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VI. Prior Year Credits

Line 14

Subtract the amount in Line 13 from the sum of any non-exempt payables.

Prior year credits will not be allowed against the liability of the Alabama

(See definition of related party debt.)

Business Privilege Tax.

Line 15

VII. Instructions For Schedule A, Form PSA

Add to net worth the sum of compensation, distributions, or similar

amounts paid or accrued to a direct or indirect owner the amount exceeding

Line 1

$500,000 per owner. (Section 40-14A-23(f)(3) (a), (b), and (c))

Enter the issued capital stock and additional paid in capital. This amount

Line 16

cannot be reduced by treasury stock. (Section 40-14A-23(a)(1))

Line 2

Enter total net worth (add lines 13 through 15). Go to Schedule B, line 1.

If line 16 is less than $57,000, go to Schedule B, line 26 and enter $100.

Enter the amount of appropriated and unappropriated retained earnings,

but not less than zero. This amount shall include the balance of any dividend

VIII. Instructions For Schedule B, Form PSA

payables on the taxpayer’s year-end balance sheet. (Section 40-14A-

EXCLUSIONS (For each exclusion attach supporting documentation.)

23(a)(1)(b))

Line 1

LLE’s taxed as corporations and non-stock issuing entities enter assets

Enter net worth as computed in Schedule A, Line 6, 10, 11, or 16

minus liabilities. (Section 40-14A-23(a)(2))

depending on the type of entity.

Line 3

If the amount of net worth is less than $57,000, go to Line 26 and pay

Subtract the sum of Schedule A, Lines 1 and 2 from the sum of any non-

$100 privilege tax.

exempt payables. (See definition of related party debt.)

Line 2

Line 4

Enter the book value of investments by the taxpayer in the equity of other

Add to net worth the sum of compensation or similar amounts paid or

taxpayers doing business in Alabama.

accrued to a direct or indirect shareholder owning more than 5% of the

List investments in entities actively engaged in doing business in

corporation the amount exceeding $500,000 per shareholder. (Section

Alabama. Merely being registered or qualified to do business in Alabama

40-14A-23(f)(1) (a), (b), and (c))

does not constitute doing business in Alabama. Include the amount of each

Line 5

investment, the FEIN of each entity, and the name of each entity.

Add to net worth the sum of compensation, distributions, or similar

This exclusion does not apply if the taxpayer is a dealer in securities

amounts paid or accrued to a direct or indirect shareholder owning more than

subject to 26 U.S.C. Section 1236. (Section 40-14A-23(g)(1))

5% of the corporation the amount exceeding $500,000 per shareholder.

Line 3

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

For Financial Institutions Only

Line 6

Financial institutions may exclude from net worth determined in Schedule

Enter total net worth (add Lines 1 through 5). Go to Schedule B, Line 1. If

A their investment in the equity of any other corporation or LLE that: (1) does

Line 6 is less than $57,000, go to Schedule B, Line 26 and enter $100.

not pay business privilege tax to Alabama, and (2) taxpayer owns more than

Line 7

50% of the other corporation or LLE, unless the other corporation or LLE is

Enter the sum of the Partner’s capital accounts from Form 1065 (U.S.

dormant and not regularly engaged in one or more business activity. This

Partnership Return of Income). This number may not be less than zero.

exclusion does not apply if the taxpayer is a dealer in securities subject to 26

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

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

Line 8

Line 4

Add to net worth the sum of compensation, distributions, or similar

Enter from taxpayer’s balance sheet, the unamortized portion of goodwill

amounts paid or accrued to a direct or indirect partner or member the amount

and core deposit intangibles (for financial institutions only), which resulted

exceeding $500,000 per partner or member. (Section 40-14A-23(f)(3)(a), (b),

from a direct purchase of another LLE or corporation. Must include supporting

and (c))

documentation that includes (1) Name and FEIN of entity acquired, (2) Date

Line 9

of acquisition, (3) Name and FEIN of entity that directly purchased the above

Subtract the amount in Line 7 from the sum of any non-exempt payables.

entity, (4) Original amount of goodwill, (5) Accumulated amortization, and (6)

(See definition of related party debt.)

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

Line 10

Line 5

Enter total net worth (add Lines 7 through 9). Go to Schedule B, Line 1. If

Exclude any unamortized balance that the taxpayer properly elected,

Line 10 is less than $57,000, go to Schedule B, Line 26 and enter $100.

pursuant to Pronouncement 106 of the Financial Accounting Standards

Line 11

Board (FASB), relating to post-retirement benefits, to amortize over a period

For business trusts classified as a corporation for federal income tax

of years rather than immediately charging that amount to earnings. Must

purposes, enter the assets minus the liabilities. Skip to Schedule B, Line 1.

include a description of benefits, amortization schedule, and the location of

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

the amount on the balance sheet. (Section 40-14A-23(g)(4))

Line 12

Line 6

If the owner of a disregarded entity is subject to the privilege tax, then the

For financial institutions only, enter the net worth as adjusted exceeding

disregarded entity pays the minimum tax. Go to Schedule B, Line 26 and pay

6% of the taxpayer’s total assets. Net worth as adjusted is calculated by

$100 privilege tax. The taxpayer must provide the name and FEIN of the

subtracting from Schedule A, Line 6 the sum of (Lines 2-5) from Schedule B.

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

(Section 40-14A-23(g)(5))

Line 13

Line 9

For disregarded entities that have an owner that is not subject to the

privilege tax (such as an individual or nontaxable partnership) enter the

The apportionment factor is used for multi-state entities. For taxpayers

assets minus liabilities of the disregarded entity. (Section 40-14A-23(c))

that conduct all of their business in Alabama, use 100% as the apportionment

Page 5

Form Psa Instructions - Business Privilege Tax Return And Annual Report - Instructions For The Preparation Of The Alabama - 2003 Page 3

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