Corporate Income Tax
Corporations pay Alabama income tax based on their net taxable income derived from business conducted within the state. The amount of net income apportioned to Alabama is determined by applying a four factor formula of property, payroll, and double weighted sales to total net income. The rate of corporate income taxation is 6.5% (Individuals are taxed at a rate of 5%). Corporations that anticipate having a tax liability of $500 or more must file and pay estimated tax on a quarterly basis.