Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-6-4 - SALES TAX DUE MONTHLY; FILING OF REPORTS; RECORDS REQUIRED; REFUNDS; INTEREST; HEARINGS ON ASSESSMENTS; EXAMINATIONS OF RETURNS; INTER ALIA › Section 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

Current through Register Vol. 42, No. 9, June 28, 2024
(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.
Author:
Dan DeVaughn
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-23-31,
				  40-23-83.