Cities work to bring in business license fees

January is a flurry of activity in local municipalities, as all business licenses are due this month in order to avoid penalties and interest.

In Fultondale, zoning inspector Kim Powell spent several days in December stuffing and mailing 1,800 renewal applications.

She said this week that the payments are already flowing in, but some notices are also coming back with incorrect addresses on them. That means the notices will have to be re-sent with corrected mailing information.

“Our department is bringing in the money up until March,” Powell said.

Last year, business licenses generated $850,000. The city is budgeted to take in the same amount this year in business license revenue.

Business licenses also account for a generous portion of the city of Gardendale’s annual revenue.

Last year, business licenses generated almost $2 million in Gardendale. The city is budgeted to bring in $1,850,000 this year for the 3,000 active business license accounts.

January is “very, very hectic” at Gardendale City Hall, according to city accountant Dee Gray. “It comes in waves. We get a lot of our licenses in the mail. It’s really good that we can do the work as it comes in to post it.”

In addition to preparing and mailing out 3,000 business license notices in December, Susan McKendree and Pam Sharbono mail out a second round of notices in February as a courtesy.

“In mid-February, we start calling people so they won’t incur more debt,” McKendree said.

Further north, the town of Kimberly has about 1,100 active business license accounts. Assistant town clerk Mona Hendrix mailed out the notices in November.

“They are steadily coming in,” Hendrix said. On Friday, she had issued 88 business licenses for 2011.

“They usually wait until the last minute,” she said.

Hendrix issued 526 business licenses last year. She said if a business such as a contractor does not operate in Kimberly during a certain year, she does not require that they purchase a license for that year.

License fees are also coming at Hayden, where town clerk Ann Stone said she does not yet know how many business licenses will be issued. In July, hundreds of properties annexed into the town of Hayden from unincorporated Blount County, so town officials are still restructuring.

Morris and Warrior officials were also not sure how many business licenses would be issued in their cities, because a tax service called RDS gathers business license fees for those locations.

In most cities and towns, most business license fees are based on gross receipts, while other businesses pay a flat rate.

Also in most of the cities and towns, license fees are due in January. Payments not made in January are subject to penalties. On Feb. 1, most municipalities charge a 15-percent penalty. After 60 days, or on March 2, municipalities charges 30 percent plus interest.