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View All Corporate Income Tax FAQs

Does Alabama have a carry forward provision for net operating losses?

Yes. Alabama’s net operating loss carry forward provision began with net operating losses incurred during a tax year beginning on or after January 1, 1984. Prior to this period Alabama did not have a net operating loss provision. A net operating loss incurred during a tax year beginning on or after January 1, 1984 and before January 1, 1985 can be carried forward 5 years. A loss from a tax year beginning on or after January 1, 1985 can be carried forward 15 years. For tax years beginning on or after January 1, 1985 and before January 1, 1990, the net operating loss deduction was limited to $600,000 per year.

NOTE: For all tax periods beginning during calendar year 2001, Section 40-18-35.1 (Act 2001-1088 (HB2)) suspends net operating losses.

Yes. Alabama’s net operating loss carry forward provision began with net operating losses incurred during a tax year beginning on or after January 1, 1984. Prior to this period, Alabama did not have a net operating loss provision. A net operating loss incurred during a tax year beginning on or after January 1, 1984, and before January 1, 1985, can be carried forward five years. A loss from a tax year beginning on or after January 1, 1985, can be carried forward 15 years. For tax years beginning on or after January 1, 1985, and before January 1, 1990, the net operating loss deduction was limited to $600,000 per year.

NOTE: For all tax periods beginning during calendar year 2001, Section 40-18-35.1 (Act 2001-1088 (HB2)) suspends net operating losses.

Related FAQs in Corporate Income Tax

In Alabama, a resale certificate is officially called a “Sales Tax License”. To get a copy of your Alabama resale certificate or Sales Tax License, you should:

Login to MAT, locate the appropriate tax account, locate and click “Print tax account license” link. If you need help or cannot access your certificate online contact the Alabama Department of Revenue Sales and Use Tax Division for assistance.

Step by Step Instructions for License Renewal

Yes. In accordance with Rule 810-6-1-.144.03: All buyers of property for resale purposes are entitled to purchase at wholesale, tax-free, the property they resell as regular course of business when they have secured the sales tax license required by law. This rule also applies to retailers located outside Alabama when they have secured the sales tax license required by law in the state in which they are located.

A credit card transaction fee is a charge added to the regular price of an item by a retailer when the purchaser pays for the item using a credit card. Other names for this fee include swipe fee, credit card surcharge, processing fee, service charge, or convenience fee.

These fees are subject to sales and use tax and should be included in the seller’s gross sales on retail transactions when calculating tax due. Example: A sale of tangible personal property totals $100. The customer pays with a credit card and is charged a $3 credit card transaction fee. The total price of $103, including the credit card transaction fee, is subject to sales and use taxes.

A credit card fee, even if separately stated, is part of the retailer’s cost of doing business, and the entire consideration for the sale of tangible personal property is subject to sales and use taxes.

If a transaction consists of only non-taxable goods or services, the credit card transaction fee is not subject to sales and use taxes. Example: A customer is charged $50 for a haircut. The customer pays with a credit card and is charged a $3 credit card transaction fee. Since the haircut is not subject to sales and use taxes, the corresponding credit card transaction fee is not subject to sales and use taxes.

When trying to complete title applications for vessels that have inches listed on the MSO, please use this Vessel Length Chart for conversion purposes.

Vessel Length Chart

Yes, Alabama allows resident individuals to claim a tax credit for income taxes imposed by other states. This credit is claimed on Form 40, Schedule CR. A copy of the other state’s return and a copy of the state Schedule K-1 should be included as documentation of this credit.

If the individual does not file an individual income tax return in the other state or the state provides an exclusion of income, include a proforma return calculating the tax at the other state’s rate and a copy of the state Schedule K-1 as documentation of this credit.

Note: Any Pass-Through Entity tax deducted on the Pass-Through Entity’s federal return, which reduces the taxable income reported on the owner’s K-1, should be added back to compute Alabama taxable income.

No, if the current title is an Alabama ELT there is no cost to print a physical title.

However, once an ELT is printed on physical title paper it can not be printed again. A replacement title application must be applied for if a replacement is needed.