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AL SB292
Bill
AI Summary
SB292 Summary
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Department of Revenue shall issue certificates of exemption from state and local sales and use taxes to licensed contractors and subcontractors purchasing building and construction materials for 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 with exemption certificates must file reports of all exempt purchases as a prerequisite to certificate renewal, as prescribed by the department.
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Department may assess contractors with sales and use taxes on improperly accounted items and impose civil penalties of two times the tax due (minimum $2,000) plus potential two-year ban from using exemption certificates for intentional violations.
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Law is effective for contracts entered into on or after January 1, 2024, and does not apply to prior contracts, change orders, or contract extensions when the original contract predates January 1, 2024.
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
Enacted
5/31/2023