HB 131 — Sales and use tax, durable medical equipment and medical supplies revised.

HB131 ENGROSSEDENROLLED HB131 IL9AWZW-2IL9AWZW-3 By Representatives Butler, Gidley RFD:

07-Feb-24 Page 0 HB131 EngrossedEnrolled 2Enrolled, 4An AAct, BILL TO BE ENTITLED AN ACT 9 To amend Sections 40-9-30 and 40-9-60, Code of Alabama, 1975, to require certain health care providers to obtain a certificate of exemption from the Department of Revenue to make sales tax exempt purchases of certain durable medical equipment and medical supplies;

(c) A provider who rents or leases oxygen or durable medical equipment to a recipient of benefits under the Page 1 HB131 Engrossed Medicare or Medicaid program under orders from a duly licensed physician shall be exempt from all state and local rental and leasing taxes.

(d)(1) In addition to any other exemptions provided in subsection (b) or (c), any items used for the treatment of illness or injury or to replace all or part of a limb or internal body part purchased by or on behalf of an individual Page 1 HB131 Enrolled pursuant to a valid prescription and covered by and billed to Medicare, Medicaid, or a health benefit plan shall be exempt from state, county, and municipal sales, use, and rental and leasing taxes, including, but not limited to, any of the following:

(2) Beginning September 1, 2024, any health care provider claiming an exemption pursuant to this subsection shall obtain and maintain a certificate of exemption from the Department of Revenue, in accordance with the provisions of Section 40-9-60, prior to the purchase and shall provide the certificate to the seller at the time of the purchase." "§40-9-60 Page 2 HB131 Engrossed (a) All persons or companies, including, but not limited to, those cited in this chapter, other than governmental entities, which have statutory exemption from the payment of Alabama sales and use taxes levied in, including, but not limited to, Chapter 23, or lodgings taxes levied in Chapter 26, regardless of the type of transaction or whether the tangible personal property is subject to sales and use tax Page 2 HB131 Enrolled or whether the accommodations are subject to lodgings tax, shall be required to annually obtain a certificate of exemption from the Department of Revenue.

(2) The term governmental entity does not include public corporations, other than those public corporations Page 3 HB131 Engrossed described in subdivision (1), private schools, or private universities.

Page 3 HB131 Enrolled (b) Certificates of exemption shall be valid for one year from the date of issuance and shall be renewed annually each subsequent year.

Any person or company that fails to 95 obtain or renew a certificate of exemption prior to its expiration may not make tax exempt purchases or rent tax exempt accommodations after the expiration.

Any reports required 95 by the Department of Revenue shall be filed as a prerequisite to the renewal of a certificate of exemption.

(c) Any person or company that intentionally uses a certificate of exemption in violation of its intended purpose, in addition to the actual sales, use, and lodgings tax liability due, shall be subject to a civil penalty levied by the Department of Revenue in an amount of not less than two-thousand dollars ($2,000) or two times any state and local sales, use, and lodgings tax due for the transactions, whichever is greater, and based on the person or company's willful misuse of the certificate of exemption, may be barred Page 4 HB131 Engrossed from the use of any certificate of exemption for up to two years.

(e) The Department of Revenue may adopt rules to administer and implement this section and may adopt rules Page 4 HB131 Enrolled requiring an annual exemption certificate for persons or companies not subject to subsection (a), other than government entities, providing for an annual information report from such persons or companies, and imposing penalties equivalent to the penalties provided for in subsection (c) for noncompliance by such persons or companies in order to verify exemptions and make reports to the Legislature." Section 2.

Page 5 HB131 EngrossedEnrolled House________________________________________________ Speaker of Representativesthe ReadHouse forof theRepresentatives first________________________________________________ timePresident and referredPresiding ................07-Feb-24Officer toof the Senate House of Representatives committeeI onhereby Statecertify Governmentthat Readthe forwithin theAct secondoriginated timein and placedwas ................21-Feb-24passed onby the calendar:House 22-Feb-24, as amended.

0 amendments Read for the third time and passed ................22-Feb-24 as amended Yeas 101 Nays 0 Abstains 0 John Treadwell Clerk Senate 08-May-24 Passed Page 6