HB36 Alabama 2025 Session

Summary

Primary Sponsor

Chris EnglandRepresentative

Democrat

Session

2025 Regular Session

Title

Simplified sellers use tax, additional tax levied, distribution of proceeds provided

Summary

HB36 would add a 1.25% simplified sellers use tax on Alabama sales and direct the proceeds largely to local boards of education, while preserving the existing 8% tax and updating distribution rules.

What This Bill Does

It creates an additional simplified sellers use tax of 1.25% on the sale price of tangible personal property or marketplace-facilitated sales by eligible sellers. The new tax would be collected and remitted in the same manner as the existing 8% tax, with exemptions and purchaser certificates still applicable. All proceeds from the new tax would be distributed to local boards of education based on average daily membership. The bill also allows monthly distributions of proceeds from the existing tax to counties, municipalities, and local boards of education, and includes nonsubstantive technical revisions; it becomes effective September 1, 2025.

Who It Affects

• Consumers and buyers in Alabama, who would pay a higher total sales tax on eligible purchases due to the added 1.25% tax (subject to exemptions).
• Local boards of education (and, via existing provisions, counties and municipalities), which would receive additional funding from the new tax, with education funding allocated by average daily membership and distribution rules that may allow monthly distributions.

Key Provisions

• Imposes an additional simplified sellers use tax of 1.25% on the sales price for tangible property or marketplace-facilitated sales by eligible sellers.
• The new tax is reported, collected, and remitted in the same manner as the existing 8% tax, including exemptions and purchaser certificates.
• All proceeds from the new 1.25% tax are distributed to local boards of education based on average daily membership (preceding school year).
• The department may initiate monthly distributions of proceeds from the simplified sellers use tax to counties, municipalities, and local boards of education.
• The act preserves and modifies distribution rules for the existing 8% tax and includes nonsubstantive technical revisions; effective date is September 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