Alabama 2023 Regular Session

Alabama Senate Bill SB177 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	SB177INTRODUCED
2	2	Page 0
3	3	ROWSYY-1
4	4	By Senators Orr, Givhan, Butler, Allen, Waggoner, Roberts
5	5	RFD: Finance and Taxation Education
6	6	First Read: 05-Apr-23
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11	11	5 ROWSYY-1 3/31/2023 KHF (F) KHF 2023-863
12	12	Page 1
13	13	SYNOPSIS:
14	14	Under existing law, the state imposes sales or
15	15	use taxes upon certain persons, firms, or corporations.
16	16	Sales of certain items are taxed at a reduced rate.
17	17	"Food" is not a defined term and is taxed at the
18	18	general rate. Sales of other items are exempt from the
19	19	taxes.
20	20	This bill would define "food" for purposes of
21	21	sales and use taxes and begin phasing-out the state
22	22	sales and use tax on food on September 1, 2023. Future
23	23	rate reductions would be contingent upon certain growth
24	24	requirements in the Education Trust Fund.
25	25	This bill would establish the sales and use tax
26	26	rate on food for purposes of county and municipal sales
27	27	and use taxes as the existing general or retail sales
28	28	tax rate on the effective date of this act and allow a
29	29	county and municipal election to reduce the sales tax
30	30	rate or exempt food from local sales and use taxes.
31	31	A BILL
32	32	TO BE ENTITLED
33	33	AN ACT
34	34	Relating to sales taxes; to amend Section 40-23-1, as
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64	64	last amended by Acts 2022-199 and 2022-291, 2022 Regular
65	65	Session, Code of Alabama 1975, Section 40-23-2, as last
66	66	amended by Act 2022-346, 2022 Regular Session, Code of Alabama
67	67	1975, Section 40-23-60, as last amended by Act 2022-199, 2022
68	68	Regular Session, Code of Alabama 1975, and Section 40-23-61,
69	69	Code of Alabama 1975; to define "food" and begin phasing-out
70	70	the state sales and use tax on food on September 1, 2023; to
71	71	require certain growth targets in the Education Trust Fund for
72	72	future sales tax reductions on food; to establish the sales
73	73	and use tax rate on food for purposes of county and municipal
74	74	sales and use taxes as the existing general or retail sales
75	75	and use tax rate; and to authorize a county and municipality
76	76	to reduce the sales and use tax rate or exempt food from local
77	77	sales and use taxes.
78	78	BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
79	79	Section 1. Section 40-23-1, as last amended by Acts
80	80	2022-199 and 2022-291 in the 2022 Regular Session, Code of
81	81	Alabama 1975, Section 40-23-2, as last amended by Act 2022-346
82	82	in the 2022 Regular Session, Code of Alabama 1975, Section
83	83	40-23-60, as last amended by Act 2022-199 in the 2022 Regular
84	84	Session, Code of Alabama 1975, and Section 40-23-61, Code of
85	85	Alabama 1975, are amended to read as follows:
86	86	"§40-23-1
87	87	(a) For the purpose of this division, the following
88	88	terms shall have the respective meanings ascribed by this
89	89	section:
90	90	(1) PERSON or COMPANY. Used interchangeably, includes
91	91	any individual, firm, copartnership, association, corporation,
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121	121	receiver, trustee, or any other group or combination acting as
122	122	a unit and the plural as well as the singular number, unless
123	123	the intention to give a more limited meaning is disclosed by
124	124	the context.
125	125	(2) DEPARTMENT. The Department of Revenue of the State
126	126	of Alabama.
127	127	(3) COMMISSIONER. The Commissioner of Revenue of the
128	128	State of Alabama.
129	129	(4) TAX YEAR or TAXABLE YEAR. The calendar year.
130	130	(5) SALE or SALES. Installment and credit sales and the
131	131	exchange of properties as well as the sale thereof for money,
132	132	every closed transaction constituting a sale. Provided,
133	133	however, a transaction shall not be closed or a sale completed
134	134	until the time and place when and where title is transferred
135	135	by the seller or seller's agent to the purchaser or
136	136	purchaser's agent, and for the purpose of determining transfer
137	137	of title, a common carrier or the U.S. Postal Service shall be
138	138	deemed to be the agent of the seller, regardless of any F.O.B.
139	139	point and regardless of who selects the method of
140	140	transportation, and regardless of by whom or the method by
141	141	which freight, postage, or other transportation charge is
142	142	paid. Provided further that, where billed as a separate item
143	143	to and paid by the purchaser, the freight, postage, or other
144	144	transportation charge paid to a common carrier or the U.S.
145	145	Postal Service is not a part of the selling price.
146	146	(6) GROSS PROCEEDS OF SALES. The value proceeding or
147	147	accruing from the sale of tangible personal property, and
148	148	including the proceeds from the sale of any property handled
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178	178	on consignment by the taxpayer, including merchandise of any
179	179	kind and character without any deduction on account of the
180	180	cost of the property sold, the cost of the materials used,
181	181	labor or service cost, interest paid, any consumer excise
182	182	taxes that may be included within the sales price of the
183	183	property sold, or any other expenses whatsoever, and without
184	184	any deductions on account of losses; provided, that cash
185	185	discounts allowed and taken on sales shall not be included,
186	186	and "gross proceeds of sales" shall not include the sale price
187	187	of property returned by customers when the full sales price
188	188	thereof is refunded either in cash or by credit. The term
189	189	"gross proceeds of sale" shall also mean and include the
190	190	reasonable and fair market value of any tangible personal
191	191	property previously purchased at wholesale which is withdrawn
192	192	or used from the business or stock and used or consumed in
193	193	connection with a business, and shall also mean and include
194	194	the reasonable and fair market value of any tangible personal
195	195	property previously purchased at wholesale which is withdrawn
196	196	from the business or stock and used or consumed by any person
197	197	so withdrawing the same, except property that has been
198	198	previously withdrawn from business or stock and so used or
199	199	consumed with respect to which property the tax has been paid
200	200	because of previous withdrawal, use, or consumption, except
201	201	property that enters into and becomes an ingredient or
202	202	component part of tangible personal property or products
203	203	manufactured or compounded for sale and not for the personal
204	204	and private use or consumption of any person so withdrawing,
205	205	using, or consuming the same, and except refinery, residue, or
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235	235	fuel gas, whether in a liquid or gaseous state, that has been
236	236	generated by, or is otherwise a by-product of, a
237	237	petroleum-refining process, which gas is then utilized in the
238	238	process to generate heat or is otherwise utilized in the
239	239	distillation or refining of petroleum products.
240	240	In the case of the retail sale of equipment,
241	241	accessories, fixtures, and other similar tangible personal
242	242	property used in connection with the sale of commercial mobile
243	243	services as defined herein, or in connection with satellite
244	244	television services, at a price below cost, "gross proceeds of
245	245	sale" shall only include the stated sales price thereof and
246	246	shall not include any sales commission or rebate received by
247	247	the seller as a result of the sale. As used herein, the term
248	248	"commercial mobile services" shall have the same meaning as
249	249	that term has in 47 U.S.C. §§ 153(n) and 332(d), as in effect
250	250	from time to time.
251	251	(7) TAXPAYER. Any person liable for taxes hereunder.
252	252	(8) GROSS RECEIPTS. The value proceeding or accruing
253	253	from the sale of tangible personal property, including
254	254	merchandise and commodities of any kind and character, all
255	255	receipts actual and accrued, by reason of any business engaged
256	256	in, not including, however, interest, discounts, rentals of
257	257	real estate, or royalties, and without any deduction on
258	258	account of the cost of the property sold, the cost of the
259	259	materials used, labor or service cost, interest paid, any
260	260	consumer excise taxes that may be included in the sales price
261	261	of the property sold, or any other expenses whatsoever and
262	262	without any deductions on account of losses. The term "gross
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292	292	receipts" shall also mean and include the reasonable and fair
293	293	market value of any tangible personal property previously
294	294	purchased at wholesale which is withdrawn or used from the
295	295	business or stock and used or consumed in connection with a
296	296	business, and shall also mean and include the reasonable and
297	297	fair market value of any tangible personal property previously
298	298	purchased at wholesale which is withdrawn from the business or
299	299	stock and used or consumed by any person so withdrawing the
300	300	same, except property which has been previously withdrawn from
301	301	business or stock and so used or consumed and with respect to
302	302	which property the tax has been paid because of previous
303	303	withdrawal, use, or consumption, except property which enters
304	304	into and becomes an ingredient or component part of tangible
305	305	personal property or products manufactured or compounded for
306	306	sale as provided in subdivision (9) and not for the personal
307	307	and private use or consumption of any person so withdrawing,
308	308	using, or consuming the same, and except refinery, residue, or
309	309	fuel gas, whether in a liquid or gaseous state, that has been
310	310	generated by, or is otherwise a by-product of, a
311	311	petroleum-refining process, which gas is then utilized in the
312	312	process to generate heat or is otherwise utilized in the
313	313	distillation or refining of petroleum products.
314	314	(9) WHOLESALE SALE or SALE AT WHOLESALE. Any one of the
315	315	following:
316	316	a. A sale of tangible personal property by wholesalers
317	317	to licensed retail merchants, jobbers, dealers, or other
318	318	wholesalers for resale and does not include a sale by
319	319	wholesalers to users or consumers, not for resale.
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349	349	b. A sale of tangible personal property or products,
350	350	including iron ore, and including the furnished container and
351	351	label of the property or products, to a manufacturer or
352	352	compounder which enter into and become an ingredient or
353	353	component part of the tangible personal property or products
354	354	that the manufacturer or compounder manufactures or compounds
355	355	for sale, whether or not the tangible personal property or
356	356	product used in manufacturing or compounding a finished
357	357	product is used with the intent that it becomes a component of
358	358	the finished product; provided, however, that it is the intent
359	359	of this section that no sale of capital equipment, machinery,
360	360	tools, or product shall be included in the term "wholesale
361	361	sale." The term "capital equipment, machinery, tools, or
362	362	product" shall mean property that is subject to depreciation
363	363	allowances for Alabama income tax purposes.
364	364	c. A sale of containers intended for one-time use only,
365	365	and the labels thereof, when containers are sold without
366	366	contents to persons who sell or furnish containers along with
367	367	the contents placed therein for sale by persons.
368	368	d. A sale of pallets intended for one-time use only
369	369	when pallets are sold without contents to persons who sell or
370	370	furnish pallets along with the contents placed thereon for
371	371	sale by persons.
372	372	e. A sale to a manufacturer or compounder, of crowns,
373	373	caps, and tops intended for one-time use employed and used
374	374	upon the containers in which a manufacturer or compounder
375	375	markets his products.
376	376	f. A sale of containers to persons engaged in selling
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406	406	or otherwise supplying or furnishing baby chicks to growers
407	407	thereof where containers are used for the delivery of chicks
408	408	or a sale of containers for use in the delivery of eggs by the
409	409	producer thereof to the distributor or packer of eggs even
410	410	though containers used for delivery of baby chicks or eggs may
411	411	be recovered for reuse.
412	412	g. A sale of bagging and ties used in preparing cotton
413	413	for market.
414	414	h. A sale to meat packers, manufacturers, compounders,
415	415	or processors of meat products of all casings used in molding
416	416	or forming wieners and Vienna sausages even though casings may
417	417	be recovered for reuse.
418	418	i. A sale of commercial fish feed including
419	419	concentrates, supplements, and other feed ingredients when
420	420	substances are used as ingredients in mixing and preparing
421	421	feed for fish raised to be sold on a commercial basis.
422	422	j. A sale of bait used to capture or attempt to capture
423	423	fish or other seafood in the process of commercial fishing by
424	424	a holder of a commercial license issued pursuant to Chapter 12
425	425	of Title 9.
426	426	k. A sale of tangible personal property to any person
427	427	engaging in the business of leasing or renting tangible
428	428	personal property to others, if tangible personal property is
429	429	purchased for the purpose of leasing or renting it to others
430	430	under a transaction subject to the privilege or license tax
431	431	levied in Article 4 of Chapter 12 of this title against any
432	432	person engaging in the business of leasing or renting tangible
433	433	personal property to others.
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463	463	l. A purchase or withdrawal of parts or materials from
464	464	stock by any person licensed under this division where parts
465	465	or materials are used in repairing or reconditioning the
466	466	tangible personal property of a licensed person, which
467	467	tangible personal property is a part of the stock of goods of
468	468	a licensed person, offered for sale by him or her, and not for
469	469	use or consumption of a licensed person.
470	470	(10) SALE AT RETAIL or RETAIL SALE. All sales of
471	471	tangible personal property except those defined as wholesale
472	472	sales. The quantities of goods sold or prices at which sold
473	473	are immaterial in determining whether or not a sale is at
474	474	retail. Sales of building materials to contractors, builders,
475	475	or landowners for resale or use in the form of real estate are
476	476	retail sales in whatever quantity sold. Sales of building
477	477	materials, fixtures, or other equipment to a manufacturer or
478	478	builder of modular buildings for use in manufacturing,
479	479	building, or equipping a modular building ultimately becoming
480	480	a part of real estate situated in the State of Alabama are
481	481	retail sales, and the use, sale, or resale of building shall
482	482	not be subject to the tax. Sales of tangible personal property
483	483	to undertakers and morticians are retail sales and subject to
484	484	the tax at the time of purchase, but are not subject to the
485	485	tax on resale to the consumer. Sales of tangible personal
486	486	property or products to manufacturers, quarry operators, mine
487	487	operators, or compounders, which are used or consumed by them
488	488	in manufacturing, mining, quarrying, or compounding and do not
489	489	become an ingredient or component part of the tangible
490	490	personal property manufactured or compounded as provided in
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520	520	subdivision (9) are retail sales. The term "sale at retail" or
521	521	"retail sale" shall also mean and include the withdrawal, use,
522	522	or consumption of any tangible personal property by any one
523	523	who purchases same at wholesale, except property that has been
524	524	previously withdrawn from the business or stock and so used or
525	525	consumed and with respect to which property tax has been paid
526	526	because of previous withdrawal, use, or consumption, except
527	527	property that enters into and becomes an ingredient or
528	528	component part of tangible personal property or products
529	529	manufactured or compounded for sale as provided in subdivision
530	530	(9) and not for the personal and private use or consumption of
531	531	any person so withdrawing, using, or consuming the same; and
532	532	wholesale purchaser shall report and pay the taxes thereon. In
533	533	the case of the sale of equipment, accessories, fixtures, and
534	534	other similar tangible personal property used in connection
535	535	with the sale of commercial mobile services as defined in
536	536	subdivision (6), or in connection with satellite television
537	537	services, at a price below cost, the term "sale at retail" and
538	538	"retail sale" shall include those sales, and those sales shall
539	539	not also be taxable as a withdrawal, use, or consumption of
540	540	such tangible personal property.
541	541	(11) BUSINESS. All activities engaged in, or caused to
542	542	be engaged in, with the object of gain, profit, benefit, or
543	543	advantage, either direct or indirect, and not excepting
544	544	subactivities producing marketable commodities used or
545	545	consumed in the main business activity, each of which
546	546	subactivities shall be considered business engaged in, taxable
547	547	in the class in which it falls.
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577	577	(12) AUTOMOTIVE VEHICLE. A power shovel, dragline,
578	578	crawler, crawler crane, ditcher, or any similar machine that
579	579	is self-propelled, in addition to self-propelled machines that
580	580	are used primarily as instruments of conveyance.
581	581	(13) PREPAID TELEPHONE CALLING CARD. A sale of a
582	582	prepaid telephone calling card or a prepaid authorization
583	583	number, or both, shall be deemed the sale of tangible personal
584	584	property subject to the tax imposed on the sale of tangible
585	585	personal property pursuant to this chapter. For purposes of
586	586	this subdivision, the sale of prepaid wireless service that is
587	587	evidenced by a physical card constitutes the sale of a prepaid
588	588	telephone calling card, and the sale of prepaid wireless
589	589	service that is not evidenced by a physical card constitutes
590	590	the sale of a prepaid authorization number.
591	591	(14) PREPAID WIRELESS SERVICE. The right to use mobile
592	592	telecommunications service, which must be paid for in advance
593	593	and that is sold in predetermined units or dollars of which
594	594	the number declines with use in a known amount, and which may
595	595	include rights to use non-telecommunications services or to
596	596	download digital products or digital content. For purposes of
597	597	this subdivision, mobile telecommunications service has the
598	598	meaning ascribed by Section 40-21-120.
599	599	(15) CONSUMABLE VAPOR PRODUCT. Any nicotine liquid
600	600	solution or other material containing nicotine that is
601	601	depleted when used as a vapor product.
602	602	(16) VAPOR PRODUCTS. Any non-lighted, noncombustible
603	603	product that employs a mechanical heating element, battery, or
604	604	electronic circuit regardless of shape or size and that can be
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634	634	used to produce vapor from nicotine in a solution. The term
635	635	includes any vapor cartridge or other container of nicotine in
636	636	a solution or other form that is intended to be used with or
637	637	in an electronic cigarette, electronic cigar, electronic
638	638	cigarillo, electronic pipe, or similar product or device. The
639	639	term does not include any product regulated by the United
640	640	States Food and Drug Administration under Chapter V of the
641	641	Federal Food, Drug, and Cosmetic Act.
642	642	(17) PRODUCER VALUE ADDED AGRICULTURAL PRODUCTS. Fruits
643	643	or other agricultural products that have undergone some degree
644	644	of further processing by the original producer of the
645	645	agricultural product, including, but not limited to, whole
646	646	cuts of meat, bound cut flowers, jams, jellies, or boiled or
647	647	roasted peanuts.
648	648	(18) COMMERCIAL FISHING. The activity of catching or
649	649	processing fish or other seafood regularly and exclusively as
650	650	a means of livelihood by a holder of a commercial license
651	651	issued pursuant to Chapter 12 of Title 9. The term includes
652	652	shellfish farmers, shrimpers, oysterers, lobsterers, and
653	653	crabbers.
654	654	(19) COMMERCIAL FISHING VESSEL. Any vessel whose
655	655	masters and owners are regularly and exclusively engaged in
656	656	commercial fishing as their means of livelihood.
657	657	(20) FOOD. Food on the Special Supplemental Nutrition
658	658	Program for Women, Infants, and Children (WIC) state food list
659	659	meeting the requirements of 7 CFR Part 246.10 and WIC Policy
660	660	Memorandum #2015-3. In the event the federal WIC Program no
661	661	longer exists, the Legislature shall provide a new definition
662	662	309
663	663	310
664	664	311
665	665	312
666	666	313
667	667	314
668	668	315
669	669	316
670	670	317
671	671	318
672	672	319
673	673	320
674	674	321
675	675	322
676	676	323
677	677	324
678	678	325
679	679	326
680	680	327
681	681	328
682	682	329
683	683	330
684	684	331
685	685	332
686	686	333
687	687	334
688	688	335
689	689	336 SB177 INTRODUCEDSB177 INTRODUCED
690	690	Page 13
691	691	of "food" by general law.
692	692	(b) The use within this state of tangible personal
693	693	property by the manufacturer thereof, as building materials in
694	694	the performance of a construction contract, for the purposes
695	695	of this division, shall be considered as a retail sale thereof
696	696	by the manufacturer, who shall also be construed as the
697	697	ultimate consumer of materials or property, and who shall be
698	698	required to report transaction and pay the sales tax thereon,
699	699	based upon the reasonable and fair market price thereof at the
700	700	time and place where same are used or consumed by the
701	701	manufacturer. Where the contractor is the manufacturer or
702	702	compounder of ready-mix concrete or asphalt plant mix used in
703	703	the performance of a contract, whether the ready-mix concrete
704	704	or asphalt plant mix is manufactured or compounded at the job
705	705	site or at a fixed or permanent plant location, the tax
706	706	applies only to the cost of the ingredients that become a
707	707	component part of the ready-mix concrete or the asphalt plant
708	708	mix. The provisions of this subsection shall not apply to any
709	709	tangible personal property that is specifically exempted from
710	710	the tax levied in this division.
711	711	(c) The sale of lumber by a lumber manufacturer to a
712	712	trucker for resale is a sale at wholesale as sales are defined
713	713	herein where the trucker is either a licensed dealer in lumber
714	714	or, if a resident of Alabama, has registered with the
715	715	Department of Revenue, and has received therefrom a
716	716	certificate of registration or, if a nonresident of this state
717	717	purchasing lumber for resale outside the State of Alabama, has
718	718	furnished to the lumber manufacturer his or her name, address,
719	719	337
720	720	338
721	721	339
722	722	340
723	723	341
724	724	342
725	725	343
726	726	344
727	727	345
728	728	346
729	729	347
730	730	348
731	731	349
732	732	350
733	733	351
734	734	352
735	735	353
736	736	354
737	737	355
738	738	356
739	739	357
740	740	358
741	741	359
742	742	360
743	743	361
744	744	362
745	745	363
746	746	364 SB177 INTRODUCEDSB177 INTRODUCED
747	747	Page 14
748	748	and the vehicle license number of the truck in which the
749	749	lumber is to be transported, which name, address, and vehicle
750	750	license number shall be shown on the sales invoice rendered by
751	751	the lumber manufacturer. The certificate provided for herein
752	752	shall be valid for the calendar year of its issuance and may
753	753	be renewed from year to year on application to the Department
754	754	of Revenue on or before January 31 of each succeeding year;
755	755	provided, that if not renewed the certificate shall become
756	756	invalid for the purpose of this division on February 1.
757	757	(d) The dispensing or transferring of ophthalmic
758	758	materials, including lenses, frames, eyeglasses, contact
759	759	lenses, and other therapeutic optic devices, to a patient by a
760	760	licensed ophthalmologist, as a part of his or her professional
761	761	service, for purposes of this division, shall constitute a
762	762	sale, subject to the state sales tax. The licensed
763	763	ophthalmologist or licensed optometrist shall collect the
764	764	state sales tax. In no event shall the providing of
765	765	professional services in connection with the dispensing or
766	766	transferring of ophthalmic materials, including dispensing
767	767	fees or fitting fees, by a licensed ophthalmologist or
768	768	licensed optometrist be considered a sale subject to the state
769	769	sales tax. When the ophthalmic materials are purchased by a
770	770	consumer covered by a third party benefit plan, including
771	771	Medicare, the sales tax shall be applicable to the amount that
772	772	the ophthalmologist, optometrist, or optician is reimbursed by
773	773	the third party benefit plan plus the amount that the consumer
774	774	pays to the ophthalmologist, optometrist, or optician at the
775	775	time of the sale. All transfers of ophthalmic materials by
776	776	365
777	777	366
778	778	367
779	779	368
780	780	369
781	781	370
782	782	371
783	783	372
784	784	373
785	785	374
786	786	375
787	787	376
788	788	377
789	789	378
790	790	379
791	791	380
792	792	381
793	793	382
794	794	383
795	795	384
796	796	385
797	797	386
798	798	387
799	799	388
800	800	389
801	801	390
802	802	391
803	803	392 SB177 INTRODUCEDSB177 INTRODUCED
804	804	Page 15
805	805	opticians or optometrists shall be considered retail sales
806	806	subject to the state sales tax. The term "supplier" shall
807	807	include but not be limited to optical laboratories, ophthalmic
808	808	material wholesalers, or anyone selling ophthalmic materials
809	809	to ophthalmologists.
810	810	(e) Notwithstanding the above, the withdrawal, use, or
811	811	consumption of a manufactured product by the manufacturer
812	812	thereof in quality control testing performed by employees or
813	813	independent contractors of the taxpayer, for purposes of this
814	814	division, shall not be deemed or considered to constitute a
815	815	transaction subject to sales tax, nor shall a gift by the
816	816	manufacturer of a manufactured product, withdrawn from the
817	817	manufacturer's inventory, to an entity listed in 26 U.S.C. §§
818	818	170(b) or (c), be considered a transaction subject to sales
819	819	tax.
820	820	(f) Notwithstanding the foregoing, a gift by a retailer
821	821	of a product or products where the aggregate retail value of
822	822	any single gift is equal to or less than ten thousand dollars
823	823	($10,000), withdrawn from the retailer's inventory, to an
824	824	entity listed in 26 U.S.C. §§ 170(b) or (c) shall not be
825	825	deemed or considered to constitute a transaction subject to
826	826	sales and use tax."
827	827	"§40-23-2
828	828	There is levied, in addition to all other taxes of
829	829	every kind now imposed by law, and shall be collected as
830	830	herein provided, a privilege or license tax against the person
831	831	on account of the business activities and in the amount to be
832	832	determined by the application of rates against gross sales, or
833	833	393
834	834	394
835	835	395
836	836	396
837	837	397
838	838	398
839	839	399
840	840	400
841	841	401
842	842	402
843	843	403
844	844	404
845	845	405
846	846	406
847	847	407
848	848	408
849	849	409
850	850	410
851	851	411
852	852	412
853	853	413
854	854	414
855	855	415
856	856	416
857	857	417
858	858	418
859	859	419
860	860	420 SB177 INTRODUCEDSB177 INTRODUCED
861	861	Page 16
862	862	gross receipts, as the case may be, as follows:
863	863	(1) Upon every person, firm, or corporation, (including
864	864	the State of Alabama and its Alcoholic Beverage Control Board
865	865	in the sale of alcoholic beverages of all kinds, the
866	866	University of Alabama, Auburn University, and all other
867	867	institutions of higher learning in the state, whether the
868	868	institutions be denominational, state, county, or municipal
869	869	institutions, any association or other agency or
870	870	instrumentality of the institutions) engaged or continuing
871	871	within this state, in the business of selling at retail any
872	872	tangible personal property whatsoever, including merchandise
873	873	and commodities of every kind and character, (not including,
874	874	however, bonds or other evidences of debts or stocks, nor
875	875	sales of material and supplies to any person for use in
876	876	fulfilling a contract for the painting, repair, or
877	877	reconditioning of vessels, barges, ships, other watercraft,
878	878	and commercial fishing vessels of over five tons load
879	879	displacement as registered with the U.S. Coast Guard and
880	880	licensed by the State of Alabama Department of Conservation
881	881	and Natural Resources) an amount equal to four percent of the
882	882	gross proceeds of sales of the business except where a
883	883	different amount is expressly provided herein. Provided,
884	884	however, that any person engaging or continuing in business as
885	885	a retailer and wholesaler or jobber shall pay the tax required
886	886	on the gross proceeds of retail sales of the business at the
887	887	rates specified, when his or her books are kept so as to show
888	888	separately the gross proceeds of sales of each business, and
889	889	when his or her books are not kept he or she shall pay the tax
890	890	421
891	891	422
892	892	423
893	893	424
894	894	425
895	895	426
896	896	427
897	897	428
898	898	429
899	899	430
900	900	431
901	901	432
902	902	433
903	903	434
904	904	435
905	905	436
906	906	437
907	907	438
908	908	439
909	909	440
910	910	441
911	911	442
912	912	443
913	913	444
914	914	445
915	915	446
916	916	447
917	917	448 SB177 INTRODUCEDSB177 INTRODUCED
918	918	Page 17
919	919	as a retailer, on the gross sales of the business.
920	920	Where any used part including tires of an automotive
921	921	vehicle or a truck trailer, semitrailer, or house trailer is
922	922	taken in trade, or in a series of trades, as a credit or part
923	923	payment on the sale of a new or rebuilt part or tire, the tax
924	924	levied herein shall be paid on the net difference, that is,
925	925	the price of the new or used part or tire sold less the credit
926	926	for the used part or tire taken in trade, provided, however,
927	927	this provision shall not be construed to include batteries.
928	928	(2) Upon every person, firm, or corporation engaged or
929	929	continuing within this state in the business of conducting or
930	930	operating places of amusement or entertainment, billiard and
931	931	pool rooms, bowling alleys, amusement devices, musical
932	932	devices, theaters, opera houses, moving picture shows,
933	933	vaudevilles, amusement parks, athletic contests, including
934	934	wrestling matches, prize fights, boxing and wrestling
935	935	exhibitions, football and baseball games, (including athletic
936	936	contests, conducted by or under the auspices of any
937	937	educational institution within this state, or any athletic
938	938	association thereof, or other association whether the
939	939	institution or association be a denominational, a state, or
940	940	county, or a municipal institution, or association or a state,
941	941	county, or city school, or other institution, association or
942	942	school) skating rinks, race tracks, golf courses, or any other
943	943	place at which any exhibition, display, amusement, or
944	944	entertainment is offered to the public or place or places
945	945	where an admission fee is charged, including public bathing
946	946	places and public dance halls of every kind and description
947	947	449
948	948	450
949	949	451
950	950	452
951	951	453
952	952	454
953	953	455
954	954	456
955	955	457
956	956	458
957	957	459
958	958	460
959	959	461
960	960	462
961	961	463
962	962	464
963	963	465
964	964	466
965	965	467
966	966	468
967	967	469
968	968	470
969	969	471
970	970	472
971	971	473
972	972	474
973	973	475
974	974	476 SB177 INTRODUCEDSB177 INTRODUCED
975	975	Page 18
976	976	within the State of Alabama, an amount equal to four percent
977	977	of the gross receipts of any such business. Provided, however,
978	978	notwithstanding any language to the contrary in the prior
979	979	portion of this subdivision, the tax provisions so specified
980	980	shall not apply to any athletic event conducted by a public or
981	981	nonpublic primary or secondary school or any athletic event
982	982	conducted by or under the auspices of the Alabama High School
983	983	Athletic Association. The tax amount which would have been
984	984	collected pursuant to this subdivision shall continue to be
985	985	collected by the public or nonpublic primary or secondary
986	986	school, but shall be retained by the school that collected it
987	987	and shall be used by the school for school purposes.
988	988	(3) Upon every person, firm, or corporation engaged or
989	989	continuing within this state in the business of selling at
990	990	retail machines used in mining, quarrying, compounding,
991	991	processing, and manufacturing of tangible personal property an
992	992	amount equal to one and one-half percent of the gross proceeds
993	993	of the sale of the machines. The term "machine," as herein
994	994	used, shall include machinery which is used for mining,
995	995	quarrying, compounding, processing, or manufacturing tangible
996	996	personal property, and the parts of the machines, attachments,
997	997	and replacements therefor, which are made or manufactured for
998	998	use on or in the operation of the machines and which are
999	999	necessary to the operation of the machines and are customarily
1000	1000	so used.
1001	1001	(4) Upon every person, firm, or corporation engaged or
1002	1002	continuing within this state in the business of selling at
1003	1003	retail any automotive vehicle or truck trailer, semitrailer,
1004	1004	477
1005	1005	478
1006	1006	479
1007	1007	480
1008	1008	481
1009	1009	482
1010	1010	483
1011	1011	484
1012	1012	485
1013	1013	486
1014	1014	487
1015	1015	488
1016	1016	489
1017	1017	490
1018	1018	491
1019	1019	492
1020	1020	493
1021	1021	494
1022	1022	495
1023	1023	496
1024	1024	497
1025	1025	498
1026	1026	499
1027	1027	500
1028	1028	501
1029	1029	502
1030	1030	503
1031	1031	504 SB177 INTRODUCEDSB177 INTRODUCED
1032	1032	Page 19
1033	1033	or house trailer, or mobile home set-up materials and supplies
1034	1034	including but not limited to steps, blocks, anchoring, cable
1035	1035	pipes, and any other materials pertaining thereto, an amount
1036	1036	equal to two percent of the gross proceeds of sale of the
1037	1037	automotive vehicle or truck trailer, semitrailer, or house
1038	1038	trailer, or mobile home set-up materials and supplies
1039	1039	provided, however, where a person subject to the tax provided
1040	1040	for in this subdivision withdraws from his or her stock in
1041	1041	trade any automotive vehicle or truck trailer, semitrailer, or
1042	1042	house trailer for use by him or her or by his or her employee
1043	1043	or agent in the operation of the business, there shall be
1044	1044	paid, in lieu of the tax levied herein, a fee of five dollars
1045	1045	($5) per year or part thereof during which the automotive
1046	1046	vehicle, truck trailer, semitrailer, or house trailer shall
1047	1047	remain the property of the person. Each year or part thereof
1048	1048	shall begin with the day or anniversary date, as the case may
1049	1049	be, of such withdrawal and shall run for the 12 succeeding
1050	1050	months or part thereof during which the automotive vehicle,
1051	1051	truck trailer, semitrailer, or house trailer shall remain the
1052	1052	property of the person.
1053	1053	Where any used automotive vehicle or truck trailer,
1054	1054	semitrailer, or house trailer is taken in trade or in a series
1055	1055	of trades, as a credit or part payment on the sale of a new or
1056	1056	used vehicle, the tax levied herein shall be paid on the net
1057	1057	difference, that is, the price of the new or used vehicle sold
1058	1058	less the credit for the used vehicle taken in trade.
1059	1059	Sales of automobiles, motorcycles, trucks, truck
1060	1060	trailers, travel trailers, campers, housecars, or semitrailers
1061	1061	505
1062	1062	506
1063	1063	507
1064	1064	508
1065	1065	509
1066	1066	510
1067	1067	511
1068	1068	512
1069	1069	513
1070	1070	514
1071	1071	515
1072	1072	516
1073	1073	517
1074	1074	518
1075	1075	519
1076	1076	520
1077	1077	521
1078	1078	522
1079	1079	523
1080	1080	524
1081	1081	525
1082	1082	526
1083	1083	527
1084	1084	528
1085	1085	529
1086	1086	530
1087	1087	531
1088	1088	532 SB177 INTRODUCEDSB177 INTRODUCED
1089	1089	Page 20
1090	1090	that will be registered or titled outside Alabama, that are
1091	1091	exported or removed from Alabama within 72 hours by the
1092	1092	purchaser or his or her agent for first use outside Alabama
1093	1093	are subject to Alabama sales tax in an amount equal to only
1094	1094	the state automotive sales tax rate, unless the sales tax laws
1095	1095	of the state in which the purchaser will title or register the
1096	1096	vehicle allows an Alabama resident to purchase a motor vehicle
1097	1097	for first titling and registering in Alabama without the
1098	1098	payment of tax to that state. However, in no case shall the
1099	1099	amount of Alabama state sales tax due on a motor vehicle that
1100	1100	will be registered or titled for use in another state exceed
1101	1101	the amount of sales tax that would otherwise have been due in
1102	1102	the state where the vehicle will be registered or titled for
1103	1103	first use. In order to qualify as a travel trailer, camper, or
1104	1104	housecar that will be registered or titled for use in another
1105	1105	state, the purchaser must provide documentation to the seller
1106	1106	that the purchaser is not a resident of Alabama as required by
1107	1107	the Department of Revenue. No such proof is required in the
1108	1108	sale of an automobile, motorcycle, truck, truck trailer, or
1109	1109	semitrailer, excluding a travel trailer, camper, or housecar.
1110	1110	The tax collected under this export provision shall be Alabama
1111	1111	sales tax and shall exclude county and municipal sales tax. On
1112	1112	January 1, 2016, and each January 1 thereafter, the Alabama
1113	1113	Department of Revenue shall publish to the state's website a
1114	1114	list of states that do not allow drive out provisions to
1115	1115	Alabama residents. Should the list, required by this
1116	1116	subsection and relied upon by the taxpayer, be incorrect, the
1117	1117	taxpayer shall be relieved from the liability concerning the
1118	1118	533
1119	1119	534
1120	1120	535
1121	1121	536
1122	1122	537
1123	1123	538
1124	1124	539
1125	1125	540
1126	1126	541
1127	1127	542
1128	1128	543
1129	1129	544
1130	1130	545
1131	1131	546
1132	1132	547
1133	1133	548
1134	1134	549
1135	1135	550
1136	1136	551
1137	1137	552
1138	1138	553
1139	1139	554
1140	1140	555
1141	1141	556
1142	1142	557
1143	1143	558
1144	1144	559
1145	1145	560 SB177 INTRODUCEDSB177 INTRODUCED
1146	1146	Page 21
1147	1147	miscollection of the state automotive sales tax. Sales of all
1148	1148	other vehicles such as mobile homes, motor bikes, all terrain
1149	1149	vehicles, and boats do not qualify for the export exemption
1150	1150	provision and are taxable unless the dealer can provide
1151	1151	factual evidence that the vehicle was delivered outside of
1152	1152	Alabama or to a common carrier for transportation outside
1153	1153	Alabama. In order for the sale to be exempt from Alabama tax,
1154	1154	the information relative to the exempt sale shall be
1155	1155	documented on forms approved by the Revenue Department.
1156	1156	Of the total $.02 tax on each dollar of sale provided
1157	1157	hereunder, 58 percent of the total tax generated by this
1158	1158	subdivision (4) shall be deposited to the credit of the
1159	1159	Education Trust Fund and 42 percent of the total tax generated
1160	1160	by this subdivision (4) shall be deposited to the credit of
1161	1161	the State General Fund.
1162	1162	(5) Upon every person, firm, or corporation engaged or
1163	1163	continuing within this state in the business of selling
1164	1164	through coin-operated dispensing machines, food and food
1165	1165	products for human consumption, not including beverages other
1166	1166	than coffee, milk, milk products, and substitutes therefor,
1167	1167	there is levied a tax equal to three percent of the cost of
1168	1168	the food, food products, and beverages sold through the
1169	1169	machines, which cost for the purpose of this subdivision shall
1170	1170	be the gross proceeds of sales of the business.
1171	1171	(6) Upon every person, firm, or corporation engaged or
1172	1172	continuing within this state in the business of selling food
1173	1173	as defined in Section 40-23-1, there is a tax levied equal to
1174	1174	four percent. Beginning September 1, 2023, the tax rate shall
1175	1175	561
1176	1176	562
1177	1177	563
1178	1178	564
1179	1179	565
1180	1180	566
1181	1181	567
1182	1182	568
1183	1183	569
1184	1184	570
1185	1185	571
1186	1186	572
1187	1187	573
1188	1188	574
1189	1189	575
1190	1190	576
1191	1191	577
1192	1192	578
1193	1193	579
1194	1194	580
1195	1195	581
1196	1196	582
1197	1197	583
1198	1198	584
1199	1199	585
1200	1200	586
1201	1201	587
1202	1202	588 SB177 INTRODUCEDSB177 INTRODUCED
1203	1203	Page 22
1204	1204	be reduced to three percent. On November 1, 2025, and on
1205	1205	November 1 of every odd-numbered year thereafter until the tax
1206	1206	rate is zero, the tax rate shall be reduced by one percent.
1207	1207	Provided, however, the rate of tax shall only be reduced if
1208	1208	the growth in total net receipts from all revenue sources to
1209	1209	the Education Trust Fund in the preceding two fiscal years was
1210	1210	at least five percent more than the last odd-numbered fiscal
1211	1211	year."
1212	1212	"§40-23-60
1213	1213	For the purpose of this article, the following terms
1214	1214	shall have the respective meanings ascribed to them in this
1215	1215	section:
1216	1216	(1) PERSON or COMPANY. Any individual, firm, company,
1217	1217	partnership, association, corporation, receiver or trustee, or
1218	1218	any other group or combination acting as a unit, and the
1219	1219	plural as well as the singular number, unless the intention to
1220	1220	give a more limited meaning is disclosed by the context.
1221	1221	(2) DEPARTMENT. The Department of Revenue of the State
1222	1222	of Alabama.
1223	1223	(3) COMMISSIONER. The Commissioner of Revenue of the
1224	1224	State of Alabama.
1225	1225	(4) WHOLESALE SALE or SALE AT WHOLESALE. Any one of the
1226	1226	following:
1227	1227	a. A sale of tangible personal property by wholesaler
1228	1228	to licensed retail merchants, jobbers, dealers or other
1229	1229	wholesalers for resale and does not include a sale by
1230	1230	wholesalers to users or consumers, not for resale.
1231	1231	b. A sale of tangible personal property or products,
1232	1232	589
1233	1233	590
1234	1234	591
1235	1235	592
1236	1236	593
1237	1237	594
1238	1238	595
1239	1239	596
1240	1240	597
1241	1241	598
1242	1242	599
1243	1243	600
1244	1244	601
1245	1245	602
1246	1246	603
1247	1247	604
1248	1248	605
1249	1249	606
1250	1250	607
1251	1251	608
1252	1252	609
1253	1253	610
1254	1254	611
1255	1255	612
1256	1256	613
1257	1257	614
1258	1258	615
1259	1259	616 SB177 INTRODUCEDSB177 INTRODUCED
1260	1260	Page 23
1261	1261	including iron ore, and including the furnished container and
1262	1262	label of such property or products, to a manufacturer or
1263	1263	compounder which enter into and become an ingredient or
1264	1264	component part of the tangible personal property or products
1265	1265	which the manufacturer or compounder manufactures or compounds
1266	1266	for sale, whether or not such tangible personal property or
1267	1267	product used in manufacturing or compounding a finished
1268	1268	product is used with the intent that it become a component of
1269	1269	the finished product; provided, however, that it is the intent
1270	1270	of this section that no sale of capital equipment, machinery,
1271	1271	tools, or product shall be included in the term "wholesale
1272	1272	sale." The term "capital equipment, machinery, tools, or
1273	1273	product" shall mean property that is subject to depreciation
1274	1274	allowances for Alabama income tax purposes.
1275	1275	c. A sale of containers intended for one-time use only,
1276	1276	and the labels thereof, when the containers are sold without
1277	1277	contents to persons who sell or furnish the containers along
1278	1278	with the contents placed therein for sale by such persons.
1279	1279	d. A sale of pallets intended for one-time use only
1280	1280	when the pallets are sold without contents to persons who sell
1281	1281	or furnish the pallets along with the contents placed thereon
1282	1282	for sale by such persons.
1283	1283	e. A sale to a manufacturer or compounder of crowns,
1284	1284	caps, and tops intended for one-time use employed and used
1285	1285	upon the containers in which the manufacturer or compounder
1286	1286	markets the manufacturer's or compounder's products.
1287	1287	f. A sale of containers to persons engaged in selling
1288	1288	or otherwise supplying or furnishing baby chicks to growers
1289	1289	617
1290	1290	618
1291	1291	619
1292	1292	620
1293	1293	621
1294	1294	622
1295	1295	623
1296	1296	624
1297	1297	625
1298	1298	626
1299	1299	627
1300	1300	628
1301	1301	629
1302	1302	630
1303	1303	631
1304	1304	632
1305	1305	633
1306	1306	634
1307	1307	635
1308	1308	636
1309	1309	637
1310	1310	638
1311	1311	639
1312	1312	640
1313	1313	641
1314	1314	642
1315	1315	643
1316	1316	644 SB177 INTRODUCEDSB177 INTRODUCED
1317	1317	Page 24
1318	1318	thereof where the containers are used for the delivery of the
1319	1319	chicks or a sale of containers for use in the delivery of eggs
1320	1320	by the producer thereof to the distributor or packer of the
1321	1321	eggs even though the containers used for delivery of baby
1322	1322	chicks or eggs may be recovered for reuse.
1323	1323	g. A sale of bagging and ties used in preparing cotton
1324	1324	for market.
1325	1325	h. A sale of commercial fish feed including
1326	1326	concentrates, supplements, and other feed ingredients when
1327	1327	such substances are used as ingredients in mixing and
1328	1328	preparing feed for fish raised to be sold on a commercial
1329	1329	basis.
1330	1330	i. A sale of bait used to capture or attempt to capture
1331	1331	fish or other seafood in the process of commercial fishing, as
1332	1332	defined in Section 40-23-1, by a holder of a commercial
1333	1333	license issued pursuant to Chapter 12 of Title 9.
1334	1334	j. A sale of tangible personal property to any person
1335	1335	engaging in the business of leasing or renting such tangible
1336	1336	personal property to others, if the tangible personal property
1337	1337	is purchased for the purpose of leasing or renting it to
1338	1338	others under a transaction subject to the privilege or license
1339	1339	tax levied in Article 4 of Chapter 12 against any person
1340	1340	engaging in the business of leasing or renting tangible
1341	1341	personal property to others.
1342	1342	k. A purchase or withdrawal of parts or materials from
1343	1343	stock by any person licensed under this article where the
1344	1344	parts or materials are used in repairing or reconditioning the
1345	1345	tangible personal property of the licensed person which
1346	1346	645
1347	1347	646
1348	1348	647
1349	1349	648
1350	1350	649
1351	1351	650
1352	1352	651
1353	1353	652
1354	1354	653
1355	1355	654
1356	1356	655
1357	1357	656
1358	1358	657
1359	1359	658
1360	1360	659
1361	1361	660
1362	1362	661
1363	1363	662
1364	1364	663
1365	1365	664
1366	1366	665
1367	1367	666
1368	1368	667
1369	1369	668
1370	1370	669
1371	1371	670
1372	1372	671
1373	1373	672 SB177 INTRODUCEDSB177 INTRODUCED
1374	1374	Page 25
1375	1375	tangible personal property is a part of the stock of goods of
1376	1376	the licensed person, offered for sale by the licensed person
1377	1377	and not for use or consumption of the licensed person.
1378	1378	l. A sale to meat packers, manufacturers, compounders,
1379	1379	or processors of meat products of all casings used in moulding
1380	1380	or forming wieners and Vienna sausages, even though the
1381	1381	casings may be recovered for reuse.
1382	1382	(5) SALE AT RETAIL or RETAIL SALE. All sales of
1383	1383	tangible personal property except those above defined as
1384	1384	wholesale sales. The quantities of goods sold or prices at
1385	1385	which sold are immaterial in determining whether or not a sale
1386	1386	is at retail. Sales of building materials to contractors,
1387	1387	builders, or landowners for resale or use in the form of real
1388	1388	estate are retail sales in whatever quantity sold. Sales of
1389	1389	building materials, fixtures, or other equipment to a
1390	1390	manufacturer or builder of modular buildings for use in
1391	1391	manufacturing, building, or equipping a modular building
1392	1392	ultimately becoming a part of real estate situated in the
1393	1393	State of Alabama are retail sales, and the use, sale, or
1394	1394	resale of such building shall not be subject to the tax. Sales
1395	1395	of tangible personal property to undertakers and morticians
1396	1396	are retail sales and subject to the tax at the time of
1397	1397	purchase, but are not subject to the tax on resale to the
1398	1398	consumer. Sales of tangible personal property or products to
1399	1399	manufacturers, quarry operators, mine operators, or
1400	1400	compounders, which are used or consumed by them in
1401	1401	manufacturing, mining, quarrying, or compounding and do not
1402	1402	become an ingredient or component part of the tangible
1403	1403	673
1404	1404	674
1405	1405	675
1406	1406	676
1407	1407	677
1408	1408	678
1409	1409	679
1410	1410	680
1411	1411	681
1412	1412	682
1413	1413	683
1414	1414	684
1415	1415	685
1416	1416	686
1417	1417	687
1418	1418	688
1419	1419	689
1420	1420	690
1421	1421	691
1422	1422	692
1423	1423	693
1424	1424	694
1425	1425	695
1426	1426	696
1427	1427	697
1428	1428	698
1429	1429	699
1430	1430	700 SB177 INTRODUCEDSB177 INTRODUCED
1431	1431	Page 26
1432	1432	personal property manufactured or compounded as provided in
1433	1433	subdivision (4) are retail sales. The term "sale at retail" or
1434	1434	"retail sale" shall also mean and include the withdrawal, use,
1435	1435	or consumption of any tangible personal property by anyone who
1436	1436	purchases same at wholesale, except property that has been
1437	1437	previously withdrawn from the business or stock and so used or
1438	1438	consumed and with respect to which property the tax has been
1439	1439	paid because of such previous withdrawal, use, or consumption,
1440	1440	except property that enters into and becomes an ingredient or
1441	1441	component part of tangible personal property or products
1442	1442	manufactured or compounded for sale as provided in subdivision
1443	1443	(4); and not for the personal and private use or consumption
1444	1444	of any person so withdrawing, using, or consuming the same,
1445	1445	and such wholesale purchaser shall report and pay the taxes
1446	1446	thereon; and except refinery, residue, or fuel gas, whether in
1447	1447	a liquid or gaseous state, that has been generated by, or is
1448	1448	otherwise a by-product of, a petroleum-refining process, which
1449	1449	gas is then utilized in the process to generate heat or is
1450	1450	otherwise utilized in the distillation or refining of
1451	1451	petroleum products. The term "retail sale" or "sale at retail"
1452	1452	shall also mean and include the sale of tangible personal
1453	1453	property previously purchased at wholesale for the purpose of
1454	1454	leasing or renting under a transaction subject to the
1455	1455	privilege or license tax levied in Article 4 of Chapter 12,
1456	1456	regardless of whether the sale is to the person who
1457	1457	theretofore leased or rented the tangible personal property or
1458	1458	to some other person.
1459	1459	(6) BUSINESS. All activities engaged in, or caused to
1460	1460	701
1461	1461	702
1462	1462	703
1463	1463	704
1464	1464	705
1465	1465	706
1466	1466	707
1467	1467	708
1468	1468	709
1469	1469	710
1470	1470	711
1471	1471	712
1472	1472	713
1473	1473	714
1474	1474	715
1475	1475	716
1476	1476	717
1477	1477	718
1478	1478	719
1479	1479	720
1480	1480	721
1481	1481	722
1482	1482	723
1483	1483	724
1484	1484	725
1485	1485	726
1486	1486	727
1487	1487	728 SB177 INTRODUCEDSB177 INTRODUCED
1488	1488	Page 27
1489	1489	be engaged in, with the object of gain, profit, benefit, or
1490	1490	advantage, either direct or indirect, and not excepting
1491	1491	subactivities producing marketable commodities used or
1492	1492	consumed in the main business activity, each of which
1493	1493	subactivities shall be considered business engaged in, taxable
1494	1494	in the class in which it falls.
1495	1495	(7) STORAGE. Any keeping or retention in this state for
1496	1496	any purpose except sale in the regular course of business or
1497	1497	subsequent use solely outside this state of tangible personal
1498	1498	property purchased at retail.
1499	1499	(8) USE. The exercise of any right or power over
1500	1500	tangible personal property incident to the ownership of that
1501	1501	property, or by any transaction where possession is given,
1502	1502	except that it shall not include the sale of that property in
1503	1503	the regular course of business.
1504	1504	(9) PURCHASE. Acquired for a consideration, whether
1505	1505	such acquisition was effected by a transfer of title, or of
1506	1506	possession or of both, or a license to use or consume; whether
1507	1507	such transfer shall have been absolute or conditional, and by
1508	1508	whatsoever means the same shall have been effected; and
1509	1509	whether such consideration be a price or rental in money, or
1510	1510	by way of exchange or barter.
1511	1511	(10) SALES PRICE. The total amount for which tangible
1512	1512	personal property is sold, including any services, including
1513	1513	transportation, that are a part of the sale, valued in money,
1514	1514	whether paid in money or otherwise, and includes any amount
1515	1515	for which credit is given to the purchaser by the seller,
1516	1516	without any deduction therefrom on account of the cost of the
1517	1517	729
1518	1518	730
1519	1519	731
1520	1520	732
1521	1521	733
1522	1522	734
1523	1523	735
1524	1524	736
1525	1525	737
1526	1526	738
1527	1527	739
1528	1528	740
1529	1529	741
1530	1530	742
1531	1531	743
1532	1532	744
1533	1533	745
1534	1534	746
1535	1535	747
1536	1536	748
1537	1537	749
1538	1538	750
1539	1539	751
1540	1540	752
1541	1541	753
1542	1542	754
1543	1543	755
1544	1544	756 SB177 INTRODUCEDSB177 INTRODUCED
1545	1545	Page 28
1546	1546	property sold, the cost of the materials used, labor or
1547	1547	service cost, interest charged, losses, or any other expenses
1548	1548	whatsoever; provided, that cash discounts allowed and taken on
1549	1549	sales shall not be included and sales price shall not include
1550	1550	the amount charged for property returned by customers when the
1551	1551	entire amount charged therefor is refunded either in cash or
1552	1552	by credit.
1553	1553	(11) IN THIS STATE or IN THE STATE. Within the exterior
1554	1554	limits of the State of Alabama, and includes all territory
1555	1555	within such limits owned by or ceded to the United States of
1556	1556	America.
1557	1557	(12) AUTOMOTIVE VEHICLE. A power shovel, dragline,
1558	1558	crawler, crawler crane, ditcher or any similar machine which
1559	1559	is self-propelled, in addition to self-propelled machines
1560	1560	which are used primarily as instruments of conveyance.
1561	1561	(13) PREPAID TELEPHONE CALLING CARD. A sale of a
1562	1562	prepaid telephone calling card or a prepaid authorization
1563	1563	number, or both, shall be deemed the sale of tangible personal
1564	1564	property subject to the tax imposed pursuant to this chapter.
1565	1565	For purposes of this subdivision, the sale of prepaid wireless
1566	1566	service that is evidenced by a physical card constitutes the
1567	1567	sale of a prepaid telephone calling card, and the sale of
1568	1568	prepaid wireless service that is not evidenced by a physical
1569	1569	card constitutes the sale of a prepaid authorization number.
1570	1570	(14) PREPAID WIRELESS SERVICE. The right to use mobile
1571	1571	telecommunications service, which must be paid for in advance
1572	1572	and that is sold in predetermined units or dollars of which
1573	1573	the number declines with use or the expiration of time in a
1574	1574	757
1575	1575	758
1576	1576	759
1577	1577	760
1578	1578	761
1579	1579	762
1580	1580	763
1581	1581	764
1582	1582	765
1583	1583	766
1584	1584	767
1585	1585	768
1586	1586	769
1587	1587	770
1588	1588	771
1589	1589	772
1590	1590	773
1591	1591	774
1592	1592	775
1593	1593	776
1594	1594	777
1595	1595	778
1596	1596	779
1597	1597	780
1598	1598	781
1599	1599	782
1600	1600	783
1601	1601	784 SB177 INTRODUCEDSB177 INTRODUCED
1602	1602	Page 29
1603	1603	known amount, and which may include rights to use
1604	1604	non-telecommunications services or to download digital
1605	1605	products or digital content. For purposes of this subdivision,
1606	1606	mobile telecommunications service has the meaning ascribed by
1607	1607	Section 40-21-120.
1608	1608	(15) REMOTE USE TAX. Amounts collected from out of
1609	1609	state vendors who, on October 1, 2012, were or would have been
1610	1610	remote sellers as defined in Section 40-23-171; and amounts
1611	1611	remitted by consumers on the individual tax return.
1612	1612	(16) FOOD. Food on the Special Supplemental Nutrition
1613	1613	Program for Women, Infants, and Children (WIC) state food list
1614	1614	meeting the requirements of 7 CFR Part 246.10 and WIC Policy
1615	1615	Memorandum #2015-3. In the event the federal WIC Program no
1616	1616	longer exists, the Legislature shall provide a new definition
1617	1617	of "food" by general law. "
1618	1618	"§40-23-61
1619	1619	(a) An excise tax is hereby imposed on the storage, use
1620	1620	or other consumption in this state of tangible personal
1621	1621	property, not including, however, materials and supplies
1622	1622	bought for use in fulfilling a contract for the painting,
1623	1623	repairing or reconditioning of vessels, barges, ships, other
1624	1624	watercraft and commercial fishing vessels of over five tons
1625	1625	load displacement as registered with the U.S. Coast Guard and
1626	1626	licensed by the State of Alabama Department of Conservation
1627	1627	and Natural Resources, purchased at retail on or after October
1628	1628	1, 1965, for storage, use or other consumption in this state
1629	1629	at the rate of four percent of the sales price of such
1630	1630	property or the amount of tax collected by the seller,
1631	1631	785
1632	1632	786
1633	1633	787
1634	1634	788
1635	1635	789
1636	1636	790
1637	1637	791
1638	1638	792
1639	1639	793
1640	1640	794
1641	1641	795
1642	1642	796
1643	1643	797
1644	1644	798
1645	1645	799
1646	1646	800
1647	1647	801
1648	1648	802
1649	1649	803
1650	1650	804
1651	1651	805
1652	1652	806
1653	1653	807
1654	1654	808
1655	1655	809
1656	1656	810
1657	1657	811
1658	1658	812 SB177 INTRODUCEDSB177 INTRODUCED
1659	1659	Page 30
1660	1660	whichever is greater; provided, however, when the seller
1661	1661	follows the Department of Revenue's suggested use tax brackets
1662	1662	and his records prove that his following said brackets
1663	1663	resulted in a net undercollection of tax for the month, he may
1664	1664	report the tax due or tax collected, whichever is less, except
1665	1665	as provided in subsections (b) and (c) of this section.
1666	1666	(b) An excise tax is hereby imposed on the storage, use
1667	1667	or other consumption in this state of any machines used in
1668	1668	mining, quarrying, compounding, processing and manufacturing
1669	1669	of tangible personal property, purchased at retail on or after
1670	1670	October 1, 1965, at the rate of one and one-half percent of
1671	1671	the sales price of any such machine or the amount of tax
1672	1672	collected by the seller, whichever is greater; provided,
1673	1673	however, when the seller follows the Department of Revenue's
1674	1674	suggested use tax brackets and his records prove that his
1675	1675	following said brackets resulted in a net undercollection of
1676	1676	tax for the month, he may report the tax due or tax collected,
1677	1677	whichever is less; provided, that the term "machine," as
1678	1678	herein used, shall include machinery which is used for mining,
1679	1679	quarrying, compounding, processing, or manufacturing tangible
1680	1680	personal property, and the parts of such machines, attachments
1681	1681	and replacements therefor, which are made or manufactured for
1682	1682	use on or in the operation of such machines and which are
1683	1683	necessary to the operation of such machines and are
1684	1684	customarily so used.
1685	1685	(c) An excise tax is hereby imposed on the storage, use
1686	1686	or other consumption in this state of any automotive vehicle
1687	1687	or truck trailer, semitrailer or house trailer, and mobile
1688	1688	813
1689	1689	814
1690	1690	815
1691	1691	816
1692	1692	817
1693	1693	818
1694	1694	819
1695	1695	820
1696	1696	821
1697	1697	822
1698	1698	823
1699	1699	824
1700	1700	825
1701	1701	826
1702	1702	827
1703	1703	828
1704	1704	829
1705	1705	830
1706	1706	831
1707	1707	832
1708	1708	833
1709	1709	834
1710	1710	835
1711	1711	836
1712	1712	837
1713	1713	838
1714	1714	839
1715	1715	840 SB177 INTRODUCEDSB177 INTRODUCED
1716	1716	Page 31
1717	1717	home set-up materials and supplies including but not limited
1718	1718	to steps, blocks, anchoring, cable pipes and any other
1719	1719	materials pertaining thereto, purchased at retail on or after
1720	1720	October 1, 1965, for storage, use or other consumption in this
1721	1721	state at the rate of two percent of the sales price of such
1722	1722	automotive vehicle, truck trailer, semitrailer or house
1723	1723	trailer, and mobile home set-up materials and supplies as
1724	1724	specified above, or the amount of tax collected by the seller,
1725	1725	whichever is greater; provided, however, when the seller
1726	1726	follows the Department of Revenue's suggested use tax brackets
1727	1727	and his records prove that his following said brackets
1728	1728	resulted in a net undercollection of tax for the month, he may
1729	1729	report the tax due or tax collected, whichever is less. Where
1730	1730	any used automotive vehicle or truck trailer, semitrailer or
1731	1731	house trailer is taken in trade, or in a series of trades, as
1732	1732	a credit or part payment on the sale of a new or used vehicle,
1733	1733	the tax levied herein shall be paid on the net difference,
1734	1734	that is, the price of the new or used vehicle sold less the
1735	1735	credit for the used vehicle taken in trade.
1736	1736	Of the total $.02 tax on each dollar of sale provided
1737	1737	hereunder, 58 percent of the total tax generated by this
1738	1738	subsection shall be deposited to the credit of the Education
1739	1739	Trust Fund; and 42 percent of the total tax generated by this
1740	1740	subsection shall be deposited to the credit of the State
1741	1741	General Fund.
1742	1742	(d) An excise tax is hereby imposed on the storage, use
1743	1743	or other consumption in this state of food as defined in
1744	1744	Section 40-23-60, at the rate of four percent of the sales
1745	1745	841
1746	1746	842
1747	1747	843
1748	1748	844
1749	1749	845
1750	1750	846
1751	1751	847
1752	1752	848
1753	1753	849
1754	1754	850
1755	1755	851
1756	1756	852
1757	1757	853
1758	1758	854
1759	1759	855
1760	1760	856
1761	1761	857
1762	1762	858
1763	1763	859
1764	1764	860
1765	1765	861
1766	1766	862
1767	1767	863
1768	1768	864
1769	1769	865
1770	1770	866
1771	1771	867
1772	1772	868 SB177 INTRODUCEDSB177 INTRODUCED
1773	1773	Page 32
1774	1774	price of such food. Beginning September 1, 2023, the tax rate
1775	1775	shall be reduced to three percent. On November 1, 2025, and on
1776	1776	November 1 of every odd-numbered year thereafter until the tax
1777	1777	rate is zero, the tax rate shall be reduced by one percent.
1778	1778	Provided, however, the rate of tax shall only be reduced if
1779	1779	the growth in total net receipts from all revenue sources to
1780	1780	the Education Trust Fund in the preceding two fiscal years was
1781	1781	at least five percent more than the last odd-numbered fiscal
1782	1782	year.
1783	1783	(d)(e) Every person storing, using or otherwise
1784	1784	consuming in this state tangible personal property purchased
1785	1785	at retail shall be liable for the tax imposed by this article,
1786	1786	and the liability shall not be extinguished until the tax has
1787	1787	been paid to this state; provided, that a receipt from a
1788	1788	retailer maintaining a place of business in this state or a
1789	1789	retailer authorized by the department, under such rules and
1790	1790	regulations as it may prescribe, to collect the tax imposed
1791	1791	hereby and who shall for the purpose of this article be
1792	1792	regarded as a retailer maintaining a place of business in this
1793	1793	state, given to the purchaser in accordance with the
1794	1794	provisions of Section 40-23-67, shall be sufficient to relieve
1795	1795	the purchaser from further liability for tax to which such
1796	1796	receipt may refer.
1797	1797	(e)(f) An excise tax is hereby imposed on the classes
1798	1798	of tangible personal property, and at the rates imposed on
1799	1799	such classes, specified in subsections (a), (b) and (c) of
1800	1800	this section, on the storage, use, or other consumption in the
1801	1801	performance of a contract in this state of any such tangible
1802	1802	869
1803	1803	870
1804	1804	871
1805	1805	872
1806	1806	873
1807	1807	874
1808	1808	875
1809	1809	876
1810	1810	877
1811	1811	878
1812	1812	879
1813	1813	880
1814	1814	881
1815	1815	882
1816	1816	883
1817	1817	884
1818	1818	885
1819	1819	886
1820	1820	887
1821	1821	888
1822	1822	889
1823	1823	890
1824	1824	891
1825	1825	892
1826	1826	893
1827	1827	894
1828	1828	895
1829	1829	896 SB177 INTRODUCEDSB177 INTRODUCED
1830	1830	Page 33
1831	1831	personal property, new or used, the tax to be measured by the
1832	1832	sales price or the fair and reasonable market value of such
1833	1833	tangible personal property when put into use in this state,
1834	1834	whichever is less; provided, that the tax imposed by this
1835	1835	subsection shall not apply where the taxes imposed by
1836	1836	subsection (a), (b), or (c) of this section apply."
1837	1837	Section 2. (a) On the effective date of this act, the
1838	1838	definition of "food" in Sections 40-23-1 and 40-23-60, Code of
1839	1839	Alabama 1975, shall apply to county and municipal sales and
1840	1840	use taxes. For purposes of county and municipal sales and use
1841	1841	taxes, the sales tax rate on food shall be established as the
1842	1842	general or retail sales tax rate in effect in the county or
1843	1843	municipality on the effective date of this act, unless
1844	1844	otherwise provided by law. An act of the Legislature or an
1845	1845	ordinance or resolution adopted by a county or municipal
1846	1846	governing body levying a county or municipal sales and use tax
1847	1847	inclusive of food passed or enacted on or before the effective
1848	1848	date of this act shall remain operative, but no additional
1849	1849	county or municipal sales and use taxes on food may be levied.
1850	1850	(b) Any county or municipal governing body may, by
1851	1851	resolution or ordinance, reduce the general or retail sales
1852	1852	tax rate on food for local sales and use taxes. Such ordinance
1853	1853	or resolution must be adopted at least 60 days prior to
1854	1854	becoming effective.
1855	1855	Section 3. This act shall become effective on September
1856	1856	1, 2023, following its passage and approval by the Governor,
1857	1857	or its otherwise becoming law.
1858	1858	897
1859	1859	898
1860	1860	899
1861	1861	900
1862	1862	901
1863	1863	902
1864	1864	903
1865	1865	904
1866	1866	905
1867	1867	906
1868	1868	907
1869	1869	908
1870	1870	909
1871	1871	910
1872	1872	911
1873	1873	912
1874	1874	913
1875	1875	914
1876	1876	915
1877	1877	916
1878	1878	917
1879	1879	918
1880	1880	919
1881	1881	920
1882	1882	921
1883	1883	922
1884	1884	923