HB17 Alabama 2024 Session

Summary

Primary Sponsor

Chris EnglandRepresentative

Democrat

Session

Regular Session 2024

Title

Simplified sellers use tax, rate increased, distribution of proceeds.

Summary

HB17 would raise the simplified sellers use tax rate and change how the extra tax money is shared among state funds, counties, cities, and local schools.

What This Bill Does

The bill increases the simplified sellers use tax rate on eligible sales delivered into Alabama. It also changes how the tax proceeds are distributed, directing funds to state accounts (General Fund and Education Trust Fund) and to counties and municipalities, with later changes that shift distributions between municipalities and counties and add a separate share for local boards of education. The bill maintains reporting requirements and sets an effective date of September 1, 2024.

Who It Affects

• Eligible sellers participating in the simplified sellers use tax program: must collect the higher rate, file monthly reports, and keep exemption documents.
• Purchasers of tangible personal property delivered into Alabama: the tax applies to their purchases if they use the simplified sellers use tax, and they are relieved from other state/local sales/use taxes for those transactions.
• Counties and municipalities: receive larger or reallocated shares of the tax proceeds under the new distribution rules.
• Local boards of education: receive a portion of the proceeds based on average daily membership (under certain provisions).
• State government (State Treasury, General Fund, Education Trust Fund): receive portions of the proceeds as part of the revised distribution scheme.

Key Provisions

• The simplified sellers use tax rate is increased from the current rate to a higher rate described in the bill (text shows 'eightnine and twenty-five hundredths percent' of the sales price).
• The tax remains applicable to eligible sellers delivering tangible personal property into Alabama and continues to relieve both seller and purchaser from other state or local taxes on the transaction.
• Initial distribution ( Sections 40-23-193 and 40-23-197): 50% of the tax proceeds go to the State Treasury with 75% of that for the General Fund and 25% for the Education Trust Fund; 25% to each county; 25% to each municipality.
• For tax periods beginning on or after January 1, 2019, net proceeds after the initial distribution are to be split 60% to municipalities and 40% to counties, distributed by population and deposited to county general funds as appropriate.
• An additional 1.25% of the simplified sellers use tax is directed to local boards of education based on average daily membership.
• Distributions to counties and municipalities occur quarterly and are administered by the Department, with statements provided to purchasers and documentation retained by sellers.
• The act becomes effective September 1, 2024.

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

Subjects

Taxation & Revenue