Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-6-3 - EXEMPTIONS FROM SALES AND USE TAX › Section 810-6-3-.41.02 - Exemption For Improvement Districts

Current through Register Vol. 42, No. 9, June 28, 2024
(1) The definitions of the terms "appointing
			 government," "improvements," and "public person" contained in Section
			 11-99A-2,
Code of Ala. 1975
, are incorporated into this rule by
			 reference.
(2) The term
			 "improvement district" as used in this rule shall mean a district created
			 pursuant to Chapter 99A of Title 11 of the
Code of Ala.
			 1975
.
(3) Subject to
			 any limitation or restriction imposed by the appointing government pursuant to
			 Section
			 11-99A-20(c) and the restrictions outlined in paragraphs (5) and (6) below; all sales of
			 tangible personal property to, and all sales of tangible personal property by,
			 an improvement district are exempt from all state, county, and municipal sales
			 and use taxes and gross receipts taxes in the nature of a sales tax. (Section
			 11-99A-20(a)).
(4) Subject to any limitation or
			 restriction imposed by the appointing government pursuant to Section
			 11-99A-20(c) and the restrictions outlined in paragraphs (5) and (6) below; the purchase,
			 acquisition, and installation of tangible personal property for improvements by
			 an improvement district are exempt from all state, county, and municipal sales
			 and use taxes and gross receipts taxes in the nature of a sales tax regardless
			 of whether the purchases of the materials are made by the improvement district
			 or by a contractor or subcontractor for use in the acquisition, construction,
			 or installation of improvements for an improvement district. (Sections
			 11-99A-20(b) and
			 11-99A-20(c)).
(5) The sales and use tax
			 exemptions outlined in Section
			 11-99A-20 shall not apply to any purchase, acquisition, or installation that would not be
			 exempt if purchased, acquired, or installed directly by the appointing
			 government. (Section
			 11-99A-20(b)).
(6) The sales and use tax
			 exemptions outlined in Section
			 11-99A-20 shall not be used for the acquisition, equipping, or construction of property
			 to be owned by any person other than a utility company, the improvement
			 district, or another public person. (Section
			 11-99A-2(6)).
(7) Any contractor or
			 subcontractor who is making tax-exempt purchases pursuant to Section
			 11-99A-20(b) may apply for and obtain a sales and use tax Certificate of Exemption (Form
			 STE-1). A contractor or subcontractor applying for a Form STE-1 shall attach to
			 its application a certification, under oath, from the Chairman of the Board of
			 the improvement district outlining the terms of the improvement district's
			 agreement with the appointing government with respect to any limitations,
			 restrictions, or rescissions to the sales and use tax exemptions otherwise
			 applicable to purchases by the improvement district, contractor, or
			 subcontractor. The Form STE-1 issued to the contractor or subcontractor will be
			 project specific and shall be provided by the contractor or subcontractor to
			 its vendors to document the tax-exempt status of its purchases of materials for
			 the improvement project indicated on the Form STE-1. A contractor or
			 subcontractor who will be making tax-exempt purchases for more than one
			 qualifying improvement project shall obtain a separate Form STE-1 for each
			 project. A contractor or subcontractor who obtains a Form STE-1 shall comply
			 with all of the provisions of Sales and Use Tax Rule
			 810-6-5-.02 entitled 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.
(8) Effective October 1, 2000, the sale to,
			 or the storage, use, or consumption by, any contractor or subcontractor of any
			 tangible personal property to be incorporated into realty pursuant to a
			 contract awarded prior to July 1, 2004, with an improvement district organized
			 pursuant to Chapter 99A of Title 11,
Code of Ala.
			 1975
, is exempt from all state, county, and municipal sales and
			 use taxes provided the contractor or subcontractor has complied with Rule
			 810-6-3-.77 entitled Exemption of Certain Purchases by Contractors and Subcontractors in
			 conjunction with Construction Contracts with Certain Governmental Entities,
			 Public Corporations, and Educational Institutions. This exemption, which is in
			 addition to the one found in Section
			 11-99A-20,
			 does not exempt any purchases by contractors or subcontractors that are not
			 also exempt pursuant to Section
			 11-99A-20.
(9) In accordance with Act. No. 2004-638, the
			 sale to, or the storage, use, or consumption by any contractor or subcontractor
			 of any tangible personal property contract to be incorporated into realty
			 pursuant to a contract awarded, or any portion of a contract which is revised,
			 renegotiated, or otherwise altered, on and after July 1, 2004, to the extent
			 that such revision, renegotiation, or alteration requires the purchase of
			 additional tangible personal property is subject to all state, county and
			 municipal sales and use taxes. Items purchased after June 30, 2004, pursuant to
			 a contract awarded prior to July 1, 2004, will continue to be exempt for the
			 remainder of the contract to the extent that any post June 30, 2004, revision
			 or amendment does not require the purchase of additional tangible personal
			 property.
Author:
Ginger L. Buchanan
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  11-99A-2,
				  11-99A-20,
				  40-23-31,
				  40-23-83.