Estate and Inheritance Tax.

Ala. Code tit. 40, ch. 15

in effect

Ala. Code § 40-15-1 Meaning of “Executor,” “Administrator” or “Legal Representative”.

40-15-1. Meaning of “Executor,” “Administrator” or “Legal Representative”. The terms “executor,” “administrator” and “legal representative,” used interchangeably in this chapter, shall be held to mean the executor or administrator or trustee or legal representative of the decedent whose estate is subject to an estate tax under this title. In the event no executor or administrator is appointed and qualified, then the term “executor” as used herein shall be held to mean any person in actual or constructive possession and acting for any estate subject to tax under this chapter. (Acts 1935, No. 194, p. 256; Code 1940, T. 51, §433.)

Ala. Code § 40-15-2 Amount of Tax.

40-15-2. Amount of Tax. Subject to the exception hereinafter stated, there is hereby levied and imposed upon all net estates passing by will, devise or under the intestate laws of the State of Alabama, or otherwise, which are lawfully subject to the imposition of an estate tax by the State of Alabama, a tax equal to the full amount of state tax permissible when levied by and paid to the State of Alabama as a credit or deduction in computing any federal estate tax payable by such estate according to the act of Congress in effect, on the date of the death of the decedent, taxing such estate with respect to the items subject to taxation in Alabama. The tax hereby imposed shall not exceed in the aggregate amounts which may by any law of the United States be allowed to be credited against or deducted from such federal estate tax. The estate tax hereby levied shall be levied only so long as and during the time an inheritance or estate tax is enforced by the United States against Alabama inheritances or estates and shall only be exercised or enforced to the extent of absorbing the amount of any deduction or credit which may be permitted by the laws of the United States now existing or hereafter enacted to be claimed by reason thereof as a deduction or credit against such similar tax of the United States applicable to Alabama inheritances or estates. The rates of taxation, the definition of “net estate” and the methods of arriving thereat shall be as provided in such act of Congress. (Acts 1935, No. 194, p. 256; Code 1940, T. 51, §432.)

Ala. Code § 40-15-3 Duplicate of Federal Return Filed by Executor; Computation by Department of Revenue.

40-15-3. Duplicate of Federal Return Filed by Executor; Computation by Department of Revenue. It is hereby made the duty of the executor of the estate of any person who has died a resident of Alabama and upon which estate the tax imposed under any federal revenue act has not been paid, and the executor of any person who may hereafter die a resident of this state, and whose estate is subject to the payment of a federal estate tax, to file with the Department of Revenue of Alabama a duplicate of all the returns which he is required to make to the federal authorities for the purpose of having the estate taxes determined. When such duplicate return is filed with the Department of Revenue, it shall compute the amount of tax that would be due upon said return as federal estate taxes imposed under any federal act permitting credit of inheritance or estate taxes to the states upon the property of said estate taxable in the State of Alabama and shall assess against said estate as estate tax for the State of Alabama the amount levied and found to be due under the provisions of such act or acts. If, after the filing of any duplicate returns herein required and the assessment of the state estate taxes, upon basis of return made, the federal authorities shall increase or decrease the amount of the federal estate tax, an amended return shall be filed with the Department of Revenue, showing all the changes made in the original return and the amount of increase or decrease in the federal estate tax, and the Department of Revenue shall assess against said estate the additional amount found to be due hereunder. In the event of a decrease in the federal estate tax, the state shall refund to the said estate its proportion of said decrease. (Acts 1935, No. 194, p. 256; Code 1940, T. 51, §434.)

Ala. Code § 40-15-4 Time of Payment and Filing Return; Extension of Time.

40-15-4. Time of Payment and Filing Return; Extension of Time. The tax imposed by this chapter shall be paid and the return required by Section 40-15-3 shall be filed on or before nine months after the decedent’s death and shall be paid by the personal representative to the Department of Revenue; provided, that where the Department of Revenue finds that the payment on the due date of any part of the amount due would impose undue hardship upon the estate, the Department of Revenue may extend the time for payment of all or any part, not to exceed 10 years from the original due date. In such case the amount or amounts in respect of which the extension is granted shall be paid on or before the dates thus fixed, unless further extended within said limitation as to time. If the time for payment is extended, there shall be collected, in addition to the tax, interest thereon at the legal rate from the original due date of the tax to the date of payment. The Department of Revenue may, in its discretion, accept such security as it may approve for the deferred payments or may release any part of remainder of the estate from any claim or lien for the payment of the tax. (Acts 1935, No. 194, p. 256; Code 1940, T. 51, §435; Acts 1983, No. 83-740, p. 1208, §1; Acts 1992, No. 92-186, p. 349, §42.)

Ala. Code § 40-15-5 Amended Return Showing Change in Federal Tax.

40-15-5. Amended Return Showing Change in Federal Tax. In the event that the federal authorities shall, after the filing of the return with the Department of Revenue, increase or decrease the amount of the federal estate taxes as a result of appeal or otherwise, an amended return shall be filed with the Department of Revenue showing all the changes made in the original return and the amount of final increase or decrease in the federal estate tax. If the amended return shall show an increase in the amount of the federal estate tax, the Department of Revenue shall assess against and there shall be payable in respect to said estate any deficiency in the tax theretofore paid or assessed. If the amended return shall show a decrease in the federal estate taxes, the Department of Revenue, on receipt of an appropriate certificate of refund, abatement or recovery, shall forthwith certify the amount of such refund found to be due to such estate to the Comptroller, who, upon receipt of such certificate of refund due, shall issue his warrant for the amount shown in said certificate, payable to the person legally authorized to receive such refund, such payment to be made from the general state funds. (Acts 1935, No. 194, p. 256; Code 1940, T. 51, §436.)

Ala. Code § 40-15-7 Nonresident Decedents.

40-15-7. Nonresident Decedents. (a) Except as herein otherwise provided, all of the provisions of this chapter shall be applicable to so much of the estates of nonresident decedents as is subject to estate tax under the act of Congress in effect at the time of the death of decedent as consists of real estate or tangible personal property located within this state or other items of property or interest therein lawfully subject to the imposition of an estate tax by the State of Alabama. (b) In assessing the tax upon any real estate or tangible property located within this state belonging to the estate of a nonresident decedent, which shall pass by will, devise or by the laws of intestacy, the Department of Revenue shall determine the tax due to be such proportion of the federal estate tax as would be leviable upon an estate of similar taxable net value, less that proportion of any exemption to which the estate is entitled, which the actual value of the real estate and tangible personal property located within this state belonging to the estate of the nonresident decedent bears to the actual value of the gross estate of the nonresident decedent wherever situated whether in this state or not. (c) No tangible personal property located within this state belonging to the estate of a nonresident decedent and taxable under this chapter shall be transferred or delivered to any person except a legal representative of the estate of said deceased duly appointed whether in this state or in the state of the decedent’s domicile by a court having jurisdiction for the purpose. (d) Such property shall not be transferred or delivered to a foreign legal representative until the tax has been paid, except under such conditions and after giving such security as the Department of Revenue may agree upon. Any person or corporation which shall transfer or deliver or having control thereof shall permit the transfer or delivery of any such property to any person other than a resident legal representative before such tax has been paid shall be liable for the tax and additional penalty of not more than $1,000 in an action brought by the Department of Revenue for the use of the state. (e) Legal representatives shall be liable for such tax upon and to the extent of all such property which shall come into their hands as such, with interest as hereinafter provided. (f) Every person having in his possession or control any tangible personal property belonging to the estate of a nonresident and taxable under this chapter shall, unless the property is delivered to a resident legal representative within 30 days after the death of the owner, notify the Department of Revenue and prepare and transmit to the department and the legal representative an itemized schedule of the property. If the tax is not paid or a resident legal representative appointed within nine months after the owner’s death, the Circuit Court of the County of Montgomery shall, upon petition of the Department of Revenue, appoint a resident legal representative, or a special legal representative as the circumstances of the case may require, to whom the property shall be transferred, whose duty it shall be to collect and pay the tax and to account for the balance of the property according to law under order of the court. (g) All taxes imposed by this chapter in relation to estates of nonresident decedents shall be due and payable at the time of the death of the decedent; and, if not paid within nine months thereafter, unless the time for payment shall be extended, interest shall be charged and collected from the expiration of nine months after the death of the decedent, and said taxes and interest shall be and remain a lien on the property transferred until the same are paid. (h) Real estate and tangible personal property within the jurisdiction of this state, except as otherwise provided, belonging to nonresidents which shall pass by deed, grant, bargain, sale or gift, made in contemplation of death, or made or intended to take effect in possession or enjoyment at or after the death of the grantor or donor, shall be subject to the same tax imposed upon transfers hereinbefore described by this chapter. The taxes upon such transfer shall become due and payable at once upon the death of the grantor or donor, and if not paid within nine months from the death of the grantor or donor, unless the time for payment shall be extended, shall be subject to interest as aforesaid after the expiration of said period until paid. Said taxes and interest shall be a charge against the person receiving such property, and the property transferred shall be subject to a lien to secure its payment. All persons or corporations within the jurisdiction of the state in whose possession or control any such property so transferred or to be transferred remains at the time of the death of the grantor or donor shall be subject to all the duties, liabilities, and penalties imposed herein upon persons having the possession or control of the personal estate of such decedent. (i) A resident legal representative holding personal property of a deceased nonresident subject to said tax shall deduct the tax therefrom or collect it from the legal representative in the state of the decedent’s domicile and shall not deliver such property to him or any other person until he has collected the tax and paid the same to the Department of Revenue. When the transfer of such personal property is subject to a tax under the provisions of this chapter and the legal representative in the state of domicile neglects or refuses to pay the tax upon demand, or if for any reason the tax is not paid within nine months after the decedent’s death, or within the time extended, the resident legal representative may, upon such notice as the Circuit Court of the County of Montgomery may direct, be authorized to sell such property or, if the same can be divided, such portion thereof as may be necessary, and shall deduct the tax from the proceeds of such sale and shall account for the balance, if any, in lieu of the property. When a conveyance made by the nonresident decedent in his lifetime is subject to said tax, the resident legal representative shall collect the taxes due on account of such conveyance and may be authorized to sell any property subject to the lien of such tax, as in other cases. (j) The Department of Revenue shall determine the amount of all taxes due and payable under the provisions of this chapter in relation to nonresident decedents and shall certify the amount due and payable to the resident legal representative, if any, otherwise, to the person or persons by whom the tax is payable. (k) The Department of Revenue, whenever it has knowledge or reason to believe that any person, firm, or corporation has in his, its or their possession or control any tangible personal property belonging to the estate of a deceased nonresident upon or in respect to which the tax has not been paid and a schedule of which has not been furnished, as herein provided, or that any such person, firm, or corporation has received a transfer or delivery of such property or made such transfer or delivery, except to a resident legal representative, upon which or in respect to which the tax has not been paid, as herein provided, or that such person, firm, or corporation has knowledge of a transfer or delivery of any such personal property, of such nonresident decedent in his lifetime, by deed, grant, bargain, sale, or gift, made in contemplation of death, or made or intended to take effect in possession or enjoyment at or after the death of the grantor or donor, or has possession or control of property so transferred, may require such person or any member of such firm, or any officer of such corporation to appear at the office of the Department of Revenue at Montgomery, at such time as the Department of Revenue may designate, and then and there to produce for the use of the department all books or papers which may be in the possession or control of such person, firm, or corporation relating to such property or transfer or delivery and to furnish such other information relating to the same as he may be able and the department may require. Whenever the Department of Revenue shall require the attendance of any person, as herein provided, it shall issue a notice stating the time and place when such attendance is required and shall transmit the same by certified or registered mail, or cause a copy of the same to be given in hand, to such person at least 14 days before the date when such person is required to appear. If any person receiving such notice shall neglect or fail to attend or to give attendance so long as may be necessary, for the purpose for which the notice was issued, or refuse to furnish such books or papers or give such information, or if a corporation or firm whose officer or member is thus summoned refuses to permit him to produce such books or papers as are called for and are within the control of the corporation or firm, such person, firm, or corporation shall be liable to a penalty of $25 for each offense, which may be recovered by the Department of Revenue for the use of the state. Any person attending in response to summons as herein provided shall thereafter be entitled to the same travel and witness fees as are allowed to witnesses summoned to testify on behalf of the state in other cases. (Acts 1935, No. 194, p. 256; Code 1940, T. 51, §438; Acts 1983, No. 83-740, p. 1208, §2; Acts 1992, No. 92-186, p. 349, §43.)

Ala. Code § 40-15-8 Location of Property for Purposes of Death Taxation.

40-15-8. Location of Property for Purposes of Death Taxation. Moneys, credits, securities and other intangible personal property within the state not employed in carrying on any business therein by the owner shall be deemed to be located at the domicile of the owner for purposes of death taxation and, if held in trust, shall not be deemed to be located in this state for purposes of death taxation because of the trustee’s being domiciled in this state; provided, that if no other state subjects such property held in trust to death taxation, it may be deemed property having a taxable situs within this state for purposes of death taxation. (Acts 1939, No. 593, p. 965, §1; Code 1940, T. 51, §438(1).)

Ala. Code § 40-15-9 Reciprocity; Effect of Unconstitutionality of Section.

40-15-9. Reciprocity; Effect of Unconstitutionality of Section. This chapter shall be effective only as to the property of residents of states which grant to property of residents of Alabama a similar exemption from death taxation. In the event, however, that such reciprocal provision contained in this section shall be declared unconstitutional or invalid, either in part or in whole, then Section 40-15-8 shall continue in full force and effect, it being the legislative intent to exempt the property described in Section 40-15-8 from death taxation notwithstanding any subsequent invalidation of the reciprocal provision herein contained. (Acts 1939, No. 593, p. 965, §2; Code 1940, T. 51, §438(2).)

Ala. Code § 40-15-12 Disposition of Proceeds.

40-15-12. Disposition of Proceeds. Such amount of money as shall be appropriated for each fiscal year by the Legislature to the Department of Revenue with which to pay the salaries, the cost of operation and the management of the said department shall be deducted, as a first charge thereon, from the taxes collected under and pursuant to Section 40-15-2; provided, that the expenditure of said sum so appropriated shall be budgeted and allotted pursuant to Article 4 of Chapter 4 of Title 41 and limited to the amount appropriated to defray the expenses of operating said department for each fiscal year. The balance of the tax collected under and pursuant to said Section 40-15-2 shall remain in the State Treasury to the credit of the State General Fund. (Acts 1935, No. 194, p. 256; Code 1940, T. 51, §441; Acts 1951, No. 939, p. 1606.)

Ala. Code § 40-15-13 Lien of State; Affidavit by Personal Representative of Estate.

40-15-13. Lien of State; Affidavit by Personal Representative of Estate. (a) The State of Alabama shall have a lien for all taxes and interest thereon which are or may become due hereunder on all property which a decedent dies seized or possessed of subject to taxes under this chapter, in whatever form of investment it may happen to be, and all property acquired in substitution therefor. (b) The personal representative of an estate may execute and record in the county of last domicile of the decedent and wherever the decedent’s probate estate is pending, an affidavit certifying that the estate is not taxable or alternatively, an affidavit certifying that the estate is taxable and that the proper copy of the federal estate tax return has or will be filed with the department within the proper time limits as provided by law. The affidavit shall begin by stating that it is being filed in accordance with this section. The content of the affidavit shall include, but not be limited to, the legal name of the decedent, the Social Security number of the decedent, the legal residence, including county, of the decedent, the date of death, whether a federal estate tax return will be filed, and the name and address of the administrator/executor. Assets, which are owned by the estate but held, administered, or maintained by a person other than the personal representative, may be transferred in reliance on the recorded affidavit, and without obtaining an Alabama Estate Tax Waiver, unless they know or should know of the incorrectness of the recorded affidavit. (Acts 1935, No. 194, p. 256; Code 1940, T. 51, §442; Act 2001-468, p. 622, §1; Act 2002-516, p. 1330, §1.)

Ala. Code § 40-15-14 Extension of Payment until Determination of Federal Tax.

40-15-14. Extension of Payment until Determination of Federal Tax. The tax hereby levied, being based and conditioned upon the levy of a similar tax by the United States, in the event that after due return made the final assessment of the tax or final assessment as to the value of the estate for the purposes of such federal tax shall not have been arrived at when payment would otherwise become due or delinquent hereunder, then and in such event the time for payment of the tax due hereunder shall, on showing being made to the Department of Revenue, be extended until final agreement, determination or assessment of the tax or value of the estate for the determination of the tax shall have been made for the purpose of such federal tax; provided, that the Department of Revenue may demand and require the payment of such amount of the tax as it may determine will not be in excess of the total tax that will be due the State of Alabama under this chapter, as shown by the tax return made, when the final determination of the amount of the assessment of the tax shall have been made for federal tax purposes. (Acts 1935, No. 194, p. 256; Code 1940, T. 51, §443.)

Ala. Code § 40-15-15 Assessment of Tax Due.

40-15-15. Assessment of Tax Due. Where appropriate returns are made and information supplied by the legal representative of any estate subject to the tax imposed hereby, the Department of Revenue shall assess the tax due in time to enable such legal representative to make payment of the same and receive credit upon the federal tax. The Department of Revenue may adopt the valuation arrived at by the federal authorities as the basis for the tax hereunder. (Acts 1935, No. 194, p. 256; Code 1940, T. 51, §444; Acts 1992, No. 92-186, p. 349, §44.)

Ala. Code § 40-15-17 Property Outside of State.

40-15-17. Property Outside of State. In the event that the estate of any decedent taxable hereunder shall include property situated outside of the state, the proportion of the federal estate tax leviable hereunder against or in respect to the property of the estate subject to the tax imposed hereby shall be that proportion which the property of the estate within or subject to the tax jurisdiction bears to the gross value of the estate of the decedent not so subject to taxation. (Acts 1935, No. 194, p. 256; Code 1940, T. 51, §446.)

Ala. Code § 40-15-18 State and Federal Estate Taxes to Be Paid Out of Estate Property.

40-15-18. State and Federal Estate Taxes to Be Paid Out of Estate Property. Unless the decedent directs otherwise in his or her will, all estate taxes, whether state or federal, payable by reason of the death of the decedent, shall be paid by the executor or other personal representative out of the estate property and shall be a charge against the residue thereof, and the executor or other personal representative shall be under no duty to recover from anyone for the benefit of the estate the pro rata portion of the estate tax attributable to inclusion in the gross estate of any property, including proceeds of policies of insurance upon the life of the decedent receivable by a beneficiary other than the executor or other personal representative, which does not pass to the executor or other personal representative as a part of the estate. This section shall apply to the estate of any decedents who shall die on or after July 26, 1951, and before January 1, 2008, and to the estate of any decedent who dies after December 31, 2007, if the decedent continuously lacks testamentary capacity from January 1, 2008, until the date of death. (Code 1940, T. 51, §449(1); Acts 1951, No. 291, p. 583; Act 2007-283, p. 501, §13.)

Ala. Code § 40-15-19 Administration of Chapter.

40-15-19. Administration of Chapter. The administration of this chapter is vested in and shall be exercised by the Department of Revenue, which shall prescribe the forms and reasonable rules of procedure in conformity with this chapter for making returns and for ascertainment, assessment and collection of the taxes imposed hereunder. (Acts 1935, No. 194, p. 256; Code 1940, T. 51, §447.)

Source: Alabama Legislature (alison.legislature.state.al.us)URL: https://alison.legislature.state.al.us/code-of-alabamaFetched: 10/20/2026