a wide variety of entertainment content, provided that some portion of the project is produced in Alabama. Qualified productions include motion pictures, soundtracks for motion pictures, music albums, documentaries, most television programming (except those exclusively for news, weather, sports or financial market reports), sound recordings, videos and music videos, commercials and video games.
The Alabama Entertainment Office will review applications to establish the eligibility for this tax credit. Once the eligibility is established, the credit is claimed via My Alabama Taxes. Please see the bottom of this page for further details on My Alabama Taxes.
Alabama Film Rebate Incentives include:
Income Tax Rebate – This rebate equals 25 percent of certain production expenditures on the project that are incurred in Alabama plus 35 percent of the payroll paid to Alabama residents. The rebate may be used to offset any Alabama income tax liability of the qualified production company for the tax year during which such expenditures were paid or incurred. If the amount of the rebate exceeds the qualified production company’s Alabama income tax liability, then the excess is refundable.
State Sales, Use, and Lodging Tax Exemption – A qualified production company that intends to spend certain qualified expenditures in Alabama may be entitled to receive an exemption from the state portion of sales, use, and lodgings taxes. The exemption only applies to the state portion, however – not to the local portion of those taxes. An ALDOR exemption certificate must be presented to Alabama vendors to utilize the exemption.
Sweet Home Alabama Tourism Investment Act
Act 2023-34 provides a tax rebate to companies that have an approved certified tourism destination project that meet the criteria for a qualifying project. The Alabama Tourism Department is the administering agency for certifying the qualifying tourism projects. To qualify for a tax rebate, the applicant must submit an application to the Alabama Tourism Department for approval. Please direct all inquiries regarding the eligibility and qualifications of prospective projects info@tourism.alabama.gov or 334-242-4169.
Provisions of the Sweet Home Alabama Tourism Investment Act:
An approved company with a certified tourism destination project may receive tax rebates up to $5 million over 10 years per project, with a maximum of $1 million in rebates per calendar year.
Allows tax rebates on state and local sales, lodging, and rental taxes generated and arising out of the certified tourism destination projects.
No approved company may receive more than $1 million in tourism rebates in a calendar year.
The tax rebate program is effective from August 1, 2023, through July 31, 2028, unless extended by legislative action.
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