What an LLC costs in Alabama (2026)

Forming an LLC in Alabama costs $200. After that the state charges no yearly report fee, and LLCs owe Alabama Business Privilege Tax.

LLC taxes in Alabama by revenue

Profit taken as two thirds of revenue where a tax is on net income.

Alabama Business Privilege Tax: Tax on Alabama net worth at $0.25 to $1.75 per $1,000, the rate set by federal taxable income apportioned to Alabama ($1.00 per $1,000 for income $1 to $199,999; $1.25 from $200,000; $1.50 from $500,000; $1.75 from $2.5 million). Modelled at $1.00 per $1,000. Since tax year 2024 there is no tax and no return when the tax is $100 or less (Act 2022-252), which replaced the old $100 and then $50 minimum. Maximum $15,000. Single member LLCs owned by an individual are filed as disregarded entities and still owe it on their net worth. Due with the federal return (April 15 for calendar year).

What else an LLC owner pays

The fees above are what the state charges the LLC. The bigger cost is tax on the profit: a single-member LLC pays the same income tax and self-employment tax as a sole proprietor. At $100,000 of profit that comes to $26,747 a year in Alabama, fees included. An S corp election can lower it: LLC vs S corp in Alabama.

A name reservation is required before filing and has its own small fee, not included. LLCs pay the Business Privilege Tax instead of an annual report. Paying by card adds a convenience fee of 3% plus $2 (about $8).

• All five structures in Alabama
• Sole proprietorship vs LLC
• LLC cost in every state
• How to form an LLC