Retail Report | Alabama Retail Association

Week 5 of the legislative session has concluded. Lawmakers will be in their districts next week and will not convene in Montgomery.

House Unanimously Approves Bill to Apply CPI to Tax-Free Holidays

The House gave resounding approval to HB315 which adjusts the caps on goods exempt from sales tax during Alabama’s two annual sales tax holidays. Rep. Joe Lovvorn, R-Auburn, was joined by 85 of his colleagues in sponsoring the legislation to raise the exemption limits based on the Consumer Price Index (CPI) for the 2026 calendar year and every five years thereafter.

The bill will now travel to the Senate for consideration. Sen. Kirk Hatcher, D-Montgomery, has introduced the Senate version of the bill.

Bills to Cut Grocery and Individual Taxes Introduced

Rep. Danny Garrett, R-Trussville, has introduced legislation to reduce the state’s grocery tax, allow local governments to modify their local food taxes, decrease taxes for seniors on fixed incomes, and increase deductions for state income taxes. During the House Ways and Means Education Committee meeting, Rep. Garrett highlighted that if the legislation is passed, it would save Alabama taxpayers approximately $191.2 million.

HB386 reduces the sales and use tax rate on food to two percent, effective September 1, 2025.
HB387 authorizes county and municipal governments to lower their sales and use tax on food and removes previous limitations on such reductions.
HB388 increases the exemption amount for taxable retirement income for individuals aged 65 or older from $6,000 to $12,000.
HB389 increases the optional standard deduction and expands the adjusted gross income range to increase the threshold at which the state imposes individual income taxes.

All bills received a favorable report from the Committee.

Update on Pharmacy and Insurance Related Bills

HB123, a sunset bill addressing structural reforms and oversight for the Alabama Board of Pharmacy, received a favorable report Tuesday in the Senate County and Municipal Government Committee. The bill, sponsored by Rep. Kerry Underwood, R-Tuscumbia, was amended to require the board to adopt and publish fee schedules for various violations and to revise the nomination process for board members.

The Senate Healthcare committee gave a favorable report to HB79 sponsored by Rep. Chip Brown R-Mobile. The bill prohibits punitive action against pharmacists that recommend or dispense drugs for off-label use.

Sen. Tim Melson’s, R-Florence, has proposed legislation to prevent health insurance companies and other organizations from restricting what physicians, healthcare providers, and pharmacists can communicate to patients regarding the costs of treatments or medications. The bill was substituted and received a favorable report from the Senate Banking and Insurance Committee. It was substituted to broaden its scope, now also covering contracted healthcare providers and including optometrists.

Lawmakers Consider Immigration Package – Labor Broker Bill Passes

Alabama lawmakers approved several bills addressing immigration this week, including HB302 introduced by Rep. Ben Robbins, R-Sylacauga. The bill establishes regulations for labor brokers, mandating that they register with the Department of Workforce and comply with E-Verify protocols. The bill offers protection to business entities and employers who unknowingly hire employees who are not properly verified by labor brokers.