HB4 Alabama 2026 Session

Summary

Primary Sponsor

Matt WoodsSenator

Republican

Session

2026 Regular Session

Title

Taxation; establishes Alabama Broadband Investment Maximization Act; exempts ADECA project funded or administered purchases from sales and use tax

Summary

HB4 would create a temporary state sales tax exemption for broadband equipment and supplies used in ADECA-funded broadband projects.

What This Bill Does

It exempts the state sales and use tax on gross receipts from the sale of equipment, machinery, software, and related components used to provide broadband services or Internet access, but only for purchases made through ADECA-funded or ADECA-administered projects. The Department of Revenue would implement and administer the exemption through rules. The exemption excludes retail sales of personal consumer electronics (like smartphones, computers, tablets) and computer-grade modems/routers. The exemption is available from September 1, 2026, to August 31, 2029, while the act becomes effective June 1, 2026, and it does not automatically apply to county or municipal taxes unless the local government approves it.

Who It Affects

• ADECA-funded or ADECA-administered broadband project implementers (state agencies and their contractors) would not pay state sales tax on qualifying equipment and supplies, reducing project costs.
• Local governments (counties and municipalities) and Alabama residents would face potential changes in local tax revenue because county/municipal taxes are not exempt unless locally approved, though residents could benefit from expanded broadband access.

Key Provisions

• Exemption from state sales and use taxes on equipment, machinery, software, ancillary components, and other infrastructure used to provide broadband services or Internet access, for purchases tied to ADECA-funded or ADECA-administered projects.
• Exemption applies only to purchases made pursuant to ADECA-funded or administered projects; the Department of Revenue can adopt rules to implement and administer the exemption.
• Excludes the retail sale of personal consumer electronics (e.g., smartphones, computers, tablets) and computer-grade modems/WiFi routers from the exemption.
• Definitions for broadband services, equipment, and Internet access are provided to determine eligibility of purchases.
• Local counties and municipalities must approve the exemption at the local level; otherwise, local sales/use taxes remain in effect.
• Effective date: June 1, 2026; exemption window: September 1, 2026, through August 31, 2029.

AI-generated summary using openai/gpt-5-nano on Feb 12, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation & Revenue