HB120 Alabama 2023 Session

Summary

Primary Sponsor

Randall Shedd

Republican

Session

Regular Session 2023

Title

Relating to sales and use tax; to establish the Alabama Broadband Investment Maximization Act; to amend Section 40-23-4, Code of Alabama 1975, to exempt the purchase of broadband equipment and supplies from sales and use tax.

Summary

HB120 would create the Alabama Broadband Investment Maximization Act and exempt the purchase of broadband equipment and supplies from Alabama sales and use taxes.

What This Bill Does

If passed, the bill would exempt the gross proceeds from the sale of equipment, machinery, software, ancillary components, and infrastructure used to produce broadband communications services or provide Internet access from sales and use tax. It defines broadband services and equipment and states that the exemption does not apply to retail sales of consumer electronics. The exemption would be in effect from October 1, 2023, through September 30, 2026, unless extended by the Legislature, and would require amending Section 40-23-4 to include this exemption.

Who It Affects

• Broadband service providers, network builders, and equipment suppliers would pay no sales tax on eligible broadband-related equipment and supplies, reducing upfront costs for deployment and operation.
• State and local governments (and their taxpayers) would see a reduction in sales tax revenue during the exemption period.

Key Provisions

• Provision 1: Establishes the Alabama Broadband Investment Maximization Act and amends Section 40-23-4 to exempt the purchase of broadband equipment and supplies from sales and use tax.
• Provision 2: Exempts the gross proceeds from the sale of equipment, machinery, software, ancillary components, and infrastructure used to produce broadband services or provide Internet access, while excluding the retail sale of consumer electronics.
• Provision 3: Sets a temporary effective period for the exemption (October 1, 2023, to September 30, 2026) with potential extension by the Legislature, and provides definitions for key terms such as broadband services, equipment, and Internet access.

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