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Taxes and Incentives

Taxes

Ad Valorem/Property Tax

Ad Valorem/Property Tax

Property (Ad Valorem) taxes are taxes on real and/or personal property. Real property includes the land, any structures permanently attached to the land, as well as mobile homes. Personal property refers to furniture, fixtures, tools, and equipment used in the operation of a business. Add-ons to Motor Vehicles are considered personal property. "Add-on" equipment is any item added to the cab and chassis of a motor vehicle, either by the original manufacturer or a secondary manufacturer. Add-on equipment includes, but is not limited to: box type bodies, dumping mechanisms, wrecker rigs, refrigerated bodies, limousines, armored trucks and vans, buses, cement mixer drums, refuse compactors, cranes, booms, propane and petroleum tanks, and flat beds. Other terms used to describe what is referred to as add-on equipment include: added value equipment, specialized equipment, truck equipment, and bodies. All aircraft, including hot air balloons both personal and commercial are considered personal property and as such are taxable in Alabama. The State Department of Revenue is responsible for determining property value which, by law, must be set according to "Fair and reasonable market value." Your property is probably not for sale, but the appraiser must set the value of the property as if it were to be "SOLD" in an arm’s length transaction between a willing buyer and a willing seller - neither being under pressure to buy or sell.

Time Table for Collecting Real Property Taxes

Time Table for Collecting Real Property Taxes

Taxes are collected on the following schedule for the year that ended on September 30.

October 1st
Tax Due
January 1st
Tax Delinquent
March 1st
Turned Over to Probate Court for Tax Collection
April 1st
Advertised for Sale
May 1st
Tax Sale

What to do When you Buy Property

What to do When you Buy Property

  1. Record deed in Probate Office
  2. Assess the property in the Revenue Commissioner's Office when the deed is recorded. Claim any exemptions which are due at this time. Be sure to provide your address and telephone number

Homestead Exemption

Homestead Exemption

Homestead Exemption I
May be Claimed on your principal residence, regardless of age or income. Amount of assessed value exempted is $4,000.00 State and $2,000.00 County.
Homestead Exemption II (Act 91)
For persons over 65 or totally disabled, whose income is less than $12,000.00 annually. The exemption is for all State taxes and County up to $5,000.00 Assessed Value.
Homestead Exemption III (Act 48)
For persons after 65 or totally disabled, this exemption is from all property taxes if their taxable income is less than $7,500.00.
*NOTE: For homestead exemption II and III, the taxpayer must file and sign their assessment each year to remain eligible.

Current Use Value

Current Use Value

Current use value is an exemption which applies to class III property. Upon application, the property is taxed based on value to the owner without consideration of the potential value of the property. Current use is applied most commonly to farm land.

Calculating Your Taxes

Calculating Your Taxes

All taxable property shall be divided into the following classes and shall be assessed for Ad Valorem tax purposes at the following ratios of assessed value of such property:

Class 1
All property of utilities used in the business of such utilities - 30% of market value.
Class 2
All property not otherwise classified - 20% of market value.
Class 3
All agricultural, forest and residential property - 10% of market value.
Example:
40 acres of cropland in the county appraised at $500.00 per acre.
Total fair market value is $20,000.00.
Appraised value times (X) 10% equals (=) $2,000.00 times (X) .029 millage equals (=) tax due of $58.00.

After an assessed value has been placed on your property the amount of taxes is determined by multiplying the correct tax rate by the assessed value then subtracting the proper exemptions.

Millage Rates

Millage Rates

Millage Rates Applied to Different Areas of Talladega County

1 mill = 1/10 of 1 penny
Area of County Millage Rate
City of Talladega 38.5
City of Sylacauga 50.5
City of Lincoln 39.0
City of Oxford 39.0
City of Childersburg 41.5
City of Munford 39.0
Talladega Springs 34.0
District 1C - Outside 29.0
District 1Cy - Outside with Childersburg School 32.0
District 1F - Outside with Fayetteville School 34.0
District 1L - Outside with Lincoln School 34.0
District 1M - Outside with Munford School 34.0

Tax Collection

Tax Collection

Taxes are due 1st of October and are delinquent after the 31st of December.

Make Payments in the Following Ways
  1. Pay by mail and avoid waiting in line by mailing a check or money order to:
    Sally K. Flowers
    Talladega County Revenue Commissioner
    PO Box 1119
    Talladega, AL 35161
  2. You may come to the Revenue Commissioner's Office and make payment in person.
  3. Ask your mortgage company to pay your bill.

Failure to pay property tax results in tax sale of property.
Property may be redeemed within three years after date of sale.

If you purchase property during the year, you need to make sure the taxes are paid. The tax bill will usually be in the previous owner's name. You are responsible for taxes on all property you own-no matter how the tax bill might be listed.

Homestead Exemptions

State up to 4000 x .0065
County up to 2000 x .0095

Multiply Assessed Value X Millage

Multiply state exemption up to 4000.
Multiply county exemption up to 2000.
Add these two amounts together and subtract from first totals.
This will give you the amount of tax due after exemptions

Example
Assessed Value: 4500 ($45,000 appraised value) District 1
4500 x .029 = $130.50
St.h/x ex. 4000 x .0065 = -26.00
Co.h/s ex. 2000 x .0095 = -19.00
Total Tax Due = $85.50

Incentives

Whether you are a new company looking to relocate to Talladega County, or an existing company wanting to expand here, there are tax incentives that may be available to you. A summary of these can be found below.

In addition to the state-level tax incentives listed below, local-level incentives may also be available. For help determining tax rates and finding available incentives, contact the Talladega County Economic Development Authority at 256-245-8332.

Jobs Tax Credit

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

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.

Alabama Corporate Income Tax Incentives

Alabama Corporate Income Tax Incentives

The Alabama corporate income tax rate is one of the lowest in the nation at 6.5%. A full deduction for all federal income taxes apportioned to Alabama produces a significantly reduced effective rate. The following tax credits may be available for qualifying projects:

Potential Income Tax Incentives

  • 15 year net operating loss carryforward
  • Enterprise zone credit/exemption for qualifying sites in economically depressed areas
  • Basic skills educational tax credit covering up to 20% of employer sponsored educational program that enhances basic skills of employees
  • Heroes for Hire income tax credit

For more information, see the Alabama Income Tax Incentives section on the ADOR website.

Business Privilege Tax Incentives

Business Privilege Tax Incentives

Business privilege tax rate and caps

  • Graduated based on the entity's federal taxable income apportioned to Alabama
  • Rate ranges from $.25 to $1.75 for each $1,000 of net worth in Alabama
  • Business privilege tax ranges from a minimum of $100 to a maximum of $15,000 for most business entities
  • Maximum business privilege tax is $3,000,000 for financial institutions, financial institution groups, and insurance companies

Available privilege tax credits and deductions include:

  • Net amount invested in pollution-control equipment
  • Net amount invested in air carrier hub operation equipment
  • Enterprise zone credit

For more information, see the Business Privilege Tax Information section on the ADOR website.

Property Tax Incentives

Property Tax Incentives

Assessed value and millage rates

  • All real and personal business property will be assessed at 20% of its fair market value
  • The combined state and local millage rate will then be applied to the assessed value
  • The Alabama state property tax rate is limited to 6.5 mills (.65%).
  • Both cities and counties may levy additional millage rates. Current millage rates for counties and cities can be found in the Millage Rate Section of the ADOR website.

Possible property tax abatements and exemptions include:

  • Abatements of non-educational property taxes for qualifying new or expanding businesses can be extended from 10 to 20 years
  • Abatements of non-educational property tax incremental increases on property and equipment
  • Pollution-control equipment exemptions
  • No property taxes on raw materials, finished goods, and inventory held for resale
  • Additional exemptions from city property taxes may be granted by any Class 6 cities which are listed in the Class 6 Cities section on the ADOR website.

For more information, see the Property Tax Incentives section on the ADOR website.

Sales and Use Tax Incentives

Sales and Use Tax Incentives

Sales and use tax rate differentials

  • General rate is 4.0%.
  • Rate for manufacturing and farm machinery is 1.5%
  • Rate for automotive vehicles is 2%
  • Rate for food sold through vending machines is 3%
  • In addition to state taxes, most cities and counties also levy their own sales & use taxes, which provide similar rate differentials. Current rate information for Talladega County can be found in the City and County Tax Rates Section of the ADOR website.

Possible sales and use tax abatements and exemptions include

  • Abatements of non-educational sales and use taxes on construction materials
  • Pollution control equipment exemption
  • Raw materials exemption
  • Exemption of certain aircraft maintenance parts
  • Utility gross receipts tax exclusion
  • Exemption from taxes for increased utility services, for up to 10 years
  • Enterprise zone exemption
  • Abatement of non-educational sales and use taxes on manufacturing machinery and equipment.
  • Other exemptions may apply and can be found in the sales and use tax law section of the ADOR website

For more information, see the Sales and Use Tax Incentives section on the ADOR website.

Enterprise Zone Tax Incentives and Exemptions

Enterprise Zone Tax Incentives and Exemptions

Talladega County has four separate areas designated as Enterprise Zones. Businesses that locate or expand within these zones may be eligible for additional tax and local tax incentives shown below

Enterprise zone tax incentives:

  • Credit based on income tax liability from Enterprise Zone Project Operations
  • Credit for new capital investment
  • Company may claim a credit of up to $1,000 per new permanent employee for training new permanent employees in new skill areas

Enterprise zone tax exemptions:

  • Sales and use tax on purchases of construction-related materials, machinery and equipment used in the zone
  • Income tax for five years
  • Business privilege for five years

Financing & Permitting Programs

Financing & Permitting Programs

Accelerate Alabama Fund

Provides loans to fund site preparation in counties with populations less than 25,000 in an amount up to $2 million per project is at least 25 jobs are created, or up to $1 million if less than 25 jobs would be created. Two sites per year located outside of these counties can receive this funding at the Governor's discretion.

AlabamaSAVES (Sustainable and Verifiable Energy Savings) Loan Program

Provides 10 year, 2% interest rate loans of $250,000 - $4,000,000, covering up to 90% of total project costs to help existing industries finance energy-savings improvements to their facilities.

Industrial Development Grant Program

Grants awarded to counties, municipalities, development boards or authorities, port authorities, or public corporations for site preparation or reasonable rehabilitation of an existing building or structure necessary to attract a qualifying project. Size of grant is dependent on amount of capital investment.

Industrial Access Road and Bridge Program

Covers cost of construction, construction engineering, and inspection costs for providing public access to new or expanding distribution, manufacturing, or industrial firms.

Industrial Revenue Bonds (IRBs)

May be used as long term financing of up to 100% of a project including

  • Acquisition of land, buildings, site preparation, and improvements
  • Construction of buildings
  • Acquisition and installation of furnishings, fixtures, and equipment
  • Capitalizible soft costs (e.g., architectural and engineering, interest incurred during construction, cost associated with bond issuance, etc.

Regional Revolving Loan Funds for Economic Development

Fixed rate financing, at below market rates, for business startup or expansions and economic or community development projects is directly available through East Alabama Regional Planning and Development Commission.

Alabama New Market Tax Credit Program

This program provides state income tax, financial institution excise, or premium tax credits for investments and businesses in impoverished and low-income communities.

Alabama Innovation Fund

This state level fund provides grant funding to public universities within Alabama to leverage research and development expenditures that support economic development initiatives within the state.

USDA Rural Development

The USDA provides a variety of loan, grant, and loan guarantee programs, plus technical assistance for companies looking to develop in rural areas. More information about these programs, including grant and loan information, can be found on the USDA Rural Development – Alabama website.

One-Stop Environmental Permitting

The Alabama Department of Environmental Management is the state's one-stop shop for environmental permitting with the authority to issue the permits required by all the major federal environmental laws.

Alabama Power Incentives

Alabama Power Incentives

Alabama Power has a history of developing customized service offerings. The incentives offered to customers are customized based on a number of factors. For further information on how these incentives may assist locating your project in Alabama Power’s service territory, please contact a representative at Alabama Power’s Economic Development Department.

PowerSouth Funding Advantage

PowerSouth Funding Advantage

Rural Economic Developmental Loan Program

Provides zero-interest loans to Rural Utilities Service borrowers to promote rural economic development and job creation projects. Funds are passed on to third party borrowers as zero interest loans for projects that create jobs in rural areas, or that provide infrastructure or community facilities in rural areas that will lead to economic stability.

Rural Economic Development Grant Program

Contrary to the name, this is a loan program – not a grant program. It was established by grants to Rural Utilities Service (RUS) borrowers, such as PowerSouth Energy Cooperative and its Member-Owners, to promote rural economic development and job creation projects. RUS borrowers loan the grant funds to eligible borrowers. The payments made on these loans are used to fund the RUS borrowers’ Revolving Loan Fund (RLF) for further investment in the community.

Revolving Loan Fund (RLF) PowerSouth Energy

The purpose for PowerSouth Energy Cooperative’s Revolving Loan Fund (RLF) is to provide funds for gap financing in partnership with other financial resources that promote economic development and job creation. The RLF is funded by payments made under the Rural Economic Development Grant Program.