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-.196 - Withdrawals From Inventory

Current through Register Vol. 42, No. 9, June 28, 2024
(1)
			 Except as noted in paragraphs (2), (3) and (4) below, all withdrawals of
			 tangible personal property from inventory are taxable under the withdrawal
			 provisions of the sales tax statute unless the property has been previously
			 withdrawn from the inventory and the sales tax has been paid because of the
			 previous withdrawal or unless the property withdrawn enters into and becomes an
			 ingredient or component part of tangible personal property or products
			 manufactured or compounded for sale and not for the personal and private use or
			 consumption of the person withdrawing same. (
Ex parte
			 Sizemore
, 605 So. 2d 1221 (Ala. 1992))(Sections
			 40-23-1(a)(6),
			 40-23-1(a)(8),
			 4 0-23-1(a)(10), and
			 40-23-60(5),
Code of Ala. 1975
).
(2) The transactions in (a) and (b) below
			 shall not be deemed or considered to constitute a transaction subject to sales
			 tax. Qualified charitable entities listed in
			 26 U.S.C. Sections
			 170(b) or (c) are defined in
			 (c) below.
(a) Pursuant to Section
			 40-23-1(e),
			 the withdrawal, use, or consumption of a manufactured product by the
			 manufacturer thereof in quality control testing performed by employees or
			 independent contractors of the manufacturer, nor a gift by the manufacturer of
			 a manufactured product, withdrawn from the manufacturer's inventory, to an
			 entity listed in
			 26 U.S.C. Sections
			 170(b) or (c).
(b) Pursuant to Section 40-23-23 -1(f),
			 effective July 1, 2006, a gift by a retailer of a product or products withdrawn
			 from the retailer's inventory to a qualified charitable entity listed in
			 26 U.S.C. Sections
			 170(b) or (c), where the
			 aggregate retail value of any single gift is equal to or less than
			 $10,000.00.
(c) Qualified
			 charitable entities listed in
			 26 U.S.C. Sections
			 170(b) or (c) include, but
			 are not limited to the following:
1. a
			 church, or a convention or association of churches;
2. an educational organization which normally
			 maintains a regular faculty, curriculum, and enrolled body of
			 students;
3. a hospital or a
			 medical research organization which provides medical or hospital care, medical
			 education, or medical research as their primary purpose or function;
4. an organization which normally receives a
			 substantial part of its support from the United States or any State or
			 political subdivision thereof or from direct or indirect contributions from the
			 general public, and which is organized and operated for the benefit of a
			 college or university referenced in 2. above;
5. a governmental unit that is a State or a
			 possession of the United States and any political subdivision of any of the
			 foregoing, the United States, or the District of Columbia, which uses the gift
			 exclusively for public purposes;
6.
			 a corporation, trust, or community chest, fund, or foundation created or
			 organized in the United States or in any possession thereof or under the laws
			 thereof, and organized and operated exclusively for religious, charitable,
			 scientific, literary, or educational purposes, or to foster national or
			 international amateur sports competition, or for the prevention of cruelty to
			 children or animals, and which normally receives a substantial part of its
			 support from governmental units referenced in 5. above or from direct or
			 indirect contributions from the general public;
7. a private foundation described in
			  26USC 170(b) (1) (E); and
8. an
			 organization described in  26USC 509(a) (2).