Is a single-member limited liability company (SMLLC), whose status is disregarded for federal income tax purposes, considered to be the seller for purposes of Section 40-18-86, Code of Alabama 1975?
The federal classification for income tax purposes applies for Alabama income tax purposes. Since Section 40-18-86 is the withholding of income tax, the federal classification also applies for income tax withholding purposes. Accordingly, a SMLLC whose status is disregarded for federal income tax purposes is not considered the seller for purposes of Section 40-18-86. Instead the owner of the SMLLC is considered the seller for purposes of the Alabama law.
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