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Swyft Filings is committed to providing accurate, reliable information to help you make informed decisions for your business. That's why our content is written and edited by professional editors, writers, and subject matter experts. Learn more about how Swyft Filings works, our editorial team and standards, what our customers think of us, and more on our trust page.
Unfortunately, the paperwork for your new business has just begun after you formed your limited liability company or C corporation in Alabama. Business owners are responsible for securing a business license and relevant permits at the Federal, state, city, and county levels. Read on for everything you need to know about Alabama business licenses.
Alabama Business License: Key Takeaways
Alabama requires every business to get a business privilege license.
Beyond the business privilege license, Alabama businesses may need various other permits, such as general, federal, sector-specific, state, county, city permits, and professional licenses, depending on their operations.
To secure the necessary licenses, businesses in Alabama should start with a general business license at the county level and then consider federal, state, and local requirements, including permits and professional certifications, while ensuring compliance and renewing licenses as needed.
Ensuring you have the right business licenses and permits is crucial. Let us manage the complexities for you, so you can stay focused on what you do best — running your business.
What Is a Business License?
A business license gives you permission from a government or other entity to perform a specific type of business in a particular municipality. They are required at many levels of government, from Federal agencies to your local county commission and city hall.
Remember that registering your company with the state of Alabama and applying for an EIN with the Federal government is not the same as having a business license. Unfortunately, the paperwork continues.
There are a few types of business licenses that apply at several levels of government.
Types of Business Licenses
General business license: A general business license doesn’t apply to a specific type of business but is required for all companies operating within a particular municipality.
Sector- or commodity-specific business licenses: To sell alcohol, gas, tobacco, or participate in transportation or other businesses, you may be required to have specific permits from tax offices or other authorities.
DBA: A “doing-business-as” (often called a “trade name” or “fictitious name”) allows you to conduct business under a name that’s different from the one you registered. You can drop the “LLC” from the sign in your coffee shop window. In Alabama, a DBA is called a trade name.[1]
Tax registrations: You must register to pay sales tax and use tax. In addition, certain goods or services are taxed differently by different jurisdictions. For example, rentals incur different taxes than simple sales tax.
Permits: To build or modify a property or do a specific type of business in a given area, permits may be required to ensure that you comply with state, federal, and local zoning and other laws.
Jurisdictions To Check
Federal: Your business may be regulated by the Federal government. Relevant agencies may include the Department of Agriculture or the Federal Communications Commission. This only applies to certain types of business.
State: Alabama has state licenses that apply depending on your business type. These are due to the Alabama Department of Revenue or a different agency. License fees often apply. There are some exemptions.
County: County business licenses will depend on the laws of your home county and the counties where you do business. This may require some research.
City: Many cities require general business licenses or permits or special licenses for certain types of businesses.
Professional license or other: You may need to secure a permit from a state board or other certifier to practice your profession.
It’s essential to spend some time researching which business licenses apply to your type of business. Not operating with the correct licenses and permits could result in fines, criminal charges, and involuntary dissolution of your small business.
Get Your Alabama Business License in 7 Steps
Below, we’ll show you how to get every business license you need to operate in good standing, starting with Alabama’s general business license and moving to additional licenses at the federal, state, and local levels, where such licenses are sometimes called occupational tax certificates.
Step 1: Apply for Alabama General Business Licenses
First, no matter the type of business you’re doing, the Code of Alabama requires you to secure a business privilege license issued by the county probate office in the county where your company has its primary physical location.[2]
Though it applies to every business in the state, the business privilege license is not a state license. You can find a mailing address or phone number for every county probate office in Alabama here. License fees and procedures will vary by municipality. This license is separate from any professional license or permit your small business might need.
Step 2: Apply for Federal Licenses for Alabama Businesses
You probably won’t need a business license from a Federal agency, but if your new business is involved in any of the following, you will want to follow up with the relevant government office:[3]
Food imports or transportation (Department of Agriculture).
Manufacturing, importing, or selling alcoholic beverages (Bureau of Alcohol, Tobacco, Firearms, and Explosives).
Fishing, wildlife, or ocean transport (Fish and Wildlife Service, NOAA, Fisheries Service, or Federal Maritime Commission).
Broadcasting on radio or television (Federal Communications Commission).
Alabama may require additional licenses on top of a federal permit or certification. As the business owner, securing these licenses is your responsibility.
Step 3: Search for Alabama Permits and Licenses
Horse tracks, firing ranges, nursing homes, and trucking companies; Alabama has many types of businesses, and state laws apply to many of them. The Alabama Department of Revenue publishes a handbook that you can search for your type of business, along with a quick reference guide to see what state licenses you might need.
For example, healthcare and emergency services providers must pursue the relevant state licenses and professional licenses with the Alabama Department of Public Health.[4] You’ll need a license to sell or distribute motor fuels as well as relevant permits and an alcohol license to sell alcohol beverages and tobacco in the state of Alabama.[5],[6]
Building permits are handled at the city level, so we cover that in the next section.
Step 4: Search for Local County or City Alabama Business Licenses
Each Alabama town, city, and county has different laws and ordinances regarding building permits, sales tax permits, and other additional licenses that businesses need to operate legally. Check the websites of your local city for the most precise information on what’s required.
Here are some examples of the dynamics between city and county permits and licensing:
In the city of Montgomery, you are required to fill out a business license (and a certificate of occupancy if you rent or own a physical location) and may also need to register to pay city sales tax, gas tax, beer tax, lodging tax, whiskey tax, or wine tax.[7] On top of that, you’ll need to check Montgomery County resources for additional licenses you may need—especially contractors and food establishments.[8]
Tuscaloosa County businesses need to secure a business license from the county and collect county sales tax.[9] But if you’re in the town of Vance, for instance, you’ll also want to work with the local government for building permits and comply with relevant zoning ordinances, and city sales tax.[10]
Professional licenses are usually administered at the state level.
Step 5: Search for Alabama Professional Licenses
Practices requiring certification from a state board — such as doctors, social workers, plumbers, lawyers, or pesticide applicators — must secure the proper state license to ply their trade. Usually, a state license will suffice for your business, but you should check with your city government for due diligence.
Step 6: Apply for an Alabama Home-Based Business License
If your new business is based out of your residence, your city or county may require you to register with a separate form or secure a license to operate your small business at home.
The state of Alabama doesn’t require home business licenses as a rule. But daycare centers, for example, need to have a fenced backyard, a working phone, and other specific amenities and need to secure a license with the state of Alabama.[11]
If you run a boutique consulting firm or a type of business that doesn’t affect a neighborhood’s parking, zoning, or noise ordinances, a residential business location shouldn’t be a problem. But check with your city government: in Hoover, Alabama, for example, you will need a home occupation license to locate your business at home.[12]
Step 7: Maintain Your Alabama Business License
Once you’ve identified and secured all the business licenses your business needs in Alabama and your city and county, the work is over — for now. But Just like your driver’s license expires, so do your state licenses. Maintaining compliance and renewing your licenses on time is as important as getting started on the right foot.
At this point, it’s clear that business owners have a shocking amount of paperwork to juggle. A third-party service like Swyft Filings can take the headaches, research, and calendar-keeping off your hands, searching for the business licenses you need and keeping you in good standing with the secretary of state and every other tax office and state department you need to satisfy.
Apply for a Alabama Business License Online
Pulling your hair while staring at confusing government websites trying to get your business licenses and permits in order will not help your small business stand out. Your new business needs you at your best.
If you let Swyft Filings take on the business license paperwork, you’ll win back hours of your day to spend on the important things. We search the Alabama secretary of state and your county and local government agencies to fill out the business license applications you need. You’ve seen how complicated this is; let us handle it.
Focus on Your Business: Dive into your passion while we handle the intricacies of acquiring the necessary local, state, and federal business licenses and permits.
Simplify Your Paperwork: Complete our straightforward questionnaire, and we’ll handle all the required filings for you, accurately and promptly.
Stay Compliant: Avoid the risks and severe repercussions of non-compliance. We’re here to ensure your business remains in good standing.
FAQs
How do I get a business license in Alabama?
Alabama business privilege licenses are issued through county and city governments. Contact your city and county government for information. Many professional licenses, certificates, and tax registrations, like liquor and tobacco, go through the state government, often the revenue department.
Does Alabama require a general business license?
Yes. Alabama businesses must secure a business privilege license from their county or city government.
Can you sell things in Alabama without a license?
You need an Alabama business license to operate your business. This is issued by the county probate court where your business is located.
Do I need a special license for an online business in Alabama?
No, you do not need a specific business license to start an online business in Alabama.
Can I collect sales tax in Alabama without a license?
You need a business license to register to pay Alabama sales tax and use tax.
How much does an Alabama business license cost?
The issuance fee for a business license in Alabama depends on the gross receipts of your business (or expected gross receipts if you’re just getting started).
What’s the penalty for not having a business license in Alabama?
Penalties will depend on the license type and your business's gross receipts.
Bibliography
State of Alabama. “Instructions for Application to Register Trade Mark, Service Mark, or Trade Name in Alabama.” Accessed June 11, 2023.
Alabama Department of Revenue. “Business Privilege License.” Accessed June 11, 2023.
U.S. Small Business Administration. “Apply for licenses and permits.” Accessed June 12, 2023.
Alabama Public Health. “Certificates, Licenses, and Permits.” Accessed June 12, 2023.
Alabama Department of Revenue Business & License Tax Division. “Instructions for Motor Fuel Excise Tax License Application.” Accessed June 12, 2023.
Alabama Alcoholic Beverage Control Board. “Licensing & Compliance.” Accessed June 12, 2023.
City of Montgomery Alabama. “License and Revenue.” Accessed June 12, 2023.
Montgomery County Probate Court. “Business Licenses.” Accessed June 12, 2023.
Tuscaloosa County Alabama. “Business Licenses.” Accessed June 12, 2023.
City of Vance. “Permitting Information.” Accessed June 12, 2023.
Alabama Department of Human Resources. “Day Care Center License Requirements.” Accessed June 12, 2023.
City of Hoover Alabama. “Home Occupation Application.” Accessed June 12, 2023.
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