ALABAMA DEPARTMENT OF REVENUE
SALES, USE & BUSINESS TAX DIVISION
SALES & USE TAX RULE
810-6-1-.08.01. Automotive Supply Jobbers, Sales by.
(1) Automotive supply jobbers shall comply with the provisions of Title
40 relative to maintaining the records necessary to determine the amount
of sales or use taxes for which they are liable including the requirement
that their records show separately the gross proceeds of wholesale sales
and the gross proceeds of retail sales. Automotive supply jobbers shall
also comply with the provisions of Sales and Use Tax Rule 810-6-4- .10
Keeping Records of Sales for Resale. (Sections 40-2A-7(a), 40-23-9, and
40-23-83)
(2) Automotive supply jobbers shall collect sales or use tax on sales
to all customers who do not have a valid sales tax license number or certificate
of exemption number. Invoices which do not show the purchaser's name, but
are made out to "cash" shall always be considered to be retail sales invoices.
(Sections 40-23-26 and 40-23-67)
(3) If the purchaser has a sales tax license number, the jobber may
sell to the purchaser tax exempt, provided the purchaser is buying the
items for resale. Even though a purchaser has a sales tax license number,
the jobber is not relieved of the responsibility of collecting tax on the
items which the purchaser uses. It is the jobber's responsibility to know
the nature of the customer's business so that the jobber will know when
to collect tax on items purchased for use.
(4) Sales of automotive parts to licensed automobile dealers with repair
shops or service departments are at wholesale, tax-free. Sales of automotive
parts to licensed automobile dealers without repair shops or service departments
are taxable unless the dealer qualifies for the exemption contained in
Section 40-23-1(a)(9)k for parts purchased for use in repairing or reconditioning
automobiles that are a part of the dealer's stock of goods for sale. See
Rule 810-6-1-.116 Parts and Materials Used to Repair or Recondition Dealers'
Automobiles.
(5) Sales of materials to licensed automobile dealers are taxable unless the
dealer qualifies for the exemption contained in Section 40-23-1(a)(9)k for materials
purchased for use in repairing or reconditioning automobiles that are a part
of the dealer's stock of goods for sale. See Rule 810-6-1-.116 Parts and Materials
Used to Repair or Recondition Dealers' Automobiles. The term "materials" as
used in this section includes paint, solder, flux, body lead, wax, underseal,
and tire blacking which become a part of the reconditioned automobile. The term
"materials" as used in this section does not include items which do not become
a part of the reconditioned automobile such as sandpaper, thinner used for cleaning
purposes, masking tape, rags, brushes, tools, and soap.
(6) The automotive supply jobber shall collect sales or use tax on sales
of supplies unless the customer is purchasing the supplies for resale.
Supplies include but are not limited to cleaning compounds, chamois, rags,
drill bits, shop files, welding gases and supplies, metal bars and rods,
masking tape, fire extinguisher fluid, hydraulic jack oil, friction tape,
signs, white sidewall cleaner, brooms, mops, window cleaner, rivets, tacks,
cotter pins, repair parts for shop equipment, degreaser, bolts, nuts, washers,
screws, oil measures, wiping cloths, drop light cords, auto body soap,
hand soap, vixen files, light bulbs, rubbing compound, floor oil absorbent
compounds, brushes of all kinds, tar remover, and polishing cloths.
(7) The automotive supply jobber shall collect sales or use tax on sales
of power tools, heavy tools, and equipment and replacement parts unless
the customer is purchasing the tools, equipment, or replacement parts for
resale. Power tools, heavy tools, and equipment and replacement parts include
but are not limited to floor jacks, air compressors and parts, washing
equipment and parts, painting equipment and parts, electric sanders, air
hose and chucks, drop cords, and welding equipment and parts.
(8) The automotive supply jobber shall collect sales or use tax on sales
of hand tools unless the customer is purchasing the tools, equipment, or
replacement parts for resale. Sales of hand tools to licensed resellers
who do not stock such tools for resale are taxable.
(9) The automotive supply jobber shall collect sales or use tax on sales
to automobile painters or repair shops of items which lose their identity,
such as paint, solder, and solvents.
(10) The measure of sales or use tax due on taxable sales of any new,
used, or rebuilt automotive part, except batteries, is the net trade difference,
that is the selling price less credit for the used part taken in trade.
The measure of sales or use tax due on taxable sales of batteries is the
total sales price of the battery without any deduction or credit for the
value of the used part taken in trade (See Rules 810-6-1-.12 and 810-6-1-
.180 for definitions of automotive vehicle and trailer). (Section 40-23-2(1))
(11) When automotive supply jobbers perform labor in connection with
a sale of repair parts, invoices covering the transaction shall clearly
show the amounts charged for each part and amounts charged for labor. Where
invoices do not show parts and labor separately, sales tax is due on the
total amount of the invoice.
(12) When automotive supply jobbers provide tire recapping service to
a customer, they shall collect sales or use tax from the customer measured
by the total amount billed for the recapping service. Materials used by
the automotive supply jobber in performing the recapping service are not
taxable when purchased or withdrawn by the jobber. The machines used directly
in the recapping process by the automotive supply jobber are taxable at
the reduced machine rate when purchased or withdrawn by the jobber. Machines
and equipment not used directly in the recapping process and all materials
and supplies which do not become a component part of the finished product
are taxable at the general rate when purchased or withdrawn by the jobber.
(Adopted through APA effective March 10, 1998)
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