The 2026 Legislative Session has officially come to a close, with the House and Senate adjourning sine die on April 9. Over the course of the session, more than 1,000 bills were introduced, covering a wide range of issues impacting Alabama retailers. Throughout it all, the Alabama Retail Association worked to monitor legislation, engage with lawmakers, and ensure the retail industry’s voice was represented at every stage of the process.

We will provide a comprehensive legislative summary outlining the bills we tracked and their final status.

Cash Rounding Bill Awaits Governor Signature
Legislation sponsored by Rep. Norman Crow, R-Tuscaloosa, and carried in the Senate by Sen. Jay Hovey, R-Auburn, received final passage this week and has been sent to Gov. Kay Ivey for signature.

HB545 would authorize the rounding of in-person cash transactions to the nearest five cents, establishing a uniform approach for handling final totals while leaving product pricing and sales tax calculations unchanged. Electronic payments would not be affected.

While the bill ultimately advanced with little opposition, it prompted some debate on the Senate floor along with policy questions about how rounding differences should be treated. An amendment offered by Sen. Vivian Figures, D-Mobile, would have required amounts collected from rounding up to be remitted to the Education Trust Fund, while providing retailers a tax credit for amounts lost when transactions are rounded down. That proposal was tabled.

We appreciate the members who worked alongside the Alabama Retail Association and other business groups to provide much-needed clarity and protections for retailers and consumers as penny circulation continues to decline.

Senate Sends Overtime Deduction and Grocery Tax Holiday Bill to Governor
Sponsored by Rep. James Lomax, R-Huntsville, HB527 has now cleared the Legislature, receiving a favorable report from the Senate Finance and Taxation Education Committee on Tuesday before passing the full Senate unanimously on Thursday. The bill now heads to Gov. Kay Ivey for her signature.

As passed, the legislation maintains the provision allowing taxpayers to deduct up to $1,000 in qualified overtime pay annually for tax years 2026 through 2028. It also includes the grocery sales tax holiday added by the House, which will take effect immediately upon enactment.

Under that provision, the state’s 2% sales tax on groceries will be suspended from May 1 through June 30. For purposes of the exemption, “food” is defined consistent with federal Supplemental Nutrition Assistance Program (SNAP) guidelines.

With the May 1 start date quickly approaching, retailers who sell qualifying food items should start preparing to implement the temporary exemption as soon as the bill is signed into law.

SNAP Purchase Restrictions Bill Sent to Governor
Legislation sponsored by Sen. Arthur Orr, R-Decatur, and Rep. Reed Ingram, R-Matthews, that would restrict certain purchases under the Supplemental Nutrition Assistance Program (SNAP) has been sent to the Governor following final passage. SB57 requires the Alabama Department of Human Resources to seek a federal waiver from USDA to prohibit the use of SNAP benefits for the purchase of candy and soda.

Under the measure, “candy” is defined as products where sugar or similar sweeteners are a primary ingredient, including items such as chocolate bars, non-chocolate candy, and chewing gum, while excluding bakery items, baking ingredients, and other foods intended for meal preparation. “Soda” is defined as beverages whose first ingredients include carbonated water and added sugars, but does not include drinks containing low or no-calorie sweeteners. If approved, the waiver would allow these items to be excluded from eligible SNAP purchases, with implementation no sooner than April 1, 2027. The bill also requires that retailers be provided at least one month’s notice before the waiver may take effect.

The House adopted the bill with amendments, including one by Rep. Rex Reynolds, R-Huntsville, removing the Department of Revenue from any administrative role, and another by Rep. Mack Butler, R-Rainbow City, related to energy drinks. The Senate declined to concur with the changes and requested a conference committee, which ultimately removed the energy drinks amendment. Both chambers approved the final conference committee report, clearing the bill for the Governor’s signature.

Although the Department of Revenue language was removed, the bill still provides that the Governor shall direct the appropriate state agency to publish a list of items included and excluded under the waiver to assist retailers with compliance. The legislation also provides limited liability protection for retailers in cases of accidental noncompliance.

Swipe Fee Tax Clarification Bill Sent to Governor
Legislation sponsored by Sen. Arthur Orr, R-Decatur, received final passage in the House this week and has been sent to Gov. Kay Ivey for signature. Rep. Chad Robertson, R-Heflin, carried SB221 in the House, where it passed without discussion.

The measure clarifies that credit and debit card transaction fees are excluded from the calculation of sales and use tax, reinforcing that such fees are not subject to taxation under current law. The bill was introduced in response to an internal Alabama Department of Revenue policy that had raised concerns about inconsistent treatment and a lack of statutory authority.

Franchisee Religious Observation Bill Receives Final Passage
Sponsored by Sen. Dan Roberts, R-Birmingham, SB138 would prohibit a franchisor from requiring a franchisee to operate on a day that conflicts with the franchisee’s sincerely held religious beliefs, except in limited circumstances.

The House further amended the bill being carried by Rep. Ben Robbins, R-Sylacauga, and gave it final approval. The Senate concurred with the changes, and the bill is now pending Gov. Kay Ivey’s signature. Sen. Roberts said he introduced the legislation after a constituent whose bakery franchise was purchased by a private equity firm was told it would be required to open on Sundays, a day the business had historically remained closed for religious reasons.

Alcohol Bills Advance to Governor’s Desk
Sponsored by Rep. Andy Whitt, R-Ardmore, HB593 has now cleared the Legislature after being amended and passed by the Senate, with the House concurring in those changes. The bill has been sent to Gov. Kay Ivey for signature.

The legislation, carried by Sen. Randy Price, R-Opelika, expands Alabama’s existing brewpub framework by creating new license categories for small craft distilleries and wineries and allowing a single manufacturer license for combined operations within a contiguous area. It also permits tours, tastings, and limited off-site sales at public events. The Senate amendment provides additional clarity around the role of state and local governments in the taxation of alcoholic beverages.

SB287, sponsored by Sen. Kirk Hatcher, D-Montgomery, and carried in the House by Rep. Kenyatte Hassell, D-Montgomery, also received final passage this week. The measure clarifies that licensed importers may bring alcoholic beverages into Alabama from outside the state and aligns the importer license year to begin October 1.

The House approved the bill, and the Senate concurred with the House committee amendment, sending the measure to the governor for signature.

Alabama Moves to Expand Indoor Vaping Restrictions
Legislation that would prohibit vaping in most enclosed public spaces, including retail stores, restaurants, shopping malls, elevators, and banks, under the same framework as the Alabama Clean Indoor Air Act was approved by the House. SB9 was amended in the House with Rep. Laura Hall, D-Huntsville, proposing language to honor Rep. Barbara Drummond’s commitment to the issue. The chapter will now be known and cited as the Vivian Davis Figures and Barbara Drummond Clean Indoor Air Act.

The Senate concurred with the changes, and the bill is now pending Gov. Kay Ivey’s signature.

Consumer Data Privacy Rights Bill Advances
Legislation establishing a framework for consumer data privacy rights in Alabama gives individuals the ability to access, correct, delete, and obtain a copy of their personal data. HB351, sponsored by Rep. Mike Shaw, R-Vestavia Hills, received final passage in the Senate, where Sen. Chris Elliott, R-Josephine, carried the legislation. The Senate adopted the amendments previously approved in committee and tweaked the provision relating to political action committees (PACs). The House concurred with the Senate changes, and the bill is now awaiting Gov. Kay Ivey’s signature.