Ala. Admin. Code r. 810-6-5-.02 - State Sales And Use Tax Certificate Of Exemption (Form STE-1) - Issued For Wholesalers, Manufacturers And Other Product Based Exemptions
(1) The term
"Department" as used in this regulation shall mean the Department of Revenue of
the State of Alabama.
(2) Persons,
firms, and corporations who are not required to have a sales tax license
pursuant to §
40-23-6, Code of Ala.
1975, and who are entitled to make certain purchases at wholesale,
tax free, may obtain a sales and use tax certificate of exemption by applying
for same on a form provided by the Department. Upon receipt of a properly
completed application and approval of same by the Department, the applicant
will be issued a state sales and use tax certificate of exemption (Form STE-1)
which can be copied, completed, and provided to vendors as documentation for
tax exempt purchases. A Form STE-1 will not be issued to persons, firms, or
corporations who have a sales tax license issued pursuant to §
40-23-6, Code of Ala.
1975, or who do not have a place of business within the State of
Alabama.
(3) 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, shall be required to obtain a sales and
use tax certificate of exemption to be renewed on an annual basis by applying
for same on a form provided by the Department. Please see Sales and Use Tax
Rule 810-6-5-.02.01, entitled State
Sales and Use Tax Certificate of Exemption for Entities Having a Statutory
Exemption from the Payment of Sales, Use, and Lodgings Taxes, for additional
information.
(4) An application for
a sales and use tax certificate of exemption shall require the following
information:
(a) Applicant's Federal Employer
Identification Number,
(b)
Applicant's business telephone number,
(c) Applicant's legal name, trade name, and
complete mailing address,
(d)
Number of businesses in Alabama and exact location of each (exact location
shall include city, county, and street address; if location is on highway or
rural route, exact location shall include details sufficient to allow
Department personnel to find the place of business),
(e) Indication of the kind and class of
business (i.e. wholesaler, manufacturer, etc.),
(f) Type of products manufactured or
sold,
(g) Reason the exemption is
claimed,
(h) Indication of the
legal form of ownership (sole proprietorship, partnership, corporation, LLC,
etc.),
(i) Copy of certificate of
incorporation or articles of incorporation, if applicable,
(j) Name, title, home address, and social
security number of sole proprietor, each partner, or each corporate officer,
and
(k) Signature of sole
proprietor, each partner, or an elected corporate officer.
(5) The Department, upon approving an
application for a sales and use tax certificate of exemption, 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 false swearing, as to the
validity of the exemption claim,
(f) Certificate holder's name and
address,
(g) Date of approval or
issuance by the Department, and
(h)
Signature of approval by the Department
(6) 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
which the holder gives to the vendor:
(a) Name
and address of the vendor to whom the certificate copy is provided,
(b) Date of the certificate is
provided,
(c) Basis for the
certificate holder's exemption claim, and
(d) Certificate holder's signature and
title.
(7) 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 specifying that all tangible personal property
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 purchased is of the kind
usually purchased for the purpose indicated.
(8) 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.
(9) Certificate holders
must return their certificate to the Department if the business for which the
certificate was issued is closed or if they engage in retail sales for which a
sales tax license is required.
(10)
Certificate holders must notify the Department immediately in writing of any
change in name or address.
(10)
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.
(12) Any person, firm, or corporation selling
tangible personal property tax free who relies on a Form STE-1 and reasonably
believes the tax exemption claim is legal shall not be held liable for sales or
use tax subsequently determined by the Department to be due on the sale for
which the certificate was received. Instead, the Department will collect or
recover the tax due from the party or parties who made the illegal tax-free
purchase with the Form STE-1 and the person or persons who benefited from the
illegal use of the Form STE-1. (Sections
40-23-120 and
40-23-121)
(13) With the exception of the certificates
which are provided for in Sections
40-23-4(a)(10),
40-23-62(12), and
40-23-4.3, Code of
Ala. 1975, Form STC-1 provided for in Sales and Use Tax Rule
810-6-3-.77, and Form STE-2
provided for in Sales and Use Tax Rule
810-6-4-.24.01 pursuant to
Section 40-23-120, the state sales and use
tax certificate of exemption (Form STE-1) is the only exemption certificate or
exemption number which relieves the seller, when acting in good faith and
exercising reasonable care, of liability for any sales or use tax later
determined by the Department to be due on a sale for which an exemption was
originally claimed.
(14) Section
40-23-121 authorizes the
Department to use its powers and responsibilities in accordance with the
general laws of this state to effect collection of any tax due from a purchaser
resulting from the purchaser's unauthorized use of a state sales and use tax
certificate of exemption (Form STE-1). This act will be enforced by the
Department in the same manner as the state Sales or Use Tax Law, as the case
may be, is enforced, including but not limited to the power to examine
purchasers' records; assess tax, penalty, and interest; and file tax liens.
Notes
Author: Ginger Buchanan
Statutory Authority: Code of Ala. 1975, §§ 40-23-31, 40-23-82.
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