Alabama LLC Business Licenses — Step 7 of 8
Alabama's licensing setup trips people up in one specific way: there's a county-issued "Business Privilege License" that sounds almost identical to the Business Privilege Tax from Step 6 — but they're completely different things, from different agencies. Add city licenses and industry permits on top, and it's worth mapping out clearly. Here's exactly what applies to you.
Alabama has no single statewide business license, but nearly every LLC needs a Business Privilege License from the county Probate Judge or License Commissioner where the LLC is located — separate from the Business Privilege Tax you file with the state. Most cities (Birmingham, Montgomery, Huntsville, Mobile) also require their own city business license on top of the county one. Regulated professions need additional state occupational licenses.
- State general license
- None
- County license
- Almost always
- Issued by
- County Probate Judge
- City license
- Often required too
- Home county only
- Usually, yes
- Not the same as
- Business Privilege Tax
- Next step
- Step 8 →
Alabama doesn't make every business buy one general statewide license — but that doesn't mean licensing is simple. There's a genuinely confusing naming overlap here: the Business Privilege License (this step, issued by your county) is a completely different thing from the Business Privilege Tax (Step 6, filed with the state). Same name pattern, different agency, different purpose.
- County Business Privilege License — issued by the Probate Judge or License Commissioner in your LLC's home county. This is required for nearly every Alabama business under Title 40, Chapter 12.
- Usually only your home county — if your LLC is based in Huntsville (Madison County) but does business in nearby Athens (Limestone County), you generally only need the Madison County license.
- City business license — most Alabama cities (Birmingham, Montgomery, Huntsville, Mobile) additionally require their own city-issued license, separate from the county one.
- State occupational licenses — regulated professions (contractors, cosmetology, HVAC, healthcare) need approval from the relevant state board.
License Finder Checklist
Check what applies to you and we'll list the licenses and registrations most likely to apply:
Where Each License Comes From
County Business Privilege License
Contact the Probate Judge's office or License Commissioner in the county where your LLC is located — not the Secretary of State, and not the Department of Revenue directly. Cost varies by license type and county; industry-specific licenses (like daycare or food trucks) typically cost more than a generic license.
City business license
Handled separately by each city's tax and license division — for example, Birmingham's Revenue Division or Huntsville's Finance Department. Fees are often based on gross receipts, and most require annual renewal.
State occupational licenses
Alabama routes regulated trades through standalone industry boards rather than one umbrella agency — contractors go through the Alabama Licensing Board for General Contractors, cosmetologists through the Board of Cosmetology and Barbering, and so on.
Don't confuse this with Step 6The Business Privilege License (this step) is issued by your county and lets you legally operate. The Business Privilege Tax (Step 6) is a state tax return filed with the Alabama Department of Revenue. They share almost the same name but are handled by entirely different offices — completing one doesn't satisfy the other.
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Alabama Business Licenses — FAQ
Ahmad Adil is the founder and CEO of LLC School. The guidance here — the county-issued Business Privilege License system under Title 40, Chapter 12, its distinction from the Business Privilege Tax, and typical city and state licensing layers — reflects current Alabama Department of Revenue and municipal guidance. This is educational information, not legal advice.
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