Frequently Asked Questions (FAQ)

  1. Why do I need to purchase a business license?
  2. What is the cost of an initial business license?
  3. What type of license do I need to open a business?
  4. What are the steps in getting a license?
  5. How long does it take to acquire a business license?
  6. When does the license expire?
  7. Do I need to be tested for a contractor's license?
  8. On what is the contractor's license fee based?
  9. What type of license is needed to clean homes or apartments?
  10. What do I need to open a food service of any type?
  11. What is required for a retail automobile license or wholesaler automobile license?
  12. I am selling products from my home (jewelry, baskets, etc.). What type of license would I need?
  13. Is a license required for lawn work (cutting grass, raking, etc.)?
  14. Is a license required for washing cars?
  15. What kinds of taxes does the Revenue Department administer?
  16. What is Sales Tax?
  17. What are wholesale sales?
  18. When is Sales tax due?
  19. If the 20th falls on a weekend or holiday, when is the due date?
  20. Is the seller allowed a discount for timely filing and paying the sales tax that is due?
  21. Is there a penalty imposed for not filing timely and not paying the sales tax that is due?
  22. What is Rental Tangible Personal Property tax?
  23. What is Use Tax?
  24. Do Tuscaloosa, Northport, and Tuscaloosa County offer online filing for taxes and other processes?
  25. I am selling merchandise from various locations and am constantly moving from location to location (Transient Merchant). What type of license do I need?
  26. How do I know if I need a residential building permit?
  27. How do I know if I need a commercial building permit?
  28. Do I need to file for an Alabama Tax ID Number?

1)Why do I need to purchase a business license?

(Tuscaloosa County) Code of Alabama 1975, Title 40, Chapter 12 states, "Every person, firm, company, corporation or association, receiver or trustee, but not a governmental subdivision, engaged in any business, vocation, occupation, calling, or profession herein enumerated or who shall exercise any privilege hereinafter described for which a license or privilege tax is required shall first procure a state license, and a county license when so required, and shall pay for the same or shall pay for the exercise of such privilege the amounts hereinafter provided, and comply with all other provisions of this title."

(City of Tuscaloosa and Northport) Each person located or engaged in any business, vocation, occupation or profession in the City of Tuscaloosa or the City of Northport or their Police Jurisdiction shall take out and pay a City business license. A license is required if you are doing business in the City, but not located in the City. Depending on the type of business you have, a license for both Cities may be required. The Police Jurisdiction extends 3 miles around the corporate limits of Tuscaloosa and Northport.

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2)What is the cost of an initial business license?

(Tuscaloosa County) State and county business licenses do not have any "one time fees". The cost of the license is determined by the type of business and location.

(City of Tuscaloosa and Northport) The cost of the initial license is based on your estimated gross receipts from the time you open until December 31st plus the base license fee. For a business located in the city of Northport there is a one time $25 inspection fee.

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3) What type of license do I need to open a business?

The type of license issued will be based on the type of business you will be operating. We can determine what type of license is necessary by asking you questions concerning your business. In several cases, more than one type of business license is required.

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4) What are the steps in getting a license?

(Tuscaloosa County) A direct application must be turned in to the office of the Tuscaloosa County License Commissioner. Most can be issued immediately at the time of application.
A few exceptions include:

  1. Auto dealers-must present proof of a current Motor Vehicle Dealer Regulatory License (Act 539) issued by the Alabama Department of Revenue;
  2. Restaurants, cafes, public-eating houses, etc.- must present a certificate from the County Health Department.

Note: Other prerequisites may be required in some instances.

(City of Tuscaloosa and Northport) The first step is determining where your physical location will be. If this location is inside the city limits or its police jurisdiction, then you will be required to get your business location approved through a Code Compliance.

Once this Code Compliance is complete, then a business license will be issued based on your estimated gross receipts for the remainder of the calendar year. When the license is renewed at the end of the partial year, an adjustment to the amount originally paid will be made on the next year's license amount.

A license is required if you are doing business in the City, but not located in the City. You will also need to check with other governmental agencies to see whether or not a license is needed. The following is a list of the local agencies:

License and Business Tax Information:

City of Tuscaloosa, Revenue Department
Business License and Tax
2201 University Boulevard
Tuscaloosa, AL 35401
(205) 248-5200

Tuscaloosa County License Department
714 Greensboro Avenue
Tuscaloosa, AL 35401
(205) 349-3870 ext. 235

Tuscaloosa County Special Tax Board
714 Greensboro Avenue
Tuscaloosa, AL 35401
(205) 349-3870 ext. 225

Northport Revenue Division
3500 McFarland Boulevard
Northport, AL 35476
(205) 339-7000

State Department of Revenue
Business Tax
518 19th Avenue
Tuscaloosa, AL 35401
(205) 759-2571

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5) How long does it take to acquire a business license?

(Tuscaloosa County) Most licenses can be issued at the time of application. However, some licenses will take longer. (See list in question #4)

(City of Tuscaloosa and Northport) If the business is physically located in Northport or Tuscaloosa, then the various city departments must approve your location before you can open for business. If you are located outside the City, then the license can be issued that day.

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6) When does the license expire?

(Tuscaloosa County) State and County licenses expire September 30th, and must be renewed in October of each year. If not paid by November 1st, a penalty will be assessed.

(City of Tuscaloosa and Northport) All City licenses expire December 31st and you have until February 158th to renew without a penalty.

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7) Do I need to be tested for a contractor's license?

The State and County require no testing. However, you may need to contact the State Contractors Board. (334) 272-5030

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8) On what is the contractor's license fee based?

(Tuscaloosa County) The fee is based on the gross amount of all orders or contracts accepted in the State of Alabama between October 1st and September 30th of each year.

(City of Tuscaloosa and Northport) It is based on the previous year's gross receipts less payment made to licensed sub-contractors. First and second year businesses must estimate and/or annualize their gross receipts through December 31st of that year.

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9) What type of license is needed to clean homes or apartments?

Tuscaloosa County) No county license is required for cleaning service unless a product is sold. (ex: Cleaning Solution). There is no license needed for cleaning carpet, but a license is needed for cleaning rugs, pillow, etc. There is also a license needed for a Laundry or Dry Cleaners.

(City of Tuscaloosa and Northport) Both Cities require a business license.

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10) What do I need to open a food service of any type?

(Tuscaloosa County) Contact the Health Department first at (205) 554-4540. After a Health Department permit is issued, then State and County Licenses can be issued.

(City of Tuscaloosa and Northport) You must be approved by the various departments and have a Health Department permit.

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11) What is required for a retail automobile license or wholesaler automotive license?

(Tuscaloosa County)You must apply for a Regulatory License with the State of Alabama. A booklet obtained from the State Department of Revenue must be completed and mailed to Montgomery. After approval, the State will issue a Regulatory License. You must bring in your Regulatory License to purchase a business license for the State and County.

(City of Tuscaloosa and Northport) You must complete their requirements for a business license.

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12) I am selling products from my home (jewelry, baskets, etc.). What type of license would I need?

(Tuscaloosa County) You would purchase a Transient Vendor license because you do not have a storefront.

(City of Tuscaloosa and Northport) Both Cities require a license but the type of license required varies.

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13) Is a license required for lawn work (cutting grass, raking, etc.)?

(Tuscaloosa County) No license is required by State or County. However, if you are sodding, planting bushes, trees, or moving dirt, you will need a contractor's license.

(City of Tuscaloosa and Northport) Both cities require a business license if you are located, or if you are performing services in the City or Police Jurisdiction.

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14) Is a license required for washing cars?

(Tuscaloosa County) No license is required by State and County when "Hand Detailing". A license is required for coin operated car washes.

(City of Tuscaloosa and Northport) Both Cities require a license.

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15) What kinds of taxes does the Revenue Department administer?

(City of Tuscaloosa and Northport) The Revenue Department administers, collects and enforces several types of taxes: The following is a list of the taxes administered, collected and enforced by the City of Tuscaloosa and the City of Northport Revenue Departments:

  • Sales Tax
  • Sellers Use Tax
  • Consumers Use Tax
  • Rental Tangible Personal Property Tax
  • Liquor Tax
  • Lodgings Tax
  • Tobacco Tax
  • Residential Rental Tax
  • Business License
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16) What is Sales Tax?

Sales Tax is a privilege tax imposed on the retail sale of tangible personal property. The tax is collected by the seller from their customers and remitted directly to the City of Tuscaloosa or the City of Northport. All sales of tangible personal property are retail sales except those defined as wholesale sales.

The total sales tax percentage for Tuscaloosa County is 8 percent. All businesses must collect and pay back 8% in taxes.

Starting July 1, 2005, the total sales tax rate for Tuscaloosa County will go up to 9 percent.

The breakdown is as follows:

For sales made within the City Limits of Tuscaloosa or Northport:
City - 2%
County - 2%
State - 4%


For sales made outside the City Limits of Tuscaloosa or Northport, but within their police jurisdictions: (1/2 of above rate)
City - 1%
County - 3%
State - 4%

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17) What are wholesale sales?

Wholesale sales are sales of tangible personal property to licensed merchants, jobbers, dealers, or other wholesalers for resale. It does not include sales to users or consumers that are not for resale. The seller must maintain the sales tax number or exemption number for these customers.

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18) When is Sales tax due?

The sales tax is due monthly, with returns and remittances to be filed on or before the 20th day of the month for the previous month's sales. However, beginning with the calendar year 1999, a taxpayer may elect to file and pay sales tax on a calendar quarter basis if the total State of Alabama sales tax for which the taxpayer is liable averages less than $200 per month during the preceding calendar year. Also, if a taxpayer's total State of Alabama sales tax liability during the preceding year is $10 or less, the taxpayer may file sales tax on a calendar year basis. The request to file quarterly or on a calendar basis must be made in writing to the taxing jurisdiction.

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19) If the 20th falls on a weekend or holiday, when is the due date?

To be considered a timely filing, the return must be postmarked on or before the next working day, or paid in the revenue office the first working day following the weekend or holiday.

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20) Is the seller allowed a discount for timely filing and paying the sales tax that is due?

(City of Tuscaloosa and Northport) Yes. A discount is allowed if the tax is paid before the 20th day of the month in which the tax is due. The sales tax discount consists of 5 percent on the first $100 of tax due, and 2 percent on all tax over $100. Please note, however, that the monthly discount may not exceed $200.

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21) Is there a penalty imposed for not filing timely and not paying the sales tax that is due?

(City of Northport and Tuscaloosa) The penalty is the same as the State of Alabama. The penalty for failure to file is 10 percent or $50, whichever is greater, and 10 percent for failure to pay.

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22) What is Rental Tangible Personal Property tax?

Also known as rental tax, this tax is a privilege tax levied on the lessor for the leasing or renting of tangible personal property. Gross receipts, including any rental of tangible personal property are subject to the rental tax at the following rates:

If lessee is located inside the City of Tuscaloosa:

Automotive vehicles - 1/2 of 1% (.005)
Lines and garments - 1% (.01)
General Rate - 2% (.02)


If lessee is located inside the City of Northport:
Automotive vehicles - 1/2 of 1% (.005)
Lines and garments - 1% (.01)
General Rates - 3% (.03)

Police Jurisdiction rate would be of the above listed rate for both Cities.

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23) What is Use Tax?

This tax is for supplies, materials and/or equipment purchased at wholesale, out of state, or out of Tuscaloosa County for storage, use, or consumption when the 9 percent sales tax was not paid at the time of purchase. In some cases, State sales tax was paid but not local (city and county) sales tax.

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24) Do Tuscaloosa, Northport, and Tuscaloosa County offer online filing for taxes and other processes?


The City of Northport does currently offer online processing of taxes. The City of Tuscaloosa is currently working toward offering online filing for business license and taxes. Tuscaloosa County expects to have its collection processes online by Fall 2005 as well.

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25)I am selling merchandise from various locations and am constantly moving from location to location (Transient Merchant). What type of license do I need?

(City of Tuscaloosa)
You are considered to be a transient merchant and need a license specifically for transient merchants. This type of license has special requirements and also requires a special fee. For more information on acquiring a transient merchant license contact the revenue office at City Hall (205-248-5200).

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26) How do I know if I need a residential building permit?

(City of Tuscaloosa)
The City of Tuscaloosa Inspections Department requires a work permit for all residential projects except the following. For more information please contact the Inspection Department at 205-349-0190.
A building permit is NOT required for the following residential projects:

Building
1. One-Story detached accessory structures provided the floor area does not exceed 200 square feet.
2. Fences not over 6 feet.
3. Retaining walls that are not over 4 feet in height measured from the bottom of the footing to the top pf the wall, unless supporting a surcharge.
4. Water tanks supported directly upon grade if the capacity does not exceed 5,000 gallons and the ratio of height to diameter or width does not exceed 2 to 1.
5. Sidewalks and driveways not more than 30 inches above adjacent grade and not over any basement or story below.
6. Painting, papering, tiling, carpeting, cabinets, counter tops and similar finish work.
7. Prefabricated swimming pools that are less than 24 inches deep.
8. Swings and other playground equipment accessory to a one or two-family dwelling.
9. Window awnings supported by an exterior wall which do not project more than 54 inches from the exterior wall and do not require additional support.

Electrical
A permit shall not be required for minor repair work, including replacement of lamps or the connection of approved portable electrical equipment to approved permanently installed receptacles.

Gas
1. Portable heating, cooking or clothes drying appliances.
2. Replacement of any minor part that does not alter approval of equipment or make such equipment unsafe.
3. Portable fuel cell appliances that are not connected to a fixed piping system and are not interconnected to a power grid.

Mechanical
1. Portable heating appliances.
2. Portable ventilation appliances.
3. Portable cooling unit.
4. Steam, hot or chilled water piping within any heating or cooling equipment regulated by this code.
5. Replacement of any minor part that does not alter approval of equipment or make such equipment unsafe.
6. Portable evaporative cooler.
7. Self-contained refrigeration systems containing 10 pounds or less of refrigerant or that are actuated by motors of 1 horsepower or less.
8. Portable fuel cell appliances that are not connected to a fixed piping system and are ot interconnected to a power grid.

The stopping of leaks in drains, water, soil, waste, or vent pipe; provided, however, that if any concealed trap, drainpipe, water, soil, waste or vent pipe becomes defective and it becomes necessary to remove and replace the same with new material, such work shall be considered as new work and a permit shall be obtained and inspection made as provided in this code.

The clearing of stoppages or the repairing of leaks in pipes, valves or fixtures, and the removal and reinstallation of water closets, provided such repairs do not involve or require the replacement or rearrangement of valves, pipes, fixtures.

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27) How do I know if I need a commercial building permit?

(City of Tuscaloosa)
The City of Tuscaloosa Inspections Department requires a work permit for all commercial projects except the following. For more information please contact the Inspection Department at 205-349-0190.
A building permit is NOT required for the following commercial projects:


Building

1. One-story detached accessory structures used as tool and storage sheds, playhouses and similar uses, provided the floor area does not exceed 120 square feet.
2. Fences not over 6 feet high.
3. Oil derricks.
4. Retaining walls which are not over 4 feet in height measured from the bottom of the footing to the top of the wall, unless supporting a surcharge or impounding Class I, II, or III-A liquids.
5. Water tanks supported directly on grade if the capacity does not exceed 5,000 gallons and the ratio of height to diameter or width does not exceed 2 to 1.
6. Sidewalks and driveways not more than 30 inches above grade and not over any basement or story below and which are not part of an accessible route.
7. Painting, papering, tiling, carpeting, cabinets, counter tops and similar finish work.
8. Temporary motion picture, television, and theater stage sets and scenery.
9. Prefabricated swimming pools accessory to a Group R-3 occupancy, as applicable in Section 101.2, which are less than 24 inches deep, do not exceed 5,000 gallons and are installed entirely above ground.
10. Shade cloth structures constructed for nursery or agricultural purposes and not including service systems.
11. Swings and other playground equipment accessory to detached one and two family dwellings.
12. Window awnings supported by an exterior wall which do not project more than 54 inches from the exterior wall and do not require additional support of Group R-3, as applicable in Section 101.2, and Group U occupancies.
13. Movable cases, counters and partitions not over 5 feet 9 inches in height.

Electrical
Repairs and maintenance: Minor repair work, including the replacement of lamps or the connection of approved portable electrical equipment to approved permanently installed receptacles.

Radio and television transmitting stations: The provisions of this code shall not apply to electrical equipment used for radio and television transmissions, but do apply to equipment and wiring for power supply, the installations of towers and antennas.

Temporary testing systems: A permit shall not be required for the installation of any temporary system required for the testing or servicing of electrical equipment or apparatus.

Gas:
1. Portable heating appliances.
2. Replacement of any minor part that does not alter approval of equipment or make such equipment unsafe.

Mechanical:
1. Portable heating appliances.
2. Portable ventilation appliances.
3. Portable cooling unit.
4. Steam, hot or chilled water piping within any heating or cooling equipment regulated by this code.
5. Replacement of any minor part that does not alter approval of equipment or make such equipment unsafe.
6. Portable evaporative cooler.
7. Self-contained refrigeration systems containing 10 pounds or less of refrigerant or that are actuated by motors of 1 horsepower or less.

Plumbing:
1. The stopping of leaks in drains, water, soil, waste, or vent pipe; provided, however, that if any concealed trap, drainpipe, water, soil, waste or vent pipe becomes defective and it becomes necessary to remove and replace the same with new material, such work shall be considered as new work and a permit shall be obtained and inspection made as provided in this code.

2. The clearing of stoppages or the repairing of leaks in pipes, valves or fixtures, and the removal and reinstallation of water closets, provided such repairs do not involve or require the replacement or rearrangement of valves, pipes, fixtures.

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28) Do I need to file for an Alabama Tax ID Number?

Yes. Anyone who sells tangible personal property to an end user and collects sales tax must have an Alabama Sales Tax Number. For information on obtaining an Alabama Sales Tax Number click here . To learn more about state tax reporting, click here to go to the State of Alabama website.

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