HB315 Alabama 2025 Session

Summary

Primary Sponsor

Joe LovvornRepresentative

Republican

Session

2025 Regular Session

Title

Taxation; to adjust the dollar value cap based on Consumer Price Index (CPI) of certain items exempt from sales tax during certain weekends

Summary

HB315 updates Alabama's sales tax holidays by indexing price caps to CPI, expanding exempt item categories, and extending the lead time for local exemptions.

What This Bill Does

The Department of Revenue must adjust the dollar amounts for covered items using the Consumer Price Index, starting in 2026 and updating every five years. It expands the list of covered items with new price caps, including clothing up to $100 per article, computers/software/school supplies up to $750 per single purchase, and a broader set of items (batteries, radios, lights, duct tape, generators, etc.) with specific caps such as $60 per item and up to $1,000 for generators/power-related gear. Local governments (counties and municipalities) may exempt covered items from local sales taxes during designated holiday weekends, but must follow longer advance notice requirements and may not exempt outside those periods. The act becomes effective October 1, 2025.

Who It Affects

• Group 1: Alabama consumers and shoppers — they would see tax exemptions applied to a wider range of items during designated sales holidays, with prices capped according to CPI-adjusted limits.
• Group 2: Local governments (counties/municipalities) and the Department of Revenue — local governments gain authority to set exemptions with extended lead times, while the Department administers CPI-based adjustments and related rules.

Key Provisions

• Amends Section 40-23-210 to redefine 'covered items' and set price caps, including clothing up to $100 per article, detailed exclusions, and a separate cap for computers, software, and school supplies up to $750 per single purchase.
• Adds a comprehensive list of items categorized as 'clothing accessories or equipment', 'protective equipment', and 'sport or recreational equipment' with specific inclusions and exclusions.
• Adds 40-23-210(b): For 2026, the Department of Revenue shall adjust dollar amounts by CPI changes from December 2006 to December 2024, rounded to the nearest dollar, and repeats this adjustment every five calendar years.
• Amends Section 40-23-230 to expand 'covered items' to include numerous items selling for $60 or less per item and adds a generator/power-related items category up to $1,000 per item, with CPI-based adjustments similar to 40-23-210.
• Adds 40-23-230(c): For 2026, CPI-based adjustments apply to the new item caps, with periodic updates every five years.
• Amends Section 40-23-213 to allow counties/ municipalities to exempt 'covered items' from local sales taxes during designated holiday weekends with a lead time of at least 3090 days prior to the third full weekend of July, and no exemptions outside those periods.
• Amends Section 40-23-233 to provide similar local exemption authority and lead-time requirements for exemptions during the first Friday in July and the last full weekend of February in subsequent years, with no exemptions outside designated holidays.
• Effective date set: October 1, 2025.

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