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For tax periods beginning before January 1, 1999 – No.  Alabama’s income tax laws and rules specifically required each corporation to file a separate return with the department (§40-18-39(a) and Rules 810-3-39-.01).

For tax period beginning after December 31, 1998 – Yes.  Alabama’s Tax Conformity Act (Act 98-502) allows an Alabama “affiliated group” to elect to file a consolidated Alabama tax return, provided the “group” files a consolidated federal return for the same taxable year.  An “Alabama affiliated group” means a group of corporations that constitute an affiliated group as defined in 26 U.S.C. §1504, one or more members of which are subject to tax under §40-18-31.

For tax periods beginning after December 31, 2001 – Yes. Act 2001-1089(HB4) revised the Consolidated filing requirements in Alabama Code Section 40-18-39 for tax periods beginning after December 31, 2001. Alabama consolidated returns can only include Alabama “nexus” companies.

Each corporation included in the Alabama consolidated return must compute their Alabama taxable income on a separate company basis. Then, the taxable income of the Alabama group is combined to determine the tax due.

The consolidated filing fee is a maximum of $25,000 due by the extended due date of the return. To make the election, the Alabama Form 20C-CRE must be filed by the due date of the return, including extensions, for the first taxable year for which the election is applicable. The consolidated election is binding for 120 consecutive months (10 years).