The Mobile City Council on Tuesday approved a resolution opposing Alabama Senate Bill 349, which would make pharmacies exempt from business license fees based on gross receipts.
Prescription drugs are already exempted from sales tax, but this bill — introduced on Fed. 27 by Sen. Bill Beasley — would also exempt pharmacies from paying business license fees based on total gross sales.
“We shouldn’t give one industry preferential treatment over others,” Council Vice President Levon Manzie said, following a pre-conference meeting.
Councilman John Williams expanded on the bill during the council comment portion of Tuesday’s regular meeting.
“All businesses should pay their fair share to the municipalities in which they reside,” he said. “We are open to discuss with the pharmaceutical industry the rate in which they are taxed.”
Williams explained that pharmacies are currently taxed at a rate that would force them to pay the equivalent of roughly $6,000 for a business license on $5 million in gross receipts.
“If the pharmaceutical industry believes paying $6,000 on $5 million in gross receipts is too much they are free to come and discuss it,” he said. “We don’t think it’s unfair. Every single business in our city, with the exception of banks, have a similar factor.”
The retail side of pharmaceutical businesses would not be impacted by the bill, Williams said.
In other business, the council delayed until April 3 a final decision on the allocation of money to fund a settlement between the city and Waste Management over the disposal of yard debris at Dirt, Inc.
The settlement would allow the city to continue to dump construction and demolition waste at Dirt, Inc. and avoid a new lawsuit from WM. The company previously won a lawsuit against the city’s Solid Waste Authority over breach of a 1994 contract along with a $6 million judgement.
The delay would allow council attorney Wanda Cochran to continue to review more than 20 years of documents related to the agreement. If passed, the agreement would pay WM $348,000 per year. The funds would essentially pay WM, which claims to have a contractual right to construction and demolition waste, and allow the city to continue to use Dirt, Inc.