Who Qualifies for a Sales and Use Tax Exemption?

In general, Alabama law does not provide a sales or use tax exemption to churches or charitable, civic, or other nonprofit organizations. These organizations are required to pay sales or use tax on all purchases of tangible personal property. Additionally, when these organizations engage in selling tangible personal property at retail, they are required to collect and remit the sales and use tax unless specifically exempted by statute.

Statutorily Exempt Organizations

An exemption from sales and use tax is available for certain organizations that have been specifically exempted by statute. These organizations include:

• Airport authorities
• Services or who are certified by the Department of Rehabilitation Services
• Behavioral health care facilities
• Certain blood banks
• Certain food banks and pantries
• Certain groups whose primary activity is raising money for public libraries
• Certain organizations primarily providing services to the developmentally disabled
• Child advocacy centers
• City and county-owned and operated hospitals and nursing homes
• Credit unions (federal and state)
• Economic development boards
• Emergency telephone service districts
• Fire department owned and operated by a city or county
• Girl Scouts/Boy Scouts of America
• Goodwill Industries
• Health care authorities (regular and municipal special health care)
• Industrial Development Board (IDB)
• March of Dimes
• Medical boards
• Mental health authorities
• Out-of-state public colleges and universities
• Out-of-state public schools
• Parent teacher organizations (e.g., nonprofit booster clubs comprised of parents and teachers)
• Public and private schools and school boards (not day cares)
  (See Ala. Administrative Rules 810-6-3-.47.02 through 810-6-3-47.06)
• Public colleges and universities
• Regional mental health care facilities
• Rescue service organizations
• United Appeal Fund organizations and supported charities
• United Way organizations and supported charities
• Volunteer fire departments
• Water authorities
• YMCA
• YWCA
• YWCO

The above listing is not all-inclusive and may not include entity exemptions that are specifically named within Chapters 9 and 23 of Title 40, Code of Ala. 1975.

Additional Guidance and Administrative Rules

If you believe your entity may qualify for a sales and use tax exemption as a statutorily exempt entity, please review the following application and administrative rules as applicable*.

Form ST:EX-A1-SE Application for Sales Tax Certificate of Exemption for Statutorily Exempt Entities

Ala. Administrative Rule 810-6-5-.02.01 State Sales and Use Tax Certificate of Exemption for Entities Having a Statutory Exemption from the Payment of Sales, Use, and Lodgings Taxes

Ala. Administrative Rule 810-6-5-.02.02 Informational Report for Entities Having a Statutory Exemption from the Payment of Sales, Use, and Lodgings Taxes

*Additional rules may be applicable for specific entities. Please visit our Administrative Rule page for more information.