The Alabama House on Tuesday passed a slate of tax-exemption bills for nonprofits and community organizations.
House members voted to grant nine education, youth services, and community and cultural development organizations exemptions from state and local taxes.
House Bill 123, sponsored by Representative Terri Collins, R-Decatur, would exempt Decatur’s Cook Museum of Natural Science and Birmingham’s McWane Science Center from state sales and use taxes. The bill also would allow municipalities and counties to exempt the organizations from local sales and use taxes.
“They’re probably way more than compensating for the tax exemptions we’re giving up, and we appreciate their work,” Collins said.
House Bill 388, sponsored by Representative David Faulkner, R-Mountain Brook, would exempt local community foundations serving Birmingham, Decatur, Huntsville, Northeast Alabama, South Alabama, West Alabama, and the Limestone County and Walker County areas from state sales and use taxes through August 31, 2031.
House Bill 394, sponsored by Representative Kelvin Lawrence, D-Montgomery, would exempt Freedom Quilting Bee Legacy from state sales and use taxes and allow counties and municipalities to exempt the organization from local taxes.
Freedom Quilting Bee Legacy promotes economic opportunity and cultural education by supporting the work of quiltmakers in Alberta and Gee’s Bend.
House Bill 326, sponsored by Representative Parker Moore, R-Hartselle, would remove a sunset provision in state law affecting the Masonic Grand Lodges of Alabama and subordinate lodges. The existing state sales and use tax exemption is set to expire in 2027.
Representative Jeremy Gray, D-Opelika, spoke in support of House Bill 422 and House Bill 423, which would exempt Greater Peace Community Development Corporation and Goodwill Industries of the Southern Rivers from state sales and use taxes and allow municipalities and counties to exempt the organizations from local taxes.
Greater Peace Community Development Corporation provides housing and food assistance, youth and early childhood education, and workforce development services in Opelika and the greater Lee County area, with a focus on economically distressed communities.
House Bill 425, sponsored by Representative Mark Gidley, R-Hokes Bluff, would exempt Sleep in Heavenly Peace from state sales and use taxes through September 30, 2029, and allow municipalities to provide local tax exemptions.
“They’ve built 15,231 beds for children that needed beds,” Gidley said. “The number on the waiting list is 2,301.”
House Bill 411, sponsored by Representative Craig Lipscomb, R-Gadsden, would exempt the auxiliary of The Big Oak Ranch from state, county, and municipal sales and use taxes.
Big Oak Ranch is a Christian ministry based in Alabama that provides long-term foster care for children who have experienced abuse, neglect, or abandonment. Its auxiliary sells goods to children staying at the ranch’s locations.
The House adopted a substitute version of HB411 that allows municipalities to opt out.
Lawmakers passed all of the bills unanimously. The measures advance to the Alabama Senate.
If enacted, the bills would take effect September 1 and October 1, 2026.
