Ally Bank Units Barred From Offsetting Losses on Alabama Taxes

Ally Financial Inc. owes Alabama about $4 million in financial institution excise taxes because it improperly filed consolidated returns with two related companies, a state appeals court ruled Friday.

Ally Financial didn’t have direct ownership of Ally Bank, and third unit IB Finance Holding Co. wasn’t a financial institution required to file an FIET return, Judge Christy O. Edwards wrote for the Alabama Court of Civil Appeals. That means Ally Financial couldn’t use its losses to offset profits of Ally Bank for tax years 2011 to 2020.

The court also rejected the companies’ argument that limiting consolidated returns to organizations ...