Alabama Administrative Code Chapter 810-6-4 — Sales Tax Due Monthly; Filing of Reports; Records Required; Refunds; Interest; Hearings On Assessments; Examinations of Returns; Inter Alia

810 Alabama Department of Revenue

Ala. Admin. Code r. 810-6-4-.01 Accounts Charged Off (Bad Debts) And Repossessions

(1) The term "bad debt or uncollectible account" as used in this rule shall mean any portion of the sales price of a taxable item which the retailer cannot collect. Bad debts include, but are not limited to, worthless checks, worthless credit card payments, and uncollectible credit accounts. Bad debts, for sales and use tax purposes, do not include finance charges, interest, or any other nontaxable charges associated with the original sales contract, or expenses incurred in attempting to collect any debt, debts sold or assigned to third parties for collection, or repossessed property.

(2) The term "repossessions" as used in this rule shall mean the repossession of taxable items from the purchaser by the retailer because of the purchaser's default in the payment of the amount owed.

(3) The term "credit sale" shall include all sales in which the terms of the sale provide for deferred payments of the purchase price. Credit sales include installment sales, conditional sales contracts, and revolving credit accounts.

(4) Sections 40-23-8 and 40-23-68(e), Code of Ala. 1975, require that any person taxable under the law having cash and credit sales may report the cash sales, and the retailer shall include in each report all credit collections made during the preceding tax reporting period and shall pay the taxes due on the cash sales and the credit collections at the time of filing the tax report, but in no event shall the gross proceeds of credit sales be included in the measure of tax to be paid until collections of the credit sales have been made.

(5) In the event a retailer reports and pays the sales or use tax on credit accounts which are later determined to be uncollectible, the retailer may take a credit on a subsequent tax report or obtain a refund for any tax paid with respect to the taxable amount of the unpaid balance due on the uncollectible credit accounts within three years following the date on which the accounts were charged off as uncollectible for federal income tax purposes.

(6) If a retailer recovers in whole, or in part, amounts previously claimed as bad debt credits or refunds, the amount collected shall be included in the first tax report filed after the collection occurred. (Sections 40-23-8 and 40-23-68(e))

(7) If taxable items upon which sales or use tax has been paid by the retailer are repossessed, the retailer is allowed a credit or deduction for that portion of the actual purchase price remaining unpaid. The deduction must not include any nontaxable charges which were a part of the original sales contract. Any payments made by the purchaser prior to repossession must be applied ratably against the various charges in the original sales contract.

History

• Author: Dan Devaughn
• Authority: Code of Ala. 1975, §§40-23-31, 40-23-83.
• Filed with LRS March 20, 1992; Certification filed August 20, 1992, effective September 25, 1992. Amended: Filed September 15, 1998; effective October 20, 1998.

Ala. Admin. Code r. 810-6-4-.02 Amounts Of Sales Tax To Be Collected On Admissions (Repealed 7/9/98)

(Repealed)

History

• Author: Patricia A. Estes
• Authority: Code of Ala. 1975, §§40-23-31
• Repealed: Filed June 4, 1998; effective July 9, 1998.

Ala. Admin. Code r. 810-6-4-.02.05 Consigned Property (Repealed 11/14/21)

(REPEALED)

History

• Authority: Code of Ala. 1975, §§40-2A-7(5), 40-23-1(a)(6), 40-23-31, 40-23-83.
• Repealed: Published September 30, 2021; effective November 14, 2021.

Ala. Admin. Code r. 810-6-4-.03 Discounts Allowed On Payments Of Sales Tax Made Before Delinquency

Allowed Discount.

(a) The department is authorized to allow a sales tax discount for sales taxes due and payable to the state by persons licensed under §40-23-6, Code of Ala. 1975.

(b) The allowed discount cannot exceed a maximum amount of four hundred dollars ($400), and is calculated as follows:

1. Five percent of the first one hundred dollars ($100) of sales taxes levied.

2. Two percent of the sales taxes levied over one hundred dollars ($100) per period.

(c) Each licensee is allowed a maximum discount of four hundred dollars ($400), regardless of the number of retail locations within the state.

(d) No discount is authorized or allowed upon any taxes which are not paid before delinquency.

(2) Discount Based on Filing Frequency. Section 40-23-7(d), Code of Ala. 1975, allows certain taxpayers to file Sales Tax returns with the department on a calendar quarter, calendar semi-annual, or calendar year basis rather than on a monthly basis. The sales tax discount for licensees who file monthly, quarterly, semi-annually, or annually must not exceed the allowed discount as provided in paragraph (1) per calendar quarter, per calendar semi-annual, or per calendar year, respectively.

(3) Application of Discount. The allowed discount outlined in paragraphs (1) and (2) applies to all state, county, and municipal sales taxes administered by the department. The rate, maximum, and effective date of the discount for each state administered county and municipal sales tax due and payable to the department must be calculated in the same manner as the discount for the state sales tax.

History

• Author: Lee Ann Rouse
• Authority: Code of Ala. 1975, §§11-3-11.3, 11-51-180, et seq., 11-51-200, et seq., 40-2A-7(a)(5), 40-12-4, et seq., 40-23-6, 40-23-7(d), 40-23-31, 40-23-36, 40-23-83.
• Repealed and Replaced: Filed September 3, 1996; effective October 8, 1996. Amended: Filed September 15, 1998; effective October 20, 1998. Amended: Filed August 30, 2001; effective October 4, 2001. Repealed and New Rule: Published December 30, 2021; effective February 13, 2022.

Ala. Admin. Code r. 810-6-4-.04 Extension Of Time For Filing Return

The Department "for good cause" may extend the time, not to exceed 30 days, for filing sales and use tax returns. The Supreme Court of Alabama in State v. Louis Pizitz Dry Goods Company, 11 So. 2d 342, held that the request for such an extension must be received by the Department prior to the date the return became delinquent in order to have the extension granted. No discount for timely payment will be allowed on sales or use tax paid after the statutory due date but within the extended time and interest must be added to the tax. (Adopted October 1, 1959, amended November 3, 1980, readopted through APA effective October 1, 1982, amended January 10, 1985). (Sections 40-23-7 and 40-23-74).

History

• Author: Dan DeVaughn
• Authority: Code of Ala. 1975, §§40-23-31, 40-23-83.
• Amended: January 10, 1985. Filed November 17, 1992; certification filed February 18, 1993; effective March 24, 1993.

Ala. Admin. Code r. 810-6-4-.05 Failure Of Vending Machine Operator To Collect Does Not Relieve Him Of Payment (Repealed 7/30/98)

(Repealed)

History

• Author: Patricia Estes
• Authority: Code of Ala. 1975, §§40-23-31.
• Amended: August 16, 1974. Readopted through APA effective October 1, 1982. Repealed: Filed June 25, 1998; effective July 30, 1998.

Ala. Admin. Code r. 810-6-4-.06 Failure Of Seller To Collect Tax

Failure to collect the tax due is unlawful. Both the Sales and Use Tax Laws require the seller to collect the tax due. Provisions of these laws make it unlawful to fail to collect the tax making such failure a misdemeanor punishable by fine or by imprisonment or both. The Sales and Use Tax Laws further provide, however, that the failure, refusal, or inability of the seller to collect the tax does not relieve him of his liability to the state for the taxes due on his sales. In the court case Tanner v. State, 190 So. 292, the Alabama Court of Appeals upheld the conviction of Tanner, who had failed or refused to add the sales tax due to the sales price of merchandise sold by him. 40-23-26

History

• Authority: Code of Ala. 1975, §§40-23-31; 40-23-83.
• Revised December 31, 1984.

Ala. Admin. Code r. 810-6-4-.07 Farm Machines, Machinery, Equipment, And Vessels

(1) Definitions.

(a) Commercial Fishing Vessel – Any vessel whose masters and owners are regularly and exclusively engaged in commercial fishing as their means of livelihood by a holder of a commercial license issued pursuant to Chapter 12 of Title 9.

(b) Machine, Machinery, or Equipment – Sales at retail of any machine, machinery, or equipment that is used in planting, cultivating, and harvesting farm products or used in connection with the production of agricultural produce or products, livestock, or poultry on farms, and sales at retail of any parts of such machine, machinery, or equipment, attachments and replacements that are made or manufactured for use on or in the operation of the machine, machinery, or equipment and are necessary to and customarily used in the operation of such machine, machinery, or equipment. Examples of items that qualify as machine, machinery, or equipment include but are not limited to tractors, detachable plows, harrows, planters, cultivators, fertilizer spreaders, plow stocks, turning plows, seed drills, and sprayers.

(2) Unless otherwise exempt from sales or use tax, pursuant to §40-23-4, Code of Ala. 1975, the reduced rate of one- and one-half percent applies to a Commercial Fishing Vessel, Machine, Machinery, or Equipment. The reduced rate does not apply to sales of parts, attachments, and replacements for any automotive vehicle or trailer designed primarily for public highway use, except farm trailers used primarily in the production and harvesting of agricultural commodities.

(3) The general sales or use tax rate applies to all hand tools. A power chain saw sold for use by a pulpwood dealer in cutting trees for sale in the dealer’s regular course of business qualifies for the reduced sales or use tax rate of one and one-half percent. A power chain saw sold for nonfarm use is taxable at the general sales or use tax rate. See Rule 810-6-2-.66.05 Portable Power Saws.

(4) Where any used machine, machinery, equipment, or commercial fishing vessel is taken in trade or in a series of trades as credit or partial payment on a sale of the new or used machine, machinery, equipment, or commercial fishing vessel, the measure of sales or use tax shall be the price of the new or used machine, machinery, equipment, or commercial fishing vessel sold, less the credit for the used machine, machinery, equipment, or commercial fishing vessel taken in trade.

(5) The dealers' sales invoices will be accepted as the basis for determining the tax rate applicable unless there is conclusive evidence that the invoice does not reveal the true facts.

History

• Author: Patricia A. Estes, Christy Vandevender
• Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-23-1, 40-23-4, 40-23-31, 40-23-37, 40-23-60, 40-23-63.
• Amended: Filed November 23, 1998; effective December 28, 1998. Amended: Published September 30, 2022; effective November 14, 2022.

Ala. Admin. Code r. 810-6-4-.07.05 5 Federal Excise Tax On Certain Trucks And Trailers, Retailers

(1) Effective April 1, 1983, the federal government levied a 12 percent retail excise tax on retail sales of certain trucks and trailers (26 USC Sec. 4051). This tax is a tax which the retailer is required to collect from his customer and remit to the federal government and is measured by the value of the articles sold at retail.

(2) A retailer who collects this tax from his customer and remits same directly to the federal government may exclude the federal excise tax from the measure of sales or use tax provided he bills the federal excise tax to his customer as a separate item. (Adopted October 3, 1987) (Sections 40-23-1(a)(6)) and 40-23-1(a)(8))(AGO Evans, July 31, 1992).

History

• Author: Dan DeVaughn
• Authority: Code of Ala. 1975, §§40-23-31, 40-23-83.
• Rule originally adopted as Rule H5-011; readopted under APA October 1, 1982; amendment adopted October 8, 1985. Repealed: Filed April 15, 1993.

Ala. Admin. Code r. 810-6-4-.08 Conference On Assessments (Formerly Titled Hearing On Assessments (Repealed May 22, 1993)

(Repealed)

History

• Author: Dan DeVaughn
• Authority: Code of Ala. 1975, §§40-23-31, 40-23-83.
• Rule originally adopted as Rule H5-011; readopted under APA October 1, 1982; amendment adopted October 8, 1985. Repealed: Filed April 15, 1993.

Ala. Admin. Code r. 810-6-4-.09 Interest On Overpayments Of Sales And Use Taxes (Repealed March 24, 1993)

(Repealed)

History

• Author: Dan DeVaughn
• Authority: Code of Ala. 1975, §§40-23-31, 40-23-83.
• Adopted January 20, 1996. Amended August 10, 1982; readopted through APA effective October 1, 1982; amendment filed February 26, 1987; filed October 21, 1992. Repealed: Filed February 18, 1993.

Ala. Admin. Code r. 810-6-4-.10 Keeping Records Of Sales For Resale (Formerly Regulation L)

Any seller within or without this state engaged in making sales at both retail and wholesale who claims as exempt from the Sales or Use Tax Act a sale to a licensed retail merchant, licensed dealer, licensed jobber, or other licensed person as a sale for resale must show on the invoice of such sales and the copy thereof (which copy must be retained in the seller's office) the name and address and the sales tax account number of such licensed retailer, dealer, jobber, or other person; and in the event that the name and address and such sales tax account number are not shown as herein provided, the Department of Revenue will treat such sale as a prima facie taxable retail sale. Provided, however, that it shall not be necessary to enter the sales tax account number on each invoice of such sale for resale if the sales tax account number is placed one time on the seller's books, ledger, loose leaf binder, or similar written record to which are posted such sales deducted as sales for resale; or, if a card index file showing the name and address and sales tax account number of the buyer is maintained by the seller, the name and address of the buyer on the invoice or other written memorandum made at the time of the sale can be identified by the Department of Revenue from the face of such invoice or other written memorandum at the time of the sale with such buyer's name and address and sales tax account number on such card index file. (Adopted March 8, 1948, amended November 3, 1980.) 40-23-2(1)

History

• Authority: Code of Ala. 1975, §§40-23-31, 40-23-83. History:

Ala. Admin. Code r. 810-6-4-.11 Leased Departments, Filing Tax Returns For

(1) Where a store leases departments to other persons who (i) operate the departments, (ii) keep their own books, and (iii) make their own collections on accounts; a separate sales tax return shall be filed by each person operating a leased department. Persons who lease departments and file their own returns shall obtain the sales tax license required pursuant to Code of Ala. 1975, Section 40-23-6.

(2) Where the store leases departments to other persons who operate the departments and the store keeps the books and makes collections on accounts for the persons who lease the departments, the store may, as agent for the lessees, file returns for the leased departments and pay the taxes due. The lessees, however, shall not be relieved of liability for the tax until the amount due has been paid.

(3) Where the store files returns as agent for leased departments, it may either file separate returns for each department leased or may file a consolidated return for both its business and the leased departments. Persons who lease departments and for whom the store files separate returns shall obtain the sales tax license required pursuant to Section 40-23-6. If the store files a consolidated return for its business and for each leased department, sufficient records shall be maintained to allow a determination of the respective sales and use tax liability for its business and each of the leased departments. (Code of Ala. 1975, Sections 40-2A-7(a)(1), 40-23-6, 40-23-7, and 40-23-9)

History

• Author: Dan DeVaughn
• Authority: Code of Ala. 1975, §§40-23-31, 40-23-83, 40-2A-7(a)(5), 40-2A-7(a)(1)40-23-6, 40-23-7, 40-23-9.
• Amended: Filed June 25, 1998; effective July 30, 1998.

Ala. Admin. Code r. 810-6-4-.12 Reserved

Reserved

Ala. Admin. Code r. 810-6-4-.13 Permit Issued To Electric Cooperatives, Telephone Companies And Others (Repealed 2/13/22)

(REPEALED)

History

• Author: Dan DeVaughn
• Authority: Code of Ala. 1975, §§11-51-180 via 40-23-31, via 40-23-83; §§11-51-207 via 40-23-31, via 40-23-83; §40-2A-7(a)(5).
• Adopted July 2, 1975. Amended: November 3, 1980. Amended: Filed May 2, 1996, effective June 6, 1996. Amended: Filed September 15, 1998; effective October 20, 1998. Repealed: Published December 30, 2021; effective February 13, 2022.

Ala. Admin. Code r. 810-6-4-.14 Sales And Use Tax Direct Pay Permit

(1) Requirements. Direct pay permits issued by the department authorize a business to make certain purchases from vendors without payment of state sales and use tax as well as county and municipal sales and use taxes administered by the department. In order to maintain the direct pay permit, the following conditions must be met:

(a) All purchases of tangible personal property made with a direct pay permit must be reported directly to the department.

(b) The permit holder must report the sales and use tax on forms approved by the department and must pay the taxes directly to the state. Unless the permit holder qualifies to file and pay sales and use taxes on a quarterly, semi-annually, or annual basis, sales and use taxes must be reported and paid monthly on or before the twentieth day of the month following the month during which the tangible personal property was used for a taxable purpose.

(c) The permit holder is required to keep books and records necessary to determine the correct tax liability. All books and records are subject to examination by the department.

(d) The direct pay permit does not extend to construction contracts. Sales Tax is due on building materials, consumed by a contractor in the performance of construction contracts, at the time of purchase from vendors in Alabama. If tax is not paid to the seller, the contractor is required to pay consumers use tax directly to the department.

(e) The direct pay permit is not transferable and can be revoked by the department upon notice by registered mail to the permit holder.

(2) Application Required. An application for a direct pay permit is require and available from the department.

(3) Permit Issued. Upon approval of an application, a direct pay permit is issued by the department.

(4) Returns Provided. Sales Tax direct pay permit returns are provided through the department’s electronic filing system, My Alabama Taxes.

(5) Purchases to Report. Purchases from Alabama vendors must be reported by the permit holder on sales tax direct pay permit returns. Purchases by direct pay permit holders from out-of-state vendors must be reported separately on consumers use tax returns.

History

• Author: Dan DeVaughn, Lee Ann Rouse
• Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-23-31, and 40-23-83.
• Amended: August 16, 1974, readopted through APA effective October 1, 1982. Amended: Filed May 6, 1992. Amended: Filed February 26, 1996; effective April 1, 1996. Amended: Filed September 15, 1998; effective October 20, 1998. Amended: Published December 30, 2021; effective February 13, 2022.

Ala. Admin. Code r. 810-6-4-.15 Permit To Pay Sales And Use Taxes On Motor Fuels Direct To The Department Of Revenue

(1) The term "Department" as used in this regulation shall mean the Department of Revenue of the State of Alabama.

(2) The definition of the term "motor fuel" contained in Code of Ala. 1975, Section 40-17-1, is incorporated by reference herein.

(3) Except as outlined in paragraphs (4) and (10) below, in-state sellers must collect and remit sales tax on retail sales of motor fuels which are not subject to the motor fuels excise tax and do not qualify for a sales tax exemption; and, out-of-state sellers, who do not have a place of business in Alabama but for whose business sufficient nexus exists, must collect and remit seller's use tax on retail sales of motor fuels which are not subject to the motor fuels excise tax and do not qualify for a use tax exemption.

(4) Where the Department finds that it is practically impossible at the time of purchase for the purchaser or the purchaser's vendors to determine with any degree of certainty the applicability of sales or use tax to purchases of motor fuels and where it would facilitate and expedite the collection of the taxes to permit the purchaser to purchase all motor fuels without payment of sales or use tax to the vendor, a user of motor fuels may obtain a permit which will allow the holder to purchase all motor fuels free of sales and use taxes and to report and pay the applicable tax directly to the Department. An application for the permit shall be made on forms furnished by the Department and shall require the following information:

(a) Applicant's Federal Employer Identification Number,

(b) Applicant's legal name and complete mailing address,

(c) Business address(es) in Alabama including city, county, and street address or, if location is on a highway or rural route, including details sufficient to allow Department personnel to find the place of business,

(d) Indication of the nature of business,

(e) Business phone number,

(f) Desired effective date of permit, and

(g) Signature and title of sole proprietor, each partner, or an elected corporate officer and the date of each signature.

(5) The permit holder shall be required to pay sales or use tax directly to the Department on motor fuels purchased without payment of sales or use tax to the vendor when the motor fuel is subsequently used in a manner that (i) is exempt from the motor fuels excise tax and (ii) does not qualify for a sales and use tax exemption.

(6) A permit holder, who purchases motor fuels with motor fuels excise tax paid and subsequently uses the motor fuel in a manner which qualifies the user for a refund of the motor fuels excise tax pursuant to Sections 40-17-2(c) and 40-17-220(g), shall report and pay the applicable sales or use tax to the Department, Sales or use tax accrues at the time the motor fuel is used, provided the motor fuel does not qualify for a sales or use tax exemption.

(7) The permit holder shall maintain books and records which clearly disclose the total amounts of motor fuels purchased and the use of motor fuels for taxable and nontaxable purposes.

(8) The permit referenced in paragraph (4) above shall be restricted to purchases of motor fuels only, shall be entitled Sales and Use Tax Motor Fuel Permit, and shall contain the following information:

(a) Taxpayer's direct pay permit number, legal name, and complete address,

(b) Statement of the conditions to which the permit is subject,

(c) Effective date of the permit,

(d) Signature on behalf of the Department of Revenue and the date signed, and

(e) Attesting signature of the Departmental Secretary.

(9) Permit holders shall file returns on forms furnished by the Department and pay the sales or use taxes due on or before the twentieth day of the month next succeeding the tax reporting period in which the motor fuel is used in a manner subject to sales or use tax. Motor Fuels Sales Tax Direct Pay Permit Returns shall require the following information:

(a) The holder's direct pay permit account number, legal name, and complete address,

(b) Period covered by the return and due date of the return,

(c) Estimated tax due for the current month, if applicable,

(d) total gallons of motor fuel used during the period covered by the return which are not subject to the motor fuels tax,

(e) Cost of the fuel not subject to the motor fuels tax,

(f) Sales tax due on the motor fuel,

(g) Estimated tax paid on previous month's return, if applicable,

(h) Tax due after deducting credit for previous month's estimate,

(i) Total tax due (tax shown due in item (h) plus current month's estimate, if applicable),

(j) Penalties and interest due, if applicable, (k) Credits claimed,

(l) Total amount due,

(m) Total amount remitted,

(n) An indication if payment of tax is made through electronic funds transfer (EFT), and

(o) Taxpayer's signature and the date signed.

(10) The holder of a Sales and Use Tax Direct Pay Permit shall not be issued a separate Sales and Use Tax Motor Fuel Permit. Instead, all purchases of motor fuels and the payment of applicable sales or use taxes due thereon by holders of Sales and Use Tax Direct Pay Permits shall be made in accordance with the provisions of Sales and Use Tax Rule 810-6-4-.14 Sales and Use Tax Direct Pay Permit.

History

• Author: Dan DeVaughn, Asst. Chief, Sales Tax Division
• Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-23-31, 40-23-83.
• Readopted through APA effective October 1, 1982. Amended: May 6, 1992. Amended: Filed February 26, 1996; effective April 1, 1996. Amended: Filed September 15, 1998; effective October 20, 1998.

Ala. Admin. Code r. 810-6-4-.16 Petition For Refund Of Sales Taxes (Repealed March 24, 1993)

Petition For Refund Of Sales Taxes (Repealed March 24, 1993)

Ala. Admin. Code r. 810-6-4-.17.01 Procedure To Be Followed By Municipalities And Counties In Obtaining Sales Tax Information (Repealed September 25, 1992)

(Repealed)

History

• Author: Original Author unknown
• Authority: Code of Ala. 1975, §§40-23-29(d), 40-23-31, 40-23-83.
• Readopted through APA, effective October 1, 1982. Amended April 11, 1989; Notice of Intended Action filed April 19, 1989; certification filed July 18, 1989; effective August 23, 1989. Filed April 20, 1992; certification filed August 20, 1992. Repealed: September 25, 1992.

Ala. Admin. Code r. 810-6-4-.17.05 Processing, Definition

The word "processing" as used in the Sales and Use Tax Law is understood to have the following meaning: "Processing" means to subject to some special process or treatment. To heat, as fruit with steam under pressure so as to cook or sterilize. To subject, especially raw material, to a process of manufacture, development, preparation for the market, etc.; to convert into marketable form, as livestock by slaughtering, grain by milling, cotton by spinning, milk by pasteurizing, fruits and vegetables by sorting and repacking. To make usable, marketable, or the like, waste matter or inferior, defective, decomposed substance or product by a process, often chemical process, as to process rancid butter, rayon waste, coal dust, beet sugar. 40-23-2(3)

History

• Authority: Code of Ala. 1975, §§40-23-31, 40-23-83.

Ala. Admin. Code r. 810-6-4-.18 Refunds Of Excess Payments Shown On Returns (Repealed)

(Repealed)

History

• Author: Dan DeVaughn
• Authority: Code of Ala. 1975, §§40-23-31 40-23-83.
• Filed October 21, 1992. Repealed: Filed February 18, 1993.

Ala. Admin. Code r. 810-6-4-.19 State Sales Tax Returns Required From All Retailers

(1) Retailers required by §40-23-6, Code of Ala. 1975, to collect, report, and remit sales taxes must observe the following rules:

(a) Each retailer must submit to the department a Sales Tax return for each calendar tax reporting period within the time prescribed by law and on forms provided by the department. In addition to the return, the retailer must compute and pay the tax due to the department.

(b) Each retailer must file only one Sales Tax return per tax reporting period for all retail units of business operated within the state.

(c) Unless the retailer qualifies to file and pay Sales Tax on a calendar quarter, calendar semi-annual, or calendar year basis, tax is due and payable in monthly installments on or before the twentieth day of the month next succeeding the month in which the tax accrues. See Rule 810-6-5-.30 Filing And Paying State Sales And Use Taxes And State-Administered County And Municipal Sales And Use Taxes On A Quarterly Or Annual Basis. (§40-23-7)

History

• Author: Dan DeVaughn
• Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-23-7, 40-23-31 40-23-83. Administrative Rule 810-6-5-.30.
• Adopted October 1, 1959, readopted through APA effective October 1, 1982; adopted as amended March 7, 1985; effective as amended April 22, 1985. Amended: Filed February 26, 1996; effective April 1, 1996. Amended: Filed September 15, 1998; effective October 20, 1998. Amended: Published July 31, 2020; effective September 14, 2020.

Ala. Admin. Code r. 810-6-4-.20 Seller Must Collect And Pay Tax Due

(1) It is the mandatory duty of the seller, the taxpayer, to pay the tax lawfully due under the Sales Tax Law and a like mandatory duty to add the amount thereof to the sales price and to collect same from the customer. (Doby v. State, 174 So. 233, Meriwether v. State, 42 So. 2d 465.)40-23-26

(2) No retailer shall advertise or hold out or state to the public or to any consumer, directly or indirectly, that the tax or any part thereof will be assumed or absorbed by the retailer or that it will not be added to the sales price of the property sold or that, if added, it or any part thereof will be refunded. Under the provisions of this section, however, a retailer may advertise the sale of tangible personal property by (i) stating the sales price alone without reference to the taxa, (ii) stating separately the sales price and the amount of tax to be collected thereon, or (iii) stating the sales price “plus tax” or “exclusive of tax” provided the retailer in the case of all such sales shall maintain his records to show separately the actual price of such sales and the amount of the tax paid thereon and provided such retailer, if requested, shall furnish the consumer with a sales slip or other like evidence of the sale showing the tax separately computed thereon.

(3) Whenever practical, each retailer shall add the sales tax as a separate line item to the selling price. The initial invoice, bill, charge ticket, sales slip, or receipt shall separately state the amount of the tax being charged. If not separately stated, it will be presumed that sales tax was not charged to the customer or collected. In such cases, the measure will be the gross receipts.

(a) In those instances where it is practically impossible to furnish a customer with an invoice, bill, charge ticket, sales slip, or receipt, the retailer shall conspicuously post a sign indicating that the charge for the item being purchased includes the price of the item and the total percentage of sales tax being collected. The sign shall be of sufficient size to allow a person of normal vision to read it from a distance of 20 feet and shall be posted in plain view.

(b) Each retailer who makes tax-included sales in which tax is an unspecified part of the customer charge shall post a sign pursuant to paragraph (a) using the following example:

Charge for items purchased includes price of item and 8% sales tax.

This requirement is effective upon adoption under the Administrative Procedures Act.

History

• Author: Ginger L. Buchanan
• Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-23-2(1), 40-23-9, 40-23-26, 40-23-31.
• Amended: Filed May 6, 2005; effective June 10, 2005.

Ala. Admin. Code r. 810-6-4-.21 Reporting And Paying Sales Or Sellers Use Tax On Collections Of Accounts Receivable On the Seller’s Books At The Time Of A Rate Increase

(1) The correct rate of tax due on credit sales made prior to the effective date of a rate increase is the old rate in effect prior to the rate change.

(2) Tax due on collections on credit sales subject to the old rate of tax may be reported and paid by the seller as follows. The seller shall make a written declaration of the amount of accounts receivable on the seller’s books as of the close of business the day before the effective date of the rate increase. This letter of declaration should be attached to the seller's next tax return. The seller will then be allowed to report and pay tax on all collections on accounts receivable at the old rate until the declared balance is consumed. A copy of the declaration letter should be attached to each subsequent return on which the old rate is applied to collections on accounts receivable. The seller should note on the attached letter the unused balance carried forward from the previous tax reporting period, the amount of the balance being used on the current return, and the remaining unused balance carried forward to the return for the next tax reporting period. Once the declared balance is exhausted, all collections on credit sales must be reported and paid at the new rate.

(3) The declaration and computation of tax at the old rate only applies to collections on accounts receivable. All cash sales are subject to the new rate of tax as of the effective date of the rate increase and must be reported and paid at the new rate. Section 40-23-8, Code of Ala. 1975

History

• Author: Dan DeVaughn
• Authority: Code of Ala. 1975, §§40-23-31, 40-23-83.
• Filed with LRS July 20, 1990; Certification filed with LRS November 1, 1990, effective December 6, 1990. Amended: Filed September 15, 1998; effective October 20, 1998.

Ala. Admin. Code r. 810-6-4-.21.01 Determining The Applicable Law Levy Or Tax Rate When An Existing Sales Or Use Tax Levy Is Replaced Or Amended

(1) The term “local sales or use taxes” as used in this rule shall include county or municipal sales and use taxes and county or municipal gross receipts taxes in the nature of a sales tax.

(2) When the rates of local sales or use taxes change, or an existing local sales and use tax levy is repealed and replaced by a new tax levy, or both; the time that a sale or purchase occurs shall determine the applicable tax rate, or the applicable tax levy, or both. A sale or purchase occurs at the time and place when and where title is transferred by the seller or seller’s agent to the purchaser or the purchaser’s agent. Sales or purchases occurring before the effective date of a rate change or before the effective date of a new tax levy which replaces an older tax levy are subject to the old rate or old tax levy, or both. Sales or purchases occurring on or after the effective date of a rate change or on or after the effective date of a new tax levy which replaces an older tax levy are subject to the new rate or the new tax levy, or both. (Section 40-23-1(a)(5), Code of Ala. 1975)

(3) For purposes of determining transfer of title, property is delivered by the seller or the seller’s agent to the buyer or buyer’s agent by:

(a) The buyer or the buyer’s agent taking possession of the property at the seller’s place of business,

(b) The seller making delivery to the buyer or the buyer’s agent by use of a conveyance owned by the seller, or

(c) The seller’s agent making delivery to the buyer or the buyer’s agent.

(4) A common carrier or the U.S. Postal Service shall be deemed the seller’s agent regardless of any F.O.B. point and regardless of who selects the method of transportation, and regardless of by whom or the method by which freight, postage, or any other transportation charge is paid. (Section 40-23-1(a)(5))

(5) Unless the new state sales and use tax levy statutorily provides otherwise, the applicability of a new state sales and use tax levy which replaces an existing state levy shall be determined in the same manner as outlined above for determining the applicable local sales and use tax levy.

(6) See Rule 810-6-4-.21 entitled Reporting and Paying Sales or Seller’s Use Tax on Collections of Accounts Receivable on the Seller’s Books at the Time of a Rate Increase.

History

• Author: Dan DeVaughn
• Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-23-1(a)(5), 40-23-31, 40-23-83.
• New Rule: Filed November 23, 1998, effective December 28, 1998.

Ala. Admin. Code r. 810-6-4-.21.02 Local Government Rate Notification Requirements for Sales, Use, Rental, and Lodgings Tax

(1) The department shall publish and maintain a current listing of tax levies for municipal and county sales, use, rental, and lodgings taxes pursuant to §11-51-210, Code of Ala. 1975.

(2) Local Government Notification Requirements.

(a) Rate Notification. Every municipality or county (“locality”) levying a new sales, use, rental, or lodgings tax, or amending an existing levy of these taxes must submit notification of the new levy or amendment to the department at least sixty (60) days before the requested effective date of the tax levy or amendment. The notification must include the following to be considered proper notification to the department:

1. A written notification on the locality’s letterhead or other department accepted format, addressed to the department and signed by a local government representative.

2. A certified copy of the levying or amending act, ordinance, or resolution.

3. The name of and preferred contact information for the locality’s designated representative to whom notifications from the department as required in paragraph (3) will be provided.

(b) Administration Notification. Every municipality or county (“locality”) changing tax administrators must submit notification of the new administrator to the department at least thirty (30) days before the requested effective date of the administration change. The notification must include the following to be considered proper notification to the department:

1. A written notification on the locality’s letterhead or other department accepted format, addressed to the department and signed by a local government representative.

2. A certified copy of the ordinance or resolution.

(c) Local Government Notification Submission. Proper notification, as provided in paragraph (2), must be submitted to the department’s Local Tax Unit by either of the following methods:

1. Uploading the required documentation to the local government portal, which may be accessed through the department’s website under Local Governments.

2. Submitting by email to localtaxunit@revenue.alabama.gov.

(d) The date of receipt of the notice by the department (the “received date”) shall be determined by the date stamp of the required documentation that is uploaded to the local government portal or date of email.

(3) Department Notification Requirements.

(a) Upon proper completion of the requirements of paragraph (2), the department will provide a tax levy return confirmation to the locality no later than the first day of the second month after the received date. The tax levy return confirmation will include the new tax rates to be effective as understood by the department based on the notification provided in accordance with paragraph (2), as well as the statutory effective date of the new tax rate(s) and the date the notification was received by the department.

(b) Any corrections to the rates listed on the tax levy return confirmation must be submitted to the department, as provided in paragraph (2), by the locality within ten (10) calendar days of the date of receipt of tax levy return confirmation by the locality’s designated representative. Unless notification of corrections is provided in accordance with this paragraph, the rates and corresponding effective dates listed on the tax levy return confirmation and thereafter published by the department will be considered correct.

(4) Statutory Effective Date of Levy.

(a) The statutory effective date of a new tax rate levy or amendment of an existing tax levy for which notice has been provided in accordance with paragraph (2)(a) will be the first day of the third month following the date of receipt of proper notification as described in paragraph (2), unless the tax levy or amendment has requested a specified effective date that is after the first day of the third month. Provided, however, if the effective date requested by the municipality or county is not the first day of the month, the statutory effective date will be the first day of the month following the effective date requested in accordance with the notification requirements in paragraph (2).

(b) The statutory effective date of an administrative change for which notice has been provided in accordance with paragraph (2)(b) will the first day of the second month following the date of receipt of proper notification as described in paragraph (2) unless the ordinance or resolution has requested a specified effective date that is after the first day of the second month following the date of receipt of proper notification as described in paragraph (2). Provided, however, if the effective date requested by the municipality or county is not the first day of the month, the statutory effective date will be the first day of the month following the effective date requested in accordance with the notification requirements in paragraph (2).

1. Example 1. A city enacts a new rental tax levy to be effective June 1st. The department receives proper notification of the new levy on April 1st. The statutory effective date of the new levy is July 1st.

2. Example 2. A town amends their existing sales and use tax rates effective July 1st. The department receives proper notification of the amendment on April 15th. The statutory effective date of the amended levy is July 1st.

3. Example 3. A county enacts a new sales and use tax levy to be effective June 1st. The department receives proper notification of the new levy on January 1st. The statutory effective date of the new levy is June 1st.

4. Example 4. A city enacts a new lodgings tax levy to be effective October 15th. The department receives proper notification of the new levy on July 5th. The statutory effective date of the new levy is November 1st.

5. Example 5. A county adopts a resolution to change their tax administrator to be effective October 1st. The department receives proper notification of the administration change on September 5th. The statutory effective date of the tax administration change is November 1st.

6. Example 6. A city adopts an ordinance to change their tax administrator to be effective July 1st. The department receives proper notification of the administration change on May 30th. The statutory effective date of the tax administration change is July 1st.

(5) Hold Harmless and Rate Responsibility.

(a) If the rate published by the department and relied upon by the taxpayer is less than the actual rate provided on the locality’s tax levy return confirmation, the department shall be responsible for reimbursement of the difference to the affected locality. This liability will not exceed a period of one year from the date the incorrect rate was published by the department.

(b) If a county or municipality fails to properly notify the department of a new levy or amendment to an existing levy as provided in this rule, the department is relieved from the liability of any difference in the tax levy to the local jurisdiction.

(c) If a taxpayer charges an insufficient tax rate due to reliance on the department’s published rates, no additional liability of the difference in the actual tax levy is due to Alabama or its local jurisdictions.

History

• Author: Laura Reese and Christy Vandevender
• Authority: Code of Ala. 1975, §§11-51-210, 40-2A-7(a)(5).
• New Rule: Published February 28, 2020; effective April 13, 2020. Amended: Published March 31, 2026; effective May 15, 2026.

Ala. Admin. Code r. 810-6-4-.21.03 County and Municipal Sales and Use Tax Exemptions

1. Definitions.

2. Department – The Alabama Department of Revenue

3. Procedures.

4. Pursuant to Act 2025-280, any law that enacts or amends a sales and use tax exemption shall apply only to state sales and use taxes and shall not apply to county or municipal sales and use taxes, unless all the following are satisfied:

5. The law provides for exemption of county or municipal sales and use taxes.

6. The exemption is approved by resolution or ordinance of the county or municipality.

7. The county commission or municipality provides notice of the resolution to the Department by July 1 prior to the effective date of the exemption.

8. Resolutions and ordinances should be provided to the Department’s local tax unit by either of the following methods:

(i). Uploading the required documents to the local government portal, which may be accessed through the Department’s website under Local Governments.

(ii). Submitting by email to localtaxunit@revenue.alabama.gov.

1. The date of receipt of the notice by the Department (“received date”) shall be determined by the date stamp of the required documentation that is uploaded to the local government portal or by the date of the email.

2. The resolution or ordinance must include all the following:

3. An effective date of September 1 of a given year for the exemption.

4. The duration of the exemption, which must be in fiscal year increments or in perpetuity.

5. A county or municipality may rescind a county or municipal sales and use tax exemption by resolution or ordinance provided both of the following conditions are met: 1. The rescission is effective beginning on September 1 of a given fiscal year. 2. The county commission or municipality provides notice of the resolution or ordinance to the Department by July 1 prior to the effective date of the rescission. 3. Publication Requirement. a. The Department will publish and maintain a list of county and municipal sales and use tax exemptions that are adopted pursuant to Act 2025-280. This list is available on the Department’s website.

History

• Author: Christy Vandevender
• Authority: § 40-2A-7(a)(5), Code of Ala. 1975 and Act 2025-280
• New Rule: Published March 31, 2026; effective May 15, 2026.

Ala. Admin. Code r. 810-6-4-.22 Abatement Of The Sales And Use Tax Liability On Private Use Industrial Development Property

(1) Unless otherwise defined herein, the definitions of terms set forth in Code of Ala. 1975, Section 40-9B-3, are incorporated by reference herein.

(2) As used in this rule, the term “project” means a private use industrial development property or a major addition to a private use industrial development property.

(3) As used in this rule, the term "public body" means a public authority, county, or municipal government.

(4) A private user who is liable for sales and use taxes pursuant to Section 40-9B-7 may be granted an abatement of these taxes by a public body subject to the geographical or jurisdictional limitations outlined in Section 40-9B-5 and to the extent authorized in Section 40-9B-4.

(5) Effective August 1, 1998, purchases of tangible personal property to be incorporated into a project for which the private user has been granted a valid abatement of construction-related sales and use taxes pursuant to Chapter 9B of Title 40 are exempt from state and noneducational local sales or use taxes whether the purchase is made by

(i) a contractor or a subcontractor who will incorporate the property into the project or

(ii) the private user of the project.

The contractor or subcontractor is no longer required to purchase the property in the name of the private user or as agent for the private user; have the property billed or invoiced to the private user; and have the property paid for with funds belonging to the private user in order to purchase the property exempt from sales and use taxes. The exemption on purchases by contractors or subcontractors shall not apply to any purchases which would not also be exempt if purchased by a private user who has been granted a valid abatement pursuant to Chapter 9B of Title 40. Contractors, subcontractors, and private users making tax-exempt purchases pursuant to an abatement granted under Chapter 9B of Title 40 shall comply with the provisions of Sales and Use Tax Rules 810-6-4-.24 and 810-6-4-.24.01.

(6) With respect to purchases by contractors or subcontractors of tangible personal property to be incorporated into a project for which a valid abatement was granted prior to August 1, 1998, the new exemption for direct purchases by contractors and subcontractors outlined in paragraph (5) shall apply only to those purchases which occur on or after August 1, 1998. Purchases occurring prior to August 1, 1998, are exempt only if the purchase is made in the name of the private user or as agent for the private user, the purchase is billed or invoiced to the private user, and the purchases paid for with funds belonging to the private user. The criteria contained in Section 40-23-1(a)(5) for determining when transactions are closed or sales are completed shall be used to determine when purchases by contractors and subcontractors occur.

(7) It shall not be necessary for a private user to vest title to industrial development property in a public body in order to be granted an abatement of sales and use tax. A private user is not required to purchase property in the name of a public body; have the property billed or invoiced to the public body; and have the property paid for with funds belonging to the public body in order to purchase property exempt from sales and use taxes pursuant to an abatement.

(8) An abatement of sales and use taxes may be granted without the issuance of bonds by a public body.

(9) An abatement of sales and use taxes (a) shall commence on the date in which the applicable public body grants that abatement, (b) shall apply to all property which shall not have been acquired by the private user, contractor, or subcontractor as of the commencement date, and (c) shall expire on the date the entire project is placed in service.

(10) Section 40-9B-6(c), provides that the private user who is granted an abatement shall file with the Revenue Department within 90 days after the granting of the abatement a copy of the agreement required by Section 40-9B-6(b).

(11) An abatement of sales and use taxes may be granted only with respect to a project that has not previously been placed in service by the private user who is applying for the abatement or by a person who is a related party.

(12) A change of ownership or assignment of interest in property shall not qualify the property for a new or additional abatement beyond the previous abatement. The new user may be allowed to receive the remainder of abatements previously granted to the original user.

(13) With respect to the abatement of sales and use taxes incurred in connection with a major addition, the addition must constitute an amount at least equal to 30 percent of the original cost to the industrial development property or two million dollars ($2,000,000), whichever is less.

(14) Capitalized repairs, rebuilds, maintenance, and replacement equipment shall not qualify as a major addition. Replacement equipment includes equipment that performs the same function as the equipment it replaces even though the new equipment performs the function better or faster, but does not include equipment that performs one or more additional functions in addition to performing the same function as the equipment it replaces.

(15) Only additions to existing industrial development property may be considered as a major addition. The renovation or remodeling of existing facilities shall not constitute a major addition and, therefore, does not qualify for an abatement of sales and use taxes.

History

• Author: Dan DeVaughn
• Authority: Code of Ala. 1975, §§40-23-31, 40-23-83.
• Filed January 15, 1993; certification filed April 15, 1993; effective May 22, 1993. Amended: Filed September 15, 1998; effective October 20, 1998.

Ala. Admin. Code r. 810-6-4-.22.01 Unabated State Construction Related Transaction Tax

(1) Definitions.

(a) Department – The Alabama Department of Revenue

(b) Unabated State Tax – State construction related transaction taxes imposed by Title 40, Chapter 23, on tangible personal property and taxable services incorporated into a private use industrial property, including but not limited to, state sales tax, state sales tax direct pay, state sellers use tax, and state consumers use tax.

(c) Person – Any individual, association, estate, trust, partnership, corporation, or other entity of any kind.

(2) Tax Imposed.

(a) The Unabated State Tax applies to each person who is granted an abatement pursuant to Section 40-9B-4 or 40-9G-2, Code of Ala. 1975.

(b) The Department will collect the Unabated State Tax on transactions that were previously subject to abatement.

(3) Tax Rate.

(a) The Unabated State Tax rate is equal to 0.75%.

(b) The rate will be applied to the total purchase price of construction related materials incorporated into the abatement project.

(4) Effective Date.

(a) The Unabated State Tax will apply to new abatements granted on or after June 1, 2026, pursuant to Section 40-9B-4 or 40-9G-2, Code of Ala. 1975.

(b) The tax will apply throughout the applicable abatement period.

(5) Reporting Requirements.

(a) Each person subject to the Unabated State Tax is required to file a monthly return with the Department. The return must be filed electronically using the My Alabama Taxes website. The return and corresponding payment is due on or by the 20^th day of each month following the month in which the tax is accrued. Example: Tax accrued June 2026 is due July 20, 2026.

History

• Author: Christy Vandevender
• Authority: § 40-2A-7(a)(5), Code of Ala. 1975 and Act 2025-84
• New Rule: Published June 30, 2026; effective August 14, 2026.

Ala. Admin. Code r. 810-6-4-.23 Application For The Abatement Of The Sales And Use Tax Liability Of The Private User Of Private Use Property To Which A Public Authority, County, Or Municipal Government Has Title Or A Possessory Right

(1) Unless otherwise defined herein, the definitions of terms set forth in Code of Ala. 1975, Section 40-9B-3, are incorporated by reference herein.

(2) As used in this regulation, the term "public body" means a public authority, county, or municipal government.

(3) An application for an abatement of sales and use taxes may be made by any person who proposes to become a private user of industrial development property or of a major addition. Such application shall be made to the appropriate public body as outlined in Code of Ala. 1975, Section 40-9B-5, and shall be made in advance of commencing the acquisition, construction, or equipping of the project. Notwithstanding the foregoing, a private user who commences the acquisition, construction, or equipping of a project prior to making an application for abatement may nevertheless make said application (such application shall be made to the appropriate public body as outlined in Section 40-9B-5, Code of Ala. 1975, (1992 Cum. Supp.)) subsequent to the aforementioned commencement and, if the abatement is granted, receive an abatement of sales and use tax liabilities incurred during the period beginning with the date of execution and delivery by a public body of an abatement agreement and ending with the date the entire project is placed in service. Sales and use tax liabilities incurred prior to the effective date of the abatement cannot be abated.

(4) An application for an abatement of sales and use taxes may be made to the appropriate public body on an application form provided by the Alabama Department of Revenue. The application furnished by the Alabama Department of Revenue shall require the following information:

(a) the type(s) of taxes for which an abatement is being requested,

(b) applicant's SIC Code,

(c) an indication as to whether the project is a new project or a major addition,

(d) if applicable, an indication as to whether the major addition equals the lesser of $2,000,000 or 30 percent of the original cost of existing industrial development property,

(e) if the applicant is applying for an abatement for a major addition and indicates that 30 percent of original cost of the existing industrial development property is lesser than $2,000,000; the original cost of the existing industrial development property,

(f) project applicant's legal name, trade name, and complete address,

(g) the city and county in which the project is located,

(h) the date the applicant's company was organized, (i) the name and phone number of a contact person,

(j) a description of the project,

(k) estimated dates of when construction will begin, when construction will be completed, and when the property will be placed in service,

(l) estimates of the number of employees to be hired initially and in each of the succeeding three years,

(m) estimates of the annual payroll of new employees initially and in each of the succeeding three years,

(n) an estimate of the cost of real property broken down by estimates of the cost of land, new building(s), and existing building(s),

(o) an estimate of the cost of materials to become a part of realty,

(p) an estimate of the cost of personal property broken down by estimates of the cost of manufacturing machinery and the cost of all other personal property,

(q) an indication as to whether bonds have been issued for the project,

(r) if bonds have been issued for the project, the date the bonds were issued,

(s) if bonds have not been issued for the project, an indication as to whether bonds will be issued,

(t) if bonds will be issued for the project, the projected date of the bond issue, and

(u) applicant's signature and title and the date of the signature.

(5) The application form referenced in paragraph (4) shall instruct the applicant to attach to the application as complete a listing as Fpossible of property and cost on which an abatement is requested to facilitate a cost/benefit analysis by the public body to which the application is submitted.

History

• Author: Dan DeVaughn
• Authority: Code of Ala. 1975, §§40-23-31, 40-23-83.
• Filed January 15, 1993; certification filed April 15, 1993; effective May 22, 1993. Amended: November 5, 1996; effective date December 9, 1996.

Ala. Admin. Code r. 810-6-4-.24 Copy Of Abatement Agreement To Be Filed With The Revenue Department And The Procedures Governing The Use Of Direct Pay Permits Or Exemption Certificates By Private Users And Contractors

(1) Unless otherwise defined herein, the definitions of terms set forth in Code of Ala. 1975, Section 40-9B-3, are incorporated herein.

(2) As used in this rule, the term "public body" means a public authority, county, or municipal government.

(3) As used in this rule, the term "Department" means the Department of Revenue of the State of Alabama.

(4) An abatement of sales and use taxes granted by a public body as authorized by Section 40-9B-4 and in accordance with the geographical or jurisdictional limitations outlined in Section 40-9B-5 shall be embodied in an Abatement Agreement between the public body and the private user. The Abatement Agreement shall contain all the information required pursuant to Section 40-9B-6(b) and a copy of this agreement must be filed with the Department within 90 days after the granting of the tax abatement.

(5) Except as noted in paragraph (7), a private user, contractor, or subcontractor who will purchase, store, use, or consume tangible personal property which it will incorporate into a private use industrial development property or a major addition for which a valid abatement has been granted pursuant to Chapter 9B of Title 40 shall submit to the Department an application for a Sales and Use Tax Certificate of Exemption for an Industrial or Research Enterprise Project. Upon receipt and approval of the application, the Department shall issue the certificate of exemption (Form STE-2) to the qualifying applicant. Applicants who are issued Form STE-2 shall comply with all provisions of Sales and Use Tax Rule 810-6-4-.24.01. All exemption certificates issued by the Department will be limited to use on purchases of tangible personal property which qualify for the abatement and will bear an expiration date which shall be the same as the estimated date of completion contained within the Abatement Agreement. The expiration date may be extended beyond the estimated date of completion referenced in the Abatement Agreement provided the project for which the abatement was granted has not been placed in service. A request for an extension of the expiration date of a Form STE-2 issued to the private user of a project, the contractor, or a subcontractor on the project may only be made by the private user; provided that the prime contractor for the project may request the extension of the expiration date where (i) the private user has not obtained a Form STE-2 and (ii) the private user of the project confirms that the project has not been placed in service by countersigning the prime contractor’s request for the extension. Certificate holders shall be responsible for reporting and remitting nonabateable sales and use taxes, including county and municipal sales and use taxes levied for educational purposes or for capital improvements for education, due on all purchases for which they use the certificate to purchase tangible personal property without payment of the tax to the vendor or supplier.

(6) A certificate of exemption (Form STE-2) shall be “project specific”. Accordingly, contractors or subcontractors making tax-exempt purchases in conjunction with more than one project for which abatements have been granted shall apply for and obtain a separate Form STE-2 for each qualifying project. Each Form STE-2 shall be used only to make tax-exempt purchases for the project specified on the certificate.

(7) In lieu of obtaining a Form STE-2, private users who hold a Sales and Use Tax Direct Pay Permit may elect to continue making all purchases pursuant to the terms of the direct pay permit and continue to file direct pay permit returns in accordance with Sales and Use Tax Rule 810-6-4-.14. Purchases which qualify for the abatement shall be reported on these returns and deducted from total purchases before state and noneducational county and municipal taxes are computed. County and municipal sales and use taxes which are levied for educational purposes or for capital improvements for education shall be computed and paid with the private user's local direct pay permit returns. The election by the private user to use an existing direct pay permit in lieu of obtaining a Form STE-2, does not preclude a contractor or subcontractor who will also be making tax-exempt purchases in conjunction with the project from obtaining a Form STE-2.

History

• Author: Dan DeVaughn
• Authority: Code of Ala. 1975, §§40-23-31, 40-23-83.
• Filed January 15, 1993; certification filed April 15, 1993; effective May 22, 1993. Amended: Filed November 5, 1996, effective date December 9, 1996. Amended: Filed September 15, 1998; effective October 20, 1998.

Ala. Admin. Code r. 810-6-4-.24.01 Sales And Use Tax Certificate Of Exemption For An Industrial Or Research Enterprise Project (Form STE-2) - Responsibilities Of The Certificate Holder - Burden Of Proof - Liability For Taxes Later Determined To Be Due

(1) Unless otherwise defined herein, the definitions of terms set forth on Code of Ala. 1975, Section 40-9B-3, are incorporated by reference herein.

(2) The term "Department" as used in this rule shall mean the Department of Revenue of the State of Alabama.

(3) As used in this rule, the term “project” means a private use industrial development property or a major addition to a private use industrial development property.

(4) The sales and use tax certificate of exemption (Form STE-2) referenced in Sales and Use Tax Rule 810-6-4-.24 may be issued by the Department to

(i) a private user who has been granted an abatement of sales and use taxes in accordance with Chapter 9B of Title 40,

(ii) a contractor or subcontractor who will purchase, store, use, or consume tangible personal property to be incorporated into a project for which the private user has been granted a valid abatement pursuant to Chapter 9B of Title 40, or

(iii) both.

The certificate of exemption shall be used only by the person or entity to whom it is issued; therefore, each eligible party desiring to make tax-exempt purchases pursuant to an abatement of construction-related sales and use taxes granted under authority of Chapter 9B of Title 40 shall make a separate application for an exemption certificate. Upon receipt and approval of a properly completed application, the Department will issue the qualified applicant a Form STE-2 which the certificate holder shall copy, complete, and provide to its vendors as documentation for the tax exempt status of the certificate holder’s qualifying purchases of tangible personal property.

(5) A prime contractor applying for a Form STE-2 shall submit, with the application, written confirmation from the private user that the applicant will be making purchases of tangible personal property to be incorporated into the project referenced on the application. A contractor or subcontractor applying for a Form STE-2 shall submit, with the application, written confirmation from the private user or the prime contractor that the applicant will be making purchases of tangible personal property to be incorporated into the project referenced on the application.

(6) The application referenced in paragraph (4) shall require the following information:

(a) Applicant's Federal Employer Identification Number,

(b) Applicant's legal name and complete mailing address,

(c) Address of the project site,

(d) Business phone number,

(e) Date the abatement was granted,

(f) Estimated completion date of the project for which the abatement has been granted, and

(g) Signature and title of sole proprietor, each partner, or an elected corporate officer and the date of the signature.

(7) The Department, upon approving an application for a Form STE-2, will provide the applicant with a Form STE-2 containing the following information:

(a) Project number,

(b) Restrictions to the scope of the certificate holder’s exempt status,

(c) Effective date of the exemption certificate,

(d) Expiration date of the exemption certificate,

(e) Statement of the duties and responsibilities of the vendor to whom a certificate is provided by the certificate holder,

(f) Statement, to be declared by the certificate holder under penalties of false swearing, as to the validity of the exemption claim,

(g) Certificate holder’s name and address,

(h) Date of approval or issuance by the Department, and

(i) Signature of approval by the Department.

(8) At the time of providing a copy of a Form STE-2 to a vendor from whom a tax-exempt purchase is being made, the following information shall be provided by the certificate holder on the certificate copy which the certificate holder gives to the vendor:

(a) Name and address of the vendor to whom the certificate copy is provided,

(b) Date the certificate is provided, and

(c) Certificate holder’s signature and title.

(9) A certificate holder regularly making tax exempt purchases of the kind and nature for which the Form STE-2 has been issued may furnish a properly executed certificate to the seller specifying that all tangible personal property subsequently purchased will be for the purpose shown on the certificate and thus be relieved of the burden of executing a separate certificate for each individual tax-exempt purchase as long as the tangible personal property purchased qualifies for the abatement.

(10) The certificate holder shall maintain a list of all vendors to whom a copy of the exemption certificate is furnished. This list should be retained in the certificate holder’s records available for inspection by the Department during regular business hours and should provide the name, address, and type of business of each vendor to whom a copy of the certificate has been furnished.

(11) When the project for which the abatement has been granted is placed in service, the certificate holder shall return the certificate to the Department.

(12) The certificate holder shall notify the Department immediately in writing of any change in name or mailing address.

(13) The burden of proof that a sale is exempt is upon the person making the sale unless the seller takes from the certificate holder a properly executed Form STE-2. Any sale for which an exemption has been claimed but which is not supported by a Form STE-2 shall be deemed a sale at retail by the Department and the seller held liable for the tax thereon. A seller who sells tangible personal property tax-exempt based upon the presentment of a Form STE-2 by the purchaser shall reference the Project Number shown on the Form STE-2 on the invoice or billing to the certificate holder.

(14) Any person, firm, or corporation selling tangible personal property tax free who relies on a Form STE-2 and reasonably believes the tax exemption claim is legal shall not be held liable for sales or use tax subsequently determined by the Department to be due on the sale for which the certificate was received. Instead, the Department will collect or recover the tax due from the party or parties who made the illegal tax-free purchase with the Form STE-2 and the person or persons who benefited from the illegal use of the Form STE-2. (Sections 40-23-120 and 40-23-121)

(15) With the exception of the certificates which are provided for in Sections 40-23-4(a)(10), 40-23-62(12), and 40-23-4.3, Code of Ala. 1975, and Form STE-1 provided for in Sales and Use Tax Rule 810-6-5-.02 pursuant to Section 40-23-120, Form STE-2 is the only exemption certificate or exemption number which relieves the seller, when acting in good faith and exercising reasonable care, of liability for any sales or use tax later determined by the Department to be due on a sale for which an exemption was originally claimed.

(16) The authority granted to the Department in Section 40-23-121 shall include but is not limited to the power to examine the certificate holder’s records; assess the certificate holder for tax, penalty, and interest; and file tax liens.

History

• Author: Dan DeVaughn
• Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-23-31, 40-23-83.
• New Rule: Filed November 5, 1996; effective December 10, 1996. Amended: Filed September 15, 1998; effective October 20, 1998.

Ala. Admin. Code r. 810-6-4-.25 Taxability Of The Private User Of Private Use Property To Which A Public Authority, County, Or Municipal Government Has Title Or A Possessory Right

(1) The term "de minimis deviations" as used in Chapter 9B of Title 40 of the Code of Ala. 1975, and in this rule shall mean, with reference to the amount of capital expenditures for private use property, not exceeding 10 percent in the aggregate of the amount set forth in the inducement or lease or other agreement. In respect thereof, and with reference to the description of the private use property set forth in the inducement or lease or other agreement in respect thereof, such modification thereto as did not or would not change the predominant activity carried on at the private use property.

(a) Predominant Activity - If the trade or business to be conducted by a private user at a given site is predominately (i.e. more than 50% of the project investment) in the nature of an industrial or research enterprise, then all of the property to be acquired at the site will constitute industrial development property eligible for abatements under Chapter 9B of Title 40. If the predominant activity is not in the nature of an industrial or research enterprise, then only that portion, if any, of the property which will be so used will constitute industrial development property eligible for abatements.

(2) The term "title" as used in Chapter 9B of Title 40 and in this rule shall mean, with respect to property, legal title or ownership.

(3) Unless otherwise defined herein, the definitions of terms set forth in Code of Ala. 1975, Section 40-9B-3, are incorporated by reference herein.

(4) The private user of private use property is liable for sales and use taxes as outlined in Section 40-9B-7(a)(2).

(5) The taxability provision outlined in Section 40-9B-7(a)(2) shall not apply if the private user was entitled to use, or would be entitled to use, the private use property as outlined in Section 40-9B-7(d). This exception applies only to the property and the amount of capital expenditures set out in the inducement, subject to de minimis deviations.

(6) The taxability provision outlined in Section 40-9B-7(a)(2) shall not apply to private use property for which there exists an independent statutory source of exemption or abatement from sales and use taxes (other than a source based solely on title to the property being in a public authority or a county or municipal government).

(7) Once property becomes private use property the property shall not lose its status as private use property because of a change in accounting procedures or a change from a capital lease to an operating lease.

History

• Author: Dan DeVaughn
• Authority: Code of Ala. 1975, §§40-23-31, 40-23-83. History: Filed with LRS January 15, 1993; certification filed with LRS April 15, 1993; effective May 22, 1993.
• Filed September 15, 1998; effective October 20, 1998.

Ala. Admin. Code r. 810-6-4-AA Appendix A

department of revenue

administrative code

APPENDIX A

table of contents

Attachment 810-6-4-.13 Application For Direct Pay Permit

Attachment 810-6-4-.14 Application For Direct Pay Permit

Attachment 810-6-4-.15 Application For Sales And use Tax Motor Fuel Permit

Attachment 810-6-4-.19 Sales Tax Return

Attachment 810-6-4-.24.01 Application For Sales And Use Tax Certificate Of Exemption

Author:

Statutory Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-23-31, 40-23-83.

History: Amended: Filed May 2, 1996; effective June 6, 1996.

Author:

Statutory Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-23-31, 40-23-83.

History: Amended: Filed February 26, 1996; effective April 1, 1996.

Author:

Statutory Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-23-31, 40-23-83.

History: Amended: Filed February 26, 1996; effective April 1, 1996.

Author:

Statutory Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-23-31, 40-23-83.

History: Amended: Filed February 26, 1996; effective April 1, 1996. (Form updated 7-29-96 - not certified)

History

• Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-23-31, 40-23-83.
• Amended: Filed May 2, 1996; effective June 6, 1996.

Ala. Admin. Code r. 810-6-4-AB Appendix B

department of revenue

administrative code

appendix b

table of contents

Attachment 810-6-4-.13 Permit To Purchase Tangible Personal Property Without The Payment To The Vendor Of The State-Administered Local Use Tax

Attachment 810-6-4-.14 Permit To Purchase Tangible Personal Payment To The Vendor Of The Sales And Use Tax

Attachment 810-6-4-.15 Sales And Use Tax Motor

Attachment 810-6-4-.19 Sales Tax Return Without Estimated Payment

Attachment 810-6-4-.24.01 Application For Sales And Use Tax Certificate Of Exemption

Author:

Statutory Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-23-31, 40-23-83.

History: Amended: Filed May 2, 1996; effective June 6, 1996.

Author:

Statutory Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-23-31, 40-23-83.

History: Amended: Filed February 26, 1996; effective April 1, 1996.

Author:

Statutory Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-23-31, 40-23-83.

History: Amended: Filed February 26, 1996; effective April 1, 1996.

Author:

Statutory Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-23-31, 40-23-83.

History: Amended: Filed February 26, 1996; effective April 1, 1996. (Form updated 7-29-96 - not certified)

History

• Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-23-31, 40-23-83.
• New Form: Filed November 5, 1996; effective December 9, 1996.

Ala. Admin. Code r. 810-6-4-AC Appendix C

department of revenue

administrative code

APPENDIX c

table of contents

Attachment 810-6-4-.14 Sales Tax Return (Regulation A)

Attachment 810-6-4-.15 Sales Tax Return Motor Fuel Only (Regulation M)

Author:

Statutory Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-23-31, 40-23-83.

History: Amended: Filed February 26, 1996; effective April 1, 1996.

History

• Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-23-31, 40-23-83.
• Amended: Filed February 26, 1996; effective April 1, 1996.

Ala. Admin. Code r. 810-6-4-AD Appendix D

department of revenue

administrative code

APPENDIX D

TABLE OF CONTENTS

Attachment 810-6-4-.14 Sales Tax Return With Estimated Payment (Regulation A)

Attachment 810-6-4-.15 Sales Tax Return With Estimated Payment (Regulation M)

Author:

Statutory Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-23-31, 40-23-83.

History: Amended: Filed February 26, 1996; effective April 1, 1996.

History

• Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-23-31, 40-23-83.
• Amended: Filed February 26, 1996; effective April 1, 1996.