Start a Business in Alabama
Costs, permits, taxes, and requirements for AL.
- Cost rank
- 4th of 50
- 87% of the national average · tied with 2 other states
- State income tax
- 2-5%
- Charged on top of federal income tax
- Sales tax
- 4%
- You collect it on taxable sales and remit it to the state
- LLC filing fee
- $200
- One-off, paid to the Secretary of State · 5th most expensive of 50 (median $100)
Where Alabama sits on cost
Cheapest third to most expensive third, by startup cost index. Hover a state for its index and rank.
What's different in Alabama
There is no single business licence in Alabama. Cities and counties issue their own, so a trade that crosses two or three town lines in a working week ends up holding two or three of them, renewing on dates that do not line up. The rate in the ledger above is the state's share only; local add-ons sit on top of it, and in some towns they roughly match the state again. What is left of the map is shaped by large assembly plants: the counties near one pay skilled hourly rates that the rest of the state does not have to match.
- A licence per town, not per state
- Cities and counties each issue their own, with separate forms and separate renewal dates.
- The local add-on does the real work
- What you actually charge depends on the town and county you sell in, not on the state figure.
- Assembly plants set the trade wage
- Near a large plant, skilled hourly pay is bid up and a small shop competes with it for the same people.
- Wind cover on the Gulf counties
- Insurers price the two coastal counties for hurricanes; premiums there behave nothing like inland ones.
Business Guides for Alabama
All 53, cheapest first. Ranges are what that business actually costs in AL.
Under $10K 23
- Notary Services $246 – $1,640
- Social Media Management $425 – $2,600
- Pet Sitting $435 – $2,610
- Web Design $425 – $4,350
- Dog Walking $435 – $4,350
- Personal Training $1,000 – $8,000
- Tutoring $425 – $8,700
- E-Commerce $435 – $8,700
- Window Cleaning $870 – $8,700
- Graphic Design $875 – $8,700
- Cleaning Business $2,000 – $8,000
- Bookkeeping $1,750 – $8,700
- Handyman $2,000 – $10,000
- Vending Machine $2,460 – $12,300
- House Painting $1,740 – $13,050
- Pool Cleaning $1,740 – $13,050
- Tax Preparation $1,750 – $13,050
- Lawn Care $3,000 – $12,000
- Auto Detailing $2,000 – $15,000
- Photography $3,000 – $15,000
- Pressure Washing $3,000 – $15,000
- Consulting $875 – $17,400
- Event Planning $1,750 – $17,400
$10K – $50K 17
- DJ Service $2,600 – $17,400
- Interior Design $1,740 – $21,750
- Carpet Cleaning $4,350 – $21,750
- Massage Therapy $4,350 – $21,750
- Mobile Spa $6,560 – $20,500
- Landscaping $5,000 – $25,000
- Wedding Photography $8,700 – $34,800
- Junk Removal $4,350 – $43,500
- Bakery $2,000 – $50,000
- Pest Control $8,700 – $43,500
- Pet Grooming $4,350 – $65,250
- Catering $8,700 – $65,250
- Florist $8,700 – $65,250
- Tree Service $8,700 – $65,250
- Electrician $13,050 – $65,250
- Plumbing $13,050 – $65,250
- Moving Company $16,400 – $82,000
$50K and up 13
- Yoga Studio $13,050 – $87,000
- HVAC $17,400 – $87,000
- Barber Shop $21,250 – $102,000
- Nail Salon $25,500 – $127,500
- Hair Salon $29,750 – $127,500
- Gym $42,500 – $127,500
- Food Truck $40,000 – $150,000
- Ice Cream Shop $43,500 – $261,000
- Coffee Shop $68,000 – $255,000
- Daycare $4,350 – $435,000
- Car Wash $43,500 – $435,000
- Laundromat $87,000 – $435,000
- Restaurant $148,750 – $425,000
Get a personalized cost estimate for Alabama
Calculate CostsBusiness Requirements in Alabama
Register Your Business
File with Alabama Secretary of State. LLC fee: $200
Get Business License
Most cities require a general business license ($50-$300).
Get EIN
Free from IRS. Required for bank accounts and taxes.
Register for Sales Tax
State rate: 4%. Local taxes may apply.
Get Business Insurance
General liability protects from lawsuits. Often required by landlords.