File a Alabama LLC Annual Report

In Alabama, annual reporting is especially essential. The state combines its annual report with its business privilege tax filing, meaning that business owners must complete both simultaneously.

If you own a business in Alabama, it’s imperative to complete your annual report and business privilege tax return accurately and on time. Submitting a late return could be a costly mistake: The penalty can amount to 10% of your total tax burden, plus an additional 1% for each month your payment is late.

At ZenBusiness, we’re here to take the stress out of annual reports for Alabama business owners. In this guide, we’ll break down the practical details of the Alabama annual report and business privilege tax, allowing you to understand your obligations. We’ll also explain how different business entities are required to file and answer common questions about Alabama’s business reporting system.

As we describe various aspects of this process, we’ll also explain how ZenBusiness can assist you run your business smoothly. For example, our worry-free compliance service can help with filing deadlines.

After learning a bit more about Alabama’s regulations, these services might seem especially appealing. Here’s everything you need to know about annual reports in Alabama.

What is an Alabama annual report?

All business entities in Alabama must file annual reports and business privilege tax returns. An annual report provides basic details about a business and its operations, while the business privilege tax charges businesses for operating in Alabama.

While annual reports and taxation are dealt with separately in many states, Alabama elects to combine them (at least with this particular tax; your business will likely owe taxes beyond the business privilege tax), meaning business owners file both simultaneously. But the filing process differs somewhat depending on the type of business you operate.

The simplest way to understand annual reports and business privilege tax returns in Alabama is to familiarize yourself with the following forms. Once you do, you’ll know which forms you’ll need to submit to the Alabama Department of Revenue in any given year.

• Alabama Business Privilege Tax Return and Annual Report for Corporations (form CPT): This form must be completed by C corporations and limited liability entities taxed as corporations. The form requires detailed information about a corporation’s net worth and earnings during the preceding tax period and a final calculation of the corporation’s business privilege tax burden. This form can be quite complicated, so we recommend reading the associated instructions and seeking the assistance of an accounting professional.

• Alabama Business Privilege Tax Return and Annual Report for Pass-Through Entities (form PPT): This form is the equivalent to the CPT but intended for entities not taxed as corporations. These entities include S corporations, limited liability entities, and “disregarded entities” (such as a single-member Alabama LLC). This form is also somewhat complicated, so we recommend reviewing its instructions carefully and consulting a qualified accounting professional to complete it properly.

• Alabama Business Privilege Tax Initial Privilege Tax Return (form BPT-IN): This form is only required for business entities that have been recently formed and must be submitted within two and a half months of the formation of your business. This form is intended to capture any business privilege tax owed by all new businesses, including corporations and “pass-through entities.” Once again, a qualified accounting professional can be quite helpful in completing this form.

• Alabama Secretary of State Corporation Annual Report (schedule AL-CAR): This form is only required for C corporations and S corporations (even limited liability entities taxed as corporations do not need to submit this form). It requests basic contact information related to the business and its leaders. Corporations must attach this form to their CPT or PPT forms and submit them together.

Due dates for submission of these forms also differ for various Alabama business entities. However, because these forms relate to the business privilege tax, they are due at the same time that tax is.

Here are the due dates for submission of Business Privilege Tax Return and Annual Report forms in Alabama for different businesses. These deadlines refer to filing the prior year’s return (e.g., filing a 2019 return in 2020):

• C corporations: Initial Report is due 75 days after the filing date and Annual Report forms due every year by April 15
• S corporations: March 15 
• Limited liability entities: March 15
• Disregarded entities: Whenever the owner is required to file their federal income tax return

What information do I need to file an annual report in Alabama?

To complete the forms discussed, you’ll need to supply the information they require. Some of these items are basic, intended for records and contact purposes.

For example, regardless of the type of business entity you operate, you’ll need to provide your business’s mailing address, a contact person, and their email address and phone number.

You’ll also need to provide certain administrative information, such as your business’s “BPT account number,” which you received after registering your business with the Department of Revenue online. If you need any clarification regarding these items, use this Department of Revenue annual report service forms search website to find detailed instructions for completing each form.

However, the most important information you’ll provide will concern how much your business owes in business privilege tax. Once again, we advise hiring a qualified tax professional to complete these calculations for your business.

While it is possible to compute your tax burden using the Department of Revenue’s instructions, the necessary calculations can be quite convoluted.

Once you complete your required forms, you’ll need to gather some related documents to substantiate your filing. Here’s what Alabama requires you to submit with your Business Privilege Tax Return and Annual Report forms:

• A copy of pages 1 to 5 of the business’s federal tax return. If you do not submit a federal tax return, you’ll need to provide a balance sheet and income statement instead.

• A copy of the balance sheet used to compute the taxpayer’s net worth for business privilege tax purposes. You can use this form as your balance sheet.

• Documentation supporting any exclusion of deductions claimed on that balance sheet to calculate net worth.

• If you do business in and outside Alabama, you’ll need a copy of your business’s income apportionment schedule. If you have a C corporation, you’ll use Form 20C; S corporations use Form 20S; and for Limited Liability Entities you’ll use Form 65.

Recall that C corporations and S corporations must also fill out the AL-CAR form and attach it to their return.

How do I file an annual report for my business in Alabama?

Alabama’s process for submitting your Business Privilege Tax Return and Annual Report forms and associated documentation can be submitted online or by mail to the Alabama Department of Revenue.

You can choose to include the business privilege tax with your forms or submit the forms and pay separately using the Department of Revenue’s online payment system.

If you do choose to include payment, provide the following with your filing:

• A voucher form with details of your payment

• A check written out to the Alabama Department of Revenue with your BPT account number in the note section

You can send these items and all your forms to the Alabama Department of Revenue.

When you are ready to make your business privilege tax payment, you’ll need to log on to the Department of Revenue’s My Alabama Taxes (MAT) portal. If you do not have an account, you may need to make one before proceeding.

The MAT website offers two options for submitting payments by credit card, the Official Payments Corporation and Value Payment Systems. Value Payment Systems does not charge a convenience fee to process your payment, but enrolling in this system may take slightly longer.