A buried provision in Alabama's HB393 could change which fitness businesses qualify for state tax abatements—and most owners don't know it yet.
Most gym and fitness studio owners in Alabama have never heard of NAICS codes. But starting June 1, 2026, one of them might determine whether your business qualifies for valuable state tax abatements, investment credits, and grants—or loses eligibility entirely.
That's because HB393, a bill focused on updating Alabama's tax incentive programs, contains a provision that shifts the classification system used to define which businesses count as "industrial or research enterprises" under state law. The change is technical, but the consequences are real.
For years, Alabama's tax incentive statutes have used the 2012 version of the North American Industry Classification System (NAICS)—a federal standard that assigns numeric codes to different types of businesses. HB393 updates that reference across all amended statutes to the 2022 NAICS classification system.
This matters because NAICS codes don't stay static. Between 2012 and 2022, some industry classifications shifted, merged, or were redefined. A fitness business whose code qualified for tax abatement eligibility under the 2012 system might fall into a different code under 2022 standards—potentially gaining or losing eligibility for state incentive programs.
The specific language appears in Alabama Code §40-9B-3(a)(14), on page 10, lines 269-273 of HB393. It's the kind of provision that doesn't make headlines but can quietly reshape who qualifies for tax relief.
Fitness studios and gyms that currently receive or are applying for tax abatements, investment tax credits, or state grants should pay attention. If your business's NAICS code changed between the 2012 and 2022 classification systems, your eligibility status could change when the new code takes effect.
This is particularly relevant for specialized fitness operations—boutique studios, training facilities, or hybrid wellness businesses—where classification boundaries can be ambiguous. A business classified one way under 2012 codes might be reclassified under 2022 standards.
The effective date is June 1, 2026, giving business owners time to prepare. If you currently benefit from tax incentives or are considering applying, now is the moment to:
Review your current NAICS code and confirm whether it's based on 2012 or 2022 classifications. Contact Alabama's Department of Revenue or your tax advisor to understand how the code change might affect your specific business. If you're applying for new incentives, clarify which NAICS system the state is currently using for eligibility determinations.
This isn't an emergency, but it's not something to ignore either. Tax incentive programs can represent meaningful savings for fitness businesses, and understanding how classification changes affect your eligibility is basic due diligence.
For a detailed breakdown of how NAICS code changes may apply to your specific fitness business, contact your state trade association or local tax professional. The Alabama Department of Revenue can also clarify current eligibility requirements under both systems.