The Tax Incentive Reform Act of 1992 (Chapter 9B of Title 40, Code of Alabama 1975) gives cities, counties, and public authorities the ability to abate: noneducational state, county, and city property taxes; state sales and use taxes; and noneducational county and city sales and use taxes. Details are described under Property Tax and Sales and Use Tax. In order to receive an abatement for either sales tax, use tax, or property tax, a business must follow certain procedures. The checklists for these procedures are found on the following pages. For property tax purposes, an abatement must be granted prior to placing the project in service (see Alabama Department of Revenue Regulations 810-4-3-.01 through 810-4-3-.07). Similarly, for sales and/or use tax purposes, an abatement must be granted prior to taking title to any equipment or construction materials in a taxable transaction (see Alabama Department of Revenue Regulations 810-6-4-.22 through 810-6-4-.25). A prenotification letter must be sent to the State Industrial Development Authority outlining state incentives being applied for. In order to qualify for an abatement for either sales tax, use tax, or property tax, a business must fall within certain industry classification codes as follows:

1) a trade or business described in 1987 Standard Industrial Classification Industry Group Number 0724, Major Groups 20 to 39, inclusive, 50 and 51, Industrial Group Number 737, and Industry Numbers 4613, 8731, 8733, and 8734 or

2) a trade or business described in the 1997 North American Industry Classification System within Subsector 493 (Warehousing and Storage), Industry Number 488310 (Port and Harbor Operations), or Industry Number 488320 (Marine Cargo Handling)

The Chamber of Commerce has an “Abatement Booklet,” an informative guide to assist with the application and filing procedures for an abatement. The booklet contains the procedures, forms, and instructions to apply for an abatement of non-educational property, state and non-educational county and city sales and use taxes on industrial development property in accordance with Section 40-9B-1et seq., Code of Alabama 1975.

LOCAL CHAMBER ASSISTANCE
The Chamber of Commerce can provide you with an “Abatement Booklet.” The Chamber can also assist with the prenotification letter. The actual application is filed through the local industrial development board.