Business Licenses and Permits

The City of Montgomery, Alabama is surrounded by a 3 mile area outside of the city limits that is under the jurisdiction of the city police.  Businesses in the police jurisdiction have not had to have a city business license or charge the city’s high 10% sales tax rate.  That is about to change.

According to the Montgomery Advertiser, under a proposed resolution the sales tax rate would be raised by 1.75% to 8.25%.  While this tax is not as high as the City of Montgomery, it will help the city pay for police services in the jurisdiction area.  The new tax rate will take effect on January 1st.

Earlier this year the city tried to implement a similar measure which would also require businesses within the police jurisdiction to have a city business license.  Business owners balked at the additional fee as the services provided by the city to the area such as planning and zoning did not warrant the extra revenue for the city.  The business community was able to limit the resolution to the sales tax increase and therefore each business was able to save thousands of dollars in business license fees.  This is a small victory for businesses struggling in a weak economy.

Amy Lee, Business License Research Analyst, Corporation Service Company

Tags: Alabama, business license, sales tax