Code of Alabama

Ala. Code § 11-51-91 (2026)

Licenses for Business, Etc., Conducted Outside Corporate Limits of Municipality.

✓ official Alabama Legislature (ALISON) text, current July 2026

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(a) Any municipality with an ordinance in effect on January 1, 2021, to fix and collect licenses for any business, trade, or profession done within the police jurisdiction of the municipality but outside the corporate limits thereof may continue to do so after July 26, 2021; provided, that the amount of the licenses shall not be more than one half the amount charged and collected as a license for like business, trade, or profession done within the corporate limits of the municipality, fees and penalties excluded; and provided further, that the total amount of the licenses outside the corporate limits shall not be in an amount greater than the cost of services provided by the municipality within the police jurisdiction outside the corporate limits. All licenses adopted pursuant to this section shall be assessed to all businesses, trades, or professionals within the police jurisdiction.

(b) No calculation shall be required to be made by the municipal officials or license officer for the cost of services to any particular business or classification of businesses within the police jurisdiction so long as the total amount of revenues from the licenses collected in the police jurisdiction is not an amount greater than the cost of services provided by the municipality to the police jurisdiction.

(c)(1) On or before December 31, 2021, any municipality collecting license revenue or other taxes and fees within its police jurisdiction outside the corporate limits shall notify the Department of Examiners of Public Accounts that it collects license revenue and other taxes and fees in its police jurisdiction outside the corporate limits. Beginning March 1, 2022, each municipality collecting license revenue and other taxes or fees within its police jurisdiction outside the corporate limits shall prepare an annual report which shall include an accounting of all license revenues and other taxes or fees collected in the police jurisdiction outside the corporate limits during the previous fiscal year and provide a list of the services provided by the municipality and a list of providers within the police jurisdiction outside the corporate limits. If the municipality provides police or fire protection within the police jurisdiction, the report shall include the following information:

a. The total annual budget for each police department and fire department within the municipal corporate limits.

b. The total number of calls responded to by each police or fire department within the municipal corporate limits and the total number of calls responded to by each police or fire department within the police jurisdiction. For the police department, the number should include the number of calls responded to as well as the number of citations and arrests made.

(2) A copy of the annual report, which shall be completed by March 1 for the previous fiscal year, shall be forwarded to the Department of Examiners of Public Accounts and shall be made available to the public.

(3) If a municipality fails to file a report as provided in subdivision (1) within 12 months of the report being due, the municipality may not collect any further license revenue or any other taxes or fees in the police jurisdiction outside the corporate limits.

(4) The Department of Examiners of Public Accounts shall provide written notice to the Department of Revenue of any municipality prevented from the further collection of license revenue or other taxes or fees as provided in subdivision (3), within 30 days of the expiration of the time period provided for in subdivision (3).

(5) The Legislative Committee on Public Accounts, by majority vote, shall have the authority to direct the Examiners of Public Accounts to perform an audit of any municipality collecting revenue in its police jurisdiction outside the corporate limits. A municipality shall not be responsible for the cost of the audit so directed unless it is determined by the Examiners of Public Accounts that a municipality is not in compliance with the requirements of subsections (a) and (b).

(d) When the place at which any business, trade, or profession is done or carried on is within the police jurisdiction of two or more municipalities which levy the licenses thereon authorized by this section, the licenses shall be paid to, issued, and collected by that municipality only whose boundary measured to the nearest point thereof is closest to the business, trade, or profession. This section shall not have the effect of repealing or modifying the limitations in this article relating to railroad, express companies, sleeping car companies, telegraph companies, telephone companies, and public utilities and insurance companies and their agents. This section shall be given a liberal construction to effectuate its purpose and meaning.

(e) Act 2021-297 does not affect any public or private contracts, or any mutual aid agreements between law enforcement, fire service, public safety, or emergency service agencies.

(Acts 1927, No. 580, p. 674; Acts 1932, Ex. Sess., No. 235, p. 240; Code 1940, T. 37, §733; Acts 1943, No. 502, p. 477; Acts 1986, No. 86-427, p. 790; Act 2006-586, p. 1548, §2; Act 2015-361, p. 1101, §1; Act 2021-297, §§3, 4.)

Notes of Decisions

Cited in 15 cases, 1978–2015 · leading case: State Dept. of Revenue v. Reynolds Metals Co., 541 So. 2d 524 (Ala. 1988).

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State Dept. of Revenue v. Reynolds Metals Co., 541 So. 2d 524 (Ala. 1988). · cites it 16× “In response to our Ex parte City of Leeds decision, the Legislature amended Code 1975, § 11-51-91, [1] effective April 29, 1986.”

Holt Civic Club v. City of Tuscaloosa, 439 U.S. 60 (1978). · cites it 4× “Code § 12-14-1 (1975), [2] and to the city's *62 power to license businesses, trades, and professions, Ala. Code § 11-51-91 (1975). [3] Tuscaloosa, however, may collect from businesses in the police jurisdiction only one-half of the license fee chargeable to similar businesses…”

Dickson Campers, Inc. v. City of Mobile, 37 So. 3d 134 (Ala. Civ. App. 2007). · cites it 31× “Pursuant to Ala.Code 1975, § 11-51-91, the City adopted a business-license tax and assessed businesses in the police jurisdiction one-half the amount charged to businesses within the City's municipal limits.”

Ex Parte City of Leeds, 473 So. 2d 1060 (Ala. 1985). · cites it 5× “Pursuant to Alabama Code 1975, § 11-51-91, a municipality may collect license taxes from businesses located outside its corporate limits but within its police jurisdiction, to defray the cost of municipal services provided to those businesses.”

Dickson Campers, Inc. v. City of Mobile, 37 So. 3d 150 (Ala. 2009). · cites it 16× “Dickson Campers sought: (1) a judgment declaring void the license taxes levied on businesses in the City’s police jurisdiction pursuant to § 11-51-91, Ala.Code 1975; (2) an injunction against further collection of the taxes; (3) a refund of taxes paid; and (4) other relief,…”

Town of Westover v. Bynum, 68 So. 3d 840 (Ala. Civ. App. 2011). · cites it 6× “Code 1975, § 11-51-91, as authorizing a municipality to levy and collect business-license fees from a business located in an overlapping police jurisdiction if the nearest municipality does not collect such taxes), and Ala. Code 1975, § 11-51-206 (authorizing a municipality to…”

Town of Killen v. Clemmons, 963 So. 2d 670 (Ala. Civ. App. 2007). · cites it 7× “At the time this action was commenced, § 11-51-91, Ala.Code 1975, stated, in pertinent part, that "[a]ny city or town within the State of Alabama may fix and collect licenses for any business, trade or profession done within the police jurisdiction of such city or town but…”

City of Prattville v. Joyner, 661 So. 2d 1158 (Ala. 1995). · cites it 3× “Ala.Code 1975, § 11-51-91. If the ordinance had become effective, Joyner was to continue paying this maximum amount, even though the city would no longer have been providing the fire protection.”

Marks v. Tenbrunsel, 910 So. 2d 1255 (Ala. 2005). “Waddell , indicates the Legislature's intent to withhold immunity from those *1261 who, in bad faith, cause the making of false reports of child abuse.”

Alfa Mut. Ins. Co. v. City of Mobile, 981 So. 2d 371 (Ala. 2007). “Code 1975, to impose a license tax on businesses operating within their corporate limits and by § 11-51-91, Ala.Code 1975, to impose a license tax on businesses operating within their police jurisdictions.”

City of Prattville v. Joyner, 698 So. 2d 122 (Ala. 1997). “Code [1975,] § 11-51-91, the determination of what services, if any, are to be provided from time to time in its police jurisdiction by a municipality is a matter within the legislative discretion of the governing body of the municipality.”

Town of Westover v. Bynum, 103 So. 3d 827 (Ala. Civ. App. 2012). “2007-11-6-147, which the Town had adopted pursuant to § 11-51-91, Ala.Code 1975, the Country Store owed the Town $47,011.”

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— Ala. Code § 11-51-91(c) — 1 case

City of Pike Road v. City of Montgomery, 202 So. 3d 644 (Ala. 2015).

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