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Corporate Income Tax

Tax Types >
  • Corporate Income Tax

Resources

Authority

Sections 40-18-1 through 40-18-59 and 40-18-160 through 40-18-176, Code of Alabama 1975. Sections 40-27-1 through 40-27-6, Code of Alabama 1975.

Corporations – Net taxable income from business within the state. For tax years beginning on or after January 1, 2021, Alabama income is determined by a single sales factor apportionment.

CONSTITUTIONAL PROVISIONS

Amendment No. 212 to the Constitution of Alabama of 1901 (proclaimed ratified December 18, 1963) increased the allowable maximum corporate income tax rate to 5 percent, with deduction allowed for all federal income taxes paid. Taxes due by foreign corporations are to be based on income derived from sources within Alabama.

Amendment No. 662 to the Constitution of Alabama of 1901 (proclaimed ratified June 19, 2000) increased the corporate income tax rate to 6.5 percent beginning in calendar year 2001.

6.5 percent of annual net income with a deduction allowed for federal income tax paid or accrued.

Portion necessary to reimburse the Property Tax Relief Fund for Homestead Exemptions. The remaining balance to the Education Trust Fund.