HB 107

Sponsor
Session
Regular Session 2018
Title
Municipal business licenses, not required for certain persons travelling through municipality on business, Sec. 11-51-90.2 am'd.
Description

Under existing law, a municipality may require a business license for each location where a taxpayer does business in the municipality and the police jurisdiction of the municipality

This bill would provide that a business license is not required for a person travelling through a municipality on business if the person is not operating a branch office or doing business in the municipality

To amend Section 11-51-90.2 of the Code of Alabama 1975, relating to the purchase of a municipal business license; to provide that a business license is not required for a person travelling through a municipality on business if the person is not operating a branch office or doing business in the municipality.

Subjects
Municipalities
View Original PDF: HB 107 - Introduced - PDF

Under existing law, a municipality may require a business license for each location where a taxpayer does business in the municipality and the police jurisdiction of the municipality

This bill would provide that a business license is not required for a person travelling through a municipality on business if the person is not operating a branch office or doing business in the municipality

To amend Section 11-51-90.2 of the Code of Alabama 1975, relating to the purchase of a municipal business license; to provide that a business license is not required for a person travelling through a municipality on business if the person is not operating a branch office or doing business in the municipality.

Section 1

Section 11-51-90.2 of the Code of Alabama 1975, is amended to read as follows:

§11-51-90.2

(a) Every taxpayer required to purchase a business license under this chapter shall:

(1) Purchase a business license for each location at which it does business in the municipality, except as otherwise provided by the municipality.

(2) Except as provided in Section 11-51-193, with respect to taxpayers subject to state licensing board over- sight, be classified into one or more of the following 2002 North American Industrial Classification System ("NAICS") sec- tors and applicable sub-sectors, industry groups, industries and U.S. industries thereunder: SECTOR NAICS TI- SUGGESTED BUSINESS BASIS FOR LI- TLE LICENSE CODE GROUP- CENSE CALCULA- ING BY SAMPLE TOPIC TION OR CATEGORY 111 Crop Produc- Agriculture, farm- Gross Receipts tion ing, nursery, and/or Flat Rate fruit, growers 112 Animal Pro- Animal, dairy, cat- Gross Receipts duction tle, ranching, and/or Flat Rate sheep, chicken 113 Forestry and Forestry, logging, Gross Receipts Logging timber and/or Flat Rate 114 Fishing, Fishing, hunting, Gross Receipts Hunting, and supplies and equip- and/or Flat Rate Trapping ment 115 Support for Cotton ginning, Gross Receipts Agriculture farm management, and/or Flat Rate and Forestry post-harvest activ- ities 211 Oil and Gas Oil, gas, extrac- State Regulated Extraction tion, natural gas, [See, e.g. Section crude 40-20-2(c)] 212 Mining (ex- Mining activities Gross Receipts cept Oil and and/or Flat Rate Gas) Where not State Regulated 213 Support for Support activities Gross Receipts Mining Ac- for oil and gas and/or Flat Rate tivities wells Where not State Regulated 221 Utilities Utilities, gas, State Regulated electric, water, (See Section sewage, steam 11-51-129) 236 Building, Construction, Gross Receipts Developing building, general, and/or Flat Rate and General residential, subdi- Contracting visions 237 Heavy Con- Construction, heavy Gross Receipts struction construction, high- and/or Flat Rate way, bridge, street 238 Special Construction, all Gross Receipts Trade Con- special trades and/or Flat Rate tractors 311 Food Manu- Food manufacturing, Gross Receipts, facturing animal, grain, Flat Rate, or fruit, dairy, meat, Value of Goods seafood Produced 312 Beverage and Beverage manufac- Gross Receipts Tobacco turing, soft drink, and/or Flat Rate Products bottled water, Where Not State Manufactur- breweries, ice Regulated, or ing Value of Goods Produced 313 Textile Mills, textile, Gross Receipts, Mills fabric, yarn, car- Flat Rate, or pet, canvas, rope, Value of Goods twine Produced 314 Textile Other mill opera- Gross Receipts, Product tions not covered Flat Rate, or Mills in 313 Value of Goods Produced 315 Apparel Man- Apparel manufactur- Gross Receipts, ufacturing ing, hosiery, men, Flat Rate, or women, children, Value of Goods lingerie Produced 316 Leather and Leather manufactur- Gross Receipts, Allied Prod- ing, shoes, lug- Flat Rate, or uct Manufac- gage, handbag, re- Value of Goods turing lated products Produced 321 Wood Prod- Wood products, saw- Gross Receipts, ucts Manu- mills, wood, pres- Flat Rate, or facturing ervation, veneer, Value of Goods trusses, millwork Produced 322 Paper Manu- Paper manufactur- Gross Receipts, facturing ing, pulp, paper, Flat Rate, or converted products Value of Goods Produced 323 Printing and Printing, litho- Gross Receipts, Related Sup- graphic, screen, Flat Rate, or port Activi- quick, digital, Value of Goods ties books, handbills Produced 324 Petroleum Petroleum manufac- Gross Receipts, and Coal turing, asphalt, Flat Rate, or Products roofing, paving, Value of Goods Manufactur- grease Produced ing 325 Chemical Chemical manufac- Gross Receipts, Manufactur- turing, wood, fer- Flat Rate, or ing tilizer, pesticide, Value of Goods paint, soap, other Produced 326 Plastics and Plastic and tire Gross Receipts, Rubber Prod- manufacture, pipe, Flat Rate, or uct Manufac- hoses, belts, bot- Value of Goods turing tle, sheet, foam Produced 327 Nonmetallic Nonmetallic manu- Gross Receipts, Mineral facturing, clay, Flat Rate, or Product Man- glass, cement, Value of Goods ufacturing lime, gypsum, other Produced 331 Primary Metal manufactur- Gross Receipts, Metal Manu- ing, iron, steel, Flat Rate, or facturing aluminum, copper, Value of Goods other nonferrous Produced 332 Fabricated Fabricated metal, Gross Receipts, Metal Prod- cutlery, struc- Flat Rate, or uct Manufac- tural, ornamental, Value of Goods turing wire, machine shops Produced 333 Machinery Machinery manufac- Gross Receipts, Manufactur- turing, farm, HVAC, Flat Rate, or ing office, industrial, Value of Goods engine, other Produced 334 Computer and Computers and elec- Gross Receipts, Electronic tronics, peripher- Flat Rate, or Product Man- als, audio, video, Value of Goods ufacturing circuit boards Produced 335 Electrical Electrical equip- Gross Receipts, Equipment ment, lighting, Flat Rate, or Appliance small appliance, Value of Goods Component battery, other Produced Manufactur- ing 336 Transporta- Transportation man- Gross Receipts, tion Equip- ufacturing, auto, Flat Rate, or ment Manu- truck, trailer, mo- Value of Goods facturing tor home, ship, Produced boat, motorcycle 337 Furniture Furniture manufac- Gross Receipts, and Related turing, cabinets, Flat Rate, or Products office furniture, Value of Goods Manufactur- beds, kitchen Produced ing 339 Misc. Manu- Misc. manufactur- Gross Receipts, facturing ing, medical, den- Flat Rate, or tal, jewelry, Value of Goods sporting goods, Produced toys, signs, all other 421 Wholesale Wholesale Gross Receipts Trade, Dura- trade-durable, mo- and/or Flat Rate ble Goods tor vehicle, home furniture, machin- ery, equipment 422 Wholesale Wholesale Gross Receipts Trade, trade-nondurable, and/or Flat Rate Non-Durable paper, apparel, Goods grocery, dairy, farm, beverages 441 Motor Vehi- Motor vehicles, au- Gross Receipts cle and tomobiles, motorcy- and/or Flat Rate Parts Dealer cles, boats, parts, accessories 442 Furniture Furniture stores, Gross Receipts and Home home, floor, fur- and/or Flat Rate Furnishing nishings, window, Stores special products 443 Electronics Electronic and ap- Gross Receipts and Appli- pliance store, and/or Flat Rate ance Stores household, radio, television, com- puter 444 Building Ma- Building materials, Gross Receipts terial and hardware, paint, and/or Flat Rate Gardening home center, wall- Equipment paper Dealers 445 Food and Food and beverage Gross Receipts Beverage stores, grocery, and/or Flat Rate Stores convenience, mar- Where Not State kets, liquor, beer Regulated 446 Health and Health and personal Gross Receipts Personal care stores, drug, and/or Flat Rate Care Stores cosmetic, optical, health food 447 Gasoline Gasoline stations, Gross Receipts Stations filling stations and/or Flat Rate Based on No. of Dispensers 448 Clothing and Clothing stores, Gross Receipts Accessories men's women's, and/or Flat Rate Stores children, infants, shoe, jewelry, lug- gage 451 Sporting Sporting goods Gross Receipts Goods, stores, hobby, toy, and/or Flat Rate Hobby, Book, fish, gun, music, Music books 452 General Mer- General merchandise Gross Receipts chandise stores, department, and/or Flat Rate warehouse clubs, superstores 453 Miscella- Misc. store retail- Gross Receipts neous Store ers, florist, gift, and/or Flat Rate Retailers novelty, used, pets, art, tobacco 454 Nonstore Re- Nonstore retailers, Gross Receipts tailers electronic shop- and/or Flat Rate ping, mail order, vending, direct selling 481 Air Trans- Air transportation, Gross Receipts portation airline tickets, and/or Flat Rate shipping, freight, Where Not State charters Regulated 482 Rail Trans- Rail transporta- State Regulated portation tion, ticket of- and/or Flat Rate fices, short line, freight 483 Water Trans- Water transporta- Gross Receipts portation tion, coastal, and/or Flat Rate freight, inland, Where Not State passenger, forward- Regulated ers 484 Truck Trans- Truck transporta- Gross Receipts portation tion, terminal, lo- and/or Flat Rate cal, long-distance, Where Not State freight Regulated 485 Transit and Ground transporta- Gross Receipts Ground Pas- tion, bus, taxi, and/or Flat Rate senger limousine, charter, Transporta- buggy tion 487 Scenic and Scenic and sight- Gross Receipts Sightseeing seeing, land, wa- and/or Flat Rate Transporta- ter, air, special tion 492 Couriers and Couriers and mes- Gross Receipts Messengers sengers, services, and/or Flat Rate delivery 493 Warehousing Warehouse and stor- Gross Receipts, and Storage age, household, Flat Rate or refrigerated, dis- Square Feet tribution, special 511 Publishing Publishing, newspa- Gross Receipts Industries pers, periodicals, and/or Flat Rate (except databases, software Internet) 512 Motion Pic- Motion pictures and Gross Receipts ture and videos, theatres, and/or Flat Rate Sound Re- recording, studios, cording In- drive-in dustry 515 Broadcasting Broadcasting and Gross Receipts (except radio, TV and/or Flat Rate Internet) Where Not State Regulated 516 Internet Publications or Gross Receipts Publishing broadcasting for and/or Flat Rate and Broad- Internet only Where Not State casting Regulated 517 Telecommuni- Providing, access Gross Receipts cations to facilities for and/or Flat Rate voice, data, text, Where Not State sound and/or video Regulated 519 Information Providing, storing, Gross Receipts Services and processing, and and/or Flat Rate Data Pro- providing access to cessing information 522 Credit In- Credit companies Gross Receipts termediation and activities re- and/or Flat Rate and Related lated to credit Where Not State Activities and mediation of Regulated. Banks credit and savings and loan associations are state regulated and are subject to the license tax authorized under Section 11-51-130 and under Section 11-51-131, respec- tively. 523 Securities, Insurance compa- Gross Receipts Commodity, nies, life, health, and/or Flat Rate Other Finan- accident, and all Where Not State cial Prod- other Regulated ucts 524 Insurance Insurance compa- State Regulated Carriers and nies, fire, marine, Related Ac- and fire casualty tivities 525 Funds, Funds, plans, Gross Receipts Trusts, and/or programs and/or Flat Rate Other Finan- organized to pool Where Not State cial Vehi- securities or other Regulated cles assets for others, other than the Ala- bama Municipal Funding Corporation 531 Real Estate Real estate, of- Gross Receipts fices, agents, bro- and/or Flat Rate kers, developers Where Not State Regulated 532 Rental and Rental and leasing, Gross Receipts Leasing Ser- auto, truck, equip- and/or Flat Rate vices ment, tangible property 541 Professions, Attorney, doctor, Gross Receipts for Scientific, dentist, architect, outdoor/billboard Technical engineer, vet, advertising; oth- Services other professions erwise flat rate and/or gross re- ceipts 551 Management Management of com- Gross Receipts of Companies panies and enter- and/or Flat Rate and Enter- prises, offices, Where Not State prises regional, corporate Regulated. For purposes of this chapter only, bank holding companies are state regu- lated and are sub- ject only to the license tax amount authorized under Section 11-51-130(a)(12). 561 Administra- Administrative and Gross Receipts tive and support services, and/or Flat Rate Support Ser- office, employment, Where Not State vices answering, travel Regulated 562 Waste Man- Waste management, Gross Receipts agement and services, landfill, and/or Flat Rate Remediation septic tank, compa- Where Not State Services nies, trucks Regulated 611 Educational Educational ser- Gross Receipts Services vices, business, and/or Flat Rate secretarial, com- Where Not State puter, technical, Regulated sports, other 621 Ambulatory Health care ser- Gross Receipts Health Care vices, mental, out- and/or Flat Rate Services patient, HMO, diag- nostic, blood, di- alysis, other 622 Hospitals Hospitals, surgi- Gross Receipts cal, substance and/or Flat Rate abuse, psychiatric, Based on No. of specialty Patients or Beds 623 Nursing and Nursing and resi- Gross Receipts Residential dential care facil- and/or Flat Rate Care Facili- ities, elderly, day ties care, assisted liv- ing 624 Social As- Social assistance, Gross Receipts sistance child, shelters, and/or Flat Rate vocational, emer- Where Not State gency Regulated 711 Performing Arts and sports, Gross Receipts Arts, Spec- dance, musical, and/or Flat Rate tator Sports spectator, teams, tracks, promoters, agents 712 Museums, Museums, historical Gross Receipts Historical sites, zoos, botan- and/or Flat Rate Sites and ical gardens, Similar parks, special sites 713 Amusement, Amusement and rec- Gross Receipts Gambling and reation, gambling, and/or Flat Rate Related theme, arcade, Where Not State golf, marinas, fit- Regulated ness 721 Accomoda- Accommodations, ho- Gross Receipts tions tel, travel, and/or Flat Rate bed-and-breakfast, rooming houses, mo- tel 722 Food Ser- Food service and Gross Receipts vices and drinking places, and/or Flat Rate Drinking restaurant, cater- Places ers, bar, lounge, club 811 Repair and Repair and mainte- Gross Receipts Maintenance nance, automotive, and/or Flat Rate electronic, commer- cial, residential, other 812 Personal and Personal care ser- Gross Receipts Laundry Ser- vices, hair, nail, and/or Flat Rate vices skin, barber, beauty, diet, tan- ning, funerals 910 Category Vending machines, Gross Receipts for: pool tables, amuse- and/or Flat Rate ment devices, etc. 920 Category for Employees: as in Gross Receipts, employees: number of employees Flat Rate or Num- used in license ber of Employees calculation 930 Category for Square feet used Gross Receipts, square feet: for warehousing, Flat Rate or Num- large buildings, ber of Square Feet and other types 923 Administra- General Category Gross Receipts tion of Hu- and/or Flat Rate man Resource Where Applicable Programs 924 Administra- General Category Gross Receipts tion of En- and/or Flat Rate vironmental Where Applicable Quality Pro- grams 925 Administra- General Category Gross Receipts tion of and/or Flat Rate Housing, Ur- Where Applicable ban, Comm. 926 Administra- General Category Gross Receipts tion of Eco- and/or Flat Rate nomic Pro- Where Applicable grams 927 Space Re- General Category Gross Receipts search and and/or Flat Rate Technology Where Applicable 928 National Se- General Category Gross Receipts curity and and/or Flat Rate Interna- Where Applicable tional Af- fairs 999 Unclassified General Category Gross Receipts or Establish- Flat Rate, Where ments Not State Regu- lated

(3) Notwithstanding any provision of this chapter to the contrary, a business license is not required for a person travelling 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. (b) The taxing jurisdiction's basis for determination of the business license tax for each sector shall correspond with the basis specified in subsection (a), such as gross receipts, flat rate, number of employees, or square footage. Provided, however, with respect to machines and other devices described in Sector 910 above, the municipality, in addition to a gross receipts-based or flat rate license, may require the taxpayer to purchase a decal for each machine or device located within the municipality. The charge for such decal shall not exceed the municipality's actual cost of the decal. Provided further, the taxing jurisdiction shall have authority to issue one license, rather than multiple licenses, to a business in accordance with the taxing jurisdiction's business license ordinance. To the extent that subsection (a) indicates that a business activity described in an NAICS sector is fully or partially state regulated, no taxing jurisdiction shall have authority to impose a business license tax in excess of the amount otherwise authorized by state law on the state regulated portion of such sector.

(c) The measure of a municipal business license based on gross receipts shall be based on the taxpayer's gross receipts for the license year next preceding the current license year unless the taxpayer first began doing business in the municipality during the current license year, in which event the gross receipts shall be projected by the taxpayer for the remaining portion of the current license year. If the taxpayer's actual gross receipts for the short license year are either more or less than projected, the taxpayer's annualized gross receipts used in calculating its business license tax liability for the following license year shall be increased or decreased, respectively, by the amount of the difference. When annualizing the gross receipts for the short license year, the amount of the gross receipts projected by the taxpayer shall be divided by the number of full months the taxpayer was in business in the municipality and multiplied by 12; provided that each taxpayer shall be deemed to have been in business in the municipality for a minimum of one month for purposes of this calculation. If the taxpayer employs a fiscal year for federal and state income tax purposes, the taxpayer's gross receipts may be determined, at the option of the taxpayer, from the federal income tax return of the taxpayer for the fiscal year next preceding the current license year, provided that the gross receipts reported thereon reasonably reflect the financial condition of the taxpayer as of the December 31 next preceding the current license year, and the taxpayer so notifies the municipality either prior to or simultaneously with filing the first business license remittance form using fiscal year data. The taxpayer's use of fiscal year data, as provided above, shall constitute an irrevocable election to use fiscal year data with respect to the current and subsequent business license years unless the governing body of the municipality or its director of finance or other chief revenue officer or his or her designee consents otherwise. Provided, however, that nothing in this subsection shall prohibit a municipality from doing any of the following:

(1) Creating one or more sub-sectors in each of the NAICS sectors listed in subsection (a) above, subject to the limitations regarding the basis for license calculation and subsections (e) and (f) below.

(2) Levying and collecting any municipal tax, other than an annual business license, that now exists or that may hereafter be adopted pursuant to Section 11-51-90 or some other provision of state law, including, but not limited to, lodgings taxes, alcoholic beverage taxes, gasoline and motor fuel taxes, tobacco taxes, leasing or rental taxes, occupational taxes, sales and use taxes, and gross receipts taxes in the nature of a sales tax.

(3) Allowing or requiring a taxpayer to purchase a minimum business license with respect to the short license year following 90 days of operations in the municipality, based on the amount which bears the same relationship to the actual amount of gross receipts during such preceding license year as the entire license year bears to the number of days during which the taxpayer was operating during such preceding license year. If the taxpayer did not commence operations until after the first day of the calendar year, the municipality may by ordinance require the taxpayer to remit the business license tax at the end of such 90 day period, or on December 31 of the current license year, whichever occurs first.

(d) For purposes of subsection (a), the terms

state regulated" or "where not state regulated," when used with reference to a business listed in one of the NAICS sectors and any subsequently created sub-sector, mean and refer to other provisions of the Code of Alabama 1975, that deal with or limit the taxation of the respective business by municipalities, none of which are amended or repealed by this act.

(e) Notwithstanding anything in this chapter to the contrary, the licenses authorized by Sections 11-51-130 and 11-51-131 are in lieu of any other business licenses authorized by this chapter, and banks and savings and loan associations subject to either of those sections are not subject to the business license taxes otherwise authorized by this chapter, regardless of whether one or more NAICS sectors or sub-sectors describe or include any business or activity of such bank or savings and loan association. Any municipal business license tax applicable to a bank holding company, as defined in Section 5-13B-2(f), shall not exceed the amount set forth in the schedule provided for banks under Section 11-51-130(a)(12). Provided, however, if a bank holding company is engaged in additional lines of business that do not fall within NAICS Sectors 551 or 522 and which are not considered financial in nature, as defined under federal banking law, the bank holding company shall take out and pay for a business license for each additional line of business so assessed by the municipality; provided further that for each separate additional business license, the gross receipts taxable under such license shall be only those gross receipts of the bank holding company which arise under the license for the respective additional line of business and not from a financial activity, as defined under federal banking law, or from an activity within NAICS Sector 551 or 522. This subsection (e) shall not apply to any subsidiary of a bank or savings and loan association.

(f) Notwithstanding any provision of this chapter to the contrary, each of the several municipalities in this state may annually assess and collect from each utility or other entity described in Section 11-51-129 only one municipal business license tax for all lines of business classified in NAICS Sector 221, and the levy, collection and assessment of the single business license tax shall be subject to the provisions and limitations of Section 11-51-129 and Section 11-51-90A. If any such utility or entity described in Section 11-51-129 is engaged in one or more additional lines of business that do not fall within NAICS Sector 221, and if the additional line of business of such utility or other entity is so assessed by the municipality, then the utility or other entity shall take out and pay for a business license for that additional line of business, even if the utility or other entity does not meet the requirement in Section 11-51-95 that it must derive more than 10 percent of its gross receipts from the business falling within the NAICS sector during the preceding license year; provided however, that for each separate, additional business license, the gross receipts taxable under such license shall be only those gross receipts of the utility or other entity from business done within the municipality and which arise within the line of business which is the subject of the respective license."

Section 2

The provisions of this act are severable. If any part of this act is declared invalid or unconstitutional, that declaration shall not affect the part which remains. References to sections of the Code of Alabama 1975, or to sectors or sub-sectors of the 2002 North American Industrial Classification System (NAICS) shall mean and include references to any corresponding provision of subsequent state law or of a subsequent Industrial Classification System; provided, however, that references in this act to a particular section of the Code of Alabama 1975, or more generally to a business being "state regulated," to the extent those references are intended to impose limitations on the business license under a particular NAICS sector, shall not be deemed amended or superseded by an amendment to the corresponding NAICS sector or the issuance of additional NAICS sectors, sub-sectors or additional designations or of another Industrial Classification System.

Section 3

This act shall become effective immediately following its passage and approval by the Governor, or its otherwise becoming law.

No articles found.
Action Date Chamber Action
March 22, 2018HDelivered to Governor at 10:17 a.m. on March 22, 2018.
March 22, 2018HAssigned Act No. 2018-411.
March 22, 2018HClerk of the House Certification
March 22, 2018SSignature Requested
March 21, 2018HEnrolled
March 21, 2018HPassed Second House
March 21, 2018SMotion to Read a Third Time and Pass adopted Roll Call 992
March 21, 2018SThird Reading Passed
March 1, 2018SRead for the second time and placed on the calendar
February 20, 2018SRead for the first time and referred to the Senate committee on County and Municipal Government
February 20, 2018HMotion to Read a Third Time and Pass adopted Roll Call 382
February 20, 2018HThird Reading Passed
January 25, 2018HRead for the second time and placed on the calendar
January 9, 2018HRead for the first time and referred to the House of Representatives committee on State Government
2018-03-21
Chamber: Senate
Result: Passed
2018-02-20
Chamber: House
Result: Passed