SB11 Alabama 2021 Session

Summary

Primary Sponsor

Sam GivhanSenator

Republican

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

SB11 gives airport authorities a full sales and use tax exemption and expands tax-exemption certificates for projects they oversee, while reducing the annual paperwork for these authorities.

What This Bill Does

It exempts airport authorities from state, county, and municipal sales and use taxes beginning January 1, 2020. It adds airport authorities to the governmental entities that can receive tax-exemption certificates for specific projects, allowing contractors and subcontractors to purchase building materials tax-free for those projects (materials must become part of the project and be properly accounted for). It requires reporting of exempt purchases, sets penalties for misuse, and allows the Department of Revenue to adopt implementing rules; it also aims to lower administrative costs and clarifies bidding to reflect tax savings. The changes apply to contracts entered into after certain dates and do not apply to older contracts, with some distinctions for public water or sewer authorities learned in the bill text; the act becomes effective immediately after the governor signs it.

Who It Affects

• Airport authorities: receive full state, county, and municipal sales and use tax exemption; may participate as a governmental entity eligible for exemption certificates on projects; may not be required to obtain an annual exemption certificate for certain purposes.
• Contractors and subcontractors working on government projects involving airport authorities: may obtain certificates of exemption to purchase building materials and other tangible property that become part of the project; must keep cost accounting and file required reports; face penalties for improper use or misreporting; subject to potential bans from using exemptions for violations.
• Alabama Department of Revenue: responsible for issuing exemption certificates, enforcing proper use, collecting reports, assessing taxes when exemptions are not properly accounted for, and issuing penalties; may adopt rules to implement the new provisions.

Key Provisions

• Section 1: Explicitly exempts airport authorities from state, county, and municipal sales and use taxes starting January 1, 2020.
• Section 2: Expands the meaning of 'governmental entity' to include airport authorities for tax-exempt projects and allows certificates of exemption to be issued to governmental entities and to contractors/subcontractors for materials that become part of the project; requires cost accounting, ready for inspection, and mandatory reporting as a prerequisite to exemption certificates; imposes penalties and possible bar from exemptions for misuse; allows DOR to adopt implementing rules; excludes highway/road/bridge contracts from certain exemptions; sets operative dates and pre-existing contract exclusions.
• Section 3: Updates to Section 40-9-60 clarify exemption administration for governmental entities (including airport authorities), with annual exemption certificates primarily applying to non-governmental exemptions; reinforces definitions and operative framework for governmental entities.
• Overall effect: The bill lowers administrative costs for airport-related public works by formalizing tax exemptions, extending exemption eligibility to airport authority projects, and reducing the need for annual exemption filings for these authorities, while maintaining enforcement mechanisms and reporting requirements.

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