ADOR ; Alabama Tax Incentives > Property Tax & Sales Tax Abatements > Abatement Procedures

• The private user must determine the site for development. The site must be chosen before an abatement can be granted, because the source of abatement will depend on the location of the site. (i.e., within the jurisdiction of a certain county, city, or public industrial authority).
• The private user must apply for an abatement of state and non-educational county and city sales and use taxes and non-educational property taxes on industrial development property to the appropriate governing body (i.e., county government, city government, or public industrial authority). 
• The private user should submit a completed "Application to Local Granting Authority for Abatement of Taxes " (Form CO:CAA) to the appropriate governing body. The application should include a complete and detailed listing of real and personal property for which an abatement is requested.
• After the abatment is granted, the private user is required to send a copy of the executed abatement agreement, certified resolution by the public body, application to local granting authority (Form CO:CAA), and the certificate of exemption application (Form ST:EX-A2) to the Department of Revenue within 90 days after the abatement is granted. Effective August 1, 1998, any contractor or subcontractor who will be purchasing property to be incorporated into the project should also file an application for a certificate of exemption.
• For property tax purposes, the private user must send a copy of the abatement agreement to the county assessing official in the county where the property is located   Any abatement that has been granted must be claimed by the private user with the county assessing official.

• A county may grant abatements (for certain state, county, and city taxes) on property located within the county, but not within the city limits or police jurisdiction unless the county is given authority by the governing body of the municipality.
• A city may grant abatements (for certain state, county, and city taxes) on property located within the city limits and police jurisdiction. If a city government abates county taxes, the city must nofitfy the county by sending a copy of the abatement resolution to the county commission, by certified mail.
  
• A public industrial authority may grant abatements (for certain state, county, and city taxes) on property located within the authority's jurisdiction. If a municipal public authority abates county taxes, the municipal public authority must nofitfy the county by sending a copy of the abatement resolution to the county commission, by certified mail.

An estimated amount of tax abated for each type of tax;

The maximum exemption period for each abatement;

Good faith projections, by the private user, of the amount to be invested, the number of individuals to be employed, and the payroll (initially and in the succeeding three years); and

The Standard Industrial Classification Code of the business.

If the project is for an addition to an existing industrial development property, the agreement should contain information to document that the addition is at least the lessor of 30% of the original cost of the industrial development property or $2,000,000.

• For sales and use tax, the abatement starts on the date on which the abatement is granted and continues in effect until the entire project is placed in service.
• For property tax, if bonds are issued the abatement shall start on the date the bonds are issued to finance the cost of the private use property; else, the abatement shall start on the date the project is placed in service or such date as specified in the abatement agreement.  An abatement for non-educational property taxes shall not exceed ten years from the date the abatement period begins.