OCCUPATIONAL LICENSE FEES

City Code Section 74-112 Levy of fee.

It shall be unlawful for any person to engage in or follow any trade, occupation or profession within the city on and after February 1, 1962, without paying license fees for the privilege of engaging in or following such trade, occupation or profession, which license fees shall be measured by two percent (2%) of the gross receipts of each such person. 

City Code Section 74-114 Withholding of fee and filing of return by employers

Each employer shall deduct from each payment due each employee the amount of the license fees measured by the compensation due each employee.  The payments required to be made on the account of such deductions by employers shall be made monthly to the city for the monthly periods ending on the last calendar day of each month of each year, on or before the 20^th day of the month next following the end of each such monthly period.  Each employer shall at the same time make a return in connection therewith on a form made available by the city.  The failure or omission by any employer to deduct such license fees shall not relieve an employee from the payment of such license fees and compliance with the requirements for making returns as provided in this article, or with any regulations promulgated under this article.  Each employer shall file in the revenue department, on or before January 31 of each year, a return on a form made available by the city, which return shall show the gross amount of compensation of each employee, the amount of license fees deducted and paid by such employer for all or any part of the preceding calendar year, and the last known address of each employee.  Each employer shall keep accurate records of all such compensation, deductions, license fees, payments and returns.  Such records shall be kept and maintained by each such employer for not less than five years subsequent to the date such compensation was earned. 

Explanation:

All employees who work in the City of Gadsden are required to pay to the City of Gadsden an occupational license fee of 2% of their gross compensation.  The employer is responsible for withholding this fee and reporting and remitting it to the City on a monthly basis on or before the 20^th of the following month (postmark must be on or before the 20^th).  If this amount is not withheld from the employees’ compensation, this does not relieve the employees from the payment of the occupational license fee. 

There will be a delinquent penalty added of ten percent (10%) of the amount due plus an additional amount two percent (2%) of the amount due for each month or part of a month until the occupational license fee is paid.  The maximum penalty is twenty eight percent (28%) and the minimum penalty is $25.00.  This information is provided in the Code of Ordinances, Section 74-120.

By January 31 of each calendar year, a reconciliation form, which is available through the city, must be completed by the employer with W2s attached for each employee that was employed for all or part of the preceding calendar year.  All employers are responsible for keeping accurate records on all employees for at least five years.