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• Documentation to validate all exclusions

VI. Prior Year Credits

of any non-exempt payables. (See definition of

and deductions

related party debt.)

Prior year credits will not be allowed against

Line 10

IV. Instructions for Schedule E –

the liability of the Alabama Business Privilege

Enter total net worth (add Lines 7 through 9).

Tax.

Initial Returns

Go to Schedule B, Line 1. If Line 10 is less than

VII. Instructions For Schedule A,

-An initial return is the first return due after

$57,000, go to Schedule B, Line 26 and enter

the taxpayer incorporates, registers, organizes,

Form PSA

$100.

qualifies, or begins doing business in Alabama,

Line 11

Line 1

whichever comes first. Enter that date here:

For business trusts classified as a corpora-

Enter the issued capital stock and additional

_____/_____/_____.

tion for federal income tax purposes, enter the

paid in capital. This amount cannot be reduced

-The initial PSA is due 30 days after the

assets minus the liabilities. Skip to Schedule B,

by treasury stock. (Section 40-14A-23(a)(1))

above date, and may not be extended.

Line 1. (Section 40-14A-23(d))

Line 2

Schedule E, Line 1

Line 12

Enter the amount of appropriated and unap-

Complete Lines 1 through 6 of Forms PSA,

If the owner of a disregarded entity is subject

propriated retained earnings, but not less than

Schedule A as of the date above. Skip any lines

to the privilege tax, then the disregarded entity

zero. This amount shall include the balance of

that do not apply. Enter the total from Schedule

pays the minimum tax. Go to Schedule B, Line

any dividend payables on the taxpayer’s

A, Line 6 to Schedule E, Line 1.

26 and pay $100 privilege tax. The taxpayer

year-end balance sheet. (Section 40-14A-

Schedule E, Line 2

must provide the name and FEIN of the single

23(a)(1)(b))

Complete Lines 1 through 7 of Form PSA,

member. (Section 40-14A-23(c))

LLE’s taxed as corporations and non-stock

Schedule B as of the date above. Skip any lines

Line 13

issuing entities enter assets minus liabilities.

that do not apply. Enter the total from Schedule

For disregarded entities that have an owner

(Section 40-14A-23(a)(2))

B, Line 7 to Schedule E, Line 2.

that is not subject to the privilege tax (such as an

Line 3

Schedule E, Line 4

individual or nontaxable partnership) enter the

Subtract the sum of Schedule A, Lines 1 and

The apportionment factor for the initial return

assets minus liabilities of the disregarded entity.

2 from the sum of any non-exempt payables.

is calculated by dividing the amount of tangible

(Section 40-14A-23(c))

(See definition of related party debt.)

property in Alabama by the total tangible proper-

Line 14

Line 4

ty on the above date. For entities that conduct all

Subtract the amount in Line 13 from the sum

Add to net worth the sum of compensation or

of their business in Alabama, enter 100%.

of any non-exempt payables. (See definition of

similar amounts paid or accrued to a direct or

Schedule E, Line 6

related party debt.)

indirect shareholder owning more than 5% of the

Complete Lines 11 through 19 of Form PSA,

Line 15

corporation the amount exceeding $500,000 per

Schedule B as of the date above. Skip any lines

Add to net worth the sum of compensation,

shareholder. (Section 40-14A-23(f)(1) (a), (b),

that do not apply. Enter the total from Schedule

distributions, or similar amounts paid or accrued

and (c))

B, Line 19 to Schedule E, Line 6.

to a direct or indirect owner the amount exceed-

Line 5

Schedule E, Line 10

ing $500,000 per owner. (Section 40-14A-

Add to net worth the sum of compensation,

For initial returns, the proration percentage

23(f)(3) (a), (b), and (c))

distributions, or similar amounts paid or accrued

will be apportioned from the above date until the

Line 16

to a direct or indirect shareholder owning more

last day of the taxpayer’s tax year.

Enter total net worth (add lines 13 through

than 5% of the corporation the amount exceed-

V. Penalties and Interest

15). Go to Schedule B, line 1. If line 16 is less

ing $500,000 per shareholder. (Section

than $57,000, go to Schedule B, line 26 and

40-14A-23(f)(2) (a), (b), and (c))

Failure to timely file return – If a return is

enter $100.

Line 6

filed after the due date, enter a late filing penalty

Enter total net worth (add Lines 1 through 5).

of 10% of the tax due or $50, whichever is

VIII. Instructions For Schedule B,

Go to Schedule B, Line 1. If Line 6 is less than

greater.

Form PSA

$57,000, go to Schedule B, Line 26 and enter

Failure to timely pay tax – If payment is not

EXCLUSIONS (For each exclusion attach

$100.

received by the due date, enter a late payment

supporting documentation.)

Line 7

penalty of 1% per month, of the amount of the

Line 1

Enter the sum of the Partner’s capital

tax due, not to exceed 25% of the tax. Taxpayers

Enter net worth as computed in Schedule A,

accounts from Form 1065 (U.S. Partnership

paying 90% of the actual tax liability with a valid

Line 6, 10, 11, or 16 depending on the type of

Return of Income). This number may not be less

extension request will not be subject to this

entity.

than zero. (Section 40-14A-23(b))

penalty.

If the amount of net worth is less than

Interest – Interest is due on all payments

Line 8

$57,000, go to Line 26 and pay $100 privilege

made after the original due date.

Add to net worth the sum of compensation,

tax.

distributions, or similar amounts paid or accrued

The interest rate is the same as provided in

Line 2

to a direct or indirect partner or member the

Section 40-1-44(a).

amount exceeding $500,000 per partner or

If assistance is needed in computing the

Enter the book value of investments by the

member. (Section 40-14A-23(f)(3)(a), (b), and

taxpayer in the equity of other taxpayers doing

penalty and/or interest amounts call (334)

353-7923. The examiner that will assist you will

(c))

business in Alabama.

need to know the tax liability and the date the

Line 9

List investments in entities actively engaged

return will be mailed.

Subtract the amount in Line 7 from the sum

in doing business in Alabama. Merely being reg-

PAGE 2

Form Psi - Instructions For The Preparation Of The Alabama Business Privilege Tax Return And Annual Report - 2004 Page 2

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