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, repealed by Act 2004-638, effective July 1, 2004)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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