3975-2:N:01/14/1998:jl/jl LRS97-4457
| SYNOPSIS: | Under existing law, legislation must be passed for each individual organization seeking exemption from state and local sales and use taxes. |
| This bill would provide a general exemption from state and local sales and use taxes for any organization falling into one of certain categories. | |
| This bill would provide for the issuing of exemption certificates and would allow final determination on an organization's exempt status by the Commissioner of the Department of Revenue. |
To provide a general exemption from state and local sales and use taxes for certain categories of organizations; to provide for the issuance of exemption certificates; and to provide final determination by the commissioner of revenue.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. (a) There is exempt from the provisions of Chapter 23 of Title 40 of the Code of Alabama 1975, any sales or use tax upon tangible personal property or taxable services sold, given, or donated to any of the following:
(1) Church, temple, synagogue, or mosque.
(2) University.
(3) College.
(4) School.
(5) Orphanage.
(6) Institution organized for the principal purpose of placing homeless children in foster homes.
(7) Home for the aged.
(8) Hospital.
(9) Girls' club.
(10) Boys' club.
(11) Community health council.
(12) Volunteer fire department.
(13) Organ bank for transplantable tissue.
(14) Organization whose primary objective is to promote the spiritual and recreational environment of members of the armed services of the United States, such as the United Service Organization as it is presently conducted.
(15) Historical property owned by a historical commission recognized under Article 10, Chapter 9, Title 41 of the Code of Alabama 1975.
(16) Nonprofit community blood bank.
(17) Senior citizen service centers which meet the standards set by the Alabama Commission on Aging for eligibility to receive state funds.
(18) Humane society or animal shelters.
(b) In addition to the exempt institutions, organizations, and historical properties described in subsection (a), there are also exempt such other institutions and organizations which have received a determination of exemption from the Internal Revenue Service under § 501(c)(3), (c)(5) labor organizations, (c)(13) not-for-profit cemetery companies, and (c)(19) of the Internal Revenue Code (26 U.S.C. § 501(c)(3),(c)(5), and (c)(19)) and are currently operating under it, and any war-time era veterans' organization which has received a determination of exemption from the Internal Revenue Service under § 501(c)(4) of the Internal Revenue Code (26 U.S.C. § 501(c)(4)) and which is chartered by the United States Congress.
(c) Any exemption granted under subsection (a) or (b) shall be limited to such institutions, organizations, or historical properties which are not organized or operated for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual.
(d) Any exemption granted under the preceding subsections shall only apply to sales, gifts, or donations made directly to the exempt institution, organization, or historical property. There shall be no exemption upon sales, gifts, or donations made to an independent contractor with any such exempt institution, organization, or historical property.
(e) No dealer shall sell, give, or donate, and no user shall use, any tangible personal property under the claim that the same is exempt from the sales or use tax levied by Chapter 23 of Title 40 of the Code of Alabama 1975, where the exemption from taxation is claimed because the vendee or user is an educational, religious, or charitable institution or organization or historical property and is entitled to an exemption as such institution or organization or historical property under subsections (a) to (d), inclusive, unless the vendee or user shall have issued to it by the Commissioner of the Department of Revenue an exemption certificate declaring that the institution or organization or historical property is entitled to the exemption provided for by subsections (a) to (d), inclusive. In the case of a sale to a person who is not a resident or domiciliary of Alabama, an exemption certificate issued by the commissioner is not required if the dealer instead receives from the person a copy of a current and valid exemption from federal taxation under 26 U.S.C. § 501(c)(3). The dealer shall maintain a copy of the exemption in the dealer's records to document that the purchaser was entitled to the exemption.
(f) The Commissioner of the Department of Revenue may make a final determination after hearing, if demanded, as to whether any institution or organization or historical property is entitled to the benefit of the exemption established by this act. The commissioner may issue exemption certificates to institutions, organizations, and historical properties which, in the commissioner's judgment, are entitled to an exemption.
(g) No tax exemption as permitted by this act applies to the purchase of bingo materials, supplies, equipment, or cards.
Section 2. This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.