ALABAMA DEPARTMENT OF REVENUE
SALES, USE & BUSINESS TAX DIVISION
SALES & USE TAX RULE
810-6-1-.97. Materials Used on Road
and Bridge Projects.
(1) (a) Sales of sand, gravel, or other building
materials by landowners or other suppliers who regularly sell or offer to sell
these materials are subject to sales tax when made to contractors for the State
of Alabama or the counties or municipalities of the State for use by the contractors
in building roads or bridges. This rule applies in all instances where the contractor
is obligated by the terms of the contract to furnish, to pay for, and to lay
down the materials, including sales of materials which have been selected by
and on which an option has been taken by the state or the counties or municipalities
of the State. The supplier shall collect the tax from the contractor and remit
the amount due to the Department of Revenue. (Sections 40-23-1(a)(10) and 40-23-60(5))
(b) Where an isolated sale of sand, gravel, or similar material is made to a
contractor by a landowner who is not engaged in the business of selling such
material, the isolated sale will not be required to be reported to the Department
and neither sales tax nor use tax will be due from the landowner or from the
contractor on the transaction.
(c) On and after October 1, 2000, the sale of sand, gravel, or other building
materials by landowners or other suppliers to, or the storage, use, or consumption
of these materials by, any contractor or subcontractor to be incorporated
into realty pursuant to a road or bridge construction contract with the State
of Alabama or any county or incorporated municipality of the State of Alabama
pursuant to a contract awarded prior to July 1, 2004, is exempt from state,
county, and municipal sales and use taxes provided the contractor or subcontractor
has complied with Rule 810 6 3-.77 entitled Exemption of Certain Purchases
by Contractors and Subcontractors in conjunction with Construction Contracts
with Certain Governmental Entities, Public Corporations, and Educational Institutions.
(Section 40-9-33, Code of Alabama 1975) (Sections 40-2A-7(a)(5), 40-23-1(a)(10),
40-23-31, 40-23-60(5), and 40-23-83, Code of Alabama 1975, Act No. 2000-684)
(Readopted through APA effective October 1, 1982, amended March 27, 2001,
amended June 10, 2005)
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