SB345 Alabama 2016 Session

Summary

Primary Sponsor

Bobby D. SingletonSenator

Democrat

Session

Regular Session 2016

Title

Taxation, exemption from sale, use, and rental tax granted to certain subscription services, Secs. 40-12-223, 40-23-4, 40-23-62 am'd.

Summary

SB345 would exempt digital goods transferred electronically from Alabama sales, use, and rental taxes when the buyer does not receive a permanent right to use the product.

What This Bill Does

The bill adds tax exemptions for the gross proceeds from renting or selling electronically transferred products (such as streaming video and broadcasting content) when the right to use is not permanent or is conditional on continued payment. It covers both sales and leases of these digital goods and also the storage or use of such products, but it excludes computer software. It tightens definitions around what counts as a product transferred electronically and what constitutes a permanent right, with an effective date set after the bill becomes law.

Who It Affects

• Consumers in Alabama who purchase or lease electronically transferred digital content (e.g., streaming video, video on demand, broadcasting content) will not be taxed on those transactions if the use is not permanent.
• Businesses that sell or lease electronically transferred digital products (e.g., streaming services, broadcasters) will not have to collect sales tax on those transactions when the customer does not obtain a permanent use right.

Key Provisions

• Adds exemption to 40-12-223 (15): gross proceeds from leasing or rental of electronically transferred products that are not permanently usable or whose use is conditioned on continued payment.
• Adds exemption to 40-23-4 (50): gross proceeds from sale of electronically transferred products with non-permanent rights or conditional use.
• Adds exemption to 40-23-62 (39): storage, use, or consumption of electronically transferred products with non-permanent rights or conditional use.
• Defines 'product transferred electronically' to include video programming services, subscription video services, video on demand, and broadcasting content, but excludes computer software; defines 'permanent' as perpetual or indefinite, with subscription access not considered permanent.
• Effective date: the act becomes law on the first day of the third month after passage and governor approval.

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