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Alabama LLC: No Annual Report, and a Business Privilege Tax With a $0 Floor

Alabama LLCs file no annual report with anyone, and pay no recurring Secretary of State fee. The recurring obligation is the Business Privilege Tax, a computed net worth tax that a small LLC often does not file at all, because a computed tax of $100 or less is exempt with no return required.

By the LLCForming research teamFees checked Nov 8, 2026

There is no Alabama LLC annual report

The claim that Alabama's Business Privilege Tax return doubles as the annual report was once structurally true, and it is now out of date. The Department of Revenue's official notice on the 2024 filing changes states that the Secretary of State Corporation Annual Report will no longer be filed with the Business Privilege Tax return, that the Secretary of State Business Services Division processes annual reports itself, and that the only entities required to file an annual report are domestic and foreign for-profit corporations and professional corporations. The notice adds, in the Department's own emphasis, that annual reports from other entities will not be accepted. The Secretary of State fee schedule tells the same story: it lists an annual report fee of $10 only under for-profit corporations, and no annual report line under domestic or foreign LLCs. An Alabama LLC therefore has no annual report to file, no report fee to budget, and no report deadline to miss.

The Business Privilege Tax, in one table

Item	Alabama rule
What it is	A tax levied under section 40-14A-22 for the privilege of being organized under Alabama law or doing business in Alabama, computed on Alabama-apportioned net worth. It is a net worth tax, not an income tax and not a flat fee.
The exemption	For taxable years beginning after December 31, 2023, a taxpayer whose computed tax is $100 or less is fully exempt and files no return at all (Act 2022-252). Most small LLCs land here, at $0.
Rate, net worth under the lowest income bracket	$0.25 per $1,000 of Alabama net worth, where apportioned federal taxable income is less than $1
Rate, $1 to less than $200,000 of income	$1.00 per $1,000
Rate, $200,000 to less than $500,000	$1.25 per $1,000
Rate, $500,000 to less than $2,500,000	$1.50 per $1,000
Rate, $2,500,000 or more	$1.75 per $1,000
Cap	$15,000 for LLCs and other general business entities. An electing family limited liability entity is capped at $500.
Which form	Form PPT for pass-through entities, including limited liability entities and disregarded entities. An LLC taxed as a corporation for federal purposes files Form CPT instead.

Because the tax is a percentage of net worth above an exemption threshold, it is not a flat charge and it is excluded from the flat totals on this page, the same way income taxes are. The practical answer for a typical small LLC is the exemption row: compute the tax, and if it comes to $100 or less, there is nothing to pay and no return to file.

Due dates, and the penalties when the tax is owed and missed

Business Privilege Tax return due dates correspond to the corresponding federal return due dates, and the tax is payable in full on the original due date. For a limited liability entity the return is due no later than two and one-half months after the beginning of the taxable year, which for a calendar-year LLC taxed as a partnership is March 15, on Form PPT. A disregarded entity's return is due by the owner's corresponding federal due date, and an LLC taxed as a corporation, filing Form CPT, is due three and one-half months after the beginning of the taxable year, April 15 for a calendar-year filer. An initial return, Form BPT-IN, is due within two and one-half months after the entity organizes, qualifies with the Secretary of State, or starts doing business in Alabama, and only if the computed tax exceeds $100. An automatic six-month filing extension is granted, but there is no extension of time to pay and no extension for Form BPT-IN. When a required return is missed, the penalties under section 40-2A-11 are: failure to timely file, 10% of the tax shown due or $50, whichever is greater; failure to timely pay, 1% of the tax shown due for each month unpaid, capped at 25%; plus interest on unpaid tax from the original due date. The Department of Revenue issues delinquency notices for unpaid Business Privilege Tax, and the tax also gates the Department's Certificate of Compliance, which is issued only after the Department confirms all required returns are filed and tax is paid.

What Alabama does not do to an LLC, stated plainly

Many state pages in this guide describe an administrative dissolution process, and readers look for Alabama's. The Alabama LLC materials do not describe one. Chapter 5A, Article 7 is titled Dissolution, Winding Up, and Reinstatement, and its sections cover events of dissolution, winding up, claims, and reinstatement after dissolution, with no administrative-dissolution section among them, and no Secretary of State form, fee schedule line, or LLC page reviewed describes the Secretary of State administratively dissolving an LLC, for tax noncompliance, for agent failure, or for any other ground. So this page does not invent one. The verified consequences of falling behind in Alabama are these: the Department of Revenue penalties and interest above, delinquency notices, a Certificate of Compliance that cannot be issued until returns are filed and tax is paid, which in turn blocks a foreign LLC's withdrawal, and the standing statutory duty under section 10A-1-5.31(a) to continuously maintain a registered agent and a registered office in the state. Business Privilege Tax also remains due for every registered year until the entity is legally dissolved or withdrawn through the Secretary of State, regardless of whether it is actively doing business, which is why closing properly matters.

Reinstatement after a dissolution: $100

An Alabama LLC that has dissolved can reinstate by filing the Domestic LLC Certificate of Reinstatement with the Secretary of State, under sections 10A-5A-7.07 and 10A-5A-7.08, for $100. The form requires a certification that all applicable conditions of section 10A-5A-7.07 have been satisfied, the original formation date and the dissolution date, a registered agent and office block, the name after reinstatement complying with section 10A-5A-7.09, with the word reinstated added after the name if the former name is no longer available, and a copy of the certified true and complete copy of the LLC's Certificate of Formation attached. Reinstatement is effective immediately on filing, under section 10A-5A-7.10.

Closing an Alabama LLC on purpose

Ending the LLC deliberately is a filing with the Secretary of State, not the probate judge and not a lapse. File the Domestic Limited Liability Company Articles of Dissolution, under section 10A-5A-7.02(b), with the Secretary of State for $100, stating the current recorded name, the Alabama Entity ID number, the date the Certificate of Formation was filed, the reason for filing, the effective date of dissolution, and a statement that the LLC has dissolved. The domestic form lists no Department of Revenue tax-clearance certificate as an attachment, and none should be asserted for it. That clearance mechanic exists one step over, for foreign LLCs: a Certificate of Withdrawal, also $100 with the Secretary of State, must attach a Department of Revenue Certificate of Compliance. Two timing warnings close the page. A dissolution cannot be backdated to the date you stopped conducting business; it is in effect as of the date the Secretary of State receives it, and any entity that still shows a status of exists on the Secretary of State's website is subject to being taxed. File promptly, because Business Privilege Tax runs until the dissolution is legally on file. Our dissolution guide covers winding down before you file.