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 status shows conflicting information: it states the bill passed both chambers but also lists a last action of pending committee. The effective date is set for October 1, 2026.

Refunds for Local Sales Taxes Paid by Nonresident Alabama Taxpayers

This bill requires cities to return local sales taxes paid on physical items by Alabama residents who live in a different city, if the resident provides proof of payment and residency.

What This Bill Does

Requires municipalities to refund local sales and use taxes collected from Alabama residents living outside that municipality's limits when they buy tangible personal property.
Allows taxpayers to file one petition per year for these refunds using a process set by each municipality.
Mandates that taxpayers keep records showing the amount of tax paid as proof of payment.
Requires taxpayers to provide official proof that they live in a different Alabama jurisdiction than where they bought the item.

Who It Names or Affects

Alabama residents who buy physical items and pay sales tax in cities or towns other than their own place of residence.
Municipalities that collect local sales and use taxes from these nonresident taxpayers.

Terms To Know

Tangible personal property: Physical items you can touch, like clothes or electronics, which are subject to the tax refund rule in this bill.
Municipality: A city or town government that collects local taxes and must process refunds under this law.

Limits and Unknowns

The law does not take effect until October 1, 2026.
Taxpayers can only file for one refund per year under this rule.
Each municipality must create its own specific process for handling these refund petitions.

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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