Tuscaloosa, AL Local Taxes & Fees: Business Tax Classification (2026)
Key Facts
- Classification basis
- 6-digit NAICS code per Sec. 7-18(a)
- NAICS edition
- 2002 system, updated per Ala. Act 2006-586
- Default fallback
- Classification 999000, Unclassified
- Multi-line threshold
- Separate license above 25% of gross receipts
- Late penalty
- 15% at due date, 30% after 30 days
Summary
Every business in Tuscaloosa is slotted into a six-digit NAICS classification on the Sec. 7-18 license schedule, which fixes the payment schedule used to calculate its annual business license fee. Unmatched activities get the nearest three-digit NAICS family, and if nothing reasonably fits, the code defaults them to classification 999000, unclassified.
(a)Each person required to obtain a business license shall be classified according to the following schedule, and shall pay a business license fee in accordance with the payment schedule (PS) indicated for that NAICS classification...(b)Each business activity shall be assigned a six-digit NAICS number from subsection (a). The classification schedule in subsection (a) is based on the 2002 North American Industrial Classification System ("NAICS")...(c)In the event a person who is required to purchase a license is engaged in an activity with a NAICS number that does not correspond to all six (6) digits delineated in subsection (a)...(2)...the person shall then be assigned to the NAICS classification in subsection (a) with the nearest last three (3) digits, provided the nearest NAICS number adequately describes the licensed activity.(3)In the event the person cannot be classified using this procedure, then the person shall be assigned the license classification 999000, unclassified.
Official source re-checked September 7, 2026: no newer edition of the code had been published (publisher’s edition: Code of Ordinances: Supplement 102).
Full Breakdown
Sec. 7-18(a) requires "each person required to obtain a business license" to be classified according to a schedule matching six-digit NAICS codes to a lettered or numbered "payment schedule" (PS) that sets the fee formula, ranging from flat fees (for example, $1,000 for fortunetellers/clairvoyants under NAICS 812991) to percentage-of-gross-receipts schedules (3% for electric and natural gas utilities under 221122/221210) to tiered per-thousand-dollar rates for manufacturers under Schedule Y. Sec. 7-18(b) ties the whole schedule to the 2002 North American Industrial Classification System, with the revenue department authorized to apply later NAICS editions under Alabama Act No.
2006-586. When a taxpayer's activity does not map cleanly to one of the six-digit codes listed in subsection (a), Sec. " Sec. 7-30 separately requires a taxpayer running more than one line of business under different NAICS classifications to buy a separate license for any line generating over 25 percent of the prior year's gross receipts. Classification and fee disputes route through the revenue director, whose interpretation is "final and binding" under Sec. 7-1(b) absent a successful appeal.
Violations & Fines
Operating under a classification that understates the applicable payment schedule exposes the taxpayer to the same 15 percent late-payment penalty (rising to 30 percent after 30 days) that applies to unpaid license taxes generally under Sec. 7-27(c), plus interest at the federal underpayment rate, and can trigger suspension of license renewal under Sec. 7-2(f).
Frequently Asked Questions
How does Tuscaloosa decide which license fee schedule applies to my business?
What if my business doesn't match any NAICS code on the list?
Do I need two licenses if I run two different kinds of business from one location?
Sources & Official References
Other rules in Tuscaloosa
Compare Tuscaloosa to another location·View the Alabama local taxes & fees overview
See something wrong?
Help us keep this page accurate. If you notice an error or outdated information, let us know.