Legislation to reduce business license costs for pharmacies ready for floor debate

Both Senate and House versions of legislation that would stop what one Alabama Retail Association member calls “robbery without a gun” are ready for floor debate.

After a public hearing Wednesday, Feb. 22, the Senate Fiscal Responsibility and Economic Development Committee approved  SB31 by Sen. Billy Beasley, D-Clayton. The bill now goes to the full Senate for consideration.

Beasley’s bill, along with its companion, HB58 by Rep. Ron Johnson, R-Sylacauga, would allow pharmacies to remove prescription drug sales from their gross receipts when calculating the cost of their business license.  The House Health Committee approved HB58 on Feb. 9, making it possible for it be debated by the full House.

Pharmacist Hamp Russell, owner of City Drug on Dexter Avenue, just blocks from the Alabama Capitol, recently told Alabama Retail that his city business license – which is more than $12,000 – is based on his total revenue, rather than taxable revenue.

Prescription drugs in Alabama are not taxed. Those costly medications account for 90 percent of City Drug’s inventory, and the amount the drug store makes on prescription drugs “is determined by an insurance company” or Medicaid and Medicare, Russell said. He said his profit margin is less than 2 percent. The city “is robbing me without a gun,” said the business owner, who has been an Alabama Retail Association member since 2015.

Pharmacists from Sylacauga, Section, Tuscaloosa and several small communities in south Alabama appeared to speak in favor of the bill at Wednesday’s public hearing.

The Senate leadership stopped this legislation last year because cities would lose revenue they had already budgeted. At Wednesday’s public hearing, Ken Smith, executive director of the Alabama League of Municipalities, was the only person to testify against the bill. He said the loss to cities would “have to be made up with some other revenue.” He also called the legislation a “gateway” bill that would lead to attempts by other industries to reduce their business license obligations.

In 2016, the governor pocket vetoed legislation that would have limited where and under what circumstances home health care or durable medical equipment companies need a city business license.

The Alabama Retail Association supports simplification of business and delivery licenses in Alabama.

This article is part of the Alabama Retail Report, a communication for Alabama Retail Association members. Not a member? Join us!

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