The place to find business sales tax information

— as well as solutions, services and jobs!

Don't Forget Alabama Exemption for Governmental Construction Projects

author photo of Ned Lenhart

For governmental construction projects entered into after January 1, 2014, Alabama law now provides an exemption from sales tax for the materials purchased for use in the project.  Taking advantage of this exemption, however, requires that contractors and subcontractors first jump through a few administrative hoops.

The exemption applies to materials and supplies that become part of a structure pursuant to a qualifying contract.  Qualifying projects are ones entered into with the following governmental entities: The state of Alabama, Alabama counties and cities, public schools, or an Alabama industrial or economic development board that is already exempt from sales tax.    Contracts with the Federal government and contracts pertaining to highways and roads do not qualify for the exemption.

Each exempt entity, each contractor, and each subcontractor must make an application with the Alabama Department of Revenue by using Form ST:EXC-01 to register the particular project with the state and to obtain the required exemption certificates.  In addition to this process, contractors can also be appointed as "purchasing agents" for the exempt entity and purchase materials directly from vendors without paying Alabama sales tax.  Form ST:PAA1 is used to apply for purchasing agent status.

Your questions or comments are encouraged! Let me know if there are particular Alabama sales-use issues that you'd like to see covered in this blog.

Ned Lenhart, CPA is the founder and President of Interstate Tax Strategies, P.C. (“ITS”). Ned has over 28 years of varied state tax consulting experience including roles as the Director of Compliance for the Missouri Department of Revenue, SALT Manager for Arthur Andersen in Kansas City, and Director with Deloitte in their Atlanta office from 1994 to 2003. He started ITS in 2003 to assist local and national companies by helping them develop proactive strategies to managing their multi-state sales tax obligations.

Comments or questions? Unfortunately, Ned Lenhart is not currently accepting new comments nor questions. Use the Site's SEARCH bar to locate other helpful information.

Other recent “Alabama (AL)” posts by Ned Lenhart, CPA:

NOTE: All blog content, comments, and participation subject to disclaimer at bottom of page.



Access to any portion of is contingent upon your acceptance of our Terms of Use. This Web Site and content provided by STS Publishing, LLC and its third party content providers, including, but not limited to information, documents, forms, comments, advice and opinions, is for informational purposes only, and is not a substitute for professional advice, nor does the use of this Web Site constitute a professional-client relationship. The Web-Site also includes advertisements, directory listings, job postings and links to third party web sites, all of which are provided for your convenience only and in no way constitute a referral, endorsement, or warranty by of any product or service provided by such third parties. All content is provided “as is” with no guarantee regarding accuracy, suitability, or timeliness. Your reliance on any content accessed on or through the Web Site, or on any product or service provider is strictly at your own risk.