Alabama Privilege Tax

[Brian P.]

Hi everyone.  Been investing in the Huntsville area for the last few years and really love it.  Big fan of Alabama overall.  

One of the few idiosyncrasies that I find problematic in AL is the Alabama Business Privilege Tax. I have an Alabama based LLC that acquires and holds my AL properties. Call it Company A. The sole member of this entity is a holding company LLC (let's call it Company B) that is registered in another state. My CPA is adamant that both entities need to file the privilege tax return in AL every year. Does this make sense? I can understand why the AL entity needs to, but I can't understand why Company B would need to because it's not an AL entity. Any thoughts/experience with this?

[J Zev J.]

@Brian P. - I'm not sure why a member (which is a foreign LLC not actually doing business in Alabama) would need to file the Alabama BPT. Maybe your CPA can give you an exact reason of why it should be filed and that might help research it more. You can always contact the Alabama department of revenue directly to get clarification too.