HB305 Alabama 2022 Session

Summary

Primary Sponsor

Paul W. LeeRepresentative

Republican

Session

Regular Session 2022

Title

Municipal business license, rental and leasing services, not required to obtain a business license in each municipality in which its equipment is rented or leased

Summary

HB305 allows rental/delivery businesses with no physical presence in a municipality to use a limited delivery license instead of a per-location business license, with set fees and exemptions.

What This Bill Does

The bill amends Section 11-51-194 to let municipalities require a delivery license for delivering merchandise into the municipality by businesses with no other physical presence there. The license is a fixed rate (up to $100) and may require a delivery vehicle decal (cost not exceeding the municipality's actual cost), plus an issuance fee up to $10. It defines delivery license as covering delivery and limited setup/installation of the taxpayer’s merchandise, with gross receipts from delivery into the municipality capped at $75,000 for the license year (calculated in arrears); common carriers are not eligible, and receipts counted toward the cap if non-common-carrier delivery occurs. There are exemptions for small operators (receipts under $10,000 and no presence) and options to choose between a delivery license or a regular business license for eligible taxpayers; the changes do not create tax nexus, and penalties up to $10 can apply if criteria are not met.

Who It Affects

• Businesses that deliver or rent goods into a municipality but have no other physical presence there; they may be subject to a delivery license (up to $100) with potential decals and an arrears-based calculation, or may qualify for exemption if they fall under specific revenue thresholds.
• Municipalities and delivery businesses in Alabama; municipalities gain authority to require delivery licenses, set associated fees, decals, and annual receipt caps, while common carriers are excluded from obtaining such licenses.

Key Provisions

• Amends Section 11-51-194 to allow a delivery license for businesses with no other physical presence delivering or installing merchandise in the municipality; license fee up to $100 and possible vehicle decals with costs limited to actual decal cost.
• Municipalities may charge an issuance fee up to $10 for a delivery license; delivery licenses are fixed-rate and tied to the limited privilege of delivering merchandise within the municipality, with a gross receipts cap of $75,000 per license year.
• Delivery licenses are calculated in arrears based on the prior year’s gross receipts; common carriers cannot obtain a delivery license, and their deliveries may count toward the cap if the taxpayer also delivers via a non-common-carrier vehicle.
• Exemptions and options: if receipts within the municipality are under $10,000 and there is no other physical presence, no delivery or regular business license is required; otherwise, eligible taxpayers may choose between a delivery license or a regular business license.
• Nexus and penalties: purchasing a delivery license or exemption does not establish nexus for tax purposes; if criteria are not met during the license year, the taxpayer must obtain the appropriate license and may face a penalty up to $10.
• Other provisions: the $75,000 cap can be increased every five years or up to $150,000 by municipal ordinance; the act becomes effective immediately after the governor’s approval.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Business Licenses