HB340 Summary

• Amends Section 40-9-14.1 of the Alabama Code to extend sales and use tax exemption certificates to contracts for construction of highways, roads, and bridges entered into on or after January 1, 2022.

• Maintains existing exemption certificate requirements for contractors and subcontractors, including accurate cost accounting, reporting of exempt purchases, and bid forms accounting for tax savings.

• Imposes civil penalties on contractors or subcontractors who intentionally misuse exemption certificates, including minimum penalties of $2,000 or two times the tax due, and possible debarment from using exemptions for up to two years.

• Exempts contracts for highways, roads, and bridges from exemption certificate requirements if the original contract was entered into prior to January 1, 2022, or if they are change orders or extensions of pre-2022 contracts.

• Becomes effective October 1, 2021, following passage and Governor approval.