Alabama LLC renewal isn’t a separate annual report — the state keeps your LLC active through its annual Business Privilege Tax (BPT) return. For a calendar-year LLC, that return is due March 15 each year, and filing it satisfies your annual reporting obligation to the state. Miss it and penalties start at $50 and grow monthly; ignore it long enough and the state can dissolve your LLC.
What You Actually File Each Year
Alabama doesn’t use the “annual report” label most states do. Instead, every LLC owes a Business Privilege Tax for the privilege of doing business in the state, and the BPT return doubles as your annual filing. The obligation continues every year your LLC legally exists, whether or not the business is active or earning revenue.1Alabama Department of Revenue. What Taxpayers Must File an Alabama Business Privilege Tax Return
Most LLCs file Form PPT, which covers pass-through entities including standard LLCs, S-corporations, and disregarded entities. If your LLC elected to be taxed as a C-corporation for federal purposes, you file Form CPT instead.2Alabama Department of Revenue. Alabama Business Privilege Tax
When It’s Due
Form PPT is due two and a half months after the start of your LLC’s taxable year, matching the federal deadline for pass-through returns. Calendar-year LLCs file by March 15.3Alabama Department of Revenue. When Is the Alabama Business Privilege Tax Return Due If your LLC runs on a fiscal year, count two and a half months from the first day of that fiscal year.
You get an automatic six-month extension to file, and no form is required to claim it.4Alabama Department of Revenue. Can I File an Extension to Obtain More Time to File an Alabama Business Privilege Tax Return Watch the catch: the extension covers the return only, not the payment. Alabama law provides no extension of time to pay, so the full tax is still due on the original deadline.5Alabama Department of Revenue. Alabama Business Privilege Tax Return Instructions Form PPT 2025 If you expect to owe anything, send an estimated payment by March 15 even if the return itself will be late.
How Much You Owe
The BPT is calculated on your LLC’s net worth apportioned to Alabama, with the rate keyed to your federal taxable income:6Alabama Department of Revenue. Business Privilege Tax
- Less than $1 of taxable income: $0.25 per $1,000 of Alabama net worth
- $1 to $199,999: $1.00 per $1,000
- $200,000 to $499,999: $1.25 per $1,000
- $500,000 to $2,499,999: $1.50 per $1,000
- $2,500,000 or more: $1.75 per $1,000
The maximum tax for an LLC is $15,000.5Alabama Department of Revenue. Alabama Business Privilege Tax Return Instructions Form PPT 2025
If your calculated tax is $100 or less, no filing is required. This full exemption applies to all taxable years beginning after December 31, 2023, so it covers 2025 and forward unless the legislature changes it.2Alabama Department of Revenue. Alabama Business Privilege Tax Many small or newly formed LLCs qualify. Run the calculation each year to confirm — don’t just assume.
First-Year Filing Is Different
New LLCs don’t start with Form PPT. Your first filing is Form BPT-IN, the initial privilege tax return, due within two and a half months after your LLC is organized or begins doing business in Alabama.2Alabama Department of Revenue. Alabama Business Privilege Tax There is no extension for the initial return, so mark that date on the calendar the day you form the LLC. From the following year onward, you’re on the regular Form PPT cycle.
The $100 threshold applies to the initial return too. If the tax calculates to $100 or less, no initial filing is required.5Alabama Department of Revenue. Alabama Business Privilege Tax Return Instructions Form PPT 2025
How to File and Pay
File through My Alabama Taxes (MAT) at myalabamataxes.alabama.gov. You’ll enter your Form PPT data, attach supporting financial schedules, and submit payment in one session.1Alabama Department of Revenue. What Taxpayers Must File an Alabama Business Privilege Tax Return Before you log in, have your FEIN, pages 1 through 5 of your federal Form 1065 or 1120-S, and your net worth figures ready.7Alabama Department of Revenue. Quick Preparation Reference for TY 2025 Alabama Business Privilege Tax Forms Single-member LLCs should use the LLC’s FEIN, not the owner’s SSN.
Payment method depends on the amount. If your tax is $750 or more, electronic payment is required — ACH debit or another EFT method.8Alabama Department of Revenue. EFT Threshold of $750 Under $750, you can mail a check or money order with Form BPT-V, though electronic payment is still encouraged.9Alabama Department of Revenue. How Do I Make a Payment for Business Privilege Tax Paper forms are on the Department of Revenue’s website if you prefer mail.
What Happens If You File Late
Alabama charges separate penalties for filing late and paying late, and they stack.
The late filing penalty is the greater of $50 or 10% of the tax due. Even if you owe nothing, a late return still costs at least $50.10Alabama Legislature. Alabama Code Title 40 Revenue and Taxation – Section 40-2A-11 The late payment penalty adds 1% of the unpaid tax each month, capped at 25% of the total. Interest runs on any unpaid balance.
Ignore the obligation long enough and the Department of Revenue can flag your LLC as non-compliant, costing it good standing. Continued failure to file can lead to administrative dissolution, which strips your LLC of its authority to operate in the state and the liability shield that comes with the LLC structure.
Getting Back Into Good Standing
If you’ve missed filings or your LLC has been dissolved for non-compliance, cleanup runs through both the Department of Revenue and the Secretary of State:
- File every past-due BPT return covering every year the LLC legally existed.
- Pay all back taxes, penalties, and interest in full.
- Request a Certificate of Compliance from the Department of Revenue. The fee is $10 plus a $4 service charge, and it will only be issued once all returns and taxes are settled.11Alabama Department of Revenue. How Do I Obtain a Certificate of Compliance From Alabama Department of Revenue
- File reinstatement paperwork with the Secretary of State and include the Certificate of Compliance. The certificate must be no more than six months old when the Secretary of State receives it.11Alabama Department of Revenue. How Do I Obtain a Certificate of Compliance From Alabama Department of Revenue
The longer you wait, the more it costs. Penalties and interest compound every year, and if another business registers under your LLC’s name while it’s dissolved, you can lose the name.
If You’re Done With the LLC
The BPT keeps accruing as long as your LLC legally exists, even with zero activity or revenue.1Alabama Department of Revenue. What Taxpayers Must File an Alabama Business Privilege Tax Return The only way to stop the annual obligation is to formally dissolve. For a domestic Alabama LLC, that means filing Articles of Dissolution with the Secretary of State under Section 10A-5A-7.02(b), with a $100 filing fee.12Alabama Secretary of State. Domestic LLC Articles of Dissolution You’ll still need to file all outstanding BPT returns and pay any taxes owed through the dissolution date. An unused LLC sitting idle is another year of tax liability every year you leave it open.