Alabama Code Title 40. Revenue and Taxation § 40-18-170

For purposes of applying the provisions of this chapter which relate to employee fringe benefits, the Alabama S corporation shall be treated as a partnership, and any two-percent shareholder of the Alabama S corporation shall be treated as a partner of such partnership. The term “two-percent shareholder” means any person who owns, or is considered as owning in accordance with 26 U.S.C. § 318, as in effect from time to time, on any day during the taxable year of the Alabama S corporation more than two percent of the outstanding stock of such corporation or stock possessing more than two percent of the total combined voting power of all stock of such corporation.