Area Development Alabama Resource Page
Basic Business Taxes
For domestic corporations (Alabama corporations), rate is 6.5 percent of the net income annually. Deductions are allowed for federal income tax paid or accrued. For foreign corporations (companies incorporated outside the state), rate is 6.5 percent of the income annually from business within the state. Deductions are allowed for federal income tax paid or accrued.
Net Operating Loss Carry-forward:
Corporate income tax law provides for a 15-year carry-forward of net operating losses.
Sales and use taxes:
A 4 percent sales tax is based on gross retail sales and gross proceeds derived by lessors for leases or rentals. A 4 percent use tax is levied on all items purchased out of state but consumed, stored, or used inside the state. Items subject to the sales tax are exempt from use tax. Manufacturing equipment is taxed at 1.5 percent. Sales and use tax on all building material, machinery, and equipment for a qualified industrial project may be exempt, except for the local educational portions of the tax.
Property tax:
The state tax is 6.5 mills. Additional tax may be levied by counties and municipalities and the local rate is an aggregate of all lawful levies. The assessment ratio for industrial property is 20 percent of fair market value.
Alabama Development Office
Alabama Center for Commerce
401 Adams Avenue
Montgomery, AL 36130
(800) 248-0033
(334) 242-0400
(334) 242-5669
