Alabama Business Privilege Tax Return
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By state law, Alabama corporations, LLCs, LPs, and LLPs must file a Business Privilege Tax Return with the Alabama Department of Revenue each year. However, for the 2024 tax year, businesses that are calculated to owe $100 or less in business privilege tax aren't required to file the BPT Return or pay the tax.
Corporations also need to file an Alabama Annual Report with the Secretary of State. Let’s go over important due dates, filing fees, required information, and answers to any questions you may have along the way!
Alabama Business Privilege Tax Return Due Dates and Fees
In order to successfully file your Alabama Business Privilege Tax, you’ll need to do the following:
- Find your business entity’s due date and determine your filing fees.
- Download and complete your tax return.
- File your return and pay your business privilege tax.
The tax rate for the Alabama Business Privilege Tax is based on how much revenue your business brings to the state of Alabama. So, your rate will rise and fall depending on how much money your business earns each year.
Note: The AL Department of Revenue reduced the minimum business privilege tax from $100 to $50 for the 2023 tax year and eliminated the minimum tax completely for the 2024 tax year. In 2024, taxpayers whose business privilege tax is calculated as $100 or less are exempt from paying this tax and don’t have to file a Business Privilege Tax Return.
The chart below breaks down the Alabama tax rates.
Total Alabama Revenue – More than OR equal to |
BUT less than |
Tax Rate per $1000 of taxable Alabama income |
$0 | $1 | $0.25 |
$1 | $200,000 | $1.00 |
$200,000 | $500,000 | $1.25 |
$500,000 | $2,500,000 | $1.50 |
$2,500,000 | ———— | $1.75 |
How to file your Alabama Business Privilege Tax Return
Alabama Business Privilege Tax Returns must be filed by mail. To download and print your tax return, you’ll need to visit the Alabama Department of Revenue website.
- On the state website, click “Forms” on the top menu.
- Once you’re at the “Forms” page, type “Alabama Business Privilege Tax Return” in the Title Search box. Then, select the current year in the “Form Year” box. This will bring the most current tax return to the top of your search results.
- C Corporations will need to file “Form CPT” and S Corporations/Limited Liability Entities will need to file “Form PPT.”
Alabama Business Privilege Tax Return Information
To complete the Alabama Business Privilege Tax Return, you must include the following information:
- The business’s information: Include the business’s full name, address, and FEIN (Federal Employer Identification Number).
- The remaining sections of the form will be used to calculate your total Alabama net worth and total business privilege tax due.
Required Attachments to BPT Return
- Your business’s federal tax return (copy of pages 1-5).
- A copy of the Alabama apportionment schedule. All schedules can be found by searching the “Forms” page on the Alabama Department of Revenue website.
- C Corporations: Form 20C
- S Corporations: Form 20S
- Limited Liability Entities: Form 65
- A statement supporting any exclusions or deductions claimed.
Paying Business Privilege Tax in Alabama
Your Alabama Business Privilege Tax/Annual Report fee can be paid in four ways:
-
Make an ACH direct debit payment through your My Alabama Taxes (MAT) account. You can create an account by clicking “Register here.”
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Use “Quick Payments” on the MAT website. This option doesn’t require you to create a MAT account; however, you can only use this option if you first received a billing notice from the state of Alabama regarding your tax/annual report payment.
-
Make a credit card payment using Official Payments Corporation OR Value Systems Payments. You will be assessed a 2.5% convenience fee on payments made through Official Payments Corporation. Value Systems Payments does not charge a convenience fee.
-
Mail a check or money order along with a Business Privilege Tax Payment Voucher to the Alabama Department of Revenue. This option can only be used if your total amount due is LESS than $750.
Alabama Annual Report for Corporations
In addition to the Business Privilege Tax Return, Alabama corporations and foreign corporations registered in Alabama also need to file an annual report with the Secretary of State. This is a separate filing from the BPT Return. LLCs, LPs, and nonprofits don’t need to file an annual report in Alabama. The state fee for the annual report is $10, and the filing period is January 1 to March 15.
How to file the Alabama Annual Report
The Alabama annual report can be filed online or by mail. Note: If filing by mail, you must submit the form in duplicate.
Online:
AL Secretary of State Online Service
By Mail:
Secretary of State, Business Services
P.O. Box 5616
Montgomery, AL 36103
Northwest’s Annual Compliance Service
We offer two different compliance services for LLCs and corporations. If you have an LLC, we can submit your Business Privilege Tax Payment Voucher and pay your business privilege tax for you, up to $2,500. For corporations, we’ll file your annual report with the Secretary of State. Both services cost $100 plus the state-mandated tax or fee.
How do I sign up for Alabama compliance service?
You can sign up for this service by itself or add it to an existing service. Once you’re signed up, you’ll pay nothing up front. We’ll send you a reminder 90 days before your filing due date and auto-charge your preferred payment method five days later if you don’t want us to cancel.
How Does Northwest Protect My Privacy?
At Northwest, you don’t have to figure out how to opt out of exposing your personal information. That’s because we practice Privacy by Default®. We automatically minimize the exposure of your data, without being asked. By using our annual compliance service, you can minimize the amount of personal information you share on the public record and your chance of being targeted by advertisers and scammers.
Instead of your own information, we’ll use:
- Our contact information, including our street address when possible.
- Our IP address, which limits the connection between your cell phone, personal computer, and work computers to make it harder for advertisers to find you.
- Our bank and credit card information.
We believe everyone has the right to keep their information private. That’s why privacy is our guiding principle when we create every service and product.
Get Alabama Annual Compliance today!
GET STARTEDAlabama Business Privilege Tax FAQs
Yes, the state of Alabama requires new business entities to file an initial Business Privilege Tax Return within 2.5 months after formation. Businesses use the same tax rate and calculation process as the one used for the annual Business Privilege Tax Return. However, for the 2024 tax year, if your business privilege tax would be $100 or less, you’re not required to file the BPT return or pay the tax.
If you’re required to pay business privilege tax and do not, Alabama Department of Revenue may charge your business TWO different late fees. If your return is filed late, you will be assessed 10% of the total tax due. If you don’t pay your business privilege tax on time, you will be assessed 1% of the total amount due (not to exceed 25%) for each month you are delinquent.
Your Alabama Business Privilege Tax Return will be processed in 8-12 weeks. Unfortunately, you can’t pay for expedited service.
Any person who is affiliated with the business can file the Alabama Business Privilege Tax. This could be a director, manager, or someone outside the business (such as an accountant or attorney) that’s hired to file your tax return.
Nope. You can include photocopies of original documents.
Yes, the state of Alabama requires new business entities to file an initial Business Privilege Tax Return within 2.5 months after formation. Businesses use the same tax rate and calculation process as the one used for the annual Business Privilege Tax Return. However, for the 2024 tax year, if your business privilege tax would be $100 or less, you’re not required to file the BPT return or pay the tax.
If you’re required to pay business privilege tax and do not, Alabama Department of Revenue may charge your business TWO different late fees. If your return is filed late, you will be assessed 10% of the total tax due. If you don’t pay your business privilege tax on time, you will be assessed 1% of the total amount due (not to exceed 25%) for each month you are delinquent.
Your Alabama Business Privilege Tax Return will be processed in 8-12 weeks. Unfortunately, you can’t pay for expedited service.
Any person who is affiliated with the business can file the Alabama Business Privilege Tax. This could be a director, manager, or someone outside the business (such as an accountant or attorney) that’s hired to file your tax return.
Nope. You can include photocopies of original documents.
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