A buried provision in Alabama's HB393 updates industry classification codes—and it could change which tax breaks your fitness business qualifies for.
Most gym and fitness studio owners in Alabama don't realize that the tax abatements and incentives their business may qualify for depend on how state law classifies their industry. And most don't know that classification system just changed.
On June 1, 2026, Alabama's HB393 takes effect, updating how the state identifies which industries are eligible for certain tax breaks. The change centers on something called NAICS codes—the North American Industry Classification System that government agencies use to sort businesses into categories.
HB393 updates Alabama's tax code to reference the 2022 NAICS system instead of the older 2012 version. It also corrects specific code numbers used to define what qualifies as an "Industrial or Research Enterprise" under state law. Those enterprises are eligible for abatements on noneducational ad valorem taxes, construction-related transaction taxes, and mortgage and recording taxes.
In plain terms: the state is cleaning up its list of which types of businesses can apply for these tax breaks. Some codes were consolidated or renumbered between 2012 and 2022. For example, code 51221 became 5122, and 51913 became 51929. When the state updates its reference system, the eligibility criteria for tax incentives can expand or shift.
For fitness studios and gyms, this matters because your business's NAICS classification determines whether you fall into a category the state considers eligible for abatement programs. If your operation was borderline under the old codes, or if the industry classification itself was unclear, the updated 2022 codes may clarify your status—either opening new opportunities or confirming existing ones.
Any gym, fitness studio, or wellness facility in Alabama considering expansion, renovation, or new construction should pay attention. If you've been thinking about a capital project and wondered whether you might qualify for tax relief on construction costs or property taxes, this update could change the answer.
The provision is found in Section 1 of HB393, specifically §40-9B-3(a)(10)a.1., on pages 4–5 of the bill text. The effective date is June 1, 2026, which gives business owners time to understand how the new codes apply to their situation before that date arrives.
If you operate a fitness business and have considered applying for state tax abatements, now is the time to verify your NAICS code and understand how the 2022 update affects your eligibility. The specifics depend on your exact business structure and the nature of your operations, so consulting with a tax professional or your state economic development office is a smart step.
The update itself is administrative—the state is simply aligning its tax code with the current industry classification system. But for gym owners and studio operators, administrative changes can have real financial consequences. Understanding this provision before June 2026 puts you in a better position to make informed decisions about expansion and tax planning.
Source: Alabama HB393, Section 1, §40-9B-3(a)(10)a.1., effective June 1, 2026.