Alabama Business License: Who Needs One & How to Apply (2025)
As of 2025, Alabama does not impose a general business license requirement; instead, business licensing is regulated on a local, state, and federal level.
This means that whether you need an Alabama business license or not will depend on your business’s location and industry.
This article will cover:
What Is a Business License in Alabama?
A business license is a permit issued by a local, state, or federal body in order to allow businesses to perform a specific business activity and/or operate legitimately.
So, if there isn’t a “general business license” in Alabama, what exactly is there?
Well, Alabama — like the vast majority of states — imposes different requirements depending on where you’re located and what you actually do.
For example:
- A restaurant in Birmingham will need a food service permit from the Jefferson County Department of Health.
- A CPA firm in Montgomery will need individual CPA licenses from the Alabama State Board of Public Accountancy.
- An online retailer shipping products from Huntsville will need a sales tax license from the Alabama Department of Revenue.
- An aerospace components manufacturer in Mobile will need a business privilege license from the Mobile County License Commission.
Note: These examples are simplified to illustrate common licensing requirements and do not list every permit that may be needed. Operating without proper licensing can result in penalties including fines, business closure orders, and legal complications. Always research the specific requirements for your business type and location.
Do I Need an Alabama Business License?
Well, the answer to this will ultimately depend on your business’s situation. You can have a look at our table below in order to get a general idea:
Alabama Business Licensing at a Glance
| Jurisdiction | License Type | Who Needs It & Where to Apply |
|---|---|---|
| Local |
| Varies by location Contact your local municipality to determine local requirements. |
| State | Sales Tax Permit and Resellers Permit | Businesses selling taxable goods or services. Apply via Alabama Department of Revenue through My Alabama Taxes (MAT) |
| Business Privilege License | Required for ALL businesses operating in Alabama from the county where business is conducted. Apply through your County Probate Judge or License Commissioner | |
| Professional Licenses | Required for regulated professions (medical, engineering, nursing, etc.). Apply through relevant professional board (e.g., Alabama Board of Medical Examiners, Alabama Board of Nursing, Alabama Board of Licensure for Professional Engineers) | |
| Industry-Specific State Licenses | Businesses in regulated industries (e.g., food establishments, liquor, childcare, environmental permits). Apply through relevant Alabama agencies (Alabama Department of Public Health, Alabama Alcoholic Beverage Control, etc.) | |
| Federal | Industry-Specific Licenses | Businesses involved in federally regulated activities such as agriculture, aviation, firearms, alcohol, broadcasting, or wildlife. Apply through the relevant federal agency (e.g., USDA, FAA, ATF, FCC, FWS) |
*While this table is meant to give you a general idea, it’s by no means exhaustive. For all your licensing needs, we suggest either going with a professional licensing service or consulting with a business attorney.
Recommended Solution
Figuring out your licensing needs can be complicated and time-consuming, taking focus away from running and growing your business. We recommend using an affordable service instead for just $150.
How to Get a Business License in Alabama
The process of obtaining a business license in Alabama will depend on the permit in question, but generally involves completing the following steps:
1. Form a Business Structure & Obtain an EIN
We recommend formalizing your business before acquiring a business license in order to avoid potentially having to repeat this process again later down the line.
This also gives other benefits depending on the business model, such as:
- Personal liability protection
- Improved legitimacy
- Larger access to loans and corporate finance
We generally recommend that most small business owners form an LLC. An LLC provides liability protection, is affordable, and offers flexibility in how it can be taxed and managed.
Want to make sure your LLC is formed correctly? Northwest can handle your Alabama LLC formation with first-year free registered agent service and excellent customer support.
Note: You should obtain an Employer Identification Number (EIN) after forming your LLC. You can have a look at our How to Get an EIN overview for more information.
2. Apply for the Right Business License in Alabama
This step will depend on the business license in question.
Alabama Local Business Licenses
Many Alabama cities and counties require local business licenses or permits to be obtained. This can be in addition to the common state-wide licenses talked about above.
Here are some common local permits you may need:
- Business Privilege License: All businesses operating in Alabama must obtain a business privilege license from the county probate judge or license commissioner in the county where the business is located. This is required in every county you conduct business (e.g., if your business is based in Jefferson County, you would contact the Jefferson County Revenue Department.
- Industry Permits: This includes health permits required for restaurants, food trucks, and businesses handling food products. Health permits are issued at the county level by local health departments (e.g., if your business is based in Birmingham, you would need permits from the Jefferson County Department of Health Environmental Health Division at (205) 930-1215).
- City Business License: Most Alabama cities require their own business license in addition to county and state requirements. This is separate from the Business Privilege License and must be obtained from the city where you operate (e.g., if your business is based in Birmingham, you would apply through the City of Birmingham Tax and License Division.
- Zoning Permits: You may need this to ensure that your business’s location is zoned appropriately and is compliant with local laws (e.g., if you were based in Montgomery, you would check with the Montgomery Planning Department for zoning compliance).
- Sign Permits: These can be required before installing business signage (e.g., if you were based in Huntsville, you would check with the City of Huntsville Planning Division.
- Certificate of Occupancy: Required for most businesses before they can legally occupy a building or space. This verifies that the structure meets building codes and is safe for the intended use (e.g., if your business is in Mobile, you would contact the Mobile Building Official’s Office for occupancy certificates).
To find your local county or city’s official contact information and licensing requirements, you can visit the Alabama League of Municipalities for municipal contacts or contact your county probate judge’s office directly for county requirements.
Alabama State Business Licenses
Below we’ve included the most common business licenses that are required on a state level.
Alabama Seller’s Permit
The business tax registration, sometimes called a seller’s permit, is obtained online for free through the Alabama Department of Revenue.
Apply OnlineTip: Your business does not need to pay sales and use tax when purchasing goods for resale. Have a look at the Alabama Department of Revenue’s list of sales and use tax exemptions to learn more.
Alabama Professional Licenses
If you’re interested in a professional license, you’ll need to head over to the relevant state commission, as this is not handled on a local level. We’ve provided the licensing boards of a few of the most common professions below to get you started:
- Alabama Real Estate Commission: Licenses real estate agents, brokers, and property managers.
- Alabama State Board of Public Accountancy: Licenses Certified Public Accountants (CPAs) and regulates the practice of public accounting to protect the public interest.
- Alabama State Board of Pharmacy: Licenses pharmacists and regulates pharmacy practice.
- Alabama State Bar: Handles attorney admissions to practice law in Alabama through examination, reciprocity, or UBE score transfer.
- Alabama Licensing Board for General Contractors: Licenses general contractors for commercial and industrial projects valued at $50,000 or more.
- Alabama Board of Medical Examiners & Medical Licensure Commission: Licenses physicians (MDs and DOs), physician assistants, anesthesiologist assistants, and certified registered nurse practitioners.
For more information on how to go about getting licensed, you can have a look at StateRequirement’s in-depth licensing guides.
Industry-Specific State Licenses
Some Alabama businesses require additional licenses based on the specific industry they operate in.
Here are some common examples of industry-specific state licenses in Alabama:
- Liquor License: Required for businesses that manufacture, distribute, or sell alcoholic beverages. Regulated by the Alabama Alcoholic Beverage Control Board.
- Motor Vehicle Dealer License: Required for businesses that sell vehicles on a regular basis. Regulated by the Alabama Department of Revenue Motor Vehicle Division.
- Child Care License: Required for facilities caring for one or more unrelated children for more than four hours daily. Regulated by the Alabama Department of Human Resources Child Care Services Division.
- Food Establishment License: Required for restaurants, food trucks, and businesses preparing/serving food to the public. Regulated by the Alabama Department of Public Health at the county level.
- Cannabis Business License: Required for medical cannabis cultivation, processing, testing, and dispensing operations under Alabama’s medical cannabis program. Regulated by the Alabama Medical Cannabis Commission.
Note: This is not a complete list. Licensing requirements vary by industry and business model. For more, visit the Alabama Department of Revenue’s list of industry boards and license requirements.
Alabama Environmental Permits
If your business’s industry will mean that it could negatively impact the environment, there is a good chance you’ll need some sort of license or permit from the Alabama Department of Environmental Management (ADEM).
Examples of industries regulated here include:
- Underground Storage Tank Registration
- Aboveground Storage Tank Registration
- Air Quality Permits (construction and operating)
- NPDES Water Discharge Permits
- Construction Stormwater Permits
- Industrial Stormwater Permits
- Hazardous Waste Generator Permits
- Solid Waste Management Permits
- Wetlands and Stream Alteration Permits
- Coastal Zone Management Permits
- Public Water System Permits
- Water Well Drilling Permits
- Brownfields and Voluntary Cleanup
- Radioactive Materials Handling
- Surface Mining Operations
- Petroleum Product Storage and Handling
- Chemical Manufacturing and Processing
- Food Processing and Manufacturing
Recommended Solution
Business licensing can be complicated and time-consuming, taking focus away from running and growing your business. We recommend using an affordable legal service to handle your licensing needs instead.
Federal Business Licenses for Alabama LLCs
If your business is in a federally regulated industry (which is uncommon), it’ll need to acquire the appropriate business license from the right body before starting to operate.
A full list of industries regulated at a federal level can be found below:
- Agriculture: Overseen by the U.S. Department of Agriculture
- Alcoholic Beverages: Overseen by the Alcohol and Tobacco Tax and Trade Bureau and the Local Alcohol Beverage Control Board
- Aviation: Overseen by the Federal Aviation Administration.
- Firearms, Ammunitions, and Explosives: Overseen by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
- Fish and Wildlife: Overseen by the U.S. Fish and Wildlife Service.
- Commercial Fishing: Overseen by the National Oceanic and Atmospheric Administration Fisheries Service.
- Maritime Transportation: Overseen by the Federal Maritime Commission.
- Mining and Drilling: Overseen by the Bureau of Safety and Environmental Enforcement.
- Radio and Television Broadcasting: Overseen by the Federal Communications Commission.
- Transportation and Logistics: Overseen by the U.S. Department of Transportation
Alabama Business License Renewal
Depending on your business license, you may need to renew it periodically — usually within one or two years.
Your Alabama Sales Tax License must be renewed annually by November 30 through the My Alabama Taxes (MAT) portal.
Several of the local permits will also need to be renewed annually; this includes health department permits, signage permits, and fire department permits, which generally all need to be renewed annually.
Having said that, this will depend on both your location and the license in question.
Alabama Business License FAQs
Alabama doesn’t require a general business license that applies to all businesses. However, depending on your location and industry, you’ll likely need specific permits or licenses at the local, state, or federal level. Most businesses need at least a Business Privilege License from their county and a Sales Tax License if they sell taxable goods or services.
This depends on your business type and location. Common requirements include: a Business Privilege License from your county probate judge or license commissioner, a Sales Tax License (free) from the Alabama Department of Revenue if selling taxable goods, local permits (health, zoning, occupancy), professional licenses (for regulated professions), and industry-specific licenses (liquor, childcare, environmental permits).
The Sales Tax License is free. Business Privilege License costs vary significantly by county and business type. While the typical range is $15–$1,000, some fees can be lower for small retailers or higher for certain industries in larger cities. Professional licenses can cost $150-$500+, and specialized licenses like liquor permits range from $300-$1,000 depending on license type and location population.
Yes, most licenses require periodic renewal. Sales Tax Licenses must be renewed annually by November 30 through the My Alabama Taxes portal (mandatory since 2020). Business Privilege Licenses renew annually from October 1-31 (expiring September 30). Professional licenses typically renew every 1-3 years with continuing education requirements, and city licenses vary by municipality.
Generally, no. You must obtain all required licenses before beginning operations. Operating without proper licenses can result in fines, business closure orders, and difficulty obtaining licenses in the future. Some licenses allow provisional operation while applications are pending, so you should check with the specific agency.
Yes, home-based businesses need the same licenses as traditional businesses, plus they must comply with local zoning laws. You’ll need a Business Privilege License from your county, a Sales Tax License if selling taxable goods/services, any required professional licenses, and must ensure your residential area is zoned for business use or obtain appropriate variances.