Tax Incentives

Tax incentives are available for new and expanding companies in Escambia County, Alabama. A summary of those incentives can be found below. Additional information can be found on the Alabama Department of Revenue website.

In addition to state level tax incentives, incentives at the local level may be available. For help determining tax rates and finding available incentives, contact the Escambia County Industrial Development Authority at (251) 368-5404.

Click the tabs below to learn more about available Tax Incentives:

State Corporate Income Taxes

  • Corporate income tax rate is 6.5%
  • Based on the net taxable income of business done in Alabama
  • Businesses are permitted to deduct all of their federal taxes apportioned to Alabama

Potential incentives include:

  • Net-operating loss carryforward
  • Pollution-control equipment deduction
  • Income tax capital credit (see below)
  • Basic skills educational tax credit

Capital Credit

  • Available to qualifying all new and expanding companies and industries
  • Gives businesses up to 5% credit of capital costs
  • Can be applied to the Alabama income liability generated by the project income
  • Available annually for a maximum of 20 years

For more information, see the Capital Credit Information section on the ADOR website.

Business Privilege Tax

  • Based on a company's net worth in Alabama and the company's ability to pay
  • Rate ranges from $.25 to $1.75 for each $1,000 of net worth in Alabama

Available incentives include:

  • Pollution-control equipment deduction
  • Air carrier with hub operations deduction

Property Tax

Alabama state property tax rate is 6.5mills (.0065%). Escambia County's and the cities current rates and can be found in the Property Tax Section of the ADOR website.

Possible incentives include:

  • Abatements for non-educational property taxes
  • Pollution-control equipment exemptions
  • No property taxes on inventory
  • Raw materials inventory exemptions

Sales and Use Tax

The state sales and use tax rates are 4%. Escambia County's current rate information can be found in the City and County Tax Rates Section of the ADOR website.

Available incentives include:

  • Abatement of State and non-educational local construction-related taxes
  • Raw materials, pollution control equipment, quality control testing, and donations to charitable entities exemptions
  • Utility gross receipts tax exclusions
  • Discount if sales tax is paid promptly

State Unemployment Tax

  • Employer requirement for the state unemployment tax is based on the 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
  • Employees do not contribute

State Enterprise Zone

Specified areas of Escambia County are designated as Enterprise Zones. The Enterprise Zone Program offers state tax and non-tax incentives along with local incentives for qualifying companies.

Favored Geographic Area

Escambia County is considered a favored geographic area within its Enterprise Zones. This allows broader access to the income tax capital credit because companies in the Enterprise Zones can use the lower thresholds for investment ($500,000) and new employees (5) in qualifying for the credit.