SB6 Alabama 2015 1st Special Session

Summary

Primary Sponsor

Trip Pittman

Republican

Session

First Special Session 2015

Title

Motor vehicle, remote sales, sales and use tax, distribution to General Fund, Secs. 40-23-61, 40-23-85, 40-23-174 am'd.

Summary

SB6 would change how use tax and remote sales tax funds are distributed among Alabama's General Fund, Education Trust Fund, CHIP, and local governments.

What This Bill Does

It amends sections 40-23-61, 40-23-85, and 40-23-174 to specify the shares of use tax proceeds and remote use tax proceeds. It sets, for each tax category, how much goes to the General Fund and how much goes to the Education Trust Fund, and it requires CHIP funding as a first charge. It also creates rules for distributing remote sales tax proceeds if a national agreement is reached, including shares to municipalities and counties, and it clarifies that certain out-of-state seller transactions are treated as use tax for these distributions.

Who It Affects

• State government, via the General Fund and the Education Trust Fund, as specified shares of use tax and remote use tax revenues
• Local governments (municipalities and counties), which would receive portions of remote sale/use tax proceeds based on delivery location
• CHIP (Children's Health Insurance Program), which is funded as a first charge against General Fund allocations
• Out-of-state remote sellers, whose transactions are treated as use tax for distribution purposes

Key Provisions

• Amends 40-23-61 to outline use tax distributions among funds: 58% of the total tax from the 0.02 tax component goes to the Education Trust Fund and 42% to the General Fund (with existing vehicle and related tax rules retained, including underreporting adjustments).
• Amends 40-23-85 to specify remote use tax distributions: 75% to the General Fund and 25% to the Education Trust Fund from remote use tax amounts, and the balance of these taxes is distributed 75% to the Education Trust Fund and 25% to the General Fund; CHIP funding is a first charge against General Fund allocations.
• Amends 40-23-174 to provide distribution rules if a national remote-sales tax agreement is reached: half of such proceeds go to Alabama (75% to General Fund and 25% to ETF from that half), 1/4 to the municipality where the delivery occurs, and the remainder to the county where the delivery occurs.
• Effective date: October 1, 2015.
• Clarifies that transactions involving a seller outside Alabama, when property is shipped from outside the state, shall be treated as use tax for distribution purposes.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation