HB176 Alabama 2025 Session

Summary

Primary Sponsor

Mark ShireyRepresentative

Republican

Session

2025 Regular Session

Title

Taxation, sales tax exemptions, sales and use tax exemption with local option provided for purchases of optical aids, including eyeglasses and contact lenses

Summary

HB176 would exempt the state sales tax on gross proceeds from selling optical aids, such as eyeglasses and contact lenses, starting September 1, 2025.

What This Bill Does

The bill amends Alabama tax law to exempt gross proceeds from the sale of optical aids from state sales and use tax. It defines optical aids and eye glasses, and notes that the exemption does not automatically apply to county or municipal taxes unless a local government approves. It also states that dispensing or transferring ophthalmic materials by licensed ophthalmologists or optometrists is a sale subject to state sales tax, with the practitioner collecting the tax, while professional dispensing services themselves are not taxed. When a consumer uses a third-party benefit plan, the tax would apply to the amount reimbursed plus the consumer’s payment.

Who It Affects

• Consumers in Alabama who buy optical aids (eyeglasses, contact lenses) would see a state sales tax exemption on the gross sale proceeds, reducing the cost at the point of sale. Local taxes may still apply if a county or municipality does not opt in.
• Licensed ophthalmologists, optometrists, and optical suppliers who dispense ophthalmic materials would have to treat certain transactions as taxable sales and collect the state tax on those items, with tax calculated based on reimbursements plus patient payments when third-party plans are involved.

Key Provisions

• Exempts gross proceeds from the sale of optical aids (including eyeglasses and contact lenses) from state sales and use tax, effective September 1, 2025.
• Exemption does not apply to county or municipal sales taxes unless the local governing body passes a resolution or ordinance approving it.
• Defines optical aids and eyeglasses, including prescription lenses and frames, and clarifies that dispensing ophthalmic materials by licensed professionals is a taxable sale with tax collected by the provider.
• Professional services related to dispensing or fitting ophthalmic materials are not themselves taxable, but the sale of the materials is subject to state tax when dispensed.
• If a consumer’s purchase involves third-party reimbursements (e.g., Medicare), the tax applies to the reimbursed amount plus the consumer’s payment at the time of sale.

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