A buried provision in Alabama's HB393 updates which businesses qualify for state tax breaks—and it could matter for your studio.
Most gym and fitness studio owners in Alabama don't realize that their eligibility for state tax abatements, investment credits, and research grants depends on a technical classification system that hasn't been updated in over a decade. That's about to change.
Alabama's HB393, a bill focused on tax abatement and tax incentive programs, contains a provision that updates the North American Industry Classification System (NAICS) codes used across five state statutes. The update moves from the 2012 NAICS codes to the 2022 version—a shift that expands which businesses qualify for Alabama's industrial tax abatements and related incentives.
NAICS codes are the standard way the federal government—and states following federal guidance—classify businesses by industry. When Alabama's tax incentive laws were written, they referenced the 2012 NAICS code list. Over the past decade, the classification system has evolved. Some industries have been reclassified, new codes have been created, and others have been consolidated.
By updating to the 2022 NAICS codes, HB393 ensures that fitness studios and gyms operating under newer or reclassified industry codes are no longer left out of programs they may have qualified for under the updated system. In short: the state is aligning its tax incentive eligibility with current industry definitions.
This matters because tax abatements and investment credits can be significant for growing businesses. If your gym or studio falls into a newly recognized or reclassified 2022 NAICS code that wasn't explicitly listed under the old 2012 system, this update could open doors to incentives previously unavailable to you.
The specific provision is found in §40-9B-3 (pages 10, lines 269–273) and affects the operative NAICS code references across all five amended statutes governing Alabama's tax abatement and incentive programs.
The provision becomes effective June 1, 2026. That gives gym and fitness studio owners several months to understand how the updated codes might apply to their business and to plan accordingly if they're considering applying for tax abatements or other state incentives.
If you operate a multi-location chain or hold different business classifications across properties, the timing is worth noting—you may want to review your current NAICS code classification before the June 2026 effective date to understand whether the 2022 update changes your eligibility status.
The update itself is technical and unglamorous, but for owners operating in newly classified or reclassified codes, it represents a real shift in access to state tax incentives. It's the kind of buried provision that doesn't make headlines but can affect your bottom line.
Alabama's Department of Revenue and the Alabama Fitness Industry Association can provide guidance on NAICS code classification for your specific business.