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    Alabama Business Personal Property Tax: A Breakdown

    Posted by Lisa English on Oct 21, 2021 7:36:48 AM

    Alabama Business Personal Property Tax: A Breakdown

    Our clients who file Alabama business personal property tax returns have different perspectives on the state’s timing: Some see it as having an early return due date; others see it as having a late return due date. That’s because Alabama has an unusual tax year compared to other states. Learn more about that—and a few other highlights of Alabama’s property tax practices and policies—below.

    Alabama Business Personal Property Tax: What You Need To Know


    Alabama’s key property tax dates can be summed up fairly succinctly:

    Key Dates

    Explanations

    October 1

    Assessment date (first day of the new tax year)

    December 31

    Tax returns due for the next year; tax payments due for the current year

    January–October

    Tax notices are mailed at various times; appeals are due 30 days from the notice date


    If you regularly file in a number of states, Alabama doesn’t have a lot of dates to remember, comparatively. But the state should also stand out to you for another reason: its unusual tax year, which runs from October 1 to September 30. (Most other states have a tax year ending on December 31 or January 1.) Alabama business personal property returns are due December 31.

    Here’s some clarification about what that means for you as a taxpayer:

    • Your December 31 tax filing is for the following year.
    • Your December 31 tax filing is based on the value of the property you owned as of October 1 that same year.
    • December 31 is the due date for both tax returns and bill payments.
    • The taxes you pay on December 31 are for the current year.

    The late/early debate is reflected in the points above: Alabama returns are for the following year, which makes them early. However, they are based on an assessment date in the current year, which makes them late. For example:

    A return filed on 12/31/2019 is for 2020 taxes, but the return itself is based on the value of assets owned 10/1/2019.

    A few other key pieces of information for Alabama business personal property returns:

    • Supplies are taxable in Alabama.
    • Inventory is not taxable in Alabama.
    • Intangible personal property is not taxable in Alabama.

    See how easy property tax management can be—schedule a demo of CrowdReason property tax software today.

    Take The Confusion Out Of Alabama Business Personal Property Tax With A Tailored Solution

    Our MetaTaskerPT and TotalPropertyTax (TPT) solutions not only accommodate Alabama’s differential in accounting practices, but can also help manage a number of other property tax requirements for the state. Our clients filed nearly 200 Alabama returns in aggregate last year—keep reading to see why they chose CrowdReason to handle the job.

    1. TPT easily handles Alabama’s distinct accounting practices.

    To remedy the confusion around Alabama’s unique accounting practices, think about tax years in three different ways:

    • The system tax year corresponds to the year of the assessment date, or lien date. For example, if you filed your return by the 2021 due date, the system tax year would be 2021.
    • The collector’s tax year corresponds to the year you would see on a tax bill. Using the preceding example, the collector’s tax year would be 2022. To keep data organized and easy to reference, MetaTaskerPT automatically detects the collector’s tax year (2022) when you receive and upload a tax bill, then feeds it into TPT to attach to the associated system tax year (2021). This way, the taxable value lines up with the return you filed.
    • The accounting tax year is a user-designated year that can correspond with the collector’s tax year, the system tax year, or a completely different year, depending on your accounting practices. Continuing with the above example, the accounting tax year could be either 2021 or 2022. This way, you can produce an AP file with the year you want to see, regardless of the tax year in which the bill was processed.

    2. TPT makes Alabama depreciation schedules available for use.

    We source and verify the state’s depreciation collections every year. We check every factor in every life year—in total, there are over 300 individual factors across three collections:

    • Alabama non-composite collection. This collection represents depreciation factors only. For example, if you purchased an item in 2016, the depreciation factor lessens the item’s value and indicates how much it’s worth now.
    • Alabama index collection. This collection consists of index factors only. In contrast to depreciation factors, index factors increase an item’s value and indicate its current worth.
    • Alabama composite collection. This collection combines depreciation and index factors to determine an item’s value, which may be less or more than the prior year’s value—or its original value in some cases. For example, an item may have a depreciation factor of .75 but an index factor of 1.25—TPT simplifies calculations by applying these factors at the same time.

    3. TPT includes Alabama’s return form.

    With TPT, there’s no need to hunt down the latest Alabama business personal property tax return form. We research and verify the latest version of this return form annually and ensure it’s available for client use in TPT. If any form sections or questions have changed since the prior year, we capture those changes so our clients maintain full compliance.

    Our system also has numerous other features that make filing and bill-paying easier, including an integration with Anybill that automates payments. It’s also capable of generating hundreds of returns in just a few minutes. So whether you’re just managing Alabama business personal property taxes or taxes in a number of states, CrowdReason software can help your team be more productive, more organized, and even more valuable. To find out more, schedule a demo or talk to us.

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    Topics: States

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