Alabama County introduces lodging tax for road improvements and law enforcement funding

A new legislative proposal, House Bill 590, introduced in Alabama on April 17, 2025, aims to implement a county-level lodging tax to fund critical infrastructure and law enforcement initiatives. This bill seeks to address the pressing need for road and bridge improvements while also bolstering local law enforcement resources.

Under HB590, a tax will be levied on lodging services, mirroring the existing state lodgings tax structure. Notably, nonprofit organizations recognized as tax-exempt under federal law will be exempt from this new tax. The bill stipulates that the tax will be treated as a debt owed to the county, secured by a lien on the property of those liable for the tax. The Alabama Department of Revenue will initially oversee tax collection, with the option for counties to appoint their own agents in the future.

The financial implications of this bill are significant. The tax proceeds will be allocated as follows: 55% will fund road and bridge improvements, with a specific distribution favoring District 1 (75%) over District 2 (25%). Additionally, 20% of the revenue will support the sheriff's department for law enforcement purposes. This allocation underscores the dual focus of the bill on enhancing public safety and infrastructure.

While the bill has garnered support for its potential to improve local services, it may face opposition from those concerned about the financial burden on travelers and local businesses. As discussions continue, stakeholders are weighing the economic benefits against the potential impact on tourism and hospitality sectors.

As HB590 moves through the legislative process, its outcomes could reshape funding for essential county services, making it a pivotal point of discussion in Alabama's 2025 legislative session. The bill's progress will be closely monitored, as its approval could set a precedent for similar initiatives in other counties across the state.