Title 40

The amount of any contribution by the State of Alabama or any political subdivision thereof computed in accordance with 26 U.S.C. § 118(b)(2), to the extent that the amount is included in the corporation’s federal taxable income pursuant to 26 U.S.C. § 118(b)(2) shall be deducted…

In computing net income of corporations, no deduction shall in any case be allowed in respect to any of the items specified in Section 40-18-17. (Acts 1935, No. 194, p. 256; Code 1940, T. 51, §404.)

(a) Except as provided in subsection (c), every corporation, joint stock company, or association subject to income tax under this chapter shall file a return with the Department of Revenue for each taxable year, stating specifically the items of its gross income and the deduction…

(a) For a tax year in which the business interest expense deduction of the taxpayer, or of any federal consolidated return group of which the taxpayer is a member, is not limited pursuant to 26 U.S.C. § 163(j) on the federal income tax return for the tax year, the taxpayer shall …

(a)(1) For tax years beginning on or after January 1, 2021, a corporate income taxpayer shall be allowed one month following the due date of the corresponding federal income tax return, including applicable extensions, to file the Alabama corporate income tax return as required b…

Interest or other income on obligations of the United States, or its possessions, or interest or other income on bonds or other securities of any agencies or instrumentalities of the United States, or of corporations organized under the laws of the United States, received by any …

The income tax provided in this chapter shall be reported on forms as prescribed by the department. The failure to receive such form from the department shall not relieve a taxpayer from liability for any tax penalty or interest otherwise due. The tax due as reported on such retu…

Any surplus remaining from the proceeds of the tax imposed by this chapter after providing for interest and installment annual payments or annual amortization installments on the current debts of the state as of September 30, 1932, shall be applied to the reduction of the ad valo…

(a) Time of payment for individuals. In the case of individuals, the total balance of the tax owed after credits for taxes paid through withholding as provided in Section 40-18-78, or through estimated payments as provided in Sections 40-18-82 and 40-18-83, shall be due and payab…

(a) This section shall be known and may be cited as the David E. Scott Tax Filing Act of 2021. (b)(1) Notwithstanding anything to the contrary in Chapter 16 or this chapter, payments of income tax or financial institution excise tax originally due between April 15, 2021, and June…

Income arising from an installment sale (including the sale by a dealer in personal property) may be reported in accordance with 26 U.S.C. §453, provided that the amendment made to said Section 453 by the Tax Reform Act of 1984 (Pub. L. No. 98-369), adding 26 U.S.C. §453(i), shal…

The tax levied and imposed by Section 40-18-2 shall be computed as follows: (1) For a single person, head of family, or married persons filing separate returns: a. Two percent of taxable income not in excess of five hundred dollars ($500). b. Four percent of taxable income in exc…

Any person or corporation, joint stock company or association liable to income tax under this chapter, which shall fail to make return as required by this chapter within the time allowed, shall be guilty of a misdemeanor and on conviction thereof shall be fined not less than $10,…

In every respect herein specified in this chapter, returns for the levy and collection of the taxes herein provided for shall be subject to the lien provisions of this title. All income taxes collected by the Department of Revenue shall be as soon as practicable turned over to th…

All income tax returns filed under this chapter, or copies thereof on file with the State Department of Revenue, shall be open to inspection by officials or duly authorized agents of the Bureau of Internal Revenue lawfully charged with the administration or enforcement of the fed…

The assessment and collection of the income taxes imposed by this chapter shall be under the supervision of the Department of Revenue. (Acts 1935, No. 194, p. 256; Code 1940, T. 51, §420.)

Every corporation, joint stock company, or association organized under the laws of the state or organized under the laws of any other state, nation, or territory and doing business in this state, whether taxable under this chapter or not, shall furnish to the officers and employe…

The Department of Revenue may at any time, in its discretion, require the taxpayer to furnish a sworn statement of the annual return of income made under the provisions of the act of Congress of the United States for the calendar or fiscal year in question or for the preceding ca…

The Department of Revenue shall from time to time, as said department shall deem desirable, promulgate such reasonable rules and regulations governing procedure and methods of ascertaining and determining gains and income so as to conform as nearly as possible to the best account…

There is hereby appropriated out of the proceeds of the income tax levied and collected under the provisions of this chapter to the Property Tax Relief Fund such an amount as may be necessary for the replacement of any revenues lost by reason of the exemption of homesteads from a…

In addition to all other appropriations heretofore or hereinafter made, there is hereby appropriated to the Department of Revenue for the fiscal year ending September 30, 2000, such amount as is reasonably required to offset its conversion costs as a first charge against the reve…

(a) Basis (unadjusted) of property. The basis of property shall be the cost of the property with the following exceptions: (1) INVENTORY VALUE. If the property should have been included in the last inventory, the basis shall be the last inventory value thereof. (2) GIFT or TRANSF…

(a) The provisions in 26 U.S.C. § 1400Z-2 shall be applicable to an investment in an approved opportunity fund in calculating both of the following: (1) The income tax levied by this chapter, or the estimated income tax payment. (2) The financial institution excise tax found in C…

This section shall be known and may be cited as the “COVID-19 Recovery Capital Credit Protection Act of 2021.” (b) For the purposes of this section the following terms shall have the assigned meanings: (1) APPROVED PROJECT ENTITY. An entity that has filed a notice of intent with …

For tax years ending after March 11, 2021, the date of enactment of the federal American Rescue Plan Act, any amount received from the Administrator of the Small Business Administration in the form of a restaurant revitalization grant under Section 5003 of the American Rescue Pla…

(a) Effective for tax years beginning on or after January 1, 2024, research and experimental expenditures for Alabama tax purposes under Chapter 16 and Chapter 18 shall not follow the provisions of 26 U.S.C § 174, as amended by the Tax Cuts and Jobs Act (TCJA), P.L. 115-97. Taxpa…

(a) Computation of gain or loss. Except as hereinafter provided in this section, the gain from the sale or other disposition of property shall be the excess of the amount realized therefrom over the adjusted basis provided in subsection (b) of Section 40-18-6, and the loss shall …

(a) General rule. Except as provided in this section, upon the sale or exchange of property, the entire amount of the gain or loss determined under Section 40-18-7 shall be recognized. (b) Exchange of stock for stock of same corporation. No gain or loss shall be recognized if com…

(a) A qualified employee’s gain shall not be recognized upon the disposition of his or her ownership interest in a qualified entity, and a qualified investment fund’s gain shall not be recognized upon the disposition of the fund’s ownership interest in a qualified entity. (b) Sub…

If, in the case of a taxpayer owning any noninterest-bearing obligation issued at a discount and redeemable for fixed amounts increasing at stated intervals, the increase in the redemption price of such obligation occurring in the taxable year does not, under the method of accoun…

For the purpose of this article, the following terms shall have the respective meanings ascribed by this section: (1) EMPLOYEE. Employee as defined in the Internal Revenue Code, as amended from time to time. (2) EMPLOYER. Employer as defined in the Internal Revenue Code, as amend…

(a) Every employer, as defined under the laws of the United States in effect July 1, 1982, or as subsequently may be defined, with respect to income tax collected at source, making payment of wages as defined under such laws to employees, shall deduct and withhold upon such wages…

If the remuneration paid by an employer to an employee for services performed during one half or more of any payroll period of not more than 31 consecutive days constitutes wages, all the remuneration paid by such employer to such employee for such period shall be deemed to be wa…

(a) Every employee, on or before the date of commencement of employment, shall furnish his or her employer with a signed Alabama withholding exemption certificate relating to the number of withholding exemptions which he or she claims, which in no event shall exceed the number to…

(a) This section shall be known and may be cited as the “Provisional Construction Employer Withholding Act.” (b)(1) Subsequent to August 1, 2007, in addition to the other requirements contained in this title, all provisional construction employers shall be required to: a. Post a …

(a) Every employer required to deduct and withhold tax under Section 40-18-71 shall for each quarterly period, on or before the last day of the month following the close of each quarterly period, file a return and pay to the Department of Revenue the tax required to be withheld u…

(a) Every person required to deduct and withhold from an employee a tax under Section 40-18-71 shall furnish to each such employee in respect of the remuneration paid by such person to such employee during the calendar year, on or before January 31 of the succeeding year, or, if …

An employer shall be liable for the payment of the tax required to be deducted and withheld under Section 40-18-71 and shall not be liable to any person for the amount of any such payment. (Acts 1955, No. 289, p. 661, §7.)

(a) Where there has been an overpayment of tax under Section 40-18-71, refund or credit shall be made to the employer only to the extent that the amount of such overpayment was not deducted and withheld under Section 40-18-71 by the employer. (b) Any refund allowed by this sectio…

The amount deducted and withheld as tax under Section 40-18-71 during any calendar year upon the wages of any individual shall be allowed as a credit to the recipient of the income against the tax imposed by Section 40-18-5 for taxable years beginning in such calendar year. If mo…

Where there has been an overpayment of any tax imposed under Section 40-18-71 or 40-18-80, the amount of such overpayment, if a petition for refund is timely filed or the department otherwise allows an automatic refund within that period, may be credited against any income tax or…

(a) Individuals. Individuals shall pay estimated income tax in accordance with 26 U.S.C. § 6654 except: (1) The provisions of 26 U.S.C. § 6654(d)(2)(C)(iii) and 26 U.S.C. § 6654(f)(2) shall not apply; (2) Five hundred dollars ($500) shall be substituted for the amount provided fo…

(a) Corporations. Corporations shall pay estimated income tax in accordance with 26 U.S.C. § 6655 except: The provisions of 26 U.S.C. § 6655(g)(1)(A)(ii) through (iv) shall not apply. (b) For the purposes of this section: (1) Section 40-18-2 shall be substituted when 26 U.S.C. § …

Any individual may elect to file a “short form” return provided by the Department of Revenue and pay any tax due; provided, that the individual does not have income from sources other than wages except for interest and dividend income of not more than $1,500. Items allowed on the…

Repealed by Act 2010-568, effective with tax years beginning December 31, 2009. (Acts 1955, No. 289, p. 661, §13; Acts 1983, No. 83-741, p. 1214, §3; Acts 1993, 1st Ex. Sess., No. 93-852, p. 95, §6; Act 2001-1088, 4th Sp. Sess., p. 1095, §5.)

Repealed by Act 2010-568, effective with tax years beginning December 31, 2009. (Acts 1955, No. 289, p. 661, §14; Acts 1983, No. 83-741, p. 1214, §4; Act 2001-1088, 4th Sp. Sess., p. 1095, §5.)