Privilege Tax.

Ala. Code tit. 40, ch. 14A, art. 2

in effect

Ala. Code § 40-14A-21 Short Title.

40-14A-21. Short Title. This article shall be known and may be cited as the “Alabama Business Privilege Tax Act of 1999.” (Act 99-665, 2nd Sp. Sess., §2; Act 2000-705, p. 1442, §2.)

Ala. Code § 40-14A-22 Levy and Amount of Tax.

40-14A-22. Levy and Amount of Tax. (a) Levy of tax. There is hereby levied an annual privilege tax on every corporation, limited liability entity, and disregarded entity doing business in Alabama, or organized, incorporated, qualified, or registered under the laws of Alabama. The tax shall accrue as of January 1 of every taxable year, or in the case of a taxpayer organized, incorporated, qualified, or registered during the year, or doing business in Alabama for the first time, as of the date the taxpayer is organized, incorporated, registered, or qualifies to do business, or begins to do business in Alabama, as the case may be. The taxpayer shall be liable for the tax levied by this article for each year beginning before the taxpayer has been dissolved or otherwise ceased to exist or has withdrawn or forfeited its qualification to do business in Alabama. The amount of the tax due shall be determined by multiplying the taxpayer’s net worth in Alabama by the rate determined in subsection (b). (b) Rate of tax. For all taxable years of taxpayers that begin after December 31, 1999, the rate of tax shall be as set forth below. If taxable income of the taxpayer is: at least | but less than | The tax rate shall be $1 | $0.25 per $1,000 $1 | $200,000 | $1.00 per $1,000 $200,000 | $500,000 | $1.25 per $1,000 $500,000 | $2,500,000 | $1.50 per $1,000 $2,500,000 | $1.75 per $1,000 (c) Minimum tax. (1) Except as provided in subsection (f), and subdivisions (2) and (3), the privilege tax levied by this article on certain corporations, business trusts, limited liability entities, and disregarded entities shall not be less than $100. (2) For the taxable year beginning after December 31, 2022, taxpayers who would otherwise be subject to the minimum tax due of $100 provided for in subdivision (c)(1) shall pay $50 in lieu thereof. This subdivision shall not apply to those subject to the tax levy provided under Section 20-2A-80. (3) For taxable years beginning after December 31, 2023, taxpayers who would otherwise be subject to the minimum tax due provided for in subdivisions (c)(1) or (c)(2) shall be exempt from the privilege tax levied by this article and the associated filing requirement. This subdivision shall not apply to those subject to the tax levy provided under Section 20-2A-80. (d) Maximum tax. (1) Except as provided in subdivision (2), the privilege tax levied by this article shall not exceed $15,250 for any taxpayer for the taxable year beginning January 1, 2000. For each taxable year thereafter, the maximum tax shall not exceed $15,000 for any taxpayer, except as provided in subdivision (2). (2) With respect to any (i) financial institution groups as defined in subsection (f)(1); (ii) insurance company that is subject to the premium taxes levied by Chapter 4A of Title 27; and (iii) corporation, company, limited liability entity, or association whose property is assessed for taxation pursuant to the provisions of Chapter 21 and is obligated to serve the general public, but is not subject to the Alabama Corporate Income tax, the privilege tax levied by this article shall not exceed $3,000,000, for any taxpayer or, for a financial institution group, for the financial institution group as a whole each year except as provided in subsection (e). The privilege tax levied by this article on any electing family limited liability entity shall not exceed $500. The privilege tax levied by this article on any corporation organized as a not-for-profit corporation that does not engage in any business other than holding title to property and paying the expenses thereof, including, without limitation, a property owners’ association or a corporation organized solely to hold title to property on a temporary basis, shall not exceed $100. (e) Short taxable years. If any taxpayer’s taxable year is less than 12 months because the taxpayer is incorporated or organized within the taxable year, or if any foreign corporation or foreign limited liability entity qualifies, registers, or begins to do business in this state within the taxable year or converts to a taxable year other than the calendar year, the amount of the tax levied by this article shall be determined in the manner specified in this article but apportioned to the short taxable year in same proportion as the number of days in the short taxable year bears to 365, but in no event less than the amounts as specified in subsection (c) as applicable nor more than the applicable amount specified in subsection (d). (f) Minimum taxes for financial institution groups. (1) For purposes of this subsection, the following terms shall mean: a. Affiliated Group. (i) One or more chains of corporations or limited liability entities connected through the ownership of stock or ownership interests with a common parent which is a corporation or limited liability entity, but only if the common parent owns directly stock or ownership interests meeting the requirements of item (ii) in at least one of the other corporations or limited liability entities, and only if stock or ownership interests meeting the requirements of item (ii) in each of the corporations or limited liability entities (except the common parent) is owned directly by one or more of the other corporations or limited liability entities. (ii) The ownership of stock or ownership interests of any corporation or limited liability entity meets the requirements of this paragraph if it possesses at least 80 percent of the total voting power or capital and profits interest of the corporation or limited liability entity. b. Financial Institution. The meaning given in Section 40-16-1. c. Financial Institution Group. All taxpayers in an affiliated group where at least one member of the group is a financial institution that is subject to the provisions of Chapter 16. In the event a financial institution taxpayer is not a member of an affiliated group, that financial institution shall be treated as a financial institution group. (2) To the extent that the members of a financial institution group have different taxable years, the group shall be deemed, for purposes of the business privilege tax levied by Article 2, to have a calendar taxable year. (3) Taxpayers who are members of a financial institution group shall complete their business privilege tax returns without regard to this subsection. Those taxpayers shall submit their returns together, and the minimum tax amount provided in subdivision (5) shall apply to the aggregate business privilege tax liability of the group. To the extent that the minimum amount provided in subdivision (5) applies to determine the liability of the group, each taxpayer that is a member of the group shall be liable for that portion of the group liability which is equal to the amount multiplied by the ratio of the taxpayer’s liability without regard to this subsection over the liability of the group without regard to this subsection. Upon the annual election of the common parent, a financial institution group may file a single return, executed by the common parent of that financial institution group. The return shall be completed as if the financial institution group were a single taxpayer. Each member of the financial institution group shall be jointly and severally liable for the group’s business privilege tax and corporate shares tax liabilities. (4) The tax returns for all members of a financial institution group shall be due no later than the corresponding Alabama financial institution excise tax return due date. Extensions for filing these returns shall not be granted for more than six months. (5) For taxable years beginning on or after January 1, 2000, the minimum aggregate business privilege tax levied by Article 2 on all members of a financial institution group shall be: a. For financial institutions with total deposits inside Alabama of less than one billion dollars ($1,000,000,000) within that financial institution group, as reported to the FDIC, OTS, or the NCUSIF as of June 30 of the immediately preceding taxable year, the tax rate shall be $.125 per one thousand dollars ($1,000) of such deposits. For deposit rate purposes for all future periods, the deposits shall in no event be less than the deposits listed as of June 30, 1999. b. For financial institutions with total deposits inside Alabama of one billion dollars ($1,000,000,000) or greater up to and including six billion dollars ($6,000,000,000) within that financial institution group, as reported to the FDIC, OTS, or the NCUSIF as of June 30 of the immediately preceding taxable year, the tax rate shall be $.17 per one thousand dollars ($1,000) of such deposits. For deposit rate purposes for all future periods, the deposits shall in no event be less than the deposits listed as of June 30, 1999. c. For financial institutions with total deposits inside Alabama greater than six billion dollars ($6,000,000,000) within that financial institution group, as reported to the FDIC, OTS, or the NCUSIF as of June 30 of the immediately preceding taxable year, the tax rate shall be $.225 per one thousand dollars ($1,000) of such deposits. For deposit rate purposes for all future periods, the deposits shall in no event be less than the deposits listed as of June 30, 1999. d. Provided, however, that in the case of a financial institution group that, as of June 30, 1999, (i) had total deposits of less than one billion dollars ($1,000,000,000) and (ii) derived at least a majority of its deposits, as reported to FDIC, OTS, or NCUSIF, that were booked to one or more branches or offices located within Alabama from account holders whose addresses of record on the books of the financial institution group were outside the State of Alabama, the phrase “total deposits in Alabama,” for purposes of calculating the minimum aggregate business privilege tax levied by Article 2 for all taxable years beginning on and after January 1, 2000, shall only include deposits of account holders whose addresses of record on the books of the financial institution group are inside the State of Alabama. e. In the event a financial institution group sells Alabama deposits to another financial institution group that reports those deposits in Alabama for purposes of Act 2000-705, those deposits shall not be taxed more than once pursuant to the provisions of Act 2000-705 in the same taxable year. The liability for such taxes shall be the responsibility of the purchaser, and the tax base for the selling group shall be adjusted accordingly. f. In the event an existing financial institution group reports deposits in any year less than 96.5 percent of the deposits reported as of June 30, 1999, the alternative minimum tax shall be based on the deposits reported as of June 30, 1999. In the event an existing financial institution group reports deposits in any year more than 96.5 percent of the deposits reported as of June 30, 1999, the alternative minimum tax shall be based on the deposits reported for that taxable year. For financial institutions coming into existence after June 30, 1999, the deposits upon which the alternative minimum tax is based shall not be less than the deposits reported the first full year that financial institution reported deposits to the FDIC, OTS, or NCUSIF. (g) The Department of Revenue may adopt rules for the implementation and administration of this section. (Act 99-665, 2nd Sp. Sess., p. 131, §2; Act 2000-705, p. 1442, §2; Act 2017-363, §7; Act 2022-252, §§1, 2.)

Ala. Code § 40-14A-23 Definition of Net Worth.

40-14A-23. Definition of Net Worth. (a) Net worth of corporation. The net worth of a corporation shall equal the aggregate net amount of the following items determined as of the first day of the corporation’s taxable year and adjusted as required in this article: (1) In the case of a corporation, the sum of the following: a. The issued capital stock and any additional paid-in capital, without reduction for treasury stock; and b. Retained earnings, but not less than zero, which shall include any amounts designated for the payment of dividends until the amounts are definitely and irrevocably placed to the credit of stockholders subject to withdrawal on demand, and (2) In the case of an entity taxed as a corporation under this article that does not issue stock, the difference between the book value of the entity’s assets and liabilities, but not less than zero. (b) Net worth of limited liability entities. The net worth of a limited liability entity shall be an amount equal to the sum, but not less than zero, of the capital accounts of the owners of the limited liability entity determined as of the first day of the taxable year of the entity and as further adjusted pursuant to this article. (c) All the items that would enter into determining a disregarded entity’s net worth shall be instead taken into account in determining the net worth of its owner, and the net worth of the disregarded entity shall be zero. Provided, however, that if the owner of the disregarded entity is an individual, general partnership, or other entity not subject to this tax, the net worth of the disregarded entity shall be equal to the assets minus the liabilities of the disregarded entity. (d) Net worth of business trusts classified as corporations. The net worth of a business trust classified as an association taxable as a corporation for federal income tax purposes shall be equal to the book value of the assets minus the liabilities of the business trust but not less than zero. (e) Additions to net worth. (1) Additions to net worth may be positive amounts only. (2) Net worth shall include related-party debt in certain situations as follows: a. If a taxpayer is indebted to related parties in an amount that exceeds the net worth of the taxpayer determined under subsections (a), (b), or (c), then the amount of the excess shall be included in the net worth of the taxpayer. b. For purposes of this subsection, the terms “debt,” “indebted,” and “indebtedness” shall not include trade debt, accounts payable, or deposit liabilities to related parties that are doing business in Alabama. (f) There shall be added to net worth, as determined above, compensation and distributions paid or accrued in certain situations. (1) CORPORATIONS OTHER THAN ALABAMA S CORPORATIONS. a. For a C corporation, net worth shall include compensation or similar amounts paid or accrued to a direct or indirect shareholder if such shareholder owns at least a 5% capital, profits, or voting interest in such corporation, to the extent such amount exceeds $500,000 with respect to each shareholder in the determination period. The rules of 26 U.S.C. §267(c) shall apply in determining whether an individual is a direct or indirect shareholder who owns at least a 5% capital, profits, or voting interest in such corporation. b. All compensation or similar amounts paid or accrued to shareholders described in paragraph a. shall be aggregated if such shareholders are members of the same family as described in 26 U.S.C. §267(b)(1), unless the shareholders are 21 years of age or older and materially participate in the business. c. Compensation or similar amounts paid or accrued to a person not described in paragraphs a. and b. shall be included in such aggregate amount if such person is related to any of the shareholders described in paragraphs a. and b., in accordance with the rules of 26 U.S.C. §267(b)(1), unless the person is 21 years of age or older and materially participates in the business. (2) ALABAMA S CORPORATIONS. a. For an Alabama S corporation, add to the above net worth the sum of compensation, distributions or similar amounts paid or accrued to a direct or indirect shareholder if that shareholder owns at least a 5% capital, profits, or voting interest in the corporation, to the extent such amounts exceed $500,000 with respect to each shareholder in the determination period. The rules of 26 U.S.C. §267(c) shall apply in determining whether an individual is a direct or indirect shareholder who owns at least a 5% capital, profits, or voting interest in the corporation. b. All compensation, distributions, or similar amounts paid or accrued to shareholders described in paragraph a. shall be aggregated if such shareholders are members of the same family as described in 26 U.S.C. §267(b)(1), unless the shareholders are 21 years of age or older and materially participate in the business. c. Compensation or other similar amounts and distributions paid or accrued to a person not described in paragraphs a. and b. shall be included in such aggregate amount if such person is related to any of the shareholders described in paragraphs a. and b., in accordance with the rules of 26 U. S. C. §267(b)(1), unless the person is 21 years of age or older and materially participates in the business. (3) LIMITED LIABILITY ENTITIES. a. For a limited liability entity, net worth shall include compensation, distributions or similar amounts paid or accrued to each direct or indirect partner or member to the extent the amounts exceed $500,000 with respect to each partner or member in the determination period. In determining whether an individual is an indirect partner or member, the principles of 26 U.S.C. §267(c) shall apply. b. All compensation, distributions, or similar amounts paid or accrued to partners or members described in paragraph a. shall be aggregated if such partners or members are members of the same family as described in 26 U.S.C. §267(b)(1), unless the partners or members are 21 years of age or older and materially participate in the business. c. Compensation, distributions, or other similar amounts paid or accrued to a person not described in paragraphs a. and b. shall be included in such aggregate amount if such person is related to any of the partners or members described in the paragraphs a. and b., in accordance with the rules of 26 U.S.C. §267(b)(1), unless the person is 21 years of age or older and materially participates in the business. (4) DISREGARDED ENTITIES. a. For a disregarded entity, net worth shall include compensation, distributions, or similar amounts paid or accrued to a direct or indirect owner to the extent the amount exceeds $500,000 in the determination period. In determining whether an individual is an indirect owner, the principles of 26 U.S.C. §267(c) shall apply. b. All compensation, distributions, or similar amounts paid or accrued to an owner or indirect owners described in paragraph a. shall be aggregated if the owner or indirect owners are members of the same family as described in 26 U.S.C. §267(b)(1), unless the owner or indirect owners are 21 years of age or older and materially participate in the business. c. Compensation, distributions, or similar amounts paid or accrued to persons not described in paragraphs a. and b. shall be included in the aggregate amount if the person is related to any of the owners described in paragraphs a. and b., in accordance with the rules of 26 U.S.C. §267(b)(1), unless the person is 21 years of age or older and materially participates in the business. (g) From the sum of the items and additions to net worth determined in subsections (a) through (f), the following items shall be subtracted: (1) The book value of the investment by the taxpayer in the equity of any other taxpayer (including any excess related-party debt described in paragraph (e)(2)a. that is included in the net worth of the taxpayer) that is doing business in Alabama. The subtraction shall not include the book value of any security held by a dealer primarily for sale to customers in the ordinary course of its trade or business pursuant to 26 U.S.C. §1236. (2) In the case of financial institutions, the investment by the taxpayer in the equity (including any excess related-party debt added to net worth pursuant to paragraph (e)(2)a.) of any other corporation or limited liability entity that is not doing business in Alabama if the taxpayer owns more than 50 percent of the outstanding capital stock of the other corporation or more than 50 percent of the capital and profits interest of the limited liability entity, unless the other corporation or limited liability entity is dormant and not regularly engaged in one or more business activities. A corporation shall not be deemed dormant and shall be considered regularly engaged in one or more business activities if the corporation owns, directly or indirectly, more than 50 percent of the outstanding capital stock of another corporation regularly engaged in one or more business activities. A corporation shall be deemed to directly or indirectly own more than 50 percent of another corporation if both corporations would be part of a controlled group of corporations as defined in 26 U.S.C. §1563 if a 50 percent ownership requirement were applied in lieu of the 80 percent ownership requirement in 26 U.S.C. §1563. (3) The unamortized portion of goodwill and core deposit intangibles appearing on the taxpayer’s balance sheet by reason of a direct purchase of another corporation or limited liability entity. (4) The unamortized balance of any amount that the taxpayer properly elected, pursuant to Pronouncement 106 of the Financial Accounting Standards Board or any equivalent successor authority, to amortize over a period of years rather than immediately charging that amount to earnings. (5) In the case of a financial institution, the amount of net worth as adjusted pursuant to this section that exceeds six percent of its assets. (Act 99-665, 2nd Sp. Sess., p. 131, §2; Act 2000-705, p. 1442, §2.)

Ala. Code § 40-14A-24 Net Worth in Alabama.

40-14A-24. Net Worth in Alabama. (a) A taxpayer’s net worth in Alabama shall be determined by apportioning the taxpayer’s net worth computed under Section 40-14A-23 in the same manner as prescribed for apportioning income during the determination period for purposes of the income tax levied by Chapter 18, or the manner in which the income would be apportioned if the taxpayer were subject to the income tax, or for the purposes of the financial institution excise tax levied by Chapter 16; provided, however, that the net worth of insurers subject to the insurance premium tax levied by Chapter 4A of Title 27 shall be apportioned on the basis of the ratio of the insurer’s Alabama premium income to its nationwide total direct premiums as reflected on schedule T of the insurer’s annual statement filed with the Commissioner of Insurance for the then immediately preceding calendar year. (b) There shall be deducted from the amount of net worth in Alabama as determined in accordance with subsection (a): (1) The net amount invested by the taxpayer in any bond or other security issued before January 1, 2000 by the State of Alabama, or any county, municipality or other political subdivision of the State of Alabama, or any public corporation, agency or instrumentality of the foregoing, but only until the year in which occurs the earlier of the final stated maturity thereof or the date on which the principal of the bond or other security shall be called for optional redemption prior to the final maturity thereof. For purposes of this subdivision, “net amount invested” means the amount of cash, including any premium and net of any discount, paid as the purchase price for the bond or other security, less the amount of any premium amortized and plus the amount of any discount accreted to the date of calculation, reduced by the proportionate amount of principal on the bond or other security that is amortized or otherwise paid or retired. This subdivision shall not apply if the taxpayer is a dealer in securities subject to the rules of 26 U.S.C. §1236. (2) The net amount invested by the taxpayer in all devices, facilities, or structures, and all identifiable components or materials for use therein, that are located in Alabama and are acquired or constructed primarily for the control, reduction, or elimination of air, ground, or water pollution or radiological hazards where such pollution or radiological hazards result from or would be caused by the taxpayer’s activities in Alabama. (3) The net amount invested by the taxpayer in all real and tangible personal property, equipment, facilities, structures, and components including, but not limited to, all aircraft replacement parts, components, systems, supplies, and sundries affixed or used on an aircraft, and ground support equipment and vehicles used by or for the aircraft, when used by certified or licensed air carrier with a hub operation within this state, for use in conducting intrastate, interstate, or foreign commerce for transporting people or property by air. For the purpose of this subdivision (3), the words “hub operation within this state” shall be construed to have all of the following criteria: a. There originate from the location 15 or more flight departures and five or more different first-stop destinations five days per week for six or more months during the calendar year; and b. Passengers or property, or both, are regularly exchanged at the location between flights of the same or a different certificated or licensed air carrier. (4) During the period beginning December 1, 1997, and ending on the date 20 years thereafter, the amount invested in all new and existing manufacturing facilities in this state by the taxpayer, which amount shall be limited to the investment in all real and tangible personal property, equipment, facilities, structures, components, and inventory in this state, provided that the taxpayer has met the criteria in paragraph a. below, and, in addition, has met the criteria in paragraph b. below: a. The taxpayer must, not later than December 31, 2000, file with the department a statement of intent to claim the deduction provided under this section. This statement of intent shall contain any information required by the department. b. During the period commencing with December 1, 1997, and ending on the date six years thereafter, the amount of new investment in all new and existing manufacturing facilities in this state by the taxpayer and, in addition, the number of new employees at all new and existing manufacturing facilities in this state shall meet or exceed the limits described in one of the following brackets: Amount Invested | Number of New Employees Not less than $1,000,000,000 | Not less than 500 Not less than $900,000,000 | Not less than 600 Not less than $800,000,000 | Not less than 700 Not less than $700,000,000 | Not less than 800 Not less than $600,000,000 | Not less than 900 Not less than $100,000,000 | Not less than 1,000 No deduction shall be available under this subdivision (4) until the criteria defined in paragraph a. above, and, in addition, paragraph b. above have been met. The deduction available under this subdivision (4) shall only be available during those years within the 20 years after December 1, 1997, in which the taxpayer maintains the criteria defined in paragraph b. above. (5) The amount invested by the taxpayer in the purchase of an existing manufacturing facility in this state, which amount shall be limited to the investment in all real and tangible personal property, equipment, facilities, structures, components, and inventory on or after January 1, 1998, and during the period for 20 years thereafter, provided that the taxpayer has met the criteria in paragraphs a., b., and c. a. The taxpayer must, within six months of February 19, 1998, file with the department a statement of intent to claim the deduction provided pursuant to this subdivision (5). The statement of intent shall contain any information required by the department. b. At the time of purchase, the existing manufacturing facility must have at least 1,000 employees, which employment level must be maintained during the period 20 years after the date of acquisition by the taxpayer. c. At the time of purchase, the existing manufacturing facility must produce aluminum alloy can stock. (6) The balance of any reserve, account, or trust reasonably determined to satisfy any liability that is imposed by federal, state, or local government laws or regulations for reclamation, storage, disposal, decontamination, retirement, or other related costs associated with a plant, facility, mine, or site in Alabama. (7) The book value of any residential real estate project in Alabama that qualifies for federal or state income tax credits, loans, or grants on the grounds that it provides housing for low-income individuals. (8) In the case of an Alabama S corporation, an amount equal to 30 percent of the corporation’s taxable income. (9) In the case of a limited liability entity or a disregarded entity, an amount equal to 30 percent of its taxable income, provided that the deduction provided in this subdivision shall not apply if the shares tax levied by Article 3 is in effect. (c) Nothing in this section shall be construed to allow any item to be deducted more than once or to allow a deduction for any item that is excluded from net worth. (Act 99-665, 2nd Sp. Sess., p. 131, §2; Act 2000-705, p. 1442, §2.)

Ala. Code § 40-14A-25 Filing of Returns.

40-14A-25. Filing of Returns. (a) Every taxpayer shall file a privilege tax return, which shall include the public record disclosures required by Section 10-2B-16.22, with the department for every taxable year for which it is subject to the tax levied by this article. A disregarded entity that is owned by an individual, general partnership, or other entity not subject to the tax levied by this article shall file a return and pay the tax levied on it by this article. Except as provided in Section 40-14A-22(f) (4), the return required by this section is due no later than the corresponding federal income tax return as required to be filed as provided under federal law. In the case of a taxpayer’s initial return, two and one half months after the taxpayer comes into existence, qualifies or registers to do business, or commences doing business in Alabama as the case may be. A disregarded entity that is required to file a return by this section shall file the return not later than the time its owner is required to file its return. If a taxpayer is required to change its taxable year pursuant to the previous sentence, then it shall file a return for the short taxable year beginning January 1, 2001, and ending on the day before the beginning of its new taxable year, and the return shall be filed no later than the corresponding federal income tax return as required to be filed as provided under federal law. In cases where receivers, trustees in bankruptcy, or assignees are operating the property or business of taxpayers, those receivers, trustees, or assignees shall file returns for the taxpayers in the same manner and form as the taxpayers are required to file returns. Any tax due on the basis of returns filed by receivers, trustees, or assignees shall be collected in the same manner as if collected from the taxpayers for whose business or property they have custody and control. The department may grant a reasonable extension of time for filing returns under rules and regulations prescribed by the department. No extension shall be for more than six months. (b) The tax provided in this article shall be reported on forms and in the manner as prescribed by the department. The failure to receive a form from the department shall not relieve a taxpayer from liability for any tax, penalty, or interest otherwise due. The tax due, as reported, shall constitute an admitted liability for that amount. The department may compute and assess additional tax, penalty, and interest against a taxpayer as provided in Chapter 2A. Interest on overpayments of business privilege tax will be computed and paid in the manner provided in Section 40-1-44(b)(1)b. (c) A corporation that is a member of an Alabama affiliated group that has elected to file a consolidated return pursuant to Section 40-18-39 or Section 40-16-3(b), if it is subject to the tax imposed by this article, shall file a separate return reporting and paying tax on its net worth without regard to other members of the affiliated group. (Act 99-665, 2nd Sp. Sess., p. 131, §2; Act 2000-705, p. 1442, §2; Act 2017-363, §8.)

Ala. Code § 40-14A-26 Remittance and Disposition of Tax.

40-14A-26. Remittance and Disposition of Tax. The tax levied by this article shall be due at the same time the return is due. Remittance of the tax levied by this article shall be made to the department at Montgomery, Alabama, for deposit to the State Treasurer of Alabama. In addition to all other appropriations heretofore or hereinafter made, there is hereby appropriated to the department for the fiscal year ending September 30, 2000, such amount as is reasonably required to offset its conversion costs as a first charge against the revenues from the tax levied by this article. The department and the Secretary of State shall each promulgate a regulation listing those persons who are authorized to execute the privilege tax return and the extension request, and the annual report, respectively, which shall permit the taxpayer’s return preparer to execute any of those forms on behalf of the taxpayer. For all subsequent years, there shall be appropriated to the department as a first charge against the revenues from the tax levied by this article an amount that will offset its actual costs in the administration and regulation of this tax. The balance of the tax collected shall be distributed as follows: (a) For the fiscal year beginning October 1, 1999, and each fiscal year thereafter, each county shall receive an amount that would have been distributed to each county prior to the repayments required by settlement of litigation regarding audits conducted by the Alabama Department of Revenue from the franchise tax distributed under former Section 40-14-43 during the fiscal year ending September 30, 1999. Beginning with the fiscal year ending September 30, 2000, and for each fiscal year thereafter, each county’s distribution shall be increased by three-quarters of one percent of the amount received by each county in the preceding year. (b) For the fiscal year beginning October 1, 1999, and each fiscal year thereafter, each county and each tax recipient agency or fund within the county shall receive an amount equal to the amount it received from the shares tax assessed under the procedures of former Article 4 of Chapter 14 with respect to the fiscal year ending September 30, 1999. Beginning with the fiscal year ending September 30, 2000, and for each fiscal year thereafter, each county’s and recipient agency’s or fund’s distribution shall be increased by three-quarters of one percent of the amount received by each entity in the preceding year. (c) The balance remaining after the distributions in (a) and (b) above shall be deposited into the State General Fund. (Act 99-665, 2nd Sp. Sess., p. 131, §2; Act 2000-705, p. 1442, §2.)

Ala. Code § 40-14A-27 Dissolution, Etc., of Corporations or Limited Liability Entities.

40-14A-27. Dissolution, Etc., of Corporations or Limited Liability Entities. Whenever a corporation or a limited liability entity organized under the laws of this state is dissolved, terminated, liquidated, or otherwise wound-up, by an agreement or notice of the stockholders or owners of the limited liability entity filed in the office of the judge of probate of the county wherein the corporation or limited liability entity was organized, the judge of probate shall at once give notice to the department and Secretary of State of the dissolution event, with the name of the taxpayer and the date of dissolution, termination, liquidation, or other winding-up. When a dissolution of a corporation or limited liability entity organized under the laws of this state takes place by judgment of a court, upon the filing of a complaint under the laws of this state by the creditors, stockholders, the owners of the limited liability entity, or others, the clerk of the court shall at once notify the department and Secretary of State of such dissolution, termination, liquidation, or other winding-up. In any case where petitions are filed in any court by the creditors, stockholders, owners of the limited liability entity, or others for the dissolution, termination, liquidation, or other winding-up of the entity in case of insolvency of the taxpayer, the clerk of the court shall give notice of the civil action to the department so that the department may file a petition in the case in the court for the purpose of collecting any unpaid privilege tax owing by the taxpayer. (Act 99-665, 2nd Sp. Sess., p. 131, §2; Act 2000-705, p. 1442, §2.)

Ala. Code § 40-14A-28 Nonexemption from License or Privilege Tax.

40-14A-28. Nonexemption from License or Privilege Tax. The payment of the tax levied by this article shall not exempt any taxpayer from the payment of any regular license or privilege tax required by law for engaging in or carrying on any business for which a license or privilege tax is required of individuals, firms or corporations. (Act 99-665, 2nd Sp. Sess., p. 131, §2.)

Ala. Code § 40-14A-29 Submission of Initial Tax and Report.

40-14A-29. Submission of Initial Tax and Report. (a) By domestic entities. Each corporation, limited liability entity, and disregarded entity organized under the laws of Alabama shall, within two and one-half months after its organization, file with the department an initial report setting out its name, address, and the name and address of its agent for service of process in Alabama and a return including payment of the tax levied by this article for the year of its organization. The report and return required by this section shall be made on forms prescribed by the department. (b) By foreign entities. Every corporation, limited liability entity, and disregarded entity organized under the laws of a jurisdiction other than Alabama shall, within two and one-half months after qualifying to do business in Alabama, file with the department an initial report setting forth its name and address, its principal place of business where organized, its principal place of business in Alabama, and the name and address of its agent for service of process in Alabama and a return including payment of the tax levied by this article for the first year of the taxpayer’s qualification to do business in Alabama. The report and return required by this section shall be made on forms prescribed by the department. (Act 99-665, 2nd Sp. Sess., p. 131, §2; Act 2000-705, p. 1442, §2.)

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