Form Et-1 Instructions - Financial Institution Excise Tax

project, and is applied after all deductions, exemptions and other credits. As the proj-

to specific jurisdictions.

ect entity, the financial institution is required to complete and attach Form AR with

Beside the line number in Schedule K, enter the item description.

the Form ET-1 return to be eligible to receive the capital credit. If the financial in-

In Column A enter the total amount of gross income or loss to be excluded from

stitution is a member or partner of an investing company that has a qualifying proj-

apportionable income.

ect, the financial institution must complete and attach Form K-RCC with Form ET-1.

In Column B enter the amount of gross income or loss allocable to Alabama.

If a capital credit is claimed on Form ET-1, the project number should be entered in

Enter total nonbusiness expense in Column C and any nonbusiness expense al-

the space provided on line 33b.

locable to Alabama in Column D. Nonbusiness expense may exceed nonbusiness in-

For further information regarding the capital credit and the necessary forms to

come and in fact may exist when there is no nonbusiness income.

claim the capital credit, visit the Alabama Department of Revenue's Web site at

Subtract Column C from Column A, and enter the remainder in Column E. Sub-

under the Tax Incentives page, or contact the Depart-

tract Column D from Column B, and enter the remainder in Column F.

ment at P.O. Box 327001, Montgomery, AL 36132-7001 or 334-242-1175.

Add the amounts in Columns E and F, and enter the totals on line 2. Carry the total

LINE 33c – Extension Payment (ET-8). Enter the amount of any tax remitted as

of Column E to page 1, line 22. Carry the total of Column F to page 1, line 26.

an extension payment with Form ET-8.

Schedule L – Alabama Apportionment Factor. The financial institution’s busi-

LINE 33d – Additional Payments. Enter the amount of any additional tax

ness activity in Alabama is represented by the Alabama Apportionment Factor, which

remitted.

is computed as the average of: the property factor; the payroll factor; and, the re-

LINE 33e – Total Credits and Payments. Enter the total credits and payments

ceipts factor. See Alabama Department of Revenue Regulation Number 810-9-1-.05,

claimed on lines 33a, 33b, 33c and 33d.

Apportionment and Allocation of Net Income of Financial Institutions, for de-

LINE 34 – Penalty. Enter the total late filing and late payment penalties, as spec-

tailed instructions regarding the items to be included in the numerator and the de-

ified in Section 40-2A-11, Code of Alabama 1975. The late filing penalty for an Ala-

nominator of each of these factors.

bama Financial Institution Excise Tax return is 10% of the tax shown due with the

For purposes of the Alabama Financial Institutions Excise Tax, “business income”

return or $50, whichever is greater. The late payment penalty is equal to 1% of the

is income arising from transactions and activity in the regular course of the taxpayer’s

amount of tax shown due on the return for each month the tax is unpaid – not to ex-

trade or business and includes income from tangible and intangible property if the ac-

ceed 25% of the tax amount shown due on the return.

quisition, management, and disposition of the property constitute integral parts of the

LINE 35 – Interest from April 15 to Date of Payment. Enter the amount of in-

taxpayer’s regular trade or business operations. In essence, all income which arises

terest due on the amount of any tax due remitted after April 15. Compute the interest

from the conduct of trade or business operations of a taxpayer is business income.

using IRS rates from April 15 of the excise tax year until the date of payment. The Ala-

For purposes of administering the Alabama Financial Institutions Excise Tax, the in-

bama interest rate is the same as provided for in IRC Section 6621.

come of the taxpayer is business income unless clearly classifiable as nonbusiness

income, and nonbusiness income means all income other than business income.

LINE 36 – Total Payment Due/(Refund Due). Subtract line 33e from the sum

of lines 32, 34 and 35, and enter the amount here. A negative amount represents an

Property Factor:

overpayment.

For purposes of computing the property factor, real and tangible personal prop-

Schedule A – Distribution Data. Taxpayers conducting business in Alabama

erty mean, respectively, property on which the taxpayer may claim depreciation for

federal income tax purposes, or property to which the taxpayer holds legal title and

are required to provide the percentage of their total business conducted in this state

on which no other person may claim depreciation for federal income tax purposes (or

by the amount of business conducted in each county and municipality. This informa-

tion is captured in Schedule A, and is used to determine how monies collected will be

could claim depreciation if subject to federal income tax). Real and tangible personal

distributed for the tax year.

property do not include coin, currency, or property acquired in lieu of or pursuant to

a foreclosure.

A financial institution that does not maintain an office in Alabama, but is subject

For purposes of computing the property factor, loans include any extension of

to tax, is not required to complete Schedule A, other than checking the box to indi-

credit resulting from direct negotiations between the taxpayer and its customer, or

cate that no such office exists in Alabama.

Schedule B – Alabama Net Operating Loss Carryforward Calculation. Net

the purchase, in whole or in part, of such extension of credit from another or both.

operating losses will be carried back two years from the year of the loss, and then car-

Loans include participation, syndications, and leases treated as loans for federal in-

come tax purposes. Loans are valued at their outstanding principal balance, without

ried forward for eight years. Net operating losses must be carried back or forward

regard to any reserve for bad debts. Credit card receivables are valued at their out-

only on the account of the member which incurs the loss and must be used to offset

standing principal balance, without regard to any reserve for bad debts.

the income over the ten year period in chronological order. Taxpayers claiming an

NOL for a tax period that is more than six years old must attach a copy of the

In the appropriate rows and columns, enter the amounts (at cost, unless stated

Form ET-1 (page 1 only). This includes any tax periods where the net operating

otherwise) of property available for use in the production of business income, in Ala-

loss being claimed in the current year may have been utilized.

bama at the beginning of the taxable year, in Alabama at the end of the taxable year,

in total for the taxpayer at the beginning of the taxable year, and in total for the tax-

Schedule D – Bad Debts (Reserve Method). In the appropriate columns, for the

payer at the end of the taxable year, for:

6 prior years, enter the amounts of accounts receivable at the end of the year, amount

added to reserve, amount charged against reserve and the reserve for bad debts at

– Loan and credit card receivables,

the end of the year. Use this schedule only if the Reserve Method is allowed.

– Premises and fixed assets,

– Other real estate owned, and

Schedule E – Taxes Deducted. Enter the required information for the taxes ac-

tually paid during the taxable year. The total amount for Schedule E must agree with

– Other real and tangible personal property.

the amount entered on line 12, page 1. Attach additional schedules as needed.

LINE 5 – Totals. Enter in each column the totals of lines 1 through 4.

Schedule F – Taxes Used as Credits. Enter the required information for each

LINE 6 – Average Value. Enter in the appropriate column the average value of

category of taxes used as an allowable credit. The total for Schedule F must agree

property in Alabama and Everywhere. Compute the average by totaling the beginning

with the amount entered on line 33a, page 1. Attach additional schedules as needed.

amounts and ending amounts, for the Alabama columns and the Everywhere

The taxpayer must provide a complete listing of the taxes used as credits, in the for-

columns, and then dividing each by 2.

mat required by the Alabama Department of Revenue, upon receiving a written re-

LINE 7 – Annual Rental Expense. In the Alabama and Everywhere Beginning

quest from the Department.

of Year columns, enter the amount of expense for the rental of real or tangible per-

Schedule K – Allocation of Nonbusiness Income, Loss, and Expense. Enter

sonal property used in the production of business income. Annualize for short-period

on Schedule K all items of nonbusiness income, nonbusiness loss, and nonbusiness

returns. For both the Alabama column and the Everywhere column, multiply the an-

expense. These items are excluded from apportionable income and are allocated ei-

nual rental expense by 8, and enter the result in the appropriate Alabama End of Year

ther to Alabama or to another state. See Alabama Department of Revenue Regula-

column or Everywhere End of Year column. The amounts entered in the End of Year

columns represent the capitalized rental value.

tion Number 810-9-1-.05, Apportionment and Allocation of Net Income of

Financial Institutions, for a discussion of the classification of income and expense

LINE 8a – Total Average Property for Alabama. Add the amounts on lines 6 and

into business and nonbusiness categories and the assignment of nonbusiness items

7 in the Alabama End of Year column.

Form Et-1 Instructions - Financial Institution Excise Tax - 2012 Page 4

Related Articles

Related forms

Related Categories