SB 292 — Relating to taxation and revenue; to provide for the Department of Revenue to grant certificates of exemption from sales and use taxes to contractors and subcontractors licensed by the State Licensing Board for General Contractors for the purchase of building materials and construction materials to be used in the construction of a building or other project for an entity statutorily exempt from paying sales and use taxes; and to provide for accounting for purchases and enforcement for violations.

SB292 INTRODUCEDENROLLED ZEXGKR-1ZEXGKR-2 By Senators Roberts, Shelnutt RFD:

03-May-23 2023 Regular Session Page 0 ZEXGKR-1SB292 04/27/2023Enrolled CMHEnrolled, (L)bmAn 2023-1671Act, 23 4Relating SYNOPSIS:to taxation and revenue;

This bill would provide for the Department of Revenue to grant certificates of exemption from sales and use taxes to contractors and subcontractors licensed by the State Licensing Board for General Contractors for the purchase of building materials and construction materials to be use in the construction of a project for an entity that is exempt by law from paying sales and use taxes.

A BILL TO BE ENTITLED AN ACT Relating to taxation and revenue;

Page 1 SB292 INTRODUCED Section 1.

(2) The Department of Revenue shall grant a certificate Page 1 SB292 Enrolled of exemption from state and local sales and use taxes to any contractor licensed by the State Licensing Board for General Contractors, or any subcontractor working under the same contract, for the purchase of building materials, construction materials and supplies, and other tangible personal property that becomes part of the structure that is the subject of a written contract for the construction of a building or other project for and on behalf of a statutorily exempt entity that is exempt from the payment of sales and use taxes.

(c) The use of a certificate of exemption for the purchase of tangible personal property pursuant to this section shall include only tangible personal property that becomes part of the structure that is the subject of the Page 2 SB292 INTRODUCED construction contract.

Page 2 SB292 Enrolled (2) Any contractor or subcontractor who intentionally uses a certificate of exemption in violation of this section, in addition to the actual sales or use tax liability due, shall be subject to a civil penalty levied by the department in the amount of two times any state and local sales or use tax due for the property not less than two thousand dollars ($2,000) and, based on the contractor's or subcontractor's willful misuse of the certificate of exemption, may be barred from the use of any certificate of exemption on any project for up to two years.

(f) The department may adopt rules to implement this section in order to effectuate the purposes of this section and to provide for accurate accounting and enforcement of this Page 3 SB292 INTRODUCED section.

95 (i) This section shall be operative for any contracts with a statutorily exempt entity entered into on or after January 1, 2024, and shall not apply to any contracts entered into prior to January 1, 2024, nor shall this section apply to any contract change order or contract extensions, including Page 3 SB292 Enrolled revised, renegotiated, or altered contracts, when the original contract was entered into prior to January 1, 2024.

Page 4 SB292 Enrolled 91 ________________________________________________ President and Presiding Officer of the Senate 95 97 ________________________________________________ Speaker of the House of Representatives SB292 Senate 16-May-23 I hereby certify that the within Act originated in and passed the Senate.

Patrick Harris, Secretary.

House of Representatives Passed:

31-May-23 By:

Senator Roberts Page 5