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Contractors press for reform of municipal business‑license rules in hearing on House Bill 566; municipalities warn of revenue loss
Summary
House Bill 566 would limit municipalities from taxing a contractor’s full statewide gross receipts for project‑level business‑license fees. Construction groups urged the change to prevent what they called 'double taxation'; the Alabama League of Municipalities opposed the bill, citing fiscal risk and lack of a clear fiscal note.
House Bill 566 drew extended public testimony on whether contractors should be assessed local business‑license fees based only on activity in the project city rather than on their total statewide gross receipts.
Proponents including the Alabama Associated General Contractors, Alabama Road Builders Association and construction industry representatives described instances where a single plant or contractor purchases business licenses in many municipalities for the same project work and called the existing practice an effective double tax. Trey Sar of the Alabama AGC told the committee the bill would codify a practice limiting local gross‑receipts calculations to the project city or permit a flat fee for delivery‑level work.
The Alabama League of Municipalities, represented by Baker Allen, opposed the bill. He said municipalities rely on license revenue for essential services and that the fiscal note for the bill did not estimate local revenue impacts; he warned that the measure could erode municipal budgets and cited public‑service cost examples such as fire engines.
Other witnesses from the concrete and road‑builders associations described operational examples of contractors buying many city licenses for deliveries and urged the committee to address the perceived inequity for small businesses that pay high cumulative fees. Proponents said the bill would not remove local authority to set flat fees or project‑level gross‑receipts charges; it would only prevent using an employer’s total statewide receipts as the base in every project city.
The committee concluded the public hearing and indicated it will vote on the bill at a later meeting. The transcript records no committee vote on House Bill 566 at this session.
