Retail Report | Alabama Retail Association

The second half of the legislative session is upon us and bills are moving quickly. Catch up on the latest action below.

Bills to Raise Limits on Sales Tax Holiday Items Receive Favorable Committee Votes
Bills to adjust the caps on goods exempt from sales tax during Alabama’s two annual sales tax holidays passed unanimously in the Senate Finance and Taxation Education Committee. The bills, HB315 and SB209, supported by the Alabama Retail Association, seek to raise the exemption limits based on the Consumer Price Index (CPI) starting in the 2026 calendar year and every five years thereafter. The current exemption thresholds were established in 2006. Senator Rodger Smitherman, D-Birmingham, commended the bipartisan efforts of the bill’s sponsors, Representative Joe Lovvorn, R-Auburn, and Senator Kirk Hatcher, D-Montgomery.

Flurry of Bills to Address Psychoactive Hemp Products Introduced and Considered this Session
During this legislative session, several bills have been introduced aimed at implementing additional regulations and, in some cases, outright bans on psychoactive hemp products and beverages. Lawmakers have expressed concerns regarding the accessibility of these products to minors and the lack of oversight. Below is a list of the bills that have been proposed so far.

PBM Bill Passes House Committee with Amendment
SB252, sponsored by Sen. Billy Beasley, D-Clayton, was amended and approved by the House Insurance Committee on Wednesday. The bill requires pharmacy benefit managers (PBMs) to reimburse independent pharmacies the amount paid by the Alabama Medicaid Agency, which currently includes a $10.64 per-prescription dispensing fee plus the cost of the drug. The bill was amended to remove the private right of action against a PBM or its affiliate and the two-year sunset provision.

Tax Exemption for Baby, Maternity and Menstrual Products Clears Senate Committee
Following passage from the House, HB152 by Rep. Neil Rafferty, D-Birmingham, received a favorable vote in the Senate Finance and Taxation Education Committee. The bill would exempt the purchase of certain baby supplies, baby formula, maternity clothing, and menstrual hygiene products for personal use from the state portion of sales and use tax. The legislation also allows local governments to adopt exemptions for these products. Senator Arthur Orr, R-Decatur, is carrying similar legislation in the Senate.

Bill Establishing Portable Benefits for Gig Workers Sent to Governor for Signature
SB86, sponsored by Sen. Arthur Orr, R-Decatur, enables independent contractors to have portable benefit accounts that move with them to various contract jobs. This bill also allows companies that hire these contractors to contribute to the accounts. The Alabama Retail Association worked to ensure companies who contribute to independent benefit plans are not exposed to liability under the Alabama Workers’ Compensation Act. The bill passed unanimously in the House on Tuesday and is now awaiting Governor Ivey’s signature.

Public Hearing Held on Ready to Drink Legislation
The Senate Tourism Committee held a public hearing on SB268, sponsored by Sen. Bobby Singleton, D-Greensboro. The legislation defines a new category of ready-to-drink mixed liquor beverages and permits the sale of these beverages at retail establishments. The Committee did not take action on the bill, and a substitute bill was provided for members to review. Rep. Craig Lipscomb, R-Gadsden, has also introduced a bill to regulate the sale of ready-to-drink beverages in the House.

Bill to Provide Procedures for Establishing and Increasing Local Taxes and Fees Receives Committee Vote
SB249, sponsored by Sen. Gerald Allen, R-Cottondale, requires local governments who wish to impose a new tax or license fee, or to increase an existing tax or license fee, to provide at least a 30-days’ notice and hold a public hearing prior to consideration. The bill received a favorable report from the Senate County and Municipal Government Committee.

Consumer Protection Bill Introduced
A bill introduced by Rep. Prince Chestnut, D-Selma, would make it unlaw to use computers, such as chatbots or artificial intelligence, to mislead consumers into believing they are interacting with a human. HB516 outlines that such practices would be considered unlawful if the consumer is not clearly notified that they are interacting with a non-human entity or if the consumer may reasonably believe they are communicating with a human. If passed, the legislation is set to take effect on October 1, 2025.

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