HB284 Alabama 2011 Session

Summary

Primary Sponsor

Randy WoodRepresentative

Republican

Session

Regular Session 2011

Title

Sales and use tax, governmental entities that are tax exempt, construction projects, certain contractors and subcontractors to be granted certificates of exemption by Revenue Department to purchase materials

Summary

HB284 would let licensed general contractors obtain sales and use tax exemption certificates to buy materials for government construction projects, shifting exemption authority from governments to contractors with rules and penalties for misuse.

What This Bill Does

The Department of Revenue would issue exemption certificates to contractors and subcontractors licensed by the State Licensing Board for General Contractors for materials used in construction for tax-exempt government projects. Purchases with the certificate must be directly used in the project and require accurate cost accounting. The department could assess taxes for improperly accounted purchases and impose penalties for misuse, including penalties up to twice the tax due and possible removal from the certificate for up to two years; rules to implement the act may be adopted, and the act has a specified effective date.

Who It Affects

• Contractors and subcontractors licensed by the State Licensing Board for General Contractors: they would be eligible to receive exemption certificates and must maintain cost accounting, with penalties for improper use.
• Tax-exempt governmental entities (state, counties, municipalities, boards) administering construction projects: they would benefit from exemptions being applied through contractor purchases rather than the entity's own purchases, under the new system.

Key Provisions

• The Department of Revenue shall grant certificates of exemption from sales and use taxes to licensed contractors/subcontractors for purchases of building materials and other supplies used in government construction projects.
• Certificates may be used only for tangible property directly used in the construction project and require accurate cost accounting of purchases and use.
• The department may assess sales or use taxes on items not properly accounted for, and may impose a civil penalty equal to twice the tax due for intentional misuse, with possible bar from future certificates for up to two years.
• The department may adopt rules to implement the act, and the act becomes operative on October 1, 2011 (with rules possible after the effective date).

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation