Birmingham, AL Business License Guide

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The Ultimate Business License Guide for Birmingham, Alabama (2025 Edition)

Last updated: September 2025

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Note on accuracy: You asked for official, current figures and no guesswork. Some fees and rates change often (especially local gross-receipts license classes and alcohol/health permit fees). Where precise amounts change or depend on your NAICS classification, this guide links directly to the official source and tells you exactly where to verify the current dollar figure. Do not rely on third-party blogs for amounts or deadlines.

What you must get first (big-picture overview)

Before you open the doors or launch online sales in Birmingham, you typically need to complete up to four layers of setup:

  • Your legal entity (with the Alabama Secretary of State)
  • Your state tax accounts (with the Alabama Department of Revenue via My Alabama Taxes)
  • Your city business license (with the City of Birmingham)
  • Your county/state business privilege license (with Jefferson County Probate Court)

Plus: zoning/use approvals, building permits, health/fire approvals, and specific licenses (like alcohol or childcare). If you hire workers, add employer registrations (UI, new hire reporting, workers’ compensation).

Reality check: Not every business needs every permit, but skipping any one of these can get you fined or shut down. Always verify your location’s zoning before you sign a lease.

Snapshot: Who issues what

Layer What it covers Typical timing Where to confirm
Legal entity LLC/corporation filing, name reservation Same day to several business days (online) Alabama SOS — Business Entities
State tax accounts Sales/use tax, rental/lodging, withholding Often same day via MAT; some accounts take longer My Alabama Taxes (MAT)
City of Birmingham business license Gross receipts-based city license by NAICS classification Often within a few business days after approval City of Birmingham — Finance/Tax & License
Alabama state/county business privilege license Annual state/county license purchased at probate court Same day in person (varies), online submission varies Jefferson County — Probate Court/Licensing
Health/Fire/Zoning permits Food service permit; certificate of occupancy; zoning compliance; fire inspection A few days to several weeks depending on scope JCDH — Food Safety, City of Birmingham — Zoning/Permits
Alcohol (if applicable) State ABC license + local approvals Weeks to months (background checks, hearings) Alabama ABC Board — Licensing

What to do if this doesn’t work:

  • If you’re unsure which apply to your business, book a free session with the Alabama SBDC Network (choose the UAB center for Birmingham) to map your exact requirements and timeline.
  • For brick-and-mortar, request a pre-application meeting with City Planning/Permitting via the City of Birmingham site (search “pre-application meeting”) before you sign a lease.

Step 1: Set up your legal entity (or decide to operate as a sole proprietor)

Most Birmingham businesses choose one of these:

  • Sole proprietor or general partnership (no state formation filing; still need licenses and tax accounts)
  • Limited Liability Company (LLC)
  • Corporation (C-corp or S-corp election with IRS)

Most important first action:

  • Confirm your business name availability and form the entity with the Alabama Secretary of State if you’re not a sole proprietor. Start at Alabama SOS — Business Entities.

What you’ll typically need:

  • Proposed business name
  • Registered agent in Alabama
  • Business address and organizer/incorporator details

Fees and timelines:

Documents to keep handy:

  • Articles/Certificate of Formation or Incorporation (once approved)
  • EIN assignment letter (SS-4 confirmation)
  • Operating agreement (LLC) or bylaws (corporation) — not filed with the state but important for banks and investors

Common realities (don’t skip):

  • Banks in Birmingham will ask for your EIN letter and state formation proof to open a business account.
  • Landlords often ask for your entity paperwork and sometimes a certificate of occupancy before letting you open.
  • Alabama requires many businesses to file the Alabama Business Privilege Tax return annually (separate from the county/state business privilege license sold by the probate court). See Alabama Department of Revenue — Business Privilege Tax.

What to do if this doesn’t work:

  • If your name gets rejected or paperwork is bounced, call the Alabama SOS Business Services help line listed on the SOS Business Entities page or use their contact form for filing feedback.
  • Use the Alabama SBDC at UAB for free checklists and reviews of your formation steps.

Step 2: Register for state taxes (My Alabama Taxes — MAT)

Most businesses that sell goods or taxable services in Birmingham must register with the Alabama Department of Revenue (ADOR) and file via MAT.

Most important first action:

  • Create your MAT account and register for sales/use tax and any other relevant accounts at My Alabama Taxes.

What accounts you may need:

  • Sales tax (state rate is 4%; local rates vary — verify current combined rate for your location through ADOR rate tools)
  • Seller’s use or consumer’s use tax (if applicable)
  • Lodgings or short-term rental tax (if providing stays under 180 days; confirm local rates)
  • Rental tax (for leasing tangible property; rates vary)
  • Withholding tax (if you have employees and withhold Alabama income tax)

Where to confirm rates and deadlines:

  • Sales and use tax rates and filing frequency vary by locality and your collection volume. ADOR provides official rate listings and due date guidance on ADOR Sales & Use Tax. For current local rates in Birmingham, use ADOR’s official rate lookup or the tax rate publications linked on that page.
  • Alabama sales/use tax returns are commonly due on the 20th of the month following the reporting period for monthly filers. Always verify your assigned filing frequency and due date in MAT. See the deadline guidance in ADOR Sales & Use Tax.

Real-world example:

  • An online boutique with inventory in Birmingham needs a sales tax account and must collect the Birmingham combined rate at checkout for shipments to Birmingham addresses. The owner registers in MAT, sets monthly filing, and remits by the 20th each month.

Documentation checklist:

Task What you’ll need Where to do it
Create MAT profile EIN, legal name, address, responsible party info My Alabama Taxes
Register sales/use tax EIN, NAICS code, business start date, locations ADOR — Sales & Use Tax
Set filing frequency MAT will assign monthly/quarterly/annual based on volume In MAT account
Payment setup Bank routing/account info In MAT account

Common pitfalls:

  • Registering the wrong account (e.g., sales tax vs. seller’s use). If you have a physical location in Alabama, you usually need a sales tax account.
  • Missing local taxes administered by ADOR (Jefferson County or Birmingham add-ons that ADOR collects on the locality’s behalf). Use MAT’s rate tools and publications.
  • Late filing penalties can add up quickly if you miss the 20th monthly deadline.

What to do if this doesn’t work:

  • Contact ADOR using the phone numbers and email listed on the ADOR Sales & Use Tax page. If you can’t get through, visit a local ADOR Taxpayer Service Center (locations listed on the ADOR site) for in-person help.

Step 3: Get your City of Birmingham business license

Birmingham requires a city business license for most businesses operating in city limits, including home-based and online businesses with a Birmingham location. Licenses are classified by NAICS code and typically based on gross receipts brackets.

Most important first action:

  • Confirm your NAICS classification and apply for the City of Birmingham business license through the city’s Finance/Tax & License office. Start at the City of Birmingham site and search “Business License.”

What you’ll typically provide:

  • Legal business name and EIN (or SSN for sole proprietors)
  • Business location address (inside city limits)
  • NAICS code and a description of activities
  • Projected gross receipts for new businesses (to calculate your initial fee)

How fees work:

  • Birmingham’s license fees are set by ordinance and vary by classification and gross receipts. New businesses often pay based on projected receipts and true-up on renewal.
  • For the current fee schedule by NAICS class, go to the Finance/Tax & License section of the City of Birmingham site and download the latest license schedule or contact the Tax & License office listed there. Do not rely on old PDFs you find on search engines.

Deadlines and renewals:

  • Most Alabama municipalities require renewal each year, typically due by January 31 for the license year. Confirm Birmingham’s exact license renewal due date and late penalties on the city’s official license page (Finance/Tax & License) on birminghamal.gov.

Occupational license tax (employee withholding):

  • The City of Birmingham imposes an occupational license fee on wages earned within the city. Employers must withhold and remit on behalf of employees who work within city limits. For current rate, employer registration, forms, and due dates, use the Finance/Tax & License pages on the City of Birmingham site and search “occupational license tax” or “occupational tax.”

Processing time and issuance:

  • If your application is complete and your location is properly zoned with no outstanding inspections, licenses are often issued within several business days. Complex classifications or locations that need inspections can take longer.

Where to get help:

  • Use the city’s official contact page linked from the Finance/Tax & License section to reach the license team. If you prefer in-person help, go to Birmingham City Hall (710 20th Street North, Birmingham, AL 35203) and ask for the Tax & License counter. Check the City of Birmingham site for current hours.

What to do if this doesn’t work:

  • If your application is stalled due to zoning, request a zoning verification letter or schedule a meeting with Planning via the City of Birmingham site.
  • Use the Alabama SBDC at UAB for help classifying your NAICS and projecting gross receipts.
  • If your classification is disputed, ask the city in writing for the code basis and appeal steps documented in their ordinance or administrative rules.

Step 4: Buy your Alabama State/County Business Privilege License (Jefferson County)

Alabama requires most businesses to purchase a state/county Business Privilege License each year through the county probate office where the business is located. In Birmingham, that’s Jefferson County.

Most important first action:

  • Navigate to Jefferson County’s official site and find the Probate Court Licensing section for “Business License” (also called “State/County Business Privilege License”). Follow the instructions to apply and pay.

Key facts you should confirm on the county site:

  • License year runs from October 1 to September 30 (common statewide) with renewals due at the start of the license year. Late penalties apply after the county’s delinquency date. Confirm current due dates on the Probate Licensing page.
  • The license category and fee are based on your business type, goods/services, and sometimes gross receipts. The county publishes fee schedules by code/class. Use only the latest schedule linked on the county site.
  • If your business has multiple locations or activities, you may need multiple license categories.

Documents needed:

  • EIN/SSN
  • Legal entity info
  • Business address within Jefferson County
  • NAICS or license classification per the county schedule

Where to ask questions:

  • Use the Probate Licensing contact linked on the Jefferson County site for phone/email and office locations (Birmingham and Bessemer courthouses). Walk-in service is often available; bring your documents.

What to do if this doesn’t work:

  • If the online information is unclear, go in person to a Probate Licensing office with your entity documents and a short written description of your activities. Ask which license code applies and what base fee/receipts proof you must show.
  • If you operate outside Jefferson County too, ask the county staff how to handle multi-county licensing (some businesses require multiple county licenses).

Step 5: Zoning, building permits, and occupancy for Birmingham addresses

Don’t wait on this—many delays happen here. Even if you’re leasing an existing space, the use may have changed, or previous permits may not cover your operations.

Most important first action:

  • Verify your location’s zoning and permitted use with the City of Birmingham before you sign a lease. Visit birminghamal.gov, search “Zoning” or “Planning,” and request a zoning verification for your address.

Typical approvals:

  • Zoning/use approval for your business type at your specific address
  • Building permits if you do build-out or signage
  • Certificate of Occupancy (CO) before opening to the public
  • Fire Marshal inspection (depending on use)

Where to start:

  • Use the City’s permitting portal and Planning department pages via birminghamal.gov (search “Permits” or “Citizen Access”). Many permits can be applied for online. If the portal is confusing, call the number listed on the permits page or visit City Hall for guidance.

Timeline reality:

  • Minor tenant improvements can be approved within a couple of weeks, but plan longer if you need stamped plans, sprinkler/hood systems, or structural work. Inspections must be scheduled and passed before a CO is issued.
  • Sign permits are separate—don’t install signs without a permit.

What to do if this doesn’t work:

  • If a use isn’t permitted, ask Planning about a conditional use or variance path and the likely timeline. This often takes weeks to months.
  • For build-out delays, request a plan review status update through the permitting portal or the contact listed on your permit record.
  • For complex build-outs, consider hiring a local architect who knows Birmingham’s process.

Step 6: Health permits, food trucks, alcohol, and other specialized licenses

If you sell food or alcohol, or operate certain regulated services (salons, childcare, healthcare), you need additional approvals. These are separate from your business license.

Most important first action:

  • For food service, contact the Jefferson County Department of Health (JCDH) early to review your menu, equipment, and layout. Start at JCDH — official site and navigate to Environmental Health → Food Safety.
  • For alcohol, review the Alabama ABC licensing paths and whether your location and city will approve your license. Start at Alabama ABC Board — Licensing.

Industry-specific approvals overview

Business type Permit/licensing authority What to confirm Where to start
Restaurants, cafes, food trucks Jefferson County Department of Health (Environmental Health) Plan review, food service permit, commissary for food trucks JCDH — Food Safety
Bars, breweries, restaurants serving alcohol Alabama ABC Board + City of Birmingham approvals License class, fees, background checks, local hearings Alabama ABC Board — Licensing
Salons, barbers, spas Alabama Board of Cosmetology & Barbering Practitioner and shop licenses, inspections AL Board of Cosmetology & Barbering
Childcare centers Alabama Department of Human Resources (DHR) Licensing, staff clearances, ratios, facility standards Alabama DHR — Child Care Services
Contractors Alabama Licensing Board for General Contractors; Home Builders Licensure Board (residential) State license class, city permits; bonding ALBGC, HBLB
Transportation (commercial) USDOT/AL DPS (if applicable) DOT numbers, insurance, CDL FMCSA — Register

Fees and timelines:

  • Fees vary widely by class and square footage/equipment. Verify current amounts directly on each agency’s official fees page. For example, JCDH posts health permit fees and ABC lists license classes and state application fees.
  • Food trucks must secure a commissary agreement and meet JCDH mobile food unit standards; inspections are required before operating.

Real-world example:

  • A food truck based in Birmingham coordinates with JCDH for plan review, secures a commissary kitchen, passes inspection, obtains a city business license listing mobile vending activity, and registers sales tax on MAT (often monthly filing by the 20th).

What to do if this doesn’t work:

  • If your food plan is rejected, ask JCDH for the specific code items that failed and schedule a re-review. They typically provide checklists.
  • If ABC licensing gets delayed, ask the assigned licensing specialist for a checklist of local approvals still missing (e.g., zoning letters, local consent). Some ABC classes require city council approval—plan extra time.

Step 7: If you have employees: payroll, occupational tax, UI, workers’ comp, and posters

Hiring triggers separate obligations at federal, state, and city levels.

Most important first action:

  • Register for Alabama employer withholding (if you’ll withhold Alabama income tax) in MAT, and set up your withholding account and filing schedule. See ADOR Withholding Tax.

Employer checklist (Birmingham/Alabama):

Common pitfalls:

  • Forgetting city occupational tax registration and remittance when employees split time inside/outside city limits.
  • Misclassifying workers as independent contractors (Alabama follows multi-factor tests; when in doubt, ask ADOL).
  • Missing UI and workers’ comp triggers when you cross five employees.
  • Not posting required workplace posters (federal and state). See ADOL — Required Posters.

What to do if this doesn’t work:

  • If payroll setup is overwhelming, use a payroll provider that supports Alabama and Birmingham local taxes and filing (ask explicitly about City of Birmingham occupational tax support).
  • If you get a notice from ADOR or the City, call the number on the notice immediately and ask how to cure. Agencies are generally cooperative if you respond quickly.

Step 8: Renewals, deadlines, and ongoing compliance

Don’t set-and-forget. Put these on your calendar with reminders.

Most important first action:

  • Put the city license renewal and county license renewal dates into your calendar now and set reminders 30 days ahead.

Key recurring items

Item Typical due date Where to confirm
City of Birmingham business license renewal Often due by January 31 annually City Finance/Tax & License on birminghamal.gov
Alabama State/County Business Privilege License (Jefferson County) License year Oct 1–Sep 30; confirm renewal window and delinquency date Jefferson County — Probate Court Licensing
ADOR sales/use tax return Often due 20th of the month following reporting period (for monthly filers) ADOR — Sales & Use Tax
City occupational tax withholding Typically monthly; confirm exact due date and frequency City Finance/Tax & License on birminghamal.gov
Alabama Business Privilege Tax return (APT/BPT) Due dates depend on entity type and tax year; initial and annual returns may apply ADOR — Business Privilege Tax

What to do if this doesn’t work:

  • If you miss a filing, file and pay ASAP and contact the agency about abatement options if you qualify. Do not ignore notices.
  • If you change addresses or ownership, update all layers (SOS, ADOR/MAT, City license, County license). Agencies may not share updates between themselves.

Step 9: Cost planning and realistic timelines

Your final totals depend on your NAICS class, gross receipts, leases, build-out, and whether you sell food or alcohol. Use the tables below to plan and then verify on each agency’s site.

Planning timeline (typical)

Step Conservative time estimate Notes
Entity formation + EIN 1–7 business days Online filings usually faster; EIN is instant if online.
MAT tax registrations Same day to 3 days Sales/use accounts often same day; verify in MAT.
City business license approval 1–10 business days Depends on zoning/inspections and classification.
County business license Same day in person Bring docs; online availability varies.
Zoning/permits/CO 2–8 weeks Build-out, inspections, and plan review drive timing.
Health permit (food) 2–6 weeks Includes plan review and inspection; food trucks need commissary.
Alcohol license 6–12+ weeks Background checks and local approvals take time.

Recurring cash flow (what to expect)

Item Typical pattern Where to verify current amounts
City business license Annual, based on gross receipts brackets by NAICS City Finance/Tax & License at birminghamal.gov
County business license Annual (Oct–Sep), by category Jefferson County — Probate Licensing
Sales/use tax Monthly or quarterly, based on receipts ADOR — Sales & Use Tax
Occupational tax (City) Monthly withholding from employee wages City Finance/Tax & License at birminghamal.gov
Health permits Annual or periodic depending on facility type JCDH — Food Safety
ABC licenses Annual, class-based Alabama ABC Board — Licensing

What to do if this doesn’t work:

  • If your budget is tight, stagger spending: form entity and EIN first ($0 for EIN), then register taxes (free), and time your city/county license purchases as close to opening as allowed to avoid paying early and renewing sooner than needed.
  • If your timeline slips, communicate with your landlord and contractors; many build-out delays stem from missing drawings or slow inspections—ask for checklists and pre-inspection walkthroughs.

Step 10: Common mistakes to avoid (learn from local patterns)

  • Skipping zoning verification before leasing. A small change of use can require major upgrades (e.g., adding a grease interceptor or extra parking).
  • Underestimating license class. Choosing the wrong NAICS/class can underpay fees and trigger penalties at renewal.
  • Forgetting occupational tax setup. If you have employees in city limits, you likely must withhold and remit.
  • Combining plan review and construction. Do not start work until permits are issued; stop-work orders are costly.
  • Relying on outdated PDFs found on Google. City fee schedules and ABC classes change. Always use the latest from the official site.
  • Missing the 20th for ADOR filings. Set multiple reminders on filing due days.
  • Treating contractors as 1099s without analysis. Misclassification penalties are steep; use ADOL guidance.
  • Not updating agencies after address/name changes. City, county, ADOR, and SOS all need updates—none update the others for you.

What to do if this doesn’t work:

  • If you receive a penalty, read the notice carefully, pay what’s due to stop interest, and then ask about abatement if you have reasonable cause and a clean record.
  • For classification disputes, request the ordinance section or guidance used. Escalate politely with written documentation and, if needed, ask the SBDC for a second opinion.

Step 11: Birmingham/Alabama licensing tables you can use now

Table A — Core registrations and licenses

Requirement Applies to Where to get it Notes
Legal entity (LLC/Corp) Most businesses (except sole props) Alabama SOS — Business Entities Keep your formation approval and registered agent current.
EIN Most entities and any employer IRS — EIN Free ($0).
State tax accounts (MAT) Sellers of taxable goods/services, withholding, etc. My Alabama Taxes Sales/use, lodging, rental, withholding.
City of Birmingham business license Any business in city limits birminghamal.gov → Finance/Tax & License Based on NAICS and gross receipts.
County business privilege license Most businesses in Jefferson County jccal.org → Probate → Licensing Annual; Oct–Sep license year is typical.

Table B — Taxes you may owe (verify in MAT and with the City)

Tax Who collects Filing cadence Where to confirm
Alabama state sales tax (4%) ADOR Monthly/quarterly/annual ADOR — Sales & Use Tax
Local sales/use add-ons ADOR or self-administered localities Same as above ADOR rate lookup via Sales & Use Tax page
City of Birmingham occupational tax City of Birmingham Monthly (employer withholding) City Finance/Tax & License at birminghamal.gov
Alabama withholding ADOR As assigned ADOR — Withholding

Table C — Documents you’ll keep being asked for

Document Who asks for it Why it matters
Articles/Certificate of Formation/Incorporation Banks, landlords, licensing Proof of legal entity
EIN letter (SS-4) Banks, payroll, licensing Federal tax ID proof
Lease or deed City licensing, zoning, utilities Proof of premises
Floor plan/site plan Permitting, JCDH, Fire Layout, equipment placement
Insurance certificates Landlord, ABC, contractors Liability and workers’ comp
Photo ID of owners ABC, banks, licensing Identity and background checks

Table D — When to call vs. when to visit in person

Situation Better approach Why
Zoning/use question for a specific address In person or a scheduled call with Planning Saves weeks of back-and-forth; get written verification
Probate license classification confusion In person at Probate Licensing Staff can review codes and print fee sheet
Inspection scheduling or failed inspection questions Call the inspector’s office listed on your permit Get precise fix-list before reinspection
ABC local approval steps Call state ABC office and City Clerk/Council office Local timelines vary; align state and local steps

What to do if this doesn’t work:

  • If you’re not getting clarity, ask for a supervisor or a written policy citation (ordinance number, code section, or official brochure version). Keep a notes log of who you talked to and when.

Step 12: Inclusivity, diversity, and accessibility resources (Birmingham and Alabama)

If you are a woman-owned, minority-owned, disabled-owned, veteran-owned, LGBTQ+-owned, or immigrant-owned business, there are programs and certifications that can help with procurement, mentoring, and capital access.

Most important first action:

  • Book free advising with the Alabama SBDC Network (choose the UAB center) and ask about certification paths (DBE, WBE, MBE), local grants, and lender introductions.

Key programs and contacts:

  • Disadvantaged Business Enterprise (DBE) certification for transportation projects is administered in Alabama via the Alabama Department of Transportation Unified Certification Program. See ALDOT — DBE Program for application details and to determine eligibility.
  • Federal Women-Owned Small Business (WOSB/EDWOSB) certification is managed by SBA. See SBA — WOSB Program.
  • City of Birmingham and Birmingham-area agencies sometimes maintain their own vendor registration and diversity programs. Check the City’s procurement/vendor pages via birminghamal.gov and search “vendor,” “supplier,” or “minority business.”
  • Birmingham Business Resource Center (BBRC) supports minority businesses with lending readiness and counseling. See BBRC — Official Site.
  • REV Birmingham provides small business coaching, pop-up/market access, and storefront activation. See REV Birmingham.
  • Veterans: The U.S. Department of Veterans Affairs’ Veteran Small Business Certification (Vets First) is now managed by SBA. See SBA — Veteran Small Business Certification (VetCert).
  • Accessibility and language access: Many agencies provide interpreters or translated documents upon request. City of Birmingham 311 and department contacts listed on birminghamal.gov can route language assistance. ADOR and ADOL provide accessible formats and, in some cases, Spanish-language resources.
  • Immigrant-owned businesses: For federal EIN and ITIN guidance, use the IRS multilingual resources at IRS — Individuals with an ITIN. For licensing, the city/county generally rely on EIN/SSN and identity verification per standard procedures regardless of immigration status; consult a qualified attorney for legal advice.

What to do if this doesn’t work:

  • If you’re unsure which certification to pursue, bring your NAICS codes, ownership breakdown, and target customers (government vs. corporate) to an SBDC counselor; they’ll map your fastest, most valuable certification.
  • If a program denies your application, request a written explanation and the reapplication or appeal steps; many denials are fixable with missing documents.

Step 13: Real-world Birmingham examples (what actually happens)

  • Retail shop (downtown). The owner forms an LLC, gets an EIN ($0), registers for sales tax via MAT, verifies the space is zoned for retail and that no major build-out is needed, buys the city business license under the appropriate retail NAICS class, and purchases the Jefferson County business privilege license. Timelines: 2–4 weeks to open because the tenant finishes cosmetic improvements and waits on the certificate of occupancy.
  • Food truck. The owner secures a commissary kitchen and coordinates with JCDH for plan review and inspection, registers with MAT for sales tax, applies for a city business license with a mobile vending designation, and maps operating hours to avoid city event restrictions. Timelines: 4–6 weeks if the truck already meets equipment standards.
  • Small consultancy (home-based). The owner chooses to operate as a sole proprietor to start, gets an EIN ($0) to avoid sharing SSN, verifies home occupation rules with the City, registers with MAT only if taxable services apply (many professional services are not subject to sales tax—verify on ADOR’s site), gets a city business license classed by NAICS, and purchases the county license. Timelines: 1–2 weeks.

What to do if this doesn’t work:

  • If your opening date is slipping due to inspections, request a pre-inspection walk-through or a punch list so you don’t fail on minor items.
  • If your cash flow is tight, time your licenses so you are not paying full-year fees months before opening. Confirm pro-rating or effective-date rules with the city and county before paying.

Step 14: FAQs — State-specific and city-specific

  • Do I need a City of Birmingham business license to do business online from my home in Birmingham?
    • Yes, if your place of business is within city limits, the city generally requires a business license, even for home-based businesses. Confirm home occupation rules, allowable signage, and parking/traffic limits on the City’s Planning pages at birminghamal.gov.
  • What is the Birmingham occupational tax and do I have to withhold it?
    • It’s a city tax withheld from employee wages for work performed in city limits. Employers must register, withhold, and remit. Get employer registration and due date details through the Finance/Tax & License pages on birminghamal.gov.
  • What’s the combined sales tax rate in Birmingham?
    • The state rate is 4%, and local rates vary by city/county and by product. Use ADOR’s official rate tools via ADOR — Sales & Use Tax to look up your exact combined rate by address.
  • When are Alabama sales tax returns due?
    • Monthly returns are often due by the 20th of the following month, but your filing frequency and due dates are assigned in MAT. Confirm in your My Alabama Taxes account.
  • Do I need the Jefferson County business privilege license if I have the city license?
  • What if my business is outside Birmingham city limits but I do jobs in Birmingham?
    • You may need a Birmingham business license if you’re conducting business within city limits (it can depend on activity frequency and type). Check the city’s license ordinance and contractor rules via birminghamal.gov or call the Tax & License contact listed there.
  • Is workers’ compensation required in Alabama?
  • What if my industry isn’t listed clearly in the Birmingham license schedule?
    • Provide your NAICS and a plain-language description to the city’s license staff and ask for the classification and ordinance section they’re using. Keep that written classification for future renewals.
  • Can I transfer my Birmingham license if I move addresses?
    • Address changes typically require updates with the City, plus possible zoning checks for the new location. Use the Finance/Tax & License contacts on birminghamal.gov and update ADOR/MAT and the county license as well.
  • Are professional services taxed?
    • Many professional services are not subject to sales tax in Alabama, but there are exceptions and local interpretations for certain services and rentals. Always verify on ADOR — Sales & Use Tax, and ask ADOR if unsure.

What to do if this doesn’t work:

  • If your question isn’t addressed on the official pages linked above, use each agency’s contact page. Ask for a citation (ordinance, regulation, or guidance document) in the reply so you have something official to rely on.

Step 15: A step-by-step checklist (print this)

  • Form your entity (or decide to operate as a sole proprietor) with Alabama SOS — Business Entities.
  • Get your EIN ($0) at IRS — EIN.
  • Create your My Alabama Taxes account and register for sales/use, withholding, or other applicable accounts.
  • Verify zoning for your exact address via birminghamal.gov (search “Zoning Verification”).
  • If needed, apply for building permits and plan a path to a Certificate of Occupancy.
  • If selling food, begin plan review with JCDH — Food Safety.
  • If selling alcohol, start with Alabama ABC Board — Licensing and contact the City for local approvals.
  • Apply for your City of Birmingham business license via Finance/Tax & License on birminghamal.gov.
  • Purchase your Alabama State/County Business Privilege License at Jefferson County — Probate Licensing.
  • If hiring employees, set up Alabama withholding (MAT), UI (ADOL), City occupational tax withholding (Finance/Tax & License on birminghamal.gov), New Hire Reporting (newhire.alabama.gov), and workers’ comp coverage if you will have five or more employees.
  • Put key due dates on your calendar: city license renewal (often January 31), county license (year Oct 1–Sep 30), ADOR filings (often 20th monthly), and any ABC/health renewal dates.

What to do if this doesn’t work:

  • Bring this checklist to the Alabama SBDC at UAB and ask them to sanity-check your plan for your specific NAICS, location, and build-out scope.

Step 16: What to do when cash is tight (realities and options)

  • Ask the city and county how projected receipts affect your initial license fee. New businesses sometimes pay a minimum based on projection and reconcile later.
  • Don’t overspend on signage before permits—unpermitted signs may need removal.
  • If a bank is slow, consider a Community Development Financial Institution (CDFI) active in Birmingham. Ask BBRC or REV Birmingham to introduce you to local lenders who understand city licensing delays.
  • Time your opening to avoid paying a full year of license fees for only a short period (verify effective date and pro-ration rules with the city and county in writing).

What to do if this doesn’t work:

  • If fees are a barrier, discuss a lean launch path (home-based or market pop-ups) with REV Birmingham, or book the SBDC to model revenue and expense timing so you don’t pay fees before sales start.

Step 17: “If all else fails” escalation map

  • City of Birmingham: Use the department’s contact listed on the Finance/Tax & License pages and ask for a supervisor. If still unresolved, request in writing the ordinance/policy basis for the decision and appeal steps.
  • Jefferson County Probate Licensing: Visit in person with your documents and ask staff to walk you through the classification. Ask for a printed schedule and the code reference.
  • ADOR: Schedule an appointment at a Taxpayer Service Center listed on ADOR’s site. Bring notices, return filings, and your MAT account info.
  • ABC Board: Ask your licensing specialist for a checklist and a status summary. If local consent is pending, contact the City Clerk’s office or Council liaison.
  • Health (JCDH): Ask for the specific code sections that failed and whether conditional approval is possible pending a fix. Request a reinspection date.

About This Guide

  • Purpose: A practical, Birmingham-specific hub for starting, licensing, and maintaining a compliant business—without fluff or guesswork.
  • Sources: This guide points directly to official agencies: City of Birmingham, Jefferson County, Alabama Department of Revenue, Alabama Secretary of State, Jefferson County Department of Health, Alabama ABC Board, Alabama Department of Labor, and the IRS. Use only those official pages for current fees and deadlines.
  • Currency: Laws, fees, and links change. Always verify the current amounts, forms, and due dates on the official pages linked above before you file or pay.

Disclaimer

This guide is general information, not legal or tax advice. Program rules, fees, tax rates, classifications, and deadlines change. Always verify details with the official agencies linked in this guide and consult a qualified attorney or CPA for your specific situation. The authors are not responsible for changes after publication or for actions you take based on this guide.