AL SB295

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

Allows these public water and sewer entities to receive certificates of exemption from state and local sales and use taxes from the Department of Revenue for tax exempt projects.

Contractors and subcontractors working on projects for these entities can purchase building materials, construction materials and supplies, and tangible personal property free from sales and use taxes.

Requires contractors to maintain accurate cost accounting of exempt purchases and file reports as a prerequisite to renewal of exemption certificates.

Imposes civil penalties of not less than $2,000 or twice the state and local sales tax owed on contractors who intentionally misuse exemption certificates, with potential debarment from using exemptions for up to two years.