HB256 Alabama 2021 Session

Summary

Primary Sponsor

Kyle South

Republican

Session

Regular Session 2021

Title

Fayette County, further provide for distribution of privilege license tax, technical revisions, Sec. 45-29-242.20 am'd.

Summary

HB256 updates Fayette County's privilege license tax rules, including how the tax is collected and how the proceeds are distributed, with some technical updates to the state sales tax language.

What This Bill Does

It applies only to Fayette County and allows the county to levy a one-cent privilege license tax on gross sales or receipts, collected by the state tax department. The bill outlines reporting requirements, how the tax is added to prices, and penalties for nonpayment or improper refunds, including a lien and enforcement powers. It also changes how the tax proceeds are distributed between the Fayette County Board of Education and the county’s general fund and debt service, and sets a collection fee for the state to administer the tax.

Who It Affects

• Taxpayers in Fayette County and businesses subject to the one-cent privilege license tax; they must collect the tax from customers, file tax reports, and comply with reporting and payment requirements.
• Fayette County Board of Education and the Fayette County General Fund (and related debt obligations) which receive designated shares of the tax proceeds, and the county government that oversees debt service and debt reduction.

Key Provisions

• applies only to Fayette County and authorizes a one-cent privilege license tax on gross receipts; most existing exemptions under state sales tax statutes remain exempt from this local tax
• tax collection and reporting are done by the State Department of Revenue, with monthly reporting, handling of credit sales, and inspection rights for the county
• requires sellers to add the tax to the sales price or admission fee, prohibits refunds or absorption of the tax, and establishes penalties for noncompliance
• creates a lien on the tax debt and gives the department enforcement powers similar to those used for state sales and use taxes, including use of special counsel if needed
• incorporates state sales and use tax laws for administration and enforcement of this local tax, with powers and duties mirroring the state statutes
• the Department of Revenue may charge Fayette County up to 5% of total collections as a collection fee, paid into the State Treasury
• proceeds are distributed annually: initially 40% to the Fayette County Board of Education, 40% to debt service for Tom Bevill Reservoir bonds, and 20% to the Fayette County General Fund for debt reduction (not for new hires); after retirement of the Tom Bevill Reservoir bonds, 40% to Board of Education and 60% to the General Fund for debt reduction
• Sections become effective immediately after the governor signs the act, with existing receipts ratified and confirmed if received before the effective date

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

Subjects

Fayette County