Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-6-3 - EXEMPTIONS FROM SALES AND USE TAX › Section 810-6-3-.41.01 - Exemption For Certain Health Care Authorities

Current through Register Vol. 42, No. 9, June 28, 2024
(1) The term "health care authority" as used
			 in this rule shall mean any public corporation organized pursuant to Article 11
			 of Chapter 21 of Title 22,
Code of Ala. 1975
, and any
			 public hospital corporation reincorporated pursuant to Article 11 of Chapter 21
			 of Title 22,
Code of Ala. 1975
.
(2) The sale, purchase, use, storage, or
			 consumption of tangible personal property used in the construction and
			 equipment of any health care facilities for a health care authority, regardless
			 of whether the sale is to the health care authority, its contractor, its
			 subcontractors, or its agent, is exempt from state, county, and municipal sales
			 and use taxes. (Section
			 22-21-333).
(3) The exemption in Section
			 22-21-333 applies to purchases of materials and equipment used in the construction of a
			 new facility and in the construction of an addition to an existing facility.
			 (AGO, Sessions, March 26, 1996)
(4)
			 To qualify for the exemption in Section
			 22-21-333,
			 the property purchased must become a part of the facility or the equipment of
			 the facility or must constitute supplies or other items necessary for the
			 day-to-day operation of the facility. Purchases of tangible personal property
			 by the health care authority's contractor, subcontractors, or agent, when the
			 property does not become a part of the facility or the equipment of the
			 facility or does not constitute supplies or other items necessary for the
			 day-to-day operation of the facility, are taxable. Examples of nonexempt items
			 are diesel fuel and repair parts for construction equipment, hand tools, and
			 consumable supply items used by the contractor, subcontractor, or
			 agent.
(5) Notwithstanding the
			 exemption outlined above, an individual, partnership, or corporation organized
			 for profit that is or will be treated for federal income tax purposes as the
			 owner of property to which a health care authority has title to, or a
			 possessory right in, is liable for sales or use taxes as if the for-profit
			 entity held title to the property unless the individual, partnership, or
			 corporation would be entitled to use the property pursuant to a lease or other
			 agreement entered into before May 21, 1992, or would be entitled to use the
			 property at some future time pursuant to an inducement agreement entered into
			 or adopted before May 21, 1992. For-profit entities, however, may qualify for
			 abatements of certain sales and use taxes pursuant to Chapter 9B of Title 40 of
			 the
Code of Ala. 1975
. Section
			 40-9B-7 only pertains to private users of private use property. Private user is defined
			 in Section
			 40-9B-3.
			 Therefore, Section
			 40-9B-7 does not change the tax exempt status of a non-profit entity for sales and use
			 tax purposes.
Authors:
Deborah Lee, Ginger L. Buchanan
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  11-62-18,
				  40-9B-7,
				  40-23-31,
				  40-23-83.