Alabama LLC annual report and yearly fees: what is due and when

What does a Alabama LLC have to file each year?

For forming the LLC in the first place, see how to form an LLC in Alabama.

When is it due?

The business privilege tax return is due on the same date as the LLC's federal income tax return. For calendar-year LLCs, that is generally March 15 for LLCs taxed as partnerships or S corporations, and April 15 for single-member LLCs reported on an individual owner's return. A newly formed LLC that is not exempt files an initial return, Form BPT-IN, within two and a half months of formation.

How much does it cost?

For most small LLCs, nothing. For tax years beginning in 2024 and later, an LLC whose business privilege tax would be $100 or less is exempt and does not file a return.

Above that, the tax is the LLC's Alabama net worth multiplied by a rate set by its income: from $0.25 per $1,000 of net worth for LLCs with no taxable income, rising through $1.00, $1.25 and $1.50 to $1.75 per $1,000 for the highest incomes, with a maximum for most businesses. For example, an LLC with $40,000 of income falls in the $1.00 band. With $80,000 of Alabama net worth its tax would be $80, so it is exempt and files nothing; with $150,000 of net worth the tax would be $150, so it files and pays.

How do you file it?

1. Check whether the LLC is exempt

   Multiply Alabama net worth by the rate for the LLC's income. If the result is $100 or less, no return is due.

2. Register with My Alabama Taxes

   The Department of Revenue's online portal, used for filing and payment.

3. Prepare Form PPT

   With the net worth computation and the required pages of the federal return attached.

4. File and pay by the due date

   Online through My Alabama Taxes, with any tax due.

What information do you need?

The return is built from the LLC's balance sheet at the end of its tax year, mainly members' capital accounts and certain loans from members and related parties, together with the LLC's federal income, apportioned to Alabama if it operates in several states. Pages from the federal return are attached. Keeping the books current makes this straightforward. See how to read a balance sheet.

What happens if you file late or not at all?

Late returns and late payments carry penalties, which have minimum amounts that can exceed a small tax, plus interest. Persistent non-compliance can also affect the LLC's standing. An exempt LLC has no yearly state filing to miss, but it must still keep its registered agent and address current with the Secretary of State, and file any other tax returns it is registered for.

How do you restore a dissolved LLC?

An LLC dissolved for missing filings can usually be reinstated by filing every overdue report, paying the fees and penalties owed and filing a reinstatement application. Reinstatement generally restores the LLC as if it had never been dissolved, but the name may have been taken in the meantime. Acting quickly keeps the cost and the risks lower. See reinstating a dissolved LLC.

What else does a Alabama LLC pay each year?

Owners pay Alabama income tax on their share of profit. Counties and many cities require business licenses, usually renewed each year. LLCs registered for sales tax file returns monthly, quarterly or annually, and employers file withholding returns. See how to form an LLC in Alabama for the one-time costs.

What does a typical year look like?

Is anything different for foreign owners?

No. A Alabama LLC owned by someone outside the US files the same business privilege tax return in the same way, usually online with a card. Make sure the registered agent forwards state notices promptly, since that is where reminders and penalty notices go. Separately, a single-member LLC owned by a foreign person must file Form 5472 with a pro forma Form 1120 with the IRS every year; that federal filing is unrelated to the state report and carries a $25,000 penalty if missed. See annual filings for foreign-owned LLCs.

How do you avoid missing it?

Put the due date in a calendar with a reminder a month ahead, keep the email address on the state's records current, and file as soon as the filing window opens. Registered agent services usually send reminders too. Be wary of official-looking letters from private companies offering to file for a much higher fee: genuine notices come from the Alabama Department of Revenue or the Secretary of State, and you can always file directly. See business tax deadlines.

This guide is general information. It is not tax or legal advice for your situation.