Key figures
Alabama compliance
2026, with sources
Registration and the privilege tax
A Delaware corporation doing business in Alabama registers as a foreign entity with the Secretary of State. From then on, it files Form CPT each year with the Department of Revenue: the business privilege tax return, which is also its annual report and carries the $10 Secretary of State fee.
The privilege tax is measured on Alabama net worth. The rate runs from $0.25 per $1,000 for a company with no Alabama taxable income up to $1.75 per $1,000 at $2.5 million or more, with a $15,000 cap. After Act 2022-252, a computed tax of $100 or less is not due from 2024, which removes it for most early-stage companies.
Local licenses
Alabama cities and counties issue their own business licenses, and many administer their own sales and use taxes rather than leaving them to the Department of Revenue. A company opening an office in Birmingham or Huntsville checks with the city and county for a business license, and for whether they collect sales, use or occupational taxes themselves.
Deadlines
- With the corporate income tax returnBusiness privilege tax return and annual report (with the $10 Secretary of State fee)Form CPT
- April 15 for calendar-year corporationsCorporation income tax returnForm 20C
The federal baseline
This page covers what Alabama adds. The federal rules underneath it apply here too.
Common questions
What is the Alabama business privilege tax?
Alabama’s business privilege tax is an annual tax on the privilege of doing business, measured by Alabama net worth at a rate from $0.25 to $1.75 per $1,000 that rises with the company’s Alabama taxable income, capped at $15,000. A loss-making startup is in the lowest bracket, and since 2024 a computed tax of $100 or less is not due at all.
Is there an Alabama annual report?
Yes, through the business privilege tax return. For a corporation, Form CPT doubles as the annual report, and the Department of Revenue collects the $10 Secretary of State annual report fee with it.
Compliance next door
- FLFlorida complianceFlorida compliance is a $70 foreign qualification, a $150 annual report due by May 1 with a $400 late fee, the F-1120, and local business tax receipts where you have an office.
- GAGeorgia complianceGeorgia compliance is a $235 certificate of authority, a $60 annual registration by April 1, Form 600 with its net worth tax, and an unclaimed property report every November 1.
- MSMississippi complianceMississippi compliance is a $500 certificate of authority, a $25 annual report, the corporate income and franchise tax return by the 15th day of the fourth month, and an unclaimed property report by November 1.
- TNTennessee complianceTennessee compliance is a certificate of authority, an annual report by April 1, the FAE170 by April 15, the business tax wherever receipts reach $100,000, and an unclaimed property report each November 1.
Founder guides on this
- ComplianceFirst-year compliance calendar for a Delaware C-corpDelaware franchise tax, 1099s, the federal return, payroll filings, state annual reports and sales tax: the deadlines a young C-corp misses most, by month.
- FundraisingAudit-ready books before your Series AInvestors, lenders and auditors ask for the same things: accrual statements, reconciled accounts and support for every balance. How to be ready first.
More of the Alabama guide
- AccountingAccounting and state tax in AlabamaCorporate tax, conformity to federal rules, apportionment and what it does to your books
- ReceivablesReceivables and sales tax in AlabamaSales tax registration, economic nexus, whether SaaS is taxable, and collecting from customers
- PayablesPayables and contractors in AlabamaPaying vendors and contractors: 1099 filing, use tax, contractor tests and withholding
- PayrollPayroll taxes and employer rules in AlabamaWithholding, unemployment insurance, paid leave, minimum wage and the rules on paydays
- AdvisoryAdvisory: credits and decisions in AlabamaCredits, incentives and the decisions that are cheaper to get right the first time
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.