In a move aimed at boosting funding for education and infrastructure projects, the state of Alabama has introduced a new taxation plan on February 18, 2026. The plan, which has been in the works for months, is set to bring in much-needed revenue for critical state services.One of the key components of the new taxation plan is an increase in the state's sales tax rate. The rate will be raised by 1%, bringing it to a total of 5%. This increase is expected to generate millions of dollars in additional revenue, which will be earmarked for education and infrastructure projects.In addition to the sales tax increase, the plan also includes a new tax on online purchases. This tax will apply to all online retailers selling goods to Alabama residents, regardless of whether they have a physical presence in the state. This move is seen as a way to level the playing field for brick-and-mortar stores, which have long argued that online retailers have an unfair advantage due to their lack of sales tax obligations.Governor John Smith, who has been a strong supporter of the new taxation plan, praised it as a necessary step to ensure the long-term financial health of the state. "By increasing our sales tax rate and implementing a tax on online purchases, we are able to generate the revenue needed to invest in our schools, roads, and bridges," Governor Smith said in a statement.Critics of the plan, however, have raised concerns about its potential impact on low-income residents. They argue that the sales tax increase will disproportionately affect those who can least afford it. Some lawmakers have called for measures to offset this impact, such as increasing the state's Earned Income Tax Credit.Despite these concerns, the new taxation plan is set to go into effect on April 1, 2026. State officials are optimistic that the additional revenue generated by the plan will help address critical funding needs and improve the overall quality of life for Alabama residents.