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

Sec. 8-37 implements Alabama's Municipal Business License Reform Act of 2006 (Act 2006-586), which requires every municipal business license to be tied to a North American Industrial Classification System (NAICS) sector or subsector code. The finance director or a designee places each business in the NAICS classification that best matches its actual activity in the city and bills the license tax on the schedule tied to that code, and can assign additional NAICS digits for reporting where needed. The code lists dozens of NAICS-to-schedule pairings: general contractors fall under Schedule 2a at a flat $300, specialty-trade contractors like plumbers and electricians pay Schedule 2b at $150, and most merchants, retailers, wholesalers and manufacturers fall under Schedule 5a, paying $150 plus three-twentieths of one percent of gross receipts above $50,000 from the preceding year.

Nonprofit membership organizations fall under the related Schedule 5b, which counts membership fees toward that same gross-receipts threshold. Sec. 8-20 requires the city's consent before any license transfers, and Sec. 8-21 makes operating without the required license unlawful, punished up to the maximum fine allowed by state law for each day of operation. A taxpayer disputing its classification or an assessed tax can file a petition for refund within two years of payment under Sec. 8-35, or appeal a final assessment to circuit court within 30 days under Sec. 8-23.