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HB 36

Simplified sellers use tax, additional tax levied, distribution of proceeds provided

2025 Regular Session Introduced by Chris England

Alabama bill creates simplified use tax on sellers with specified revenue distribution to address out-of-state sales tax collection gap.

Read for the first time and referred to the House Committee on Ways and Means General Fund
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Bill Summary · HB 36

Legislative bill overview

HB 36 proposes to implement a simplified sellers use tax in Alabama and establish how the resulting tax proceeds will be distributed. The bill creates an additional tax obligation on sellers and specifies mechanisms for allocating collected revenue among state and local entities.

Why is this important

Use taxes are designed to close the "tax gap" by taxing goods purchased from out-of-state sellers who don't collect sales tax, ensuring in-state businesses aren't undercut by tax advantages. This directly affects state and local government revenue, which funds education, infrastructure, and services, and impacts how businesses across Alabama compete.

Potential points of contention

  • Compliance burden: Simplified use tax systems still require sellers to track, report, and remit taxes, which small businesses may find administratively complex and costly
  • Revenue distribution disputes: How proceeds are allocated between state general fund and local governments (counties, cities) will likely generate debate about fairness to different regions and budget priorities
  • Competitive concerns: Out-of-state retailers may object to additional tax requirements, and in-state retailers will scrutinize whether revenue truly levels the playing field or simply increases overall tax burden

Compiled from official sources — confirm details with the bill’s official record.

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