SB160 Alabama 2025 Session

Summary

Primary Sponsor

Arthur OrrSenator

Republican

Session

2025 Regular Session

Title

Relating to Sales and Use Tax; to establish conditions for exemption of county or municipal sales and use tax

Summary

SB160 would require counties and municipalities to follow specific rules to grant local sales and use tax exemptions, including dates, duration, and notice to the state.

What This Bill Does

It sets conditions for local exemptions, requiring approval by resolution or ordinance, an effective date of September 1, and a duration either in fiscal-year increments or in perpetuity, with notice to the Alabama Department of Revenue prior to the start date. It also allows rescission of exemptions under similar rules with Sept 1 effectiveness and July 1 notice. It limits exemptions created under pre-existing general laws unless those laws meet the new requirements, and it sets a sunset for existing exemptions by Sept 1, 2025 unless compliance is achieved; the Department of Revenue will maintain a list of exemptions and may issue implementing rules. The act takes effect immediately.

Who It Affects

• Counties and municipalities that grant or rescind local sales and use tax exemptions; they must follow the new criteria for exemptions and rescissions.
• Alabama Department of Revenue (and the public) which will receive notices, maintain a list of exemptions, and regulate compliance with the new requirements.

Key Provisions

• Exemptions from local county/municipal taxes must be approved by resolution or ordinance and be provided by law that specifically allows such exemption.
• Exemptions must include an effective date (September 1 of a specified year) and a duration (in fiscal year increments or in perpetuity).
• The approving county or municipality must notify the Alabama Department of Revenue by July 1 before the exemption’s effective date.
• Counties/municipalities may rescind exemptions using a resolution or ordinance, with an effective date of September 1 and prior notice to the Department by July 1.
• Exemptions under pre-existing general laws enacted before the act must comply with the new requirements or cease to be effective beginning September 1, 2025.
• The Department of Revenue must publish and maintain a list of exemptions adopted under these provisions, and may adopt rules to administer the section.
• The act is effective immediately.

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