HB422 Alabama 2017 Session

Summary

Primary Sponsor

Paul W. LeeRepresentative

Republican

Session

Regular Session 2017

Title

Municipal business licenses, not required for certain persons travelling through municipality on business, Sec. 11-51-90.2 am'd.

Summary

HB422 would exempt travelers passing through a municipality on business from needing a municipal business license if they are not operating a branch office or doing business there.

What This Bill Does

It amends Section 11-51-90.2 to remove the requirement for a business license for a person traveling through a municipality on business who is not operating a branch office or doing business in the municipality. It preserves the NAICS-sector framework for license calculations (based on gross receipts, flat rate, etc.) and allows municipalities to issue a single license and require decals for machines, up to their cost. It outlines how license taxes are calculated, including short license year handling and optional use of fiscal-year data, while retaining distinctions between state-regulated and non-state-regulated sectors and adding special rules for banks, bank holding companies, utilities, and multi-line businesses.

Who It Affects

• Travelers or businesspeople who are merely passing through a municipality and are not operating a local branch or doing business there: no municipal business license required.
• Municipalities and local taxing authorities: maintain licensing framework but traveling-through exemptions reduce license requirements for non-local activity; may impose decals for machines and issue a single license per business in some cases.
• Banks and bank-related entities: banks and savings associations have license tax rules in lieu of other licenses; bank holding companies with additional lines must obtain separate licenses for those lines, with gross receipts limited to the specific line of business.
• Utilities and multi-line businesses: a single license may cover all lines within NAICS Sector 221, with additional lines requiring separate licenses if applicable; additional licenses tax only the receipts from the respective line of business.

Key Provisions

• Exemption: travel-through, non-branch, non-local business travelers do not need a municipal business license.
• Basis for taxes: license taxes continue to be based on NAICS sectors with bases such as gross receipts, flat rate, number of employees, or square footage; decals may be required for machines, at cost.
• Single license option: municipalities may issue one license per business rather than multiple licenses when appropriate.
• Short-year and fiscal-year data: rules for projecting gross receipts for new entrants, annualizing short-year receipts, and optional use of fiscal-year data with irrevocable election unless consent is given otherwise.
• State vs. local regulation: the act preserves distinctions between state-regulated and non-state-regulated sectors and aligns municipal taxes with applicable state law limits for those sectors.
• Banking provisions: licenses for banks and savings associations under Sections 11-51-130/131 are in lieu of other licenses; bank holding companies with additional lines must obtain separate licenses for those lines, with revenue limited to the line’s receipts and not counting financial activities.
• Sector 221 utilities: municipalities may require only one license for all lines within NAICS Sector 221; if there are additional lines outside Sector 221, a separate license may be required for those lines.
• Effective date: the act becomes effective immediately upon 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

Municipalities