HB645 • 2026

Taxation; state privilege tax levied for historical horse racing

Taxes

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Hollis
Last action: 2026-03-19
Official status: Pending Committee Action in House of Origin
Effective date: Not listed

Plain English Breakdown

The bill states the tax is distributed as provided by local law, but does not specify how that distribution works in this text.

State Tax for Historical Horse Racing Machines

This bill creates an eight percent state tax on money made from historical horse racing machines and removes older local taxes on the same activity.

What This Bill Does

Creates an eight percent state privilege tax on net gambling revenue from pari-mutuel wagering on historical horse racing using computerized machines.
Requires the Department of Revenue to collect this tax from each licensee who runs these activities.
Removes existing laws that taxed pari-mutuel wagering in Class 1 municipalities, Macon County, Greene County, and Mobile County.
States that this new state tax replaces all other local taxes or fees on historical horse racing betting.
Clarifies that the current tax rules for live greyhound racing and non-historical horse racing do not change.

Who It Names or Affects

Licensees who operate computerized machines for historical horse racing wagering.
The Alabama Department of Revenue, which will collect the new state tax.
Local governments in Class 1 municipalities and specific counties that previously collected their own taxes on this activity.

Terms To Know

Historical horse racing: Betting using computerized machines based on past real-life horse races rather than live events happening at the same time.
Net gambling revenue: The total money received from bets, minus free bets, promotional credits, federal excise taxes, voided wagers, and prizes paid to winners.
Pari-mutuel wagering: A betting system where people who bet on the same outcome share a pool of money after fees are taken out.

Limits and Unknowns

The bill does not allow any new forms of gambling beyond what was already legal when this act takes effect.
It is unclear exactly how much tax revenue will be collected until the machines operate under these rules starting October 1, 2026.

Bill History

2026-03-19 House
Pending Committee Action in House of Origin
2026-03-19 House
Read for the first time and referred to the House Committee on Economic Development and Tourism

Official Summary Text

Taxation; state privilege tax levied for historical horse racing

Current Bill Text

Read the full stored bill text

HB645 INTRODUCED
Page 0
HB645
U9N54GG-1
By Representative Hollis
RFD: Economic Development and Tourism
First Read: 19-Mar-26
1
2
3
4
5
U9N54GG-1 03/19/2026 CMH (L)CMH 2026-1422
Page 1
First Read: 19-Mar-26
SYNOPSIS:
This bill would establish a state privilege tax
on historical horse racing activities which would be in
lieu of all other state and local taxes.
This bill would repeal local laws providing a
tax on such activities.
A BILL
TO BE ENTITLED
AN ACT
Relating to taxation; to establish a state privilege
tax on historical horse racing activities; and to repeal
Sections 11-65-29, 11-65-30, 11-65-35, 45-32-150.13,
45-44-150.12, and 45-49-151.14, Code of Alabama 1975, levying
local pari-mutuel wagering taxes and other fees
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. (a) There is levied in the state a privilege
tax of eight percent of the net gambling revenue collected
from pari-mutuel wagering on historical horse racing on
computerized machines of each historical horse racing
licensee. The tax shall be collected by the Department of
Revenue from each historical horse racing licensee and
distributed as provided by local law.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
HB645 INTRODUCED
Page 2
distributed as provided by local law.
(b) For purposes of subsection (a), "net gambling
revenue" means the total amount of money or value in any form
received as a result of any pari-mutuel wagering on historical
horse racing activities, excluding free bets, free lays, and
promotional credits, less federal excise taxes, voided wagers,
and the total money or value in any form paid as prizes or
winnings.
(c) The state privilege tax collected under this
section is exclusive of and supersedes any other local taxes,
fees, or commissions now imposed on historical horse racing
pari-mutuel activities in the state.
(d) Nothing in this section shall change the existing
tax structure for live greyhound racing, simulcast live
greyhound racing, or live or simulcast horse racing which is
not historical horse racing.
(e) Nothing in this section shall be construed to
authorize, permit, or expand any form of gambling activity
beyond that which is permitted by law on the effective date of
this act.
Section 2. The following sections are repealed:
(1) Section 11-65-29, Code of Alabama 1975, imposing
the state horse wagering fee in Class 1 municipalities.
(2) Section 11-65-30, Code of Alabama 1975, imposing
the commission wagering fee in Class 1 municipalities.
(3) Section 11-65-35, Code of Alabama 1975, relating to
certain racing taxes in Class 1 municipalities.
(4) Section 45-44-150.12, Code of Alabama 1975,
imposing a tax due on pari-mutuel pools in Macon County,
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
HB645 INTRODUCED
Page 3
imposing a tax due on pari-mutuel pools in Macon County,
Alabama.
(5) Section 45-32-150.13, Code of Alabama 1975,
imposing a tax on pari-mutuel pools in Greene County, Alabama.
(6) Section 45-49-151.14, Code of Alabama 1975,
imposing a tax on pari-mutuel pools in Mobile County, Alabama.
Section 3. This act shall become effective on October
1, 2026.
57
58
59
60
61
62
63