Section 40-14A-22 Levy and amount of tax.
Section 40-14A-22
Levy and amount of tax.
(a) Levy of tax. There is hereby levied an annual privilege tax on every corporation, limited liability entity, and disregarded entity doing business in Alabama, or organized, incorporated, qualified, or registered under the laws of Alabama. The tax shall accrue as of January 1 of every taxable year, or in the case of a taxpayer organized, incorporated, qualified, or registered during the year, or doing business in Alabama for the first time, as of the date the taxpayer is organized, incorporated, registered, or qualifies to do business, or begins to do business in Alabama, as the case may be. The taxpayer shall be liable for the tax levied by this article for each year beginning before the taxpayer has been dissolved or otherwise ceased to exist or has withdrawn or forfeited its qualification to do business in Alabama. The amount of the tax due shall be determined by multiplying the taxpayer's net worth in Alabama by the rate determined in subsection (b).
(b) Rate of tax. For all taxable years of taxpayers that begin after December 31, 1999, the rate of tax shall be as set forth below.
| If taxable income of the taxpayer is: | ||
| at least | but less than | The tax rate shall be |
| $1 | $0.25 per $1,000 | |
| $1 | $200,000 | $1.00 per $1,000 |
| $200,000 | $500,000 | $1.25 per $1,000 |
| $500,000 | $2,500,000 | $1.50 per $1,000 |
| $2,500,000 | $1.75 per $1,000 |
(c) Minimum tax. Except as provided in subsection (f), the privilege tax levied by this article on certain corporations, business trusts, limited liability entities, and disregarded entities shall not be less than $100.
(d) Maximum tax.
(1) Except as provided in subdivision (2), the privilege tax levied by this article shall not exceed $15,250 for any taxpayer for the taxable year beginning January 1, 2000. For each taxable year thereafter, the maximum tax shall not exceed $15,000 for any taxpayer, except as provided in subdivision (2).
(2) With respect to any (i) financial institution groups as defined in subsection (f) (1); (ii) insurance company that is subject to the premium taxes levied by Chapter 4A of Title 27; and (iii) corporation, company, limited liability entity, or association whose property is assessed for taxation pursuant to the provisions of Chapter 21 and is also obligated to serve the general public, the privilege tax levied by this article shall not exceed $3,000,000, for any taxpayer or, for a financial institution group, for the financial institution group as a whole each year except as provided in subsection (e). With respect to any real estate investment trust as defined in Chapter 13 of Title 10, the privilege tax levied by this article shall not exceed $500,000, for any taxpayer each year except as provided in subsection (e). The privilege tax levied by this article on any electing family limited liability entity shall not exceed $500.
The privilege tax levied by this article on any corporation organized as a not-for-profit corporation that does not engage in any business other than holding title to property and paying the expenses thereof, including, without limitation, a property owners' association or a corporation organized solely to hold title to property on a temporary basis, shall not exceed $100.
(e) Short taxable years. If any taxpayer's taxable year is less than 12 months because the taxpayer is incorporated or organized within the taxable year, or if any foreign corporation or foreign limited liability entity qualifies, registers, or begins to do business in this state within the taxable year or converts to a taxable year other than the calendar year, the amount of the tax levied by this article shall be determined in the manner specified in this article but apportioned to the short taxable year in same proportion as the number of days in the short taxable year bears to 365, but in no event less than $100 nor more than the applicable amount specified in subsection (d).
(f) Minimum taxes for financial institution groups.
(1) For purposes of this subsection, the following terms shall mean:
a. Affiliated Group. (i) One or more chains of corporations or limited liability entities connected through the ownership of stock or ownership interests with a common parent which is a corporation or limited liability entity, but only if the common parent owns directly stock or ownership interests meeting the requirements of item (ii) in at least one of the other corporations or limited liability entities, and only if stock or ownership interests meeting the requirements of item (ii) in each of the corporations or limited liability entities (except the common parent) is owned directly by one or more of the other corporations or limited liability entities. (ii) The ownership of stock or ownership interests of any corporation or limited liability entity meets the requirements of this paragraph if it possesses at least 80 percent of the total voting power or capital and profits interest of the corporation or limited liability entity.
b. Financial Institution. The meaning given in Section 40-16-1.
c. Financial Institution Group. All taxpayers in an affiliated group where at least one member of the group is a financial institution that is subject to the provisions of Chapter 16. In the event a financial institution taxpayer is not a member of an affiliated group, that financial institution shall be treated as a financial institution group.
(2) To the extent that the members of a financial institution group have different taxable years, the group shall be deemed, for purposes of the business privilege tax and corporate shares tax levied by Articles 2 and 3, to have a calendar taxable year.
(3) Taxpayers who are members of a financial institution group shall complete their corporate shares tax and business privilege tax returns without regard to this subsection. Those taxpayers shall submit their returns together, and the minimum tax amount provided in subdivision (5) shall apply to the aggregate business privilege tax and corporate shares tax liability of the group. To the extent that the minimum amount provided in subdivision (5) applies to determine the liability of the group, each taxpayer which is a member of the group shall be liable for that portion of the group liability which is equal to the amount multiplied by the ratio of the taxpayer's liability without regard to this subsection over the liability of the group without regard to this subsection. Upon the annual election of the common parent, a financial institution group may file a single return, executed by the common parent of that financial institution group. The return shall be completed as if the financial institution group were a single taxpayer. Each member of the financial institution group shall be jointly and severally liable for the group's business privilege tax and corporate shares tax liabilities.
(4) For the taxable year beginning January 1, 2000, the tax returns of all members of a financial institution group shall be due July 10, 2000. For taxable years beginning after December 31, 2000, the tax returns for all members of a financial institution group shall be due March 15 of the taxable year. Extensions for filing these returns shall not be granted beyond September 15 of the taxable year. For the return due July 10, 2000, any corporate shares taxes and business privilege taxes accrued and paid by any member of the financial institution group before July 10, 2000, shall be applied against the minimum tax amount provided in subdivision (5).
(5) For taxable years beginning on or after January 1, 2000, the minimum aggregate business privilege and corporate shares taxes levied by Articles 2 and 3 on all members of a financial institution group shall be:
a. For financial institutions with total deposits inside Alabama of less than one billion dollars ($1,000,000,000) within that financial institution group, as reported to the FDIC, OTS, or the NCUSIF as of June 30 of the immediately preceding taxable year, the tax rate shall be $.125 per one thousand dollars ($1,000) of such deposits. For deposit rate purposes for all future periods, the deposits shall in no event be less than the deposits listed as of June 30, 1999.
b. For financial institutions with total deposits inside Alabama of one billion dollars ($1,000,000,000) or greater up to and including six billion dollars ($6,000,000,000) within that financial institution group, as reported to the FDIC, OTS, or the NCUSIF as of June 30 of the immediately preceding taxable year, the tax rate shall be $.17 per one thousand dollars ($1,000) of such deposits. For deposit rate purposes for all future periods, the deposits shall in no event be less than the deposits listed as of June 30, 1999.
c. For financial institutions with total deposits inside Alabama greater than six billion dollars ($6,000,000,000) within that financial institution group, as reported to the FDIC, OTS, or the NCUSIF as of June 30 of the immediately preceding taxable year, the tax rate shall be $.225 per one thousand dollars ($1,000) of such deposits. For deposit rate purposes for all future periods, the deposits shall in no event be less than the deposits listed as of June 30, 1999.
d. Provided, however, that in the case of a financial institution group that, as of June 30, 1999, (i) had total deposits of less than one billion dollars ($1,000,000,000) and (ii) derived at least a majority of its deposits, as reported to FDIC, OTS, or NCUSIF, that were booked to one or more branches or offices located within Alabama from account holders whose addresses of record on the books of the financial institution group were outside the State of Alabama, the phrase "total deposits in Alabama," for purposes of calculating the minimum aggregate business privilege and shares tax levied by Articles 2 and 3 for all taxable years beginning on and after January 1, 2000, shall only include deposits of account holders whose addresses of record on the books of the financial institution group are inside the State of Alabama.
e. In the event a financial institution group sells Alabama deposits to another financial institution group that reports those deposits in Alabama for purposes of Act 2000-705, those deposits shall not be taxed more than once pursuant to the provisions of Act 2000-705 in the same taxable year. The liability for such taxes shall be the responsibility of the purchaser, and the tax base for the selling group shall be adjusted accordingly.
f. In the event an existing financial institution group reports deposits in any year less than 96.5 percent of the deposits reported as of June 30, 1999, the alternative minimum tax shall be based on the deposits reported as of June 30, 1999. In the event an existing financial institution group reports deposits in any year more than 96.5 percent of the deposits reported as of June 30, 1999, the alternative minimum tax shall be based on the deposits reported for that taxable year. For financial institutions coming into existence after June 30, 1999, the deposits upon which the alternative minimum tax is based shall not be less than the deposits reported the first full year that financial institution reported deposits to the FDIC, OTS, or NCUSIF.
(Act 99-665, 2nd Sp. Sess., p. 131, §2; Act 2000-705, p. 1442, § 2.)