SB221 • 2026

Taxation; to exclude credit card transaction fees from sales and use tax calculations

Taxes

Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor: Orr
Last action: 2026-04-17
Official status: Enacted
Effective date: 2026-09-01

Plain English Breakdown

The official source material does not provide additional details beyond excluding credit card transaction fees from sales and use tax calculations, so some claims were removed for accuracy.

Taxation; to exclude credit card transaction fees from sales and use tax calculations

This law excludes credit card transaction fees from the amount used to calculate sales and use taxes in Alabama.

What This Bill Does

Excludes credit card transaction fees from being included in the total price used to calculate sales and use taxes.

Who It Names or Affects

People who buy things with credit or debit cards in Alabama.
Merchants and sellers who accept payments through electronic transactions.
The state's Department of Revenue, which will need to make new rules for the tax changes.

Terms To Know

Credit Card: A card or device used to pay for goods or services on credit. This includes prepaid cards and devices that work through payment networks.
Electronic Payment Transaction: When someone uses a debit, credit, or other electronic payment method to buy something or use a service.

Limits and Unknowns

The law only affects transactions made with credit and debit cards, not paper checks.
It does not change how much tax is paid on the actual purchase price of goods or services.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

MSVNLWH-1

R 951 • Stewart

Failed

Plain English: MSVNLWH-1 : 3/19/2026 : SS 1ST STEWART AMENDMENT TO SB221 OFFERED BY SENATOR STEWART Page 1 Replace line 49 on page 2 with the following: administer the provisions of this act.

MSVNLWH-1 : 3/19/2026 : SS 1ST STEWART AMENDMENT TO SB221 OFFERED BY SENATOR STEWART Page 1 Replace line 49 on page 2 with the following: administer the provisions of this act.
(d) This exemption shall not apply to county or municipal sales or use taxes unless approved in compliance with Act 2025-280.
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This amendment summary is using official source text because generated interpretation was skipped for this run.

Bill History

2026-04-17 Senate
Enacted
2026-04-08 House
Motion to Read a Third Time and Pass - Adopted Roll Call 1297 (Yeas 75, Nays 18)
2026-04-08 House
Third Reading in Second House (Yeas 83, Nays 15)
2026-04-08 Senate
Delivered to Governor
2026-04-08 House
Signature Requested
2026-04-08 Senate
Enrolled
2026-04-08 Senate
Ready to Enroll
2026-04-08 House
Carried Over to the Call of the Chair
2026-04-01 House
Read for the Second Time and placed on the Calendar
2026-04-01 House
Reported Out of Committee Second House
2026-03-19 Senate
Motion to Read a Third Time and Pass - Adopted Roll Call 952 (Yeas 33, Nays 0)
2026-03-19 Senate
Stewart motion to Adopt - Lost Roll Call 951 (Yeas 6, Nays 28)
2026-03-19 House
Pending Committee Action in Second House
2026-03-19 House
Read for the first time and referred to the House Committee on Ways and Means Education
2026-03-19 Senate
Stewart 1st Amendment Offered
2026-02-19 Senate
Third Reading in House of Origin (Yeas 28, Nays 0)
2026-02-19 Senate
Carried Over
2026-02-12 Senate
Read for the Second Time and placed on the Calendar
2026-02-11 Senate
Reported Out of Committee House of Origin
2026-01-29 Senate
Pending Committee Action in House of Origin
2026-01-29 Senate
Read for the first time and referred to the Senate Committee on Finance and Taxation Education

Official Summary Text

This act excludes credit card transaction fees charged for an electronic payment transaction from the amount on which sales and use tax is assessed.

Current Bill Text

Read the full stored bill text

SB221 ENROLLED
Page 0
SB221
CXSA5WW-2
By Senator Orr
RFD: Finance and Taxation Education
First Read: 29-Jan-26
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SB221 Enrolled
Page 1
First Read: 29-Jan-26
Enrolled, An Act,
Relating to sales and use tax; to exclude credit card
transaction fees added to the price of goods or services
purchased by credit or debit card from the calculation of
sales and use taxes.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. (a) As used in this section, the following
terms have the following meanings:
(1) CREDIT CARD. Any card, plate, coupon book, or other
credit device existing for the purpose of obtaining money,
property, labor, or services on credit. The term shall also
mean any card or other payment code or device issued or
approved for use through a payment card network to debit an
asset account, regardless of the purpose for which the account
is established, whether authorization is based on signature,
personal identification number, or other means. The term
includes a general-use prepaid card, as defined in 15 U.S.C. §
16931-1(a)(2)(A). The term does not include paper checks.
(2) ELECTRONIC PAYMENT TRANSACTION. A transaction in
which a person uses a debit card, credit card, or other
payment code or device issued or approved through a payment
card network to debit a deposit account or use a line of
credit, whether authorization is based on a signature,
personal identification number, or other means.
(3) CREDIT CARD TRANSACTION FEE. A fee assessed on
purchases made by debit or credit card to offset interchange
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SB221 Enrolled
Page 2
purchases made by debit or credit card to offset interchange
fees charged to a merchant or seller.
(b) The amount of any credit card transaction fee
charged for an electronic payment transaction shall be
excluded from the amount on which basis sales and use tax is
assessed for that electronic payment transaction.
(c) The Department of Revenue shall establish rules to
administer the provisions of this act.
Section 2. This act shall become effective on September
1, 2026.
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SB221 Enrolled
Page 3
1, 2026.
________________________________________________
President and Presiding Officer of the Senate
________________________________________________
Speaker of the House of Representatives
SB221
Senate 19-Mar-26
I hereby certify that the within Act originated in and passed
the Senate.
Patrick Harris,
Secretary.
House of Representatives
Passed: 08-Apr-26
By: Senator Orr
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