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SB347 INTRODUCED
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SB347
5VIKJ33-1
By Senators Albritton, Jones
RFD: Finance and Taxation General Fund
First Read: 05-Mar-26
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5VIKJ33-1 03/05/2026 KHF (F)KHF 2026-1221
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First Read: 05-Mar-26
SYNOPSIS:
Under existing law, the proceeds from the
simplified sellers use tax are divided equally between
the state and local governments with the amount
distributed to the counties and municipalities
allocated on a prorated basis according to the most
recent federal decennial census prior to the
distribution.
This bill changes the methodology for
distribution of the county and municipal share of the
simplified sellers use tax to be based on population
projections from the U.S. Census Bureau Population and
Housing Estimates Program updated every five years.
A BILL
TO BE ENTITLED
AN ACT
Relating to simplified sellers use taxes; to amend
Section 40-23-197, Code of Alabama 1975, to provide for the
distribution of local funds to be based on population
projections from the U.S. Census Bureau and updated every five
years rather than the most recent federal decennial census;
and to repeal Section 40-23-197.1, Code of Alabama 1975.
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and to repeal Section 40-23-197.1, Code of Alabama 1975.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Section 40-23-197, Code of Alabama 1975, is
amended to read as follows:
"§40-23-197
(a) The proceeds of simplified sellers use tax paid
pursuant to this part shall be appropriated to the department,
which shall retain the amount necessary to fund the
administrative costs of implementing and operating the program
and to cover the amounts paid for refunds authorized in
Section 40-23-196. The balance of the amounts collected shall
be distributed as follows:
(1) Fifty percent to the State Treasury and allocated
75 percent to the General Fund and 25 percent to the Education
Trust Fund.
(2) Twenty-five percent to each county in the state on
a prorated basis according to population as determined in the
most recent federal census prior to the distribution.
(3) Twenty-five percent of funds to be distributed to
each municipality in the state on a prorated basis according
to population as determined in the most recent federal census
prior to the distribution.
(b) Effective for tax periods beginning on or after
January 1, 2019, the (2) The net proceeds after the
distribution provided in subdivision (1) of subsection (a)(1)
shall be distributed :
a. 60Sixty percent to each municipality in the state on
a basis of the ratio of the population of each municipality to
the total population of all municipalities in the state as
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the total population of all municipalities in the state as
determined in the most recent federal census prior to
distribution according to population projections from the U.S.
Census Bureau Population and Housing Estimates Program or any
prior special federal census held in any municipality.
Beginning in 2027, the ratio of the population of each
municipality to the total population of the state shall be
updated every five years; and
b. 40Forty percent to each county in the state, and
deposited into the general fund of the respective county
commission, on a basis of the ratio of the population of each
county to the total population of all counties in the state as
determined in the most recent federal census prior to the
distribution according to population projections from the U.S.
Census Bureau Population and Housing Estimates Program or any
prior special federal census held in any county. Beginning in
2027, the ratio of the population of each county to the total
population of the state shall be updated every five years .
(c) The distribution of the proceeds from the
simplified sellers use tax paid to counties and municipalities
shall occur quarterly monthly in a manner prescribed by the
department."
Section 2. Section 40-23-197.1, Code of Alabama 1975,
related to the timing of the distribution of simplified
sellers use tax, is hereby repealed.
Section 3. This act shall become effective on October
1, 2026.
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