Incentives for Alabama Businesses and Taxpayers

Written on June 24, 2015

During the latest legislative session, Alabama signed several new bills into law that provide some tax incentives for businesses and taxpayers in Alabama. Enhancements to the Alabama Accountability Act Governor Bentley recently signed the Enhancements to Alabama Accountability Act bill into law. This bill makes some major changes to the Alabama Accountability Act tax credits and can affect your 2014 Alabama tax return. This bill allows Alabama taxpayers to reserve and take 2014 tax credits even if the charitable contribution is made in 2015. As long as Alabama taxpayers reserve their tax credits and make the charitable donation before the filing of their 2014 tax return, they will be able to take the credit on their 2014 tax return. There is approximately $12,000,000 in unused credits for 2014. Another change is the increase for 2015 of the maximum credit per taxpayer from $7,500 to $50,000. Alabama Jobs Act of 2015 The Alabama Jobs Act of 2015 creates a jobs tax credit which will create two credits available on a discretionary basis: 1) A jobs credit in the amount equal to 3 percent of the previous year’s annual wages and 2) A capital credit in the amount of 1.5 percent of qualified annual capital investment. These credits are available for the first 10 years of a project. The jobs credit may offset the utility tax and the capital investment credit may offset income, excise, insurance premium, utility tax or any combination. Also, the capital investment credit may be transferred for the first three years of the project. In order to receive the credits, the Department of Commerce must determine that the project is a qualifying project that creates the appropriate number of jobs filled by Alabama residents.The company must be approved with a project agreement between the Governor and the company. The company must also provide proof of the wages paid or investment made. The credits under this act replace the existing capital credit, the Made in Alabama Act of 2012 credits, and the tariff credit. If you have any questions on how these tax credits affect you and your business, please contact your Warren Averett advisor.

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