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

Every business operating inside Montgomery, Alabama city limits must hold an annual business license, and the tax owed depends entirely on how the city classifies the business. City Code § 16-104 adopts NAICS "as the master guide in defining and describing occupations and trades" and requires the finance director to review and update the license ordinance for council approval every four years, with the last cycle set to run from January 1, 2009. , 111-115 Agriculture, 236-238 Construction, 518-519 Computing/Data Processing) and assigns each one a single capital-letter "pay schedule" (A through roughly AM).

65 per $1,000 above $10 million. To compute the actual bill, § 16-102 directs the taxpayer to determine gross receipts, find the license schedule letter from § 16-105, and compute the fee from the matching schedule in § 16-106, using the prior calendar year's gross receipts (or fiscal year receipts if the taxpayer elects that method in writing, an irrevocable election). New businesses use § 16-103's short-year method: gross-receipts filers estimate receipts from their start date through year end, then true up the following year if actual receipts differ from the estimate.

Every license, regardless of schedule, carries a $100 minimum annual tax and a $14 issuance fee under § 16-74, and is due January 1 each year, becoming delinquent January 31.