Forming an LLC in
Alabama AL
Checked November 4, 2026 · How we score
Filing fee
$200
Articles of Organization
Annual fee
$50
per year, normalised
State income tax
5%
top rate
Cost rank
#39
of 51, first-year fees
Alabama LLC costs
| Filing fee | $200 |
|---|---|
| Annual report / franchise fee | $50 Annual Business Privilege Tax return: $50 minimum (scales with net worth), due April 15 with the federal return, plus the Certificate of Formation filed at the county probate office (about $100–$200 extra in practice). |
| First-year state fees | $250 |
| Registered agent | Required (about $50–$300/year if you don't use your own address in the state) |
| Newspaper publication | No |
| Anonymous ownership | No |
| Processing time | 5 days |
Alabama taxes for LLCs
| Personal income tax (top) | 5% Graduated 2%–5%; 5% top rate. |
|---|---|
| Corporate income tax | 6.5% Flat 6.5% on net income. |
| State sales tax | 4% |
| Franchise / gross receipts | Business privilege tax: $50 minimum, up to $15,000 maximum, based on net worth; LLCs must file even if taxed as pass-through. |
A single-member LLC is a disregarded entity: profit flows to the owner's personal return. Federal income tax applies in every state. Non-US owners without US-source business income generally owe no US income tax but must file Form 5472 with a pro-forma 1120 each year.
Pros and cons
Why form in Alabama
- Low overall state tax burden
- No publication requirement
- Low sales tax base rate (4%) with local add-ons
Watch out for
- $200 state fee plus probate-office filing makes formation pricier than average
- Annual privilege tax return required every year
Best for: Founders physically based in Alabama · Low-cost operations with local customers
Alabama LLC: common questions
How much does an LLC cost in Alabama?
Filing the Articles of Organization in Alabama costs $200. After that, expect a $50 minimum business privilege tax each year. Annual Business Privilege Tax return: $50 minimum (scales with net worth), due April 15 with the federal return, plus the Certificate of Formation filed at the county probate office (about $100–$200 extra in practice). A commercial registered agent, if you need one, is typically $50–$300 a year extra.
Do I need a registered agent in Alabama?
Yes. Alabama requires every LLC to keep a registered agent with a physical street address in the state to accept legal and tax notices. You can act as your own agent if you live there, but non-residents and owners who want privacy usually pay a commercial agent, typically $50–$300 a year.
Can a non-US resident form an LLC in Alabama?
Yes. Alabama does not require US citizenship, residency or an SSN to own an LLC; you need a Alabama registered agent address and then an EIN from the IRS (by fax or mail with Form SS-4 if you have no SSN). A foreign-owned single-member LLC must also file Form 5472 with the IRS every year, even with no US income. Check what Alabama publishes, since member or manager names may appear in public filings.
Does Alabama have a state income tax?
Yes. Graduated 2%–5%; 5% top rate. LLC profits normally pass through to the owners' personal returns. Corporate income tax: Flat 6.5% on net income.
Does Alabama require a business privilege tax return for LLCs?
Yes. Every Alabama LLC files an annual Business Privilege Tax return with a $50 minimum, due April 15 for calendar-year entities. The tax scales with net worth up to a $15,000 cap, and a late return adds a penalty.
Sources
Alabama Secretary of State business filings
- Alabama Secretary of State / business filing office
- Tax Foundation – 2026 state income tax rates
- LLC University – LLC filing and annual fees by state (cross-check)
Similar states
Not tax or legal advice. Rates and rules change; we check official sources and update every page, but verify with a licensed adviser in the country before acting. Spotted something out of date? Use the correction form below.