AL HB268

Exempts all proceeds from prizes won in any state lottery from Alabama state income taxation for individual taxpayers.

Exemption becomes effective beginning with the tax year that starts January 1, 2026.

Exemption becomes void if Alabama ratifies a statewide constitutional amendment authorizing games of chance.

Amends Section 40-18-19 of the Code of Alabama 1975 by adding a new subdivision (14) to the list of income tax exemptions.

Effective date of the bill is October 1, 2025.