Alabama is benefiting greatly from the Tax Cuts and Jobs Act enacted by Republicans in 2017:
325,020 Alabama households are benefiting from the TCJA’s doubling of the child tax credit.
Every income group in every Alabama congressional district received a tax cut. Nationwide, a typical family of four received a $2,000 annual tax cut and a single parent with one child received a $1,300 annual tax cut.
1,509,530 Alabama households are benefiting from the TCJA’s doubling of the standard deduction. Thanks to the tax cuts, nine out of ten households take the standard deduction which provides tax relief and simplifies the tax filing process.
41,960 Alabama households are benefiting from the TCJA’s elimination of the Obamacare individual mandate tax. Most households hit with this tax made less than $50,000 per year.
Lower utility bills: As a direct result of the TCJA’s corporate tax rate cut, Alabama residents are saving money on utility bills. Lower electric, water, and gas bills help households and small businesses operating on tight margins. For example, at least two Alabama utilities reduced their customers’ bills (see below).
Thanks to the tax cuts, Alabama businesses of all sizes are hiring, expanding, raising pay and increasing employee benefits:
Overseas Hardwoods Company (Stockton, Alabama) — $1,000 tax reform bonuses to employees.
Sabel Steel (Montgomery, Alabama) – Expanding facilities, hiring new employees, pay increases for current employees:
Montgomery, Alabama’s, Sabel Steel is investing heavily in expanding its facilities—which means new jobs, new investment and large pay raises for most of its 230 employees across the South.
“When you’re a business, there are a lot of things to consider,” said Keith Sabel, president and CEO of Sabel Steel. “Taxes are a large part of it.”
Because the tax rate for companies like Sabel Steel—a family-owned steel distributor—has been lowered under tax reform, Sabel is able to maximize the benefits for his company.
First on the list? Rewarding the employees who work hard every day to make Sabel Steel successful.
“We gave a raise to everyone across the board,” said Sabel. “We improved everyone’s pay. We have incentives for as many workers as possible. If they meet or beat expectations, we’re making sure they’re rewarded.”
“We have quality perks,” Sabel added. “Good insurance. Good benefits. We’re constantly trying to improve, and now we’re able to. Morale is very good. We’re a family business, and we run it like a family business—where we take the time to get to know people, their families. I try to look out for my employees all the time.”
But Sabel Steel’s current employees aren’t the only ones who will benefit from tax reform and the booming economy. Sabel Steel also plans to reinvest its tax reform savings in its business by expanding and upgrading facilities in Newnan, Georgia, and Baton Rouge, Louisiana, and adding new equipment that will make its facilities more productive and innovative. Sabel also cites a new plasma machine it purchased for its plant in Theodore, Alabama—a machine that offers smoother and more efficient steel-cutting techniques. It also plans to make further upgrades to its equipment as needed.
To staff the expanded and upgraded facilities, Sabel Steel plans to hire more workers. Its recruitment effort focuses on talent, passion and integrity because Sabel Steel knows that, by starting with solid employees, it can train them on-site and equip them with the skills to do the jobs that the company needs. – July 11, 2018, National Association of Manufacturers article excerpt
American Proteins Inc. (Hanceville, Alabama)— $1,000 bonuses:
“American Proteins Inc. based in Cumming has 700 employees at its operations in Georgia and Alabama. It announced it would give employees $1,000 bonuses “in response to the tax reform package signed into law earlier this year.”
“President Donald Trump and the Republican Congress have reduced taxes for businesses and individuals and I’m excited what this means for our company and its employees,” American Proteins Inc. Chairman Tommy Bagwell said in a statement Feb. 5.” – Feb. 26 2018, Atlanta Business Chronicle article excerpt
Otelco (Oneonta, Alabama) — $500 bonuses for all employees:
The Tax Cut and Jobs Act, enacted in December 2017, affects Otelco’s taxes in 2017, as well as future tax years. Bonus depreciation was increased from 50% to 100%, beginning in 2017, with the Company realizing a benefit of over $0.6 million in fourth quarter 2017. The reduced maximum tax rate has also lowered the Company’s deferred tax liabilities and is reflected in an income tax benefit, raising net income for the quarter and year. “We recently announced to our employees that everyone would be receiving a special bonus of $500,” commented Rob Souza, President and CEO of Otelco. “Coupled with the lower tax withholding rate that most employees should experience, everyone should start 2018 with more take home pay. — March 5, 2018 Otelco statement
Alabama Power (Birmingham, Alabama) – The utility is passing along tax savings to customers:
Alabama Power Company customers will see a reduction in their bills because of the federal income tax cut approved by Congress last year, the Public Service Commission announced at its monthly meeting today.
The reduction in 2018 will be for $257 million, about a 9 percent cut, the PSC said.
The cut requires no action by the PSC, which regulates Alabama Power.
The reduction takes effect in July and continues through December.
The Tax Cuts and Jobs Act, signed into law in December, reduced the federal corporate income tax rate from 35 percent to 21 percent effective Jan. 1, 2018.
The three commissioners, all Republicans, said it was good to see consumers benefit from the tax cuts promoted and signed into law by President Trump.
“This is a great day for Alabama consumers and taxpayers,” Commission President Twinkle Andress Cavanaugh said.
The commission approved two requests from Alabama Power related to the income tax cut.
One would allow the company to apply up to $30 million of excess federal deferred income taxes this year to Energy Cost Recovery, a factor in rate-setting.
The other request from Alabama Power was to make several changes to the PSC’s method of setting rates, called Rate Stabilization and Equalization, or RSE. The PSC said the changes would enable Alabama Power “to mitigate the credit quality impacts” resulting from the Tax Cuts and Jobs Act and preserve rate stability for customers. The changes would allow Alabama Power to increase the equity share of its capital investment, the PSC said.
In conjunction with that second request, Alabama Power committed to no increases in its base rates through 2020 and to credit customers $50 million next year, the PSC said. – May 1, 2018 the Birmingham News article excerpt
Alagasco (Spire Inc.) (Birmingham, Alabama) – The utility is passing along tax savings to customers:
Spire is giving relief to its Alabama customers in the form of rate decreases as a result of the utility being a beneficiary of the Trump tax plan.
Residential customers in Mobile can expect a 4 percent rate decrease while those in Spire’s Central Alabama territory, which covers Montgomery and Birmingham, can expect a 3 percent rate decrease, Spire spokeswoman Jenny Gobble told AL.com Friday. The two territories operate under different tariffs and rate structures, which explains the different rate decreases. – February 2, 2018 the Birmingham News excerpt
Stillman College (Tuscaloosa, Alabama) – The college was able to build a 125 room hotel that will serve as a teaching center for the school’s hospitality program because of the Opportunity Zones.
“In July, Stillman College signed a memorandum of understanding with partners in a project to build a 125-room hotel on the college campus to serve as a teaching center for the school’s hospitality management program. Included in the project is mixed-use residential and commercial space, including market-rate housing for faculty, graduate students and others. The hotel would be operated by HDG Hotels of Ocala, Fla., in partnership with Stillman…
The plan is for the hotel to be sold back to Stillman College for its long-term use at the end of a holding period, with the cash flowing back to the college…
Robert Jenkins, senior managing director for Renaissance HBCU Opportunity Fund, said the Stillman project is consistent with other projects being assembled in OZs, which usually involve some mixed-use development involving retail and housing. Stillman would not be happening without opportunity zones, he said.
“You’re attracting equity to a lower income neighborhood in a tertiary city,” Jenkins said. “As much as I like Tuscaloosa, it’s not Washington, it’s not L.A., it’s not Atlanta.” In addition, graduates of the program will not only have the ability to hold jobs in the hospitality field, but will have executive and entrepreneurial skills developed by the program, he said.” – September 15th, 2019, Alabama (AL.com)
Kalikow Group (Huntsville, Alabama) — The company is building a 406-unit apartment complex in an Opportunity Zone created by the Tax Cuts and Jobs Act.:
Westbury-based The Kalikow Group and its development partner EYC Companies have secured $42 million in construction financing for a new multifamily community in Huntsville, Ala.
The $67 million project called Anthem will be a 406-unit rental community with three-story walk-up apartments and one- and two-story single-family and duplex homes with private yards and detached garages.
Amenities at the complex will feature two clubhouses, two saltwater pools, firepit terraces, lawn game areas, a dog park, a playground and an herb garden, according to a statement from the developers.
“We are excited to embark on yet another development with EYC, which has been a trusted and long-term partner in our developments throughout the Southeast,” Ed Kalikow, president of Kalikow Group, said in the statement. “Huntsville’s designation as a qualified opportunity zone also presents significant advantages, incentivizing investment by allowing the deferment of capital gains and allowing us to create this exciting new live, work, play community that will be the envy of the region.” — June 22, 2020 Long Island Business News article
Walker & Dunlop Inc. (Birmingham, Alabama) — The commercial real estate finance company announced they would be building a new apartment complex located in an opportunity zone:
Walker & Dunlop has structured $51.9 million in financing for ECLIPSE at CityCentre, a five-story, 278-unit, multifamily project here. Located in Huntsville’s Downtown area, the property is within the bounds of a designated opportunity zone census tract. — March 17, 2020 GlobeSt.Com article
Protective Life Corporation (Birmingham, Alabama) — Base wage raised to $15 per hour; $1,000 bonuses for 75% of employees:
Recognizing the benefits it will receive as a result of the recent passage of federal tax reform, Protective has committed to:
- Paying a special $1,000 bonus to approximately 75% of its employees
- Establishing a minimum wage across its employee base of $15/hour — Feb. 13, 2018 Protective Life Corporation statement
Residential Ventures (Birmingham, Alabama) — The company is renovating a space to be used for resterauts and apartments in an Opportunity Zone created by the Tax Cuts and Jobs Act:
An out-of-state developer has detailed more plans for a downtown property on First Avenue North.
Residential Ventures is renovating two floors and adding a third at 2216/2218 First Ave. N. in a project that is expected to reach close to $4 million.
Creature Architecture is designing the 21,000-square-foot project, and David Ashford of The Shopping Center Group is the retail broker.
According to commercial real estate data and analytics provider Reonomy, the building was constructed in 1910 and was last renovated in 1953. The property is located in an Opportunity Zone.
The boutique Denver developer bought the property along with 2327/2409 Morris Ave. for $2.39 million late last year from Lindsey Properties LLC. The development team includes Tim Larson, Cam Borges and Debbie Larson.
Borges, chief operations officer at Residential Ventures, told the Birmingham Business Journal they plan to use the lower floor for a restaurant concept and the upper two floors for two residential units.
The project will feature penthouse-like facades, and both residential units will include a mezzanine and balcony, as well as a living room and large master bedroom. The restaurant will include an outdoor patio and balcony that will open up to a lightwell in the middle of the building, illuminating both the restaurant and residential spaces. — June 10, 2019 Birmingham Business Journal article
Opelika Innovation and Technology Park (Opelika, Alabama) — The mayor announced that he is creating a technology park that is located in an Opportunity Zone created by the Tax Cuts and Jobs Act:
Opelika Mayor Gary Fuller announced the creation of a new technology park for the city Tuesday, which he and city leaders believe will attract new businesses to the city.
The Opelika Innovation and Technology Park has 105 acres of land along Highway 280 West between Veterans and Waverly parkways, in close proximity to Auburn University, Southern Union State Community College, Tiger Town and East Alabama Medical Center.
“I think it’s going to be positive because a number of investors are looking for a place — an opportunity zone — because of the wonderful tax ramifications that it offers investors,” Mayor Gary Fuller said, adding that he thinks the new park will be popular and that the city will hopefully announce its first tenant soon.
John Sweatman, project manager for the city’s department of economic development, said it’s now a matter of letting businesses know about what the park has to offer, and to target companies that would make good fits for the city.
The land for the park is classified as an opportunity zone, which benefits and provides incentives for businesses to move there. Not only is the cost for build-to-suit leasing cheaper, but businesses in opportunity zones also are prioritized for grant making and can benefit from investing in their own operations.
“Opelika has been incredibly proactive about harnessing the power of its Opportunity Zone. Its vision for building a place where innovation and technology can co-exist matches perfectly with the spirit of the Opportunity Zone incentive, which facilitates investment in both buildings and the companies that occupy them,” said Alexander Flachsbart, founder and CEO of Opportunity Alabama, in a news release announcing the new plan.
Gov. Kay Ivey has designated 158 Opportunity Zones across the state. — January 21, 2020 Oanow.Com article
Russell Lands (Alexander City, Alabama) — $500 bonuses for about 400 full-time non-management staff:
Russell Lands, the largest lakeside residential developer in the state, has given full-time employees a $500 check.
“We are thrilled that our company is strong, the economy is good, and that our national leaders recently approved a tax plan that should be very positive for all of us,” said Chairman Ben Russell. “This is a token of the company’s, and my personal, genuine appreciation for what our folks have done to make Russell Lands such a great company. It’s because of our employees’ efforts that we have been able to accomplish so much.”
Non-management-level employees who had been with the company since July 1 were given the checks this week – almost 400 in all. – Jan. 12 2018, Birmingham Business Journal article excerpt
Rising Tide Management (Birmingham, Alabama) – The housing management company lowered the cost of rent for housing in the Opportunity Zones by an average of $100 because of the tax legislation:
“Rising Tide Management of Birmingham was already buying up distressed housing in and around the Magic City before the creation of opportunity zones. Managing Partner Rob Ashurst said the company owns about 500 properties, with about 50 in the zones.
Rising Tide, which manages the Southeast Opportunity Zone Fund, buys the houses, renovates and manages the houses. In some cases, the company buys the houses for about $8,000, spends about $50,000 on renovations, and then rents them to tenants. By doing so, it is “solving the affordable housing problem,” Ashurst said. They have a 2 to 3 percent vacancy rate. This is a different model than other OZ plans which sometimes involve distressed large buildings repurposed as mixed-use properties with retail and housing.
“We’ve already got five years of operating history,” Ashurst said. “So we were able to put together a plan for investors, and the banks were willing to finance. The investors can get a pretty good return.” Because of the Opportunity Zone credits, rent is about $100 cheaper for tenants in the homes located in the zones, Ashurst said.” – September 15th, 2019, Alabama (AL.com)
American Life Building (Birmingham, Alabama) – The TCJA’s Opportunity Zone legislation is paving the way for an empty building to be converted into housing units, some of which will be reserved for those who are unemployed or underemployed:
“A Birmingham opportunity zone project is the $24 million conversion of the 84,000-square-foot Stonewall Building, almost 40 years vacant, into the American Life Building, with 140 one and two-bedroom flats and loft-style apartments. In addition, five of the development’s units will be reserved for rental to clients of The Dannon Project, a local nonprofit that provides workforce development and other services for underemployed and unemployed residents. It is slated for completion next year.” – September 15th, 2019, Alabama (AL.com)
Woodlawn Theatre (Birmingham, Alabama) — A local resident plans to turn the theater into something that can be used to give to the community, made possible because of the Tax Cuts and Jobs Act Opportunity Zone program:
Will Mason plans to turn the former Woodlawn Theatre into a music teaching and performance hub, but the project might be more transformative than just revenue and revitalization. A federal program that gives capital gains tax breaks for investments made in economically distressed areas is funding the project at 5503 1st Avenue North in Woodlawn, a neighborhood just east of downtown Birmingham.
The space will be both a business and provide a community service—affordable music lessons. His lesson business, Mason Music, offers lessons for as low as $10 per month through the nonprofit Mason Music Foundation. “It’s about creative community, revitalizing places and giving hope. It’s giving children a pathway they can love for the rest of their life. You can’t quantify any of that. When you talk about community revitalization, that’s the stuff that makes the difference,” said Alex Flaschbart, CEO of Opportunity Alabama. Opportunity Alabama (OPAL) is a nonprofit that connects OZ funds with projects, collects some data about OZ projects in Alabama, and wants to track how the projects impact the community. Flaschbart said he expects the theatre to create about 25 jobs, including two full-time managers. Backers hope the Woodlawn Theatre’s impact could be more profound than jobs and investment by bringing an accessible music experience and gathering place to the community. Mason says he wants to incorporate community events during the week and hold larger concerts and events on the weekend. Also, he’s considering a weekly movie night and open microphone type events where people could see a show and have a drink for $10 to $15.” — February 29, 2020 AL.Com article
Great Southern Wood Preserving, Inc. (Abbeville, Alabama) — Significantly increased employee benefits: lower healthcare costs, more paid time off, scholarships, and more:
Great Southern Wood Preserving, Incorporated, has begun an active and ongoing process to increase employee benefits by reinvesting its tax savings in its people, the company has announced. The company expects full implementation to take place in 2018.
In late 2017, Congress passed and the President signed into law legislation providing significant tax breaks for corporations. Across America, many companies have chosen a variety of options for applying these savings, such as providing one-time bonuses to employees, increasing charitable giving and reinvesting in facilities upgrades.
For its part, Great Southern Wood will make investments on an ongoing basis to lower healthcare costs for eligible employees, allow employees to accrue more paid time off based on length of service, develop scholarships for dependents of employees and enhance other benefits going forward.
“I’m very pleased that every employee across the company will see the results of the change in tax laws,” said Jimmy Rane, Great Southern Wood’s founder, president and CEO. “The success we’ve enjoyed as a company comes from every one of us working hard and doing our part, and I can’t think of a better way to apply our tax savings than by further investing in benefits programs for our employees. We strive to be an employer that draws the best and brightest to our company, and we believe that providing stronger benefits is essential to this continuing effort.”
Great Southern employs almost 1,200 at locations in eleven states. [Texas, Missouri, Arkansas, Georgia, Alabama, Mississippi, Louisiana, Pennsylvania, Virginia, Maryland, Florida] — March 29, 2018 Great Southern Wood Preserving, Inc. press release
Regions Financial Corporation (Birmingham, Alabama) – base wage increase to $15 per hour; $40 million in charitable donations; $100 million in capital expenditures:
“Regions is making these investments in anticipation of the savings it will recognize as a result of federal tax reform intended to support economic growth.” – Regions Financial Corporation press release
DTI Partners Inc. (Mobile, Alabama) — $1,000 bonus to full-time employees; $300 bonus to part-time employees:
“The tax bill was the primary reason we were able to do this as a company. The bonuses were a great morale booster. We are a very small company but we believe this will help us grow in the long run.” — Message from CEO Tom Busby
Xante Corporation (Mobile, Alabama) — $1,200 bonuses:
Mobile-based Xante Corp. handed out $1,200 bonus checks to most of its employees on Monday, as its CEO gave thanks to a Republican tax reform bill and Rep. Bradley Byrne.
Xante provides high-end printers and related software for use by professional graphics and printing operations. It employs a little over 100 people in Mobile and about 15 more in Europe. CEO Robert Ross said Monday that anyone who’d been with the company for a year or more was getting a $1,200 bonus, while those employed less than a year were getting a different amount.
Mobile employees whooped and cheered as Ross announced the windfall Monday morning. They also heard Ross explain that the company had additional plans for money saved as a result of tax cuts passed by Congress and signed into law by President Donald Trump in December. Among other changes, the tax bill significantly lowered the corporate tax rate. – Feb. 19, 2018 AL.com article excerpt
Lathan & Coleman’s Carillon Oaks (Cleburne County, Alabama) – The Opportunity Zones led to the creation of a $13 million assisted living facility.
“In Cleburne County, close to the Georgia state line, a project is taking shape to transform a school built in 1936 into a $13 million assisted living facility.
Mobile-based development firm Lathan & Coleman is planning Carillon Oaks to open next year in the old Cleburne County High School. It is the first project to use a combination of opportunity zone credits, historic rehabilitation tax credits and new market tax credits, another program targeting underserved areas, to make the project happen. The facility is expected to employ 40,” in a county where nearly 16 percent of the population is at or beneath the poverty line.
“Lathan said the project would not have happened had it not been for opportunity zones, which reduced the cost by more than 40 percent with the tax credit. ” – August 28th, 2019, Alabama (AL.com)
Hillstone Advantage Partners (Opelika, Alabama)— The Opportunity Zone portion of the TCJA led to the creation of a $10 million business park:
“In Opelika, Hillstone Advantage Partners has begun construction on a $10 million, 13-and-a-half acre business park off Hi Pack Drive.
On its website, Hillstone says its goal is “the acquisition and development of income-producing commercial and industrial real estate” in opportunity zones to “generate consistent returns and a profitable exit…all while maximizing community impact.”
The first building in the business park should be completed by the end of the first quarter of 2020, and will be used for startups and businesses that can take advantage of the zone. Developer Jacob Hill said the project was already being considered before the creation of an opportunity zone there, but it acted as an incentive.” – September 15th, 2019, Alabama (AL.com)
T.J. Maxx – 25 stores in Alabama – tax reform bonuses, retirement plan contributions, parental leave, enhanced vacation benefits, and charitable donations:
The 2017 Tax Act benefited the Company in the fourth quarter and full year Fiscal 2018. The Company expects to continue to benefit from the 2017 Tax Act going forward, primarily due to the lower U.S. corporate income tax rate. As a result of the estimated cash benefit related to the 2017 Tax Act, the Company is taking the following actions:
- A one-time, discretionary bonus to eligible, non-bonus-plan Associates, globally
- An incremental contribution to the Company’s defined contribution retirement plans for eligible Associates in the U.S. and internationally
- Instituting paid parental leave for eligible Associates in the U.S.
- Enhancing vacation benefits for certain U.S. Associates
- Made meaningful contributions to TJX’s charitable foundations around the world to further support TJX’s charitable giving. – Feb. 28, 2018 The TJX Companies Inc. press release excerpt
AT&T — 5,071 Alabama-based AT&T employees received $1,000 bonuses. The company also announced a $1 billion increase in nationwide capital expenditures.
Walmart – 144 retail locations in Alabama — Over 22,000 Alabama-based Walmart and Sam’s Club employees are receiving wage increases as well as tax reform bonuses ranging from $200 – $1,000 for a state total of $37,111,483. The starting wage rate was raised for all hourly employees to $11. The company also announced expanded maternity and parental leave and $5,000 for adoption expenses.
Apple (Apple store locations in Birmingham and Huntsville) — Alabama-based Apple employees received $2,500 bonuses in the form of restricted stock units. Nationally, $30 billion in additional capital expenditures; 20,000 new employees will be hired; increased support of coding education and science, technology, engineering, arts, and math; increased support for U.S. manufacturing.
BancorpSouth Bank (30 branch locations in Alabama) – pay raises for over 70 percent of employees; $1,000 bonuses for nearly 20 percent of employees:
BancorpSouth Bank today announced an additional investment in its employees, which includes pay increases and /or one-time bonuses to nearly all non-commissioned employees.
The investment of over $10 million in 2018 will benefit 96% of the Company’s non-commissioned workforce. Pay increases were effective January 1, 2018.
“We are proud to reward our team with this opportunity since the Tax Cuts and Jobs Act should benefit everyone” said Dan Rollins, Chairman and CEO. “BancorpSouth’s continued and future success is based on the economic vitality of the communities we serve and taking care of our teammates allows us to provide the very best service to our customers, communities and shareholders.” – Jan. 3, 2018 BancorpSouth Bank press release
The increased compensation overall at BancorpSouth affected more than 70 percent of all employees, and provided a $1,000 bonus to nearly 20 percent of all employees.
BancorpSouth employs some 4,000 employees in more than 230 locations in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri, Tennessee and Texas, plus an insurance location in Illinois. – Jan. 4, 2018 Daily Journal/BizBuzz article
“This incremental investment in our associates was made possible by the new tax reform bill.” — Jan. 25, 2018 Home Depot press release
Comcast (Multiple locations in Alabama) — $1,000 bonuses; nationally, at least $50 billion investment in infrastructure in next five years.
Chipotle Mexican Grill (Multiple locations in Alabama) – Bonuses ranging from $250 to $1,000; increased employee benefits; nationally, $50 million investment in existing restaurants.
Starbucks Coffee Company (Multiple locations in Alabama) – $500 stock grants for all retail employees, $2,000 stock grants for store managers, and varying plan and support center employee stock grants. Nationally, 8,000 new retail jobs; an additional wage increase this year, totaling approximately $120 million in wage increases, increased sick time benefits and parental leave.
U-Haul (Multiple locations in Alabama) – $1,200 bonuses for full-time employees, $500 for part-time employees.
Wells Fargo – 125 bank locations in Alabama; raised base wage from $13.50 to $15.00 per hour; nationally, $400 million in charitable donations for 2018; $100 million increased capital investment over the next three years.
Note: If you know of other Alabama examples, please email John Kartch at [email protected]