Chapter 810-6-2 - TAXES LEVIED ON GROSS SALES AND GROSS RECEIPTS; APPLICABLE TAX RATES

(1) The gross proceeds of sales of house trailers or mobile homes are taxable at the reduced automotive rate of sales or use tax. Where any house trailer or mobile home is taken in trade as a credit or part payment on the sale of a new or used house trailer or mobile home, the me…

Retail sales of hydraulic oils are subject to the sales tax at a rate of 4 percent except hydraulic oil used as part of a machine used in quarrying, mining, manufacturing, processing, and compounding tangible personal property which is taxed at 1 1/2%. §§ 40-23-2(1), 40-23-2(3) (…

(1) The following are taxed at 1 1/2% rate levied on machines used in manufacturing when used by ice manufacturers: pumps, motors, compressors, pipes, valves, gauges, water filters, ice crushing and shaving machines and other machines and the machinery used directly in the ice ma…

The materials, from which parts and attachments for machines used in manufacturing, compounding, processing, mining or quarrying are improvised, are taxed at the special 1 1/2% rate when such improvised parts or attachments are necessary to the operation of such machines and are …

(Repealed 11/3/98) Author: Patricia Estes Notes Ala. Admin. Code r. 810-6-2-.35 Repealed: Filed September 29, 1998; effective November 3, 1998. Statutory Authority: Code of Ala. 1975, §§ 40-23-31, 40-23-83.

Sales to foundrymen of kerosene to be used in making molds and cores are taxed at the general rate of 4%. (Adopted March 9, 1961, amended November 1, 1963) §§ 40-23-1(10), 40-23-2(1) Author: Notes Ala. Admin. Code r. 810-6-2-.36 Statutory Authority: Code of Ala. 1975, §§ 40-23-31…

(1) Push type and self-propelled lawn mowers, roto-tillers, and garden tractors do not come within the automotive section of law levying a lower rate of tax, they are taxable at the rate of 4%. § 40-23-2(1) (2) Self-propelled riding lawn mowers and garden tractors do come within …

(1) The Sales Tax Law defines a sale as follows: "installment and credit sales and the exchange of properties as well as the sale thereof for money, every closed transaction constituting a sale." It has been held that Alabama sales tax applies only to sales that are "closed" with…

Sales of lumber and timbers to mine operators for use in constructing or repairing structures such as tipples, bridges, or trestles used in supporting mining and processing equipment and tracks are subject to tax at the general rate of 4%. This rule does not apply to machines and…

Sales of lumber and timbers to mine operators for use in the building and maintenance of structures and for use in supporting mine roofs are subject to sales tax at the general rate of 4%. (Adopted March 9, 1961, amended November 1, 1963) § 40-23-1(10) Author: Notes Ala. Admin. C…

Machine shop equipment used for maintenance and repair purposes is taxable at the general rate of 4%. Machines used both in maintenance and repair work and in the production of manufactured articles are taxed at the special machine rate of 1 1/2% when use in production is substan…

(Repealed). Author: Patricia A. Estes Notes Ala. Admin. Code r. 810-6-2-.40 Repealed: Filed June 4, 1998; effective July 9, 1998. Statutory Authority: Code of Ala. 1975, §§ 40-23-31, 40-23-83.

(1) The 1 1/2% tax rate shall apply where a building contractor purchases for installation under a building contract machines and parts or attachments for machines which are to be used in mining, quarrying, manufacturing, compounding or processing. The parts or attachments to com…

Retail sales of stand alone, commercial and portable electrical generators that manufacture alternating current electricity are taxable at the reduced machine rate. (Sections 40-23-2(3) and 40-23-61(b)) Author: Jim Smith Notes Ala. Admin. Code r. 810-6-2-.41.01 New Rule: Filed Ju…

Materials or equipment which might constitute a machine or machinery when not used for mining, quarrying, manufacturing, compounding or processing are taxed at the general rate of 4%. (Adopted March 9, 1961, amended November 1, 1963) § 40-23-1(10) Author: Notes Ala. Admin. Code r…

A self-propelled dragline purchased for use in mining tangible personal property taxable at the reduced machine rate of sales or use tax. Replacement parts and attachments for self-propelled draglines used in mining tangible personal property are also taxable at the reduced machi…

(Repealed). Author: Patricia A. Estes Notes Ala. Admin. Code r. 810-6-2-.44 Repealed: Filed June 4, 1998; effective July 9, 1998. Statutory Authority: Code of Ala. 1975, § 40-23-31.

(Repealed). Author: Notes Ala. Admin. Code r. 810-6-2-.45 Repealed: Filed February 3, 1998; effective March 10, 1998. Statutory Authority: Code of Ala. 1975, §§ 40-23-31, 40-23-83.

(1) Patterns purchased by a manufacturer for use as a part or attachment to a machine used in manufacturing tangible personal property are subject to the sales and/or use tax at the machine rate of 1 1/2%. (2) Pattern materials purchased by a manufacturer for use in making patter…

The proper rates of state sales tax to be paid on sales of boats, motors, trailers. and other items associated with the marine industry are as follows: (a) Boat trailers sold alone are taxable at 2 percent of the net difference paid. (b) Boat motors sold alone are taxable at the …

(1) Equipment used for transporting materials to the plant of a manufacturer, processor, or compounder or used for transporting finished products from such plants is taxed at the general 4% rate. (2) The movement of materials or products purely for transportation purposes is not …

(1) Pattern materials used by foundrymen in making patterns to be used in casting are taxed at the special machine rate of 1 1/2%. (2) Sales of patterns are taxed at the special machine rate of 1 1/2% when made to a foundryman to be used by him in making molds for castings. (3) S…

Mats purchased by advertisers to be furnished to newspaper publishers for use in producing plates used in printing newspapers are taxed at the special machine rate of 1 1/2%. § 40-23-2(3) Author: Notes Ala. Admin. Code r. 810-6-2-.49 Statutory Authority: Code of Ala. 1975, §§ 40-…

Where both lodgings and meals are furnished to students by institutions of higher learning, both public and private, the meals are subject to sales tax. If both lodgings and meals are furnished for a lump sum, the full amount is to be used as the measure of the tax. Where lodging…

(1) Sales to children of lunches, when not for profit, in kindergartens, grammar schools, junior high schools, and high schools, both private and public, are specifically exempted from sales tax. (2) Sales of meals made by all colleges, universities or other institutions of highe…

(1) Members of the armed services of the United States stationed in Alabama have no immunity from sales taxes imposed upon sales of tangible personal property to them by Alabama vendors. (2) Property is not subject to Alabama use tax where purchased outside Alabama for use in thi…

Manufacturers of metal products are taxed on the use of all chemicals and oils which they use as cleaning materials, except oils classified and taxed as lubricating oils. § 40-23-2(1) Author: Notes Ala. Admin. Code r. 810-6-2-.51.07 Statutory Authority: Code of Ala. 1975, §§ 40-2…

Mechanically operated devices used in making molds from sand for use in manufacturing are taxed at the special machine rate of 1 1/2%. § 40-23-2(3) Author: Notes Ala. Admin. Code r. 810-6-2-.52 Statutory Authority: Code of Ala. 1975, §§ 40-23-31, 40-23-83.

Gross receipts from the operation of musical devices (juke boxes) are taxable. The Supreme Court of Alabama held in the case Birmingham Vending Company v. State of Alabama, 38 So. 2d 876, that both the machine owner and the proprietor of the place of the business where the machin…

(1) Sales of tangible personal property to any national or state bank are taxable unless the bank is purchasing the property for resale. (Sections 40-23-2 and 40-23-61, Code of Ala. 1975, and 12 U.S.C. Section 548) (2) National or state banks that are in the business of selling t…

(1) Gross receipts accruing from the retail sales of black and white negatives or color separations sold to printers to produce plates for offset printing are subject to the sales tax at the machine rate of 1 1/2% where sold for use as parts or attachments of machines used in man…

Mechanical equipment used in measuring, weighing, or packaging by manufacturers, compounders, or processors is taxed at the special machine rate of 1 1/2% when such equipment is a part of the production line used to put the product in condition for sale. § 40-23-2(3) Author: Note…

(Repealed 11/3/98) Author: Patricia Estes Notes Ala. Admin. Code r. 810-6-2-.55 Repealed: Filed September 29, 1998; effective November 3, 1998. Statutory Authority: Code of Ala. 1975, §§ 40-23-31, 40-23-83.

Pan glaze used by bakers as a coating for pans and trays used in baking is a supply item subject to tax. § 40-23-1(10) Author: Notes Ala. Admin. Code r. 810-6-2-.56 Statutory Authority: Code of Ala. 1975, § 40-23-31.

Used equipment is subject to the sales and use taxes on the same basis that new equipment is subject to tax. (Section 40-23-2(3) Author: Patricia Estes Notes Ala. Admin. Code r. 810-6-2-.56.01 Amended: Filed September 29, 1998; effective November 3, 1998. Statutory Authority: Cod…

(Repealed 11/3/98) Author: Patricia Estes Notes Ala. Admin. Code r. 810-6-2-.56.02 Repealed: Filed September 29, 1998; effective November 3, 1998. Statutory Authority: Code of Ala. 1975, §§ 40-23-31, 40-23-83.

(Repealed 11/3/98) Author: Patricia Estes Notes Ala. Admin. Code r. 810-6-2-.56.03 Repealed: Filed September 29, 1998; effective November 3, 1998. Statutory Authority: Code of Ala. 1975, §§ 40-23-31, 40-23-83.

Materials purchased by a manufacturer, compounder, processor, miner, or quarryman for attachment to, or to be made a part of, a machine used in manufacturing, compounding, processing, mining or quarrying is entitled to the reduced machine rate of sales or use tax regardless of wh…

Patterns which become parts or attachments of molding machines used in manufacturing are taxed at the special machine rate of 1 1/2%. § 40-23-2(3) Author: Notes Ala. Admin. Code r. 810-6-2-.58 Statutory Authority: Code of Ala. 1975, §§ 40-23-31, 40-23-83.

Foundry operators use patterns to form the molds in which their products are cast. These patterns are subject to tax at the special machine rate of 1 1/2% when purchased by the foundry operators. In those cases where the foundryman fabricates the pattern used by him, the material…

(Repealed). Author: Notes Ala. Admin. Code r. 810-6-2-.60 Repealed: Filed February 3, 1998; effective March 10, 1998. Statutory Authority: Code of Ala. 1975, §§ 40-23-31, 40-23-83.

(Repealed 11/3/98) Author: Patricia Estes Notes Ala. Admin. Code r. 810-6-2-.61 Repealed: Filed September 29, 1998; effective November 3, 1998. Statutory Authority: Code of Ala. 1975, §§ 40-23-31, 40-23-83.

Pipe threading machines used for construction purposes by a contractor or other builder are taxed at the 4% general rate. §§ 40-23-1(10), 40-23-2(1) Author: Notes Ala. Admin. Code r. 810-6-2-.62 Statutory Authority: Code of Ala. 1975, §§ 40-23-31, 40-23-83.

Piping leading to and from storage tanks and piping bringing gas or water into a plant does not come within the levy on machines used in manufacturing. The general rate of 4% applies. (Adopted March 9, 1961, amended November 1, 1963, effective July 1, 1963) § 40-23-2(1) Author: N…

(1) Piping furnished and installed by contractor along with pump houses and well connections is subject to use tax when intended for use by a paper manufacturer to supply his plant with the water necessary to the manufacturing of paper. The Supreme Court of Alabama held that the …

(1) Plates purchased by a printer for use as a part or attachment for a machine used in printing tangible personal property are subject to the sales and/or use tax at the machine rate of 1 1/2%. (2) Materials purchased by a printer for use in making plates that become a part or a…

In Alabama-Georgia Syrup Company v. State of Alabama, 42 So. 2d 796, the Alabama Supreme Court held that platform trucks "used for moving the company's products in the process of blending and packing the syrup in the plant" are not exempted by the machine exemption "under old sal…

(1) The Sales and/or Use Tax Laws levy a tax of 1 1/2% on the net difference paid for any machine, machinery, or equipment used in planting, cultivating, or harvesting farm products or used in connection with the production of agricultural produce or products, livestock, or poult…

Power cables supplying power to working areas in mines and quarries are subject to the tax at the 4% rate. § 40-23-2(1) Author: Notes Ala. Admin. Code r. 810-6-2-.67 Statutory Authority: Code of Ala. 1975, §§ 40-23-31, 40-23-83.

Electric power lines carrying electric power into a plant of a manufacturer, compounder or processor are taxed at the general rate of 4%. (Adopted March 9, 1961, amended November 1, 1963, effective July 1, 1963) Author: Notes Ala. Admin. Code r. 810-6-2-.68 Statutory Authority: C…