Section 40-9-33

Sales to a contractor of cetain personal property to be incorporated into realty.

(a) The gross proceeds of the sale to, or the storage, use, or consumption by, any contractor or subcontractor of any tangible personal property to be incorporated into realty pursuant to a contract with the United States government, the State of Alabama, a county or incorporated municipality of the State of Alabama, a corporation created for public purposes pursuant to a provision of the Constitution of Alabama of 1901, or a general or local law of the State of Alabama, or any educational institution of the United States government, the State of Alabama, or a county or incorporated municipality of the State of Alabama shall be exempt from all state, county, and municipal sales and use taxes. The exemption provided herein shall not apply to the following:

(1) Any purchases of tangible personal property by a contractor or subcontractor for storage, use, or consumption in conjunction with performing a contract with a governmental entity, public corporation, or educational institution that is not itself exempt from state sales and use taxes.

(2) Any purchases by the contractor or subcontractor of tangible personal property that is not incorporated into realty pursuant to the contract.

(b) The Department of Revenue may promulgate rules and regulations requiring contractors or subcontractors who qualify for the exemption under subsection (a) to apply for and obtain an exemption certificate which the contractor or subcontractor shall use to claim the exemption when making qualifying tax exempt purchases from vendors. Liability for sales and use taxes found to be due on tax exempt purchases made illegally with these exemption certificates shall be determined in accordance with the provisions of Section 40-23-120, and the collection and recovery of the taxes due shall be made in accordance with Section 40-23-121.

(Act 2000-684, p. 1389, §1.)