AL SB99

Amends Section 40-9-14.1 of the Code of Alabama to extend sales and use tax exemption certificates to contractors working on highway, road, and bridge construction projects for tax-exempt governmental entities, effective for contracts entered into on or after January 1, 2022.

Previously, contractors were eligible for exemption certificates on construction materials for building projects for governmental entities, but highways, roads, and bridges were explicitly excluded; this bill removes that exclusion for new contracts starting in 2022.

Exemption certificates apply only to tangible personal property that becomes part of the structure and require contractors to maintain accurate cost accounting of purchases and file reports as a prerequisite for certificate renewal.

Contractors who intentionally misuse exemption certificates face civil penalties of at least $2,000 or twice the sales tax due, plus potential two-year bars from using exemption certificates on any project.

Becomes effective October 1, 2020; does not apply retroactively to contracts, change orders, or extensions entered into before January 1, 2022.