The Alabama Business Privilege Tax is an annual tax that LLCs, corporations, and other business entities must pay for the privilege of doing business in Alabama. The minimum tax is $100 per year. The return is due April 15 (same as the federal income tax deadline). It must be filed every year — even if your business had no income.
What is the Alabama Business Privilege Tax?
The Alabama Business Privilege Tax (BPT) is an annual tax levied on LLCs, corporations, limited partnerships, and other business entities organized in Alabama or doing business in Alabama. It is administered by the Alabama Department of Revenue and is separate from your federal and state income taxes.
The tax is based on your business's net worth in Alabama — generally the value of assets used in the state minus liabilities. For most small LLCs, the minimum $100 tax applies.
Who must pay the Alabama Business Privilege Tax?
- Alabama LLCs (domestic and foreign)
- Alabama corporations (domestic and foreign)
- Limited partnerships registered in Alabama
- Limited liability partnerships
- Business trusts
Sole proprietors and general partnerships are not subject to the BPT.
How much is the Alabama Business Privilege Tax?
The tax rate is $1.75 per $1,000 of net worth allocated to Alabama, with a minimum tax of $100. For most new and small businesses with limited assets, the $100 minimum is what applies.
| Net Worth in Alabama | Tax Amount |
|---|---|
| Under $57,143 | $100 (minimum) |
| $57,143 – $200,000 | $100 – $350 |
| $200,001 – $500,000 | $350 – $875 |
| $500,001 – $1,000,000 | $875 – $1,750 |
| Over $1,000,000 | $1.75 per $1,000 |
| Maximum tax | $15,000 |
When is the Alabama Business Privilege Tax due?
The BPT return is due April 15 of each year. For a new LLC formed in 2025, the first return is due April 15, 2026. The return covers the prior calendar year.
If you need more time, you can file for an extension — but the extension is for filing only, not for paying. Any tax owed must still be paid by April 15 to avoid penalties and interest.
How to file the Alabama Business Privilege Tax return
Get Form PPT (for LLCs) or Form CPT (for corporations)
Download the form from the Alabama Department of Revenue at revenue.alabama.gov or file online through My Alabama Taxes (MAT) at myalabamataxes.alabama.gov.
Calculate your Alabama net worth
For most small LLCs, this is straightforward — total assets minus total liabilities. If your net worth is under $57,143, you simply pay the $100 minimum.
File and pay by April 15
File online through My Alabama Taxes for the fastest processing. You can also mail the return with a check payable to the Alabama Department of Revenue.
Don't skip this filing. Failing to file the BPT return results in penalties of 10% of the tax due (minimum $50) plus interest. Continued failure can result in your LLC being administratively dissolved by the state.