Amendment vs bill Amendment FRPPDD-1 vs Enrolled

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HB479 ENROLLED E0XQ22-3 By Representatives Garrett, McClammy, Crawford, Whitt, 3 Reynolds, Standridge, Carns, Hill, Clouse, Wood (R), Rehm, Woods, Givan, Lomax, Cole, Lamb, Shirey, Yarbrough, Stringer, Rigsby, Ellis, Colvin, Kitchens, Shaw, Treadaway, Bedsole, Fincher, Estes, Butler, Gidley, Robertson, Hulsey, Hall, Underwood, Harbison, Brown, Kiel, Almond, Collins, Shaver, Wood (D), Shedd, Sellers, Morris, Moore (M), Paschal, Lipscomb, Hurst, Marques, Sorrells, Pettus, Smith, Ingram, Givens, Jones, Holk-Jones, Fidler, Faulkner, Simpson, Bracy, Plump, Boyd, Drummond, Clarke, Daniels, Hollis, Gray, Ensler, Kirkland, Lawrence, Bolton, Easterbrook, Baker, Robbins, Rogers, Blackshear, Stubbs, DuBose, Oliver, Ledbetter, Whorton, Wadsworth, Lovvorn, Hammett, Chestnut, Rafferty, Sells, McCampbell, Stadthagen, Moore (P), Harrison, Wilcox, Tillman, England, Travis, Starnes, Mooney, Hassell, Warren RFD:
FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 JONES SUBSTITUTE TO HB479 OFFERED BY SENATOR JONES 2 4 SYNOPSIS:
Ways and Means Education First Read:
Under existing law, the state imposes sales or use taxes upon certain persons, firms, or corporations.
16-May-23 2023 Regular Session Page 0 HB479 Enrolled Enrolled, An Act, 3 Relating to sales and use taxes;
Sales of certain items are taxed at a reduced rate.
to amend Sections 40-23-1, 40-23-2, 40-23-60, and 40-23-61, Code of Alabama 1975, to define "food" and begin reducing the state sales and use tax on food on September 1, 2023;
"Food" is not a defined term and is taxed at the general rate.
Sales of other items are exempt from the taxes.
This bill would define "food" for purposes of sales and use taxes and begin reducing the state sales and use tax on food on September 1, 2023.
Future rate reductions would be contingent upon certain growth requirements in the Education Trust Fund.
This bill would establish the sales and use tax rate on food for purposes of county and municipal sales and use taxes as the existing general or retail sales tax rate on the effective date of this act and allow a county and municipal election to reduce the sales tax rate or exempt food from local sales and use taxes.
A BILL TO BE ENTITLED AN ACT Relating to sales and use taxes;
to amend Sections Page 1 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 40-23-1, 40-23-2, 40-23-60, and 40-23-61, Code of Alabama 1975, to define "food" and begin reducing the state sales and use tax on food on September 1, 2023;
The Department of Revenue of the State Page 1 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled of Alabama.
The Department of Revenue of the State of Alabama.
(5) SALE or SALES.
Page 2 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 (5) SALE or SALES.
The value proceeding or accruing from the sale of tangible personal property, and including the proceeds from the sale of any property handled on consignment by the taxpayer, including merchandise of any kind and character without any deduction on account of the cost of the property sold, the cost of the materials used, labor or service cost, interest paid, any consumer excise taxes that may be included within the sales price of the Page 2 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled property sold, or any other expenses whatsoever, and without any deductions on account of losses;
The value proceeding or accruing from the sale of tangible personal property, and including the proceeds from the sale of any property handled on consignment by the taxpayer, including merchandise of any kind and character without any deduction on account of the cost of the property sold, the cost of the materials used, labor or service cost, interest paid, any consumer excise taxes that may be included within the sales price of the property sold, or any other expenses whatsoever, and without any deductions on account of losses;
provided, that cash discounts allowed and taken on sales shall not be included, and "gross proceeds of sales" shall not include the sale price of property returned by customers when the full sales price thereof is refunded either in cash or by credit.
provided, that cash discounts allowed and taken on sales shall not be included, and "gross proceeds of sales" shall not include the sale price Page 3 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 of property returned by customers when the full sales price thereof is refunded either in cash or by credit.
Page 3 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled In the case of the retail sale of equipment, accessories, fixtures, and other similar tangible personal property used in connection with the sale of commercial mobile services as defined herein, or in connection with satellite television services, at a price below cost, "gross proceeds of sale" shall only include the stated sales price thereof and shall not include any sales commission or rebate received by the seller as a result of the sale.
In the case of the retail sale of equipment, accessories, fixtures, and other similar tangible personal property used in connection with the sale of commercial mobile services as defined herein, or in connection with satellite Page 4 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 television services, at a price below cost, "gross proceeds of sale" shall only include the stated sales price thereof and shall not include any sales commission or rebate received by the seller as a result of the sale.
§§ 153(n) and 332(d), as in effect 95 from time to time.
§§ 153(n) and 332(d), as in effect from time to time.
The term "gross receipts" shall also mean and include the reasonable and fair market value of any tangible personal property previously purchased at wholesale which is withdrawn or used from the business or stock and used or consumed in connection with a business, and shall also mean and include the reasonable and Page 4 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled fair market value of any tangible personal property previously purchased at wholesale which is withdrawn from the business or stock and used or consumed by any person so withdrawing the same, except property which has been previously withdrawn from business or stock and so used or consumed and with respect to which property the tax has been paid because of previous withdrawal, use, or consumption, except property which enters into and becomes an ingredient or component part of tangible personal property or products manufactured or compounded for sale as provided in subdivision (9) and not for the personal and private use or consumption of any person so withdrawing, using, or consuming the same, and except refinery, residue, or fuel gas, whether in a liquid or gaseous state, that has been generated by, or is otherwise a by-product of, a petroleum-refining process, which gas is then utilized in the process to generate heat or is otherwise utilized in the distillation or refining of petroleum products.
The term "gross receipts" shall also mean and include the reasonable and fair market value of any tangible personal property previously purchased at wholesale which is withdrawn or used from the business or stock and used or consumed in connection with a business, and shall also mean and include the reasonable and fair market value of any tangible personal property previously purchased at wholesale which is withdrawn from the business or stock and used or consumed by any person so withdrawing the same, except property which has been previously withdrawn from Page 5 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 business or stock and so used or consumed and with respect to which property the tax has been paid because of previous withdrawal, use, or consumption, except property which enters into and becomes an ingredient or component part of tangible personal property or products manufactured or compounded for sale as provided in subdivision (9) and not for the personal and private use or consumption of any person so withdrawing, using, or consuming the same, and except refinery, residue, or fuel gas, whether in a liquid or gaseous state, that has been generated by, or is otherwise a by-product of, a petroleum-refining process, which gas is then utilized in the process to generate heat or is otherwise utilized in the distillation or refining of petroleum products.
A sale of tangible personal property or products, including iron ore, and including the furnished container and label of the property or products, to a manufacturer or compounder which enter into and become an ingredient or component part of the tangible personal property or products Page 5 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled that the manufacturer or compounder manufactures or compounds for sale, whether or not the tangible personal property or product used in manufacturing or compounding a finished product is used with the intent that it becomes a component of the finished product;
A sale of tangible personal property or products, including iron ore, and including the furnished container and label of the property or products, to a manufacturer or compounder which enter into and become an ingredient or component part of the tangible personal property or products that the manufacturer or compounder manufactures or compounds for sale, whether or not the tangible personal property or product used in manufacturing or compounding a finished product is used with the intent that it becomes a component of Page 6 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 the finished product;
A sale of containers to persons engaged in selling or otherwise supplying or furnishing baby chicks to growers thereof where containers are used for the delivery of chicks or a sale of containers for use in the delivery of eggs by the producer thereof to the distributor or packer of eggs even though containers used for delivery of baby chicks or eggs may Page 6 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled be recovered for reuse.
A sale of containers to persons engaged in selling or otherwise supplying or furnishing baby chicks to growers thereof where containers are used for the delivery of chicks or a sale of containers for use in the delivery of eggs by the producer thereof to the distributor or packer of eggs even though containers used for delivery of baby chicks or eggs may be recovered for reuse.
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 casings may be recovered for reuse.
A sale to meat packers, manufacturers, compounders, Page 7 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 or processors of meat products of all casings used in molding or forming wieners and Vienna sausages even though casings may be recovered for reuse.
A purchase or withdrawal of parts or materials from stock by any person licensed under this division where parts or materials are used in repairing or reconditioning the tangible personal property of a licensed person, which tangible personal property is a part of the stock of goods of Page 7 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled a licensed person, offered for sale by him or her, and not for use or consumption of a licensed person.
A purchase or withdrawal of parts or materials from stock by any person licensed under this division where parts or materials are used in repairing or reconditioning the tangible personal property of a licensed person, which tangible personal property is a part of the stock of goods of a licensed person, offered for sale by him or her, and not for use or consumption of a licensed person.
All sales of tangible personal property except those defined as wholesale sales.
All sales of tangible personal property except those defined as wholesale Page 8 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 sales.
The term "sale at retail" or "retail sale" shall also mean and include the withdrawal, use, or consumption of any tangible personal property by any one who purchases same at wholesale, except property that has been previously withdrawn from the business or stock and so used or Page 8 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled consumed and with respect to which property tax has been paid because of previous withdrawal, use, or consumption, except property that enters into and becomes an ingredient or component part of tangible personal property or products manufactured or compounded for sale as provided in subdivision (9) and not for the personal and private use or consumption of any person so withdrawing, using, or consuming the same;
The term "sale at retail" or "retail sale" shall also mean and include the withdrawal, use, or consumption of any tangible personal property by any one who purchases same at wholesale, except property that has been previously withdrawn from the business or stock and so used or consumed and with respect to which property tax has been paid because of previous withdrawal, use, or consumption, except property that enters into and becomes an ingredient or component part of tangible personal property or products Page 9 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 manufactured or compounded for sale as provided in subdivision (9) and not for the personal and private use or consumption of any person so withdrawing, using, or consuming the same;
A sale of a Page 9 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled prepaid telephone calling card or a prepaid authorization number, or both, shall be deemed the sale of tangible personal property subject to the tax imposed on the sale of tangible personal property pursuant to this chapter.
A sale of a prepaid telephone calling card or a prepaid authorization number, or both, shall be deemed the sale of tangible personal property subject to the tax imposed on the sale of tangible personal property pursuant to this chapter.
For purposes of this subdivision, the sale of prepaid wireless service that is evidenced by a physical card constitutes the sale of a prepaid telephone calling card, and the sale of prepaid wireless service that is not evidenced by a physical card constitutes the sale of a prepaid authorization number.
For purposes of Page 10 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 this subdivision, the sale of prepaid wireless service that is evidenced by a physical card constitutes the sale of a prepaid telephone calling card, and the sale of prepaid wireless service that is not evidenced by a physical card constitutes the sale of a prepaid authorization number.
The Page 10 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled term does not include any product regulated by the United States Food and Drug Administration under Chapter V of the Federal Food, Drug, and Cosmetic Act.
The term does not include any product regulated by the United States Food and Drug Administration under Chapter V of the Federal Food, Drug, and Cosmetic Act.
Fruits or other agricultural products that have undergone some degree of further processing by the original producer of the agricultural product, including, but not limited to, whole cuts of meat, bound cut flowers, jams, jellies, or boiled or roasted peanuts.
Fruits Page 11 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 or other agricultural products that have undergone some degree of further processing by the original producer of the agricultural product, including, but not limited to, whole cuts of meat, bound cut flowers, jams, jellies, or boiled or roasted peanuts.
(b) The use within this state of tangible personal property by the manufacturer thereof, as building materials in the performance of a construction contract, for the purposes Page 11 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled of this division, shall be considered as a retail sale thereof by the manufacturer, who shall also be construed as the ultimate consumer of materials or property, and who shall be required to report transaction and pay the sales tax thereon, based upon the reasonable and fair market price thereof at the time and place where same are used or consumed by the manufacturer.
(b) The use within this state of tangible personal property by the manufacturer thereof, as building materials in the performance of a construction contract, for the purposes of this division, shall be considered as a retail sale thereof by the manufacturer, who shall also be construed as the ultimate consumer of materials or property, and who shall be required to report transaction and pay the sales tax thereon, Page 12 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 based upon the reasonable and fair market price thereof at the time and place where same are used or consumed by the manufacturer.
The certificate provided for herein Page 12 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled shall be valid for the calendar year of its issuance and may be renewed from year to year on application to the Department of Revenue on or before January 31 of each succeeding year;
The certificate provided for herein shall be valid for the calendar year of its issuance and may be renewed from year to year on application to the Department of Revenue on or before January 31 of each succeeding year;
provided, that if not renewed the certificate shall become invalid for the purpose of this division on February 1.
provided, that if not renewed the certificate shall become Page 13 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 invalid for the purpose of this division on February 1.
The term "supplier" shall include but not be limited to optical laboratories, ophthalmic material wholesalers, or anyone selling ophthalmic materials Page 13 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled to ophthalmologists.
The term "supplier" shall include but not be limited to optical laboratories, ophthalmic material wholesalers, or anyone selling ophthalmic materials to ophthalmologists.
(e) Notwithstanding the above, the withdrawal, use, or consumption of a manufactured product by the manufacturer thereof in quality control testing performed by employees or independent contractors of the taxpayer, for purposes of this division, shall not be deemed or considered to constitute a transaction subject to sales tax, nor shall a gift by the manufacturer of a manufactured product, withdrawn from the manufacturer's inventory, to an entity listed in 26 U.S.C.
(e) Notwithstanding the above, the withdrawal, use, or consumption of a manufactured product by the manufacturer thereof in quality control testing performed by employees or Page 14 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 independent contractors of the taxpayer, for purposes of this division, shall not be deemed or considered to constitute a transaction subject to sales tax, nor shall a gift by the manufacturer of a manufactured product, withdrawn from the manufacturer's inventory, to an entity listed in 26 U.S.C.
(1) Upon every person, firm, or corporation, (including the State of Alabama and its Alcoholic Beverage Control Board in the sale of alcoholic beverages of all kinds, the Page 14 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled University of Alabama, Auburn University, and all other institutions of higher learning in the state, whether the institutions be denominational, state, county, or municipal institutions, any association or other agency or instrumentality of the institutions) engaged or continuing within this state, in the business of selling at retail any tangible personal property whatsoever, including merchandise and commodities of every kind and character, (not including, however, bonds or other evidences of debts or stocks, nor sales of material and supplies to any person for use in fulfilling a contract for the painting, repair, or reconditioning of vessels, barges, ships, other watercraft, and commercial fishing vessels of over five tons load displacement as registered with the U.S.
(1) Upon every person, firm, or corporation, (including the State of Alabama and its Alcoholic Beverage Control Board in the sale of alcoholic beverages of all kinds, the University of Alabama, Auburn University, and all other institutions of higher learning in the state, whether the institutions be denominational, state, county, or municipal institutions, any association or other agency or Page 15 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 instrumentality of the institutions) engaged or continuing within this state, in the business of selling at retail any tangible personal property whatsoever, including merchandise and commodities of every kind and character, (not including, however, bonds or other evidences of debts or stocks, nor sales of material and supplies to any person for use in fulfilling a contract for the painting, repair, or reconditioning of vessels, barges, ships, other watercraft, and commercial fishing vessels of over five tons load displacement as registered with the U.S.
Where any used part including tires of an automotive vehicle or a truck trailer, semitrailer, or house trailer is taken in trade, or in a series of trades, as a credit or part Page 15 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled payment on the sale of a new or rebuilt part or tire, the tax levied herein shall be paid on the net difference, that is, the price of the new or used part or tire sold less the credit for the used part or tire taken in trade, provided, however, this provision shall not be construed to include batteries.
Where any used part including tires of an automotive vehicle or a truck trailer, semitrailer, or house trailer is taken in trade, or in a series of trades, as a credit or part payment on the sale of a new or rebuilt part or tire, the tax levied herein shall be paid on the net difference, that is, the price of the new or used part or tire sold less the credit for the used part or tire taken in trade, provided, however, Page 16 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 this provision shall not be construed to include batteries.
Provided, however, notwithstanding any language to the contrary in the prior portion of this subdivision, the tax provisions so specified Page 16 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled shall not apply to any athletic event conducted by a public or nonpublic primary or secondary school or any athletic event conducted by or under the auspices of the Alabama High School Athletic Association.
Provided, however, notwithstanding any language to the contrary in the prior portion of this subdivision, the tax provisions so specified shall not apply to any athletic event conducted by a public or nonpublic primary or secondary school or any athletic event conducted by or under the auspices of the Alabama High School Athletic Association.
The tax amount which would have been collected pursuant to this subdivision shall continue to be collected by the public or nonpublic primary or secondary school, but shall be retained by the school that collected it and shall be used by the school for school purposes.
The tax amount which would have been Page 17 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 collected pursuant to this subdivision shall continue to be collected by the public or nonpublic primary or secondary school, but shall be retained by the school that collected it and shall be used by the school for school purposes.
(4) Upon every person, firm, or corporation engaged or continuing within this state in the business of selling at retail any automotive vehicle or truck trailer, semitrailer, or house trailer, or mobile home set-up materials and supplies including but not limited to steps, blocks, anchoring, cable pipes, and any other materials pertaining thereto, an amount equal to two percent of the gross proceeds of sale of the Page 17 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled automotive vehicle or truck trailer, semitrailer, or house trailer, or mobile home set-up materials and supplies provided, however, where a person subject to the tax provided for in this subdivision withdraws from his or her stock in trade any automotive vehicle or truck trailer, semitrailer, or house trailer for use by him or her or by his or her employee or agent in the operation of the business, there shall be paid, in lieu of the tax levied herein, a fee of five dollars ($5) per year or part thereof during which the automotive vehicle, truck trailer, semitrailer, or house trailer shall remain the property of the person.
(4) Upon every person, firm, or corporation engaged or continuing within this state in the business of selling at retail any automotive vehicle or truck trailer, semitrailer, or house trailer, or mobile home set-up materials and supplies including but not limited to steps, blocks, anchoring, cable pipes, and any other materials pertaining thereto, an amount equal to two percent of the gross proceeds of sale of the automotive vehicle or truck trailer, semitrailer, or house trailer, or mobile home set-up materials and supplies provided, however, where a person subject to the tax provided for in this subdivision withdraws from his or her stock in Page 18 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 trade any automotive vehicle or truck trailer, semitrailer, or house trailer for use by him or her or by his or her employee or agent in the operation of the business, there shall be paid, in lieu of the tax levied herein, a fee of five dollars ($5) per year or part thereof during which the automotive vehicle, truck trailer, semitrailer, or house trailer shall remain the property of the person.
Sales of automobiles, motorcycles, trucks, truck trailers, travel trailers, campers, housecars, or semitrailers that will be registered or titled outside Alabama, that are exported or removed from Alabama within 72 hours by the purchaser or his or her agent for first use outside Alabama are subject to Alabama sales tax in an amount equal to only Page 18 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled the state automotive sales tax rate, unless the sales tax laws of the state in which the purchaser will title or register the vehicle allows an Alabama resident to purchase a motor vehicle for first titling and registering in Alabama without the payment of tax to that state.
Sales of automobiles, motorcycles, trucks, truck trailers, travel trailers, campers, housecars, or semitrailers that will be registered or titled outside Alabama, that are exported or removed from Alabama within 72 hours by the purchaser or his or her agent for first use outside Alabama are subject to Alabama sales tax in an amount equal to only the state automotive sales tax rate, unless the sales tax laws of the state in which the purchaser will title or register the vehicle allows an Alabama resident to purchase a motor vehicle for first titling and registering in Alabama without the Page 19 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 payment of tax to that state.
Sales of all other vehicles such as mobile homes, motor bikes, all terrain vehicles, and boats do not qualify for the export exemption provision and are taxable unless the dealer can provide Page 19 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled factual evidence that the vehicle was delivered outside of Alabama or to a common carrier for transportation outside Alabama.
Sales of all other vehicles such as mobile homes, motor bikes, all terrain vehicles, and boats do not qualify for the export exemption provision and are taxable unless the dealer can provide factual evidence that the vehicle was delivered outside of Alabama or to a common carrier for transportation outside Alabama.
In order for the sale to be exempt from Alabama tax, the information relative to the exempt sale shall be documented on forms approved by the Revenue Department.
In order for the sale to be exempt from Alabama tax, the information relative to the exempt sale shall be Page 20 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 documented on forms approved by the Revenue Department.
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On September 1, 2024, the tax rate shall be reduced to two percent, if the average of the estimated growth in the total net receipts from all revenue sources to the Education Page 20 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled Trust Fund for the fiscal year ending September 30, 2025, as certified by the Director of Finance and the Legislative Fiscal Officer, respectively, pursuant to Section 260.02 of the Constitution of Alabama of 2022, is at least three and one-half percent higher than the previous fiscal year.
On September 1, 2024, the tax rate shall be reduced to two percent, if the average of the estimated growth in the total net receipts from all revenue sources to the Education Trust Fund for the fiscal year ending September 30, 2025, as certified by the Director of Finance and the Legislative Fiscal Officer, respectively, pursuant to Section 260.02 of the Constitution of Alabama of 2022, is at least three and Page 21 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 one-half percent higher than the previous fiscal year.
Page 21 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled b.
b.
A sale of tangible personal property or products, including iron ore, and including the furnished container and label of such property or products, to a manufacturer or compounder which enter into and become an ingredient or component part of the tangible personal property or products which the manufacturer or compounder manufactures or compounds for sale, whether or not such tangible personal property or product used in manufacturing or compounding a finished product is used with the intent that it become a component of the finished product;
A sale of tangible personal property or products, including iron ore, and including the furnished container and label of such property or products, to a manufacturer or compounder which enter into and become an ingredient or Page 22 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 component part of the tangible personal property or products which the manufacturer or compounder manufactures or compounds for sale, whether or not such tangible personal property or product used in manufacturing or compounding a finished product is used with the intent that it become a component of the finished product;
A sale of containers to persons engaged in selling Page 22 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled or otherwise supplying or furnishing baby chicks to growers thereof where the containers are used for the delivery of the chicks or a sale of containers for use in the delivery of eggs by the producer thereof to the distributor or packer of the eggs even though the containers used for delivery of baby chicks or eggs may be recovered for reuse.
A sale of containers to persons engaged in selling or otherwise supplying or furnishing baby chicks to growers thereof where the containers are used for the delivery of the chicks or a sale of containers for use in the delivery of eggs by the producer thereof to the distributor or packer of the Page 23 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 eggs even though the containers used for delivery of baby chicks or eggs may be recovered for reuse.
A purchase or withdrawal of parts or materials from stock by any person licensed under this article where the parts or materials are used in repairing or reconditioning the Page 23 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled tangible personal property of the licensed person which tangible personal property is a part of the stock of goods of the licensed person, offered for sale by the licensed person and not for use or consumption of the licensed person.
A purchase or withdrawal of parts or materials from stock by any person licensed under this article where the parts or materials are used in repairing or reconditioning the tangible personal property of the licensed person which tangible personal property is a part of the stock of goods of the licensed person, offered for sale by the licensed person and not for use or consumption of the licensed person.
l.
Page 24 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 l.
Sales of tangible personal property or products to manufacturers, quarry operators, mine operators, or compounders, which are used or consumed by them in manufacturing, mining, quarrying, or compounding and do not Page 24 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled become an ingredient or component part of the tangible personal property manufactured or compounded as provided in subdivision (4) are retail sales.
Sales of tangible personal property or products to manufacturers, quarry operators, mine operators, or compounders, which are used or consumed by them in manufacturing, mining, quarrying, or compounding and do not become an ingredient or component part of the tangible personal property manufactured or compounded as provided in subdivision (4) are retail sales.
The term "sale at retail" or "retail sale" shall also mean and include the withdrawal, use, or consumption of any tangible personal property by anyone who purchases same at wholesale, except property that has been previously withdrawn from the business or stock and so used or consumed and with respect to which property the tax has been paid because of such previous withdrawal, use, or consumption, except property that enters into and becomes an ingredient or component part of tangible personal property or products manufactured or compounded for sale as provided in subdivision (4);
The term "sale at retail" or "retail sale" shall also mean and include the withdrawal, use, Page 25 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 or consumption of any tangible personal property by anyone who purchases same at wholesale, except property that has been previously withdrawn from the business or stock and so used or consumed and with respect to which property the tax has been paid because of such previous withdrawal, use, or consumption, except property that enters into and becomes an ingredient or component part of tangible personal property or products manufactured or compounded for sale as provided in subdivision (4);
Page 25 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled (6) BUSINESS.
(6) BUSINESS.
All activities engaged in, or caused to be engaged in, with the object of gain, profit, benefit, or advantage, either direct or indirect, and not excepting subactivities producing marketable commodities used or consumed in the main business activity, each of which subactivities shall be considered business engaged in, taxable in the class in which it falls.
All activities engaged in, or caused to be engaged in, with the object of gain, profit, benefit, or advantage, either direct or indirect, and not excepting subactivities producing marketable commodities used or Page 26 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 consumed in the main business activity, each of which subactivities shall be considered business engaged in, taxable in the class in which it falls.
The total amount for which tangible personal property is sold, including any services, including transportation, that are a part of the sale, valued in money, whether paid in money or otherwise, and includes any amount for which credit is given to the purchaser by the seller, Page 26 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled without any deduction therefrom on account of the cost of the property sold, the cost of the materials used, labor or service cost, interest charged, losses, or any other expenses whatsoever;
The total amount for which tangible personal property is sold, including any services, including transportation, that are a part of the sale, valued in money, whether paid in money or otherwise, and includes any amount for which credit is given to the purchaser by the seller, without any deduction therefrom on account of the cost of the property sold, the cost of the materials used, labor or service cost, interest charged, losses, or any other expenses whatsoever;
provided, that cash discounts allowed and taken on sales shall not be included and sales price shall not include the amount charged for property returned by customers when the entire amount charged therefor is refunded either in cash or by credit.
provided, that cash discounts allowed and taken on Page 27 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 sales shall not be included and sales price shall not include the amount charged for property returned by customers when the entire amount charged therefor is refunded either in cash or by credit.
The right to use mobile telecommunications service, which must be paid for in advance and that is sold in predetermined units or dollars of which Page 27 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled the number declines with use or the expiration of time in a known amount, and which may include rights to use non-telecommunications services or to download digital products or digital content.
The right to use mobile telecommunications service, which must be paid for in advance and that is sold in predetermined units or dollars of which the number declines with use or the expiration of time in a known amount, and which may include rights to use non-telecommunications services or to download digital products or digital content.
For purposes of this subdivision, mobile telecommunications service has the meaning ascribed by Section 40-21-120.
For purposes of this subdivision, Page 28 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 mobile telecommunications service has the meaning ascribed by Section 40-21-120.
Coast Guard and licensed by the State of Alabama Department of Conservation and Natural Resources, purchased at retail on or after October 1, 1965, for storage, use or other consumption in this state Page 28 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled at the rate of four percent of the sales price of such property or the amount of tax collected by the seller, whichever is greater;
Coast Guard and licensed by the State of Alabama Department of Conservation and Natural Resources, purchased at retail on or after October 1, 1965, for storage, use or other consumption in this state at the rate of four percent of the sales price of such property or the amount of tax collected by the seller, whichever is greater;
provided, however, when the seller follows the Department of Revenue's suggested use tax brackets and his records prove that his following said brackets resulted in a net undercollection of tax for the month, he may report the tax due or tax collected, whichever is less, except as provided in subsections (b), and (c), and (d) of this section.
provided, however, when the seller follows the Department of Revenue's suggested use tax brackets Page 29 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 and his records prove that his following said brackets resulted in a net undercollection of tax for the month, he may report the tax due or tax collected, whichever is less, except as provided in subsections (b), and (c), and (d) of this section.
Page 29 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled (c) An excise tax is hereby imposed on the storage, use or other consumption in this state of any automotive vehicle or truck trailer, semitrailer or house trailer, and mobile home set-up materials and supplies including but not limited to steps, blocks, anchoring, cable pipes and any other materials pertaining thereto, purchased at retail on or after October 1, 1965, for storage, use or other consumption in this state at the rate of two percent of the sales price of such automotive vehicle, truck trailer, semitrailer or house trailer, and mobile home set-up materials and supplies as specified above, or the amount of tax collected by the seller, whichever is greater;
(c) An excise tax is hereby imposed on the storage, use or other consumption in this state of any automotive vehicle or truck trailer, semitrailer or house trailer, and mobile home set-up materials and supplies including but not limited Page 30 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 to steps, blocks, anchoring, cable pipes and any other materials pertaining thereto, purchased at retail on or after October 1, 1965, for storage, use or other consumption in this state at the rate of two percent of the sales price of such automotive vehicle, truck trailer, semitrailer or house trailer, and mobile home set-up materials and supplies as specified above, or the amount of tax collected by the seller, whichever is greater;
Page 30 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled (d) An excise tax is hereby imposed on the storage, use, or other consumption in this state of food as defined in Section 40-23-60, at the rate of four percent of the sales price of such food.
(d) An excise tax is hereby imposed on the storage, use, or other consumption in this state of food as defined in Section 40-23-60, at the rate of four percent of the sales price of such food.
On September 1, 2023, the tax rate shall be reduced to three percent.
On September 1, 2023, the tax rate shall Page 31 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 be reduced to three percent.
provided, that a receipt from a retailer maintaining a place of business in this state or a retailer authorized by the department, under such rules and regulations as it may prescribe, to collect the tax imposed hereby and who shall for the purpose of this article be regarded as a retailer maintaining a place of business in this state, given to the purchaser in accordance with the provisions of Section 40-23-67, shall be sufficient to relieve Page 31 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled the purchaser from further liability for tax to which such receipt may refer.
provided, that a receipt from a retailer maintaining a place of business in this state or a retailer authorized by the department, under such rules and regulations as it may prescribe, to collect the tax imposed hereby and who shall for the purpose of this article be regarded as a retailer maintaining a place of business in this state, given to the purchaser in accordance with the provisions of Section 40-23-67, shall be sufficient to relieve the purchaser from further liability for tax to which such receipt may refer.
(e)(f) An excise tax is hereby imposed on the classes of tangible personal property, and at the rates imposed on such classes, specified in subsections (a), (b), and (c), and (d) of this section, on the storage, use, or other consumption in the performance of a contract in this state of any such tangible personal property, new or used, the tax to be measured by the sales price or the fair and reasonable market value of such tangible personal property when put into use in this state, whichever is less;
(e)(f) An excise tax is hereby imposed on the classes of tangible personal property, and at the rates imposed on Page 32 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 such classes, specified in subsections (a), (b), and (c), and (d) of this section, on the storage, use, or other consumption in the performance of a contract in this state of any such tangible personal property, new or used, the tax to be measured by the sales price or the fair and reasonable market value of such tangible personal property when put into use in this state, whichever is less;
(b) Any county or municipal governing body may, by resolution or ordinance, reduce the general or retail sales Page 32 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled tax rate on food for local sales and use taxes by 25 percent in any year in which the growth in the applicable municipal or county general fund exceeds two percent over the prior year.
(b) Any county or municipal governing body may, by resolution or ordinance, reduce the general or retail sales tax rate on food for local sales and use taxes by 25 percent in any year in which the growth in the applicable municipal or county general fund exceeds two percent over the prior year.
Such ordinance or resolution must be adopted at least 60 days prior to becoming effective and will take effect on October 1 following adoption.
Such ordinance or resolution must be adopted at least 60 days Page 33 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 prior to becoming effective and will take effect on October 1 following adoption.
Page 33 FRPPDD-1 05/31/2023 SS (F) SS 2023-2350 Sub for HB479 HB479 Enrolled ________________________________________________ Speaker of the House of Representatives ________________________________________________ President and Presiding Officer of the Senate House of Representatives I hereby certify that the within Act originated in and was passed by the House 25-May-23, as amended.
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John Treadwell Clerk Senate 01-Jun-23 Passed House 01-Jun-23 Concurred in Senate Amendment Page 34