HB155 Alabama 2019 Session

Updated Feb 26, 2026

Notable

Summary

Primary Sponsor: Steve ClouseRepresentative
Republican
Session: Regular Session 2019
Title: Lease tax, state and local levies payment and collection based on either seller's place of business or where delivered, automotive vehicles paid where vehicle registered after first payment, Sec. 40-12-222 am'd.
Summary: HB 155 updates Alabama's lease tax rules to specify how taxes are calculated and collected on leasing and renting, with retroactive effect to open tax periods.
What This Bill Does
It sets lease tax rates: 4% general, 1.5% for automotive vehicles and certain trailers, and 2% for linens and garments, with exemptions for government-leased property. Lessors may pass the tax onto lessees by adding it to the lease price, but such amounts must be included in the gross proceeds taxed. Tax sourcing rules determine where the tax applies: for most leases, based on delivery location if delivered or rental location if picked up; for autos, upfront charges are taxed by the dealer's location and ongoing payments by the lessee's garage address. The act is declaratory of existing law, retroactive to open tax periods, and imposes no new assessments or refunds for periods prior to the effective date; the effective date is the first day of the third month after passage.

Who It Affects
Lessor businesses that lease or rent tangible personal property in Alabama, who must calculate and collect the lease taxes under the new rules and rates

Key Provisions
Implements tax rates: 4% general, 1.5% for automotive vehicles/trailers, 2% for linens and garments, with specific exemptions for government leasing.
Allows lessors to pass taxes to lessees by increasing the lease price, but such amounts are treated as part of gross proceeds for tax purposes.
Defines tax sourcing: deliveries determine tax based on delivery location; pickups determine tax based on rental location; auto leases have a special rule where upfront charges are taxed by dealer location and ongoing payments by the lessee's garage address.
Clarifies retroactive application to open tax periods and states no new assessments or refunds will be issued for periods before the effective date; effective date is the first day of the third month after passage.

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