SB242 Summary

• Amends Alabama sales and use tax code to add and update definitions for tangible personal property and digital goods effective immediately upon passage and approval.

• Defines "digital goods" as sounds, images, data, facts, or information transferred electronically, including specified digital products and services using one or more software applications, which are now subject to sales tax.

• Clarifies "wholesale sale" definition to specify that component parts must "become a part of and remain a part of" the finished product, changing language from "whether or not" to "when" such tangible property becomes a component part.

• Adds definitions for consumable vapor products and vapor products (electronic cigarettes and similar devices not regulated by the FDA).

• Extends sales tax applicability to digital goods in retail sales transactions and use tax provisions, treating digital goods similarly to tangible personal property for tax purposes.