Pay Franchise Taxes

Pay Franchise Taxes

Pay Business Privilege Tax (or Franchise Taxes) in the State of Alabama Online using this service! 

FAQs

What is Business Privilege Tax?

The Alabama Business Privilege Tax is levied for the privilege of being  organized under the laws of Alabama or doing business in Alabama (if  organized under the laws of another state or country). The business privilege tax is an annual tax paid by corporations and limited liability entities (including disregarded entities) for the privilege of conducting business in Alabama.

What taxpayers must file an Alabama Business Privilege Tax return?

According to the Alabama business privilege tax law, every  corporation, limited liability entity, and disregarded entity doing  business in Alabama or organized, incorporated, qualified, or registered  under the laws of Alabama is required to file an Alabama Business  Privilege Tax Return and Annual Report. The Business Privilege Tax  remains due every registered year until the entity is legally  dissolved/withdrawn through Probate, regardless of whether or not such  entity is actively doing business in Alabama.

  • C-corporations, Financial Institution Groups, insurance companies,  REITs, and business trusts must file Alabama Form CPT. Limited liability  entities taxed as corporations for federal income tax purposes must  also file Alabama Form CPT.
  • S-corporations, limited liability entities and disregarded entities must file Alabama Form PPT.
  • Limited liability entity is defined in Section 40-14A-1, Code of Alabama 1975,  as: Any entity, other than a corporation, organized under the laws of  this or any other jurisdiction through which business may be conducted  while offering limited liability to the owners of the entity with  respect to some or all of the obligations of the entity and which is  taxable under subchapter K of the Code, including, without limitation,  limited liability companies, registered limited liability partnerships,  and limited partnerships
  • Corporation is defined in Section 40-14A-1, Code of Alabama 1975,  as: Any entity, including a limited liability company electing to be  taxed as a corporation for federal income tax purposes, through which  business can be conducted while offering limited liability to the owners  of the entity with respect to some or all of the obligations of the  entity, other than a limited liability entity or a disregarded entity
  • “S-corporation” is defined in Section 40-14A-1, Code of Alabama 1975, as: An S corporation defined under Section 40-18-160

What entities are not required to file an Alabama Business Privilege Tax return?

The following types of entities are not required to file an Alabama Business Privilege Tax return as per Section 40-14A-43, Code of Alabama 1975.: 

  • Political subdivisions of the state
  • Governmental corporations
  • Governmental agencies
  • Organizations described in Internal Revenue Code Section 501(a)
  • Community chest
  • Any entity organized and operated exclusively for religious purposes
  • Homeowners association
  • Political parties
  • Political action committees
  • Political campaign committees
  • Agricultural cooperative

When is the Alabama Business Privilege Tax return due?

With the exception of the Business Privilege return for Financial  Institutions Groups, the Business Privilege tax return due date  corresponds to the due date of the corresponding federal return.

  • For C-corporations with a calendar year or a fiscal year other than  June 30, the Alabama business privilege tax return is due no later than  three and a half months after the beginning of a taxpayer’s taxable  year. The 2020 Form CPT for a calendar year C-corporation would be due  on April 15 each year.
  • For C-corporations with a fiscal year of June 30, the Alabama  business privilege tax return is due no later than two and a half months  after the beginning of a taxpayer’s taxable year. The 2020 Form CPT  would be due on September 15.
  • For Limited Liability Entities, the Alabama business privilege tax  return is due no later than two and a half months after the beginning of  the taxpayer’s taxable year. The 2020 Form PPT for a calendar year  limited liability entity would be due on March 15.
  • The due date for the Business Privilege Tax return for Financial  Institution Groups corresponds to the due date for the Alabama Financial  Institution Excise tax return. The return is due three and a half  months after the beginning of the taxpayer’s taxable year or April 15.

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Pay Franchise Taxes

Pay Franchise Taxes

Pay Business Privilege Tax (or Franchise Taxes) in the State of Alabama Online using this service! 

FAQs

What is Business Privilege Tax?

The Alabama Business Privilege Tax is levied for the privilege of being  organized under the laws of Alabama or doing business in Alabama (if  organized under the laws of another state or country). The business privilege tax is an annual tax paid by corporations and limited liability entities (including disregarded entities) for the privilege of conducting business in Alabama.

What taxpayers must file an Alabama Business Privilege Tax return?

According to the Alabama business privilege tax law, every  corporation, limited liability entity, and disregarded entity doing  business in Alabama or organized, incorporated, qualified, or registered  under the laws of Alabama is required to file an Alabama Business  Privilege Tax Return and Annual Report. The Business Privilege Tax  remains due every registered year until the entity is legally  dissolved/withdrawn through Probate, regardless of whether or not such  entity is actively doing business in Alabama.

  • C-corporations, Financial Institution Groups, insurance companies,  REITs, and business trusts must file Alabama Form CPT. Limited liability  entities taxed as corporations for federal income tax purposes must  also file Alabama Form CPT.
  • S-corporations, limited liability entities and disregarded entities must file Alabama Form PPT.
  • Limited liability entity is defined in Section 40-14A-1, Code of Alabama 1975,  as: Any entity, other than a corporation, organized under the laws of  this or any other jurisdiction through which business may be conducted  while offering limited liability to the owners of the entity with  respect to some or all of the obligations of the entity and which is  taxable under subchapter K of the Code, including, without limitation,  limited liability companies, registered limited liability partnerships,  and limited partnerships
  • Corporation is defined in Section 40-14A-1, Code of Alabama 1975,  as: Any entity, including a limited liability company electing to be  taxed as a corporation for federal income tax purposes, through which  business can be conducted while offering limited liability to the owners  of the entity with respect to some or all of the obligations of the  entity, other than a limited liability entity or a disregarded entity
  • “S-corporation” is defined in Section 40-14A-1, Code of Alabama 1975, as: An S corporation defined under Section 40-18-160

What entities are not required to file an Alabama Business Privilege Tax return?

The following types of entities are not required to file an Alabama Business Privilege Tax return as per Section 40-14A-43, Code of Alabama 1975.: 

  • Political subdivisions of the state
  • Governmental corporations
  • Governmental agencies
  • Organizations described in Internal Revenue Code Section 501(a)
  • Community chest
  • Any entity organized and operated exclusively for religious purposes
  • Homeowners association
  • Political parties
  • Political action committees
  • Political campaign committees
  • Agricultural cooperative

When is the Alabama Business Privilege Tax return due?

With the exception of the Business Privilege return for Financial  Institutions Groups, the Business Privilege tax return due date  corresponds to the due date of the corresponding federal return.

  • For C-corporations with a calendar year or a fiscal year other than  June 30, the Alabama business privilege tax return is due no later than  three and a half months after the beginning of a taxpayer’s taxable  year. The 2020 Form CPT for a calendar year C-corporation would be due  on April 15 each year.
  • For C-corporations with a fiscal year of June 30, the Alabama  business privilege tax return is due no later than two and a half months  after the beginning of a taxpayer’s taxable year. The 2020 Form CPT  would be due on September 15.
  • For Limited Liability Entities, the Alabama business privilege tax  return is due no later than two and a half months after the beginning of  the taxpayer’s taxable year. The 2020 Form PPT for a calendar year  limited liability entity would be due on March 15.
  • The due date for the Business Privilege Tax return for Financial  Institution Groups corresponds to the due date for the Alabama Financial  Institution Excise tax return. The return is due three and a half  months after the beginning of the taxpayer’s taxable year or April 15.

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