Mayors and municipal groups urge pause on Senate Bill 304; contractors say it ends ‘double taxation’

A legislative committee heard conflicting testimony over Senate Bill 304, which would change how local business licenses apply to contractors working across municipal boundaries. Mayors and municipal groups urged a pause, saying the bill’s scope has shifted and its fiscal impact on cities is unclear, while contractors and industry associations urged the committee to move the measure forward to prevent what they called double taxation.

Jennifer Anderson, mayor of Homewood, told the committee she and other city officials were still calculating the bill’s impact and asked lawmakers to "slow down and take in the facts," noting the bill has changed multiple times and now covers as many as 12 occupations and includes counties. "We are still calculating how this going to impact us at Homewood," she said, asking for time for "additional dialogue" before SB 304 moves forward.

Representatives of several cities similarly warned of lost revenue and implementation problems. Jamie Wagner, speaking for the city of Pelum, said local leaders estimate the bill could reduce municipal business-license revenue by "approximately a half a million to three-quarters of a million annually," and raised questions about whether the bill’s exclusion language applies when job-site licenses are charged as a flat fee. Wagner also noted a practical problem: the bill’s stated October 1 effective date conflicts with municipal licensing cycles that operate on a calendar-year basis.

Baker Allen, director of governmental affairs for the Alabama League of Municipalities, told the committee the bill’s fiscal note lists an undetermined amount and warned that repeated amendments have expanded the measure’s scope. "No one ruins their diet eating one potato chip, but no one ever eats one potato chip," he said, using the metaphor to argue that the bill has steadily grown from an initial, narrower proposal.

Industry groups, including the Association of General Contractors and the Alabama Concrete Association, argued SB 304 fixes a real problem for firms that travel between jurisdictions. A representative of the Association of General Contractors said the bill creates a framework to avoid contractors being charged multiple business licenses on the same receipts and noted recent amendments that added concrete providers and a verification mechanism allowing municipalities to request evidence of licenses paid elsewhere.

The president of the Alabama Concrete Association (unnamed in the transcript) urged support for SB 304 and described the industry’s scale: "our industry has over 170 readymix plants in the state and they produce approximately 6 million yards of concrete on an annual basis," the witness said, adding that some plants must purchase dozens of municipal licenses for deliveries and that overlapping gross-receipt calculations can amount to effectively double taxation for a single yard of concrete.

Proponents argued that when contractors pay duplicative license fees the cost is folded into bids and ultimately borne by the public through higher project costs and reduced infrastructure dollars. Opponents responded that the bill’s current language and scope could shift long-term revenue away from municipalities that provide ongoing services and infrastructure to businesses.

The committee did not take a final vote during the session. The chair closed the hearing and announced the committee will meet again tomorrow morning at 10:00 a.m. in the same room after session.