A massive tax increase on contractors located and doing business in the City of Birmingham, Alabama, has been avoided, but recent amendments that go into effect January 1, 2016, still present significant increases and changes to the old business license tax.Historically, general contractors paid a flat fee of $200 per year regardless of the volume of work or the size of the company. In April of this year, the City passed a new ordinance (No. 15-59) that made many sweeping changes to the old business license tax ordinance. Among the more notable changes were to tax the contractor a much larger flat fee, plus additional amounts based on the contractor's annual gross receipts for work performed both inside and outside the city limits. There were no listed deductions and no caps on the amount of the tax. For some of the largest general contractors, it was estimated that the annual increase could be more than one-half million dollars.After much discussion and negotiation with the City, a compromise ordinance (No. 15-145) was reached and passed into law in October.
It replaces the ordinance passed in April and becomes effective January 1, 2016. A copy of the new ordinance can be downloaded, and the highlights are as follows:. An increased flat fee ranging from $250 to $1,500, depending on the contractor's gross receipts for services performed inside the city limits. A new tax equal to one tenth of one percent of annual gross receipts in excess of $2 million. However, the total business license tax is capped at $25,000. The gross receipts amount is based only upon 'work done in the City limits.' However, the definition of gross receipts includes 'any work performed in the City of Birmingham for projects outside of the City.'
Therefore, the ordinance intends to tax gross receipts attributable to work performed in the Birmingham office for projects located outside of Birmingham ( e.g., drafting, home office project management, etc.). The ordinance does not provide guidance about how this attribution of work should be calculated. The amount of taxable gross receipts may be reduced by the amount of gross receipts taxable by taxing authorities outside of the City and also by the amount of payments made to subcontractors. Upon request, contractors will be required to furnish the City with the names and contract amounts for all subcontractors performing work on a project in the City.There are still ambiguities and unanswered questions about how the new ordinance will be applied and enforced. Contractors located and/or doing business in the City of Birmingham should take immediate action to ensure compliance with the new Birmingham business license tax that becomes effective January 1, 2016.If you have any questions regarding the recent amendments, please contact Kevin Garrison, the author of this alert, or any member of our Construction group.
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› ‹. Back To Main Menu. Subscriptions ›. Back To Main Menu. At a meeting on April 21, 2015, the Birmingham City Council voted to reduce business license fees for certain professions, such as physicians, accountants, attorneys, engineers, and various others.
The City Council Agenda, as well as a video recording of the meeting is available. Bebop guitar pdf. Birmingham's business license fees are assessed annually on businesses, based on gross receipts from services rendered in the City.
At the meeting, the City Council discussed the recent history of business license fees in Birmingham, actions by previous City Councils and fee increases during Mayor Larry Langford's administration, as well as the reasons for the current reduction. According to Finance Director Tom Barnett, as quoted in an by Joseph D. Bryant on Al.com, the city has collected about $243 Million from increased business license fees since 2008.The reduction will be effective in 2016. According to Mr.
Bryant's referenced above, the total tax break next year amounts to $6 Million. Also discussed at the City Council meeting were several ideas regarding further possible changes to business license fees, such as relief for businesses in Birmingham that have paid business license fees and that have stayed in Birmingham.Attracting business to the City and job creation were the primary reasons offered by the City Council for the reduction. Relative to surrounding areas, this change reduces expenses for professionals practicing in Birmingham. If the City Council's goals are realized and businesses move in to the city from surrounding areas, the impact ultimately could be felt in lease rates for commercial real estate.
City Of Birmingham Al Business License Form
All businesses operating within the City of Alpharetta must possess a current Occupational Tax Certificate (also known as a business license) upon the first day of business. Businesses found to be operating within the corporate limits of the City of Alpharetta without a current Occupational Tax Certificate shall be subject to fines and penalties as allowed by law.For information on obtaining a City of Alpharetta Occupational Tax Certificate, please read the information below for either Home Occupation Application or for Business License Application, based upon which category best describes your business situation. Information on annual occupational tax rates is provided on the application forms. HOME OCCUPATIONSTo protect and preserve the character of residential neighborhoods, the City of Alpharetta has established regulations governing the operation of home-based businesses. A list of these regulations can be found on the first page of the Home Occupation Application. If for any reason, you or your business cannot operate in compliance with all of these guidelines, the business cannot be operated from your home.It is important to note that the covenants of some neighborhoods restrict or regulate the operation of a business. OTHER BUSINESSESIf your business is located within a newly constructed commercial building and you are the first tenant in this space, please include a copy of your Certificate of Occupancy with your completed Application for Occupational Tax Certificate.If you are not the first tenant in the space, you must schedule and successfully complete a fire and safety inspection prior to submitting your Application for Occupational Tax Certificate.
Please contact the Fire Marshall by calling 678-297-6272 to schedule your fire inspection.
City Of Birmingham Business License Code
Do I need a business license to operate in the City of Birmingham?Any individual or business wishing to engage in business within the city limits of Birmingham, Alabama will need to complete the. Business licenses are good from the date of issuance until the end of the calendar year and then must be renewed annually, with the exception of temporary event or transient businesses. Businesses will need to renew by February 15th, except alcoholic beverage licenses (January 15th) and insurance companies (March 15th).
Business Licenses applied for after the first of the year will be prorated (except for alcoholic beverage licenses) quarterly depending on the date of the license being issued. The (ATC) must also be completed before or at the same time the business license application is submitted. For “controlled” licenses (alcoholic beverage, dance, pool table, and home based businesses) there are additional requirements and must be applied for in person by appointment with the Tax and License Administration Division.
Where do I apply for a Birmingham business license?You can pick up or request by mail an application:City of BirminghamTax and License Administration DivisionFirst Floor, City Hall (TL-100)710 North 20th StreetBirmingham, AL 35203Hours are Mon-Fri, 8 a.m. To 4:45 p.m.For other questions regarding licensing, contact the Tax and License Division by phone (205) 254-2198 or fax (205) 254-2963. What is the cost associated with a business license in Birmingham?Fees are based on the annual gross receipts of the business or in case of a new business, annualized after the first 90 days of the business with a sworn affidavit. After the first year, the license will be calculated according to the gross receipts for the preceding year. In addition check the following for the appropriate tax code for your business.