Alabama Tax Changes - December 2024
Week Of 12.02.2024
Personal Income Tax
- The CHOOSE Act (Creating Hope and Opportunity for Our Students' Education Act of 2024) program went into effect on January 1, 2025.
- This program provides refundable income tax credits to eligible Alabama K-12 students.
- These credits can be used to pay for school tuition, tutoring, educational therapies, and other qualified education expenses at approved education service providers (ESPs).
- The Alabama Department of Revenue has released Chapter 810-28-1 (Rules 810-28-1-.01 through 810-28-1-.07) to provide guidance on the program, including eligibility guidelines, verification requirements, and ESP payment processes.
Sales and Use Tax
- The Town of Riverview, Alabama increased its sales tax rates effective December 1, 2024.
- General rate items and food sold through vending machines now have a 3% sales tax (previously 2%).
- Automotive vehicles, truck trailers, semi-trailers, and house trailers now have a 2% sales tax (previously 1%).
- Admissions to places of amusement and entertainment now have a 3% sales tax.
- Riverview also imposed a use tax effective December 1, 2024:
- 3% for general rate items
- 1% for farm machinery and manufacturing machinery
- 2% for automotive vehicles, truck trailers, semi-trailers, and house trailers
Sales Tax Holiday
- The Alabama Department of Revenue has updated the list of counties and municipalities participating in the 2025 Alabama severe weather preparedness sales tax holiday.
- This holiday is scheduled to take place from February 15th to 17th, 2025.
- The holiday exempts certain items from sales tax, including batteries, radios, first-aid kits, and other emergency preparedness supplies.
Week Of 12.09.2024
Alabama General Administrative Provisions—Alabama interest rates for underpayments and overpayments decrease for first quarter of 2025.
The Alabama interest rate for underpayments and overpayments for the first quarter of calendar year 2025 (January 1, 2025 through March 31, 2025) will decrease to 7% from 8%, and the rate for large corporate underpayments will decrease to 9% from 10%. The annual rate of interest added to underpayments and overpayments of Alabama taxes is the same rate established for underpayments by the U.S. Treasury Secretary under IRC § 6621. For a "large corporate underpayment" as defined in IRC § 6621, this means the interest rate set by IRC § 6621(c)(1). (Quarterly Interest Rates, Ala. Dept. Rev., 12/09/2024; IR 2024-290.)
Week Of 12.02.2024
Alabama Personal Income Tax—Alabama issues rules regarding CHOOSE Act program.
Effective January 11, 2025, the Alabama Department of Revenue has adopted Chapter 810-28-1 (Rules 810-28-1-.01 through 810-28-1-.07) regarding the Creating Hope and Opportunity for Our Students' Education Act of 2024 (CHOOSE Act) Program. For tax years beginning on or after January 1, 2025, the CHOOSE Act makes refundable income tax credits available to eligible Alabama K-12 students that can be used to pay for school tuition, tutoring, educational therapies and other qualified education expenses at approved education service providers (ESPs) across the state (see State Tax Update, 03/11/2024). The adopted rules provide guidance regarding: program eligibility guidelines and verification requirements; requirements for parents of an eligible or participating student and for education service providers; qualifying educational expenses; and education savings account fund availability and the ESP payment process.
Alabama Sales and Use Tax Rates—Riverview (Alabama) sales tax rate changes, use tax imposed.
The Alabama Department of Revenue has announced that, effective December 1, 2024, the Town of Riverview increased sales tax rates to 3% from 2% for general rate items and food sold through vending machines and to 2% from 1% for automotive vehicles, truck trailers, semi-trailers and house trailers. The sales tax was also imposed on admissions to places of amusement and entertainment at the rate of 3%. All other sales tax rates remain unchanged. Effective December 1, 2024, the Town of Riverview also imposed a use tax at the following rates: 3% for general rate items; 1% for farm machinery and manufacturing machinery; and 2% for automotive vehicles, truck trailers, semi-trailers, and house trailers. (Notice, Ala. Dept. Rev., 11/25/2024.)
Alabama Sales & Use Taxes—Riverview (Alabama) sales tax rate changes, use tax imposed.
The Alabama Department of Revenue has announced that, effective December 1, 2024, the Town of Riverview increased sales tax rates to 3% from 2% for general rate items and food sold through vending machines and to 2% from 1% for automotive vehicles, truck trailers, semi-trailers and house trailers. The sales tax was also imposed on admissions to places of amusement and entertainment at the rate of 3%. All other sales tax rates remain unchanged. Effective December 1, 2024, the Town of Riverview also imposed a use tax at the following rates: 3% for general rate items; 1% for farm machinery and manufacturing machinery; and 2% for automotive vehicles, truck trailers, semi-trailers, and house trailers. (Notice, Ala. Dept. Rev., 11/25/2024.)
Alabama Sales & Use Taxes—Alabama 2025 severe weather preparedness sales tax holiday update.
The Alabama Department of Revenue has updated the list of counties and municipalities participating in the 2025 Alabama severe weather preparedness sales tax holiday being held from February 21, 2025, to February 23, 2025. (Alabama Severe Weather Preparedness Tax Holiday Participating Localities, Alabama Dept. of Rev., 11/27/2024.)
Alabama Sales & Use Taxes—Alabama issues rule regarding rebate program for certified tourism projects.
Effective January 11, 2025, the Alabama Department of Revenue has adopted Rule 810-17-1-.02, "Sweet Home Alabama Tourism Investment Act - General Guidelines." The rule provides guidelines and procedures to be used by the Department in the administration of the Sweet Home Alabama Tourism Investment Act rebate program, under which an approved company with a certified tourism destination project may be granted tax rebates from any combination of state and local sales, local lodging, and rental taxes generated by the project.
Week Of 12.09.2024
Alabama General Administrative Provisions—Alabama interest rates for underpayments and overpayments decrease for first quarter of 2025.
The Alabama interest rate for underpayments and overpayments for the first quarter of calendar year 2025 (January 1, 2025 through March 31, 2025) will decrease to 7% from 8%, and the rate for large corporate underpayments will decrease to 9% from 10%. The annual rate of interest added to underpayments and overpayments of Alabama taxes is the same rate established for underpayments by the U.S. Treasury Secretary under IRC § 6621. For a "large corporate underpayment" as defined in IRC § 6621, this means the interest rate set by IRC § 6621(c)(1). (Quarterly Interest Rates, Ala. Dept. Rev., 12/09/2024; IR 2024-290.)
Week Of 12.02.2024
Alabama Personal Income Tax—Alabama issues rules regarding CHOOSE Act program.
Effective January 11, 2025, the Alabama Department of Revenue has adopted Chapter 810-28-1 (Rules 810-28-1-.01 through 810-28-1-.07) regarding the Creating Hope and Opportunity for Our Students' Education Act of 2024 (CHOOSE Act) Program. For tax years beginning on or after January 1, 2025, the CHOOSE Act makes refundable income tax credits available to eligible Alabama K-12 students that can be used to pay for school tuition, tutoring, educational therapies and other qualified education expenses at approved education service providers (ESPs) across the state (see State Tax Update, 03/11/2024). The adopted rules provide guidance regarding: program eligibility guidelines and verification requirements; requirements for parents of an eligible or participating student and for education service providers; qualifying educational expenses; and education savings account fund availability and the ESP payment process.
Alabama Sales and Use Tax Rates—Riverview (Alabama) sales tax rate changes, use tax imposed.
The Alabama Department of Revenue has announced that, effective December 1, 2024, the Town of Riverview increased sales tax rates to 3% from 2% for general rate items and food sold through vending machines and to 2% from 1% for automotive vehicles, truck trailers, semi-trailers and house trailers. The sales tax was also imposed on admissions to places of amusement and entertainment at the rate of 3%. All other sales tax rates remain unchanged. Effective December 1, 2024, the Town of Riverview also imposed a use tax at the following rates: 3% for general rate items; 1% for farm machinery and manufacturing machinery; and 2% for automotive vehicles, truck trailers, semi-trailers, and house trailers. (Notice, Ala. Dept. Rev., 11/25/2024.)
Alabama Sales & Use Taxes—Riverview (Alabama) sales tax rate changes, use tax imposed.
The Alabama Department of Revenue has announced that, effective December 1, 2024, the Town of Riverview increased sales tax rates to 3% from 2% for general rate items and food sold through vending machines and to 2% from 1% for automotive vehicles, truck trailers, semi-trailers and house trailers. The sales tax was also imposed on admissions to places of amusement and entertainment at the rate of 3%. All other sales tax rates remain unchanged. Effective December 1, 2024, the Town of Riverview also imposed a use tax at the following rates: 3% for general rate items; 1% for farm machinery and manufacturing machinery; and 2% for automotive vehicles, truck trailers, semi-trailers, and house trailers. (Notice, Ala. Dept. Rev., 11/25/2024.)
Alabama Sales & Use Taxes—Alabama 2025 severe weather preparedness sales tax holiday update.
The Alabama Department of Revenue has updated the list of counties and municipalities participating in the 2025 Alabama severe weather preparedness sales tax holiday being held from February 21, 2025, to February 23, 2025. (Alabama Severe Weather Preparedness Tax Holiday Participating Localities, Alabama Dept. of Rev., 11/27/2024.)
Alabama Sales & Use Taxes—Alabama issues rule regarding rebate program for certified tourism projects.
Effective January 11, 2025, the Alabama Department of Revenue has adopted Rule 810-17-1-.02, "Sweet Home Alabama Tourism Investment Act - General Guidelines." The rule provides guidelines and procedures to be used by the Department in the administration of the Sweet Home Alabama Tourism Investment Act rebate program, under which an approved company with a certified tourism destination project may be granted tax rebates from any combination of state and local sales, local lodging, and rental taxes generated by the project.