Purchase of business license; classification of taxpayers; vehicle decals; determination of gross receipts; construction with other provisions.

(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 oversight, be classified into one or more of the following 2002 North American Industrial Classification System ("NAICS") sectors and applicable sub-sectors, industry groups, industries, and U.S. industries thereunder:

SECTOR NAICS TITLE SUGGESTED BUSINESS LICENSE CODE GROUPING BY SAMPLE TOPIC OR CATEGORY BASIS FOR LICENSE CALCULATION 111 Crop Production Agriculture, farming, nursery, fruit, growers Gross Receipts and/or Flat Rate 112 Animal Production Animal, dairy, cattle, ranching, sheep, chicken Gross Receipts and/or Flat Rate 113 Forestry and Logging Forestry, logging, timber Gross Receipts and/or Flat Rate 114 Fishing, Hunting, and Trapping Fishing, hunting, supplies and equipment Gross Receipts and/or Flat Rate 115 Support for Agriculture and Forestry Cotton ginning, farm management, post-harvest activities Gross Receipts and/or Flat Rate 211 Oil and Gas Extraction Oil, gas, extraction, natural gas, crude State Regulated [See, e.g. Section 40-20-2(c)] 212 Mining (except Oil and Gas) Mining activities Gross Receipts and/or Flat Rate Where not State Regulated 213 Support for Mining Activities Support activities for oil and gas wells Gross Receipts and/or Flat Rate Where not State Regulated 221 Utilities Utilities, gas, electric, water, sewage, steam State Regulated (See Section 11-51-129) 236 Building, Developing and General Contracting Construction, building, general, residential, subdivisions Gross Receipts and/or Flat Rate 237 Heavy Construction Construction, heavy construction, highway, bridge, street Gross Receipts and/or Flat Rate 238 Special Trade Contractors Construction, all special trades Gross Receipts and/or Flat Rate 311 Food Manufacturing Food manufacturing, animal, grain, fruit, dairy, meat, seafood Gross Receipts, Flat Rate, or Value of Goods Produced 312 Beverage and Tobacco Products Manufacturing Beverage manufacturing, soft drink, bottled water, breweries, ice Gross Receipts and/or Flat Rate Where Not State Regulated, or Value of Goods Produced 313 Textile Mills Mills, textile, fabric, yarn, carpet, canvas, rope, twine Gross Receipts, Flat Rate, or Value of Goods Produced 314 Textile Product Mills Other mill operations not covered in 313 Gross Receipts, Flat Rate, or Value of Goods Produced 315 Apparel Manufacturing Apparel manufacturing, hosiery, men, women, children, lingerie Gross Receipts, Flat Rate, or Value of Goods Produced 316 Leather and Allied Product Manufacturing Leather manufacturing, shoes, luggage, handbag, related products Gross Receipts, Flat Rate, or Value of Goods Produced 321 Wood Products Manufacturing Wood products, sawmills, wood, preservation, veneer, trusses, millwork Gross Receipts, Flat Rate, or Value of Goods Produced 322 Paper Manufacturing Paper manufacturing, pulp, paper, converted products Gross Receipts, Flat Rate, or Value of Goods Produced 323 Printing and Related Support Activities Printing, lithographic, screen, quick, digital, books, handbills Gross Receipts, Flat Rate, or Value of Goods Produced 324 Petroleum and Coal Products Manufacturing Petroleum manufacturing, asphalt, roofing, paving, grease Gross Receipts, Flat Rate, or Value of Goods Produced 325 Chemical Manufacturing Chemical manufacturing, wood, fertilizer, pesticide, paint, soap, other Gross Receipts, Flat Rate, or Value of Goods Produced 326 Plastics and Rubber Product Manufacturing Plastic and tire manufacture, pipe, hoses, belts, bottle, sheet, foam Gross Receipts, Flat Rate, or Value of Goods Produced 327 Nonmetallic Mineral Product Manufacturing Nonmetallic manufacturing, clay, glass, cement, lime, gypsum, other Gross Receipts, Flat Rate, or Value of Goods Produced 331 Primary Metal Manufacturing Metal manufacturing, iron, steel, aluminum, copper, other nonferrous Gross Receipts, Flat Rate, or Value of Goods Produced 332 Fabricated Metal Product Manufacturing Fabricated metal, cutlery, structural, ornamental, wire, machine shops Gross Receipts, Flat Rate, or Value of Goods Produced 333 Machinery Manufacturing Machinery manufacturing, farm, HVAC, office, industrial, engine, other Gross Receipts, Flat Rate, or Value of Goods Produced 334 Computer and Electronic Product Manufacturing Computers and electronics, peripherals, audio, video, circuit boards Gross Receipts, Flat Rate, or Value of Goods Produced 335 Electrical Equipment Appliance Component Manufacturing Electrical equipment, lighting, small appliance, battery, other Gross Receipts, Flat Rate, or Value of Goods Produced 336 Transportation Equipment Manufacturing Transportation manufacturing, auto, truck, trailer, motor home, ship, boat, motorcycle Gross Receipts, Flat Rate, or Value of Goods Produced 337 Furniture and Related Products Manufacturing Furniture manufacturing, cabinets, office furniture, beds, kitchen Gross Receipts, Flat Rate, or Value of Goods Produced 339 Misc. Manufacturing Misc. manufacturing, medical, dental, jewelry, sporting goods, toys, signs, all other Gross Receipts, Flat Rate, or Value of Goods Produced 421 Wholesale Trade, Durable Goods Wholesale trade-durable, motor vehicle, home furniture, machinery, equipment Gross Receipts and/or Flat Rate 422 Wholesale Trade, Non-Durable Goods Wholesale trade-nondurable, paper, apparel, grocery, dairy, farm, beverages Gross Receipts and/or Flat Rate 441 Motor Vehicle and Parts Dealer Motor vehicles, automobiles, motorcycles, boats, parts, accessories Gross Receipts and/or Flat Rate 442 Furniture and Home Furnishing Stores Furniture stores, home, floor, furnishings, window, special products Gross Receipts and/or Flat Rate 443 Electronics and Appliance Stores Electronic and appliance store, household, radio, television, computer Gross Receipts and/or Flat Rate 444 Building Material and Gardening Equipment Dealers Building materials, hardware, paint, home center, wallpaper Gross Receipts and/or Flat Rate 445 Food and Beverage Stores Food and beverage stores, grocery, convenience, markets, liquor, beer Gross Receipts and/or Flat Rate Where Not State Regulated 446 Health and Personal Care Stores Health and personal care stores, drug, cosmetic, optical, health food Gross Receipts and/or Flat Rate 447 Gasoline Stations Gasoline stations, filling stations Gross Receipts and/or Flat Rate Based on No. of Dispensers 448 Clothing and Accessories Stores Clothing stores, men's, women's, children, infants, shoe, jewelry, luggage Gross Receipts and/or Flat Rate 451 Sporting Goods, Hobby, Book, Music Sporting goods stores, hobby, toy, fish, gun, music, books Gross Receipts and/or Flat Rate 452 General Merchandise General merchandise stores, department, warehouse clubs, superstores Gross Receipts and/or Flat Rate 453 Miscellaneous Store Retailers Misc. store retailers, florist, gift, novelty, used, pets, art, tobacco Gross Receipts and/or Flat Rate 454 Nonstore Retailers Nonstore retailers, electronic shopping, mail order, vending, direct selling Gross Receipts and/or Flat Rate 481 Air Transportation Air transportation, airline tickets, shipping, freight, charters Gross Receipts and/or Flat Rate Where Not State Regulated 482 Rail Transportation Rail transportation, ticket offices, short line, freight State Regulated and/or Flat Rate 483 Water Transportation Water transportation, coastal, freight, inland, passenger, forwarders Gross Receipts and/or Flat Rate Where Not State Regulated 484 Truck Transportation Truck transportation, terminal, local, long-distance, freight Gross Receipts and/or Flat Rate Where Not State Regulated 485 Transit and Ground Passenger Transportation Ground transportation, bus, taxi, limousine, charter, buggy Gross Receipts and/or Flat Rate 487 Scenic and Sightseeing Transportation Scenic and sightseeing, land, water, air, special Gross Receipts and/or Flat Rate 492 Couriers and Messengers Couriers and messengers, services, delivery Gross Receipts and/or Flat Rate 493 Warehousing and Storage Warehouse and storage, household, refrigerated, distribution, special Gross Receipts, Flat Rate or Square Feet 511 Publishing Industries (except Internet) Publishing, newspapers, periodicals, databases, software Gross Receipts and/or Flat Rate 512 Motion Picture and Sound Recording Industry Motion pictures and videos, theatres, recording, studios, drive-in Gross Receipts and/or Flat Rate 515 Broadcasting (except Internet) Broadcasting and radio, TV Gross Receipts and/or Flat Rate Where Not State Regulated 516 Internet Publishing and Broadcasting Publications or broadcasting for Internet only Gross Receipts and/or Flat Rate Where Not State Regulated 517 Telecommunications Providing, access to facilities for voice, data, text, sound and/or video Gross Receipts and/or Flat Rate Where Not State Regulated 519 Information Services and Data Processing Providing, storing, processing, and providing access to information Gross Receipts and/or Flat Rate 522 Credit Intermediation and Related Activities Credit companies and activities related to credit and mediation of credit Gross Receipts and/or Flat Rate Where Not State Regulated. Banks 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, respectively. 523 Securities, Commodity, Other Financial Products Insurance companies, life, health, accident, and all other Gross Receipts and/or Flat Rate Where Not State Regulated 524 Insurance Carriers and Related Activities Insurance companies, fire, marine, and fire casualty State Regulated 525 Funds, Trusts, Other Financial Vehicles Funds, plans, and/or programs organized to pool securities or other assets for others, other than the Alabama Municipal Funding Corporation Gross Receipts and/or Flat Rate Where Not State Regulated 531 Real Estate Real estate, offices, agents, brokers, developers Gross Receipts and/or Flat Rate Where Not State Regulated 532 Rental and Leasing Services Rental and leasing, auto, truck, equipment, tangible property Gross Receipts and/or Flat Rate 541 Professions, Scientific, Technical Services Attorney, doctor, dentist, architect, engineer, vet, other professions Gross Receipts for outdoor/billboard advertising; otherwise flat rate and/or gross receipts 551 Management of Companies and Enterprises Management of companies and enterprises, offices, regional, corporate Gross Receipts and/or Flat Rate Where Not State Regulated. For purposes of this chapter only, bank holding companies are state regulated and are subject only to the license tax amount authorized under Section 11-51-130(a)(12). 561 Administrative and Support Services Administrative and support services, office, employment, answering, travel Gross Receipts and/or Flat Rate Where Not State Regulated 562 Waste Management and Remediation Services Waste management, services, landfill, septic tank, companies, trucks Gross Receipts and/or Flat Rate Where Not State Regulated 611 Educational Services Educational services, business, secretarial, computer, technical, sports, other Gross Receipts and/or Flat Rate Where Not State Regulated 621 Ambulatory Health Care Services Health care services, mental, outpatient, HMO, diagnostic, blood, dialysis, other Gross Receipts and/or Flat Rate 622 Hospitals Hospitals, surgical, substance abuse, psychiatric, specialty Gross Receipts and/or Flat Rate Based on No. of Patients or Beds 623 Nursing and Residential Care Facilities Nursing and residential care facilities, elderly, day care, assisted living Gross Receipts and/or Flat Rate 624 Social Assistance Social assistance, child, shelters, vocational, emergency Gross Receipts and/or Flat Rate Where Not State Regulated 711 Performing Arts, Spectator Sports Arts and sports, dance, musical, spectator, teams, tracks, promoters, agents Gross Receipts and/or Flat Rate 712 Museums, Historical Sites and Similar Museums, historical sites, zoos, botanical gardens, parks, special sites Gross Receipts and/or Flat Rate 713 Amusement, Gambling and Related Amusement and recreation, gambling, theme, arcade, golf, marinas, fitness Gross Receipts and/or Flat Rate Where Not State Regulated 721 Accommodations Accommodations, hotel, travel, bed-and-breakfast, rooming houses, motel Gross Receipts and/or Flat Rate 722 Food Services and Drinking Places Food service and drinking places, restaurant, caterers, bar, lounge, club Gross Receipts and/or Flat Rate 811 Repair and Maintenance Repair and maintenance, automotive, electronic, commercial, residential, other Gross Receipts and/or Flat Rate 812 Personal and Laundry Services Personal care services, hair, nail, skin, barber, beauty, diet, tanning, funerals Gross Receipts and/or Flat Rate 910 Category for: Vending machines, pool tables, amusement devices, etc. Gross Receipts and/or Flat Rate 920 Category for employees: Employees: as in number of employees used in license calculation Gross Receipts, Flat Rate or Number of Employees 930 Category for square feet: Square feet used for warehousing, large buildings, and other types Gross Receipts, Flat Rate or Number of Square Feet 923 Administration of Human Resource Programs General Category Gross Receipts and/or Flat Rate Where Applicable 924 Administration of Environmental Quality Programs General Category Gross Receipts and/or Flat Rate Where Applicable 925 Administration of Housing, Urban, Comm. General Category Gross Receipts and/or Flat Rate Where Applicable 926 Administration of Economic Programs General Category Gross Receipts and/or Flat Rate Where Applicable 927 Space Research and Technology General Category Gross Receipts and/or Flat Rate Where Applicable 928 National Security and International Affairs General Category Gross Receipts and/or Flat Rate Where Applicable 999 Unclassified Establishments General Category Gross Receipts or Flat Rate, Where Not State Regulated

(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 Act 2006-586.

(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 11-51-90.1. 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.

(Act 2006-586, p. 1548, §3; Act 2018-411, §1.)