05.07.15 |
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Alabama Heightens Job Creation Incentive Opportunities Through New Alabama Jobs Act

Alabama State FlagThe governor of Alabama recently signed the Alabama Jobs Act (2015 House Bill 58), which provides both jobs and investment tax credits for approved business projects that increase jobs and investment in state. The new act calls for an up-front agreement between a business and the governor of Alabama, which will stipulate the number of new jobs to be created, the length of the project and other data required by the new law.[i]

Various industries will be eligible for the new incentives, including manufacturing, warehousing and storage, telecommunications, data processing, engineering and drafting services, space research technology and national/regional headquarters.[ii] Retail and farming are generally not allowed as well as certain other excluded businesses.[iii]

A minimum of at least 50 new employees in new jobs must be created for each qualifying project, except for chemical manufacturing, data centers, engineering, design, research, metal/machining technology or toolmaking, all of which may be eligible by creating any number of jobs.[iv]

A jobs tax credit against utility tax is available for 3 percent of the wages paid to eligible employees over the incentive period of 10 years.[v] The project agreement will stipulate whether the credit will be refunded or claimed against the utility tax with a carryforward available.[vi] The business will be required to certify the wages paid to eligible employees every year.[vii]

In addition to the jobs tax credit, an investment credit is available equal to 1.5 percent of the capital investment against a combination of income, financial institution excise, utility or insurance premium taxes.[viii] This credit may be taken over the 10-year incentive period and will also be part of a project agreement.[ix] The incentive period must begin on or after the placed-in-service date of the qualifying assets. Excess credits may be carried forward to the extent allowed in the project agreement but no more than five years.[x] Certification of the investment amounts will be required before the credit is claimed.[xi] A portion of the investment credit is transferable.[xii]

Project agreements for the Alabama Jobs Act must be executed on or by December 31, 2019.[xiii]

 The information provided in this blog post is for informational purposes only and not for the purpose of providing accounting, legal, or tax advice. The information and services ADP provides should not be deemed a substitute for the advice of any such professional. Such information is by nature subject to revision and may not be the most current information available.

 

Learn More About ADP SmartCompliance® Tax Credits

 

[i] http://alisondb.legislature.state.al.us/ALISON/SearchableInstruments/2015RS/PrintFiles/HB58-enr.pdf, page 13, lines 23-24; page 14, lines

[ii] http://alisondb.legislature.state.al.us/ALISON/SearchableInstruments/2015RS/PrintFiles/HB58-enr.pdf, page 9, lines 11-24; page 10, lines 1-25; page 11, lines 1-5

[iii] http://alisondb.legislature.state.al.us/ALISON/SearchableInstruments/2015RS/PrintFiles/HB58-enr.pdf, page 11, lines 6-13

[iv] http://alisondb.legislature.state.al.us/ALISON/SearchableInstruments/2015RS/PrintFiles/HB58-enr.pdf, page 12, lines 4-9

[v] http://alisondb.legislature.state.al.us/ALISON/SearchableInstruments/2015RS/PrintFiles/HB58-enr.pdf, page 15, lines 18-23

[vi] http://alisondb.legislature.state.al.us/ALISON/SearchableInstruments/2015RS/PrintFiles/HB58-enr.pdf, page 16, lines 17-25

[vii] http://alisondb.legislature.state.al.us/ALISON/SearchableInstruments/2015RS/PrintFiles/HB58-enr.pdf, page 17, lines 1-8

[viii] http://alisondb.legislature.state.al.us/ALISON/SearchableInstruments/2015RS/PrintFiles/HB58-enr.pdf, page 17, lines 17-21

[ix] http://alisondb.legislature.state.al.us/ALISON/SearchableInstruments/2015RS/PrintFiles/HB58-enr.pdf, page 18, lines 7-11

[x] http://alisondb.legislature.state.al.us/ALISON/SearchableInstruments/2015RS/PrintFiles/HB58-enr.pdf, page 18, lines 16-24

[xi] http://alisondb.legislature.state.al.us/ALISON/SearchableInstruments/2015RS/PrintFiles/HB58-enr.pdf, page 19, lines 1-8

[xii] http://alisondb.legislature.state.al.us/ALISON/SearchableInstruments/2015RS/PrintFiles/HB58-enr.pdf, page 20, lines 1-25; page 21, lines 1-25; page 22, lines 1-25; page 23, lines 1-8

[xiii] http://alisondb.legislature.state.al.us/ALISON/SearchableInstruments/2015RS/PrintFiles/HB58-enr.pdf, page 31, lines 7-12


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