Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-6-1 - GROSS PROCEEDS OF SALES; GROSS RECEIPTS; WHOLESALE SALES, SALES AT WHOLESALE; RETAIL SALES, SALES AT RETAIL; AUTOMOTIVE VEHICLES › Section 810-6-1-.184 - Seller Sells Tax Free At The Seller's Risk

Current through Register Vol. 42, No. 9, June 28, 2024
(1) Other than the exceptions noted in
			 paragraphs (2), (3), (4) and (5) below, the seller is liable for sales or use
			 tax on any sales for which the seller fails to collect the appropriate sales or
			 use tax due. It is the seller's duty under the Sales and Use Tax Laws to know
			 the general and customary business of the customer and to collect the amount of
			 tax due.
The seller is not, however, expected to follow each article of
				goods sold to its final use; therefore, the seller is not to be held
				accountable for an isolated transaction made by the customer or for an isolated
				use of property by the customer. Where a seller sells to a customer who both
				uses and sells from the same stock of goods, the seller may sell, tax free, at
				wholesale all of the goods so used and resold. (Sections
				40-23-26 and
				40-23-67,
Code of Ala. 1975
).
(2) A seller, who acts in good faith and
			 reasonably believes a tax exempt purchase is legal, is not liable for sales or
			 use tax later determined to be due on a sale for which the purchaser provides
			 the seller with a State Sales and Use Tax Certificate of Exemption (Form
			 STE-1). (See Sales and Use Tax Rule
			 810-6-5-.02 State Sales and Use Tax Certificate of Exemption (Form STE-1) -
			 Responsibilities of the Certificate Holder - Burden of Proof - Liability for
			 Taxes Later Determined to be Due.) (Section
			 40-23-120).
(3) A seller who secures a
			 properly completed and duly signed certificate pursuant to §
								40-23-4(a)(10) or §
								40-23-62(12),
Code of Ala. 1975
, and has no knowledge that such
			 certificate is false when it is filed is not liable for sales or use tax on a
			 sale later determined to be taxable. (See Sales and Use Tax Rule
			 810-6-3-.67.04 Certificate of Exemption - Fuel and/or Supplies Purchased for Use or
			 Consumption Aboard Vessels Engaged in Foreign or International Commerce or in
			 Interstate Commerce.) (Sections
			 40-23-4(a)(10) and
			 40-23-62(12)).
(4) A seller who secures from
			 the purchaser a Form ST: EXC-1, or a variation thereof approved by the Revenue
			 Department, is not liable for sales or use tax later determined to be due on
			 sales of tangible personal property which the purchaser claims are exempt
			 pursuant to Sections
			 40-23-4(a)(2), (4), or
			 (22)   or
			 40-23-62(5), (7), or
			 (23). (See Rule
			 810-6-3-.20.01 Exemption Certification Form Respecting Fertilizers, Insecticides, Fungicides,
			 and Seedlings (Form ST:EXC-1). (Section
			 40-23-4.3).
(5) A seller, who acts in good
			 faith and reasonably believes a tax exempt purchase is legal, is not liable for
			 sales or use tax later determined to be due on a sale for which the purchaser
			 provides the seller with a Sales and Use Tax Certificate of Exemption for an
			 Industrial or Research Enterprise Project (Form STE-2). (See Sales and Use Tax
			 Rule
			 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. (Section
			 40-23-120)
Author:
Dan DeVaughn
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-23-4(a)(2),
				  40-23-4(a)(4),
				  40-23-4(a)(10),
				  40-23-4(a)(22),
				  40-23-4.3,
				  40-23-26,
				  40-23-31,
				  40-23-62(5),
				  40-23-62(7),
				  40-23-62(12),
				  40-23-62(23),
				  40-23-67,
				  40-23-83,
				  40-23-120.