For assistance with determining what tax incentives and abatements are available for your company, please contact the Cherokee County Industrial Development Authority office at 256-927-1805. More in-depth information about state taxes and incentives can be found in the Tax Incentives for Industry Booklet provided by the Alabama Department of Revenue.
Enterprise Zone Tax Incentives
To help spur economic growth in Cherokee County, there are certain incentives available to new and expanding businesses located in the county through the Enterprise Zone Credit Program. Companies must meet certain site and employee requirements to be eligible for Enterprise Zone incentives. More in-depth information about Enterprise Zone incentives can be found in the Enterprise Zone brochure.
Incentives include:
Tax credit up to $2,500 per new permanent employee to be applied against the income tax liability and/or business privilege tax liability Exemptions for income, sales and use, and business privilege tax liability
Corporate Income Taxes
- Rate is 6.5%
- Based on net taxable income of business done in Alabama
- Businesses can deduct all of their federal income taxes apportioned to Alabama
- Incentives include:
- Net operating loss carryforward
- Deduction for pollution control equipment
- Income tax capital credit
- Enterprise Zone credit
- skills educational tax credit
Income Tax Capital Credit
- Available to new and expanding industries
- Up to 5% credit for the total capital costs of qualifying projects
- Available every year for 20 years
- Lower threshold available for business in Cherokee County because of its Enterprise Zone designation
Visit the Alabama Department of Revenue website for a full overview of this incentive.
Business Privilege Tax
- Based on net worth in Alabama
- Based on a corporation’s ability to pay
- Rate ranges from $.25 to $1.75 for each $1,000 of net worth in Alabama
- Incentives include:
- Deduction for pollution control equipment
- Deduction for air carrier with hub operation
- Enterprise Zone credit
State Unemployment Tax
- Employees do not contribute
- Employer requirement is based on first $8,000 of each employee’s compensation
- Rates vary from 0.5% to 5.4%
- New employer rate is 2.7%
- Rates are based on employer’s experience rating
Sales and Use Tax (General)
| CHEROKEE COUNTY | ALABAMA | |
|---|---|---|
| Source: Alabama Department of Revenue | ||
| Sales Tax | 2.5% | 4.0% |
| Use Tax | 2.5% | 4.0% |
| Sales Tax on Machinery | 1.0% | 1.5% |
| Use Tax on Machinery | 1.0% | 1.5% |
- Incentives Include:
- Abatements of state and non-educational local construction-related sales and use taxes
- Discount if sales tax is timely paid
- Exemption for raw materials
- Exemption for pollution control equipment
- Exemption for quality control testing and donations to charitable entities
- Utility gross receipts tax exclusions
- Enterprise Zone credit
Property Tax
| Source: Alabama Department of Revenue | ||
| Total State | 6.5 | |
| Total Cherokee County | 42.0 | |
| Total School | 22.0 | |
| Centre | 5.0 | |
| Cedar Bluff | 5.0 | |
| Leesburg | 5.0 | |
| Gaylesville | 5.0 | |
| Sand Rock | 5.0 | |
- Incentives Include:
- Abatements for non-educational property taxes
- Exemptions for pollution control equipment
- No property taxes on inventory (some restrictions apply)
- Exemptions for raw materials inventory
Jobs Tax Credit
- Cash refund of up to 3% of the previous year's gross payroll (not including fringe benefits) for qualifying new, direct jobs. Incentive period is up to 10 years.
- Up to an additional 0.5% cash refund is available on the wages of veterans, for companies, which employ a workforce composed of at least 12% of veterans.
- Up to an additional 1% cash refund for projects in counties with a population less than 25,000. Two sites per year located outside of these counties can receive this refund at the Governor's discretion.
Investment Tax Credit
- Credit of up to 1.5% of the qualified capital investment costs for a qualifying project each year for up to 10 years (Up to 15 years for projects in counties with populations less than 25,000 selling their output nearby)
- Credits can be used to reduce income tax (or taxes on banks or insurance companies), and taxes for utility services.
- Credits can be carried forward for five years.
- The first three years of the credits may be sold to create cash for projects, with Department of Commerce approval.