Flag_of_Alabama.svg
An official website of the Alabama State government.

The .gov means it's official

Government websites often end in .gov or .mil. Before sharing sensitive information, make sure you’re on an official government site.

The site is secure

The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

Services

Services

Business and License

Business and License

Collections

Collections

Entity Registration

Entity Registration

Human Resources

Human Resources

Income Tax

Income Tax

Legal

Legal

Motor Vehicle

Motor Vehicle

Property Tax

Property Tax

Sales and Use

Sales and Use

Tax Incentives

Tax Incentives

Tax Policy

Tax Policy

  • Homepage
  • >
  • Who may file consolidated returns?

Who may file consolidated returns?

Qualified corporate groups, shall have the option to file one excise tax return on a consolidated basis or to file separate returns. Each financial institution included in the Alabama consolidated return must compute their Alabama taxable income on a separate company basis. Then, the taxable income of the Alabama group is combined to determine the tax due.

In order for financial institution members of a controlled group to be eligible to elect to file on a consolidated basis, the members would have to meet the following two tests:

Ownership test: Includable financial institutions will be connected through stock ownership with a common parent corporation. Financial institutions are includable corporations if:
Stock possessing at least 80 percent of the voting power of all classes of stock and at least 80 percent of each class of the nonvoting stock of each of the includable corporations (except the common parent corporation) is owned directly by one or more of the other includable corporations; and
The common parent owns directly stock possessing at least 80 percent of the voting power of all classes of stock and at least 80 percent of each class of the nonvoting stock of at least one of the other includable corporations.
Filing test: In order to be eligible for this election, each member must be a financial institution as defined in Section 40-16-1 and be required to file an excise tax return.
For tax periods beginning after December 31, 2019 – Act 2019-284(HB) revised the Consolidated filing requirements in Alabama Code Section 40-16-3(e). For tax periods beginning on or after January 1, 2020, the election is binding for 120 consecutive months (10 years).

Qualified corporate groups, shall have the option to file one excise tax return on a consolidated basis or to file separate returns. Each financial institution included in the Alabama consolidated return must compute their Alabama taxable income on a separate company basis. Then, the taxable income of the Alabama group is combined to determine the tax due.

In order for financial institution members of a controlled group to be eligible to elect to file on a consolidated basis, the members would have to meet the following two tests:

Ownership test: Includable financial institutions will be connected through stock ownership with a common parent corporation. Financial institutions are includable corporations if:
Stock possessing at least 80 percent of the voting power of all classes of stock and at least 80 percent of each class of the nonvoting stock of each of the includable corporations (except the common parent corporation) is owned directly by one or more of the other includable corporations; and
The common parent owns directly stock possessing at least 80 percent of the voting power of all classes of stock and at least 80 percent of each class of the nonvoting stock of at least one of the other includable corporations.
Filing test: In order to be eligible for this election, each member must be a financial institution as defined in Section 40-16-1 and be required to file an excise tax return.
For tax periods beginning after December 31, 2019 – Act 2019-284(HB) revised the Consolidated filing requirements in Alabama Code Section 40-16-3(e). For tax periods beginning on or after January 1, 2020, the election is binding for 120 consecutive months (10 years).

Related FAQs in Consolidated Taxpayers, Financial Institution Excise Tax

The ONE SPOT system will allow returns to be filed with ACH Debit and ACH Credit method payments only. The system will not allow an ACH Debit taxpayer to complete their return filing without completing the necessary information to authorize the ACH Debit payment. The ACH Credit payment is separate from the ONE SPOT system and must be initiated by the taxpayer through their banking institution. Returns successfully submitted for ACH Debit and ACH Credit taxpayers will be exported to the local government.

Upon the completion of the Third Party Designation Form, ALDOR can provide the returns, payments and payment data files to the authorized third party administrator.

When an electronic payment is received by ALDOR in error, the payment will post to the taxpayer’s ALDOR local tax account. ALDOR will not be able to automatically transfer these payments to the non-administered local government due to the possibility the taxpayer’s payment will reject after ALDOR has transferred the payment, causing complicated collection issues. ALDOR will need the taxpayer to advise the Department with what to do with that payment.

The only non-administered local government taxes to be processed through ALDOR will be payments received as the result of legal action, such as final assessment, garnishments, and liens, entered into when the local government was state administered. Payment data for these payments will be available during the first week (5-10 working days) of the month following the tax collection period through the ALDOR website.

Website feedback