Bill > HB434

This bill revises how the proceeds from the simplified sellers use tax, which is a tax on goods purchased online or from out-of-state sellers that are used within Alabama, are distributed. Specifically, it changes the percentages allocated to different funds and entities. The bill reduces the amount going to the State General Fund from 75% to 37.5% and increases the amount going to the Education Trust Fund from 25% to 11.25%. It also introduces a new allocation of 1.25% to local boards of education based on student enrollment. The percentages allocated to counties and municipalities are also adjusted, with counties receiving 20% and municipalities receiving 30% of the remaining funds, distributed based on their respective populations according to the most recent federal census. Additionally, the bill mandates that these distributions to local entities will now occur monthly instead of quarterly, and it repeals a separate section of law that previously governed monthly distributions. This act is set to become effective on October 1, 2026.

Budget and Finance

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