HB34 Alabama 2015 1st Special Session

Under current law, all entities doing business or registered to do business in Alabama, have an annual filing obligation for Business Privilege Tax. The Business Privilege Tax is calculated based on an entity’s net worth, apportioned to Alabama. There is a minimum of $100 Business Privilege Tax imposed annually on all entities subject to this tax. Currently, most taxpayers have an annual maximum Business Privilege Tax due of $15,000. The Business Privilege Tax rate is determined by the taxpayer’s federal taxable income, apportioned to Alabama

In addition, under current law, the Business Privilege Tax due date for financial institutions is March 15. The Alabama Excise Tax return filed by financial institutions is due April 15. Taxpayers often need to extend the filing date of the Business Privilege Tax in order to have complete information not available until the financial institution Excise Tax return is completed. All other entity types have corresponding due dates for both the Business Privilege Tax and the Alabama Income Tax return

This bill will increase the annual maximum amount of Business Privilege Tax due from $15,000 to $25,000. In addition, this bill updates the tax rate schedule to eliminate the .00025 tax rate. The Business Privilege Tax rate will now be determined based on the taxpayer’s amount of Alabama taxable net worth. Taxpayers that have less than $10,000 in Alabama taxable net worth will be relieved from their Business Privilege Tax filing obligation

This bill amends the Business Privilege Tax due date for taxpayers subject to the financial institution Excise Tax from March 15 to April 15, to provide for corresponding tax return due dates for financial institutions

In addition, Section 12 of Act 99-665, as amended by Act 2000-705, is codified by this bill as part of Section 40-14A-22. Other technical corrections from these acts are also codified by this bill

To increase the annual maximum amount of Business Privilege Tax due from $15,000 to $25,000; to update the tax rate schedule to eliminate the .00025 tax rate and to determine the tax rates based on net worth for all taxpayers; to relieve taxpayers that have less than $10,000 in Alabama taxable net worth from their Business Privilege Tax filing obligation; to amend the Business Privilege Tax due date for taxpayers subject to the financial institution Excise Tax from March 15 to April 15, to provide for corresponding tax return due dates for financial institutions; and to codify Section 12 of Act 99-665, as amended by Act 2000-705, as part of Section 40-14A-22.