Governor Bentley Promotes Jobs Creation and Retention Act

Governor Bentley is joined by State Senator Phil Williams (L) and

State Representative Barry Mask (R) to promote the Jobs Creation and Retention Act.

Mike McCain, Executive Director of the Gadsden-Etowah County Industrial Development Authority, talks about the need for the Jobs Creation and

Retention incentives that would help him recruit and retain local companies in his area.

MONTGOMERY— Governor Robert Bentley today continued his mission to bring jobs to the State by promoting a bill, currently up for debate in the Alabama Legislature, that would allow companies to retain a certain portion of full-time employee state income tax withholdings.  At a press conference on the Capitol steps, Governor Bentley promoted the Jobs Creation and Retention Act which provides a new incentive to promote the creation, expansion and retention of jobs in Alabama.

In addition to traditional sources of discretionary funds that have been successfully used to promote economic development in the State, the Jobs Creation and Retention Act allows an approved company to retain a percentage of state income taxes withheld from new full-time employees to recover the company’s capital investment. 

By law, Alabama companies currently withhold 5% of their employees’ salaries for state income tax.  If passed, new businesses could be allowed to keep up to 90% of new employee withholdings and existing businesses could retain 75% of their employee income tax withholdings until their capital investment cost is recovered.  The incentive would be available to both new and existing businesses.

“The Jobs Creation and Retention Act is another incentives option we can use to give greater flexibility to bring companies and keep companies in the State,” said Governor Bentley at today’s press conference. “My mission is to bring jobs to this State and this bill gives us one more option in our economic development toolbox to get Alabamians back to work.”

Qualified companies would be approved for the tax retention by the State Industrial Development Authority (SIDA) upon the written recommendations from the Governor, Alabama Development Office and the Alabama Department of Revenue. Once approved by SIDA, the company would enter into a project agreement with the State that sets forth the amount of withholding incentives, the period for which the incentives can be retained by the company, the number of full-time employees at the company, and terminations provisions in the event that a company fails to meet minimum job and/or capital investment requirements.

“I believe this incentive is the key to unlocking Alabama’s economic development potential.  It will be used strategically and judiciously to attract and secure good paying jobs,” said ADO Director Seth Hammett.