Pelham council unanimously adopts resolution opposing Alabama SB 304, citing revenue risk

The City of Pelham Council unanimously adopted a resolution March 30 opposing Alabama Senate Bill 304 and urged the state legislature to delay further action while municipalities study the measure’s impact.

City Manager (unnamed in the transcript) told the council the bill “prohibits a municipality from including gross receipts generated outside of the municipality’s jurisdiction when calculating business license assessments,” and said the League of Municipalities has opposed the measure because of its possible effect on municipal operations. The manager said staff were asking the council to pursue outreach to committee members and to have the mayor or an appointed designee appear at the committee hearing.

Jamie Wagner, Pelham’s finance director, told the council the legislation is being framed on the House and Senate floors as addressing “double taxation,” but that municipal business licenses are a privileged operating fee and not a sales tax. Wagner said the city has options under current state law—flat fees, grocery-seat (gross-receipts) calculations or a mixture—and described rules that govern apportionment and branch-office exceptions. “This bill could negatively impact the municipal revenue and by extension, the ability to maintain current level municipal services,” Wagner said.

Wagner walked the council through example calculations. She said a Pelham-headquartered business with $15 million in gross receipts would currently generate roughly $15,250 in business-license revenue to Pelham; under the measure’s apportionment language the city could lose receipts attributable to work done in other municipalities. Wagner estimated the revenue loss “specifically for the city of Pelham is about…$15,000” in one scenario and said about 174 Pelham businesses fall in the code categories that could be affected.

The resolution read into the record (Resolution 2026-03-30-01) cites concern that SB 304 “if enacted, would result in an estimated annual loss of $500,000 to $750,000 in business license revenue” and warns the loss would affect essential services including public safety and infrastructure. The clerk read the resolution language urging the Alabama House of Representatives to stop further action on SB 304 to allow for fuller review and transparency.

Council members voiced broad agreement with staff that the bill has moved rapidly through the legislative process and that the expansion of covered industries during recent amendments raises further questions. Council members noted the operational difficulty of an effective date set for Oct. 2, 2026 while business-license renewals occur Jan. 1, and staff warned that a mid-year change would create administrative burdens for municipalities and businesses.

With a motion and second, the council voted to add the draft resolution to the agenda and then approved it unanimously. City staff said they would post contact information for committee members online and that mayors and municipal representatives planned outreach to committee members before the committee hearing and floor vote scheduled the following week.

The meeting closed after community announcements and brief council remarks; no public commenters registered for the public-comment period.

What’s next: staff and municipal representatives will contact legislative committee members and mayors’ associations, and Pelham’s mayor or designee was asked to attend the committee hearing and present the city’s concerns to the legislature.