The Alabama Business Privilege Tax (ABPT) is a requirement for all businesses in the state of Alabama. Current listings of all city and county tax rates and the addresses and phone numbers of non- Alabama corporations are subject to Alabama’s corporate income tax at a flat rate of 6.5% of net income. The information provided on this site is not legal advice, does not constitute a lawyer referral service, and no attorney-client or confidential relationship is or will be formed by use of the site. • Sales Tax – is a privilege tax imposed on the retail sale (a sale made to the end-user) of all tangible personal property sold in Alabama by businesses located in Alabama. Example: For the latest tax year, your Alabama corporation had a net income of $100,000 and the corporation’s net worth was also $100,000. This tax must be paid in addition to the business privilege tax. Note, however, that while by default LLCs are classified for tax purposes as partnerships (or, for single-member LLCs, disregarded entities), it is possible to elect to have your LLC classified as a corporation. For further guidance on Alabama’s corporate income tax and business privilege tax, check the Department of Revenue website. The business privilege tax is a tax on the net worth of your business. City of Auburn, AL Revenue Office 144 Tichenor Avenue, Suite 6 Auburn, AL 36830 Event Permit Form. Most states tax at least some types of business income derived from the state. Here’s a brief look at additional details for five of the most common forms of Alabama business: corporations (C corporations), S corporations, LLCs, partnerships, and sole proprietorships. From emerging technologies to vital manufacturing clusters, Business Alabama has been tracking the growth of the Alabama economy for more than three decades. Instead, income from your business will be distributed to you as the sole proprietor, and you will pay tax on that income on your individual federal and state tax returns. As a business owner selling taxable goods or services, you act as an agent of the state of Alabama by collecting tax from purchasers and passing it along to the appropriate tax authority. Example: For the latest tax year, your multi-member LLC, which has the default tax classification of partnership, had net income of $100,000 and the company’s net worth was also $100,000. The partnership does not owe any business privilege tax. Voice: 334-242-5324. Alabama collects a state income tax at a maximum marginal tax rate of %, spread across tax brackets. Moreover, as limited liability entities, S corporations are required to the pay the state’s business privilege tax. Franchise taxes are generally either a flat fee or an amount based on a business’s net worth. This facility provides you easy access to public information maintained by the Secretary of State's office in electronic format. The first step towards understanding Alabama’s tax code is knowing the basics. If you continue to receive this message, please contact MAT Support. Apart from taxing business income through a corporate income tax or a personal income tax, many states impose a separate tax on at least some businesses, sometimes called a franchise tax or privilege tax. Currently, six states – Nevada, Ohio, South Dakota, Texas, Washington, and Wyoming – do not have a corporate income tax. Business Licenses – (information current as of September 25, 2015) Jefferson County is currently administering business licenses levied under the provisions of Title 40, Chapter 12 and Title 34, Chapter 35 of the 1975 Code of Alabama, as amended. The header boxes above the link lists will take you to that division’s page. (Local taxes are also due, and the rates vary.) 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