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istered or qualified to do business in Alabama

The apportionment factor is computed in the

tures, components and inventory which corre-

does not constitute doing business in Alabama.

same manner as prescribed for apportioning

lates to number of new employees. (Section

Include the amount of each investment, the FEIN

income during the determination period for

40-14A-24(b)(4))

of each entity, and the name of each entity.

income tax purposes in accordance with Chapter

Line 15

18 of Title 40, or in the case of financial institu-

This exclusion does not apply if the taxpayer

Enter book value of investment relating to

tions according to Chapter 16 of Title 40. Appor-

is a dealer in securities subject to 26 U.S.C. Sec-

aluminum manufacturing facility. (Section

tionment for insurance companies is on the basis

tion 1236. (Section 40-14A-23(g)(1))

40-14A-24(b)(5))

of the ratio of the insurer’s Alabama premium

Line 16

Line 3

income to its nationwide total direct premiums as

Enter the balance of any reserve, account, or

For Financial Institutions Only

filed on Schedule T with the Insurance Commis-

trust reasonably determined to satisfy any liabil-

Financial institutions may exclude from net

sioner, State of Alabama. Taxpayers not required

ity that is imposed by federal, state, or local gov-

worth determined in Schedule A their investment

to file income tax returns with the State of Ala-

ernment laws or regulations for reclamation,

in the equity of any other corporation or LLE that:

bama must apportion net worth in the manner in

storage, disposal, decontamination, retirement,

(1) does not pay business privilege tax to Ala-

which the income would be apportioned if the

or other related costs associated with a plant,

bama, and (2) taxpayer owns more than 50% of

taxpayer were subject to income tax. Therefore,

facility, mine or site in Alabama.

the other corporation or LLE, unless the other

these taxpayers must obtain an apportionment

Provide documentation detailing the applica-

corporation or LLE is dormant and not regularly

Schedule from the Alabama income tax return at

ble governmental law or regulations that

engaged in one or more business activity. This

the Department’s Web site at

imposed the liability, as well as the location of

exclusion does not apply if the taxpayer is a

us. C Corporations should use Form 20C,

the plant, facility, mine or site in Alabama. (Sec-

dealer in securities subject to 26 U.S.C. Section

Schedule D1, S Corporations should use Form

tion 40-14A-24(b)(6))

1236. (Section 40-14A-23(g)(2))

20S, Schedule C, and Partnerships should use

Line 17

Line 4

Form 65, Schedule C. (Section 40-14A-24(a))

Enter book value of any residential real

Enter from taxpayer’s balance sheet, the

DEDUCTIONS (For each deduction attach

estate project in Alabama that qualifies for feder-

unamortized portion of goodwill and core deposit

supporting documentation)

al or state income tax credits, loans, or grants on

intangibles (for financial institutions only), which

Nothing in this section shall be construed to

the grounds that it provides housing for

resulted from a direct purchase of another LLE

allow any item to be deducted more than once or

low-income individuals. Must include a state-

or corporation. Must include supporting docu-

to allow a deduction for any item that is exclud-

ment detailing a description of the project, the

mentation that includes (1) Name and FEIN of

ed from net worth. (Section 40-14A-24(c))

site of the low income housing, and the location

entity acquired, (2) Date of acquisition, (3) Name

Items can only be deducted to the extent they

of the amount on the taxpayer’s balance sheet.

and FEIN of entity that directly purchased the

were included in net worth in Schedule A.

(Section 40-14A-24(b)(7))

above entity, (4) Original amount of goodwill, (5)

Line 11

Line 18

Accumulated amortization, and (6) Unamortized

Enter net amount invested in bonds or other

For S corporations and LLE’s only, enter 30%

portion. (Section 40-14A-23(g)(3))

securities issued by State of Alabama or any

of taxable income. Taxable income is defined as

Line 5

political subdivision of the state prior to January

“federal taxable income before NOL’s and spe-

Exclude any unamortized balance that the

1, 2000. Must include a schedule detailing the

cial deductions” apportioned to Alabama. Tax-

taxpayer properly elected, pursuant to Pro-

amount invested, the issuing agency, the bond

able income is to include income passed through

nouncement 106 of the Financial Accounting

issue date, and the location of the investments

to the shareholders and members. (Section

Standards Board (FASB), relating to post-retire-

on the taxpayer’s balance sheet as supporting

40-14A-24(b)(8) and Section 40-14A-24(b)(9))

ment benefits, to amortize over a period of years

documentation.

Line 20

rather than immediately charging that amount to

This deduction does not apply if the taxpayer

Taxable net worth is derived by subtracting

earnings. Must include a description of benefits,

is a dealer in securities subject to rules of 26

Line 19 from Line 10.

amortization schedule, and the location of the

U.S.C. 1236. (Section 40-14A-24(b)(1))

Line 21

amount on the balance sheet. (Section 40-14A-

Line 12

Determine the tax rate from the Tax Rate

23(g)(4))

Deduct the net investment for equipment

Schedule, Chart 1, which is located at the top of

Line 6

used to control, reduce or eliminate air, ground,

page 3. Use the federal taxable income before

For financial institutions only, enter the net

or water pollution in Alabama where such pollu-

net operating loss deduction and special deduc-

worth as adjusted exceeding 6% of the taxpay-

tion or radiology hazards result or would be

tions multiplied by the apportionment factor from

er’s total assets. Net worth as adjusted is calcu-

caused by the taxpayer’s activities in Alabama.

Schedule B, Line 9. Taxable income is to include

lated by subtracting from Schedule A, Line 6 the

(Section 40-14A-24(b)(2))

income passed through to shareholders, part-

sum of (Lines 2-5) from Schedule B. (Section 40-

Line 13

ners, or members. For initial returns only, the tax

14A-23(g)(5))

rate will be .00025.

Deduct the net investment in equipment of an

Line 9

airline hub operation within this state. (Section

Line 22

40-14A-24(b)(3))

Gross Privilege Tax is calculated by multiply-

The apportionment factor is used for multi-

Line 14

ing Line 20 by Line 21.

state entities. For taxpayers that conduct all of

their business in Alabama, use 100% as the

Enter book value invested after December 1,

Line 23

apportionment factor. No supporting documenta-

1997 in regard to new and existing manufactur-

For short period returns, the proration per-

tion is necessary for those entities. All other enti-

ing facilities and investments made in equip-

centage will be apportioned to the short taxable

ties attach appropriate apportionment schedule.

ment, real & tangible property, facilities, struc-

year in the same proportion as the number of

PAGE 3

Form Psi - Instructions For The Preparation Of The Alabama Business Privilege Tax Return And Annual Report - 2004 Page 3

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