SB107 Alabama 2025 Session

Summary

Primary Sponsor

David SessionsSenator

Republican

Session

2025 Regular Session

Title

Sales and use tax, simplified sellers use tax (SSUT), recalculation of distributions based on annexations, deannexations, or incorporations, on fifth year after release of census commencing on January 1, 2026

Summary

SB107 would let Alabama recalculate how much SSUT money municipalities receive every five years after the federal census to reflect changes from annexations, deannexations, or incorporations.

What This Bill Does

It adds a new mechanism for adjusting each municipality's SSUT distribution based on population changes caused by annexation, deannexation, or incorporation. The first recalculation would take effect January 1, 2026, with subsequent recalculations every five years after the latest census; municipalities must submit required documentation by October 1 preceding the recalculation. The revised distributions would be based on the updated census population and would apply until the next census-based adjustment, with specific documentation requirements for annexations, deannexations, and incorporations; the measure does not apply to municipalities covered by Section 11-41-7, and the Department of Revenue would handle verification and notification.

Who It Affects

• Municipalities that experience annexation, deannexation, or incorporation: their SSUT share could be recalculated to reflect updated population.
• The Alabama Department of Revenue: responsible for accepting documentation, verifying data, and determining the new distribution amounts.
• Residents and taxpayers in municipalities: may be affected indirectly through changes in local funding and services resulting from revised SSUT distributions.

Key Provisions

• Creates Section 40-23-197.2 to allow recalculation of SSUT distributions to municipalities based on population changes from annexation, deannexation, or incorporation.
• Recalculation takes effect on January 1 of the fifth year after the most recent federal decennial census; first recalculation set for January 1, 2026.
• Municipalities must submit specified documentation by October 1 preceding the January recalculation, including annexation/deannexation resolutions, election notices and results, and Boundary and Annexation Survey information.
• For incorporations between censuses, newly incorporated municipalities may be included if required documents are provided (petition, notices, census ordered by probate, and elected officers with contact info).
• Distributions will be based on the census population from the ordered census and will prevail until after the next decennial census; not applicable to municipalities subject to Section 11-41-7.
• The Department of Revenue may request additional documentation as needed and must notify municipalities of the determined population for distribution.
• The department may adopt rules to implement and administer this section.
• Effective date: immediate.

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