SB51 Alabama 2015 1st Special Session

Summary

Primary Sponsor

Linda Coleman-MadisonSenator

Democrat

Session

First Special Session 2015

Title

Corporate income tax, combined reporting of income required, Sec. 40-18-36 added; Secs. 40-18-1, 40-18-30, 40-18-31, 40-18-39 am'd.

Summary

SB51 would require Alabama corporate income taxes for unitary businesses to be filed on a single combined return, instead of separate returns for each entity.

What This Bill Does

It changes the filing method so all related entities in a unitary group file one Alabama corporate income tax return and report a combined income and apportionment. It creates two election options: a water's-edge election to limit which members are included, and an affiliated-group election to treat all members of an affiliated group as a single group, each with a 10-year term and rules for initiation and withdrawal. It also sets detailed rules for calculating taxable income under a combined return, including how to allocate income to Alabama, handle intercompany transactions and dividends, and apply losses, with the Department of Revenue able to issue regulations guiding transition. The changes are slated to apply to tax years after December 31, 2014.

Who It Affects

• Large Alabama corporations with unitary or broadly interconnected subsidiaries that would file a single combined Alabama corporate income tax return and allocate income among all members according to a unitary formula.
• Members of Alabama affiliated groups or unitary groups that choose or are affected by water's-edge or affiliated-group consolidated reporting (including designated common parents and their fellow group members), with eligibility rules, term limits, and potential filing costs or penalties managed by the Department.

Key Provisions

• Requires combined reporting for unitary businesses; defines how income, apportionment factors, and intercompany transactions are calculated and allocated among all members of the combined group, including rules on dividends and post-apportionment deductions.
• Establishes two elections (water's-edge and affiliated group) to determine which members are included in the combined group, each with a 10-year term, initiation/withdrawal rules, and Department of Revenue regulation; adds an annual fee for Alabama consolidated returns based on group assets; clarifies filing responsibilities and transition provisions.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation