TAX NEWS - January 2010

Income/Franchise Tax - Alabama: New rules on pass-through entity composite filing

New taxation Rules 810-3-24.2-.01, 810-3-24.2-.02, 810-3-24.2-.03, Ala. Dept. of Rev. (eff. 2/15/10). Three new rules address:

- Composite returns and composite payment requirements for pass-through entities, which are effective for taxable years beginning on or after January 1, 2009, and

- Gross income and asset requirements for classification as a "qualified investment partnership (QIP)" for tax periods beginning on or after January 1, 2009.

In Alabama, a pass-through entity is now required to file a composite return and make composite payments on behalf of its nonresident owners/members if there are one or more nonresident owners/members at any time during the taxable year.