HB14 Alabama 2021 Session

Summary

Primary Sponsor

Rex ReynoldsRepresentative

Republican

Co-Sponsor

Andy Whitt

Session

Regular Session 2021

Title

Airport authorities, sales and use tax exemption, issuance of certificate of exemptions by Revenue Dept., Secs. 40-9-14.1, 40-9-60 am'd.

Summary

HB14 would exempt airport authorities from sales and use taxes and expand exemption-certificate rules for tax-exempt projects, with penalties for misuse and changes to annual certification requirements for non-government entities.

What This Bill Does

It exempts airport authorities from state, county, and municipal sales and use taxes starting January 1, 2020. It adds airport authorities to the governmental entities that may receive exemption certificates for tax-exempt projects and clarifies they are not required to obtain an annual exemption certificate. It allows contractors and subcontractors on tax-exempt projects to receive exemption certificates for purchases of building materials that become part of the project, with requirements for cost accounting and reporting, and it specifies that highways, roads, or bridges contracts are not eligible. It establishes penalties for misuse, and it gives the Department of Revenue authority to adopt implementation rules and require bids to show tax savings.

Who It Affects

• Airport authorities: become fully exempt from state, county, and municipal sales and use taxes and may receive project-based exemption certificates; they are not required to obtain an annual exemption certificate.
• Contractors and subcontractors on government tax-exempt projects: may obtain exemption certificates for purchases of construction materials that become part of the project, must maintain cost accounting and file exempt-purchase reports, and face penalties or possible disqualification for misuse.

Key Provisions

• Airport authorities are exempt from paying any state, county, and municipal sales and use taxes beginning January 1, 2020.
• Airport authorities are included among governmental entities that may receive a certificate of exemption for tax-exempt projects and are not required to obtain an annual certificate of exemption.
• The Department of Revenue shall issue certificates of exemption to governmental entities for tax-exempt projects and to contractors/subcontractors for purchases of materials that become part of the project, with restrictions (materials must become part of the structure; cost accounting required; not for highways/roads/bridges).
• Contractors/subcontractors must maintain accurate cost accounting for exempt-purchase materials and file exemption reports as a prerequisite to renewing the certificate of exemption; improper reporting can lead to penalties.
• The Department may assess state and local taxes for unaccounted exempt purchases and impose civil penalties for misuse; misuse can lead to a bar from using exemption certificates for up to two years.
• The Department may adopt rules to implement the section, including rules for annual exemption certificates for entities not covered by government exemptions and for verifying exemptions.
• Bids on tax-exempt projects must include an accounting of tax savings; the law aims to lower administrative costs for governmental entities, contractors, and subcontractors.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation