SB105 Summary

• Repeals Amendment 225 (Section 211.04) of the Alabama Constitution of 1901.

• Limits federal income tax deduction for individual taxpayers beginning January 1, 2018, with full deduction available only for taxpayers earning $100,000 or less (single/head of household) or $200,000 or less (married filing jointly), with deductions reduced by 1% for each $500-$1,000 of income above these thresholds depending on filing status.

• Exempts sales of food (as defined under the federal Supplemental Nutrition Assistance Program) and over-the-counter drugs from Alabama state sales tax beginning January 1, 2018, while allowing local governments to continue collecting local sales taxes on these items.

• Prohibits local governments from levying separate sales taxes targeted exclusively at food or over-the-counter drugs.

• Defines over-the-counter drugs as prescription-free drugs with required labeling per federal regulations, excluding grooming and hygiene products such as soaps, shampoo, toothpaste, and sunscreen.