This bill increases the market value threshold for state ad valorem tax exemptions on tangible personal property for small businesses from $100,000 to $120,000. It specifically applies to businesses with fewer than 50 employees, allowing them to keep more of their business equipment and assets tax-free. The legislation also permits local governments to create similar exemptions for their jurisdictions and includes minor technical updates to the state tax code. This change directly affects small business owners in Alabama who own tangible personal property within the new value limit.
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 531 would exempt contractors working on public highway, road, or bridge construction projects from paying state taxes on natural gas and liquefied petroleum gas (LPG) used during construction. Specifically, it removes utility gross receipts tax, utility service use tax, and state sales and use tax on these fuels for licensed contractors or subcontractors under government contracts. Counties and municipalities may also adopt similar local tax exemptions for the same purpose. The bill, set to take effect on September 1, 2026, applies only to projects funded by governmental entities as defined in Alabama law.
HB 452 extends and increases a state tax credit for owners of certified historic properties who make qualified rehabilitation improvements. It directly affects property owners and developers working on historic buildings that meet state certification standards. The bill raises the annual credit amount and increases the total funding cap from $20 million to $300 million per year for this program. This change allows more property owners to claim the credit while expanding the state's annual investment in historic preservation.
HB 286 exempts radio and television broadcast stations licensed by the Federal Communications Commission from Alabama's utility gross receipts tax and utility service use tax on electricity, natural gas, telephone services, and other connectivity services used in their operations. This directly affects licensed broadcast stations by removing taxes on their energy and connectivity expenses for essential equipment like studio facilities, transmitters, and backup power systems. The bill amends Alabama tax code sections to specifically include broadcast stations in existing exemptions for utility services used in production. The exemption applies to all electricity, gas, phone services, and connectivity used for broadcasting functions, effective September 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 159 would exempt commercial greenhouses, pivot irrigation systems, and poultry houses in Alabama from paying utility gross receipts tax and utility service use tax on natural gas or electricity used for heating or energy purposes. This directly affects agricultural businesses operating these facilities by reducing their energy-related tax burden. The bill amends Alabama’s tax code to specifically add these uses to existing exclusions, meaning these businesses would no longer pay these taxes on qualifying energy consumption. The measure is pending in the Senate Finance and Taxation Committee and would take effect on September 1, 2026, if enacted.
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.
SB 18 would impose a new 4% state tax on net gambling revenues from historical horse racing pari-mutuel wagering operations. It applies specifically to licensed businesses running historical horse racing betting, replacing their existing privilege taxes with this single rate. The tax base excludes free bets, promotional credits, and prize payouts, while explicitly preserving current tax structures for live horse racing, greyhound racing, and simulcast operations. The bill does not authorize new gambling activities or alter existing legal gambling frameworks.
