1 HB10
2 214446-3
3 By Representative Brown (C)
4 RFD: Ways and Means General Fund
5 First Read: 11-JAN-22
6 PFD: 06/28/2021
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1
2 ENROLLED, An Act,
3 Relating to ad valorem tax; to amend Section 40-9-1
4 of the Code of Alabama 1975, to exempt all commercial fishing
5 vessels and equipment from ad valorem taxation; relating to
6 sales and use tax; to amend Sections 40-23-1, 40-23-4, as last
7 amended by Act 2019-444, 2019 Regular Session, 40-23-37,
8 40-23-60, and 40-23-63 of the Code of Alabama 1975, to provide
9 for an exemption for bait and all materials and equipment used
10 by commercial fishermen; and to levy a rate differential of
11 one and one-half percent on the purchase and storage of
12 vessels and machinery used for commercial fishing.
13 BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
14 Section 1. Sections 40-9-1, 40-23-1, 40-23-4, as
15 last amended by Act 2019-444, 2019 Regular Session, 40-23-37,
16 40-23-60, and 40-23-63 of the Code of Alabama 1975, are
17 amended to read as follows:
18 "40-9-1.
19 "The following property and persons shall be exempt
20 from ad valorem taxation and none other:
21 "(1) All bonds of the United States and this state
22 and all county and municipal bonds issued by counties and
23 municipalities in this state, all property, real and personal,
24 of the United States and this state and of county and
25 municipal corporations in this state; all cemeteries, all
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1 property, real and personal, used exclusively for religious
2 worship, for schools or for purposes purely charitable;
3 provided, that property, real or personal, owned by any
4 educational, religious, or charitable institution, society or
5 corporation let for rent or hire or for use for business
6 purposes shall not be exempt from taxation, notwithstanding
7 that the income from such property shall be used exclusively
8 for education, religious, or charitable purposes; all
9 mortgages, together with the notes, debts, and credits secured
10 thereby on real and personal property situated in this state,
11 which mortgages have been filed for record and the privilege
12 tax paid thereon; all security agreements and security
13 interests under the Uniform Commercial Code, together with the
14 notes, debts, and credits secured thereby; all money on
15 deposit in any bank or banking institution and all other
16 solvent credits; all warrants issued by county boards of
17 education and city boards of education for the purpose of
18 erecting, repairing, furnishing school buildings, or for other
19 school purposes;
20 "(2) All property, real or personal, used
21 exclusively for hospital purposes, to the amount of
22 seventy-five thousand dollars ($75,000), where such hospitals
23 maintain wards for charity patients or give treatment to such
24 patients; provided, that the treatment of charity patients
25 constitutes at least 15 percent of the business of such
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1 hospitals; provided further, that such hospital need not be
2 assessed for taxation if the owner or manager shall file with
3 the county tax assessor wherein such hospital is located
4 within the time allowed for assessing such property for
5 taxation a certificate that such hospital has done 15 percent
6 charity work in the preceding tax year; and further provided,
7 that such hospital through its owner or manager shall have
8 until the expiration of the preceding tax year to class its
9 work and ascertain whether or not such hospital has done 15
10 percent of its treatment of patients as charity work;
11 "(3) The shares of the capital stock of any
12 corporation owning and operating a hospital, to the extent of
13 seventy-five thousand dollars ($75,000) in value; provided,
14 that said corporation maintains wards for charity patients and
15 gives treatment to such patients, which treatment constitutes
16 at least 15 percent of the business of the hospital of said
17 corporation; provided, that the total exemption granted to any
18 such corporation shall not exceed seventy-five thousand
19 dollars ($75,000), taking into consideration its real and
20 personal property and the value of its shares of capital
21 stock;
22 "(4) All property owned by the American Legion or by
23 Veterans of Foreign Wars or by the Disabled American Veterans,
24 or any post thereof; provided, that such property is used and
25 occupied exclusively by said organization;
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1 "(5) All the property of literary and scientific
2 institutions and literary societies, when employed or used in
3 the regular business of such institutions;
4 "(6) The libraries of ministers of the gospel, all
5 libraries other than those of a professional character and all
6 religious books kept for sale by ministers of the gospel and
7 colporteurs;
8 "(7) The property of deaf mutes and insane persons
9 to the extent of three thousand dollars ($3,000) and the
10 property of blind persons to the extent of twelve thousand
11 dollars ($12,000);
12 "(8) All family portraits;
13 "(9) All cotton, livestock, or agricultural products
14 which have been raised or grown in the State of Alabama and
15 which shall remain in the hands of the producer thereof, or
16 his landlord, or in the hands of a cooperative association for
17 all time, and for a period of one year in the hands of the
18 purchaser or the manufacturer;
19 "(10) All cotton, wherever grown, stored in licensed
20 warehouses in the State of Alabama for a period not exceeding
21 12 months;
22 "(11) Provisions and supplies on hand for the
23 current year for the use of the family and the making of
24 crops; all wearing apparel; farming tools; tools and
25 implements of mechanics to the value of two hundred dollars
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1 ($200); all livestock, including mules, studs, jacks and
2 jennets, cattle, horses, cows, calves, hogs, sheep, and goats;
3 household and kitchen furniture and one sewing machine;
4 "(12) No license or taxation of any character,
5 except franchise taxes provided by Section 229 of the
6 Constitution of the State of Alabama, shall be collected or
7 required to be paid to the state or any county or municipality
8 therein by any state or county fair, agricultural association,
9 stock, kennel, or poultry show. Athletic stadiums owned and
10 controlled by universities, schools, or colleges and which are
11 used exclusively for the purpose of promoting intercollegiate
12 or interschool athletics; provided, that the revenue received
13 from athletic stadiums, when admission is charged, shall be
14 used for the benefit of athletic associations of such
15 universities, colleges, or schools. Nothing contained in this
16 subdivision shall be construed to prohibit any municipality,
17 county, or state from imposing any license tax upon or for the
18 privilege of engaging in the business of supplying services
19 for hire or reward or selling commodities other than
20 livestock, farm products, or farm implements or conducting or
21 operating devices or games of skill or amusements or other
22 games or devices, or conducting or operating shows, displays
23 or exhibits other than shows, displays or exhibits of
24 agricultural implements, farm products, livestock and athletic
25 prowess;
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1 "(13) All material, including without limitation
2 coke, to be compounded or further manufactured, when stocked
3 at any plant or furnace for manufacturing purposes in Alabama;
4 "(14) All articles manufactured in Alabama,
5 including pig iron, in the hands of the producer or
6 manufacturer thereof, for 12 months after its production or
7 manufacture;
8 "(15) All property, both real and personal, owned by
9 any unit or organization of the Alabama National Guard
10 officially recognized as such by the federal government and
11 organized and maintained by the state, and all property owned
12 by shares and used exclusively by and kept exclusively in the
13 possession of any such unit or organization of the Alabama
14 National Guard, the annual rent or hire of which is not in
15 excess of the annual state, county and municipal taxes on said
16 property shall be exempt from taxation by the state, and the
17 county and municipality in which the same may be situated;
18 "(16) All poultry;
19 "(17) The property of all incompetent veterans to
20 the value of three thousand dollars ($3,000);
21 "(18) The following items of personal property when
22 owned by individuals for personal use in the home or usually
23 kept at the home of the owner and not carried as stocks of
24 merchandise, namely: Libraries; phonographs; pianos and other
25 musical instruments; paintings; precious stones, jewelry,
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1 plate silverware, ornaments, and articles of taste; watches
2 and clocks; wagons, buggies, bicycles, guns, pistols, canes,
3 golf sticks, golf bags, and sporting goods; money hoarded;
4 radios; mechanical and electrical refrigerators; electrical
5 appliances;
6 "(19) All property owned by the Benevolent and
7 Protective Order of Elks, Fraternal Order of Police, Fraternal
8 Order of Eagles, or Loyal Order of Moose, or lodge thereof;
9 provided, that such property is used and occupied exclusively
10 by such organization;
11 "(20) All devices, facilities or structures, and all
12 identifiable components thereof or materials for use therein,
13 acquired or constructed primarily for the control, reduction,
14 or elimination of air or water pollution;
15 "(21) Tobacco leaf stored in hogsheads;
16 "(22) All farm tractors, as that term is defined in
17 subdivision (19) of Section 32-1-1.1; and all farming
18 implements, as that term is used in subdivision (b)(5) of
19 Section 40-11-1, as amended, when used exclusively in
20 connection with agricultural property as defined in
21 subdivision (b)(3) of Section 40-8-1, as amended;
22 "(23) All stocks of goods, wares, and merchandise
23 described in subdivision (b)(4) of Section 40-11-1, as
24 amended; and
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1 "(24) All aircraft, replacement parts, components,
2 systems, supplies and sundries affixed or used on said
3 aircraft, and ground support equipment and vehicles used by or
4 for the aircraft, when used by a certificated or licensed air
5 carrier with a hub operation within this state, for use in
6 conducting intrastate, interstate, or foreign commerce for
7 transporting people or property by air. For the purpose of
8 this subdivision, the words "hub operation within this state"
9 shall be construed to have all of the following criteria:
10 "a. There originates from the location 15 or more
11 flight departures and five or more different first-stop
12 destinations five days per week for six or more months during
13 the calendar year; and
14 "b. Passengers and/or property are regularly
15 exchanged at the location between flights of the same or a
16 different certificated or licensed air carrier.
17 "(25) All property described in Title 12 U.S.C.
18 1701(Q), commonly known as HUD 202 property, is hereby exempt
19 from any and all ad valorem taxes.
20 "(26) All vessels and equipment thereon, used
21 predominantly in the business of commercial shrimping fishing,
22 as defined in Section 40-23-1, by the owners thereof.
23 "40-23-1.
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1 "(a) For the purpose of this division, the following
2 terms shall have the respective meanings ascribed by this
3 section:
4 "(1) PERSON or COMPANY. Used interchangeably,
5 includes any individual, firm, copartnership, association,
6 corporation, receiver, trustee, or any other group or
7 combination acting as a unit and the plural as well as the
8 singular number, unless the intention to give a more limited
9 meaning is disclosed by the context.
10 "(2) DEPARTMENT. The Department of Revenue of the
11 State of Alabama.
12 "(3) COMMISSIONER. The Commissioner of Revenue of
13 the State of Alabama.
14 "(4) TAX YEAR or TAXABLE YEAR. The calendar year.
15 "(5) SALE or SALES. Installment and credit sales and
16 the exchange of properties as well as the sale thereof for
17 money, every closed transaction constituting a sale. Provided,
18 however, a transaction shall not be closed or a sale completed
19 until the time and place when and where title is transferred
20 by the seller or seller's agent to the purchaser or
21 purchaser's agent, and for the purpose of determining transfer
22 of title, a common carrier or the U. S. U.S. Postal Service
23 shall be deemed to be the agent of the seller, regardless of
24 any F.O.B. point and regardless of who selects the method of
25 transportation, and regardless of by whom or the method by
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1 which freight, postage, or other transportation charge is
2 paid. Provided further that, where billed as a separate item
3 to and paid by the purchaser, the freight, postage, or other
4 transportation charge paid to a common carrier or the U.S.
5 Postal Service is not a part of the selling price.
6 "(6) GROSS PROCEEDS OF SALES. The value proceeding
7 or accruing from the sale of tangible personal property, and
8 including the proceeds from the sale of any property handled
9 on consignment by the taxpayer, including merchandise of any
10 kind and character without any deduction on account of the
11 cost of the property sold, the cost of the materials used,
12 labor or service cost, interest paid, any consumer excise
13 taxes that may be included within the sales price of the
14 property sold, or any other expenses whatsoever, and without
15 any deductions on account of losses; provided, that cash
16 discounts allowed and taken on sales shall not be included,
17 and "gross proceeds of sales" shall not include the sale price
18 of property returned by customers when the full sales price
19 thereof is refunded either in cash or by credit. The term
20 "gross proceeds of sale" shall also mean and include the
21 reasonable and fair market value of any tangible personal
22 property previously purchased at wholesale which is withdrawn
23 or used from the business or stock and used or consumed in
24 connection with a business, and shall also mean and include
25 the reasonable and fair market value of any tangible personal
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1 property previously purchased at wholesale which is withdrawn
2 from the business or stock and used or consumed by any person
3 so withdrawing the same, except property which has been
4 previously withdrawn from business or stock and so used or
5 consumed with respect to which property the tax has been paid
6 because of previous withdrawal, use, or consumption, except
7 property which enters into and becomes an ingredient or
8 component part of tangible personal property or products
9 manufactured or compounded for sale and not for the personal
10 and private use or consumption of any person so withdrawing,
11 using, or consuming the same, and except refinery, residue, or
12 fuel gas, whether in a liquid or gaseous state, that has been
13 generated by, or is otherwise a by-product of, a
14 petroleum-refining process, which gas is then utilized in the
15 process to generate heat or is otherwise utilized in the
16 distillation or refining of petroleum products.
17 "In the case of the retail sale of equipment,
18 accessories, fixtures, and other similar tangible personal
19 property used in connection with the sale of commercial mobile
20 services as defined herein, or in connection with satellite
21 television services, at a price below cost, "gross proceeds of
22 sale" shall only include the stated sales price thereof and
23 shall not include any sales commission or rebate received by
24 the seller as a result of the sale. As used herein, the term
25 "commercial mobile services" shall have the same meaning as
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1 that term has in 47 U.S.C. Sections 153(n) and 332(d), as in
2 effect from time to time.
3 "(7) TAXPAYER. Any person liable for taxes
4 hereunder.
5 "(8) GROSS RECEIPTS. The value proceeding or
6 accruing from the sale of tangible personal property,
7 including merchandise and commodities of any kind and
8 character, all receipts actual and accrued, by reason of any
9 business engaged in, not including, however, interest,
10 discounts, rentals of real estate or royalties, and without
11