Current through Register Vol. 43, No. 02, November 27, 2024
(1) Definitions.
(a) Governmental Entity. The Federal
Government, the State of Alabama, Alabama public schools, Alabama public
universities, healthcare authorities, airport authorities, Alabama counties and
municipalities, and public corporation incorporated under any of the provisions
of Chapter 50 or 50A of Title 11, Chapter 5 of Title 37, or Chapter 7 of Title
39.
(b) Person or Company. As
prescribed in §
40-23-1, Code of Ala.
1975.
(2)
Certificate of Exemption Requirements.
(a)
Persons or companies, including but not limited to those cited in Title 40,
Chapter 9, other than governmental entities, which have a statutory exemption
from the payment of Alabama sales, use, or lodgings taxes, are required to
obtain a sales and use tax certificate of exemption. The certificate of
exemption must be renewed on an annual basis.
(b) Within thirty (30) days of receipt of a
properly documented and completed application (Form ST: EX-A1-SE), the
applicant will be issued a state sales and use tax certificate of exemption
(Form STE-1) or a letter of denial. The denial of a properly documented and
completed certificate of exemption application under the provisions of this
rule are subject to the appeal rights provided for in §
40-2A-8, Code of Ala.
1975.
(3)
Annual Renewal Required. Certificates of exemption are valid for one year from
the date of issuance and must be renewed annually each subsequent year before
the end of the month in which the certificate expires. Any person or company
that fails to obtain or renew a certificate of exemption prior to its
expiration, will no longer be allowed to make tax exempt purchases or rent tax
exempt accommodations until such time as the application for renewal is made
and the certificate is reinstated.
(4) informational Reports Required. All
persons or companies required to obtain a certificate of exemption as described
herein, are required to file an informational report with the department in a
manner prescribed in Rule
810-6-5-.02.02.
(a) Such required informational reports, if
required by the Department, are a prerequisite for the renewal of certificates
of exemption.
(b) Any person or
company that does not comply with the reporting requirements may be barred from
the use of any certificate of exemption until such time as the required
informational report is filed with the department, not to exceed six months for
the first offense and one year for the second offense. On the third offense,
such person or company shall be barred from the use of any certificate of
exemption until such time as the person or company is authorized to obtain a
certificate of exemption pursuant to a joint resolution by the Alabama
legislature.
(5)
Consequences of Improper Use.
(a) The
department may assess any person or company with state and local sales, use,
and lodgings tax for any transaction conducted with a certificate of exemption
not properly accounted for and reported in accordance with the provisions of
this rule.
(b) Any person or
company that intentionally uses a certificate of exemption in violation of its
intended purpose shall, in addition to the actual sales, use and/or lodgings
tax liability due, be subject to a civil penalty in an amount of not less than
two-thousand dollars ($2,000) or two times any state and local sales, use
and/or lodgings tax due for the transactions, whichever is greater, and based
on the person or company's willful misuse of the certificate of exemption, may
be barred from the use of any certificate of exemption for up to two
years.
(6) Certificate
of Exemption Information. Upon approval of an application for a sales and use
tax certificate of exemption. The department will provide the applicant with a
Form STE-1 containing the following information:
(a) Certificate holder's exemption
number.
(b) Restrictions, if any,
to the scope of the certificate holder's exempt status.
(c) Nature of the certificate holder's
business.
(d) Statement of the
duties and responsibilities of the vendor to whom a certificate is provided by
the holder.
(e) Statement, to be
declared by the certificate holder under penalties of perjury, as to the
validity of the exemption claim.
(f) Certificate holder's name and
address.
(g) Date of approval or
issuance by the department.
(h)
Signature of approval by the department.
(7) Certificates Provided to Vendors. The
certificate of exemption (Form STE-1) can be copied, completed, and provided to
vendors as documentation for tax exempt purchases. At the time of providing a
copy of a Form STE-1 to a vendor from whom a tax-exempt purchase is being made,
the following information shall be provided by the certificate holder on the
certificate copy that the holder provides to the vendor:
(a) Name and address of the vendor to whom
the certificate copy is provided,
(b) Date the certificate is
provided,
(c) Basis for the
certificate holder's exemption claim, and
(d) Signature and title of the authorized
representative for the certificate holder.
(8) Additional Information.
(a) Certificate holders regularly engaged in
making tax exempt purchases of the kind and nature for which the Form STE-1 has
been issued may furnish a properly executed certificate to the seller or
lodgings provider specifying that all tangible personal property or lodgings
subsequently purchased will be for the purpose shown on the certificate and
thus be relieved of the burden of executing a separate certificate for each
individual tax exempt purchase as long as there is no change in the character
of their operations and the tangible personal property or lodgings purchased is
of the kind usually purchased for the purpose indicated.
(b) Certificate holders must maintain a list
of all vendors to whom they furnish a copy of their exemption certificate. This
list should be retained in their records available for inspection by the
department during regular business hours and should provide the name, address,
and type of business of each vendor to whom a copy of the certificate has been
furnished.
(c) Certificate holders
must return their certificate to the department if the business for which the
certificate was issued is closed.
(d) Certificate holders must notify the
department immediately in writing of any change in name or address.
(e) Sales of tangible personal property to
any person, firm, or corporation not required to have a sales tax license are
subject to sales or use tax until the contrary is established. The burden of
proof that a sale is exempt is upon the person making the sale unless the
seller takes from the purchaser a properly executed Form STE-1. Any such sale
for which an exemption has been claimed but which is not supported by a Form
STE-1 may be deemed a sale at retail by the department and the seller held
liable for the tax thereon.
Authors: Ginger Buchanan, Christy
Vandevender
Statutory Authority:
Code of Ala.
1975, §§
40-2A-7(a)(5),
40-9-60, 40-2-31,
40-23-31,
40-23-120.
