SB36 • 2026

Local sales and use taxes, municipal sales and use taxes collected from nonresident Alabama taxpayers refunded

Taxes

Passed Legislature

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

Sponsor: Albritton
Last action: 2026-01-13
Official status: Pending Committee Action in House of Origin
Effective date: Not listed

Plain English Breakdown

The official source material does not provide specific information about the process or timeline for handling denied or disputed refund requests, nor does it specify administrative burdens or interest rate determination methods.

Refunding Sales and Use Taxes for Alabama Residents

This bill requires Alabama municipalities to refund sales and use taxes paid by residents from a different jurisdiction, provided they can prove residency and payment.

What This Bill Does

Requires municipalities in Alabama to give refunds of local sales and use taxes to Alabama residents who buy things in another city or town within the state.
Allows taxpayers to file one petition for refund each year with the municipality where they paid the tax.
Receivers of a refund must provide proof that they paid the tax and live in a different jurisdiction from where they made their purchase.
Municipalities must start paying interest on refunds 90 days after receiving a properly documented refund request.

Who It Names or Affects

Alabama residents who buy goods or services in another city or town within Alabama.
Local municipalities that collect sales and use taxes from non-residents.

Terms To Know

Tangible personal property: Physical items like clothing, furniture, or electronics that can be touched and moved.
Jurisdiction: A specific area where a government has authority to make rules and collect taxes.

Limits and Unknowns

The bill does not specify what happens if the refund request is denied or disputed.
It's unclear how municipalities will handle the administrative burden of processing these refunds.
There are no details on how interest rates for late refunds will be determined.

Bill History

2026-01-13 Senate
Pending Committee Action in House of Origin
2026-01-13 Senate
Read for the first time and referred to the Senate Committee on Finance and Taxation General Fund

Official Summary Text

Local sales and use taxes, municipal sales and use taxes collected from nonresident Alabama taxpayers refunded

Current Bill Text

Read the full stored bill text

SB36 INTRODUCED
Page 0
SB36
JPEZUFN-1
By Senator Albritton
RFD: Finance and Taxation General Fund
First Read: 13-Jan-26
PFD: 18-Dec-25
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JPEZUFN-1 12/17/2025 KHF (F)KHF 2025-3721
Page 1
PFD: 18-Dec-25
SYNOPSIS:
Under existing law, local sales and use taxes
collected on the purchase of tangible personal property
by an Alabama resident from a different jurisdiction
are retained by the local taxing authority that levied
the sales and use taxes.
This bill would require any sales and use taxes
collected by an Alabama municipality from the purchase
of tangible personal property by an Alabama resident
from a different jurisdiction to be refunded to the
taxpayer upon proper proof of payment and residency.
A BILL
TO BE ENTITLED
AN ACT
Relating to local sales and use taxes; to require
municipalities to refund local sales taxes paid by Alabama
residents from a different jurisdiction upon proper proof of
payment and residency.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. (a) Any Alabama taxpayer who pays municipal
sales and use taxes to an Alabama municipality other than his
or her place of residence may file a petition for refund of
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SB36 INTRODUCED
Page 2
or her place of residence may file a petition for refund of
the taxes paid with the municipality based on a process
established by the municipality. The petition for refund may
only be filed once per year.
(b) Any taxpayer seeking a refund of municipal sales
and use taxes paid pursuant to (a) shall maintain records
documenting the amount of sales and use taxes paid to the
municipality. Refunds shall require proper documentation of
amounts of municipal sales and use taxes paid, along with
proof of residency of the taxpayer.
(c) Notwithstanding any other provisions of law,
interest due on any refund of municipal sales and use taxes
paid to a municipality under this act shall begin to be paid
by the municipality beginning 90 days after the receipt date
of the properly documented refund petition with interest
accruing beginning on the 91st day.
Section 2. This act shall become effective on October
1, 2026.
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