Alabama business privilege tax calculator
Alabama's business privilege tax catches many owners off guard because it runs on its own forms and dates, separate from income tax. Use this to see whether you fall under the $100 exemption, roughly what you'll owe, and which form and date apply.
How the estimate works
Alabama charges the privilege tax on net worth, not on profit. The calculator starts from the equity on your balance sheet at December 31, 2026, apportions it to Alabama, and for pass-through entities takes off 30% of your federal taxable income. What is left is multiplied by a rate set by your income: $0.25 per $1,000 if you had no taxable income, rising in steps to $1.75 per $1,000 above $2.5 million.
Since 2024, a business whose calculated tax comes to $100 or less owes nothing and files nothing. That exemption is a cliff. A business that calculates $101 owes all $101, so it is worth knowing how close you sit to the line before the year closes.
Which return, and when
S corporations, and LLCs that file a federal 1065 or 1120-S, use Form PPT, due March 15, 2027. C corporations use Form CPT, due April 15, 2027. The tax is due on the original date even if you extend the return.
Common questions
Does the S election change my privilege tax?
It can. A C corporation that elects S status moves from Form CPT to Form PPT, and as a pass-through entity it deducts 30% of its federal taxable income apportioned to Alabama before the rate applies. The rates, the $15,000 cap and the $100 threshold are the same.
Is this the same as the business privilege license?
No. The license is a separate state and county charge, renewed every October with the probate judge or license commissioner in each county you operate in. The shared name catches people out every year.
Our LLC has been dormant for years. Does any of this apply?
It can. Alabama does not dissolve a company for going quiet, so an old LLC stays on the register until it is formally dissolved. If its balance sheet keeps it under the threshold, nothing accrues. If it holds property, the obligation may have been running the whole time.
For the background, read who still has to file the Alabama business privilege tax. If you would rather we prepared it, the return is part of our tax services.
More free tools: the Alabama business tax deadlines calendar, the S corporation tax savings calculator, and all our calculators.
Important: This calculator gives a general estimate for planning only. It is not tax, legal or financial advice, and using it does not make you a client of Titus CPAs. Results rely on the numbers you enter and on simplified assumptions. Tax rules, rates and deadlines change, so the results may be incomplete or wrong for your situation. Figures last reviewed October 2026. Before you file, pay or make a decision, confirm the result with your tax professional. If you don't have one, you can contact us.
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