The State of Alabama, Marshall County and The City of Arab levy three types of
taxes: ad valorem taxes, sales and use taxes and state income taxes. While the
state levies all three, the county and city government imposes only property and
sales taxes.
Ad Valorem Tax-Property in the city of Arab is subject to a combined millage
rate of 33.0 mills, or $3.30 per $100.00 assessed valuation. Residential property
is assessed at 10% of fair market value and industrial/commercial property is
assessed at 20%.
Ad Valorem taxes for property located in the City of Arab is levied in the following
manner.
|
|
State |
County |
City |
|
General Fund |
2.5 |
6.0 |
5.0 |
|
School Fund |
3.0 |
8.0 * |
|
|
Veterans Fund |
1.0 |
|
|
|
Road /Bridge Fund |
|
2.4 |
|
|
Hospital Fund |
|
4.5 |
|
|
Courthouse / Jail Fund |
|
.6 |
|
|
|
|
|
|
|
* Returned to Arab City Schools |
|
|
Ad Valorem tax rates in the City of Arab are lower than in any other city in
Marshall County.
Sales and Use Tax - State and City sales and use tax rates are 4% and 4% respectively,
and are levied on gross receipts from retail sales on new and used tangible personal
property, as well as the use of such property purchased outside of the state.
The following are examples of selected items and associated separate state and
city tax rates:
Automobiles...1.5% of net trade difference
Machinery......1.5% of the selling price
Agricultural Machinery and Parts...1.5% of the net trade difference
(if imported, rate is on gross sale price)
Materials or products which become an ingredient or component part of products
sold by a manufacturer are treated as purchased at wholesale at the time such
manufacturer purchases them. Some exemptions from sales and use tax are available,
such as air and water pollution control devices placed in operation in Alabama.
Financing
Industrial Revenue Bonds provide financing for land, building and equipment for the new and expanding
manufacturing plants. Certain expenses such as architectural, engineering, legal
and administrative fees associated with the sale of the bonds can be paid from
the bond proceeds (subject to limitations of the Internal Revenue Service regulation).
The political subdivision issuing the IRB retains ownership of the bond-financed
facility and leases it back to the company at a rate sufficient to pay the principal
and interest on the bonds as they mature. When the user leases the property back,
there may be several tax advantages such as exemption from sales tax on construction
materials, use tax on the purchase of equipment, as well as mortgage deed tax
and ad valorem tax for a term limited to ten years. Local sales and use taxes
and all ad valorem taxes that are levied for school purposes are not eligible
for exemption.
The TVA Economic Development Loan Fund is a multi-million dollar revolving loan program established to stimulate industrial
development and leverage capital investment in the TVA power service area. TVA
uses the fund to promote economic expansion, encourage job creation and foster
the increased sale of electricity by TVA and its power distributors. Terms are
up to $2M financing for 25% of the project, up to 10 years, at or below prime.
Criteria include creation of new jobs and power usage.
The Alabama Linked Deposit Program is a public/private partnership designed to help stimulate economic growth
and development in the state. The state treasurer will use a small portion of
the state's investment portfolio to deposit with Alabama banks or savings and
loan associations, and "link" these deposits to individual loans made to eligible
small businesses or farmers. The financial institutions will pay up to a 3% lower
rate on the state deposits and must charge a corresponding lower rate to the borrower.
The SBA 7a Loan Program can provide small businesses with long-term financing for real estate acquisition,
building construction, renovation, expansion, purchase of machinery and equipment,
purchase of inventory and working capital. Repayment of debt is also permitted
where existing short-term credit is not meeting the financial needs of the business.
Terms are similar to a standard bank loan.
The SBA 504 combination-type loan package provides the small business with a better financial
package than is otherwise available in the market. The private lender (bank)
makes a loan of only 50% of the project cost and still receives first mortgage.
The SBA makes a subordinated second loan of 40% of the project cost. The business
owner is only required to provided 10% equity. Terms are similar to a standard
bank loan.
Efforts to strengthen the economy of rural communities include the RDA Business and Industry Program, which can provide development credit in towns with populations of 50,000 or
less, with priority going to places with populations of 25,000 or fewer. RDA
Programs have similar requirements to SBA. The programs differ on the rural condition
and the lending amount. RDA prefers to make loans over $750,000.
