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Alabama
Corporate Income Tax Rate at a Glance
Alabama's top corporate income tax rate is 6.5%, applied as a flat rate. This places Alabama in the "Moderate (5–7.99%)" tier among U.S. states.
Rate Structure (Flat vs. Graduated)
Alabama applies a single flat 6.5% corporate income tax rate to all taxable income, with no brackets.
Franchise Tax / Annual Privilege Tax
Alabama Business Privilege Tax applies to LLCs and corporations. Minimum $50; rate based on net worth apportioned to Alabama. The minimum tax was repealed for entities owing $100 or less starting in tax year 2024.
S-Corp & Pass-Through Treatment
Alabama recognizes federal S-corp election. Pass-through entities may elect to be taxed at the entity level (PTE election) at 5% to work around the federal SALT cap.
Official State Revenue Department
For current corporate tax rules in Alabama, consult the state's official source at https://www.revenue.alabama.gov/individual-corporate/. Rates and rules change annually — verify with a qualified tax professional before taking any action.
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Moving to Alabama from elsewhere · Corporate Tax
Corporate income tax rates change frequently as states enact reform packages and phase-down schedules. Always verify current rates with the state's department of revenue and your tax advisor before making business decisions. This information is for educational purposes only and is not tax or legal advice.