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AL HB440
Bill
Status
5/4/2023
Primary Sponsor
Joe Lovvorn
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AI Summary
HB440 Summary
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Department of Revenue issues sales and use tax exemption certificates to contractors and subcontractors licensed by the State Licensing Board for General Contractors purchasing materials for construction projects on behalf of statutorily exempt entities.
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Exemption certificates apply only to tangible personal property that becomes part of the structure being constructed; contractors must maintain accurate cost accounting of all exempt purchases.
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Contractors must file reports of all exempt purchases as a prerequisite to renewing exemption certificates, with reporting requirements prescribed by the department.
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Department may assess unpaid sales and use taxes on improperly accounted items, and intentional violations result in civil penalties of two times the tax owed (minimum $2,000) plus potential debarment from exemption certificates for up to two years.
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Provision becomes operative for contracts entered into on or after January 1, 2024, and does not apply to contracts executed before that date or their subsequent modifications.
Legislative Description
Relating to taxation and revenue; to provide for the Department of Revenue to grant certificates of exemption from sales and use taxes to contractors and subcontractors licensed by the State Licensing Board for General Contractors for the purchase of building materials and construction materials to be used in the construction of a building or other project for an entity statutorily exempt from paying sales and use taxes; and to provide for accounting for purchases and enforcement for violations.
Last Action
Introduced and Referred to House Ways and Means Education
5/4/2023