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HB4 ENGROSSED
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HB4
KH7JRA5-2
By Representatives Kiel, Brinyark, Faulkner, Kirkland, Rigsby,
Lomax, Colvin, Stubbs
RFD: Ways and Means Education
First Read: 13-Jan-26
PFD: 25-Jun-25
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PFD: 25-Jun-25
A BILL
TO BE ENTITLED
AN ACT
Relating to taxation; to establish the Alabama
Broadband Investment Maximization Act; to exempt purchases of
broadband equipment and supplies from projects funded or
administered by the Alabama Department of Economic and
Community Affairs from sales and use tax.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. This act shall be known and be cited as the
Alabama Broadband Investment Maximization Act.
Section 2. (a) The gross receipts derived from the sale
of equipment, machinery, software, ancillary components,
appurtenances, accessories, or other infrastructure, with a
useful life of at least ten years, that is used in whole or in
part to: (i) produce broadband communications services,
including broadcasting, distributing, sending, receiving,
storing, transmitting, retransmitting, amplifying, switching,
providing connectivity for, or routing communications
services; or (ii) provide Internet access are exempt from the
state sales and use taxes provided for in Sections 40-23-2 and
40-23-61, Code of Alabama 1975.
(b) The exemption provided by this section shall only
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(b) The exemption provided by this section shall only
apply to purchases made pursuant to a project funded or
administered by the Alabama Department of Economic and
Community Affairs.
(c) The Department of Revenue may adopt rules to
implement and administer this section.
(d) This section does not apply to the retail sale of
personal consumer electronics, including, but not limited to,
smartphones, computers and tablets, and computer-grade modems
and WiFi routers.
(e) For the purpose of this section, the following
terms and phrases have the following meanings:
(1) BROADBAND COMMUNICATIONS SERVICES.
Telecommunication services, mobile telecommunication services,
video programming services, or direct-to-home satellite
television programming services.
(2) EQUIPMENT. Includes, but is not limited to, wires,
cables, fiber, conduits, antennas, poles, switches, routers,
amplifiers, rectifiers, repeaters, receivers, multiplexers,
duplexers, transmitters, circuit cards, insulating and
protective materials and cases, power equipment, backup power
equipment, diagnostic equipment, storage devices, modems, and
other general central office or headend equipment, such as
channel cards, frames, and cabinets, or equipment used in
successor technologies, including items used to monitor, test,
maintain, enable, or facilitate qualifying equipment,
machinery, software, ancillary components, appurtenances,
accessories, or other infrastructure that is used in whole or
in part to provide broadband communications services or
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in part to provide broadband communications services or
Internet access. In order to qualify for the exemption,
equipment must have a useful life of at least ten years.
(3) INTERNET ACCESS. A service that enables users to
connect to the Internet to access content, information, or
other services offered over the Internet, including:
a. The purchase, use, or sale of telecommunications by
a provider of Internet access to the extent the
telecommunications are purchased, used, or sold to provide the
Internet access service or otherwise enable users to access
content, information, or other services offered over the
Internet;
b. Services that are incidental to the provision of
Internet access when furnished to users as part of the
Internet access service, such as a homepage, email, and
instant messaging, to include voice-capable and video-capable
email and instant messaging, video clips, and personal
electronic storage capacity;
c. A homepage, email, and instant messaging, to include
voice-capable and video-capable email and instant messaging,
video clips, and personal electronic storage capacity, that
are provided independently or packaged with Internet access;
and
d. Does not include voice, audio, or video programming,
or other products and services that utilize Internet protocol
or a successor protocol and for which there is a charge,
regardless of whether the charge is separately stated or
aggregated with the charge for services for Internet access.
(f) Any county or municipality may exempt the gross
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(f) Any county or municipality may exempt the gross
proceeds from the sale of broadband equipment and supplies
provided pursuant to this section from county or municipal
sales and use taxes in accordance with Section 40-23-4.01,
Code of Alabama 1975.
(g) The exemption provided pursuant to this section
shall be available from September 1, 2026, to August 31, 2029.
Section 3. This act shall become effective on June 1,
2026.
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2026.
House of Representatives
Read for the first time and referred
to the House of Representatives
committee on Ways and Means
Education
................13-Jan-26
Read for the second time and placed
on the calendar:
0 amendments
................05-Feb-26
Read for the third time and passed
as amended
Yeas 103
Nays 0
Abstains 0
................24-Feb-26
John Treadwell
Clerk
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