HB88 Alabama 2010 Session

Summary

Primary Sponsor

H. Mac Gipson

Republican

Session

Regular Session 2010

Title

Over-the-counter medications, sales and use tax exemption, Sec. 40-23-4.4 added

Summary

HB88 would extend sales tax relief to certain over-the-counter medications in Alabama starting with 2011.

What This Bill Does

The bill adds a new exemption (40-23-4.4) to make qualifying over-the-counter medications tax-exempt from state and local sales taxes. It defines which OTC meds qualify—those that are labeled as drugs and include a Drug Facts panel or a list of active ingredients—and it explicitly excludes grooming/hygiene products and dietary supplements. It also directs that rules be created to clarify the meaning and application of the exemption. The exemption is in addition to the existing exemption for prescription medicines and takes effect for tax years beginning on or after January 1, 2011.

Who It Affects

• Alabama residents who purchase qualifying over-the-counter medications will not pay state or local sales tax on those items starting in 2011.
• Retailers and pharmacies selling qualifying OTC medications will not collect sales tax on those items and must ensure products meet the labeling criteria to qualify for exemption.

Key Provisions

• Adds Section 40-23-4.4, titled 'Over-the-Counter medications exempt.'
• Defines 'over-the-counter medications' as drugs with labeling identifying the product as a drug and including a Drug Facts panel or an active ingredients list; excludes grooming/hygiene products and dietary supplements.
• Authorizes rules under the Administrative Procedures Act to clarify the meaning of 'over-the-counter medications.'
• Exemption applies to city, county, and state sales taxes.
• Effective for tax years beginning on or after January 1, 2011.
• Contains severability and repeal provisions for conflicting laws.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation