QUESTION
Am I personally liable for these taxes the state is trying to collect?
Asked on Sep 14th, 2016 on Taxation - Alabama
More details to this question:
My in-laws and I had a construction business (an S corp) that we closed in 2008. We were unaware that we needed to file Articles of Dissolution. A few weeks ago, we started getting notices of past due Business Privilege Tax, plus interest from the state. All accounts were closed 8 years ago. There are no business assets. We haven't conducted business in over 8 years and it was a corporation.
1 ANSWER
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In Alabama, the Business Privilege Tax (BPT) is assessed against any business entity that is in existence. The law is worded in such a way that the BPT is owed merely due to the entity's existence, and thus whether a business actually operated does not affect the fact that the BPT is owed. The minimum amount for the BPT is $100 annually, and the amount of the BPT increases as the business earns more money. In order to prevent owing the BPT in the future, you should formally dissolve the business entity. Otherwise, it will continue to accrue BPT as long as it is in existence. The BPT is assessed against the business entity. You should not be personally liable for the BPT, unless the Alabama Department of Revenue has entered an assessment or filed a lien that specifically lists your individual name.
Answered on Oct 06th, 2016 at 11:09 AM