SB105 Alabama 2018 Session

Summary

Primary Sponsor

Hank Sanders

Democrat

Session

Regular Session 2018

Title

State income tax, federal deduction limited for individual taxpayers, state sales tax on food and over-the-counter drugs removed, Amendment 225 (Section 211.04, Recompiled Constitution of Alabama of 1901, as amended), repealed, const. amend.

Summary

SB 105 would repeal Amendment 225 and change Alabama tax rules by limiting the state deduction for federal taxes, while exempting food and over-the-counter drugs from state sales tax and banning local governments from taxing those items separately.

What This Bill Does

If passed, the bill would repeal the current Amendment 225. It would allow a deduction for federal income taxes paid by individual taxpayers, but limit it based on income: full deduction up to $100k AGI for single/HOH and $200k for joint filers, with gradually reducing deductions for higher incomes. It would start exempting food and over-the-counter drugs from state sales tax beginning in 2018, with local governments still collecting their local portion of sales tax on those items but not a separate tax solely on food or OTC drugs. It also defines food and OTC drugs for this purpose and requires voter approval in a statewide election to adopt the amendment.

Who It Affects

• Individual taxpayers in Alabama would see changes to their federal tax deduction, with a full deduction available only up to certain income levels and phased reductions beyond those levels.
• Consumers who buy food and over-the-counter drugs would pay no state sales tax on those items, while local sales taxes on those items would continue at the local rate but no separate food/OTC tax could be imposed.
• Local governments would be restricted from creating separate taxes that apply only to food or OTC drugs, affecting how they tax these items.
• Businesses and retailers selling food and OTC drugs could experience changes in sales tax collection due to the exemption from state tax (though local taxes at the local rate would still apply).

Key Provisions

• Repeal Amendment 225 of the Alabama Constitution (Section 211.04).
• For tax years beginning after 12/31/2017, allow a deduction for federal income taxes paid or accrued for individual taxpayers with income-based limits: fully deductible up to $100,000 AGI for single/HOH and $200,000 AGI for joint filers; partial deductions apply above those thresholds with specified reduction rates.
• Beginning 1/1/2018, exempt the sale of food and over-the-counter drugs from state sales tax; local governments may continue to collect the local portion of sales tax at the same rate but may not impose a separate food/OTC sales tax.
• Define food to follow the SNAP program definition (7 U.S.C. §2012 et seq.) for purposes of the exemption; if SNAP changes, the Legislature would set a new general-law definition of food; define over-the-counter drugs as non-prescription drugs with labeling required by federal law and exclude grooming/hygiene products.
• Require a statewide election for voter approval of the proposed constitutional amendment.

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

Subjects

Constitutional Amendments