Advocates to try again with online sales tax increase in Alabama

A bill to increase the state sales tax on online purchases will return in the 2025 legislative session, but supporters agree some advocacy and education need to happen between now and then.

A bill that would increase the sales tax on online purchases from 8% to 9.3% to put them more on par with the tax on in-store purchases died in the Alabama House. It was criticized by some GOP members for being a tax hike and others raised concern that most of the new revenue would go to the state’s largest cities.

But advocates will continue to argue that the current Simplified Sellers Use Tax — the fancy name for the online sales tax — is unfair to traditional retailers who have to charge a higher rate of combined local and state sales taxes. Meanwhile, local municipalities and schools get less revenue from online sales.