(a) Every financial institution, no later than the due date, including applicable extensions, for its corresponding federal income tax or federal information return, shall make and file with the Department of Revenue a return, signed under the penalties of perjury by its cashier, treasurer, or other authorized officer or employee, if a corporation, or by a person or authorized employee in charge of the conduct of the business to be taxed if an individual, firm, association, or other legal entity, in such form as may be prescribed by the Department of Revenue, giving such detailed information as the Department of Revenue may in its opinion require to determine the net income of the financial institution for the taxable year, by the net income of which the excise tax is to be measured.
(b) Qualified corporate groups, as in this chapter defined, shall have the option to file one excise tax return on a consolidated basis or to file separate returns. Qualified corporate groups electing to file one excise tax return on a consolidated basis shall be assessed no fee for the privilege of filing on a consolidated basis. Newly acquired corporations which have a potential separate return year as well as a consolidated year shall have the option of filing a separate return including all of their income for that year or filing as part of the consolidated group for the entire taxable year. Newly created, controlled corporations shall have the option of filing a separate return including all of their income for that year or filing as part of the consolidated group for the entire taxable year, as determined by the election of the corporate group for that year.
(c) In order for financial institution members of a controlled group to be eligible to elect to file on a consolidated basis, the members must meet the following two tests:
(1) OWNERSHIP TEST. Includable financial institutions connected through stock ownership with a common parent corporation are includable corporations if:
a. Stock possessing at least 80 percent of the voting power of all classes of stock and at least 80 percent of each class of the nonvoting stock of each of the includable corporations (except the common parent corporation) is owned directly or indirectly, applying the attribution rules of 26 U.S.C. § 318, by one or more of the other includable corporations; and
b. The common parent owns directly or indirectly, applying the attribution rules of 26 U.S.C. § 318, stock possessing at least 80 percent of the voting power of all classes of stock and at least 80 percent of each class of the nonvoting stock of at least one of the other includable corporations.
(2) FILING TEST. In order to be eligible for this election, each member must be a financial institution as defined in Section 40-16-1 and be required to file an excise tax return under this chapter.
(d) To the extent operating rules are required for the filing of a consolidated excise tax return, the consolidated return regulations of the Internal Revenue Code and the principles contained therein shall be used as a guideline in the absence of clarifying rules adopted by the Department of Revenue.
(e) Any election to file an Alabama consolidated excise tax return pursuant to this section shall be binding on both the Department of Revenue and the Alabama qualified corporate group for a period of not less than 10 taxable years, except that the election shall terminate automatically upon the revocation or termination of its federal consolidated return election.
(f) Returns filed inconsistent with this election shall be considered delinquent and subject to the penalties imposed by Section 40-2A-11.
(g) The Department of Revenue may adopt reasonable rules as it may deem necessary to determine whether business conducted in this state is properly classified as a financial institution under this chapter which is subject to the excise tax and to determine the net income of the business by which the tax is to be measured.
Last modified: May 3, 2021