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In the economic sense, Yellowhammer State doesn’t look as impressive as, say, California. Yet, Alabama shows consistent economic growth. Under the IBISWorld survey, the state has demonstrated GDP growth at a 1% annualized rate over the last five years.
In the 2022 CNBC “Top States for Business” rating, Alabama takes the 33rd position out of 50 states. While workforce quality and lower cost of running a business are among its strength, access to capital, infrastructure, and inclusion are the areas where it lags behind.
With such giants as Toyota, Mercedes-Benz, Hyundai, Boeing, and Airbus choosing to operate in the state, Alabama’s economy is led by heavy industries. Still, small enterprises (SMEs) are yet another backbone of the state economy and employment market.
If you think about launching your private venture in the state, our small business guide will help you better understand the small business landscape in AL before you delve in.
To establish an LLC or corporation in AL, you should register your formation documents with the state and pay a $200 filing fee;
All businesses in the state should acquire a privilege license, which is applicable to each county, hence, the fees vary by county accordingly;
Registered entities in AL are exposed to a privilege tax, which is payable on an annual basis and depends on the company’s profit during the taxable year. The rate varies from 0.00025% to 0.00175% on net worth and is not lower than $100;
The corporate income tax rate in the state is 6.5%;
The exact sales tax rate in AL is calculated based on your company’s registered street address taking into account a 4% state sales tax and a 2% county sales tax.