SB400 Alabama 2013 Session

Summary

Primary Sponsor

Shadrack McGill

Republican

Session

Regular Session 2013

Title

Business license tax, within municipality, amount a tax levied shall not exceed a certain amount, Sec. 11-51-90.2 am'd.

Summary

SB400 would cap the initial municipal business license fee at $5 and otherwise keep the existing framework for how municipalities calculate and collect business license taxes.

What This Bill Does

If a municipality levies a business license tax, the initial license fee cannot exceed five dollars. The bill preserves the current method of calculating license taxes by NAICS sector, using gross receipts or flat rates, and may include a decal charge for each machine at cost. It allows municipalities to issue one license or multiple licenses and maintains exemptions and special rules for banks, bank holding companies, and utilities. The act becomes effective on the first day of the third month after it is enacted.

Who It Affects

• Businesses operating in municipalities: their initial business license fee would be capped at $5, while ongoing license taxes would continue to be calculated under the existing NAICS-based framework (gross receipts or flat rate) with possible machine decal costs.
• Municipalities and local governments: retain authority to levy and calculate business license taxes under the NAICS framework, but must apply the $5 cap to the initial license and follow specific exemptions and rules for banks, bank holding companies, and utilities.

Key Provisions

• Initial business license fee cannot exceed $5.
• Ongoing license taxes remain based on NAICS sectors with gross receipts or flat-rate methods; decals for machines may be required at cost.
• Municipalities may issue one license or multiple licenses and may create sub-sectors; other municipal taxes may still be imposed separately.
• Banks and savings and loan associations are exempt from these municipal license taxes under state license provisions; bank holding companies may require separate licenses for non-financial lines with revenue limited to those lines.
• Utilities within NAICS Sector 221 may be taxed with a single license; if they have additional lines of business outside that sector, separate licenses may be issued for those lines.
• Effective date: the act becomes law on the first day of the third month following passage and approval.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation