Alabama State Tax Rulings
Free plain-English summaries of state tax letter rulings and advisory opinions issued in Alabama, with full citations and the original source on every page.
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If a company owns Industrial Development Board bonds that financed its own leased facility, can it still deduct that bond investment from its franchise-tax capital, and exclude the bond interest from income tax — even after paying big dividends to its parent and even though it borrowed the money to buy the bonds?
Yes to all. In a large Industrial Development Board (IDB) bond-financed manufacturing deal, the Taxpayer owned the IDB's bonds (bought with capital contributed — and partly borrowed — by its parent) a…
If an out-of-state pension fund invests in Alabama only as a limited partner — and registers as a foreign corporation just to make its contracts enforceable — is it 'doing business' so as to owe Alabama franchise and income tax?
No to both taxes. Entity A, an out-of-state public-school retirement fund (a trust with 'corporate powers,' investing ~$64.35 million as a limited partner in a tiered partnership that owns an Alabama …
In a bond-financed Industrial Development Authority (IDA) manufacturing project, which Alabama taxes get abated or exempted — deed recording tax, mortgage tax, sales and use tax, ad valorem tax, income tax on rent and bond interest, and the IDA's lease tax?
It depends on the tax and the document. In this IDA (Industrial Development Authority) bond-financed manufacturing project under the Tax Incentive Reform Act of 1992 (§ 40-9B-1 et seq.), the Departmen…
If a company buys or builds equipment mainly to control air and water pollution — vapor recovery systems, leak detectors, cathodic protection, double-wall tanks, cleanup gear — is that equipment exempt from Alabama sales, use, and property tax, and deductible for franchise and income tax?
Mostly yes. Company A, an Alabama petroleum business, planned to buy or self-construct five kinds of environmental equipment (vapor recovery systems, in-line leak detectors, cathodic protection, doubl…
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These are official tax letter rulings and advisory opinions issued by Alabama's revenue authority in response to questions from specific taxpayers about how the tax law applies to their facts. A ruling is binding on the department only for the taxpayer who requested it and cannot be relied on by anyone else, but it is strong evidence of how the state reads the law. Every ruling above has a plain-English question and short answer, plus a link to the full original source.