1 SB218
2 204688-2
3 By Senators Melson and Shelnutt
4 RFD: Finance and Taxation Education
5 First Read: 10-FEB-21
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1 204688-2:n:02/27/2020:LK/bm LSA2020-231R1
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8 SYNOPSIS: Under existing law, the sale of gold,
9 silver, platinum, and palladium bullion, or money
10 is exempt from sales and use tax until June 1,
11 2023.
12 Also under existing law, entities receiving
13 the tax exemption are required to report certain
14 information to the Department of Revenue.
15 This bill would amend the definition of
16 bullion, would extend the expiration date for the
17 sales and use tax exemption, and repeal the
18 reporting requirements.
19
20 A BILL
21 TO BE ENTITLED
22 AN ACT
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24 To amend Section 40-23-4, as last amended by Act
25 2019-444, 2019 Regular Session, and Section 40-9-61, relating
26 to sales and use tax exemptions; to amend the definition of
27 bullion; to extend the exemption from sales and use tax for
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1 the gross proceeds from the sales of gold, silver, platinum,
2 and palladium bullion, and money; and to delete reporting
3 requirements.
4 BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
5 Section 1. Section 40-23-4, as last amended by Act
6 2019-444, 2019 Regular Session, and Section 40-9-61 are
7 amended to read as follows:
8 "40-23-4.
9 "(a) There are exempted from the provisions of this
10 division and from the computation of the amount of the tax
11 levied, assessed, or payable under this division the
12 following:
13 "(1) The gross proceeds of the sales of lubricating
14 oil and gasoline as defined in Sections 40-17-30 and 40-17-170
15 and the gross proceeds from those sales of lubricating oil
16 destined for out-of-state use which are transacted in a manner
17 whereby an out-of-state purchaser takes delivery of such oil
18 at a distributor's plant within this state and transports it
19 out-of-state, which are otherwise taxed.
20 "(2) The gross proceeds of the sale, or sales, of
21 fertilizer when used for agricultural purposes. The word
22 "fertilizer" shall not be construed to include cottonseed
23 meal, when not in combination with other materials.
24 "(3) The gross proceeds of the sale, or sales, of
25 seeds for planting purposes and baby chicks and poults.
26 Nothing herein shall be construed to exempt or exclude from
27 the computation of the tax levied, assessed, or payable, the
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1 gross proceeds of the sale or sales of plants, seedlings,
2 nursery stock, or floral products.
3 "(4) The gross proceeds of sales of insecticides and
4 fungicides when used for agricultural purposes or when used by
5 persons properly permitted by the Department of Agriculture
6 and Industries or any applicable local or state governmental
7 authority for structural pest control work and feed for
8 livestock and poultry, but not including prepared food for
9 dogs and cats.
10 "(5) The gross proceeds of sales of all livestock by
11 whomsoever sold, and also the gross proceeds of poultry and
12 other products of the farm, dairy, grove, or garden, when in
13 the original state of production or condition of preparation
14 for sale, when such sale or sales are made by the producer or
15 members of his immediate family or for him by those employed
16 by him to assist in the production thereof. Nothing herein
17 shall be construed to exempt or exclude from the measure or
18 computation of the tax levied, assessed, or payable hereunder,
19 the gross proceeds of sales of poultry or poultry products
20 when not products of the farm.
21 "(6) Cottonseed meal exchanged for cottonseed at or
22 by cotton gins.
23 "(7) The gross receipts from the business on which,
24 or for engaging in which, a license or privilege tax is levied
25 by or under the provisions of Sections 40-21-50, 40-21-53, and
26 40-21-56 through 40-21-60; provided, that nothing contained in
27 this subdivision shall be construed to exempt or relieve the
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1 person or persons operating the business enumerated in said
2 sections from the payments of the tax levied by this division
3 upon or measured by the gross proceeds of sales of any
4 tangible personal property, except gas and water, the gross
5 receipts from the sale of which are the measure of the tax
6 levied by said Section 40-21-50, merchandise or other tangible
7 commodities sold at retail by said persons, unless the gross
8 proceeds of sale thereof are otherwise specifically exempted
9 by the provisions of this division.
10 "(8) The gross proceeds of sales or gross receipts
11 of or by any person, firm, or corporation, from the sale of
12 transportation, gas, water, or electricity, of the kinds and
13 natures, the rates and charges for which, when sold by public
14 utilities, are customarily fixed and determined by the Public
15 Service Commission of Alabama or like regulatory bodies.
16 "(9) The gross proceeds of the sale, or sales of
17 wood residue, coal, or coke to manufacturers, electric power
18 companies, and transportation companies for use or consumption
19 in the production of by-products, or the generation of heat or
20 power used in manufacturing tangible personal property for
21 sale, for the generation of electric power or energy for use
22 in manufacturing tangible personal property for sale or for
23 resale, or for the generation of motive power for
24 transportation.
25 "(10) The gross proceeds from the sale or sales of
26 fuel and supplies for use or consumption aboard ships,
27 vessels, towing vessels, or barges, or drilling ships, rigs or
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1 barges, or seismic or geophysical vessels, or other watercraft
2 (herein for purposes of this exemption being referred to as
3 "vessels") engaged in foreign or international commerce or in
4 interstate commerce; provided, that nothing in this division
5 shall be construed to exempt or exclude from the measure of
6 the tax herein levied the gross proceeds of sale or sales of
7 material and supplies to any person for use in fulfilling a
8 contract for the painting, repair, or reconditioning of
9 vessels, barges, ships, other watercraft, and commercial
10 fishing vessels of over five tons load displacement as
11 registered with the U.S. Coast Guard and licensed by the State
12 of Alabama Department of Conservation and Natural Resources.
13 "For purposes of this subdivision, it shall be
14 presumed that vessels engaged in the transportation of cargo
15 between ports in the State of Alabama and ports in foreign
16 countries or possessions or territories of the United States
17 or between ports in the State of Alabama and ports in other
18 states are engaged in foreign or international commerce or
19 interstate commerce, as the case may be. For the purposes of
20 this subdivision, the engaging in foreign or international
21 commerce or interstate commerce shall not require that the
22 vessel involved deliver cargo to or receive cargo from a port
23 in the State of Alabama. For purposes of this subdivision,
24 vessels carrying passengers for hire, and no cargo, between
25 ports in the State of Alabama and ports in foreign countries
26 or possessions or territories of the United States or between
27 ports in the State of Alabama and ports in other states shall
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1 be engaged in foreign or international commerce or interstate
2 commerce, as the case may be, if, and only if, both of the
3 following conditions are met: (i) The vessel in question is a
4 vessel of at least 100 gross tons; and (ii) the vessel in
5 question has an unexpired certificate of inspection issued by
6 the United States Coast Guard or by the proper authority of a
7 foreign country for a foreign vessel, which certificate is
8 recognized as acceptable under the laws of the United States.
9 Vessels that are engaged in foreign or international commerce
10 or interstate commerce shall be deemed for the purposes of
11 this subdivision to remain in such commerce while awaiting or
12 under repair in a port of the State of Alabama if such vessel
13 returns after such repairs are completed to engaging in
14 foreign or international commerce or interstate commerce. For
15 purposes of this subdivision, seismic or geophysical vessels
16 which are engaged either in seismic or geophysical tests or
17 evaluations exclusively in offshore federal waters or in
18 traveling to or from conducting such tests or evaluations
19 shall be deemed to be engaged in international or foreign
20 commerce. For purposes of this subdivision, proof that fuel
21 and supplies purchased are for use or consumption aboard
22 vessels engaged in foreign or international commerce or in
23 interstate commerce may be accomplished by the merchant or
24 seller securing the duly signed certificate of the vessel
25 owner, operator, or captain or their respective agent, on a
26 form prescribed by the department, that the fuel and supplies
27 purchased are for use or consumption aboard vessels engaged in
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1 foreign or international commerce or in interstate commerce.
2 Any person filing a false certificate shall be guilty of a
3 misdemeanor and upon conviction shall be fined not less than
4 $25 nor more than $500 for each offense. Each false
5 certificate filed shall constitute a separate offense. Any
6 person filing a false certificate shall be liable to the
7 department for all taxes imposed by this division upon the
8 merchant or seller, together with any interest or penalties
9 thereon, by reason of the sale or sales of fuel and supplies
10 applicable to such false certificate. If a merchant or seller
11 of fuel and supplies secures the certificate herein mentioned,
12 properly completed, such merchant or seller shall not be
13 liable for the taxes imposed by this division, if such
14 merchant or seller had no knowledge that such certificate was
15 false when it was filed with such merchant or seller.
16 "(11) The gross proceeds of sales of tangible
17 personal property to the State of Alabama, to the counties
18 within the state and to incorporated municipalities of the
19 State of Alabama.
20 "(12) The gross proceeds of the sale or sales of
21 railroad cars, vessels, barges, and commercial fishing vessels
22 of over five tons load displacement as registered with the
23 U.S. Coast Guard and licensed by the State of Alabama
24 Department of Conservation and Natural Resources, when sold by
25 the manufacturers or builders thereof.
26 "(13) The gross proceeds of the sale or sales of
27 materials, equipment, and machinery that, at any time, enter
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1 into and become a component part of ships, vessels, towing
2 vessels or barges, or drilling ships, rigs or barges, or
3 seismic or geophysical vessels, other watercraft and
4 commercial fishing vessels of over five tons load displacement
5 as registered with the U.S. Coast Guard and licensed by the
6 State of Alabama Department of Conservation and Natural
7 Resources. Additionally, the gross proceeds from the sale or
8 sales of lifeboats, personal flotation devices, ring life
9 buoys, survival craft equipment, distress signals, EPIRB's,
10 fire extinguishers, injury placards, waste management plans
11 and logs, marine sanitation devices, navigation rulebooks,
12 navigation lights, sound signals, navigation day shapes, oil
13 placard cards, garbage placards, FCC SSL, stability
14 instructions, first aid equipment, compasses, anchor and radar
15 reflectors, general alarm systems, bilge pumps, piping, and
16 discharge and electronic position fixing devices which are
17 used on the aforementioned watercraft.
18 "(14) The gross proceeds of the sale or sales of
19 fuel oil purchased as fuel for kiln use in manufacturing
20 establishments.
21 "(15) The gross proceeds of the sale or sales of
22 tangible personal property to county and city school boards
23 within the State of Alabama, independent school boards within
24 the State of Alabama, all educational institutions and
25 agencies of the State of Alabama, the counties within the
26 state, or any incorporated municipalities of the State of
27 Alabama, and private educational institutions operating within
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1 the State of Alabama offering conventional and traditional
2 courses of study, such as those offered by public schools,
3 colleges, or universities within the State of Alabama; but not
4 including nurseries, day care centers, and home schools.
5 "(16) The gross proceeds from the sale of all
6 devices or facilities, and all identifiable components
7 thereof, or materials for use therein, acquired primarily for
8 the control, reduction, or elimination of air or water
9 pollution and the gross proceeds from the sale of all
10 identifiable components of, or materials used or intended for
11 use in, structures built primarily for the control, reduction,
12 or elimination of air and water pollution.
13 "(17) The gross proceeds of sales of tangible
14 personal property or the gross receipts of any business which
15 the state is prohibited from taxing under the Constitution or
16 laws of the United States or under the Constitution of this
17 state.
18 "(18) When dealers or distributors use parts taken
19 from stocks owned by them in making repairs without charge for
20 such parts to the owner of the property repaired pursuant to
21 warranty agreements entered into by manufacturers, such use
22 shall not constitute taxable sales to the manufacturers,
23 distributors, or to the dealers, under this division or under
24 any county sales tax law.
25 "(19) The gross proceeds received from the sale or
26 furnishing of food, including potato chips, candy, fruit and
27 similar items, soft drinks, tobacco products, and stationery
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1 and other similar or related articles by hospital canteens
2 operated by Alabama state hospitals at Bryce Hospital and
3 Partlow State School for Mental Deficients at Tuscaloosa,
4 Alabama, and Searcy Hospital at Mt. Vernon, Alabama, for the
5 benefit of the patients therein.
6 "(20) The gross proceeds of the sale, or sales, of
7 wrapping paper and other wrapping materials when used in
8 preparing poultry or poultry products for delivery, shipment,
9 or sale by the producer, processor, packer, or seller of such
10 poultry or poultry products, including pallets used in
11 shipping poultry and egg products, paper or other materials
12 used for lining boxes or other containers in which poultry or
13 poultry products are packed together with any other materials
14 placed in such containers for the delivery, shipment, or sale
15 of poultry or poultry products.
16 "(21) The gross proceeds of the sales of all
17 antibiotics, hormones and hormone preparations, drugs,
18 medicines or medications, vitamins, minerals or other
19 nutrients, and all other feed ingredients including
20 concentrates, supplements, and other feed ingredients when
21 such substances are used as ingredients in mixing and
22 preparing feed for fish raised to be sold on a commercial
23 basis, livestock, and poultry. Such exemption herein granted
24 shall be in addition to exemptions now provided by law for
25 feed for fish raised to be sold on a commercial basis,
26 livestock, and poultry, but not including prepared foods for
27 dogs or cats.
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1 "(22) The gross proceeds of the sale, or sales, of
2 seedlings, plants, shoots, and slips which are to be used for
3 planting vegetable gardens or truck farms and other
4 agricultural purposes. Nothing herein shall be construed to
5 exempt, or exclude from the computation of the tax levied,
6 assessed, or payable, the gross proceeds of the sale, or the
7 use of plants, seedlings, shoots, slips, nursery stock, and
8 floral products, except as hereinabove exempted.
9 "(23) The gross proceeds of the sale, or sales, of
10 fabricated steel tube sections, when produced and fabricated
11 in this state by any person, firm, or corporation for any
12 vehicular tunnel for highway vehicular traffic, when sold by
13 the manufacturer or fabricator thereof, and also the gross
14 proceeds of the sale, or sales, of steel which enters into and
15 becomes a component part of such fabricated steel tube
16 sections of said tunnel.
17 "(24) The gross proceeds from sales of admissions to
18 any theatrical production, symphonic or other orchestral
19 concert, ballet, or opera production when such concert or
20 production is presented by any society, association, guild, or
21 workshop group, organized within this state, whose members or
22 some of whose members regularly and actively participate in
23 such concerts or productions for the purposes of providing a
24 creative outlet for th