Alabama ~ Corporate Income Tax: Double-Weighted Sales Factor, Market-Based Sourcing Enacted

Alabama has enacted legislation that revises the corporate income tax apportionment formula to include a double-weighted sales factor. Previously, Alabama had an equally weighted three-factor formula (property, payroll, and sales).

The law also modifies the sales factor to source sales of services and intangible property to Alabama if the taxpayer’s market for the sales is in Alabama. Previously, such sales were sourced using the income-producing activity and cost of performance method.

The changes become effective for taxable years beginning on or after December 31, 2010.

H.B. 434, Laws 2011, effective as noted

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Wolters Kluwer Tax and Accounting

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