Staying compliant in Alabama

How does the Alabama annual report work?

The annual report for an Alabama LLC is Form PPT, a business privilege tax return that doubles as the report, filed with the Department of Revenue by March 15 for calendar-year LLCs or 2.5 months after the start of the tax year for other tax years.^{1, 2}

Alabama's return is filed with the Alabama Department of Revenue, not the Secretary of State, and the Department's own page says S-corporations, limited liability entities and disregarded entities must file Alabama Form PPT. If you keep an LLC in another state too, compare this with staying compliant in Georgia or staying compliant in Tennessee, to see how the yearly filing works there.^{1, 2}

The deadline

The return is due 2.5 months after the start of the tax year. The Department also says Form PPT is due on the same date as the corresponding federal income return, which is a handy way to remember it: the two deadlines fall on the same day. An LLC with a fiscal year counts from the start of its own tax year, so its date differs from the calendar-year one.^{1, 2}

When no return is needed

For the taxable years beginning after December 31, 2023, the Department applies a cutoff: tax due of $100 or less is fully exempt and no return is required. The tax is based on net worth. So whether you clear the cutoff depends on your LLC's own figures, and only the calculation tells you. The Department's instructions walk through it, and a tax preparer can too; last year's answer may not hold.¹

What the return asks

The sources behind this page don't include a short statement of everything the form collects, beyond the tax, which is based on net worth. Read the current year's instructions from the Department of Revenue before you file. Our explainer on annual reports covers what Secretary of State reports in other states usually ask, for comparison.¹

Does Alabama charge LLCs a franchise or privilege tax?

Yes. Alabama charges a business privilege tax based on net worth, and an LLC pays it on the same return that doubles as its annual report (Department of Revenue).¹

Two filings carry it. In the first months of the LLC's life, Form BPT-IN is due within 2.5 months after the LLC organizes; the Department's rule covers an entity that incorporates, organizes, qualifies, or starts doing business in the state. After that, the yearly return is Form PPT.¹

Both share the exemption: tax due of $100 or less is fully exempt and no return is required. That makes Alabama different from states with a flat yearly fee, because the amount can change as the business grows. An LLC that owed nothing in its first year may owe tax and a return a few years later.¹

Privilege tax sits apart from income tax. How your LLC's profits are taxed depends on how it is owned and whether it has elected corporate tax treatment, and the Department of Revenue and the IRS each set their own returns. This page covers only the privilege tax side. A tax professional can tell you which other returns apply to your business.

What happens if an Alabama LLC files late or falls out of good standing?

The sources behind this page don't state Alabama's late-filing penalty for Form PPT or any LLC reinstatement fee, and they don't describe how administrative dissolution works here.

The Department of Revenue is the place to ask about penalties on a late return. Missing published detail is no reason to relax. A late return still has to be filed, and the Department can say what is owed. A tax preparer can help if several past years are open.

On the Secretary of State side, the risk to watch is your registered agent. The guide to Alabama registered agent rules explains what can go wrong when an LLC has no agent or an address where nobody can be served, and why lawsuit papers that can't reach you are the bigger danger. Questions about your LLC's standing after a long gap are ones for a lawyer or the Secretary of State.

How do you keep your registered agent current in Alabama?

Keep an agent who qualifies, with a registered office that must be located at a street address in this state where process may be personally served (Ala. Code § 10A-1-5.31), and file the Change of Registered Agent or Registered Office by Entity form ($100) whenever either one changes.^{3, 4}

Alabama's yearly report goes to the Department of Revenue, so it gives you no annual moment to refresh the Secretary of State's record. Changes have to be filed on their own.

When to file a change

• You switch to a different agent or service.
• Your agent moves within Alabama, which changes the registered office.
• Your individual agent moves out of Alabama and stops being a resident, so they no longer qualify.
• Your agent resigns. The agent certifies that written notice of the resignation was given to the entity prior to submitting to the Secretary of State, and the notice is effective on the 31st day after the date the Secretary of State receives and files the notice, so you have a short window to name a replacement.⁵

File the change before cancelling an old service, so the record never shows a gap. Our guide to changing a registered agent walks through the order, and cancelling a registered agent service covers the provider side. Foreign LLCs register here for $150; the facts behind this page don't set out their agent upkeep separately, so ask the Secretary of State.⁶

What a provider's compliance features cover in Alabama

None of the provider listings below mentions Alabama's privilege tax return. Alabama's report is a tax return, so ask any provider, in writing, whether its service prepares and files Form PPT and Form BPT-IN, or only reminds you. These are listed by our score.¹

• Tailor Brands includes annual compliance report filing and updates in its Essential and Elite plans, not in Lite.⁷
• ZenBusiness lists Annual Report Filing $100 per report and Worry-Free Compliance $199/year.⁸
• LegalZoom charges $99 + state filing fees for its annual report service, billed once.⁹
• Bizee (formerly Incfile) offers annual report filing, with no standalone price stated.¹⁰
• Swyft Filings sells ComplianceGuard $199/year, which includes annual report filing.¹¹
• Northwest Registered Agent charges $100 + state fees when it files.¹²
• InCorp Services charges $89 + state fees, and its agent service lists annual report and franchise tax deadlines tracked per entity, with email reminders.^{13, 14}
• Harbor Compliance charges $199 per state per year plus filing fees.¹⁵

None of these listings says the price covers privilege tax worked out from your net worth, and none replaces a tax preparer. If your LLC falls under the exemption and owes no return, a plan priced per report may have nothing to file. Reminders still help, because the exemption has to be checked each year.

Agent renewal is the other recurring cost. ZenBusiness renews at $199/yr and Bizee (formerly Incfile) at $149/year. Harbor Compliance requires notice of non-renewal at least 90 days before the end of the current term. Provider terms side by side are on the Alabama registered agent comparison, and services with compliance tools compares these features nationally.^{16, 17, 18}

What does an Alabama LLC compliance calendar look like?

Year one centres on the initial return and agent upkeep; from year two, the annual return and a yearly agent check take over.

Year one

1. Certificate of Formation filed. The Secretary of State charges $200. The Alabama LLC formation guide covers the filing, and the cheapest ways to form an Alabama LLC adds up the costs.¹⁹
2. Initial return. Form BPT-IN is due within 2.5 months after the LLC organizes, unless the tax works out under the exemption.¹
3. Agent details. Save your agent's contact details and renewal date, and confirm which email it will use for notices.
4. Other taxes. Ask the Department of Revenue and the IRS which registrations and returns apply, and keep those dates on their own list.

Year two and later

1. Annual return. Form PPT is due 2.5 months after the start of the tax year, which means March 15 for calendar-year LLCs. Work out the tax first; tax due of $100 or less is fully exempt and no return is required.^{1, 2}
2. Agent renewal. Decide whether to keep your service before any notice deadline in its terms.
3. Record check. Look up your LLC on the Secretary of State's records and confirm the agent and registered office. File the change form if anything is out of date.
4. Resignation notices. Act on one at once by naming a replacement.

Terms such as registered office and service of process are defined in the glossary. For what an agent does day to day, read what a registered agent is.