What should I know about business licenses in Alabama?
It's harder than you might expect to acquire a business license in Alabama given the overlapping nature of some of their business licenses. Sales tax registrations, in particular, have created a persistent problem for some business owners.
At issue with sales tax registrations is the fact that many counties and local governments in Alabama rely on Revenue Discovery Systems (RDS).
Along with Louisiana, Alabama uses this 3rd party service to collect and maintain all sales taxes for the state. There's often no way to know if a sales tax license is required only at the state level, or if it's required at the county and local level as well.
How many business licenses do you need?
The number of business licenses you need in Alabama depends on a number of unique factors.
These factors include...
- Within which city/county will you operate your business?
- What business activities will you be conducting?
- How heavily regulated is your industry? Etc.
To put it in perspective, we ran the following queries through our own business license research tool. Here are some authentic results:
This may include a county-specific Jefferson food establishment permit. That permit likely requires at least an Application for Food and Lodging Plan Review.
This may include a local Mobile alcohol license. That license likely requires at least an Alabama Alcoholic Beverage Application.
This may include a state-specific Alabama state motor carrier permit. That permit likely requires a business owner to consult numerous documents and forms. These forms may include an Annual Report of Motor Carrier Operations (Short Form AB), an Appendix C Financial Statement, an Appendix D Description of Safety Program, an Application for Motor Carrier Certificate - Property, and Application for Motor Carrier Certificate for Household Goods, an Application for Motor Carrier Certificate or Permit, and a Vehicle Registration Numbers for Compensated Intrastate only Motor Carriers.
See where you might owe sales tax
Need to know where and when you owe sales tax? Get a free Economic Sales Tax Risk Assessment for your nexus analysis today.
Common Alabama business license questions
Learn a few of the most common questions for what you need to know about Alabama business licenses, taxes, and more.
Are you starting a business in Alabama? You’re probably wondering if Alabama requires a business license. The answer is that it depends on your business or industry. Not all businesses require a state or county business privilege license in Alabama.
Note that some industries, like contractors and physicians, may require additional regulatory licenses. Check with your local jurisdiction to see if a license is required.
The cost of a business license in Alabama varies. The fee is often based around the population of the municipality where your business is located. Other considerations include the amount of capital invested or the gross amount of contracts or orders accepted.
Each license has a $1.00 issuance fee. Additional fees such as mailing or transaction fees may apply in some counties.
Now that you’re ready to obtain your business licenses and permits in Alabama, you need to know how to get them. State and county business privilege licenses are issued at local county probate offices in Alabama.
If a city business license is required then you will need to visit the city clerk’s office. Avalara can help you determine and apply for your Alabama business licenses.