SB86 Alabama 2023 Session

Summary

Primary Sponsor

Arthur OrrSenator

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

SB86 creates a one-time refundable income tax credit for eligible Alabama taxpayers to partially offset the sales taxes paid on groceries, funded by a new Refundable Tax Credit Fund and not taxable for state income tax purposes.

What This Bill Does

Provides a one-time refundable credit to eligible taxpayers to offset grocery sales taxes for the 2021 tax year. The credit is issued by the Department of Revenue, with payments made electronically if bank information is available or by check otherwise, starting no sooner than November 30, 2023. The credit is not considered taxable income and is not subject to offsets, debt collection, or interest paid to the recipient. Funding comes from the Refundable Tax Credit Fund, fed by transfers from the Education Trust Fund, and may accrue interest to offset administrative costs; administration rules may be adopted, and funding for implementation comes via supplemental appropriations rather than a standing appropriation.

Who It Affects

• Qualified taxpayers: resident individuals who filed an Alabama individual income tax return for the tax year beginning January 1, 2021 (and who filed on or before October 17, 2022), will receive the one-time credit (amounts: $150 for single, head of family, or married filing separately; $300 for married filing jointly).
• Non-qualifying groups: nonresidents, estates or trusts, and individuals claimed as a dependent for federal or Alabama purposes are not eligible for the credit.

Key Provisions

• Creates a one-time refundable income tax credit to partially offset grocery sales taxes for the tax year, with credit amounts of $150 (single, head of family, or married filing separately) or $300 (married filing jointly).
• Establishes the Refundable Tax Credit Fund in the State Treasury; directs transfers from the Education Trust Fund to fund credits and administrative costs, with fund interest used to offset administration costs.
• Credits are refundable and not taxable for Alabama income tax purposes; credits are not subject to offset, debt collection, or interest for the recipient.
• Credits issued no sooner than November 30, 2023; electronically deposited if bank information is on file, otherwise mailed by check.
• Eligible taxpayers are narrowly defined and restricted to specific resident filers by a set date; nonresidents, estates/trusts, and dependents are excluded.
• Department of Revenue may adopt rules to implement and administer the act; funding for implementation is via supplemental appropriations rather than direct appropriation.
• The act becomes effective immediately upon passage and approval.

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 rebate for qualified tax payers.