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What are the Alabama Annual Report and Alabama Business Privilege Tax?
Unlike most other states where the Annual Report is filed with the Secretary of State, in Alabama, the Annual Report is filed with the Department of Revenue.
You have two returns to file. The first is a one-time filing and the second one is an ongoing filing due every year.
The first one-time filing is known as the “Initial Business Privilege Tax”.
The ongoing filing is known as the “Business Privilege Tax Return and Annual Report”.
Both of these annual obligations are taxes paid to the Department of Revenue. There is no annual filing fee paid to the Secretary of State in Alabama.
Before you continue: You must have an EIN Number for an Alabama LLC from the IRS before you can file any returns with the Alabama Department of Revenue.
Why do I need to pay the Alabama Business Privilege Tax?
The Business Privilege Tax and Annual Report is a legal requirement for operating a business in the state of Alabama. Think of it as the “privilege” to be doing business in the state.
In short, there’s no way around it. You need to file and pay this tax every year in order to keep your LLC in good standing.
How is the rate for the Business Privilege Tax determined?
The Business Privilege Tax is based on your business’s taxable income.
You’ll take this number and use it to reference the rate schedule to determine the total taxes due.
Initial Business Privilege Tax Return (Form BPT-IN)
- Amount due: $50 minimum
- Due by: 2.5 months after LLC formation
- Name: Form BPT-IN
- Ongoing: No, just filed once
All new LLCs must file an Initial Business Privilege Tax Return (and pay the business privilege tax) within 2.5 months of their formation. The formation date is the date next to the signature on your Certificate of Formation.
A minimum tax of $50 is due, but you may owe more depending on your federal taxable income and your net worth. We recommend consulting with a tax professional for help.
If Northwest Registered Agent is your LLC’s Registered Agent:
The Initial Business Privilege Tax Return requires your Registered Agent’s Federal Tax ID Number. Please call Northwest to confirm, but we have their Federal Tax ID Number listed as 26-4375596.
Business Privilege Tax Return (Form PPT)
- Amount due: $50 minimum
- Due by: April 15th (first filing due the year after your LLC is formed)
- Name: Form PPT
- Ongoing: Yes, due by April 15th every year
- Attachments: Federal Tax Return, Schedule BPT-NWI, Form BPT-V
All LLCs must file the Business Privilege Tax Return (and pay the business privilege tax) each year. They are both due by April 15th each year.
Your first filing of the Business Privilege Tax Return (Form PPT) is due the year after your LLC is formed.
For example, if your LLC was formed (approved) on July 20th of 2026, your first filing of the Business Privilege Tax Return (Form PPT) will be due by April 15th of 2027.
A minimum tax of $50 is due, but you may owe more depending on your federal taxable income and your net worth. We recommend consulting with a tax professional for help.
You might owe nothing at all
House Bill 391 was signed into law in 2022. And it’s purpose is to help Alabama businesses save a little bit of money.
With this new bill, if you owe $100 or less, you actually don’t have to pay at all. Instead, you get to keep the money.
Here’s a simple example:
Imagine you run a small lemonade stand, and every year, you had to pay the state a $100 just to keep your stand open. But now, the state has changed the rules: if you owe $100 or less, you won’t have to pay anything at all!
So, let’s say after selling lemonade all year, you owe $99 on your Business Privilege Tax Return. With the new rule, you get to keep that $99 instead of paying it to the state. This change helps small businesses save money.
Download Business Privilege Tax Forms
Visit the Alabama Department of Revenue: Forms page.
In the upper right side of the table you’ll see a “Search” box. Enter the bold terms below and make sure to select the proper tax year (which you’ll see in the far right column):
- Form BPT-IN (Print Only)
- This is the Alabama Business Privilege Tax Initial Privilege Tax Return
- Form PPT
- This is the Alabama Business Privilege Tax Return and Annual Report for Pass Through Entities Only
- Form BPT-V
- This is the Business Privilege Payment Voucher
Note: The Form PPT is different for limited liability entities (like LLCs) and for other business entities (like corporations), so make sure your form says “for Pass Through Entities” on it.
Alabama’s Terms: “Limited Liability Entity” vs “Disregarded Entity”
These terms are just “tax classifications” used by the Alabama Department of Revenue.
(In the eyes of the law you are still a Limited Liability Company.)
“Disregarded Entity” = Single-Member LLC
“Limited Liability Entity” = Multi-Member LLC
What other Alabama taxes are due?
Additional taxes will be due depending on your type of business. Taxes such as Income Tax, Franchise Tax, Corporate Tax, Sales and Use Tax, and more.
You may also need to file more taxes if your business has employees.
For more information, please visit the Alabama Department of Revenue.
Calculating your Alabama LLC’s taxes can be quite confusing and if done improperly can negatively affect your business.
Our Recommendation for filing your Alabama taxes
We recommend hiring an LLC accountant to help, not only with your Alabama taxes, but also with your Federal Taxes.
Hiring a tax professional will not only help keep your LLC in compliance with Alabama, but it will also give you an advisor to go to for other business questions.
A referral from a friend or someone you trust is usually the best way to find someone to do your taxes.
You want to find someone who is a good fit for your company, makes you feel comfortable, and is willing to answer all of your questions. It should be someone you like personally as well as professionally.
It may take time to find the right person, so we recommend talking with at least 2-5 people before making your final decision. We hope you find a great tax professional!
Alabama Department of Revenue Contact Information
334-242-1170 (option 8 for Business Privilege Tax)
Alabama Department of Revenue
Alabama Department of Revenue: Contact Us
Note: Because the Annual Report in Alabama is actually a tax paid to the Department of Revenue, you should contact them directly. The Alabama Secretary of State won’t be able to answer your questions about the Business Privilege Tax.
References
Alabama Legislature: Code of Alabama
Alabama Governor Press Release: Small Business Tax Relief
Alabama Department of Revenue: Individual & Corporate Tax
Alabama Department of Revenue: Forms and Mailing Addresses
Information verified on October 27, 2026
Matt holds a Bachelor's Degree in business from Drexel University with a concentration in business law. He performs extensive research and analysis to convert state laws into simple instructions anyone can follow to form their LLC - all for free! Read more about Matt Horwitz and LLC University.