SB174 Alabama 2025 Session

Updated Feb 23, 2026

High Interest

Summary

Primary Sponsor: Clyde ChamblissSenator
Republican
Session: 2025 Regular Session
Title: Business taxes, requires annual reports from counties and municipalities, provides for causes of action, and revises the jurisdiction of the Alabama Tax Tribunal
Summary: SB174 expands the Alabama Tax Tribunal's role to hear business license tax appeals, requires annual reporting by counties and municipalities, and creates a private right of action for unlawfully collected taxes, among other changes.
What This Bill Does
It expands the Alabama Tax Tribunal's jurisdiction to include appeals of business license tax determinations made by counties or municipalities. Counties and municipalities that levy business privilege or business license taxes must file annual fiscal year reports with the Department of Revenue detailing classifications, schedules, and changes, which the Department will publish publicly; noncompliance can trigger escrow of future taxes until compliance. It creates a private right of action against private entities that are contracted to collect these taxes if they knowingly collect taxes not lawfully due. It also reorganizes the Alabama Tax Tribunal as an independent executive-branch agency with appointed judges and sets up election-out provisions for self-administered counties/municipalities to divest Tribunal jurisdiction for certain taxes, along with related procedures and funding requirements.

Who It Affects
Counties and municipalities that levy business privilege or business license taxes; they must report annual data, may face escrow of taxes for noncompliance, and may elect-out of Tribunal jurisdiction for certain taxes with specified procedures.
Taxpayers challenging business license tax determinations and private entities contracted to collect taxes; taxpayers gain access to independent tribunal appeals, and private collectors face potential civil action for unlawfully collected taxes.

Key Provisions
Creates the Business License Tax Reporting and Appeals Act and expands the Alabama Tax Tribunal's jurisdiction to hear appeals of business license tax determinations by counties and municipalities.
Requires annual fiscal year reports from counties/municipalities levying business privilege or business license taxes to the Department of Revenue by March 30, including tax classifications and changes; reports are posted publicly; noncompliance may trigger escrow of subsequent taxes until compliant.
Allows a private right of action against private entities contracted to collect business privilege or business license taxes when they knowingly collect taxes not lawfully due.
Reforms the Alabama Tax Tribunal as an independent tribunal in the executive branch, with 1-3 judges appointed for 6-year terms, a chief judge, and set salary structures; establishes independence from the Department of Revenue.
Allows self-administered counties/municipalities to elect-out of Tribunal jurisdiction for sales, use, rental, and lodgings taxes, with procedures for election-out, revocation, notice, and ongoing appeals; DoR publishes a list of election-outs.
Sets Tribunal procedures for hearings (de novo, open hearings with possible closed sessions, discovery, representation), final decisions with writing and findings, and appeals to circuit court; includes budget and funding provisions for the Tribunal.
Effective date: 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