By Nicole Boutros and Eric Coffill
The Alabama Tax Tribunal held that a taxpayer banking corporation properly deducted dividends received from an affiliated real estate investment trust (REIT) for financial institution excise tax purposes because the REIT qualified as a “corporation.” The Tribunal rejected the Department of Revenue’s assertion that the REIT was not a corporation based on its tax treatment as a REIT, explaining that the deduction applies more broadly to dividends received from payor entities that are corporations organized and existing under Alabama law. The Tribunal further disagreed with the Department of Revenue’s assertion that the REIT was a financial institution and therefore was not a “corporation,” finding that the REIT did not meet the requirements to qualify as a bank. Ameris Bank v. Ala. Dep’t of Revenue, Docket No. BIT. 16-255 (Ala. Tax Trib. Feb. 9, 2017).