The relationship between a taxpayer’s Determination Period and the taxpayer’s taxable year is, at first, confusing. But, to understand how to properly compute the Alabama Business Privilege Tax, one must first understand the terms
DETERMINATION PERIOD. The taxpayer's taxable year next preceding or, if different, the fiscal year next preceding the taxpayer's current taxable year. If the constitutional amendment proposed by Act 99-600 is ratified by the qualified electors of the state and proclaimed by the Governor as provided in Sections 284 and 285 of the Constitution of Alabama 1901, then for all tax years beginning after December 31, 2000, the term "determination period" means the taxpayer's taxable year next preceding the taxpayer's current taxable year.
TAXABLE YEAR. The calendar year for which a tax levied by this chapter is being determined. For all tax years beginning after December 31, 2000, the term "taxable year" means the fiscal year used by the taxpayer to file returns required under the income tax levied by Chapter 18 or the financial institution excise tax levied by Chapter 16, or, in the case of an insurance company subject to the premium tax levied by Chapter 4A of Title 27, the calendar year.