(a) All of the materials, equipment, tools, and supplies which they use or consume in the operation of their business and

(b) All building materials attached by them to real property except property qualifying for a specific exemption. See Rule 810 6 1 .27 entitled Building Materials.

(2) Prior to October 1, 2000, contractors or builders may not claim any immunity or exemption from the sales or use tax laws on account of property purchased and used in connection with contracts with the federal, state, county, or city governments. (Lone Star Cement Corporation v. State, Curry v. U.S. et al., 314 U.S. 1, 62 S.Ct. 48 and State v. King & Boozer, 314 U.S. 1, 62 S.Ct. 43 (1941)). (Sections 40 23 1(a)(10) and 40-23-60(5))

(3) On and after October 1, 2000, 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 awarded prior to July 1, 2004, with the United States government, the State of Alabama, and counties and incorporated municipalities of the State of Alabama is exempt from all state, county, and municipal sales and use taxes provided the contractor or subcontractor has complied with Rule 810 6 3 .77 entitled Exemption of Certain Purchases by Contractors and Subcontractors in conjunction with Construction Contracts with Certain Governmental Entities, Public Corporations, and Educational Institutions. (Section 40-9-33)

(4) In accordance with Act No. 2004-638, which repeals Section 40 9 33, 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, counties and incorporated municipalities of the State of Alabama, corporations created for public purposes pursuant to a provision of the Constitution of Alabama of 1901, or a general or local law, or any educational institution of the United States government, the State of Alabama, or a county or incorporated municipality of the State of Alabama is subject to all state, county, and municipal sales and use taxes for any contract awarded on and after July 1, 2004, or any portion of a contract which is revised, renegotiated, or otherwise altered, to the extent that such revision, renegotiation, or alteration requires the purchase of additional tangible personal property. Items purchased after June 30, 2004, pursuant to a contract awarded prior to July 1, 2004, will continue to be exempt for the remainder of the contract to the extent that any post June 30, 2004, revision or amendment does not require the purchase of additional tangible personal property. (Sections 40-2A-7(a)(5), 40-23-1(a)(10), 40-23-31, 40-23-60(5) 40-23-83, and 40-9-33, Code of Alabama 1975, Act No. 2000-684) (Readopted through APA effective October 1, 1982, amended March 27, 2001, amended June 10, 2005)