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AlabamaSB1342026 Regular SessionSenateWALLET

Taxation; tobacco interstate warehouser permits required, penalties imposed for violations

Sponsored By: William M. Beasley (Democratic)

Enacted

Taxation & Revenue

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Bill Overview

Analyzed Economic Effects

6 provisions identified: 1 benefits, 4 costs, 1 mixed.

Licensed tobacco businesses gain seizure safeguards

Beginning October 1, 2026, manufacturers' tobacco stored for resale in Alabama bonded warehouses is excluded from the specified seizure rule. Vehicles owned by permitted interstate warehousers are excluded from the specified confiscation and auction rule for selling unstamped tobacco. These exceptions do not remove other tobacco tax or stamping duties. Permitted interstate warehousers and regularly licensed tobacco dealers are also exempt from the stated tax-evasion presumption. That presumption concerns possession of more than 30 unstamped cigarette or heated-tobacco packages, or more than one box of untaxed cigars.

Tobacco businesses face reporting and seller checks

Beginning October 1, 2026, tobacco businesses selling, receiving, or distributing products for resale must report monthly between the 1st and 20th. Reports include customer names and addresses, invoice numbers and dates, product details, and itemized taxes. Warehousers must keep each sale's original order, invoice copy, and shipment evidence, plus delivery receipts for direct deliveries. Warehousers and carriers must allow shipment-record inspections and submit delivery statements when Alabama Revenue rules require them. Refusal is a misdemeanor carrying a $100–$500 fine per offense. Alabama Revenue must publicly list qualified or registered tobacco sellers, including warehousers; purchases from unlisted sellers can be confiscated. Failure to obtain a required tobacco account brings a written warning first, then $100 for the second violation. For a third or later violation, the civil penalty is $100 times the total violation count.

Tobacco stamp violations carry escalating penalties

Beginning October 1, 2026, failing to attach required tobacco tax stamps carries a penalty for each unstamped article. The first violation costs at least $25 per article; the second costs $250; the third or later costs $500. Each unstamped article counts as a separate offense, including covered heated tobacco products. Alabama Revenue can waive or reduce penalties for good cause. Repeated violations can cause license revocation, with a one-year bar on a new license or permit. Local officials can add penalties of $100–$500 within their authority.

Tobacco warehousers face new permit fees

Beginning October 1, 2026, interstate tobacco warehousers need an Alabama permit before shipping tobacco into the state. These businesses buy directly from manufacturers or their affiliates and resell only to Alabama-permitted wholesalers. Applicants need wholesale licenses from at least four other states, customer details, contracts, and audited financial statements. Businesses not registered as Alabama domestic entities also need a Certificate of Authority. The initial fee is $2,000; a renewal application and nonrefundable $500 fee are due each following October 1. Missing renewal ends the permit, and permits cannot be transferred. Alabama Revenue may deny or revoke permits for inaccurate applications, tax failures, specified licensing or fraud problems, or other good cause. Violating the permit rules carries a $1,000 penalty per violation, on top of other tobacco penalties.

Unstamped tobacco shippers risk seizures and charges

Beginning October 1, 2026, unstamped tobacco brought into Alabama for wholesale or retail sale can be seized and destroyed. This contraband rule excludes entry by interstate warehousers, manufacturers, and manufacturer affiliates. Transporting tobacco that needs stamps but lacks them, or has unpaid tax, requires an active warehouser, tobacco, or transporter permit. The permit must be active before travel on Alabama public roads; violations expose tobacco and vehicles to seizure. Seized vehicles can be auctioned, with net proceeds going to the State Treasury. Owners or drivers generally face a Class A misdemeanor; second or later offenses are Class C felonies regardless of quantity. Felony thresholds are 25,000 cigars or cigar wraps; 50,000 filtered cigars, little cigars, cigarettes, or heated tobacco products; or 2,500 containers of loose or smokeless tobacco. The transport provisions exclude personal-consumption transport covered by the existing legal exception.

Wholesalers gain a new tobacco supply route

Beginning October 1, 2026, Alabama wholesalers can buy directly from permitted interstate warehousers and apply Alabama tobacco tax stamps. Warehousers can make these sales without charging the covered tobacco taxes or attaching state or county stamps. Stamping is limited to wholesalers or distributors buying directly from manufacturers, manufacturer affiliates, or permitted interstate warehousers. Manufacturers can stamp products for trademark, promotional, or test-marketing uses with at least four weeks' written notice. Alabama Revenue must notify self-administered counties and cities within seven days after receiving that notice. Improper manufacturer stamping or breaking the exception's conditions is a Class A misdemeanor. This commercial sales route does not guarantee lower retail prices.

Sponsors & Cosponsors

Sponsor

  • William M. Beasley

    Democratic • Senate

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 306 • No: 0

House vote • 2/3/2026

Motion to Read a Third Time and Pass - Adopted Roll Call 251

Yes: 101 • No: 0 • Other: 2

House vote • 2/3/2026

Third Reading in Second House

Yes: 100 • No: 0 • Other: 3

Senate vote • 1/15/2026

Third Reading in House of Origin

Yes: 35 • No: 0

Senate vote • 1/15/2026

Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 14

Yes: 35 • No: 0

Senate vote • 1/15/2026

Beasley motion to Adopt - Adopted Roll Call 13

Yes: 35 • No: 0

Actions Timeline

  1. Enacted

    2/12/2026Senate

  2. Ready to Enroll

    2/5/2026Senate

  3. Ready to Enroll

    2/5/2026Senate

  4. Enrolled

    2/5/2026Senate

  5. Signature Requested

    2/5/2026House

  6. Delivered to Governor

    2/5/2026Senate

  7. Third Reading in Second House

    2/3/2026House

  8. Motion to Read a Third Time and Pass - Adopted Roll Call 251

    2/3/2026House

  9. Reported Out of Committee Second House

    1/21/2026House

  10. Read for the Second Time and placed on the Calendar

    1/21/2026House

  11. Third Reading in House of Origin

    1/15/2026Senate

  12. County and Municipal Government 1st Amendment Offered

    1/15/2026Senate

  13. Beasley motion to Adopt - Adopted Roll Call 13

    1/15/2026Senate

  14. Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 14

    1/15/2026Senate

  15. Engrossed

    1/15/2026Senate

  16. Read for the first time and referred to the House Committee on Ways and Means General Fund

    1/15/2026House

  17. Pending Committee Action in Second House

    1/15/2026House

  18. County and Municipal Government 1st Amendment

    1/14/2026Senate

  19. Reported Out of Committee House of Origin

    1/14/2026Senate

  20. Read for the Second Time and placed on the Calendar

    1/14/2026Senate

  21. Read for the first time and referred to the Senate Committee on County and Municipal Government

    1/13/2026Senate

  22. Pending Committee Action in House of Origin

    1/13/2026Senate

Bill Text

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