Alabama – Certificates of Exemption for Governmental Projects

SALT Report 2515 – Recently enacted legislation requires the Alabama Department of Revenue to grant a certificate of exemption from state and local sales and use taxes to any contractor licensed by the State Licensing Board for General Contractors, or any subcontractor working under the same contract who is purchasing items on behalf of an exempt governmental entity.

Qualifying purchases include building materials, construction materials, supplies, and other tangible personal property that will be used in the construction of a building or other project pursuant to a contract with the exempt governmental entity. However, the requirement does not include purchases that will be used in the construction of a highway, road, or bridge.

The exemption certificate requirement applies to contracts entered into on or after January 1, 2014. However, contract change orders and contract extensions, including revised, renegotiated, or altered contracts, are excluded if the original contract was entered into before January 1, 2014.

The provisions in this Bill take effect October 1, 2013.

For Further Information

Alabama State Legislature – House Bill 419, Laws 2013