The 2025 session of the Alabama Legislature ended on May 14, and NFIB State Director Rosemary Elebash says lawmakers passed several bills to help small businesses:

House Bills

Grocery Tax Cut (HB 386)
Lowers the state sales tax on groceries from 3% to 2%. The bill also allows (but doesn’t require) cities and counties to reduce their local grocery taxes.
Estimated savings for Alabama families: $121.9 million a year

Business Personal Property Tax Relief (HB 543)
Raises the state tax exemption on business equipment and other personal property from $40,000 to $100,000. Personal property includes things like furniture, tools, and machines that aren’t permanently attached to a building.
This change means about 83% of Alabama businesses will no longer have to pay the state’s personal property tax.
Counties and cities can choose to adopt the same exemption by passing a resolution or ordinance.

More Time to Appeal Tax Decisions (HB 505)
Doubles the time to appeal a final tax assessment, from 30 days to 60 days. Taxpayers can file appeals with either the Alabama Tax Tribunal or a circuit court.

Senate Bills

Reporting Rules for Local Business Licenses (SB 174)
Requires cities and counties to report the business license taxes they collect to the Alabama Department of Revenue.
Also allows businesses to appeal local license tax decisions to the Alabama Tax Tribunal.
The bill stops third-party companies from collecting taxes or license fees they know, or should know, aren’t legally owed.

Taxpayer Voice on Ad Valorem Committee (SB 233)
Adds two consumers to the Ad Valorem Tax Advisory Committee. These members will represent the interests of taxpayers. Before this change, the committee only included tax officials.