House Bill 388 Alabama 2026 Session

Summary

Primary Sponsor

David FaulknerRepresentative

Republican

Session

2026 Regular Session

Title

Taxation; to exempt certain community foundations from sales and use taxes

Summary

HB388 would extend and reorganize sales and use tax exemptions for ten named Alabama community foundations, allow local exemptions starting Sept 1, 2026, and repeal the current exemption framework.

What This Bill Does

It adds a new exemption (40-9-39.41) that makes ten named community foundations exempt from state sales and use taxes from September 1, 2026 through August 31, 2031. It also allows counties and municipalities to exempt these foundations from local sales and use taxes beginning September 1, 2026. It repeals the existing exemption law (40-9-39.4) and replaces it with the new framework. It requires annual informational reports from each exempt foundation to the Department of Revenue, with the information shared with the Legislative Services Agency, and the reporting data is not confidential.

Who It Affects

• Ten named community foundations (Black Belt Community Foundation; Central Alabama Community Foundation; Community Foundation of Greater Birmingham; Community Foundation of Greater Decatur; Community Foundation of Greater Huntsville; Community Foundation of Northeast Alabama; Community Foundation of South Alabama; Community Foundation of West Alabama; Limestone Area Community Foundation; Walker Area Community Foundation) to receive state sales/use tax exemption from Sept 1, 2026 to Aug 31, 2031 (and potential local exemption if a county or municipality opts in).
• Local governments (counties and municipalities) that may elect to exempt these foundations from local sales/use taxes, and state tax administration entities (Department of Revenue and Legislative Services Agency) responsible for administering the exemptions and handling annual reports.

Key Provisions

• Section 40-9-39.41 adds ten listed community foundations to the state sales and use tax exemption, with the exemption lasting from September 1, 2026 through August 31, 2031.
• The ten foundations are: Black Belt Community Foundation; Central Alabama Community Foundation; Community Foundation of Greater Birmingham; Community Foundation of Greater Decatur; Community Foundation of Greater Huntsville; Community Foundation of Northeast Alabama; Community Foundation of South Alabama; Community Foundation of West Alabama; Limestone Area Community Foundation; Walker Area Community Foundation.
• Counties and municipalities may exempt these foundations from local sales and use taxes beginning September 1, 2026 under Section 40-23-4.01.
• Section 40-9-39.4, which previously provided the exemptions, is repealed (the old framework is removed).
• Each listed foundation must file an annual informational report with the Department of Revenue, with data provided to the Legislative Services Agency; the information is exempt from confidentiality protections.

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