Alabama’s business privilege tax (“BPT”) is imposed on every business entity doing business or registered to do business in Alabama, and provides for a deduction in computing the taxable base equal to the book value of the taxpayer’s investment in the equity of any other business entity that is also doing business in Alabama. Ala. Code § 40-14A-23. Last year, the Alabama Department of Revenue (the “Department”) proposed a controversial regulation that purported to deny this statutory deduction for all tax years beginning on or after January 1, 2010. Prop. Ala. Admin. Code r. 810-2-8-.08. The Department also issued an amended BPT return for both 2010 and 2011, without public notice and comment, that simply deleted the line that formerly allowed the deduction.
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