Sales and use tax exemptions allow certain entities to purchase tangible personal property without paying taxes. 

Statutorily Exempt Entities

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

• Who Qualifies for a Sales and Use Tax Exemption?
• Rule 810-6-3-.07.05 Charitable and Non-Profit Organizations And Institutions
• Act 2015-534

Contractors Exemptions for Government and Statutorily Exempt Entities

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 entered into on or after January 1, 2014, with a governmental entity is exempt from all state, county, and municipal sales and use taxes.

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 entered into on or after January 1, 2024, with a Statutorily Exempt Entity is exempt from all state, county, and municipal sales and use taxes.

• Act 2013-205
• Act 2018-234
• Act 2021-372
• Act 2023-526

Notices

• Tax Guidance for Contractors, Subcontractors and Alabama Governmental Entities Regarding Construction-Related Contracts
• Sales Tax Certificate of Exemption for Governmental/Statutorily Exempt Entity Projects
• Tax Guidance for Alabama Governmental Entities and Roadbuilder Contractors Regarding Construction-Related Contracts
• Tax Guidance for United Way Organizations and United Way Member Agencies, United Appeal Funds and Supported Charities Claiming Exemption from the Payment of Sales, Use, and Lodgings Taxes
• Tax Guidance for United Appeal Funds and Supported Charities Claiming Exemption from the Payment of Sales, Use, and Lodgings Taxes
• United Appeal Fund Notice
• Tax Guidance for Airport Authorities

Resources

• Online Guide for Contractor’s Exemption Applications
• Filing the Quadrennial Report

Rules

• Rule 810-6-3-.77 Exemption For Certain Purchases By Contractors And Subcontractors In Conjunction With Construction Contracts With Certain Governmental Entities And Statutorily Exempt Entities
• 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
• Rule 810-6-5-.02.02 Informational Report for Entities Having a Statutory Exemption from the Payment of Sales, Use, and Lodgings Taxes
• Rule 810-6-3-.69.02 Exemption for United States, State, County, City, and Other Exempt Entities from the Payment of Sales Tax, and Purchases Made Through the Use of Purchasing Agents