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Alabama LLC and INC Annual Filing Requirements
When you register a new business in any state in the USA, the entity will be governed by the laws and regulations of that specific state. This also means that your company needs to follow annual requirements in accordance with the business laws. The requirement could vary from that of Alabama LLC annual requirements to filing of taxes. This guide has hence been created for providing an insight into different aspects of Alabama LLC annual report or corporation annual report in the state. The guide will also provide an overview of certain requirements like Employer taxes and Business Privilege Tax.
Alabama LLC Annual Filing Requirements
You can form different types of limited liability companies in the state including single-member and multi-member entities. It is important to remember that the annual requirements of a domestic LLC may be different from that of foreign LLC’s and Alabama Corporation annual requirements. Once you start a limited liability company in this state then the following important annual requirements will need to be considered
Annual Report
An annual report is required by new and existing businesses in most states and is governed by the state statutes. This report requires entities to provide updated information to the state or submit any changes like ownership changes, change of address and registered agents. Some states may also require LLC’s to provide additional information regarding assets, revenue, and paid-in capital. There is no requirement of standalone Alabama LLC annual report although the state requests entity information to be provided annually using the business privilege tax return.
Business Privilege Tax
One of the most important annual requirements in the state of Alabama is the business privilege tax also known as ABPT. This has to be filed annually by most forms of entities operating in this state. This form of privilege tax is governed by the Alabama Administrative Code, Title 810 – Alabama Department of Revenue, Chapter 810-2-8 – Alabama Business Privilege Tax and Corporate Shares Tax. A domestic limited liability company registered with the Alabama Secretary of State as well as foreign LLCs qualified to do business in this state will be subjected to the Alabama business privilege tax (ABPT) filing requirements pursuant to AL Admin Code R 810-2-8-.10.
This tax is one of the primary Alabama LLC annual requirements and is normally calculated on the net worth. The rate of ABPT is also based on the ability to pay and may range from $0.25 to $1.75 for net worth of each $1,000 in this state.
Example: If the taxable income of your LLC is less than $1 then the applicable tax rate will be $0.25 per $1000. Similarly, if the taxable income is between $1 and $200,000 then the business privilege tax rate will be $1.00 for every $1,000. This means if your taxable income is $150,000 then the rate is $150. There is also a minimum privilege tax of $100 while the maximum is $15,000.
If you have just started a limited liability company then you will not be required to submit an Alabama LLC annual report and instead will be required to file the Alabama Initial Privilege Tax Return (Form BPT-IN). In order to submit the form, you will need to provide BPT account number, Federal business code number (NAICS), and Alabama Secretary of State ID number. As a part of the Alabama LLC annual requirements, the ABPT form needs to be submitted on April 15th each year.
Employer Taxes
One of the important annual requirements in Alabama apart from the business privilege tax is the employer taxes. This is also known as State Withholding Tax or payroll taxes. There are several states that impose this type of tax and Alabama is one such state. The employer taxes or state withholding tax is a specific amount of money that an employer is required to withhold by law from the wages being paid to every employee. The employer usually does not pay the taxes and is only responsible for collection and remittance of the tax withheld. The Alabama Administrative Code, AL Admin Code R 810-3-71-.01 states that employers or withholding tax agents are required to deduct, withhold, and pay the withholding tax each calendar quarter. This has to be paid to the Department of Revenue.
Since this is one of the most important and mandatory Alabama LLC annual requirements, it can be filed monthly (Form A–6), quarterly (Form A–1), and annually (Form A–3). The withholding tax can be computed using the withholding tax tables. The due date varies according to the filing option chosen. For example, if you choose to file monthly then the return has to be filed by the 15th of the next month for the income tax withheld in the previous month.
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Alabama INC Annual Filing Requirements
A C Corporation or a business corporation is a favored structure in the state of Alabama. There are several advantages that this type of entity structure enjoys vis-à-vis other forms of businesses. Once you have incorporated, there would be several state level requirements that your business is required to fulfill and they are categorized under Alabama Corporation annual requirements. You will need to maintain compliance with all annual requirements to remain in good standing with the state and this is applicable for both domestic and foreign entities. Let’s look in detail at the various annual requirements of an Alabama Corporation.
Annual Report
An annual report is an important document that contains comprehensive and updated information pertaining to a business corporation formed or operational in any state in the USA. In the state of Alabama, there is no requirement related to filing an annual report by corporations and instead such entities have to file an Initial Business Privilege Tax Return.
Business Privilege Tax
There are several important Alabama Corporation annual requirements that every entity needs to be compliant with. One of the important annual requirements is that of the business privilege tax also known as ABPT. This is also termed as an initial business privilege tax return and is normally due after the said corporation or taxpayer starts conducting business in the state of Alabama.
Example: If you have incorporated in the state of Alabama on 05th September 2023 then the initial business privilege tax will be due within two-and one-half month or by 20th November 2023. This due date is applicable for both domestic and foreign entities.
This is one of the primary Alabama Corporation annual requirements and its filing is governed by the Alabama Administrative Code, Title 810 – Alabama Department of Revenue, Chapter 810-2-8 – Alabama Business Privilege Tax and Corporate Shares Tax. The business privilege tax is generally calculated based on the net worth of the company and filed using the Alabama Initial Privilege Tax Return (Form BPT-IN). The rate of ABPT may also be determined by the ability to pay. The tax rate ranges from $0.25 to $1.75 for net worth of each $1,000 in Alabama with the minimum tax being $100 and the maximum being $15,000.
Corporation Taxes
Different states have different types of annual requirements governed by the state business laws. Similarly, the Alabama Corporation annual requirements are governed by the Alabama Administrative Code with the filing of taxes annually being governed by Title 810 – Alabama Department of Revenue. When you incorporate in the state, you will be required to maintain compliance by filing tax returns including business privilege tax and other applicable corporation taxes. This will ensure you enjoy a good standing in the state. There are different types of corporation taxes that you may be required to file with the most important being the Corporate Income Tax with a flat rate of 6.5 percent. Apart from this, you may also be required to file state sales and use tax as well as withholding taxes.
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The annual compliances or requirements normally encompass annual reports and taxes although sometimes business license renewals are also considered a part of Alabama LLC annual requirements or that of a corporation. The state of Alabama currently doesn’t require corporations or LLCs to file an annual report although it may be required in the near future.
IncParadise as your registered agent in Alabama can assist you with Alabama Corporation annual requirements or LLC annual requirements. We are an expert in new business formation services and can help you with your Alabama LLC formation or incorporation as well. We also offer many additional services like EIN, and foreign qualification among others.