Sales Tax Exemption
For purchases using University funds within the State of Alabama (or orders that will be shipped into Alabama), the University is exempt from sales taxes under state law as a public school. To be exempt from sales tax, the purchase must be made directly by the University (p-card, purchase order, invoice/UA payment). See Sales Tax on UA Purchases (Chart A) for more information. The sales tax exemption does not apply to purchases made by individuals, student organizations, or foundations. See Sales/Use Tax on Foundation Purchases (Charts C, L, N, & T) for more information.
To provide proof of sales tax exemption to vendors, we provide a copy of the University’s sales tax exemption form, which includes our state sales tax registration #6300 00080. The University is not required to have a certificate of exemption, Form STE-1, issued by the Alabama Department of Revenue. As an Alabama public university, we are a governmental entity and thereby exempt from this requirement. See Alabama Department of Revenue Notice to Sellers to Exempt Entities for further verification.
For purchases of items to be resold by the University, a vendor may request the Uniform Sales & Use Tax Exemption/Resale Certificate – Multijurisdiction, also known as a resale certificate. The UA department should complete the seller’s name, address, and description of property purchased before providing the resale certificate to the vendor.
Certain vendors may have specific forms that they require for tax exemption. When these are available for University-wide use, they will be listed here:
Dollar General – Exemption Letter and Barcode
Hobby Lobby – Exemption Card and Certificate
Best Buy Tax Exempt Customer Program – Instructions
Target Tax-Exempt Account – Instructions
Wal-Mart – Exemption Card
Office Depot – Exemption Card
The Tax Office can assist departments with verifying sales tax exemption to vendors when unique situations arise.
Sales tax is a privilege tax imposed on the retail sale of tangible personal property sold in Alabama by businesses located in Alabama. The tax is collected by the seller from their customer and remitted directly to the state. See Tax Collection on University Sales for more information.
Consumers Use Tax
Consumers use tax is imposed on tangible personal property brought into Alabama for storage, use, or consumption in the state when the seller did not collect seller’s use tax on the sale of the property. See above information regarding sales tax exemption to determine whether a purchase is subject to use tax.
Rental / Lease Taxes
Taxes on the leasing or rental of tangible personal property in the State of Alabama are levied against the lessor of the property, not the lessee. However, the lessor has the legal right to pass the cost of the tax on to the lessee, either as included in the rental rate or as a separately stated charge. The University is not exempt from payment of such charges. These charges should be paid per contractual obligation and classified as part of the rental or lease expense.
State of Alabama law does not provide an exemption from lodgings tax for public schools or governmental entities. Therefore, the University is subject to State of Alabama lodging taxes at hotels or other facilities required by the State to collect lodging taxes.