Senate Bill 37 Alabama 2026 Session

Summary

Primary Sponsor

Greg AlbrittonSenator

Republican

Session

2026 Regular Session

Title

Local sales and use taxes, exemption for nonresident Alabama taxpayers established

Summary

SB37 would exempt municipal sales and use taxes on purchases of tangible personal property by Alabama residents who do not reside in the municipality where they buy, effective September 1, 2026.

What This Bill Does

If an Alabama resident buys tangible property in a municipality they do not live in, the municipal sales and use tax would not apply, provided they show proof of residency. The exemption applies only to municipal taxes; state sales tax would remain unchanged. The bill modifies how municipal tax rules work for these transactions starting September 1, 2026.

Who It Affects

• Alabama residents who live outside the municipality where they make a purchase would not owe municipal sales/use tax if they provide residency proof.
• Cities, towns, and other local tax authorities in Alabama would potentially lose municipal tax revenue from such transactions.

Key Provisions

• Exempts purchases of tangible personal property by an Alabama taxpayer in an Alabama municipality from municipal sales and use taxes if the purchaser does not reside in that municipality, upon proof of residency.
• Requires proof of residency to qualify for the exemption.
• Notwithstanding Section 40-23-4.1, the exemption applies.
• Effective date: September 1, 2026.

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