(a) All persons or companies, including, but not limited to, those cited in this chapter, other than governmental entities, which have statutory exemption from the payment of Alabama sales and use taxes levied in, including, but not limited to, Chapter 23 of this title, or lodgings taxes levied in Chapter 26 of this title, regardless of the type of transaction or whether the tangible personal property is subject to sales and use tax or whether the accommodations are subject to lodgings tax, shall be required to annually obtain a certificate of exemption from the Department of Revenue. This requirement does not supersede or replace the provisions of Section 40-9-14.1 or any other provision of statute requiring an entity to obtain a certificate of exemption.
This article only applies to entities that have been granted a general exemption from sales, use, or lodging taxes. The requirements of this article are not triggered by the purchase of tangible personal property that is exempt from sales and use tax.
(1) For purposes of this article, the term governmental entity means the Federal Government, the State of Alabama, Alabama public schools, Alabama public universities, healthcare authorities, Alabama counties and municipalities, and public corporations incorporated under any of the provisions of Chapter 50 of Title 11, Chapter 50A of Title 11, Chapter 5 of Title 37, or Chapter 7 of Title 39.
(2) The term governmental entity does not include public corporations, other than those public corporations described in subdivision (1), private schools, or private universities.
(3) For purposes of this article, the term lodgings tax means Transient Occupancy Tax, levied in Chapter 26 of this title.
(4) For the purposes of this article, the terms person or company shall have the same meaning as prescribed in Section 40-23-1.
(b) Certificates of exemption shall be valid for one year from the date of issuance and shall be renewed annually each subsequent year. Any person or company that fails to obtain or renew a certificate of exemption prior to its expiration may not make tax exempt purchases or rent tax exempt accommodations after the expiration. The Department of Revenue may assess any person or company with state and local sales, use, and lodgings tax for any transaction conducted with a certificate of exemption not properly accounted for and reported as required in Section 40-9-61. Any reports required by the Department of Revenue shall be filed as a prerequisite to the renewal of a certificate of exemption.
(c) Any person or company that intentionally uses a certificate of exemption in violation of its intended purpose, in addition to the actual sales, use, and lodgings tax liability due, shall be subject to a civil penalty levied by the Department of Revenue in an amount of not less than two-thousand dollars ($2,000) or two times any state and local sales, use, and lodgings tax due for the transactions, whichever is greater, and based on the person or company's willful misuse of the certificate of exemption, may be barred from the use of any certificate of exemption for up to two years.
(d) This section shall be operative for all applicable exempt persons or companies on January 1, 2016.
(e) The Department of Revenue may adopt rules to administer and implement this section and may adopt rules requiring an annual exemption certificate for persons or companies not subject to subsection (a), other than government entities, providing for an annual information report from such persons or companies, and imposing penalties equivalent to the penalties provided for in subsection (c) for noncompliance by such persons or companies in order to verify exemptions and make reports to the Legislature.