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Alabama Basic Business Taxes 2016

Corporate Taxes & Incentives Guide
Income Taxes
  • Corporation's’ income tax based on net taxable income derived only from business conducted within the state determined by applying a four-factor formula of property, payroll, and double-weighted sales to total net income.
  • Corporate income tax rate of 6.5 percent (Individuals taxed at a rate of 5 percent).
  • Full deduction for all federal income taxes apportioned to Alabama creating a significantly reduced net effective rate.
  • 15-year carryforward of net operating losses.
Property Taxes
  • Constitutional limit of the state mileage rate on both real and personal property to 6.5 mills (of which 3 mills are dedicated to education).
  • Business property, both real and personal, taxed on 20 percent of fair market value.
  • Inventories and goods-in-process are not taxed.
  • Pollution control equipment statutorily exempt from property taxation.
  • Exemption of all tangible personal property being warehoused in Alabama for shipment to a destination outside the state.

Alabama State Contact:
Alabama Department of Commerce
Alabama Center for Commerce
401 Adams Avenue
Montgomery, AL 36130
334-242-0400
800-248-0033
Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings. This information was last updated January 2016.

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