Alabama Annual Report Requirements: What LLCs and Corporations Must File

No annual reports are required for LLCs or corporations in Alabama. What business owners actually file each year is the Alabama Business Privilege Tax, which is filed with the Alabama Department of Revenue, not with the Secretary of State. If an entity has a calculated tax liability of $100 or less, it will be exempt from filing.

There are numerous pages available for other states when you search for “Alabama annual report.” Alabama used to require a report along with the business tax, and for a short period in 2024, it ran a standalone filing with the Secretary of State. These have since been repealed. Currently, there are no Alabama annual reports for any type of entity. The replacement filing, the Business Privilege Tax, is different enough to warrant a separate discussion.

Many of our clients choose to form their business in Alabama because it has a reputation for fewer compliance obligations and ongoing filings than California or New York. The absence of an annual report does not imply a lack of rules. Here are the current requirements.

Does Alabama Require an Annual Report?

No, not anymore, and previously LLCs weren’t required to file a $10 annual report either. Alabama briefly required a standalone report filed with the Alabama Secretary of State. This report was only required for domestic and foreign for-profit and professional corporations from January 1, 2024, to September 30, 2024. This was set to change with the signing of Act 2024-213 (HB 230) by the Alabama Legislature, effective as of October 1, 2024. After this date, all other entities listed will no longer be required to file a standalone report with the Secretary of State.

LLCs, Limited Partnerships, LLPs, and Nonprofits were never required to file a report with the Secretary of State for this nine-month period, and if you formed an LLC in Alabama, you did not miss an opportunity to file an annual report.

What Alabama Requires Instead: The Business Privilege Tax

The actual report requirement that is ongoing each year is the Business Privilege Tax (BPT) report. This report is not filed with the Secretary of State, but rather with the Alabama Department of Revenue. This is a tax on the privilege of conducting business in Alabama. This report includes the basis for the tax liability as well as entity information, making it the closest equivalent to an annual report in Alabama.

The tax liability is incurred each year an entity legally exists, whether active or not, until it is formally dissolved or withdrawn. This means that a single-member LLC that has not secured any clients is obligated to file this tax report or qualify for the exemption discussed below the following year after the LLC was formed.

Who Needs to File It: Entity Types and Exemptions

The form the entity needs to file is based on how the entity is taxed:

• Form CPT is filed by: C corporations, limited liability entities taxed as corporations, financial institutions, insurance companies, REITs, and business trusts
• Form PPT is filed by: S corporations, LLCs, and other limited liability entities, and disregarded entities
• Form BPT-IN is filed by newly formed or newly registered entities for their one-time initial return

One major exemption is worth mentioning. For tax years beginning after December 31, 2023, any entity whose calculated BPT is $100 or less is not required to pay the tax and is exempt from filing a return. Many small single-member LLCs fall in this category. Nonprofit corporations are also exempt from the tax.

Filing Deadlines: When Is the BPT Due?

Instead of using fixed calendar dates, Alabama connects the BPT due date with the due date of the entity’s federal income tax return.

• C corporations with a calendar year: the due date is the same as for federal Form 1120, which is generally April 15.
• S corporations, partnerships, and LLCs that are taxed as pass-through entities with a calendar year: the due date is the same as for federal Form 1120-S or 1065, which is generally March 15.
• For brand-new entities, the first BPT-IN return is due no later than two and a half months from the date of formation or qualification, provided that the calculated tax is greater than $100.

An approved federal extension of time to file, filed on Form 7004 by the entity, is an extension of the due date of the Alabama BPT. This extension is only for filing. Any tax due must still be paid by the original due date.

How Much You’ll Owe: BPT Cost and Calculation

The tax is on the entity’s net worth allocated to Alabama, using a graduated rate ranging from approximately 0.00025% to 0.00175%, depending on the type of entity and net worth. There is no longer a flat minimum fee of $50 for smaller tax filers, as any entity calculating a tax of $100 or less is not required to file a BPT return. For most entities, the tax is capped at $15,000, while for financial institutions and insurance companies, the cap is $3,000,000.

Consider a small LLC consulting business with an Alabama-apportioned net worth well below the threshold that would generate more than $100 in tax. In such instances, the LLC files nothing and owes nothing for that calendar year, as long as the calculation is $100 or less. An LLC that exceeds that threshold in a later year must file Form PPT for the first time, even if there are no other material changes to the LLC.

Documents and Information You’ll Need to File

Before you can begin to fill out either Form CPT or Form PPT, have the following:

• Alabama BPT account number and entity name, along with the accompanying FEIN
• Entity type and tax classification
• Balance sheet and/or federal income tax return (if the federal return is not attached)
• Alabama net worth and apportionment figures
• Prior-year payments or credits

For most businesses, the Alabama net worth figure is derived from the federal return, which means they must complete their federal filings before they can complete the Alabama state return.

How to File: Forms, Portals, and Payment Methods

Payment and filing for Alabama are done through the My Alabama Taxes (MAT) portal. Paper filings by mail to the Business Privilege Tax Section in Montgomery are accepted if the total payment is below the electronic payment threshold. Any payment of $750 or more must be made electronically.

Penalties for Missing the Deadline

The days of losing your registration due to missing an annual report are over, but that doesn’t mean the BPT won’t still come after you for missing deadlines. Failure to file on time results in:

• A penalty of the greater of $50 or 10% of the tax due
• A penalty of 1% of the unpaid tax per month, maxing at 25%
• Interest on the unpaid balance
• Loss of good standing, which can complicate financing and contracts, and may even jeopardize your entity’s ability to legally operate in the state

BPT vs. Federal Tax Filing: What’s the Difference

The two are often confused because their due dates overlap. Your federal tax filing (Forms 1120, 1120-S, or 1065) concerns the income tax you owe to the federal government. Your BPT filing (Forms CPT or PPT) concerns a separate state tax and is sent to the Alabama Department of Revenue. Filing one does not satisfy the other.

Common Mistakes to Avoid

There are certain patterns that have become common:

• In the hope that a filing deadline has been extended, some assume that a filing extension for the federal return also extends the payment deadline. This is inaccurate. Only the filing deadline is extended; the payment deadline is not.
• In the hope that a filing exemption from the previous year carries over, some assume the $100 filing threshold for the previous year still applies. This is inaccurate; it must be recalculated each year based on net worth and cannot be carried over.
• There are some who still confuse the BPT with the old Secretary of State annual report and search for a filing that no longer exists.
• Treating the BPT return as optional for dormant entities is also a mistake. Each year an entity legally exists, it must pay the BPT, whether or not the entity is actively conducting business.

Staying in Good Standing After You File

Each year, reassess whether you fall under the $100 exemption threshold, since it must be recalculated annually rather than assumed. A calendar reminder should not be set for a fixed date, as the payment due date is tied to the federal return due date for that entity type. Filing an extension for the federal return does not extend the due date for the Alabama tax payment. A registered agent is required for all Alabama entities year-round, as this is a separate requirement from the BPT. Prior to filing the Articles of Dissolution for the business, obtain a Certificate of Compliance (valid for 6 months) from the Department of Revenue.

If you manage BPT due-date filings alongside your registered agent renewal and other federal filings, our annual compliance filing service can help you avoid oversights.

Frequently Asked Questions

Does Alabama require an LLC to file an annual report?

No. Alabama doesn’t currently require an annual report from LLCs or any other entity type. Most LLCs instead file the Business Privilege Tax return (Form PPT) each year.

Is there a fee for the Alabama annual report?

There’s no annual report fee because there’s no annual report. There can be a Business Privilege Tax liability, which is $0 for entities with $100 or less in net worth and otherwise based on net worth.

When is the Alabama Business Privilege Tax due?

It follows the entity’s federal tax return due date, generally April 15 for calendar-year C corporations and March 15 for calendar-year S corporations, partnerships, and LLCs taxed as pass-throughs.

What happens if I don’t file my Alabama Business Privilege Tax return?

You can face a failure-to-file penalty of the greater of $50 or 10% of the tax due, a failure-to-pay penalty of up to 25%, and interest, plus risk to your good standing if it continues.

Can I file the Alabama Business Privilege Tax online?

Yes. Alabama’s My Alabama Taxes portal handles online filing and payment, and electronic payment is required for amounts of $750 or more.

Does Alabama still process an annual report for corporations?

No. The Secretary of State’s brief 2024 annual report requirement for corporations was repealed effective October 1, 2024, by Act 2024-213.