USA - ALABAMA Law and Practice Contributed by: Adam J. Sigman, Crystal H. Walls, Nathan Stotser and Katie Sinclair, Dentons
to a composite payment regime under Section 40-18-24.2 (relating to partnerships and other “Subchapter K entities”) and Section 40-18-176
The potential incentives may include abate - ments related to: • income tax;
(relating to S corporations). Composite Payment Regime
• state and local sales and use tax; • state and local ad valorem tax; and • state recording taxes.
Under the composite payment regime, the pass- through entity files and directly remits taxes to ADOR with respect to the allocable pass-through income of the non-Alabama resident taxpayer, including the share of gain from the sale of real estate by the pass-through entity. 8.5 Tax Benefits Income tax benefits are provided under Ala - bama’s income tax law, which is generally con - sistent with the federal income tax system. In certain circumstances, Alabama law provides for tax incentives with respect to certain qualify - ing investments in the state, such as: • the creation or expansion of industrial or research facilities; • various job credits; • data-processing centers; • the relocation of corporate headquarters; • investments to rehabilitate certain historic structures; and • other qualifying projects.
To qualify for such incentives, the taxpayer must file the required applications and reports, and must be approved by the proper governmental authorities; the approved investment must also comply with additional compliance require - ments. A summary of Alabama’s taxes and tax incentives can be found on the ADOR website.
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