Form Et-1 Instructions - Financial Institution Excise Tax

forms in the State of Alabama only those activities required to be licensed under the

Taxpayers with a valid election to file as part of a consolidated Alabama return must

Alabama Consumer Credit Act, the taxpayer would not meet the definition of “finan-

mark Filing Status 4 and include the return with Form ET -1 C in order for each com-

cial institution” as specified in Section 40-16-1, Code of Alabama 1975. The taxpayer

pany’s return to process correctly. Taxpayers should not check the box for filing sta-

would be subject to the provisions of the Alabama income tax law, not the provisions

tus 1 through 3 if they are part of a consolidated filing. In addition to checking Filing

of the Alabama Financial Institutions Excise Tax law.

status 4, Schedule L must be completed by the entity whose business activity in Ala-

bama is represented by the apportionment percentage (has operations in Alabama

Annual Consolidated Filing Election and Fee.

and one or more states). Taxpayers with 100% Alabama activities should not complete

Please see instructions for Form ET-1C for information concerning the filing of a

Schedule L. Schedule K should be completed if the taxpayer has received prior per-

consolidated financial institution excise tax return.

mission from the Commissioner of Revenue to report utilizing the Separate (Direct)

In order for a qualified corporate group to be eligible to file a consolidated return,

Accounting. Items reported on Schedule K are excluded from apportionable income

the financial institution members must meet the ownership and filing requirement,

and are allocated either to Alabama or to another state. See Rule 810-27-1-4-.01.

specified in Section 40-16-3, Code of Alabama 1975.

Please see our Web site at for instructions on filing a

Consolidated Financial Institution Excise Tax Return.

Extension to File Alabama Form ET-1.

BE SURE TO FILL OUT ALL APPLICABLE LINES ON PAGE 1 even if detailed

Alabama Form ET-8, Application for Extension of Time for Filing Alabama Finan-

schedules are attached. Failure to properly complete the return may result in delin-

cial Institution Excise Return, may be used to request an extension for either 3 months

quent penalties.

or 6 months. If requesting a three (3) month extension, 50% of the estimated tax due

Complete lines 1 through 31, and attach detailed schedules as needed.

must be remitted with the extension request on or before April 15th. The balance plus

Section 40-16-1, Code of Alabama 1975, defines net income for a taxable year

interest must be remitted with the return when filed on or before July 15th. If re-

(net income is referred to as Alabama Taxable Income on the Alabama Form ET-1).

questing a six (6) month extension, the entire estimated tax due must be remitted

Section 40-16-4, Code of Alabama 1975, requires the allocation and apportion-

with the extension request by April 15th. The return will be due on or before October

ment of the net income (taxable income) for a taxable year.

15th. Taxpayers who request extension of time to file Alabama Form ET-1 are

The Alabama Financial Institutions Excise Tax law and the following Alabama De-

encouraged to remit Alabama Form ET-8 and payment electronically. Payments

partment of Revenue Regulations are available on the Alabama Department of Rev-

of $750 or more must be remitted electronically. Visit our Web site at

enue Web site ( ):

and select e-services then extension.

Number 810-9-1-.01

Definitions

Number 810-9-1-.02

Returns

Preparation Instructions.

Number 810-9-1-.03

Refund Claims

Required Attachments. For the Financial Institutions Excise Tax return to be

Number 810-9-1-.04

Credits Against the Tax

considered complete, a complete signed copy of the applicable federal income

Number 810-9-1-.05

Apportionment and Allocation of Net Income of Financial

tax return must be attached. Failure to attach the complete federal return and

Institutions

supporting schedules may result in the imposition of delinquent penalties. If the

LINE 1. Enter the amount of interest and dividend income from:

taxpayer was included in a consolidated federal corporate income tax return, attach

a. Loans and Discounts

a signed copy of the consolidated return along with the accompanying spreadsheets

b. Obligations of the United States Government

showing the taxpayer’s share of the federal affiliated group’s: taxable income, sched-

c. Obligations of State and Political Subdivisions

ule M-1, M-2, and M-3 adjustments, Schedule D, Schedule UTP, Form 8886, Form

LINE 2. Enter the amount of dividend income. Include gross dividend income on

4797, and balance sheet information.

this line, even if the taxpayer is entitled to a corresponding Dividends Received De-

At the top, left-hand corner of page 1 check all applicable boxes if filing an initial,

duction (which would be properly deducted on line 18).

final, amended return, or address change.

LINE 3. Enter the amount of rental income.

At the top, right-hand corner of page 1 check the appropriate box indicating a cal-

LINE 4. Enter the gain or (loss) on sale of assets.

endar-year, fiscal-year, or short-year return. Fill in the blanks indicating the beginning

LINE 5. Enter the amount of other income, not previously included in lines 1-4

and ending dates of the tax period if the return is for a fiscal year or a short year.

above. Provide a schedule showing the different sources and amounts total-

In the top, center block of page 1 enter the taxpayer’s federal business code num-

ing the amount entered on line 5.

ber, its federal employer identification number (FEIN), and its name and mailing ad-

LINE 6 – Total Income. Total the amounts entered on lines 1 through 5, and

dress (with complete zip code). Below the address enter the state of incorporation,

enter the total on line 6.

date of incorporation, the date the taxpayer qualified to do business in Alabama, and

LINE 7. Enter the amount of officer compensation.

the nature of business being conducted in Alabama.

LINE 8. Enter the amount of salaries and wages.

If this corporation is included in a consolidated federal income tax return, check

LINE 9. Enter the amount of repairs.

the block, and enter the name and FEIN of the common parent corporation.

LINE 10. Enter the amount of the bad debts deduction, and complete Schedule

If a notification of Final IRS change is attached to the return, check the box.

D on page 2 if the Reserve Method is used. Section 40-16-1(2)(e), Code of Alabama

If the taxpayer is filing an Alabama Business Privilege Tax return, check the box

1975, provides for the deduction of bad debt by the direct charge off method. Section

and enter the FEIN used on the Form CPT (business privilege tax return). If the tax-

40-16-1(2)(h), Code of Alabama 1975, provides for a reasonable deduction of bad

payer does not file a business privilege tax return, do not check the box, leave the

debts using the reserve method, in the discretion of the Department of Revenue. The

FEIN field blank, and attach a statement to the return explaining why the taxpayer

requirements of appropriate regulatory authorities and regulations and rulings of the

does not file.

Internal Revenue Service will be considered. Any adjustment to the deductions or

Check the appropriate filing status. ONLY ONE BOX can be checked for the cor-

provisions for the reserve for bad debts by the federal Internal Revenue Service must

poration’s filing status.

be made to similar deductions on the Alabama Financial Institutions Excise Tax re-

Filing status 1 through 3. Check one of the boxes for filing status 1 through 3 if

turns. The adjustment will be made in the current year by increasing or decreasing

the taxpayer will not file as part of a consolidated Alabama financial excise return. Fil-

the applicable deduction, so that in all cases the reserve balances will be identical for

ing status 1, Corporation operating only in Alabama, should be used by taxpayers

federal income tax and Alabama Financial Institutions Excise Tax purposes. Taxpay-

with 100% Alabama activities. Filing status 2, Multi-state corporation, is available as

ers using the direct charge off method or the reserve method must, when requested

an option to taxpayer whose business activity in Alabama is represented by the ap-

in writing by the Alabama Department of Revenue, provide a schedule detailing the

portionment percentage (has operations in Alabama and one or more states). Filing

amounts charged off – identifying each loan for which a bad debt deduction is claimed.

status 3, Separate (Direct) Accounting, should only be used by taxpayers that have

LINE 11. Enter the amount of rent expense incurred.

received prior permission from the Alabama Commissioner of Revenue.

LINE 12 – Taxes. Enter the actual amount of taxes paid in 2011, and complete

Filing status 4, Proforma return, should be used only by those taxpayers

Schedule E on page 2. Taxes are deductible only in the year paid and only when

who have elected to file as part of a consolidated group for Alabama purposes.

levied on the taxpayer claiming the deduction. Do not include any payment for the Ala-

Form Et-1 Instructions - Financial Institution Excise Tax - 2012 Page 2

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