SB38 Alabama 2024 Session

Updated Feb 23, 2026

Notable

Summary

Primary Sponsor: Gerald H. AllenSenator
Republican
Session: Regular Session 2024
Title: Municipalities, business license tax, gross receipts for purpose of tax does not include excise taxes by federal, state, and local government.
Summary: SB38 would let municipalities with a gross receipts-based business license tax exclude excise taxes from gross receipts when calculating the tax.
What This Bill Does
The bill amends the definitions used for calculating municipal license taxes to state that gross receipts do not include excise taxes imposed by federal, state, or local governments. It allows businesses paying a municipal gross receipts-based license to deduct those excise taxes from their gross receipts when determining the license tax owed. It also clarifies what counts as gross receipts, including specific exclusions for taxes collected on behalf of taxing authorities and other listed items, and it sets rules for utilities and certain other categories. The act takes effect October 1, 2024.

Who It Affects
Businesses that pay a municipal gross receipts-based business license tax: they may owe less tax because excise taxes are deducted from their gross receipts.
Municipalities that levy gross receipts-based license taxes: they must apply the new definition of gross receipts and the deduction for excise taxes when calculating licenses.

Key Provisions
Gross receipts shall not include excise taxes imposed by federal, state, or local governments when used to calculate a municipal gross receipts-based license tax.
Businesses may deduct excise taxes from gross receipts for the purpose of calculating the municipal license tax, reducing the tax base.
Gross receipts are defined with several exclusions, including taxes collected by the business on behalf of taxing authorities, utility gross receipts taxes, and certain other specified items; but no other deductions are allowed beyond those provided.
For utilities or similar entities, gross receipts are limited to receipts from retail furnishing of utility services taxed under specific state statutes, with contractual protections unaffected.
Gross receipts shall not include dividends, proceeds from borrowings, sale of capital assets, repayments of principal, stock issuances, or undistributed earnings of subsidiaries.
A municipality may use a different basis for calculating the license tax for certain categories of taxpayers as prescribed by related provisions.
Effective date: October 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