Ala. Admin. Code r. 810-6-3-.33 - Industrial Development Board
(1) An industrial development board created
by an incorporated municipality within the State of Alabama pursuant to Article
4 of Chapter 54 of Title 11, Code of Ala. 1975, as
amended, is exempt from sales and use tax on any tangible personal property
purchased by the board or its duly authorized agent, provided the purchases are
made in the name of the board, the board's credit is obligated and said
purchases are paid for by the board with funds belonging to the board. The term
"funds belonging to the board" shall normally be construed to mean those funds
not exceeding the amount of the long term revenue bonds and any temporary
borrowing evidenced by revenue bonds or notes maturing not later than 18 months
from date of issue. (Section
11-54-96,
Code of Ala. 1975).
(2)
(a) The
exemption in Section
11-54-96
does not apply to a contractor where the contractor has a construction contract
with an industrial development board to furnish all materials and labor for use
in the performance of the contract. The contractor is the consumer thereof of
all the materials used in the performance of the construction contract which
becomes part of real property. A contractor may purchase items of machinery or
equipment not becoming part of the realty, tax exempt, where such items are
intended for resale to the board in the form of tangible personal property.
(Sections
40-23-1(a)(10)
and
40-23-60(5),
Code of Ala. 1975).
(b) The sale to, or the storage, use, or
consumption by, any contractor or subcontractor of any tangible personal
property to be incorporated into realty pursuant to a contract awarded after
October 1, 2000 but prior to July 1, 2004, with an industrial development board
organized pursuant to Article 4 of Chapter 54 of Title 11, Code of
Ala. 1975, is exempt from all state, county, and municipal sales
and use taxes provided the contractor or subcontractor has complied with Rule
810-6-3-.77
entitled Exemption of Certain Purchases by Contractors and Subcontractors in
conjunction with Construction Contracts with Certain Governmental Entities,
Public Corporations, and Educational Institutions. (Section
40-9-33,
Code of Ala. 1975, repealed by Act 2004-638, effective
July 1, 2004)
(3)
Notwithstanding any of the exemptions 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 an industrial
development board has title to, or a possessory right in, is liable for sales
and 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.
Notes
Authors: Deborah Lee, Ginger L. Buchanan
Statutory Authority: Code of Ala. 1975, ยงยง 40-2A-7(a)(5), 11-54-96, 40-9-33, 40-9B-4, 40-9B-5, 40-9B-6, 40-9B-7, 40-23-1(a)(10), 40-23-31, 40-23-60(5), 40-23-83.
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