ALABAMA DEPARTMENT OF REVENUE
SALES, USE & BUSINESS TAX DIVISION
SALES & USE TAX RULE
810-6-1-.72. Gases: Acetylene, Oxygen, Hydrogen.
(1) All sales to consumers such as dentists, doctors, private hospitals,
manufacturers, refiners, repairmen, welders, or junk dealers of acetylene, oxygen,
hydrogen, and other gases for use in rendering professional medical services or in
manufacturing, processing, or repairing are subject to sales or use tax. (Sections 40-23-1(a)(10)
and 40-23-60(5))
(2) Sales of these gases to manufacturers or compounders where the gas enters
into and becomes an ingredient or component part of the product manufactured or
compounded for sale are at wholesale, tax-free. For example, sales of oxygen to manufacturers
of steel where the oxygen becomes an ingredient or component part of the product manufactured
for sale are nontaxable wholesale sales. (State v. United States Steel Corporation, 206
So.2d 358) See Rule 810-6-1-.80 entitled Ingredient or Component of Product Manufactured
or Compounded for Sale. (Sections 40-23-1(a)(9)b and 40-23-60(4)b)
(3) Sales of these gases to dealers for resale are not taxable. (Sections 40-23-1(a)(9)a and
40-23-60(4)a) (Readopted through APA effective October 1, 1982, amended July 9, 1998)
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