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NOTICE: Municipal Business Licenses

  • April 13, 2018

NOTICE

TO: Municipal License Officers
Alabama League of Municipalities
SUBJECT: Municipal Business Licenses

The purpose of this notice is to inform you of upcoming requirements regarding municipal business
licenses. Per Section 40-23-262, Code of Alabama 1975, effective October 1, 2019, the information on
all municipal business privilege license applications for new licenses and renewals issued on or after
October 1, 2019, is required to be electronically transmitted to the department by the licensing
official or agent in the same manner as state/county business privilege licenses issued pursuant to Title
40, Chapter 12.

Currently, all state/county business privilege license information is uploaded online via a secure server
using the data specifications provided to the county licensing officials which standardized the field
lengths and the field types. The same type mechanism will be utilized to gather the municipal business
license information whereby you will be required to upload a detailed report each month. This report
will include for example, names, addresses, type license, license amounts, etc. You will be provided
with additional information regarding the exact requirements at a later date.

Act 2018-411 was signed into law and became effective on March 28, 2018. This Act provides that a
business license is not required for a person traveling through a municipality on business if the person
is not operating a branch office as provided in Section 11-51-90, or doing business in the municipality.

As a reminder, per Section 11-51-194(a)(2), notwithstanding any other provision of law, a municipality
may charge a taxpayer an issuance fee for a business delivery license not to exceed $10. Therefore,
the five-year adjustments to the business license issuance fees do not apply to the issuance fee for the
delivery licenses. Also, please note per Section 11-51-194(c), a taxpayer is not required to purchase a
delivery license or a regular business license if the following criteria apply: gross receipts that are
derived from within the municipality or its police jurisdiction do not exceed $10,000 during the year,
and the taxpayer has no other physical presence within the municipality or its police jurisdiction during
the year.

Questions regarding this notice may be directed to:
Business and License Tax Division
Severance and License Section
P. O. Box 327550
Montgomery, AL 36132-7550
334-353-7827

Click here to download a pdf version of this notice.