Title 40

(a) This section shall be known and may be cited as the Alabama Electing Pass-Through Entity Tax Act. (b) For the purposes of this section, “electing pass-through entity” means any Alabama S corporation, as is defined by Section 40-18-160, and any subchapter K entity, as is defin…

(a) Notwithstanding any other provision of Chapters 16 and 18 of this title to the contrary, for tax years beginning on or after January 1, 2021, any owner, member, partner, or shareholder of an electing pass-through entity shall report its pro rata or distributive share of the i…

(a) For purposes of this chapter, the income and deductions, including the distribution deduction, of estates and trusts shall be determined in accordance with Subchapter J of Chapter 1 of Subtitle A of the Internal Revenue Code, 26 U.S.C. §641 et seq., relating to estates, trust…

(a) Trusts shall be exempt from the tax imposed by this chapter if they are exempt from federal income tax under 26 U.S.C. § 501 (relating to exempt organizations), § 401 (relating to pension and profit sharing trusts), § 408 and § 408A (relating to individual retirement accounts…

(a) Nothing in Act 2006-114 shall be construed to change or otherwise affect a taxpayer’s liability relating to a tax year beginning prior to the effective date of Act 2006-114. (b) Should: (c) The deduction allowed in subsection (b) to the owner or owners of the trust shall be i…

Every resident individual, corporation, association, or agent shall make a report to the Department of Revenue of complete information covering the amount of all interest, rent, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or dete…

(a) Every taxpayer having gross income before the deductions allowed by this chapter for the taxable year exceeding the sum of the allowable standard deduction as provided in Section 40-18-15 and the personal exemption as provided in Section 40-18-19, as allowed for his or her re…

Every subchapter K entity, and every single member limited liability company, shall make a return to the Department of Revenue for each taxable year, stating specifically the items of its gross income and the deductions allowed by this chapter, and shall include in the return the…

(a) Every fiduciary, except receivers appointed by authority of law in possession of part only of the property of a taxpayer, shall make a return for the taxpayer for whom he acts, first, if the net income of such taxpayer is $1,500 or over, if single or if married and not living…

The salaries, fees, commissions, or other income of officers or agents of the United States or its agencies and instrumentalities or its contractees, received from the United States or from its agencies and instrumentalities, shall be subject to income taxes levied by the State o…

(a) Taxpayer filing separate returns. If a taxpayer, with the approval of the Department of Revenue, changes the basis of computing taxable income from the fiscal year to the calendar year, a separate return shall be filed for the period between the close of the last fiscal year …

(a) A corporation subject to the tax imposed by Section 40-18-2 shall pay a tax equal to six and one-half percent of the taxable income of the corporation, as defined in this chapter. (b) If the taxpayer elects to file an Alabama consolidated return under Section 40-18-39, the ta…

(a)(1) Individuals who are residents or domiciliaries of this state and business entities that are organized or commercially domiciled in this state have substantial nexus with this state. (2) Nonresident individuals and business entities organized outside of the state that are d…

With the exception of unrelated business taxable income determined in accordance with 26 U.S.C. § 512, the tax imposed by Section 40-18-31 shall not apply to the organizations referred to in 26 U.S.C. § 501(a), and the following entities: (1) Farmers and other mutual hail, cyclon…

In the case of a corporation subject to the tax imposed by Section 40-18-31, the term “taxable income” means federal taxable income without the benefit of federal net operating losses plus the additions prescribed and less the deductions and adjustments allowed by this chapter an…

The following items shall be added to federal taxable income for purposes of computing taxable income under this chapter: (a) State and local income taxes that are deductible in computing federal taxable income. (b) Interest on obligations of state or local governments other than…

(a) The following items shall be deducted from federal taxable income for purposes of computing taxable income under this chapter: (1) Refunds of state and local income taxes. (2) Federal income tax paid or accrued during the taxpayer’s taxable year. The portion of federal income…

In computing the taxable income of corporations subject to income tax as outlined in Section 40-18-35, there shall be allowed, in addition to the deductions specified therein, a deduction for the sum of the net operating losses which may be carried forward to the taxable year for…

All amounts included in income under 26 U.S.C. § 951A shall be deducted from federal taxable income for purposes of computing taxable income under this chapter. However, any amount subtracted under this section is allowed only to the extent such amount is not deductible in determ…

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 …