Budget & Taxes (Business Taxes)

This bill allows Alabama municipalities to charge business licenses to certain construction and trade companies that work within city limits but do not have a permanent office there. It specifically targets licensed contractors such as electricians, plumbers, HVAC specialists, general contractors, and home builders who operate on temporary job sites. The law requires these businesses to either pay a flat fee or a percentage of their gross earnings from work done in the municipality, while also allowing them to avoid double taxation by excluding income already taxed in other municipalities. Additionally, the bill exempts these businesses from licensing requirements when working on county-owned projects like roads and bridges. The changes take effect on October 1, 2026.

HB 244 exempts electricity and natural gas used in commercial greenhouses, pivot irrigation systems, and poultry houses from Alabama’s utility gross receipts tax and utility service use tax. This directly affects agricultural businesses operating these facilities by reducing their energy-related tax burden. The bill amends Alabama tax code sections to explicitly add these uses to existing exemptions, clarifying that energy used for heating or operation in these specific agricultural settings is not subject to the taxes. The change takes effect September 1, 2026, and does not alter tax rates for other energy uses.

SB 221 would change Alabama's sales tax rules by excluding credit card transaction fees from the taxable amount when customers pay by card. Specifically, merchants would no longer include fees charged by credit/debit card networks (e.g., interchange fees) when calculating sales or use tax on purchases. This directly affects merchants who currently pay tax on the total amount charged to customers, including these fees. The bill requires the Department of Revenue to create implementation rules and takes effect September 1, 2026.