Alabama Administrative Code
Title 810 - ALABAMA DEPARTMENT OF REVENUE
Chapter 810-3-71 - WITHHOLDING TAX
Section 810-3-71-.03 - Job Development Fee

(1) The Approved Company may impose a Job Development Fee only on the new employees hired by the Approved Company for a Project. The term "new employees" includes only those individuals who (i) have not previously been employed by the Approved Company in Alabama; (ii) will be employed at the project site; and (iii) will be subject to the personal income tax imposed by Section 40-18-2 of the Code upon commencement of employment at the site. An Approved Company may assess and withhold a Job Development Fee from a new employee only during the time such employee is employed at the project site. Accordingly, an Approved Company may not continue to assess and withhold a Job Development Fee from an employee who is no longer employed at the project site.

(2) The Job Development Fee assessed by an Approved Company and withheld from the gross wages of new employees shall be based solely on the wages paid to such employees by the Approved Company. The Job Development Fee withheld from a new employee's wages shall be limited to an amount no greater than the tax that would otherwise be withheld from such employee's wages pursuant to the provisions of subsection (a) through (d) of Section 40-18-71 of the Code but for the imposition of the Job Development Fee. Any tax withheld pursuant to subsection (e) of Section 40-18-71 of the Code is not a Job Development Fee within the meaning of Section 41-10-44.8(b) of the Code and must be remitted by the Approved Company in accordance with the provisions of Section 40-18-74 of the Code.

(3) Pursuant to Section 41-10-44.8(a), the aggregate Job Development Fee withheld in a given year by an Approved Company from the wages paid to employees at a Project shall not exceed the difference between (1) the sum of the debt service payments made during such year by the Approved Company pursuant to the terms of a Financing Agreement (as that item is defined in Section 41-10-44.2); and (2) the sum of the corporate income tax credits claimed by the Approved Company on its state corporate income tax return for such year pursuant to Section 41-10-44.8(a)(1) and 41-10-44.9.

(4) In determining the aggregate Job Development Fee which may be withheld from an employee's wages in a given year, an Approved Company:

(5) Upon notification by the State Industrial Development Authority that an employer has been authorized to withhold a Job Development Fee, the Department shall issue such employer a withholding tax coupon booklet containing forms and instructions for reporting the Job Development Fee and Alabama income tax withheld. This booklet shall also contain instructions for reconciling an employer's yearly withholding amount when a Job Development Fee and/or Alabama income tax has been withheld.

(6) Employers who are authorized to withhold a Job Development Fee are subject to the same filing requirements as employers described in Section 40-18-74. All monthly, quarterly and annual returns must be filed by appropriate due dates. In addition to the requirements described in Section 40-18-74, employers who withhold a Job Development Fee will submit with each monthly, quarterly and annual return a listing of employees from whose wages a Job Development Fee was withheld. This listing shall include the following information:

(7) Pursuant to Section 41-10-44.8(c), if an Approved Company fails to achieve the level of capital investment or employment anticipated at the time the State Industrial Development Authority agreed to finance the Project, the Department may, after notice and hearing, prospectively reduce or suspend all or part of the Job Development Fee inducement allowed in (1) above until such time as the anticipated capital investment and employment levels are met.

Authors: Ewell Berry, Ann F. Winborne, and Neal Hearn