The deadline is looming for local business owners to pay their annual privilege license or “business license.”

In Andalusia, business owners may have noticed a different process to pay their annual business license fee than was used in years past. For the first time, the city has contracted with Revenue Discovery Systems, or RDS, the same company that is used to collect the city’s sales, use, rental and lodging taxes.

“December and January is primarily business license collection season for the city,” said John Thompson, Andalusia city clerk. “Businesses get their notices in December, which are due by Jan. 31.”

Thompson said the fees collected are the largest source of revenue for the city, but it was not cost efficient for employees to handle the billing in-house. He said a study was done to determine how much time and cost was associated with the process, and it was determined it would be better to outsource it.

“We calculated the cost, with employee labor, postage and such, and quickly realized it wasn’t cost-efficient,” he said. “And also, it is much more convenient for the business owner. For example, if you’re a retail business operating in Andalusia and you’re already set up to pay sales tax with RDS, you go online once month and submit your gross sales, and it calculates the tax.

“The same process will work with business licenses,” he said.

But with any new process, there have been a few noticeable kinks, he said.

“With any transition, there have been a few hiccups, and there has been a bit of a confusion this year, with maybe some business owners receiving notice that they didn’t pay last year,” Thompson said. “All you have to do is contact RDS and show proof of payment, and you’re good.

“All in all, I think it’s a good step for the city and business owners to use the online system,” he said. “It’s one less step the business owner has to take. One can sit in the office and with a few clicks, take care of it instead of coming down to city hall and writing a check. We don’t even take credit cards.”

In Florala, owners must pay by Dec. 31 to avoid a penalty.

Florala City Clerk Kathy Rathel said the city also uses RDS for its business license collections.

“(RDS) invoices business license renewals for us in December with due date by January 1, 2012, and delinquent on Feb. 1,” Rathel said. “A large number of our licenses are based on gross revenues, so there’s really no way to tell just how much revenue we’ll receive – but it is one of our larges sources of revenue.”

In Opp, City Clerk Connie Smith said business license renewals are collected from Jan. 1 through Jan. 31 each year. She said she is currently mailing and emailing out renewal notices, and during the last fiscal year, the city collected approximately $368,000.

State and county business licenses were due in October; however, the state extended renewals this year through Nov. 30 due to the new immigration law. Licenses not renewed by the deadline are now being assessed a 15 percent penalty.