HB337 Alabama 2017 Session

Summary

Primary Sponsor

Danny CrawfordRepresentative

Republican

Session

Regular Session 2017

Title

Taxation, certain public water, sewer, gas electric, and fire protection authorities, boards, and systems eligible as government entities for state and local sales and use tax exemptions, Sec. 40-9-14.1 am'd.

Summary

HB337 broadens sales and use tax exemptions to include tax-exempt public water and sewer authorities and related boards or systems, with rules for how exemptions apply to public works projects.

What This Bill Does

It adds tax-exempt public water/sewer authorities, systems, and boards to the governmental entities that can receive exemption certificates from the Department of Revenue. It allows these entities and their contractors to purchase building materials and other property for exempt public works projects, with required accounting. It requires proper reporting and cost accounting, and imposes penalties for misuse; the changes apply to contracts entered on or after January 1, 2014 and are not retroactive to pre-2014 contracts.

Who It Affects

• Tax-exempt public water or sewer authorities, systems, or boards (and their associated educational institutions) that would become eligible to receive exemption certificates for qualifying projects.
• Contractors and subcontractors working on tax-exempt public works projects who would purchase materials under exemption certificates and must maintain cost accounting, file required reports, and face potential penalties for misuse.

Key Provisions

• Amends Section 40-9-14.1 to include tax-exempt public water or sewer authorities, systems, or boards, and their educational institutions, within the definition of governmental entities eligible for exemption certificates.
• The Department of Revenue shall issue exemption certificates for each tax-exempt project and to contractors/subcontractors purchasing qualifying building materials for those projects.
• Contractors/subcontractors must maintain accurate cost accounting for exempt purchases and ensure purchases become part of the project; these records are required for certificate renewal.
• Contractors must file reports of exempt purchases; violations may lead to state/local tax assessments and civil penalties (minimum $2,000 or 2x the tax due), with possible removal from exemption eligibility for up to two years for willful misuse.
• The department may adopt rules to implement the section; bids on tax-exempt projects must reflect tax savings.
• Intended to lower administrative costs; does not change how professional services are valued (fair market value).
• Operative for contracts entered on or after January 1, 2014; does not apply to contracts entered before that date, including related change orders or extensions.
• Effective date: the first day of the third month after passage/approval.

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