Birmingham, AL Local Taxes & Fees: Business Tax Classification (2026)

industries under Sec. 3A-1-21, except for taxpayers already under state licensing board oversight per Code of Ala. 1975, Sec. 11-51-193. A business operating more than one line of work at a single location does not automatically owe two licenses: Sec. 3A-1-22 requires a separate license for each additional NAICS sector or subsector only when that line produced more than 35 percent of the taxpayer's gross receipts in the preceding license year, and the council may set that threshold anywhere up to 35 percent. Receipts from a minor sideline that never crosses the threshold stay folded into the license for the taxpayer's primary line of business rather than triggering a stand-alone license.

Where the tax owed depends on facts only the business knows (gross receipts, gross sales, capital invested, number of employees, space occupied), Sec. 3A-1-13(a) requires the taxpayer to file a sworn statement with the director of finance on or before the tax due date so the department can fix the correct classification and tax amount. The license issued off that statement is conditional: Sec. 3A-1-13(b) lets the city council revoke it as inadvertently granted if the sworn statement later proves false or incorrect. If a taxpayer disputes the department's classification and refuses to pay the demanded amount within ten days of a mailed notice, Sec.

3A-1-130 sends the matter to the city council, where the taxpayer may appear in person or by counsel and show cause why the license should not be revoked; the department's classification determination stands as correct and final unless the taxpayer proves otherwise at that hearing.