HB175 Alabama 2023 Session

Summary

Primary Sponsor

Danny GarrettRepresentative

Republican

Session

Regular Session 2023

Title

Relating to income taxes; to provide a one-time refundable income tax credit to qualified taxpayers to partially offset the amount of sales taxes paid on groceries throughout the tax year; to create the Refundable Tax Credit Fund in the State Treasury; to provide that refundable credits would not be taxable for Alabama income tax purposes; and to provide an effective date.

Summary

HB175 creates a one-time refundable income tax credit for qualified Alabama taxpayers to partially offset grocery sales taxes, funded by a new Refundable Tax Credit Fund.

What This Bill Does

If enacted, the bill would provide a one-time credit of $150 for single, head of household, or married filing separately, and $300 for married filing jointly, to eligible taxpayers who filed an Alabama personal income tax return for the 2021 year by October 17, 2022. The Department of Revenue would issue the credits no sooner than November 30, 2023; credits are not taxable and would be deposited electronically if bank information is on file, otherwise mailed as a check. The credits would be paid from the Refundable Tax Credit Fund in the State Treasury, funded by transfers from the Education Trust Fund to cover payments and administrative costs, and the fund may accrue interest to offset those costs (the credit itself does not earn interest for the taxpayer).

Who It Affects

• Qualified taxpayers who filed an Alabama personal income tax return for the 2021 tax year by October 17, 2022 would be eligible to receive the one-time credit of $150 or $300 to offset grocery sales taxes.
• Noneligible groups (nonresidents, estates or trusts, and individuals claimed as a dependent by another taxpayer) would not receive the credit.

Key Provisions

• Implements a one-time refundable income tax credit for qualified taxpayers to partially offset grocery sales taxes, with amounts of $150 (single, head of household, or married filing separately) and $300 (married filing jointly).
• Creates the Refundable Tax Credit Fund in the State Treasury, funded by transfers from the Education Trust Fund to pay credits and cover administrative costs; the fund may accrue interest to offset administrative costs.
• Credits are not taxable income for Alabama and are not subject to offset or debt collection; credits are issued starting no sooner than November 30, 2023 and are deposited electronically if bank information is on file, otherwise mailed by check; credits themselves do not bear interest.
• Defines eligible taxpayers and exclusions: individuals who filed a 2021 Alabama personal income tax return by Oct 17, 2022; excludes nonresidents, estates/trusts, and dependents claimed by another taxpayer.
• Administrative and funding provisions allow the Department of Revenue to administer the act and adopt rules; the act’s funding is to be provided via supplemental appropriation; if Senate Bill 86 is enacted, the HB175 credit provisions prevail.

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

Subjects

One-time Taxpayer Refund Bill