Innovate Alabama Tax Credit program focused on entrepreneur support organizations
The program can offset up to 50 percent of four types of taxes.
To create a flourishing ecosystem in Alabama where tech accelerators and businesses thrive, Innovate Alabama offers tax incentives to help entrepreneurial support organizations do what they do best: provide the tools, resources and opportunities that help founders level up their companies.
The “Innovate Alabama Act” creates an incentive mechanism to provide funds to economic development organizations (EDOs) for certain qualifying activities. Alabama taxpayers who make cash contributions to EDOs for qualifying projects receive an Innovate Alabama Tax Credit that can offset up to 50 percent of the following tax types:
- Income tax;
- State portion of the financial institution excise tax;
- Insurance premium tax; and
- State utility license tax.
Qualifying EDOs must submit an application to Innovate Alabama, as well as commit to sending a status letter. Taxpayers donating to EDOs for approved projects receive a credit equal to their donation and may carry the credit for up to five years. The credit may be passed through to individual owners, shareholders, partners or members of an LLC.
An “economic development organization” is a state or local development organization meeting each of these three criteria:
- Is an Alabama entity not operating for a profit; and
- Is charged with improving the state or a region of the state; and
- Has a record of supporting or otherwise participating in economic development efforts in Alabama
More information on the program can be found here.
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