HB178 Alabama 2020 Session

Summary

Primary Sponsor

Andrew SorrellAuditor

Republican

Session

Regular Session 2020

Title

Assessment of property for ad valorem tax purposes, to eliminate state ad valorem taxes on certain taxable property, Sec. 40-8-1 am'd.

Summary

HB 178 would phase out the state's ad valorem tax on certain property (primarily personal property) over 2020–2029 and end state taxation on that property after 2029.

What This Bill Does

The bill amends how property is taxed by the state, specifically reducing the Class II (personal and other non-specified property) assessment ratio each year from 2021 to 2029, ending with no state tax for tax years beginning after 2029. Other property classes (I, III, IV) maintain their current classifications and rates. The change takes effect January 1, 2020, and the act repeals conflicting laws while remaining severable and subject to existing exemptions for certain property.

Who It Affects

• Property owners with Class II property (real and personal property not otherwise classified, including personal or business equipment) would see their state ad valorem tax assessment decrease each year starting in 2021, eventually facing no state tax after 2029 for tax years beginning after 2029.
• The State of Alabama (and its revenue from ad valorem taxes) would collect less state tax from this group over time, with the state portion effectively ending after 2029 for these properties; local governments may continue to levy their own local taxes as allowed under current law.

Key Provisions

• Class II personal property tax rate would decline from 20% to 18% in 2021, then 16% in 2022, 14% in 2023, 12% in 2024, 10% in 2025, 8% in 2026, 6% in 2027, 4% in 2028, and 2% in 2029, with no state tax for tax years beginning after 2029.
• For property in Classes I, III, and IV, existing tax ratios remain as defined (e.g., Class I at 30%, Class III at 10%, Class IV at 15%).
• The act becomes effective January 1, 2020, and repeals any conflicting laws while remaining severable.
• Provisions include standard definitions and exemptions (e.g., religious, educational, charitable property) and rules for manufactured homes, as well as conditions under which residential classifications may be reclassified.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Ad Valorem Tax