AL HB337

Amends Section 40-9-14.1 of the Code of Alabama 1975 to expand the definition of "governmental entity" to include tax-exempt public water or sewer authorities, systems, and boards.

Specifies eligible water and sewer entities organized under Articles 1, 8, 9, and 10 of Chapter 50, Title 11, and Article 1 of Chapter 88, Title 11 of Alabama Code.

Allows these water and sewer authorities to obtain certificates of exemption from state and local sales and use taxes for building materials and construction supplies that become part of project structures.

Contractors and subcontractors using exemption certificates must maintain accurate cost accounting and file reports of exempt purchases as a prerequisite for certificate renewal.

Contractors who intentionally misuse exemption certificates face civil penalties of at least $2,000 or twice the unpaid sales/use tax, and may be barred from using exemption certificates for up to two years.

Effective date is the first day of the third month following passage and approval by the Governor.