Alabama Tax Changes - January 2025
CHOOSE Act Education Savings Account Program
- Announcement: The application process for the CHOOSE Act (Creating Hope and Opportunity for Our Students' Education Act of 2024) is now open.
- Eligibility:
- First Priority: First 500 ESAs awarded to students with special needs.
- Second Priority: Students who are dependents of active-duty service members assigned to a priority school.
- Remaining ESAs: Awarded based on family income, not exceeding 300% of the federal poverty level for the preceding tax year.
- Application Details:
- Online Applications: Families can apply for the 2025-2026 school year at the CHOOSE Act website.
- Application Period: Open through April 7, 2025.
- Award Notifications: Scheduled for May 2025.
Severe Weather Preparedness Sales Tax Holiday
- Event Date: The 2025 Alabama severe weather preparedness sales tax holiday will take place from February 21, 2025, to February 23, 2025.
- Participation: The Alabama Department of Revenue has updated the list of counties and municipalities participating in this holiday.
Alabama Fuels & Minerals Taxes—Alabama excise tax, IRP/IFTA requirements suspended to assist winter weather event relief efforts.
The Commissioner of the Alabama Department of Revenue has announced that the Department will temporarily suspend the motor fuel exporter, importer, and transporter licensing requirements associated with the Alabama Terminal Excise Tax for exporters, importers, or transporters supporting disaster relief efforts by engaging in the export of motor fuel from Alabama to areas in other states impacted by the winter weather event for which a state of emergency or disaster has been declared, or the import of motor fuel into areas in Alabama for which a state of emergency or disaster has been declared. The Department will also temporarily suspend the requirements associated with the International Registration Plan (IRP) and the International Fuel Tax Agreement (IFTA) for any motor vehicle engaged in interstate disaster relief efforts that is traveling through Alabama as part of the relief. This temporary suspension is effective for 30 days from the date of the Commissioner's order, i.e., until February 20, 2025. (Order of the Commissioner, Ala. Dept. Rev., 01/21/2025; Order of the Commissioner, Ala. Dept. Rev., 01/21/2025.)
Alabama Personal Income Tax—Application process for Alabama CHOOSE Act education savings account program now open.
The Alabama Governor's Office has announced that the application process for the CHOOSE Act (Creating Hope and Opportunity for Our Students' Education Act of 2024), the state's Education Savings Account (ESA) program (see State Tax Update, 03/11/2024), is officially open. Families can apply online for the 2025-2026 school year at the CHOOSE Act website. The application process will be open through April 7, 2025, with award notifications scheduled to be sent to families in May 2025. In this first year of the program, the first 500 ESAs will be awarded to participating students with special needs, with second priority given to participating students who are the dependents of active-duty service members enrolled in or assigned to a priority school. Remaining ESAs will be awarded to participating students based on each family's adjusted gross income (must not exceed 300% of the federal poverty level for the preceding tax year). (Release, Office of the Alabama Governor, 01/02/2025.)
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. Rev., 01/03/2025.)
Alabama Fuels & Minerals Taxes—Alabama excise tax, IRP/IFTA requirements suspended to assist winter weather event relief efforts.
The Commissioner of the Alabama Department of Revenue has announced that the Department will temporarily suspend the motor fuel exporter, importer, and transporter licensing requirements associated with the Alabama Terminal Excise Tax for exporters, importers, or transporters supporting disaster relief efforts by engaging in the export of motor fuel from Alabama to areas in other states impacted by the winter weather event for which a state of emergency or disaster has been declared, or the import of motor fuel into areas in Alabama for which a state of emergency or disaster has been declared. The Department will also temporarily suspend the requirements associated with the International Registration Plan (IRP) and the International Fuel Tax Agreement (IFTA) for any motor vehicle engaged in interstate disaster relief efforts that is traveling through Alabama as part of the relief. This temporary suspension is effective for 30 days from the date of the Commissioner's order, i.e., until February 20, 2025. (Order of the Commissioner, Ala. Dept. Rev., 01/21/2025; Order of the Commissioner, Ala. Dept. Rev., 01/21/2025.)
Alabama Personal Income Tax—Application process for Alabama CHOOSE Act education savings account program now open.
The Alabama Governor's Office has announced that the application process for the CHOOSE Act (Creating Hope and Opportunity for Our Students' Education Act of 2024), the state's Education Savings Account (ESA) program (see State Tax Update, 03/11/2024), is officially open. Families can apply online for the 2025-2026 school year at the CHOOSE Act website. The application process will be open through April 7, 2025, with award notifications scheduled to be sent to families in May 2025. In this first year of the program, the first 500 ESAs will be awarded to participating students with special needs, with second priority given to participating students who are the dependents of active-duty service members enrolled in or assigned to a priority school. Remaining ESAs will be awarded to participating students based on each family's adjusted gross income (must not exceed 300% of the federal poverty level for the preceding tax year). (Release, Office of the Alabama Governor, 01/02/2025.)
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. Rev., 01/03/2025.)