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The Alabama Business Privilege Tax Return, commonly referred to as the Alabama CPT form, is an essential document for C-Corporations operating in the state. This form serves multiple purposes, including the calculation of the annual business privilege tax owed by corporations, as well as the submission of an annual report. It is crucial for corporations to accurately complete this form to ensure compliance with state tax regulations. The CPT form requires taxpayers to provide specific information, such as the legal name of the corporation, federal employer identification number (FEIN), and mailing address. Additionally, corporations must indicate their determination period and select their taxpayer type, whether they are a C Corporation, an insurance company, or another entity taxed as a corporation. The form also includes sections for reporting any changes in corporate leadership and for filing amended or initial returns. Corporations must compute their net worth, taking into account various exclusions and deductions, to determine the privilege tax due. This comprehensive process ensures that businesses fulfill their tax obligations while providing transparency in their financial reporting.

Sample - Alabama Cpt Form

*220001CP*
Amount Due
6 Secretary of State corporate annual report fee $10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7 Less: Annual report fee previously paid for the taxable year . . . . . . . . . . . . . . . . . . . . . . . .
8 Net annual report fee due (line 6 less line 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9 Privilege tax due (Page 2, Part B, line 20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10 Less: Privilege tax previously paid for the taxable year . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11 Net privilege tax due (line 9 less line 10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12 Penalty due (see instructions). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13 Interest due (see instructions). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14 Total privilege tax due (add lines 11, 12 and 13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15 Net tax due (add lines 8 and 14).
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16 Payment due with return if line 15 is positive. (Form BPT-V must be submitted if payment is made by check.)
Full payment of any amount due for a taxable year is due by the original due date of the return (without
consideration of any filing extensions in place). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17 Amount to be refunded if line 15 is negative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18 Check here if paid electronically 6
1a • 6 Calendar Year (Taxable Year 2022 – determination period beginning and ending 12/31/2021)
1b • 6 Fiscal Year (Taxable Year 2022 – determination period beginning • and ending • /2022)
1c • 6 Amended Return (Attach Supporting Documentation) • 6 52/53 Week Filer
Type of taxpayer (check only one): 2a • 6 C Corporation 2b • 6 Insurance Company (See definitions)
2c • 6 LLE Taxed as Corporation 2d • 6 Financial Institution Group Member 2e • 6 Real Estate Investment Trust (REIT)
2f • 6 Business Trust • Number of AL-CARs attached (Financial Institutions only)
FORM
CPT 2022
Alabama Department of Revenue
Alabama Business Privilege Tax Return
and Annual Report
ADOR
•
6
I authorize a representative of the Department of Revenue to discuss my return and attachments with my preparer.
Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge
and belief they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.
Please
Sign
Here
Paid
Preparer’s
Use Only
Preparerʼs signature
Firmʼs name (or yours, if •
self-employed) and address
•
Phone No. • Preparerʼs SSN/PTIN •
Title Date
Officerʼs
Signature
Date •
E.I. No. •
ZIP Code•
5a Date of Incorporation or Organization 5b State of Incorporation or Organization 5c County of Incorporation or Organization
• • •
TAXPAYER INFORMATION
COMPUTATION OF AMOUNT DUE OR REFUND DUE
3a LEGAL NAME OF FEIN NOT REQUIRED
BUSINESS ENTITY • 3b FEIN • •
6
(SEE INSTRUCTIONS)
3c MAILING 3d BPT ACCOUNT NO.
ADDRESS • (SEE INSTRUCTIONS) •
3h FEDERAL BUSINESS CODE NO.
3e CITY • 3f STATE • 3g ZIP CODE • (NAICS) (SEE WWW.CENSUS.GOV) •
3i CONTACT PERSON 3j CONTACT PERSON’S
CONCERNING THIS FORM • PHONE NO. •
3k TAXPAYER’S
E-MAIL ADDRESS •
If you are not
making a payment, mail your return to: If you are making a payment, mail your return, Form BPT-V, and payment to:
Alabama Department of Revenue Alabama Department of Revenue
Business Privilege Tax Section Business Privilege Tax Section
P.O. Box 327431 P.O. Box 327320
Montgomery, AL 36132-7431 Montgomery, AL 36132-7320
Telephone Number: (334) 242-1170 Web site: www.revenue.alabama.gov
RETURN INFORMATION
4a • 6 Corporation President Information Change on attached Schedule AL-CAR (Corporation Annual Report)
4b • 6 Corporation Secretary Information Change on attached Schedule AL-CAR (Corporation Annual Report)
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FORM
CPT
PAGE 2
*220002CP*
ADOR
PART A – NET WORTH COMPUTATION
Corporations & Entities Taxed as Corporations
1 Issued capital stock and additional paid in capital (without reduction for treasury stock)
but not less than zero.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2 Retained earnings, but not less than zero, including dividends payable. For LLC’s taxed
as corporations and non-stock issuing entities such as business trusts, enter assets
minus liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3 Gross amount of related party debt exceeding the sums of line 1 and 2.. . . . . . . . . . . . . . .
4 All payments for compensation or similar amounts in excess of $500,000. . . . . . . . . . . . . .
5 Total net worth (add lines 1-4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART B – PRIVILEGE TAX EXCLUSIONS AND DEDUCTIONS
Exclusions (Attach supporting documentation) (See Instructions)
1 Total net worth from line 5 above. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2 Book value of the investments by the taxpayer in the equity of other taxpayers . . . . . . . . .
3 Financial institutions, only – Book value of the investments in other corporations or LLE’s
if the taxpayer owns more than 50 percent of the corporation or LLE.. . . . . . . . . . . . . . . . .
4 Unamortized portion of goodwill and core deposit intangibles resulting from a direct
purchase. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5 Unamortized balance of properly elected post-retirement benefits pursuant to FASB 106. .
6 Financial institutions, only – The amount adjusted net worth
exceeds six percent of total assets (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7 Total exclusions (sum of lines 2-6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8 Net worth subject to apportionment (line 1 less line 7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9 Apportionment factor (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10 Total Alabama net worth (multiply line 8 by line 9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deductions (Attach supporting documentation) (See Instructions)
11 Net investment in bonds and securities issued by the State of Alabama or
political subdivision thereof, when issued prior to January 1, 2000. . . . . . . . . . . . . . . . . . .
12 Net investment in all air, ground, or water pollution control devices in Alabama. . . . . . . . . .
13 Reserves for reclamation, storage, disposal, decontamination, or retirement associated
with a plant, facility, mine or site in Alabama . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14 Book value of amount invested in qualifying low income housing projects (see instructions)
15 Total deductions (add lines 11-14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16 Taxable Alabama net worth (line 10 less line 15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17a Federal Taxable Income Apportioned to AL . .
17b Tax rate (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18 Gross privilege tax calculated (multiply line 16 by line 17b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19 Alabama enterprise zone credit (see instructions). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20 Privilege Tax Due (line 18 less line 19) (minimum $100, for maximum see instructions)
Enter also on Form CPT, page 1, line 9, Privilege Tax Due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Full payment of any amount due for a taxable year is due by the original
due date of the return (without consideration of any filing extensions in place).
C-Corporations must complete and attach
an Alabama Schedule AL-CAR, and enter $10 for
the corporate annual report fee on line 6, page 1.
BUSINESS PRIVILEGE
TAXABLE/FORM YEAR
2022
1a. FEIN 1b. LEGAL NAME OF BUSINESS ENTITY 1c. DETERMINATION PERIOD END DATE (BALANCE SHEET DATE)
V (MM/DD/YYYY)
Alabama Department of Revenue
Alabama Business Privilege Tax C-Corporation
Privilege Tax Computation Schedule
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Form Information

Fact Name Details
Governing Law The Alabama Business Privilege Tax is governed by Title 40, Chapter 14 of the Code of Alabama.
Eligible Taxpayers This form is specifically for C-Corporations, including insurance companies and financial institutions.
Filing Requirement C-Corporations must file the CPT form within 2.5 months of incorporation or qualification.
Annual Report Fee A $10 fee for the corporate annual report is required and must be included in the calculation of the total amount due.
Payment Methods Payments can be made via check or Electronic Funds Transfer (EFT). Instructions for EFT are provided on the form.
Net Worth Calculation The CPT form requires a computation of net worth, including issued capital stock and retained earnings.
Exclusions and Deductions Taxpayers may claim various exclusions and deductions, such as investments in Alabama bonds and pollution control devices.
Penalties and Interest Penalties and interest may apply for late filings or payments, as outlined in the form's instructions.
Refunds If the calculated tax is negative, the taxpayer is entitled to a refund, which must be indicated on the form.

Detailed Guide for Filling Out Alabama Cpt

Filling out the Alabama CPT form requires careful attention to detail. Each section must be completed accurately to ensure compliance with state regulations. Below are the steps to guide you through the process.

  1. Obtain the Alabama CPT form from the Alabama Department of Revenue website or your tax preparer.
  2. Identify the type of taxpayer you are by checking the appropriate box (C Corporation, Insurance Company, etc.) in section 1.
  3. Fill in the determination period by entering the beginning and ending dates in the format mm/dd/yyyy.
  4. Provide your legal name, Federal Employer Identification Number (FEIN), and mailing address in section 3.
  5. Indicate if there are any changes to your corporation’s address or corporate officers in section 4.
  6. Complete the computation of the amount due or refund due by following the instructions provided in the form, including calculating the annual report fee and privilege tax.
  7. Ensure that you include any applicable penalties or interest in your calculations.
  8. Sign and date the form where indicated, confirming that the information is accurate to the best of your knowledge.
  9. If applicable, have your paid preparer sign and provide their information in the designated area.
  10. Mail the completed form to the address specified at the bottom of the form, along with any required payment.

Obtain Answers on Alabama Cpt

  1. What is the Alabama CPT form?

    The Alabama CPT form is the Business Privilege Tax Return and Annual Report specifically for C-Corporations. It is used to report the corporation's financial information and calculate the business privilege tax owed to the state of Alabama.

  2. Who needs to file the Alabama CPT form?

    Only C-Corporations are required to file this form. This includes corporations that are classified as C-Corporations for tax purposes, as well as Limited Liability Entities (LLE) taxed as corporations. Other types of businesses, such as sole proprietorships or partnerships, do not need to file this form.

  3. When is the Alabama CPT form due?

    The form must be filed within 2.5 months after the end of the corporation's fiscal year or within 2.5 months of incorporation if it is an initial return. Failure to file on time may result in penalties.

  4. What information is required on the Alabama CPT form?

    The form requires various pieces of information, including:

    • Legal name of the taxpayer
    • Federal Employer Identification Number (FEIN)
    • Mailing address
    • Determination period (beginning and ending dates)
    • Net worth computation
    • Privilege tax calculations
  5. What are the penalties for not filing the Alabama CPT form?

    Penalties may be imposed for late filing or underpayment of the business privilege tax. The specific penalties can vary based on the amount owed and the length of time the return is late. It is advisable to file on time to avoid these penalties.

  6. How is the business privilege tax calculated?

    The business privilege tax is calculated based on the corporation's net worth. The CPT form includes a section for computing net worth, which factors in issued capital stock, retained earnings, and various exclusions and deductions. The final tax amount is determined after applying the appropriate tax rate to the taxable net worth.

  7. Can I amend my Alabama CPT form after filing?

    Yes, if you need to make changes after submitting your return, you can file an amended return. There is a checkbox on the form to indicate that it is an amended return. Ensure that you follow the instructions for amendments to avoid complications.

  8. Where do I send my completed Alabama CPT form?

    The completed form should be mailed to the Alabama Department of Revenue, Business Privilege Tax Section, at the following address:

    Alabama Department of Revenue
    Business Privilege Tax Section
    P.O. Box 327431
    Montgomery, AL 36132-7431

Common mistakes

Filling out the Alabama CPT form can be tricky, and many people make common mistakes that can lead to delays or issues with their returns. Here are eight frequent errors to watch out for.

One major mistake is not checking the correct type of taxpayer. The form clearly states that it is for C-Corporations only. If you mistakenly check another box, it can cause confusion and lead to processing delays.

Another common error is failing to provide the correct Determination Period. This section requires specific dates, and entering them incorrectly can lead to significant problems. Always double-check that the beginning and ending dates are accurate.

Many individuals forget to include their Federal Employer Identification Number (FEIN). This number is crucial for identification purposes. Leaving it blank can result in the return being rejected or delayed.

It's also important to ensure that the legal name of the taxpayer is entered correctly. Any discrepancies between the name on the form and the official records can lead to complications with the Alabama Department of Revenue.

People often overlook the requirement to check the appropriate boxes for amended or initial returns. Not marking these correctly can lead to misunderstandings about the nature of the return being filed.

Another frequent mistake involves the calculation of amounts due. Many filers miscalculate their total due, which can result in penalties or interest charges. Always double-check your math to ensure accuracy.

Some filers neglect to sign the form. A missing signature can lead to the return being considered incomplete. Make sure to sign and date the form before submission.

Lastly, failing to attach necessary supporting documentation can be a significant oversight. If the form requests additional information or schedules, ensure these are included to avoid delays in processing.

By being aware of these common mistakes, you can help ensure that your Alabama CPT form is completed accurately and submitted without issues.

Documents used along the form

The Alabama CPT form is a crucial document for C-Corporations in the state, serving as the Business Privilege Tax Return and Annual Report. In conjunction with this form, various other documents are often required to ensure compliance with state regulations. Below is a list of common forms and documents that may accompany the Alabama CPT form, each serving a specific purpose in the reporting and taxation process.

  • Alabama Schedule AL-CAR: This is the Corporation Annual Report that must be completed and submitted alongside the CPT form. It provides essential information about the corporation's operations and financial status.
  • Form BPT-IN: This form is required for initial returns, detailing the corporation's initial business activities and tax obligations. It must be attached to the CPT form if the corporation is filing for the first time.
  • Power of Attorney (POA): If a paid preparer is signing the CPT form on behalf of the corporation, a Power of Attorney must be included. This document authorizes the preparer to act on the corporation's behalf regarding tax matters.
  • Supporting Documentation for Deductions: Corporations may need to provide additional documents to support any deductions claimed on the CPT form. This may include financial statements or other relevant records.
  • Federal Tax Return: A copy of the corporation's federal tax return may be required to verify income and tax calculations. This ensures consistency between state and federal reporting.
  • Form 8832 (Entity Classification Election): If applicable, this form is used to elect how the corporation will be classified for federal tax purposes. It may be relevant for determining tax obligations at the state level as well.
  • Financial Statements: Corporations often need to submit their balance sheets and income statements. These documents provide a comprehensive overview of the corporation's financial health.
  • Annual Report Fee Payment: A payment confirmation or check for the $10 annual report fee is necessary. This fee is a requirement for maintaining corporate status in Alabama.
  • Amended Return Documentation: If the corporation is filing an amended return, it must include documentation explaining the changes made. This ensures transparency and accuracy in reporting.
  • State Business Licenses: Depending on the nature of the business, proof of any required state business licenses may be necessary to demonstrate compliance with local regulations.

Each of these documents plays a vital role in the overall process of filing the Alabama CPT form. By ensuring that all required forms and supporting materials are submitted accurately and on time, corporations can maintain compliance with state tax laws and avoid potential penalties. It is always advisable to consult with a tax professional or legal advisor when navigating these requirements to ensure that all obligations are met effectively.

Similar forms

  • IRS Form 1120: This is the U.S. Corporation Income Tax Return. Like the Alabama CPT form, it is specifically designed for corporations and requires detailed financial information to determine tax obligations. Both forms assess the financial performance of the corporation over a specified period.
  • Alabama Form 20C: This is the Alabama Corporate Income Tax Return. Similar to the CPT form, it is used by corporations operating in Alabama to report income and calculate state tax liabilities. Both forms require the legal name of the corporation and its federal employer identification number (FEIN).
  • Alabama Business Privilege Tax Return for S-Corporations: This document is akin to the CPT form but is specifically for S-Corporations. Both forms require taxpayer information and compute taxes based on business privilege, although the tax rates and calculations may differ.
  • Alabama Corporate Annual Report: This report is a requirement for corporations to maintain good standing in Alabama. Similar to the CPT form, it collects essential information about the corporation, such as its legal name and address, and is often filed concurrently with the CPT.
  • State Sales Tax Return: While primarily focused on sales tax, this form shares similarities with the CPT in that it requires businesses to report financial data and calculate tax liabilities. Both forms emphasize compliance with state tax laws and require accurate financial reporting.
  • Alabama Partnership Tax Return (Form 65): This form is used by partnerships to report income and calculate tax obligations. Like the CPT form, it requires detailed financial information and is focused on business activities within Alabama, although it caters to different types of business entities.

Dos and Don'ts

Filling out the Alabama CPT form can seem daunting, but following a few simple guidelines can help ensure that your submission is accurate and complete. Here are seven essential do's and don'ts to keep in mind:

  • Do check your taxpayer type carefully. Ensure you select the correct option for C-Corporations, as this form is specific to them.
  • Don't forget to include your Federal Employer Identification Number (FEIN). This is crucial for identifying your business.
  • Do provide a complete mailing address. Make sure to include the city, state, and ZIP code to avoid any processing delays.
  • Don't leave any sections blank. If a section does not apply, write "N/A" instead of skipping it entirely.
  • Do double-check your math. Errors in calculations can lead to penalties or delays in processing.
  • Don't submit the form late. Initial returns must be filed within 2.5 months of incorporation to avoid penalties.
  • Do sign and date the form. An unsigned form may be considered incomplete and could lead to rejection.

By adhering to these guidelines, you can streamline the process of completing the Alabama CPT form and help ensure that your business remains compliant with state regulations.

Misconceptions

  • Only C-Corporations Need to File: Many believe that all business entities in Alabama must file the CPT form. However, this form is specifically designed for C-Corporations only. Other types of entities, like LLCs or S-Corporations, are not required to use this form.
  • Filing Deadline is Flexible: Some think they can file the CPT form at their convenience. In reality, initial returns must be filed within 2.5 months of incorporation or qualification. Missing this deadline can lead to penalties.
  • Amended Returns are Optional: A common misconception is that amended returns are optional. If you discover an error after filing, it’s crucial to file an amended return to correct it. Failure to do so can result in complications with the Alabama Department of Revenue.
  • All Payments are the Same: Many assume that the fees associated with the CPT form are uniform for all corporations. In fact, the total amount due can vary significantly based on net worth and other factors outlined in the form.
  • Only Financial Institutions Need to Report: Some believe that only financial institutions need to file the CPT form. This is incorrect. All C-Corporations, regardless of their industry, must file if they meet the criteria.
  • Filing is the Only Requirement: A misconception exists that filing the CPT form is the only obligation. In addition to filing, corporations must also ensure that they pay any associated fees and taxes accurately to avoid penalties.
  • Changes in Corporate Information Don’t Need to be Updated: Some think they can ignore changes in corporate information. However, any changes to the corporate president or secretary must be reported on the form to keep records accurate.
  • Refunds are Guaranteed: Many believe that if they overpay, they will automatically receive a refund. While refunds are possible, they must be claimed correctly on the form, and there’s no guarantee that a refund will be processed without proper documentation.

Key takeaways

When filling out the Alabama CPT form, it’s important to keep a few key points in mind to ensure accuracy and compliance. Here are some essential takeaways:

  • Eligibility: This form is exclusively for C-Corporations. Make sure your business qualifies before proceeding.
  • Filing Deadlines: Initial returns must be submitted within 2.5 months of incorporation or qualification. Missing this deadline can lead to penalties.
  • Complete Required Sections: Pay close attention to taxpayer information and ensure all fields are filled out correctly, including the legal name, FEIN, and mailing address.
  • Supporting Documentation: Be prepared to attach any necessary documentation, especially for exclusions and deductions. This can help substantiate your claims and avoid issues with the Alabama Department of Revenue.

By keeping these points in mind, you can navigate the Alabama CPT form with greater confidence and clarity.