(a) The department, after consultation with the council, and with the approval of the Governor, may enter into contracts with eligible businesses to provide:
(1) For the exemption from sales and use tax imposed by the State of Alabama or from sales and use tax imposed by its political subdivisions, upon approval of the governing authority thereof, of the purchases of the material used in the construction of a building, or any addition or improvement thereon, for housing any legitimate zone business enterprise, and machinery and equipment used in that enterprise.
(2) For certain exemptions from income taxes levied by the State of Alabama levied on eligible corporations and individuals for a period of five years.
(3) For certain exemptions of business privilege taxes levied by the State of Alabama for a period of five years.
(4) For certain exemptions from utility gross receipts taxes levied by Article 3, Chapter 21, Title 40, and utility gross receipts service taxes levied by Article 4, Chapter 21, Title 40, within the enterprise zone, for a period of up to 20 years, for eligible businesses which meet the conditions of subdivision (4) of subsection (c).
(5) For certain exemptions from sales and use taxes imposed by the State of Alabama or from sales and use taxes imposed by local governmental entities, upon approval of the governing authority thereof, within the enterprise zone, for a period of up to 20 years, for eligible businesses which meet the conditions of subdivision (4) of subsection (c).
(6) For certain exemptions from income taxes levied by the State of Alabama levied on eligible corporations and individuals, from income arising from enterprise zone operations, for a period of up to 20 years, for eligible businesses which meet the conditions of subdivision (4) of subsection (c).
(b) The exemptions provided for in subdivisions (4), (5), and (6) of subsection (a) shall not be available to any eligible business after June 30, 1996. Notwithstanding the foregoing, any eligible business receiving the exemptions provided for in subdivisions (4), (5), (6) of subsection (a) before June 30, 1996, shall continue to receive those exemptions for the period of time specified in those subdivisions.
(c) The department may enter into the contracts provided in subsection (a) of this section provided that:
(1) The business and its contractors give preference and priority to Alabama manufacturers and, in the absence of Alabama manufacturers, to Alabama suppliers, contractors, and labor, except where not reasonably possible to do so without added expense, substantial inconvenience, or sacrifice in operational efficiency.
(2) The request for such exemption is accompanied by an endorsement resolution approved by the appropriate local governing body, port district, or industrial development board in whose jurisdiction the establishment is to be located.
(3) The business is or shall be located within the boundaries of an urban or rural enterprise zone.
(4) The provisions of subdivisions (4), (5), and (6) of subsection (a) shall be applicable only for businesses which employ at least 1,200 people and make capital investments and capital improvements of at least seventy-five million dollars ($75,000,000) within the enterprise zone.
(5) For businesses which meet the conditions of subdivision (4) above, amounts equivalent to all tax exemptions granted in subsection (a) above shall be utilized by the business solely and exclusively to pay for the new capital investments and improvements within the enterprise zone. These amounts will be maintained by the business in a special account for this purpose and will be subject to verification by the department.
(6) The business located in an urban or rural enterprise zone and receiving the benefits of this article certifies that at least 35 percent of its employees:
a. Are residents of the urban enterprise zone hosting the location of the business at the time of their employment; or are residents of the same county in which a rural enterprise zone is located; and
b. Were receiving some form of public assistance prior to employment; or
c. Were considered unemployable by traditional standards, or lacking in basic skills; or
d. Any combination of the above.
Certification shall be updated annually in order for the business to continue receiving the benefits pursuant to this article.
(d) The department, in cooperation with the council, may enter into agreements with employers located in either urban or rural enterprise zones under which the employers may receive wage subsidies payable from the United States Department of Labor JTPA manpower block grant funds, to the extent that these funds are granted to the State of Alabama by the United States Department of Labor.
(e) All provisions of Title 40 for the enforcement and collection of the taxes herein levied, not specifically addressed in this section, are applicable.
Last modified: May 3, 2021