810-1-6-.03. Definitions.

810-1-6-.04. Internet-Based Electronic Filing and Payment of Taxes to be Provided Through Electronic Return Originators.

810-1-6-.06. Electronic Payment Requirements and Determining Timely Payment.

810-1-6-.07. Determining Timely Filing of Electronic Returns.

The due date for filing electronic returns for the taxes enumerated in Rule 810-1-6-.05 shall be the same due date for filing the corresponding tax returns on paper. The date and time the taxpayer completes the filing of the tax return utilizing the paperless filing and payment system as documented on the confirmation page or spoken through the IVR system shall be the date and time used to determine timely filing of the electronic return. (Authority: Sections 40-2A-7(a)(5), 40-30-1, 40-30-2, 40-30-3, 40-30-4, 40-30-5 and 40-30-6, Code of Alabama 1975) (Adopted through APA effective October 4, 2001, amended November 4, 2009)

810-1-6-.12.  Taxes Required to be Filed Electronically.

(a)  No Computer,
 
(b)  No Internet Access,
 
(c)  Incompatible Computer Hardware,
 
(d)  No Access to a Telephone,
 
(e)  Any special circumstance (i.e.  physical disability) deemed worthy of a waiver by the Commissioner of Revenue.
 
1.  A waiver request must be submitted in writing and include the business name and address, account number and reason(s) why a method other than the prescribed method is necessary.

810-1-6.13.  Requirements for Third-Party Bulk Filers.

(a) Submit returns and payments for those taxes required to be filed electronically, in a timely manner using the electronic filing systems made available by the Department for taxpayers having a valid account with the Department.
 
(b) Submit a separate electronic payment for each return, account, or filing period.
 
(c) Maintain on file the client’s power of attorney allowing the third-party to file returns and/or pay Alabama taxes on behalf of the client and, upon request, provide a copy to the Department. The power of attorney must also indicate the authorization for the third-party to receive information about filings or payments directly from the Department.
 
(d) Electronically provide the Department, on a monthly basis, an updated client list containing at least the name, current mailing address, account number, and telephone number for those clients for whom they are authorized to file.  The mailing address listed for the client must be the client’s actual street or post office box address and not the third-party bulk filer’s address.

1.  Initial client list must show all clients.

2.  Subsequent updates should show only additions and deletions.

(a)  Where an antenna or satellite dish, along with parts and attachments therefor, is sold for a lump sum amount which includes both the antenna or satellite dish and the cost of erection or installation, such lump sum amount shall be used as the measure of the tax to be paid to the State. In instances where separate contracts are made for the sale of the antenna or satellite dish and other property and for the erection or installation, the tax should be measured by the sales price only, provided that the billing to the customer and the books of the seller clearly show the receipts from sales and from erection and installation.
 
(b)  In instances where dealers in radio and television receiving sets sell antennas or satellite dishes with parts and attachments therefor which they do not themselves furnish or install, but which are furnished and installed for them by an outside supplier, the sale of antennas or satellite dishes and other property sold in connection therewith are made at wholesale, tax free, by the outside supplier to the dealer who has made the retail sale. The dealer in these instances must collect and remit tax to the State in accordance with the rule stated in subparagraph (a).
 
(c)  Where dealers and suppliers make over-the-counter sales of antennas or satellite dishes and parts and attachments therefor to customers not for resale, such sales to consumers are subject to sales tax which is to be collected by the seller and paid to the State.
 
(d)  The dealers and suppliers who make the sales described in subparagraphs (a), (b), and (c) above purchase at wholesale, tax free, the antennas or satellite dishes and parts and attachments therefor which are resold by them. (Section 40-23-1(a)(10))

810-6-1-.05.  Auctioneer.

810-6-1-.06.  Automobile Painting.

810-6-1-.07.  Automobile Parts Installed for Customer.

810-6-1-.08.  Automobile Repair Shops.

810-6-1-.08.01.  Automotive Supply Jobbers, Sales by.

10-6-1-.09.  Automobile Repair Shops and Garages.

810-6-1-.10.  Automobile Seat Covers, Top Linings, Vinyl Tops.

810-6-1-.12.  Automotive Vehicles.

810-6-1-.12.01.  Courtesy Deliveries of Automotive Vehicles by Alabama Dealers for Out-of-State Dealers.

810-6-1-.13.  Awnings.

810-6-1-.14.  Awnings, Metal.

810-6-1-.22.  Barter, Exchange, Trade-In.

(a)  The agreed value placed on automotive vehicles, truck trailers, semitrailers, or house trailers taken in trade on sales of other automotive vehicles, truck trailers, semitrailers, or house trailers. On so called "trade-ups" this allowance shall not exceed the sales price of the vehicles sold by the dealer. (Sections 40-23-2(4) and 40-23-61(c))
 
(b)  Exchanges of cottonseed for cottonseed meal at or by gins. (Sections 40-23- 4(6) and 40-23-62(9))
 
(c)  The agreed value placed on any used part including tires of an automotive vehicle, truck trailer, semitrailer, or house trailer taken in trade as a credit or part payment on the sale of a new, used or rebuilt part or tire, for an automotive vehicle, truck trailer, semitrailer or house trailer; provided, however, this provision shall not include batteries. (Section 40-23-2(1))
 
(d)  The agreed value placed on any machine, machinery, or equipment used in planting, cultivating, and harvesting farm products or used in connection with the production of agricultural produce or products, livestock or poultry on farms taken in trade on the sale of other farm machines, machinery, or equipment. (Section 40-23-37)

810-6-1-.23.  Beer Tax.

Whether billed separately to the purchaser or included in a lump sum selling price; state, county, and municipal excise taxes on beer may not be excluded from the measure of sales or use tax. (Sections 40-23-1(a)(6) and 40-23-1(a)(8)) (Adopted August 15, 1974, amended October 29, 1976, amended June 12, 1978, amended August 10, 1982, readopted through APA effective October 1, 1982, amended April 3, 1987, amended May 22, 1993)

810-6-1-.24.  Bingo.

810-6-1-.27.  Building Materials.

(a)  "It would seem that the business done by building contractors generally has been considered to be rendering service rather than selling materials at retail to the owner of the building or land. As to what amounts to a sale at retail within sales tax acts the statutes and the courts seem to endeavor to lay the tax on the last sale before the use or consumption of the goods or articles sold". (State Board of Equalization v. Stanolind Oil and Gas Company, Wyoming).
 
(b)  "A contractor who buys building material is not one who buys and sells - a trader. He is not a dealer, or one who habitually and constantly, as a business, deals in and sells any given commodity. He does not sell lime and cement and nails and lumber. Sales to contractors are sales to consumers." (State v. J. Watts Kearny & Sons, Louisiana).
 
(c)  "Under the contracts before us in the case, plaintiffs agreed to build sewers and buildings requiring the use of sand, gravel, cement and steel. They were the persons using these materials, even though after their metamorphosis they became part of a structure whose title vested in the Sanitary District of Chicago. Under these circumstances it would be unreasonable to characterize the transfer of the materials incorporated in the completed structures as a sale." (Herlihy Mid-Continent Company v. Nudelman, Illinois)

810-6-1-.28.  Building Materials Defined.

(a)  Actual connection with or attachment to real property. To become a part of real property, the device or appliance must have some physical connections such as: by bolts, screws, nails, cement piping, or cable; by contact, where by reason of great weight or bulk, no additional attachment is required; by contact, where the device or appliance is necessary to make complete or useable something which is real property; by attachment to another device or appliance which has become a part of real property.
 
(b)  Appropriateness to the use or purpose of the real property to which connected. The use or purpose of the device or appliance must become an element of the use or purpose of the real property to which it is connected.

810-6-1-.29.  Building Materials Manufactured by Contractors.

(a)  Manufactured cost of materials, plus transportation to job site, plus proportionate part of general overhead, selling cost, and profit equals reasonable and fair market value of materials.

810-6-1-.30.  Carpeting and Other Floor Coverings.

810-6-1-.31.  Carrying Charges, Finance Charges.

810-6-1-.32.  Casings Sold to Meat Processors.

The terms "wholesale sale" or "sale at wholesale" shall include a sale to meat packers, manufacturers, compounders or processors of meat products of all casings used in molding or forming wieners and vienna sausages even though such casings may be recovered for reuse. (Section 40-23-1(a)(9)h) (Adopted September 26, 1966, readopted through APA effective October 1, 1982)

810-6-1-.33.  Casual Sales.

810-6-1-.33.01.  Application of Casual Sales Tax and Use Tax to Automotive Vehicles, Motorboats, Truck Trailers, Trailers, Semitrailers, Travel Trailers, and Manufactured Homes Purchased from the U.S. Government, the State of Alabama, or Counties or Incorporated Municipalities of the State of Alabama.

810-6-1-.33.02.  State Casual Sales and Use Tax Returns.

(a)  Licensing official's tax account number, name, and complete address,
 
(b)  Period covered by the return,
 
(c)  Amount of casual sales and use tax collected on automotive vehicles, truck trailers, trailers, semitrailers, travel trailers, and manufactured homes,
 
(d)  Administrative fee for timely payment,
 
(e)  Penalties and interest due, if applicable,
 
(f)  Net amount after deducting administrative fee from or adding applicable penalties and interest to Item (c),
 
(g)  Amount of casual sales and use tax collected on motor boats,
 
(h)  Administrative fee for timely payment,
 
(i)  Penalties and interest due, if applicable,
 
(j)  Net amount after deducting administrative fee from or adding applicable penalties and interest to Item (g),
 
(k)  Total amount remitted,
 
(l)  An indication if payment of tax is made through electronic funds transfer (EFT), and
 
(m)  Signature of the licensing official and the date signed.

(Adopted through APA effective April 1, 1996)

810-6-1-.34.  Caterers.

810-6-1-.35.  Chemicals Used in Treating Crude Oil.

Subject to the criteria outlined in Sales and Use Tax Rule 810-6-1-.80 entitled Ingredient or Component of Product Manufactured or Compounded for Sale, chemicals used in treating crude oil which become an integral part thereof and are sold therewith, are purchased at wholesale, tax free, for such purposes. (Sections 40-23-1(a)(9)b and 40-23- 60(4)b) (Readopted through APA effective October 1, 1982, amended December 10, 1997)

810-6-1-.36.  Commercial Fish Feed.

810-6-1-.37.  Computer Hardware and Software.

810-6-1-.38.  Consigned Property.

Sellers of property held on consignment are required to include the gross proceeds of sales of such property in sales tax returns filed under the Sales Tax Law. (Section 40-23- 1(a)(6)) (Readopted through APA effective October 1, 1982)

810-6-1-.45.  Contractors Furnishing and Erecting Building Materials Under Contract With the United States.

(1) Sections 40-23-4(a)(17) and 40-23-62(2) specifically exempt the United States government from paying sales or use tax on its purchases of tangible personal property. These exemptions, however, do not apply to purchases by a contractor where the contractor has a construction contract with the United States government to furnish all materials and labor for use in the performance of the contract. The contractor is the consumer of all the materials which the contractor purchases and uses in the performance of the construction contract and which become a part of real property. The United States Supreme Court in State of Alabama v. King & Boozer, 314 U.S. 1, 62 S.Ct. 43 (1941), and in Curry v. U.S., et al., 314 U.S. 1, 62 S.Ct. 48, held that the Alabama sales and use taxes on building materials used by building contractors for the United States government were due by such contractors even though the costs of such taxes were passed on to the United States government. The court held that these taxes were levied on the contractors and not on the United States. On and after October 1, 2000, however, a contractor’s purchases which do not qualify for the exemptions in Sections 40-23-4(a)(17) and 40-23-62(2) may qualify for the new sales and use tax exemption outlined in paragraph (2) below. (Sections 40 23 1(a)(10) and 40-23-60(5))

 

(2) 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 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)

 

(3) On and after July 1, 2004, 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 is subject to all state, county, and municipal sales and use taxes for any contract awarded, or any portion of a contract which is revised, renegotiated, or otherwise altered, on and after July 1, 2004, 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), 40-23-4(a)(17), 40-23-31, 40-23-60(5), 40-23-62(2), 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)

810-6-1-.46.  Contractor's Liability.

 

(1) Contractors or builders must pay either to the seller or directly to the Department of Revenue sales or use tax on the following:

(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)

810-6-1-.46.01.  Bleacher Systems, Lockers, Backstops, and Other Fixtures Installed in Gymnasiums.

(1) Materials or fixtures which are purchased by contractors and are intended to become permanently affixed or attached to gymnasiums, or other realty, are "building materials" and are taxable at the time of purchase by the contractor. (See Rules 810-6-1-.27 and 810-6-1-.28) (Sections 40-23-1(a)(10) and 40-23-60(5))

 

(a) Prior to October 1, 2000, these purchases are taxable even when the materials are used by the contractor in furnish and install contracts with tax exempt governmental entities and tax-exempt educational institutions. A contractor that sells the materials to a tax exempt entity under one contract and affixes the materials to realty under a second contract with the same tax exempt entity is liable for sales or use tax; the fact that the materials are sold and installed under separate contracts does not qualify the contractor's purchase of materials for the sales or use tax exemptions found in Sections 40 23 4(a)(11), 40-23-4(a)(15), 40-23-4(a)(17), 40-23-62(2), 40 23 62(13), and 40 23 62(16). (State of Alabama v. Algernon Blair Industrial Contractors, Inc., 362 So. 2d 248 (Ala. Civ. App. 1978) and Alabama Precast Products, Inc. v. Charles A. Boswell, 357 So. 2d 985 (Ala. 1978)). On and after October 1, 2000, however, purchases by contractors which do not qualify for the exemptions in Sections 40 23 4(a)(11), 40-23-4(a)(15), 40-23-4(a)(17), 40-23-62(2), 40 23 62(13), and 40-23-62(16) may qualify for the sales and use tax exemption outlined in paragraph (1)(b) below. (Rule 810 6 3 .69.02)

 

(b) On and after October 1, 2000, the sale of materials or fixtures to, or the storage, use, or consumption of materials or fixtures by, any contractor or subcontractor to be permanently affixed or attached to gymnasiums or other realty pursuant to a contract awarded prior to July 1, 2004, with the United States government, the State of Alabama, a county or incorporated municipality of the State of Alabama, or a federal, state, county, or municipal educational institution is exempt from 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, Code of Alabama 1975)

 

(2) Criteria used in determining whether materials furnished and installed in gymnasiums, or other realty, become additions to real property include but are not limited to the following: the materials are physically attached to the realty with bolts; the materials when attached are intended to be permanent and are easily identified with a part of the realty; and the materials are appropriate to the realty to which they are attached that is the materials or fixtures perform a function appropriate to the real property and such function is necessary or convenient to the normal and appropriate uses of the real property. Examples of these items include but are not limited to the following: wall attached telescopic bleacher systems, reverse fold telescopic bleacher systems, lockers, and basketball backstops.

 

(3) Materials which (i) are not intended to become permanently affixed or attached to gymnasiums, or other realty, (ii) are intended to be mobile, and (iii) do, in fact, retain their identity as tangible personal property; qualify for the sales or use tax exemptions found in Sections 40 23 4(a)(11), 40-23-4(a)(15), 40-23-4(a)(17), 40-23-62(2), 40 23 62(13), and 40-23-62(16) when sold to tax exempt governmental entities or tax-exempt educational institutions. These items are subject to sales or use tax when sold to nonexempt entities. Criteria used in determining whether materials remain tangible personal property include but are not limited to the following: the materials are not intended to become permanently affixed to realty; the materials can be easily moved from one location to another, and can even be stored out of sight or moved from building to building. An example of an item of this nature includes, but is not limited to, a mobile telescopic bleacher system. (Sections 40 23 1(a)(10) and 40 23 60(5))

 

(4) On and after July 1, 2004, 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 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, or any portion of a contract which is revised, renegotiated, or otherwise altered on and after July 1, 2004, to the extent that such revision, renegotiation, or alteration requires the purchase of additional tangible personal property. If the “change order” or revision does not require the purchase of additional tangible personal property, the change will not cause the contract to lose its exempt status. 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), 40-23-31, 40-23-83, 40-23-1(a)(10) 40-23-60(5), and 40-9-33, Code of Alabama 1975) (Adopted through APA effective January 27, 1998, amended March 27, 2001, amended June 10, 2005)

810-6-1-.47.  Coupons, Receipts from Redemption.

A retail dealer's total receipts in cash, goods, or by credit from the redemption of coupons issued by manufacturers or distributors are to be included in the measure of tax to be paid where the coupons are accepted by him in exchange for, or as part payment for tangible personal property. (Section 40-23-1(a)(6))(Readopted through APA effective October 1, 1982)

810-6-1-.50.  Dentists, Dental Laboratories, and Dental Supply Houses.

810-6-1-.51.  Deposit on Bottles.

810-6-1-.52.  Direct Mail Advertising, Printer's Liability.

(a)  The printer is located outside Alabama. The mailing list contains the names of people located within Alabama and people located outside Alabama. Use tax is due on the printed matter addressed to people within Alabama.
 
(b)  The printer is located within Alabama. The mailing list contains names of people located within Alabama and people located outside Alabama. Sales tax is due on the printed matter addressed to people within Alabama. Sales tax is not due on the printed matter addressed to people outside Alabama since these sales qualify for exemption as sales in interstate commerce.

810-6-1-.53.  Cash Discounts.

Cash discounts when allowed and taken are not to be included in gross proceeds of sales. (Section 40-23-1(a)(6)) (Readopted through APA effective October 1, 1982)

810-6-1-.54.  Discounts Based on Volume Sales.

Discounts allowed and claimed on the basis of volume sales are deductible from gross sales for sales tax purposes. Such discounts are allowable either on sales as they are made or on accumulated sales totals. (Section 40-23-1(a)(6)) (Readopted through APA effective October 1, 1982)

810-6-1-.55.  Doctors, Medical.

810-6-1-.56.  Dual Business.

810-6-1-.58.  Electrical Supplies and Equipment Sold to Contractors and Manufacturers.

(a)  The expressions "made or manufactured for use on," "necessary to the operation of," and "customarily used" are understood to mean that the part or attachment must be purchased substantially in the form in which it will be used by the manufacturer except for the usual and customary adjustments; that it is a standard part or attachment customarily used; and, further, that the machine or machinery on which it is used would not do the work for which designed if it were not so used. This includes all parts and attachments without which the machine would not do any work. In addition, it includes parts and attachments designed to increase the efficiency of the machine.
 
(b)  Items of electrical equipment including starters, switches, and circuit breakers which become a part of or an attachment to a machine used in manufacturing are taxed at the reduced machine rate of sales or use tax. This equipment must either be attached directly to the machine or be immediately adjacent to the machine in order to qualify for the reduced machine rate. (Sections 40-23-2(3) and 40-23-61(b))

810-6-1-.59.  Welding Rods and Fluxes.

810-6-1-.60.  Opticians, Optometrists, and Ophthalmologists.

810-6-1-.61.  Engravers.

Sales of materials to engravers are at wholesale, tax free, when such materials become a component of the engravings, etc., produced for sale. The machines used by the engraver manufacturing the engravings, etc. are taxable at the machine rate. The supplies, materials and equipment not becoming a component of the product sold or not constituting machines used in manufacturing are subject to the sales or use tax, whichever may apply. (Sections 40-23-1(a)(9)b) and 40-23-2(3)) (Readopted through APA effective October 1, 1982)

810-6-1-.62.  Engravers, Sales of Materials are at Wholesale, Tax Free When Such Materials Become a Component of the Engraving.

Sales of materials to engravers are at wholesale, tax free, when such materials become a component of the engravings, etc., produced for sale. The machines used by the engraver manufacturing the engravings, etc., are taxable at the machine rate. The supplies, materials, and equipment not becoming a component of the product sold or not constituting machines used in manufacturing are subject to the sales or use tax, whichever may apply. (Sections 40-23-1(a)(9)b) and 40-23-1(a)(10)) (Readopted through APA effective October 1, 1982)

810-6-1-.63.  Federal Admission Taxes.

The federal taxes required to be paid on single admissions, season tickets, and rental of boxes are not to be included in the measure of Alabama sales tax where such federal taxes are shown as a separate item properly identified on the tickets or receipts given to the person paying such admissions or rentals or purchasing such tickets. (Readopted through APA effective October 1, 1982)

810-6-1-.64.  Federal Excise Taxes, Manufacturers.

810-6-1-.65.  Federal Excise Taxes, Retailers.

810-6-1-.66.  Fencing.

810-6-1-.67.  Florists, Telegraphic Orders.

When florists sell through a telegraphic delivery association the following rules will apply:

(a)  Alabama florists are liable for sales tax measured by total receipts resulting from orders taken by them for transmittal to a second florist who makes delivery either within or without Alabama. Any expense of making the sale is to be included in the measure of the tax regardless of whether or not the expense is billed as a separate item.
 
(b)  Sales tax does not apply to amounts received by Alabama florists who make deliveries in this state pursuant to telegraphed or telephoned instructions received from florists either within or without Alabama.(Adopted March 9, 1961, amended July 30, 1962, readopted through APA effective October 1, 1982, amended July 9, 1998)

810-6-1-.69.  Containers, Components of Containers, Labels, Pallets, and Shipping Supplies.

(a)  This exclusion for manufacturers and compounders may apply to both inner and outer containers. Accordingly, when manufacturers or compounders place their manufactured or compounded products in cans or bottles and place the cans or bottles in fiber boxes for shipment to the customer; the cans or bottles and the fiber box qualify for the exclusion if both are intended for one-time use. Alabama-Georgia Syrup Co. v. State, 253 Ala. 49, 42 So. 2d 796 (1949).
 
(b)  Containers, when purchased by manufacturers or compounders for use in purchasing and storing product ingredients prior to using them as ingredients in the manufacturing or compounding process and not purchased for use as one-time-use containers for shipping the manufactured or compounded product to customers, do not qualify for the exclusion. Alabama-Georgia Syrup Co. v. State, 253 Ala. 49, 42 So. 2d 796 (1949).

(a)   Sales of containers to persons engaged in selling, supplying, or furnishing baby chicks to growers where the containers are for use in the delivery of the baby chicks to the grower. (Sections 40-23-1(a)(9)f and 40-23-60(4)f)
 
(b)   Sales of egg crates and egg cartons to egg producers for use in the delivery of eggs to distributors or packers. (Sections 40-23-1-(a)(9)f and 40-23-60(4)f)
 
(c)  Sales of bagging and ties for use in preparing cotton for market. (Sections 40-23-1(a)(9)g and 40-23-60(4)g)
 
(d)  Sales of wrapping paper and other wrapping materials to producers, processors, packers, or wholesale or retail sellers of poultry or poultry products for use in preparing poultry or poultry products for delivery, shipment, or sale. This exemption includes (i) pallets used in shipping poultry and eggs, (ii) paper, and (iii) other materials used to line boxes or other containers in which poultry or poultry products are packed together with any other materials including ice placed in the containers for the delivery, shipment, or sale of poultry or poultry products. (Sections 40-23-4(a)(20) and 40-23-62(21))

(a) RETAIL FOOD STORES (GROCERY & MEAT MARKETS):

(1)  Nontaxable only if accompanies sale and cannot be reused.

(b) FOOD AND BEVERAGE SERVERS:


(Restaurants, Drive-ins, Cafeterias, Concession Stands, Bars, Lounges, and Night Clubs)

(1)  When used as sandwich wrap - NT, when used as napkin - T.

(2)  Nontaxable only if accompanies sale and cannot be reused.

(c) LAUNDRY AND DRY CLEANING SUPPLIES:

(d) RETAIL BAKERY AND CANDY SHOPS:

(1)  Nontaxable only if accompanies sale and cannot be reused.

(2)  If used as part of package.

(e) DRUG, VARIETY, AND SUNDRY STORES: (See also Food and Beverage Servers)

(1)  Nontaxable only if accompanies sale and cannot be reused.

(2)  If used as part of package.

(f) FLORISTS AND NURSERIES: (1)

(g) RETAIL DEPARTMENT STORES & SPECIALTY STORES:


(Includes Book and Stationery Stores, Gift Shops, Hardware Stores, etc.)

(h) MEAT AND POULTRY PACKERS, FOOD LOCKERS AND DAIRIES: (1)

(1)  If the sales are made to a food locker business - it must be determined if the products are used in rendering a service, or if they are in the actual retail meat business. If they are wrapping meat for customers to be stored in their individual lockers - this is a service and the items are taxable.

(i) FARMS, ASSEMBLERS OF FARM PRODUCTS:

(1)  Nontaxable if accompanies sale and cannot be reused.

(Readopted through APA effective October 1, 1982, amended July 25, 1994, amended July 30, 1998)

810-6-1-.72.  Gases: Acetylene, Oxygen, Hydrogen.

810-6-1-.73.  Gases: Propane and Butane.

Sales at retail of propane and butane gases or any similar gas are subject to sales or use tax, whichever may apply. (Section 40-23-1(a)(10)) (Readopted through APA effective October 1, 1982)

810-6-1-.75.  Gratuities and Tips.

810-6-1-.76.  Hospitals, Infirmaries, Sanitariums, and Like Institutions - Private.

810-6-1-.77.01.  Ice, Sales of.

810-6-1-.79.03.  Industrial Uniforms, Sales or Replacement of.

When a lessee is required under a contract with the lessor to reimburse the lessor for the depreciated value of any item lost or not returned by the lessee, the transaction is not a retail sale; therefore, no sales tax is due. (See State of Alabama v. Industrial Uniform Services, Inc.) (Adopted June 12, 1978, readopted through APA effective October 1, 1982).

810-6-1-.80.  Ingredient or Component of Product Manufactured or Compounded for Sale.

810-6-1-.80.01.  Oils Used in Aluminum Rolling Process.

Oils used in the hot or cold aluminum rolling processes have been determined to remain on and become an ingredient or component part of the rolled aluminum and, therefore, subject to the criteria outlined in Sales and Use Tax Rule 810-6-1-.80 entitled Ingredient or Component of Product Manufactured or Compounded for Sale may be purchased by the processor at wholesale, free of sales or use tax. (Sections 40-23-1(a)(9)b and 40-23- 60(4)b) (Adopted through APA effective January 29, 1990, amended December 10, 1997)

810-6-1-.80.02.  Materials Purchased by Manufacturers and Compounders for Use as Rust Preventatives or Protective Coatings.

Materials, including grease and other petroleum products, purchased by manufacturers or compounders for use as a rust preventative or a protective coating for metal products while in storage or in shipment are exempt from sales or use tax when they remain on the final product manufactured or compounded for sale. (Sections 40-23-1(a)(9)b and 40-23- 60(4)b) (Adopted through APA effective January 27, 1998)

810-6-1-.81.  Installation Charges.

810-6-1-.81.01.  Interior Decorators and Interior Designers.

(1) Interior decorators and interior designers making retail sales of tangible personal property in Alabama must apply for and obtain a sales tax license. Further, these interior decorators must collect sales tax from their clients on their retail sales of tangible personal property and remit the tax to the Department of Revenue. Out of state interior decorators and interior designers, who do not have a place of business in Alabama but for whose business sufficient nexus exists, must register to collect sellers use tax on their Alabama sales and collect and remit sellers use tax to the Department of Revenue on those sales. (Sections 40 23 6 and 40 23 66)

(2) Fees charged by interior decorators or interior designers in conjunction with sales of tangible personal property are a part of the gross proceeds of sales and must be included in the measure of sales or use tax charged to and collected from their clients. Fees charged by interior decorators or interior designers are taxable even if they are billed to clients as an amount separate from the cost of tangible personal property on a cost plus basis. (Sections 40 23 1(a)(6), 40 23 1(a)(8), and 40 23 60(10))

(3) Sales or use tax does not apply to fees charged by interior decorators or interior designers solely for consultation or designing services when no sale of tangible personal property occurs in conjunction with those services.

(4) In those instances where interior decorators or interior designers receive a fixed sum fee which is not in any way contingent upon the sale of tangible personal property and, subsequently, sell tangible personal property in a completely unrelated transaction, the fixed sum fee is not a part of the selling price of the tangible personal property and is not subject to sales or use tax.

(5) Interior decorators or interior designers who contract to furnish and install tangible personal property which becomes a part of realty are the users or consumers of such property and owe sales or use tax on the cost of the property so used or consumed. Property withdrawn from inventory by an interior decorator or interior designer for use in performing contracts for additions or improvements to realty must be reported as taxable withdrawals and the sales tax thereon remitted directly to the Department of Revenue. The measure of tax on withdrawals is the cost of the property to the interior decorator or interior designer who withdraws the property. Except as enumerated in Rule 810 6 3 .77, interior decorators or interior designers making additions or improvements to realty may not claim immunity or exemption from sales or use tax on account of property purchased and used in connection with contracts with the federal, state, county, or city governments. The fact that a governmental agency has advised the interior decorator or interior designer not to include tax on the invitation to bid or purchase order would not relieve the interior decorator or interior designer from liability for sales or use tax on the cost of materials used in fulfilling a contract with that agency for making additions or improvements to realty. (Sections 40 23 1(a)(10) and 40-23-60(5)) (Adopted through APA effective April 26, 1991, amended March 27, 2001, amended June 10, 2005)

810-6-1-.84.  Labor or Service Charges.

(a)  Labor or service charges, whether included in the total charge for the product or billed as a separate item, are taxable if the labor or service (i) is incidental to making, producing, or fabricating a new or different item of tangible personal property or otherwise preparing the tangible personal property for sale and (ii) is performed prior to transfer of title to the purchaser. (Sections 40-23-1(a)(6), 40-23-1(a)(8), and 40-23-60(10), Code of Alabama 1975)
 
(b)  Labor or service charges are not taxable when billed for labor or services expended in repairing or altering existing tangible personal property belonging to another in order to restore the property to its original condition or usefulness without producing new parts. When repair work includes the sale of repair parts in conjunction with repairs to existing tangible personal property belonging to another, only the sales price of the repair parts is taxable provided the charges for the repair parts and the charges for the repair labor or repair services are billed separately on the invoice to the customer. If the repairman fabricates repair parts which are used in conjunction with repairs to existing tangible personal property belonging to another, the total charge for the parts, including any labor or service charges incurred in making, producing, or fabricating the parts, is taxable even if the fabrication labor or service charges are billed to the customer as a separate item. (Sections 40-23-1(a)(6), 40-23-1(a)(8), and 40-23-60(10), Code of Alabama 1975) (Readopted through APA effective October 1, 1982, amended December 28, 1998)

810-6-1-.85.  Laundries, Dry-Cleaning Establishments.

810-6-1-.88.  Lawyers.

Lawyers use law books, supplies, and equipment, which books, etc., are taxable. (Section 40-23-2(1)) (Readopted through APA effective October 1, 1982)

810-6-1-.89.  Lease Sales - Retention of Title.

Transfers of property constitute sales when made under lease-sale or retention-of-title contracts where these contracts contemplate transfer of ownership when all of the agreed upon payments have been made. (Section 40-23-1(a)(5)) (Readopted through APA effective October 1, 1982)

810-6-1-.89.02.  Licensed Dealers, Sales to.

810-6-1-.90.  Machine Shops.

810-6-1-.91.  Made-to-Order and Custom Sales.

Where persons contract to manufacture, compound, process or fabricate their materials into articles of tangible personal property according to the special order of their customers, the total receipts from the sales of such articles are subject to the sales or use tax, whichever may apply. The seller may not deduct any of his costs, nor can he deduct any of his charges for labor or services, which are an item of the production or fabrication costs of the article, to arrive at the taxable amount. Articles commonly made to order are curtains, draperies, tents, awnings, clothing, and slipcovers. The person making sales of made-to-order and custom made articles purchases the materials which become a component or ingredient of their products at wholesale, tax free. The equipment, tools and supplies used or consumed in the production of such articles and not becoming a part thereof are subject to tax, except that machines used in such production are specifically taxed at one and one-half percent rather than the general rate of four percent. (Section 40-23-1(a)(6) ) (Adopted March 9, 1961, amended November 1, 1963, readopted through APA effective October 1, 1982)

810-6-1-.93.  Materials From Which Patterns are Manufactured.

Pattern makers who make patterns which they sell to others for use, purchase at wholesale tax free the materials from which such patterns are made. (Adopted March 9, 1961, amended November 1, 1963, readopted through APA effective October 1, 1982)

810-6-1-.94.  Materials Used in Plating.

810-6-1-.95.  Materials Used in Repairing.

(a)  Materials which pass to the repairman's customer and which do not lose their identity when used by the repairman and which are a substantial part of the repair job (such as auto repair parts, radio tubes, and condensers) are sold at retail by the repairman. He must collect and report sales tax on such sales, including tax on the service incidental thereto. He may, however, if making a separate agreement to sell the repair parts and to perform the labor and service required, collect and remit the tax only upon the price of the parts if his records and his invoices clearly show a separation of the amounts received from sales and parts and from rendering service.
 
(b)  Materials which pass to the repairman's customer but which lose their identity when used by the repairman or which are inconsequential in amount, such as paint, solder, and tacks, are considered to have been used or consumed by the repairman and are taxable at the time of sale to him.
 
(c)  Materials which are used or consumed by the repairman and which do not pass on to his customer are supplies and taxable when sold to the repairman. (Section 40-23- 1(a)(10))
 
(d)  Materials which fall in classes (b) or (c) are purchased at wholesale for use by a repairman who, in addition to using such materials as a repairman, sells the same kinds of materials for use by others. These materials become subject to the sales tax upon their withdrawal for use by the repairman under the withdrawal feature of Section 40-23-1(6), (8), and (10). Note however, that a repairman is not to be considered a vendor of these classes of materials unless he carries a stock of them and sells outright therefrom a substantial amount. If the repairman makes only isolated sales or "accommodation" sales of these materials he is not to be considered as a seller of them under the sales tax law, in which case his supplier must collect the tax.

810-6-1-.97.  Materials Used on Road and Bridge Projects.

(1) (a) Sales of sand, gravel, or other building materials by landowners or other suppliers who regularly sell or offer to sell these materials are subject to sales tax when made to contractors for the State of Alabama or the counties or municipalities of the State for use by the contractors in building roads or bridges. This rule applies in all instances where the contractor is obligated by the terms of the contract to furnish, to pay for, and to lay down the materials, including sales of materials which have been selected by and on which an option has been taken by the state or the counties or municipalities of the State. The supplier shall collect the tax from the contractor and remit the amount due to the Department of Revenue. (Sections 40-23-1(a)(10) and 40-23-60(5))

(b) Where an isolated sale of sand, gravel, or similar material is made to a contractor by a landowner who is not engaged in the business of selling such material, the isolated sale will not be required to be reported to the Department and neither sales tax nor use tax will be due from the landowner or from the contractor on the transaction.

(c) On and after October 1, 2000, the sale of sand, gravel, or other building materials by landowners or other suppliers to, or the storage, use, or consumption of these materials by, any contractor or subcontractor to be incorporated into realty pursuant to a road or bridge construction contract with the State of Alabama or any county or incorporated municipality of the State of Alabama pursuant to a contract awarded prior to July 1, 2004, is exempt from 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, Code of Alabama 1975) (Sections 40-2A-7(a)(5), 40-23-1(a)(10), 40-23-31, 40-23-60(5), and 40-23-83, Code of Alabama 1975, Act No. 2000-684) (Readopted through APA effective October 1, 1982, amended March 27, 2001, amended June 10, 2005)

810-6-1-.98.  Mattress Renovation.

810-6-1-.99.  Meals Served by Boarding Houses.

Food furnished by operators of boarding houses is not considered to be sold at retail when the charge for such food is a lump sum covering meals for a week or for a month and when such food is not offered for sale to the general public. The supplier of food stuff is required to collect the tax from the operator at the time of the sale to him. The boarding house operator is considered to be rendering a service rather than making sales and is regarded as the consumer of the materials he purchases. This rule does not apply to meals furnished by schools and colleges. (See Rule 810-6-2-.50.) (Adopted October 1, 1959, readopted through APA October 1, 1982, amended January 10, 1985)

810-6-1-.100.  Meals, Snacks, Drinks, and Beverages Served in Alabama by Railroads, Airlines, and other Transportation Companies

810-6-1-.101.  Meals Served to School Children in the School Buildings.

Lunches sold within school buildings, not for profit, to school children are exempted from the sales tax. This exemption is construed to mean sales of lunches to pupils of kindergartens, grammar, and high schools, either public or private. (Readopted through APA effective October 1, 1982)

810-6-1-.102.  Meals Sold to the Public.

Sales of prepared foods and drinks of all kinds for consumption on or off the premises of the seller are subject to the sales tax, which tax must be collected and remitted by the seller, except as otherwise stated in Sales and Use Tax Rules 810-6-1-.99 Meals served by Boarding Houses, 810-6-2-.51 Meals Sold by Schools and 810-6-1-.100 Meals, Snacks, Drinks, and Beverages Served in Alabama by Railroads, Airlines, and other Transportation Companies. (Section 40-23-2(1), Code of Alabama 1975) (Readopted through APA effective October 1, 1982, amended July 30, 1998)

810-6-1-.103.  Metal Name Plates.

Plates attached by the manufacturer to his products for identification purposes are purchased at wholesale as a component part of the property manufactured for sale. (Section 40-23-1(a)(9)c) (Readopted through APA effective October 1, 1982)

810-6-1-.104.  Microfilming of Records.

The microfilming of records is a service transaction with the material cost being incidental to the transaction. Sales and/or use tax will be due on films, equipment, and other supplies purchased for use in microfilming records. (Legal Division Opinion February 10, 1978) (Adopted June 12, 1978, readopted through APA effective October 1, 1982)

810-6-1-.105.  Modular Buildings.

(a)  An instate builder or manufacturer of modular building components or units who builds or manufactures the components or units for resale in the form of tangible personal property to persons who affix them to realty, shall obtain a sales tax license and purchase all building materials, fixtures and other equipment becoming part of the modular building components or units without payment of sales or use tax to the suppliers. The builder or manufacturer of the modular building components or units shall (i) collect sales tax on any retail sales of the components or units sold in Alabama measured by the selling price of the components or units and (ii) report and pay the sales tax to the Department of Revenue on those retail sales.
 
(b)  In the event an instate builder or manufacturer of modular building components or units, who has obtained a sales tax license pursuant to paragraph (2)(a), also contracts to affix modular building components or units to realty either inside or outside Alabama, the builder or manufacturer shall be liable for sales tax computed on the cost price of the materials withdrawn from inventory and used to build or manufacture the components or units which the builder or manufacturer affixes to realty pursuant to the contract.

(a)  Out-of-state builders or manufacturers of modular building components or units, who do not have a place of business in Alabama but for whose business sufficient nexus exists, shall (i) register to collect sellers use tax on their Alabama sales of modular building components or units which are sold in the form of tangible personal property to persons who affix them to realty and (ii) report and pay the tax to the Department of Revenue on their Alabama sales. The measure of the sellers use tax is the selling price of the components or units. Purchases of modular building components or units from out-of-state builders or manufacturers who are not registered to collect sellers use tax are subject to consumers use tax. Consumers use tax should be computed and paid by the purchaser measured by the purchase price of the components or units. (Section 40-23-60(5))
 
(b)  An out-of-state builder or manufacturer of modular building components or units, who contracts to affix modular building components or units to realty inside Alabama, is liable for consumers use tax computed on the cost price of the materials incorporated into the components or units which the builder or manufacturer affixes to realty in Alabama pursuant to the contract. Credit for legally imposed sales and use taxes paid to any other state or its subdivisions will be allowed against the Alabama use tax due as outlined in Rule 810-6-5-.04. (Sections 40-23-60(5) and 40-27-1, Article V.1, Code of Alabama 1975) (Adopted August 15, 1974, readopted through APA effective October 1, 1982, amended October 20, 1998)

810-6-1-.106.  Monuments, Memorial Stones, Grave Markers, and other Decorative or Commemorative Objects.

810-6-1-.107.  Movie Theaters.

810-6-1.107.02.  Motor Freight Lines, Sales to.

Any sale of property to motor freight lines is subject to the sales tax where the property is delivered in Alabama by a seller doing business in Alabama. This is true even though the purchase order may have been given out-of-state to an out-of-state branch of the seller and even though payment is made out-of-state. (Readopted through APA effective October 1, 1982)

810-6-1-.109.  Name Plates, Metal.

Plates attached by the manufacturer to his products for identification purposes are purchased at wholesale as a component part of the property manufactured for sale. (Section 40-23-1(a)(9)c) (Readopted through APA effective October 1, 1982)

810-6-1-.110.  Newspapers.

810-6-1-.110.01.  Newspapers, Sales of.

810-6-1-.111.  Occasional Sale.

Property acquired for use or consumption may be sold tax free at a private sale completely disassociated from any retail business which may be operated by the seller. (Attorney General Opinion Price, May 12, 1937) (Readopted through APA effective October 1, 1982)

810-6-1-.112.  Outdoor Advertising Signs.

810-6-1-.113.  Outside Signs, Furnished.

Outside signs furnished by a manufacturer to his customers, when such signs are furnished without cost to the customers, are subject to the sales or use tax when purchased by the manufacturer. These signs are not purchased to be resold, nor are they purchased as a component of the property manufactured for sale by the manufacturers. (Section 40-23-1(a)(9)) (Readopted through APA effective October 1, 1982)

810-6-1-.114.  Painters.

810-6-1-.116.  Parts and Materials Used to Repair or Recondition Dealers' Automobiles.

810-6-1-.117.  Pawnbrokers.

Pawnbrokers are required to file sales tax returns covering all property sold by them, including in the taxable retail sales reported sales of property forfeited to them by reason of the pawner's failure to redeem. (Section 40-23-2(1)) (Readopted through APA effective October 1, 1982)

810-6-1-.118.  Peddlers, Truckers.

810-6-1-.119.  Photographs, Photostats, Blueprints, etc.

810-6-1-.123.  Pig and Scrap Iron.

When a manufacturer of iron pipe withdraws pig and scrap iron from his raw materials stock to be used by him in casting machine parts for his use, he must add the cost of such materials into his gross proceeds of sales. (Issued January, 1951, readopted through APA effective October 1, 1982)

810-6-1-.124.  Pipe Fittings.

Ordinarily pipe fittings are used by builders, contractors, or landowners as building materials which are taxed in accordance with the building material provision found in the definition of retail sales. In some instances, however, pipe fittings are used as standard parts or attachments for machines used in manufacturing, in which case they are entitled to the special machine rate of tax. See rule 810-6-2-.57 entitled Parts and Attachments For Machines Used in Manufacturing. (Sections 40-23-1(a)(10), 40-23-2(3)) (Readopted through APA effective October 1, 1982)

810-6-1-.125.  Places of Amusement or Entertainment.

(a) Live or recorded performances, whether by individual ticket or by season tickets:

1. ballet performances;
2. circuses;
3. ice-skating shows;
4. motion pictures;
5. musical concerts;
6. opera performances;
7. outdoor theaters; and
8. theaters (movies and plays)

(b) Exhibitions or displays:

1. animal shows (contests, exhibitions);
2. antique shows;
3. arts and crafts, and art shows (fairs);
4. auto, boat or gun shows;
5. museums (that display art objects, antique autos, etc.); and
6. zoos

(c) Spectator sports:

1. automobile races;
2. drag strip operations;
3. horse shows (horse riding exhibitions);
4. motorcycle races;
5. rodeos;
6. sporting events such as football, baseball, basketball, hockey, and soccer games; and
7. wrestling or boxing;

(d) Participatory sports or games:

1. arcades where amusement devices such as pinball machines or video games are played;
2. bowling games;
3. go-cart races;
4. golf courses;
5. golf driving ranges;
6. Internet cafes where amusement devices such as game consoles and computer stations are assembled for game play and have computer network access or Internet access to the video or computer games.  (The Docking Station, LLC v. State of Alabama (Admin. Law Div. Docket S. 07-124, Final Order decided May 1, 2007));
7. miniature golf courses;
8. para-sail boats;
9. pool (billiard) games;
10. skate board tracks;
11. skating rinks;
12. swimming pools; and
13. water slides;

(e) Fairs or carnivals:

1. amusement parks;
2. carnivals;
3. fairs;
4. games of skill, at a circus, carnival, etc.
5. shooting galleries (ranges); and
6. side shows;

(f) Other:

1. boat rides or sight-seeing tours for pleasure (marine life viewing, sunset sailboat cruises, dinner cruises, etc.);
2. cover charges (for admission to dance halls, nightclubs, discos, etc. that provide dancing, music, or other entertainment); and
3. rides for pleasure in helicopters, hot-air balloons, trains, etc.

810-6-1-.125.01.  Amusement Tax Due on Fees Collected by Golf Courses open to the Public.

(a)  reciprocal play agreements with other golf courses that are also not open to the public.
 
(b)  play by guests of a member (whether or not accompanied by the member).
 
(c)  hosting a tournament in compliance with the provisions of Section 40-23- 4(a)(39), as amended.
 
(d)  periodically holding invitational or charitable tournaments.
 
(e)  the sale of condominium units the purchase of which carries with it the privilege of using the golf course facilities.

(Adopted through APA effective October 12, 1993)

810-6-1-.126.  Pole Line Construction.

Materials used in the construction of pole lines for the transmission of electric power and telephone, telegraph, radio, and television signals are building materials. These materials are purchased at retail subject to sales or use tax, whichever may apply, by the persons who erect the pole lines into place by attachment to real property. These materials include poles, lines, lightning arresters, circuit breakers, switch gear, all pole accessories and also include all the materials and equipment used in the construction of substations. This class of materials is subject to tax at the four percent rate with the exception of transformers and amplifiers which are taxable at the machine rate of one and one-half percent. (Sections 40-23-1(a)(10), 40-23-2(3)) (Adopted May 26, 1961, effective July 1, 1963, amended November 1, 1963, readopted through APA effective October 1, 1982)

810-6-1-.128.  Postal Uniforms.

810-6-1-.129.  Premiums and Gifts.

A sale of tangible personal property is taxable when made to a person who will use the property as a prize or a premium or will give the property away as a gift. (Section 40-23- 1(a)(10)) (Readopted through APA effective October 1, 1982)

810-6-1-.130.  Printers.

(a)  A buyer enters into a contract with a printer for the printing of advertising circulars, catalogs, etc., and directs the printer to deliver the printed material to a newspaper or several newspapers, or directs that they be delivered to another location, sometimes the buyer's place of business. The buyer then enters into a second contract with the newspaper for distribution of the inserts. That portion of advertising supplements or inserts retained by the buyer for distribution to buyer's customers, that do not become part of newspapers manufactured for sale, will be subject to sales tax. However, those advertising supplements or inserts that are delivered to the purchasers or newspaper companies to be inserted into and become part of the newspaper are purchased at wholesale, tax free. Ralph P. Eagerton, Jr. v. Dixie Color Printing Corporation.
 
(b)  Newspaper advertising supplements and inserts which are inserted into newspapers and sold as part and parcel of the newspaper, the retail sales of which are subject to the sales tax, no sales tax arises where such advertising supplements or inserts are:
(1)  printed by the publishers of the newspaper and inserted into and sold as part and parcel of the newspaper published by such publishers or
 
(2)  printed by another printer for the newspaper publisher and paid for by the newspaper publisher for insertion into and sold as part and parcel of the newspaper. (Adopted March 9, 1961, amended November 1, 1963, amended August 16, 1974, amended June 12, 1978, readopted through APA effective October 1, 1982, amended January 10, 1985)

810-6-1-.131.  Withdrawals of Products Manufactured, Compounded, or Processed for Sale.

810-6-1-.132.  Proofs, Wholesale, Tax Free.

Sales of materials to the processors of the proofs are at wholesale, tax free, when such materials become a component part of the proofs produced for sale. (Section 40-23- 1(a)(9)b) (Readopted through APA effective October 1, 1982)

810-6-1-.133.  Pump Installed by a Contractor.

(1) A contractor who installs a pump for a county or incorporated municipality of the State of Alabama is required to pay tax on his or her purchase of the pump. The pump is in the same category as any other building materials which become affixed to realty. When title to a pump installed under contract passes from the contractor to the landowner, it has ceased to be personal property and has become real property. (Sections 40 23 1(a)(10) and 40 23-60(5))

(2) On and after October 1, 2000, the sale of a pump to, or the storage, use, or consumption of a pump by, any contractor or subcontractor to be incorporated into realty pursuant to a contract with any county or incorporated municipality of the State of Alabama awarded prior to July 1, 2004, is exempt from 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 Code of Alabama 1975) (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)

810-6-1-.134.  Pumps.

Well pumps when installed become realty along with well casing, pumphouse, well connections, etc. The person who installs the pump is the purchaser at retail who must pay sales tax or use tax, as the case may be. (Section 40-23-1(a)(10)) (Readopted through APA effective October 1, 1982)

810-6-1-.137.  Raw Materials and Supplies Purchased by Manufacturers and Compounders.

810-6-1-.138.  Rebuilding of Tracks, Idlers, and Rollers.

(a)  Sales or use tax shall be paid by the repairman-dealer to the supplier on all purchases of materials used in rebuilding the tracks, idlers, and rollers unless the repairman-dealer elects to claim the exemption provided by Section 40-23-1(a)(9)k for materials purchased or withdrawn for use in rebuilding tracks, idlers, and rollers which are part of the repairman-dealer's stock of goods for sale.
 
(b)  If the repairman-dealer elects to claim the exemption in Section 40-23-1(a)(9)k, all materials becoming a part of the rebuilt tracks, idlers, and rollers shall be purchased at wholesale tax-free by the repairman-dealer and the repairman-dealer shall maintain suitable records to distinguish between the materials used in rebuilding the tracks, idlers, and rollers offered for sale by the repairman-dealer and the materials used by the repairman-dealer in rebuilding the tracks, idlers, and rollers of others. If suitable records are maintained, the repairman-dealer shall collect and remit sales tax on sales of rebuilt tracks, idlers, and rollers in accordance with paragraph (2) and shall compute and pay sales tax on the cost of the materials withdrawn and used in rebuilding tracks, idlers, and rollers belonging to others.
 
(c)  In the event suitable records are not kept by the repairman-dealer to determine which materials are used in rebuilding tracks, idlers, and rollers offered for sale by the repairman-dealer, then all materials used by the repairman-dealer shall become a taxable withdrawal by the repairman-dealer. The sales tax due on withdrawals by the repairman-dealer shall be computed on the purchase price or cost to the repairman-dealer of the materials withdrawn for use. (Section 40-23-1(a)(10))

810-6-1-.140.  Recordings Purchased for Use with Musical Devices.

Recordings purchased for use in operating musical devices are subject to sales or use taxes whichever may apply. When such recordings have served their purpose in connection with the operation of musical devices and are sold at retail as used recordings as a regular course of business by the machine operators, such sales are subject to sales tax. (Section 40-23-1(a)(10)) (Readopted through APA effective October 1, 1982)

810-6-1-141.  Repairs, Outside or Sublet.

810-6-1-.142.  Repairs to Equipment.

Where a repairman in Alabama repairs equipment, materials which pass to the repairman's customer but which lose their identity when used by the repairman or which are inconsequential in amount such as, paint, solder, and tacks are considered to have been used or consumed by the repairman and are taxable at the time of the sale to him. (Readopted through APA effective October 1, 1982)

810-6-1-.143.  Repairs to Real Property.

810-6-1-.144.  Repairs to Tires and Tubes.

(a)  Where the repairman uses repair materials for tube and minor tire repairs only, he shall pay tax thereon to his supplier; or, if purchased outside of Alabama from a supplier who does not collect Alabama tax, he shall pay the tax direct to the Department of Revenue as use tax.
 
(b)  Where the repairman does recapping, retreading, and major repairing as well as tube and minor tire repair, he may purchase at wholesale all materials used in tire and tube repairing; then shall pay sales tax direct to the Department of Revenue on the cost price of materials withdrawn for use in tube and minor tire repairing.

810-6-1-.144.03.  Resale, Sales for.

All buyers of property for resale purposes are entitled to purchase at wholesale, tax free, the property they resell as regular course of business when they have secured the sales tax license required by law. This rule also applies to retailers located outside Alabama when they have secured the sales tax license required by law in the state in which they are located. (Section 40-23-6) (Adopted August 10, 1982, readopted through APA effective October 1, 1982)

810-6-1-.145.  Meals Furnished to Employees by Restaurants.

Restaurants, cafes, and other eating establishments are liable for sales tax on meals furnished to their employees as part of a compensation plan. The measure of tax is the value of food withdrawn and consumed by the employees.(State v. Morrison Cafeterias Consolidated, Inc., 487 So.2d 898 (Ala. 1985)) (Sections 40-23-1(a)(6) and 40-23-1(a)(10)) (Readopted through APA effective October 1, 1982, amended April 3, 1987, amended March 10, 1998)

810-6-1-.147.  Returned Merchandise.

810-6-1-.148.  Rural Electrification Authority (R.E.A.).

Cooperatives set up under authority of United States Rural Electrification Laws are not instrumentalities of any governmental body. All purchases are subject to the sales and use tax, whichever may apply, except when otherwise specifically exempted. (Section 40-23- 1(a)(10)) (Readopted through APA effective October 1, 1982)

810-6-1-.150.  Sale.

The term "sale" or "sales" includes installment and credit sales and the exchange of property as well as the sale thereof for money, every closed transaction constituting a sale. Each transaction whereby property is transferred from one owner to another constitutes a sale under the sales tax law except in instances where the property is transferred as a gift or where possession without ownership is given on a rental or lease basis with no intention to transfer ownership at the end of the rent or lease period. (Section 40-23- 1(a)(5)) (Readopted through APA effective October 1, 1982)

810-6-1-.150.05.  Sand, Gravel, and other Building Materials, Sales of.

810-6-1-.166.  Shoe Repairs.

810-6-1-.167.  Structural Steel.

Structural steel is a building material and, for that reason, is usually subject to tax at the general rate at the time of its sale to the builder, contractor, or landowner who purchases it to add to or alter real property. This is in accordance with the building material provision found in the definition of "retail sale". nbsp; In some instances, however, steel fabricators bill out machine parts as structural steel, in which case, where the facts show that the steel purchased is a part or attachment for a machine used in mining, quarrying, manufacturing, processing, or compounding, the machine rate will apply. (Sections 40-23-1(a)(10), 40-23- 2(3)) (Readopted through APA effective October 1, 1982)

810-6-1-.168.  Table Wine Tax.

Whether billed separately to the purchaser or included in a lump sum selling price; the table wine tax levied pursuant to Code of Alabama 1975, Section 28-7-16, may not be excluded from the measure of sales or use tax. Sections 40-23-1(a)(6) and (40-23- 1(a)(8)) (Adopted November 3, 1980, amended March 16, 1981, readopted through APA effective October 1, 1982, amended January 10, 1985, amended May 22, 1993)

810-6-1-.170.  Theatrical Productions, Symphonies, etc.

810-6-1-.172.  Taxability of Cross Ties and Timbers.

(a)  Where untreated cross ties or timbers are purchased from outside this state and also creosoted outside this state and subsequently brought into this state for use, the measure of the use tax shall be the cost of the untreated ties or timbers plus the cost of creosoting. (Section 40-23-60(5), Code of Alabama 1975)
 
(b)  Where untreated cross ties or timbers are purchased from outside this state and brought into this state and creosoted within this state prior to their use, the measure of the use tax shall be the cost of the untreated ties and timbers since the materials used in creosoting the ties or timbers are taxable when purchased or withdrawn by the person performing the service. (Section 40-23-60(5))
 
(c)  Where untreated cross ties or timbers are purchased within Alabama for shipment in interstate commerce without paying the Alabama sales tax and where the cross ties or timbers are shipped outside this state for creosoting and subsequently shipped into and used within this state, the purchase is subject to the use tax as measured by the full price of the finished product brought into this state. (Section 40-23-60(5))
 
(d)  Where the Alabama sales tax is paid on the purchases of untreated cross ties or timbers and the cross ties or timbers are subsequently creosoted either within this state or outside this state, the purchaser would owe no additional Alabama sales or use tax on the cross ties or timbers. (Section 40-23-1(a)(6))
 
(e)  Cross ties and timbers are taxable when sold under bulk contract with the purchaser inspecting and approving the material at the plant or yard of the seller and the seller segregating and allotting the approved material to the purchaser for future shipment according to subsequently issued shipping instructions. This material is to be reported by the seller as subject to tax in accordance with the provisions of Section 40-23-8. (Sections 40-23-2(1) and 40-23-8))
 
(f)  Cross ties and timbers are classified as building materials and are taxed at the general rate of sales or use tax except when used as a roadway for quarrying or mining equipment in which event the sales of cross ties and timbers are subject to the reduced mining or quarrying rate of sales or use tax. (Sections 40-23-2(1), 40-23-61(a), 40-23-2(3), and 40-23-61(b))

810-6-1-.173.  Tin Shops.

810-6-1-.174.  Tobacco tax.

Whether billed separately to the purchaser or included in a lump sum selling price; state, county, and municipal tobacco excise taxes may not be excluded from the measure of sales or use tax. (Sections 40-23-1(a)(6) and 40-23-1(a)(8)) (Adopted August 5, 1963, amended October 29, 1976, readopted through APA effective October 1, 1982, amended May 22, 1993)

810-6-1-.175.  Top Soil, Fill Dirt, Sand and Gravel.

810-6-1-.176.  Trade Stamps and Trade Coupons.

When making a sale of tangible personal property where as an incident thereto trade stamps or trade coupons are issued free to the purchaser, the seller shall collect and remit sales tax measured by the total amount paid by the purchaser. The seller shall not deduct from the total amount paid by the purchaser any amount on account of the value of the stamps or coupons issued nor, where the trade stamps or trade coupons have a fixed redemption value and are issued free based on a fixed ratio of stamp or coupon value to the sales price, shall the seller be required to add the value of the trade stamps or trade coupons issued to the total amount paid by the purchaser before computing, collecting, and remitting the sales tax. (Section 40-23-1(a)(6), Code of Alabama 1975) (Readopted through APA effective October 1, 1982, amended July 30, 1998)

810-6-1-.177.  Trading Stamps.

810-6-1-.178.  Transportation Charges.

810-6-1-.179.  Transportation Costs, Sellers.

In no event may a seller deduct costs of bringing property to his place of business or costs of delivering property from factory to his customer when such factory to customer transportation is paid by the seller either to a transportation company, the manufacturer, or by way of credit to this customer for transportation costs paid by the customer and deducted from seller's invoice. (Section 40-23-1(a)(6)) (Readopted through APA effective October 1, 1982)

810-6-1-.180.  Truck Trailers and Semitrailers.

The term "semitrailers" in the Sales and Use Tax Laws shall include semitrailers designed and intended for use in connection with trucks and highway tractors ordinarily used for highway hauling; also luggage, boat, utility, camper, and travel semitrailers designed primarily to be drawn by passenger automobiles. A semitrailer may be pulled by any type automotive vehicle and be taxed at the automotive rate of 2%. A trailer must be pulled by a truck or truck tractor to be taxed at the automotive rate. (Section 40-23-2(4)) (Adopted March 9, 1961, amended March 23, 1962, amended December 15, 1969, readopted through APA effective October 1, 1982, amended January 24, 1989)

810-6-1-.181.  Undertakers and Morticians.

810-6-1-.182.  Upholstery Shops.

810-6-1-.183.  Used and Secondhand Property.

Sales of used property are subject to the sales tax, also see Sales and Use Tax Rule 810- 6-1-.33 entitled Casual Sales. (Section 40-23-2(1)) (Readopted through APA effective October 1, 1982)

810-6-1-.183.02.  Sales of Tangible Personal Property Through Vending Machines.

(a)  Vending machine sales of food and food products for human consumption, coffee, milk, milk products, and substitutes for these products are taxable at 3 percent of the retail sales price. Items which qualify for this special rate include, but are not limited to, sandwiches, candy, potato chips, and crackers. (Section 40-23-2(5))
 
(b)  All other tangible personal property sold through vending machines is taxable at 4 percent of the retail sales price. Items which are taxable at the 4 percent general rate include, but are not limited, to softdrinks, fruit juices, bottled water, cigarettes, health and beauty aids, and chewing gum. (Section 40-23-2(1))

(a)  Where a licensed or unlicensed retail operator purchases property for resale through vending machines and retains title to the property in the vending machines, the wholesale supplier and the retail operator may agree that the wholesale supplier will service the machines, collect the receipts from the machines, and collect and pay sales tax to the Department of Revenue on the vending machine sales. The payment of all applicable sales tax to the Department of Revenue by the wholesale supplier shall discharge both the supplier and the licensed or unlicensed retail operator from any additional sales tax liability with respect to sales through the vending machines covered by the agreement. The payment of a rental fee on the machines by the retail operator to the wholesale supplier shall not affect the validity of the agreement.

810-6-1-.184.  Seller Sells Tax Free at the Seller's Risk.

810-6-1-.185.  Venetian Blinds.

Venetian blinds and similar window furnishings are subject to tax on the full sales price. This type of property remains personal property even though it is attached to a building. Where venetian blinds are sold at an installed price, tax is to be measured by the total invoiced amount. Also see regulation 810-6-1-.84 entitled Labor Service and regulation 810-6-1-.81 entitled Installation Charges. (Section 40-23-1(a)(10)) (Readopted through APA effective October 1, 1982)

810-6-1-.186.  Veterinarians.

810-6-1-.186.03.  Warehousemen, Sales Made by.

810-6-1-.186.04.  Warehousemen, Sales to.

810-6-1-.186.05.  Warranty, Extended or Service Contract.

810-6-1-.187.  Warranty Contracts - Replacements of Articles.

Where an unsatisfactory article is returned to the seller for replacement or repair under a warranty contract between the seller and his customer and the new article is given in exchange or defective parts are replaced at a reduced price, the amount of sales tax on such exchange or replacement shall be measured by the reduced price plus the fair and reasonable market value of any unsatisfactory article or part kept by the seller. In instances where there is no charge for the article given in exchange or for the replacement parts no tax is due. (Section 40-23-2(1)) (Readopted through APA effective October 1, 1982)

810-6-1-.188.  Watch and Jewelry Repair Shops.

810-6-1-.189.  Wheel Weights.

The balancing of wheels of automobiles is a service by the balancer. Receipts from such wheel balancing are not taxable. The weights used by a balancer are consumed by him and are taxable when sold to him. (Adopted November 1, 1963, readopted through APA effective October 1, 1982)

810-6-1-.190.  Whiskey tax.

810-6-1-.194.  Wrapping Paper.

810-6-1-.195.  X-ray Machines, Heart Catheterization Machines, Computerized Tomography Machines and Consumable Supplies Used Therein.

810-6-1-.196.  Withdrawals from Inventory.

810-6-1-.197.  Sales Taxes Paid by Certain Camps.

810-6-2-.01.  Abrasives - Shot, Grit, Etc.

Shot, grit, stars, sand, and other abrasives of like kind are taxed as parts or attachments to machines when used in machines manufacturing or processing tangible personal property. Such abrasive, when used in maintenance of equipment or when used for purposes other than manufacturing or processing tangible personal property are taxed at the general rate. (Section 40-23-2(3)) (Readopted through APA effective October 1, 1982)

810-6-2-.02.  Accessories on New Automobiles, Applicable Tax Levy.

810-6-2-.02.05.  Agricultural Publications.

No exemption is granted for agricultural publications in the Sales Tax Law. (Readopted through APA effective October 1, 1982)

810-6-2-.03.  Annealing Pots.

Steel pots or tubs used to contain small metal parts or fittings while being heat treated in an annealing furnace as a step in the manufacture thereof are taxed at the special machine rate of 1 1/2%. (Section 40-23-2(3)) (Readopted through APA effective October 1, 1982)

810-6-2-.04.  Automotive Demonstrator, Levy of Tax.

810-6-2-.06.  Baking Pans.

Baking pans used in the production of bakery products for sale are taxable at the machine rate of 1 1/2% of the gross proceeds of the sale. (Readopted through APA effective October 1, 1982)

810-6-2-.07.  Barbers and Beauticians.

810-6-2-.08.  Belting.

Belting purchased for use on a particular machine used in manufacturing is taxed at the special machine rate of 1 1/2% even though such belting may not be purchased to the exact length required. (Section 40-23-2(3)) (Readopted through APA effective October 1, 1982)

810-6-2-.09.  Boiler Tubes.

Boiler tubes used in repairing boilers used to furnish heat or power used in manufacturing are taxed at 1 1/2% as parts for machines used in manufacturing. (Section 40-23-2(3)) (Readopted through APA effective October 1, 1982)

810-6-2-.09.02.  Sales of Textbooks, Other Books, and School Supplies by Schools.

810-6-2-.10.  Coal Loading Machines.

Coal loading machines used in mines are taxed at the special machine rate of 1 1/2%. (Section 40-23-2(3)) (Readopted through APA effective October 1, 1982)

810-6-2-.11.  Coal Cutting Machines.

Coal cutting machines are taxed at the special rate of 1 1/2%. (Section 40-23-2(3)) (Readopted through APA effective October 1982)

810-6-2-.12.  Coke, Petroleum.

Petroleum coke and pitch used in the manufacture of aluminum from alumina are subject to tax at the special machine rate where such petroleum coke and pitch are made into linings for pots where alumina is reduced to aluminum or are made into anodes for such pots. (Section 40-23-2(3)) (Readopted through APA effective October 1, 1982)

810-6-2-.12.05.  Community Action Agencies.

Sales of tangible personal property to organizations which are nonprofit corporations including those that are federally funded are subject to state and local sales tax. (Community Action Agency of Huntsville, Madison County, Inc., v. State of Alabama) (Adopted August 10, 1982, readopted through APA effective October 1, 1982)

810-6-2-.12.06.  Compressors, Tar Buckets, Portable Signs.

Compressors, tar buckets, and portable signs mounted on wheels are not considered trailers. A trailer is defined as a vehicle without motive power designed to carry persons or property wholly on its own structure and to be drawn by a motor vehicle. Since portable compressors, portable tar buckets, and portable signs are not designed for ordinary highway hauling purposes, they are subject to tax at the rate of 4 percent. (Adopted through APA effective January 10, 1985)

810-6-2-.13.  Compositions.

810-6-2-.14.  Cotton Gins.

810-6-2-.15.  Crossties Used in Mining.

Crossties and switchties used in the construction and maintenance of tracks used in bringing minerals to the surface of the earth are taxed at the special machine rate of 1 1/2%. This provision does not, however, extend to crossties and switchties used in the construction or maintenance of tracks used in transporting minerals from the mine after the mining operation has been completed and it does not extend to timbers used in erecting structures in or about mines or used in supporting mine roofs. (Section 40-23-2(3)) (Readopted through APA effective October 1, 1982)

810-6-2-.15.03.  Double Wide Mobile Homes.

Mobile homes whether they be of the double wide variety or the standard variety are in fact mobile homes. Mobile homes, including double wide mobile homes, do not qualify as modular buildings. (Section 40-23-2(4)) (Adopted August 10, 1982, readopted through APA effective October 1, 1982)

810-6-2-.15.05.  Dry Docks.

A dry dock is subject to the sales or use tax, whichever applies. A dry dock is not a vessel, nor is it a barge, exempted from the sales or use tax. (Section 40-23-4(a)(12)) (Readopted through APA effective October 1, 1982)

810-6-2-.16.  Dust Collecting Equipment.

Dust collectors made up of ducts, collectors, filters, and other parts are not of themselves machines used in manufacturing. They may, however, by attachment to a machine used in manufacturing take the special one and half percent rate. The special rate would not in any event apply with respect to sheet metal or other building materials used to construct duct work or other parts of dust collection systems where such materials become a part of the building in which the system is located. (Section 40-23-1(a)(10)) (Readopted through APA effective October 1, 1982)

810-6-2-.17.  Electric Motors.

Electric motors used to drive machines used in mining, processing or manufacturing are taxed at the special machine rate of 1 1/2%. (Section 40-23-2(3)) (Readopted through APA effective October 1, 1982)

810-6-2-.18.  Electric Mine Locomotives.

Locomotives receiving power from an electric trolley used to bring coal to the surface of a mine are taxed under the machine levy at 1 1/2%. (Section 40-23-2(3)) (Readopted through APA effective October 1, 1982)

810-6-2-.19.  Electric Motors, When Furnishing Power for Machines Used in Manufacturing, Compounding, Processing, Mining or Quarrying and Plant Maintenance.

Electric motors used to furnish power for machines used in manufacturing, compounding, processing, mining, or quarrying are taxed at the machine rate of 1 1/2%. Electric motors used to power equipment used primarily in plant maintenance are subject to the tax at the general rate of 4%. (Sections 40-23-2(1) and 40-23-2(3)) (Readopted through APA effective October 1, 1982)

810-6-2-.22.  Engravers and the Machine Rate.

Gross receipts accruing from the retail sales of photo engravings, plates, cuts, and other like articles sold to printers are subject to the sales tax at the machine rate of 1 1/2% where sold for use as parts or attachments of machines used in manufacturing. (Section 40-23-2(3)) (Readopted through APA effective October 1, 1982)

810-6-2-.22.05.  Federal Tax on Hazardous Chemicals.

It is the position of the Department based on an opinion by the Legal Division of the Department of Revenue that the federal tax is to be included in the measure of the tax when computing sales and/or use tax on retail sales of hazardous chemicals. The federal tax is a "cost of doing business" tax levied upon the sale or use of certain chemicals sold by a manufacturer, producer or importer thereof. Section 4662C, Title 26, U.S.C.A. reads as follows: "If any person manufactures, produces, or imports a taxable chemical and uses such chemical, then such person shall be liable for tax under section 4661 in the same manner as if such chemical were sold by such person." Therefore, if the tax is on the cost of doing business by the provider of the chemical, then the federal tax would be included in the measure of the base used for computing the sales and/or use tax payable to the state. (Section 40-23-1(a)(10)) (Adopted August 10, 1982, readopted through APA effective October 1,1982)

810-6-2-.25.  Refractories, Rates Applicable to.

810-6-2-.27.  Gold, Coin and Bullion.

(a)  Gold purchased and delivered outside the State is subject to use tax at the time it is brought into the State.
 
(b)  Sales of gold to persons who take only a document of ownership covering gold remaining outside of the State are exempt from sales and use tax.
 
(c)  Sales to persons who use gold in the rendition of professional or commercial services such as dentists or dental laboratories are taxable.
 
(d)  Agents, including gold jobbers and brokers, who sell gold at retail in their own name must collect retail sales tax thereon. (Section 40-23-2(1)) (Adopted July 2, 1975, readopted through APA effective October 1, 1982)

810-6-2-.28.  Gravel Screens.

Gravel screens used in substantially the form in which they are purchased as parts of a mechanically powered gravel or sand washer and grader are taxed at the special machine rate of 1 1/2%. (Section 40-23-2(3)) (Readopted through APA effective October 1, 1982)

810-6-2-.29.  Hand Tools Not Exempted as Machines.

810-6-2-.30.  Hose - Water, Steam, or Air.

Hose when used as an attachment for a machine used in manufacturing, compounding, processing, mining or quarrying is taxed at the machine rate of 1 1/2%. Hose used for general purposes or for maintenance is taxed at the general rate of 4%. (Sections 40-23- 2(1) and 40-23-2(3)) (Adopted March 9, 1961, amended November 1, 1963, readopted through APA effective October 1, 1982)

810-6-2-.31.  Hospitals, Infirmaries, Sanitariums, and Like Institutions - State, City, and County.

810-6-2-.32.  House Trailers and Mobile Homes.

810-6-2-.32.05.  Hydraulic Oils.

Retail sales of hydraulic oils are subject to the sales tax at a rate of 4 percent except hydraulic oil used as part of a machine used in quarrying, mining, manufacturing, processing, and compounding tangible personal property which is taxed at 1 1/2 percent. (Sections 40-23-2(1) and 40-23-2(3)) (Adopted August 10, 1982, readopted through APA effective October 1, 1982)

810-6-2-.33.  Ice Plants.

810-6-2-.34.  Improvised Attachments for Machines Used in Manufacturing.

The materials, from which parts and attachments for machines used in manufacturing, compounding, processing, mining or quarrying are improvised, are taxed at the special 1 1/2% rate when such improvised parts or attachments are necessary to the operation of such machines and are customarily so used. (Section 40-23-2(3)) (Readopted through APA effective October 1, 1982)

810-6-2-.36.  Kerosene Used in Making Molds.

Sales to foundrymen of kerosene to be used in making molds and cores are taxed at the general rate of 4%. (Sections 40-23-1(a)(10) and 40-23-2(1)) (Adopted March 9, 1961, amended November 1, 1963, readopted through APA effective October 1, 1982)

810-6-2-.36.02.  Lawnmowers.

810-6-2-.36.05.  Lay-away Sales.

810-6-2-.37.  Lumber and Timbers Used in Mine Tipple.

Sales of lumber and timbers to mine operators for use in constructing or repairing structures such as tipples, bridges, or trestles used in supporting mining and processing equipment and tracks are subject to tax at the general rate of 4%. This rule does not apply to machines and machinery supported by such structures, nor does it apply to crossties and switchties all of which are covered in other rules. (Section 40-23-1(a)(10)) (Adopted March 9, 1961, amended November 1, 1963, readopted through APA effective October 1, 1982)

810-6-2-.38.  Lumber and Timbers Used in Mining.

Sales of lumber and timbers to mine operators for use in the building and maintenance of structures and for use in supporting mine roofs are subject to sales tax at the general rate of 4%.   (Section 40-23-1(a)(10))  (Adopted March 9, 1961, amended November 1, 1963, readopted through APA effective October 1, 1982)

810-6-2-.39.  Machine Shop Equipment.

Machine shop equipment used for maintenance and repair purposes is taxable at the general rate of 4%. Machines used both in maintenance and repair work and in the production of manufactured articles are taxed at the special machine rate of 1 1/2% when use in production is substantial. Tax is due at the general rate, however, when use in production is an incidental or inconsequential use as compared to use in maintenance and repair. (Sections 40-23-1(a)(10) and 40-23-2(3)) (Adopted March 9, 1961, amended November 1, 1963, readopted through APA effective October 1, 1982)

810-6-2-.41.  Machines Furnished and Installed by Building Contractors.

810-6-2-.41.01.  Sales of Electrical Generators.

Retail sales of stand alone, commercial and portable electrical generators that manufacture alternating current electricity are taxable at the reduced machine rate. (Sections 40-23-2(3) and 40-23-61(b)) (Adopted through APA effective July 9, 1998)

810-6-2-.42.  Machines or Machinery Not Used in Manufacturing.

Materials or equipment which might constitute a machine or machinery when not used for mining, quarrying, manufacturing, compounding or processing are taxed at the general rate of 4%. (Section 40-23-2(1)) (Adopted March 9, 1961, amended November 1, 1963, readopted through APA effective October 1, 1982)

810-6-2-.43.  Self-Propelled Draglines Used in Mining.

A self-propelled dragline purchased for use in mining tangible personal property is taxable at the reduced machine rate of sales or use tax. Replacement parts and attachments for self-propelled draglines used in mining tangible personal property are also taxable at the reduced machine rate of sales or use tax when (i) made or manufactured for use on or in the operation of the dragline, (ii) necessary to the operation of the dragline, and (iii) customarily so used. State v. Twin Seam Mining Co., Inc., 274 Ala. 3, 145 So 2d 177 (1962) (Sections 40-23-2(3) and 40-23-61(b), Code of Alabama 1975) (Adopted March 9, 1961, amended November 1, 1963, readopted through APA effective October 1, 1982, amended July 30, 1998)

810-6-2-.46.  Manufacturer's Use of Patterns.

810-6-2-.46.01.  Marine Dealers, Sales By.

The proper rates of state sales tax to be paid on sales of boats, motors, trailers, and other items associated with the marine industry are as follows:

(a)  Boat trailers sold alone are taxable at 2 percent of the net difference paid.
 
(b)  Boat motors sold alone are taxable at the general rate of 4 percent of the total selling price.
 
(c)  Nonautomotive boats sold alone are taxable at the general rate of 4 percent of the total selling price.
 
(d)  When a boat without a motor is sold with a trailer, the total selling price of the boat is taxable at the general rate and the trailer is taxable at the automotive rate on the net trade difference (total selling price of the trailer less credit allowed for a qualifying automotive unit traded-in) provided the boat and trailer prices are separately stated on the dealer's invoice. To qualify for the trade-in allowance, the unit traded-in for the trailer must qualify as an automotive unit. If the boat and trailer prices are not separately stated on the invoice, the total selling price of the boat and trailer is taxable at the general rate with no deduction allowed for a trade-in.
 
(e)  Boat, motor and trailer sold as a unit is taxable at 2 percent of the net difference paid if it qualifies as an automotive vehicle.
 
(f)  If a dealer removes a motor from a customer's unit classified as an automotive vehicle, accepts it as part payment of another motor, and installs the new motor; the tax is computed at 4 percent of the net difference paid. A motor sold with a motor traded that is not part of an automotive vehicle at the time of the sale is taxable at 4 percent of the total selling price.
 
(g)  Coast Guard required equipment and accessories such as, but not limited to, life jackets and fire extinguishers included in the price of boat, motor and trailer, are taxable at 2 percent of the net difference paid. Skis, ropes, etc., are taxable at the general rate of 4 percent.
 
(h)  Depth finders, trolling motors, and other permanently attached accessories sold with unit at time of original purchase are taxable at 2 percent of the net difference paid provided the unit qualifies as a motorboat with built-in motor, or boat with outboard type motor attached thereto by attachments intended to be permanent rather than readily removable, and which motor is controlled with remote controls built on or into the hull of said boat.
 
(i)  Boat, motor and trailer sold by dealer for an individual is subject to the tax in the same manner and at the same rate as a boat, motor and trailer owned and sold by the dealer.
 
(j)  Boat, motor and trailer sold with trade-in allowed (example: new unit $10,000.00, credit for unit traded $5,000.00, net difference $5,000.00) would be taxable at 2 percent of net difference paid provided both units qualify as an automotive vehicle as outlined in (h).
 
(k)  Sail boat sold alone is taxable at 4 percent of total selling price.
 
(l)  Sail boat sold with auxiliary motor permanently attached so that it qualifies as an automotive vehicle as outlined in (h) is taxable at 2 percent of the net difference paid.
 
(m)  Aluminum fishing boat sold alone is taxable at the general rate of 4 percent of total selling price. (Sections 40-23-2(1) and 40-23-2(4)) (Adopted through APA effective January 10, 1985, amended January 24, 1989, amended July 9, 1998)

810-6-2-.47.  Material Handling Equipment.

810-6-2-.48.  Materials From Which Patterns are Manufactured, Tax Rates Applicable.

810-6-2-.49.  Mats Purchased for Use in Newspaper Advertising.

Mats purchased by advertisers to be furnished to newspaper publishers for use in producing plates used in printing newspapers are taxed at the special machine rate of 1 1/2%. (Section 40-23-2(3)) (Readopted through APA effective October 1, 1982)

810-6-2-.50.  Meals Furnished Along With Rooms by Schools and Colleges.

Where both lodgings and meals are furnished to students by institutions of higher learning, both public and private, the meals are subject to sales tax. If both lodgings and meals are furnished for a lump sum, the full amount is to be used as the measure of the tax. Where lodgings and the meals are furnished for separate amounts and the billings and records of the institution show such charges separately, only the charge for meals is to be used as the measure of the tax. (Attorney General's Opinion 12-19-60) (Section 40-23-2(1)) (Readopted through APA effective October 1, 1982)

810-6-2-.51.  Meals Sold by Schools.

810-6-2-.51.05.  Members of Armed Services Stationed in Alabama Subject to Sales and Use Taxes.

810-6-2-.51.07.  Metal Cleaning Chemicals.

Manufacturers of metal products are taxed on the use of all chemicals and oils which they use as cleaning materials, except oils classified and taxed as lubricating oils. (Section 40-23-2(1)) (Readopted through APA effective October 1, 1982)

810-6-2-.52.  Molding Machines.

Mechanically operated devices used in making molds from sand for use in manufacturing are taxed at the special machine rate of 1 1/2%. (Section 40-23-2(3)) (Readopted through APA effective October 1, 1982)

810-6-2-.52.03.  Music Machines.

Gross receipts from the operation of musical devices (juke boxes) are taxable. The Supreme Court of Alabama held in the case Birmingham Vending Company v. State of Alabama, 38 So.2d 876, that both the machine owner and the proprietor of the place of business where the machine was operated are jointly and individually liable for the total amount of sales tax due on the gross receipts from such machines, where the machine owner supplied the machine and recordings, and where the proprietor of the location controlled the playing of the machine and both the owner and the proprietor shared in the income. The court held that this was a joint venture with either of the parties to the venture being liable for the payment of the tax due. (Section 40-23-2(2)) (Readopted through APA effective October 1, 1982)

810-6-2-.52.05.  National and State Banks.

810-6-2-.53.  Negatives.

810-6-2-.54.  Packaging Equipment.

Mechanical equipment used in measuring, weighing, or packaging by manufacturers, compounders, or processors is taxed at the special machine rate of 1 1/2% when such equipment is a part of the production line used to put the product in condition for sale. (Section 40-23-2(3)) (Readopted through APA effective October 1, 1982)

810-6-2-.56.  Pan Glaze.

Pan glaze used by bakers as a coating for pans and trays used in baking is a supply item subject to tax. (Section 40-23-1(a)(10)) (Readopted through APA effective October 1, 1982)

810-6-2-.56.01.  Used Equipment.

Used equipment is subject to the sales and use taxes on the same basis that new equipment is subject to tax. (Section 40-23-2(3)) (Readopted through APA effective October 1, 1982, amended November 3, 1998)

810-6-2-.57.  Parts and Attachments For Machines Used in Manufacturing.

Materials purchased by a manufacturer, compounder, processor, miner, or quarryman for attachment to, or to be made a part of, a machine used in manufacturing, compounding, processing, mining or quarrying is entitled to the reduced machine rate of sales or use tax regardless of whether or not such materials at the time of purchase are recognizable as parts and attachments for machines, provided, however, that the parts and attachments made from such materials are designed and manufactured for use, customarily so used and necessary to the operation of the completed machine. Such materials would include, but would not be limited to tool steel, steel plate, steel angles, shafting, packing, pipe, pipe fittings, pipe fitting supplies, valves, steam hose, fire clay, bulk lining materials, bulk insulation materials and pipe and tank coverings. Also recording instruments and similar attachments which are not generally classified as parts and attachments to manufacturing machines would qualify as parts and attachments when attached directly to a manufacturing machine. The reduced machine rate does not, however, extend to the materials used in erecting buildings or other structures even though such buildings or structures may house or support machines used in manufacturing, compounding, processing, mining, or quarrying. (Sections 40-23-2(3) and 40-23-61(b)) (Readopted through APA effective October 1, 1982, amended November 3, 1998)

810-6-2-.58.  Patterns Purchased for Use.

Patterns which become parts or attachments of molding machines used in manufacturing are taxed at the special machine rate of 1 1/2%. (Section 40-23-2(3)) (Readopted through APA effective October 1, 1982)

810-6-2-.59.  Patterns Used by Operators of Foundries.

Foundry operators use patterns to form the molds in which their products are cast. These patterns are subject to tax at the special machine rate of 1 1/2% when purchased by the foundry operators. In those cases where the foundryman fabricates the pattern used by him, the materials used in such fabrication are taxed at the special rate. (Section 40-23- 2(3)) (Readopted through APA effective October 1, 1982)

810-6-2-.62.  Pipe Threading Machines.

Pipe threading machines used for construction purposes by a contractor or other builder are taxed at the 4% general rate. (Sections 40-23-1(a)(10) and 40-23-2(1)) (Adopted March 9, 1961, amended November 1, 1963, readopted through APA effective October 1, 1982)

810-6-2-.63.  Piping.

Piping leading to and from storage tanks and piping bringing gas or water into a plant does not come within the levy on machines used in manufacturing. The general rate of 4% applies.  (Section 40-23-2(1)) (Adopted March 9, 1961, amended November 1, 1963, readopted through APA effective October 1, 1982.)

810-6-2-.64.  Piping in Manufacturing Plant.

810-6-2-.65.  Plates, Printers.

810-6-2-.66.  Platform Trucks.

In Alabama-Georgia Syrup Company v. State of Alabama, 42 So.2d 796, the Alabama Supreme Court held that platform trucks "used for moving the company's products in the process of blending and packing the syrup in the plant" are not exempted by the machine exemption "under old sales tax law". The court stated: "We do not think that platform trucks are machines within the meaning of the exemption. They are obviously used in transportation from one point in the plant to another and not in compounding and manufacturing of tangible personal property." (Sections 40-23-2(1) and 40-23-2(3)) (Readopted through APA effective October 1, 1982)

810-6-2-.66.05.  Portable Power Saws.

810-6-2-.67.  Power Cables.

Power cables supplying power to working areas in mines and quarries are subject to the tax at the 4% rate. (Section 40-23-2(1)) (Readopted through APA effective October 1, 1982)

810-6-2-.68.  Power Lines.

Electric power lines carrying electric power into a plant of a manufacturer, compounder or processor are taxed at the general rate of 4%. (Section 40-23-2(3)) (Adopted March 9, 1961, amended November 1, 1963, readopted through APA effective October 1, 1982)

810-6-2-.69.  Printers, Applicable Tax Rate.

Sales of materials to printers are at wholesale, tax free, when such materials become a component of the printed matter produced for sale. The machines used in the printing come within the machine levy and are taxed at the 1 1/2% rate. The supplies, materials, and equipment not becoming a component of the product sold or not constituting a machine used in manufacturing are subject to the sales or use tax, whichever may apply, at the general rate of 4%. (Readopted through APA effective October 1, 1982)

810-6-2-.71.  Proofs.

Gross receipts accruing from the retail sales of proofs sold to printers, publishers or others, which are used to make negatives to produce plates for offset printing, are subject to the sales tax at the machine rate of 1 1/2%. The machines used by the processor in the processing of proofs are taxable at the machine rate of 1 1/2%. The supplies, materials, and equipment not becoming a component of the product sold, or not constituting machines used in processing are subject to the sales or use tax, whichever may apply at the general rate of 4%. Where a printer or publisher processes proofs for their own use, sales or use tax shall be due on the purchase price of the materials becoming a component of the proofs at the machine rate of 1 1/2% where the proofs are used to make negatives to produce plates for offset printing. (Section 40-23-2(3)) (Adopted June 20, 1966, readopted through APA effective October 1, 1982)

810-6-2-.72.  Pumps, Mines.

Pumps when used in mining are taxed at the special machine rate of 1 1/2%. (Section 40- 23-2(3)) (Readopted through APA effective October 1, 1982)

810-6-2-.73.  Rail Bonds Used in Mining.

Rail bonds used in the construction and maintenance of mine tracks used in bringing minerals to the surface of the earth are taxed at the special machine rate of 1 1/2%. This provision does not, however, extend to rail bonds used in the construction and maintenance of trucks used in transporting materials from the mine after the mining operation has been completed. (Sections 40-23-2(3), 40-23-2(1)) (Readopted through APA effective October 1, 1982)

810-6-2-.74.  Railroad Companies-Machines.

Machines when sold to, or for use by, railroad companies in maintaining, repairing or reconditioning their equipment are subject to the sales or use tax at the general rate of 4%. (Section 40-23-2(1)) (Adopted March 9, 1961, amended November 1, 1963, readopted through APA effective October 1, 1982)

810-6-2-.74.05.  Railroad Rails.

810-6-2-.75.  Rails Used in Mining.

Mine rails used in the construction and maintenance of tracks used in removing minerals from the earth are taxed at the special machine rate of 1 1/2%. This provision does not, however, extend to rails used in the construction or maintenance of tracks used in transporting minerals after the mining operation has been completed. (Sections 40-23- 2(3) and 40-23-2(1)) (Readopted through APA effective October 1, 1982)

810-6-2-.78.  Repairs, Machine.

(Section 40-23-2(3)) (Adopted March 9, 1961, amended November 1, 1963, readopted through APA effective October 1, 1982)

810-6-2-.79.  Repairs of Electric Motors and Electric Generators.

810-6-2-.79.03.  Repossessed Used Vehicles, Sales of.

Resales of automotive vehicles repossessed by the seller or for him by a finance company are taxable measured by the gross proceeds of the resales thereof less credit for any automotive vehicle accepted as part-payment of the sales price of the vehicle so resold. (Section 40-23-2(4)) (Readopted through APA effective October 1, 1982)

810-6-2-.79.04.  Restaurants, Equipment and Supplies.

810-6-2-.79.05.  Rural Electrification Authority (R.E.A.).

Cooperatives set up under authority of United States Rural Electrification Laws are not instrumentalities of any governmental body. All purchases are subject to the sales or use tax, whichever may apply, except when otherwise specifically exempted. (Section 40- 23-1(a)(10)) (Readopted through APA effective October 1, 1982)

810-6-2-.87.  Sand Handling and Sand Conditioning Equipment.

Machines and equipment used by manufacturers for conditioning and transporting, while in process, sand for use in mold making are taxed at the special machine rate of 1 1/2%. (Section 40-23-2(3)) (Readopted through APA effective October 1, 1982)

810-6-2-.88.  Sawdust Removal Equipment.

810-6-2-.88.02.  School Buses.

A school bus purchased by an individual for use under direction of and control of a board of education is subject to tax. (Section 40-23-1(a)(10)) (Readopted through APA effective October 1, 1982)

810-6-2-.88.03.  Schools and Colleges Owned by the State, Counties or Cities, Sales Made By.

810-6-2-.88.04.  Exemption for Certain Sales by Elementary and Secondary Schools, School Sponsored Clubs and Organizations, and School Affiliated Groups.

(a)  elementary or secondary schools,
 
(b)  nonprofit elementary or secondary school-sponsored clubs and organizations, or
 
(c)  nonprofit elementary or secondary school affiliated groups, such as parent- teacher organizations and booster clubs whose membership may be composed of individuals other than students.

810-6-2-.89.  Scrap Metal Shredder.

A scrap metal shredder that will take such items as junk automobile bodies and through a series of magnetically operated devices separate the metal from the nonmetal items, shred the metal, and hydraulically compress it into blocks of certain sizes to specifications so that it can be measured when loading the furnace is taxed at the machine rate of 1 1/2%. (Section 40-23-2(3)) (Adopted June 12, 1978, readopted through APA effective October 1, 1982)

810-6-2-.91.  Soda Fountains and Ice Cream Cabinets.

Soda fountains and ice cream cabinets are taxed by the Sales and Use Tax Laws at the general rate. The machine rate does not apply. (Section 40-23-2(1)) (Readopted through APA effective October 1, 1982)

810-6-2-.92.  Soft Drink Bottlers.

Soft drink bottlers are engaged in manufacturing and compounding and, therefore, shall pay sales or use tax at the machine rate on the machines purchased used directly in manufacturing and compounding. They shall also purchase at wholesale, tax free, the ingredients of the drink which they compound. Supplies consumed in manufacturing or compounding are subject to tax at the general rate when purchased by the bottlers. (Sections 40-23-1(a)(9)b, 40-23-2(3), 40-23-2(1), 40-23-60(4)b, 40-23-61(a), and 40-23- 61)

1.  Bottle filling machines
 
2.  Capping machines
 
3.  Refrigeration equipment, when used to cool the product when in the compounding process
 
4.  Filtering equipment, used for filtering water used in the product
 
5.  Bottle washers and soakers
 
6.  Sterilizers
 
7.  Water heaters

1.  Returnable or reusable bottles
 
2.  Flats
 
3.  Soap
 
4.  Hand trucks
 
5.  Office equipment
 
6.  Office supplies
 
7.  Advertising materials

(Readopted through APA effective October 1, 1982, amended January 27, 1998)

810-6-2-.92.02.  State, County and City, Sales made by.

810-6-2-.93.  Steel Plate.

Steel plate is taxable at the 1 1/2% machine rate when made into a tank at the site when the tank becomes a part of machinery used in manufacturing or processing. (Section 40- 23-2(3)) (Adopted March 9, 1961, amended November 1, 1963, amended July 1, 1963, amended August 10, 1982, readopted through APA effective October 1, 1982)

810-6-2-.94.  Storage Tanks.

810-6-2-.95.  Supplies and Materials.

In maintaining and making repairs of machines and equipment used in mining, replacement parts specifically manufactured for use on such machines are taxed at the special machine rate of 1 1/2% when the machines themselves are entitled to the special rate. (Section 40-23-2(3)) (Readopted through APA effective October 1, 1982)

810-6-2-.96.  Switchboards.

Switchboards and other electrical equipment used in controlling the flow of electric power into manufacturing plants and mines are taxed at the general rate of 4%. (Section 40-23- 2(1)) (Adopted March 9, 1961, amended November 1, 1963, readopted through APA effective October 1, 1982)

810-6-2-.97.  Tanks Used in Manufacturing.

Tanks which are part of a chain of processing operations are taxed at the special machine rate of 1 1/2% when such tanks are purchased prefabricated and require no more than installation at the site. (Section 40-23-2(3)) (Readopted through APA effective October 1, 1982)

810-6-2-.98.  Equipment Used by Television, Cable TV, and Radio Stations.

810-6-2-.99.  Tool Steel.

Tool steel is taxed at the special machine rate of 1 1/2% when used as a part or an attachment for a machine used in mining or quarrying even though it may require some fabrication by the mine or quarry operator to adapt it for use on his equipment. (Section 40-23-2(3)) (Readopted through APA effective October 1, 1982)

810-6-2-.100.  Track Accessories Used in Mining.

Track accessories including spikes, bolts, plates, and switch parts becoming a part of mine tracks used in removing minerals from the earth are taxed at the special machine rate of 1 1/2%. This provision does not, however, extend to track accessories used in the construction or maintenance of tracks used in transporting minerals from the mine after the mining operation has been completed. (Sections 40-23-2(1) and 40-23-2(3)) (Readopted through APA effective October 1, 1982)

810-6-2-.101.  Transformers.

Transformers used in the generation, manufacture, or distribution of electricity by public utilities are machines used in manufacturing and processing tangible personal property and, therefore, are taxed at the reduced machine rate. (Curry v. Alabama Power Company, 8 So.2d 521) Following this decision by the court, the Department has ruled that all transformers used by producers or distributors of electricity and transformers used by other manufacturers, processors, or compounders as a part of their manufacturing, processing, or compounding equipment are entitled to the reduced machine rate of sales and use tax. Power capacitors and voltage regulators qualify for the reduced machine rate hen used in the generation, manufacture, or distribution of electricity by public utilities or by other manufacturers, processors, or compounders as a part of their manufacturing, processing, or compounding equipment. (Sections 40-23-2(3) and 40-23-61b)) (Readopted through APA effective October 1, 1982, amended October 29, 1993)

810-6-2-.102.  Trolley, Materials, Mine.

Trolley equipment used in supplying electric power to mine locomotives used in bringing minerals to the surface of the earth are taxed at the special machine rate of 1 1/2%. This provision, however, does not extend to electric cable, switch gear, and other equipment used to deliver electric current to trolley lines or to other mining machines or machinery. (Sections 40-23-2(3) and 40-23-2(1)) (Readopted through APA effective October 1, 1982)

810-6-2-.103.  Truck Bodies, Rates of Tax.

A truck body, not a part of an automotive vehicle at the time it is purchased, is taxable at the general 4% rate except in those instances where a truck chassis and a truck body are purchased out of Alabama in separate transactions but are assembled into a unit for importation into this State, in which event, the unit is taxable at the automotive rate of 2%. (Sections 40-23-2(1), 40-23-2(4)) (Adopted March 9, 1961, amended July 1, 1963, amended November 1, 1963, readopted through APA effective October 1, 1982, amended January 24, 1989)

810-6-2-.104.  Used Automotive Vehicles.

A used automotive vehicle is one which has been put to the use for which it was intended. All sales of used automotive vehicles are taxed at the automotive rate regardless of how acquired. The sales tax applies on sales of used automotive vehicles in the same way it applies on new automotive vehicles. (Section 40-23-2(4)) (Readopted through APA effective October 1, 1982)

810-6-2-.104.02.  Used Vehicles Acquired in Trades, Sales of.

Used automotive vehicles, used truck trailers and semi-trailers when taken in trade are subject to sales tax at the automotive rate when resold. (Section 40-23-2(4)) (Readopted through APA effective October 1, 1982)

810-6-2-.105.  Wire Rope.

Wire rope is subject to sales or use tax at the 4% general rate when used on locomotive cranes or other material handling equipment which is not entitled to the special machine rate of 1 1/2%. (Sections 40-23-2(1) and 40-23-2(3)) (Adopted March 9, 1961, amended November 1, 1963, readopted through APA effective October 1, 1982)

810-6-2-.106.  Wire Rope Used on Machines.

Wire rope is taxed at the special machine rate of 1 1/2% when used as an attachment for a machine used in mining, manufacturing or quarrying. (Section 40-23-2(3)) (Readopted through APA effective October 1,1982)

810-6-2-.107.  Wholesale Sales.

810-6-2-.108.  Paper Manufacturers, Tax Rates Applicable to.

(a)  machine clothing - felts, screen plates, and wire
 
(b)  tanks to be used in manufacturing
 
(c)  recording instruments attached directly to manufacturing machinery
 
(d)  pipes, valves, pipe fittings, and pipe fitting supplies attached to manufacturing machinery (all other pipes, valves, pipe fittings, and pipe fitting supplies are taxable at the general rate except for those which are used in a water treatment plant and, therefore, qualify for the pollution control exemption in Sections 40-23-4(a)(16) and 40-23-62(18))
 
(e)  all machinery and equipment used to generate electricity including boilers, engines, condensers, generators, transformers, and attachments thereto (machinery and equipment used solely for the transmission of electricity is taxable at the general rate)
 
(f)  electrical equipment used as direct controls of manufacturing machines
 
(g)  all transformers, wherever used
 
(h)  insulating material, both bulk and preformed, which is applied to manufacturing machinery
 
(i)  shafting, whether purchased prefabricated to exact size or unfinished to be cut and machined by the purchaser, when used on manufacturing machinery
 
(j)  packing, whether purchased prefabricated or in bulk form, when purchased for use on manufacturing machinery
 
(k)  steam hose purchased for use as a part or attachment to manufacturing machinery
 
(l)  steel, steel plate, steel angles, bushing, bronze, steel shapes, and tool steel from which machine parts or attachments are fabricated
 
(m)  fire clay and bulk lining materials
 
(n)  equipment used in measuring, weighing, and packaging product when it is a part of the production line machinery and is used to put the product in condition for sale
 
(o)  computers directly linked to manufacturing machinery and used to control or monitor manufacturing machinery
 
(p)  machinery used during the manufacturing process to test or measure materials entering the product.

(a)  steam hose used for cleaning purposes including bulk purchases of steam hose of the kind which may be used either for cleaning the plant and plant equipment or for use as an attachment to manufacturing machinery (unless the purchaser can document that all of the steam hose purchased in bulk was used on manufacturing machinery)
 
(b)  bulk or preformed insulating material not becoming an attachment to manufacturing machinery
 
(c)  machinery and equipment used solely to transmit electricity from the powerhouse to motor control centers on manufacturing machinery (these items transmit electricity rather than manufacture electricity)
 
(d)  all wire, fixtures, and other materials used in lighting
 
(e)  baling wire pulp for internal use
 
(f)  skid and anchor plates
 
(g)  steel strapping, when not furnished as part of a one-time-use container
 
(h)  gummed tape, when not furnished as part of a one-time-use container
 
(i)  wooden skids
 
(j)  pulpwood saws and saw parts (taxable at the reduced farm machine rate when purchased for use in harvesting timber)
 
(k)  yard switcher repair parts
 
(l)  safety shoes
 
(m)  lumber
 
(n)  magazine subscriptions
 
(o)  repair parts for electric trucks
 
(p)  office supplies
 
(q)  laboratory supplies
 
(r)  cafeteria equipment
 
(s)  charts used on recording instruments that are attached directly to manufacturing machinery
 
(t)  tractor repair parts
 
(u)  paints
 
(v)  auto, truck, and trailer repair parts
 
(w)  hand-operated hoists and parts
 
(x)  portable air compressors and parts
 
(y)  tools
 
(z)  first aid supplies, fire protection supplies and equipment, safety supplies and equipment
 
(aa)  welding machines and parts
 
(bb)  fuel oil
 
(cc)  Dowicide (not taxable when it becomes an ingredient or component part of the paper manufacturer's manufactured product)
 
(dd)  Nopco K. F. foam killer (exempt when used primarily for air or water pollution control purposes)
 
(ee)  seedlings and plants
 
(ff)  repair parts for gas-driven and electric lift trucks (new units taxable at the reduced automotive rate)
 
(gg)  building materials including brick, structural steel, concrete, lumber rails, paint, insulation materials, plumbing fixtures, and all other materials becoming a part of a structure
 
(hh)  pipes, valves, pipe fittings, and pipe fitting supplies including those which are used in drinking water lines and fire protection lines (pipes, valves, pipe fittings, and pipe fitting supplies which are attached to manufacturing machinery are taxable at the reduced machine rate; those which are used in a water treatment plant qualify for the pollution control exemption in Sections 40-23-4(a)(16) and 40-23-62(18))
 
(ii)  construction supplies including welding rods, acetylene, oxygen, screws, nuts, bolts, and rivets.

810-6-3-.01.  Exemptions for Agricultural Products Sold by the Producer.

(a)   This exemption does not apply to agricultural products sold by the producer through a store which the producer operates. (Curry v. Reeves, 240 Ala. 14, 195 So. 428)
 
(b)   Unlike the exemption outlined in paragraph (3) below, this exemption is not limited to products that are planted, cultivated, and harvested by the producer. Examples of products that may qualify for this exemption but not the exemption in paragraph (3) include but are not limited to milk, eggs, catfish, minnows, bees, honey, rabbits, and hamsters produced on farms.

(a)  Examples of prepared agricultural products which do not lose their exempt status when they otherwise qualify for either or both of the exemptions outlined in paragraphs (2) and (3) are:

1. raw pecans when cracked or shelled

2. raw shelled peanuts

3. raw shelled peas, beans or butterbeans

4. raw shucked corn

5. raw washed fruits or vegetables

 
(b)  Examples of processed agricultural products which do not qualify for the exemptions outlined in paragraphs (2) and (3) above are:

1. apple cider

2. boiled or roasted peanuts

3. candy

4. cane or sorghum syrup

5. fruit pies

6. ice cream

7. jellies and jams

8. peanut butter

9. pickled peaches

10. pickles

11. roasted pecans

  (Readopted through APA effective October 1, 1982, amended May 22, 1993, amended July 30, 1998)

810-6-3-.01.01  Agriculture, Definition of.

(Adopted through APA effective May 22, 1993)

810-6-3-.01.02.  Livestock, Definition of.

810-6-3-.02.  Alabama State Bar.

The Alabama State Bar is an instrumentality of the state (Section 34-3-105, Code of Alabama 1975) and is not subject to sales or use taxes on the property purchased for use in carrying on any activity they are authorized to engage in by law. (Section 40-23- 4(a)(11)) (Adopted February 6, 1968, readopted through APA effective October 1, 1982)

810-6-3-.03.  American National Red Cross.

The American National Red Cross is an agency of the United States; its purchases are exempt from the sales and use tax. (Section 40-23-4(a)(17)) (Readopted through APA effective October 1, 1982)

810-6-3-.03.02.  Automotive Vehicles, Certificate of Exemption - Out-of-State/City/County Delivery Form.

(a)   The date of the sale.  
(b)   The invoice number.  
(c)  The dealer's sales tax registration number, name, and address.  
(d)  The purchaser's name and address.  
(e)  A description of the automotive vehicle, truck trailer, semitrailer, or house trailer to include the make, model, year, vehicle identification number (VIN), an indication as to whether the vehicle is new or used, the total sales price of the vehicle, the trade-in allowance, and the net amount paid for the vehicle.  
(f)  An indication as to the state in which the vehicle will be titled or registered.  
(g)  A certification by the undersigned seller and buyer, or their representatives, that the vehicle described on the form has been sold and will be delivered outside Alabama, the city and/or county in which the dealer is located, and that the information provided on the form is true and correct.  
(h)  The state, county, and city if applicable, where the vehicle, trailer, semitrailer, or house trailer was delivered.  
(i)  The name of the person making the out-of-state or out-of- city/county delivery and an indication as to whether that person is the seller or an employee of the seller.  
(j)  The name of the person to whom the out-of-state or out-of- city/county delivery was made and the date and place of delivery.  
(k)  A certification by the person making the delivery of the vehicle, trailer, semitrailer, or house trailer that he or she has personally delivered the vehicle, trailer, semitrailer, or house trailer described in (e) to the person and place indicated in (j).

810-6-3-.04.  Baby Chicks and Poults.

Sales of baby chicks and poults are specifically exempted from sales tax. (Section 40-23- 4(a)(3)) (Readopted through APA effective October 1, 1982)

810-6-3-.06.04.  Boxing and Wrestling Matches Staged by National Guard.

Boxing and wrestling matches staged by the National Guard in National Guard Armories or on property adjacent thereto controlled by the National Guard are exempted from sales tax where such matches are held in accordance with the provisions of Section 31-2-56, Code of Alabama 1975. (Amended June 12, 1978, readopted through APA effective November 27, 1985)

810-6-3-.07.  Canteens of Alabama National Guard.

(a)  Established and operated in accordance with rules and regulations issued by the Adjutant General and approved by the Governor, and where,  
(b)  Owned, operated, and run exclusively by National Guard or Naval Militia units for the convenience and benefit of the active and retired members of the National Guard and Naval Militia, and pursuant to Act # 2006-195, all other active and retired members of the United States Armed Forces (Section 31-2-81), and where,  
(c)  Profits of such canteens or exchanges go to the units and not to the persons operating them.

810-6-3-.07.05.  Charitable Organizations and Institutions.

Charitable and nonprofit organizations and institutions have no special exemption from the sales and use taxes. Further, they are required to comply with all the provisions of these laws, relating to the filing of returns, making payments of taxes required to be collected, etc. with the exception of those listed below which are exempt from payment of all sales and use taxes by special acts of the Legislature.

810-6-3-.11.  Cottonseed Meal.

Cottonseed meal is exempt from sales and use tax when sold for use as a feedstuff for livestock or poultry. It is not exempt as a fertilizer when sold in pure form unmixed with other ingredients. See Rule 810-6-3-.12, Cottonseed Meal Exchanged for Cottonseed. (Sections 40-23-4(a)(2), 40-23-4(a)(4), 40-23-62(5) and 40-23-62(7)) (Readopted through APA effective October 1, 1982, amended March 24, 1993)

810-6-3-.12.  Cotton Seed Meal Exchanged for Cotton Seed.

Cotton seed meal exchanged for cotton seed in a transaction taking place at a cotton gin is not subject to sales or use tax. The exchange may be either between the owner of the seed and the ginner or between the owner of the seed and a third party who takes possession of the seed at the gin. Where the cotton seed is delivered at the gin to the ginner or to the third party, the transaction may be completed by acceptance of the cotton seed meal at a warehouse or other storage place not at the gin without loss of the exemption. Where the cotton seed meal given in exchange is of greater value than the cotton seed received, the ginner or third party shall collect and pay to the State of Alabama sales tax measured by the amount received in payment of the difference.   (Section 40- 23-4(a)(6)) (Readopted through APA effective October 1, 1982)

810-6-3-.12.02.  Credit Unions, Federal and State Chartered, Sales by.

810-6-3-.13.  Defense Plant Corporation.

810-6-3-.14.  County Departments of Human Resources

Sales to county departments of human resources are sales to counties and are exempted from sales and use tax. (Sections 40-23-4(a)(11) and 40-23-62(13)) (Adopted March 9, 1961, amended November 1, 1963, readopted through APA effective October 1, 1982, amended March 10, 1998)

810-6-3-.15.  Federal Charge Card Program, Exemption Certification.

ALABAMA DEPARTMENT OF REVENUE
SALES, USE & BUSINESS TAX DIVISION
EXEMPTION CERTIFICATION RESPECTING CERTAIN PURCHASES OF
TANGIBLE PERSONAL PROPERTY OR LODGINGS
MADE THROUGH THE FEDERAL CHARGE CARD PROGRAM

Business Name:  ______________________________________________________________________
Address:             ______________________________________________________________________
                          ______________________________________________________________________

                                                                       
THIS PART TO BE COMPLETED BY THE CARDHOLDER:

I hereby certify that the purchase of tangible personal property or purchase of lodgings and accommodations that is being made under this exemption certification is for the official use of the Federal Government, is a debt of the Federal Government, and the charges will be paid with a federal charge card that is centrally billed to and paid by the Federal Government.

Federal Charge Card Type (Purchase, Fleet, Travel, or Integrated): ______________________________
Federal Charge Card Account Number:     __________________________________________________
Federal Agency/Department:                   __________________________________________________
Agency/Department Telephone Number:   __________________________________________________
Date(s) of Occupancy (if applicable):         __________________________________________________

Signature of Federal Employee:   ____________________________  Date: _______________________
Name of Federal Employee:         ____________________________  Title:   _______________________ 

            (5)       In lieu of utilizing the exemption certification form, written documentation of the same information as required on the certification may be retained by the vendor or provider of lodgings and accommodations to substantiate that the transaction is exempt from tax. (Sections 40-2A-7(a)(5), 40-23-4(17), 40-23-62(2), 40-26-19, Code of Alabama 1975) (Adopted through APA effective January 5, 2010)

810-6-3-.16.  Federal and State Chartered Credit Unions.

The sale to, or use by, a Federal or state chartered credit union of tangible personal property in this state is not subject to sales or use taxes. (Section 40-23-4(a)(17)) (Adopted March 9, 1961, amended July 27, 1964, readopted through APA effective October 1, 1982)

810-6-3-.17.  Federal Production Credit Associations.

Sales of property to federal production credit associations for use in conducting the activities of such associations as authorized by federal statutes are not subject to the sales tax; provided, however, this exemption does not apply with respect to any federal production credit association after the stock held in it by the production credit corporation has been retired. (Section 40-23-4(a)(17)) (Readopted through APA effective October 1, 1982)

810-6-3-.18.  Federal Savings and Loan Associations.

810-6-3-.19.  Feed for Livestock and Poultry.

(a)  Stale bread, table waste, and other foodstuffs which have become unsuitable for sale for human consumption
 
(b)  Salt and salt blocks
 
(c)  Bone meal and oyster shells
 
(d)  Blackstrap molasses

810-6-3-.20.  Fertilizer.

810-6-3-.20.01.  Exemption Certification Form Respecting Fertilizers, Insecticides, Fungicides, and Seedlings (Form ST:EXC-1).

Purchaser's Name:___________________________________________________________________
Address:______________________________ City: _______ State: _____ Zip Code:________
SCS Farm Number (if available):____________________________________________________

I, the undersigned, hereby certify that the items of tangible personal property purchased from (name of retailer)___________
______________________ will be used for the exempt agricultural purposes described in subdivision (2), (4), or (22) of Section 40-23-4(a) or subdivisions (5), (7), or (23) of Section 40-23-62, Code of Alabama 1975, as amended, and therefore may be purchased without payment of sales or use tax under Alabama law. I am aware that liability for payment of any sales or use tax ultimately determined to be applicable with respect to the items so purchased will be the exclusive responsibility of the undersigned.

Signature: ________________________ Date: ______________________

(a)  all of the information requested on the form should be completed;
 
(b)  the seller should furnish a copy of the completed certificate, with sales receipt attached, to the purchaser; and
 
(c)  the seller should retain the original certificate and a copy of the sales receipt for a three-year period.

810-6-3-.21.  Fish and Minnow Sales by Producers.

810-6-3-.22.  Florist, Sales of Nursery Stock and Floral Products by.

810-6-3-.23.  Fluid, Milk.