(a) For the purpose of this division, the following terms shall have the respective meanings ascribed by this section:

(1) PERSON or COMPANY. Used interchangeably, includes any individual, firm, copartnership, association, corporation, receiver, trustee, or any other group or combination acting as a unit and the plural as well as the singular number, unless the intention to give a more limited meaning is disclosed by the context.

(2) DEPARTMENT. The Department of Revenue of the State of Alabama.

(3) COMMISSIONER. The Commissioner of Revenue of the State of Alabama.

(4) TAX YEAR or TAXABLE YEAR. The calendar year.

(5) SALE or SALES. Installment and credit sales and the exchange of properties as well as the sale thereof for money, every closed transaction constituting a sale. Provided, however, a transaction shall not be closed or a sale completed until the time and place when and where title is transferred by the seller or seller's agent to the purchaser or purchaser's agent, and for the purpose of determining transfer of title, a common carrier or the U. S. Postal Service shall be deemed to be the agent of the seller, regardless of any F.O.B. point and regardless of who selects the method of transportation, and regardless of by whom or the method by which freight, postage, or other transportation charge is paid. Provided further that, where billed as a separate item to and paid by the purchaser, the freight, postage, or other transportation charge paid to a common carrier or the U.S. Postal Service is not a part of the selling price.

(6) GROSS PROCEEDS OF SALES. The value proceeding or accruing from the sale of tangible personal property, and including the proceeds from the sale of any property handled on consignment by the taxpayer, including merchandise of any kind and character without any deduction on account of the cost of the property sold, the cost of the materials used, labor or service cost, interest paid, any consumer excise taxes that may be included within the sales price of the property sold, or any other expenses whatsoever, and without any deductions on account of losses; provided, that cash discounts allowed and taken on sales shall not be included, and 'gross proceeds of sales' shall not include the sale price of property returned by customers when the full sales price thereof is refunded either in cash or by credit. The term 'gross proceeds of sale' shall also mean and include the reasonable and fair market value of any tangible personal property previously purchased at wholesale which is withdrawn or used from the business or stock and used or consumed in connection with a business, and shall also mean and include the reasonable and fair market value of any tangible personal property previously purchased at wholesale which is withdrawn from the business or stock and used or consumed by any person so withdrawing the same, except property which has been previously withdrawn from business or stock and so used or consumed with respect to which property the tax has been paid because of previous withdrawal, use, or consumption, except property which enters into and becomes an ingredient or component part of tangible personal property or products manufactured or compounded for sale and not for the personal and private use or consumption of any person so withdrawing, using, or consuming the same, and except refinery, residue, or fuel gas, whether in a liquid or gaseous state, that has been generated by, or is otherwise a by-product of, a petroleum-refining process, which gas is then utilized in the process to generate heat or is otherwise utilized in the distillation or refining of petroleum products.

In the case of the retail sale of equipment, accessories, fixtures, and other similar tangible personal property used in connection with the sale of commercial mobile services as defined herein, or in connection with satellite television services, at a price below cost, 'gross proceeds of sale' shall only include the stated sales price thereof and shall not include any sales commission or rebate received by the seller as a result of the sale. As used herein, the term 'commercial mobile services' shall have the same meaning as that term has in 47 U.S.C. Sections 153(n) and 332(d), as in effect from time to time.

(7) TAXPAYER. Any person liable for taxes hereunder.

(8) GROSS RECEIPTS. The value proceeding or accruing from the sale of tangible personal property, including merchandise and commodities of any kind and character, all receipts actual and accrued, by reason of any business engaged in, not including, however, interest, discounts, rentals of real estate or royalties, and without any deduction on account of the cost of the property sold, the cost of the materials used, labor or service cost, interest paid, any consumer excise taxes that may be included in the sales price of the property sold, or any other expenses whatsoever and without any deductions on account of losses. The term 'gross receipts' shall also mean and include the reasonable and fair market value of any tangible personal property previously purchased at wholesale which is withdrawn or used from the business or stock and used or consumed in connection with a business, and shall also mean and include the reasonable and fair market value of any tangible personal property previously purchased at wholesale which is withdrawn from the business or stock and used or consumed by any person so withdrawing the same, except property which has been previously withdrawn from business or stock and so used or consumed and with respect to which property the tax has been paid because of previous withdrawal, use, or consumption, except property which enters into and becomes an ingredient or component part of tangible personal property or products manufactured or compounded for sale as provided in subdivision (9) and not for the personal and private use or consumption of any person so withdrawing, using, or consuming the same, and except refinery, residue, or fuel gas, whether in a liquid or gaseous state, that has been generated by, or is otherwise a by-product of, a petroleum-refining process, which gas is then utilized in the process to generate heat or is otherwise utilized in the distillation or refining of petroleum products.

(9) WHOLESALE SALE or SALE AT WHOLESALE. Any one of the following:

a. A sale of tangible personal property by wholesalers to licensed retail merchants, jobbers, dealers, or other wholesalers for resale and does not include a sale by wholesalers to users or consumers, not for resale.

b. A sale of tangible personal property or products, including iron ore, and including the furnished container and label of such property or products, to a manufacturer or compounder which enter into and become an ingredient or component part of the tangible personal property or products which the manufacturer or compounder manufactures or compounds for sale, whether or not such tangible personal property or product used in manufacturing or compounding a finished product is used with the intent that it becomes a component of the finished product; provided, however, that it is the intent of this section that no sale of capital equipment, machinery, tools, or product shall be included in the term 'wholesale sale.' The term 'capital equipment, machinery, tools, or product' shall mean property that is subject to depreciation allowances for Alabama income tax purposes.

c. A sale of containers intended for one-time use only, and the labels thereof, when containers are sold without contents to persons who sell or furnish containers along with the contents placed therein for sale by persons.

d. A sale of pallets intended for one-time use only when pallets are sold without contents to persons who sell or furnish pallets along with the contents placed thereon for sale by persons.

e. A sale to a manufacturer or compounder, of crowns, caps, and tops intended for one-time use employed and used upon the containers in which a manufacturer or compounder markets his products.

f. A sale of containers to persons engaged in selling or otherwise supplying or furnishing baby chicks to growers thereof where containers are used for the delivery of chicks or a sale of containers for use in the delivery of eggs by the producer thereof to the distributor or packer of eggs even though containers used for delivery of baby chicks or eggs may be recovered for reuse.

g. A sale of bagging and ties used in preparing cotton for market.

h. A sale to meat packers, manufacturers, compounders, or processors of meat products of all casings used in molding or forming wieners and Vienna sausages even though casings may be recovered for reuse.

i. A sale of commercial fish feed including concentrates, supplements, and other feed ingredients when substances are used as ingredients in mixing and preparing feed for fish raised to be sold on a commercial basis.

j. A sale of tangible personal property to any person engaging in the business of leasing or renting tangible personal property to others, if tangible personal property is purchased for the purpose of leasing or renting it to others under a transaction subject to the privilege or license tax levied in Article 4 of Chapter 12 of this title against any person engaging in the business of leasing or renting tangible personal property to others.

k. A purchase or withdrawal of parts or materials from stock by any person licensed under this division where parts or materials are used in repairing or reconditioning the tangible personal property of a licensed person, which tangible personal property is a part of the stock of goods of a licensed person, offered for sale by him, and not for use or consumption of a licensed person.

(10) SALE AT RETAIL or RETAIL SALE. All sales of tangible personal property except those above defined as wholesale sales. The quantities of goods sold or prices at which sold are immaterial in determining whether or not a sale is at retail. Sales of building materials to contractors, builders, or landowners for resale or use in the form of real estate are retail sales in whatever quantity sold. Sales of building materials, fixtures, or other equipment to a manufacturer or builder of modular buildings for use in manufacturing, building, or equipping a modular building ultimately becoming a part of real estate situated in the State of Alabama are retail sales, and the use, sale, or resale of building shall not be subject to the tax. Sales of tangible personal property to undertakers and morticians are retail sales and subject to the tax at the time of purchase, but are not subject to the tax on resale to the consumer. Sales of tangible personal property or products to manufacturers, quarry operators, mine operators, or compounders, which are used or consumed by them in manufacturing, mining, quarrying, or compounding and do not become an ingredient or component part of the tangible personal property manufactured or compounded as provided in subdivision (9) are retail sales. The term 'sale at retail' or 'retail sale' shall also mean and include the withdrawal, use, or consumption of any tangible personal property by any one who purchases same at wholesale, except property which has been previously withdrawn from the business or stock and so used or consumed and with respect to which property tax has been paid because of previous withdrawal, use, or consumption, except property which enters into and becomes an ingredient or component part of tangible personal property or products manufactured or compounded for sale as provided in subdivision (9) and not for the personal and private use or consumption of any person so withdrawing, using, or consuming the same; and wholesale purchaser shall report and pay the taxes thereon. In the case of the sale of equipment, accessories, fixtures, and other similar tangible personal property used in connection with the sale of commercial mobile services as defined in subdivision (6) above, or in connection with satellite television services, at a price below cost, the term 'sale at retail' and 'retail sale' shall include those sales, and those sales shall not also be taxable as a withdrawal, use, or consumption of such tangible personal property.

(11) BUSINESS. All activities engaged in, or caused to be engaged in, with the object of gain, profit, benefit, or advantage, either direct or indirect, and not excepting subactivities producing marketable commodities used or consumed in the main business activity, each of which subactivities shall be considered business engaged in, taxable in the class in which it falls.

(12) AUTOMOTIVE VEHICLE. A power shovel, dragline, crawler, crawler crane, ditcher, or any similar machine which is self-propelled, in addition to self-propelled machines which are used primarily as instruments of conveyance.

(13) PREPAID TELEPHONE CALLING CARD. A sale of a prepaid telephone calling card or a prepaid authorization number, or both, shall be deemed the sale of tangible personal property subject to the tax imposed on the sale of tangible personal property pursuant to this chapter.

(b) The use within this state of tangible personal property by the manufacturer thereof, as building materials in the performance of a construction contract, shall, for the purposes of this division, be considered as a retail sale thereof by manufacturer, who shall also be construed as the ultimate consumer of materials or property, and who shall be required to report transaction and pay the sales tax thereon, based upon the reasonable and fair market price thereof at the time and place where same are used or consumed by him or it. Where the contractor is the manufacturer or compounder of ready-mix concrete or asphalt plant mix used in the performance of a contract, whether the ready-mix concrete or asphalt plant mix is manufactured or compounded at the job site or at a fixed or permanent plant location, the tax applies only to the cost of the ingredients that become a component part of the ready-mix concrete or the asphalt plant mix. The provisions of this subsection shall not apply to any tangible personal property which is specifically exempted from the tax levied in this division.

(c) The sale of lumber by a lumber manufacturer to a trucker for resale is a sale at wholesale as sales are defined herein where the trucker is either a licensed dealer in lumber or, if a resident of Alabama, has registered with the Department of Revenue, and has received therefrom a certificate of registration or, if a nonresident of this state purchasing lumber for resale outside the State of Alabama, has furnished to the lumber manufacturer his name, address and the vehicle license number of the truck in which the lumber is to be transported, which name, address, and vehicle license number shall be shown on the sales invoice rendered by the lumber manufacturer. The certificate provided for herein shall be valid for the calendar year of its issuance and may be renewed from year to year on application to the Department of Revenue on or before January 31 of each succeeding year; provided, that if not renewed the certificate shall become invalid for the purpose of this division on February 1.

(d) The dispensing or transferring of ophthalmic materials, including lenses, frames, eyeglasses, contact lenses, and other therapeutic optic devices, to a patient by a licensed ophthalmologist, as a part of his or her professional service, shall not, for purposes of this division, be deemed or considered to constitute a sale, subject to the state sales tax. The licensed ophthalmologist shall be considered the ultimate consumer of the ophthalmic materials and shall have no responsibility or duty pursuant to this division for the collection of the state sales tax. The sale of the ophthalmic materials to a licensed ophthalmologist by a supplier thereof shall be considered a retail sale subject to the state sales tax, and the supplier shall be responsible for collecting sales tax from the licensed ophthalmologist. In no event shall the providing of professional services in connection with the dispensing or transferring of ophthalmic materials by a licensed ophthalmologist or optometrist be considered a sale subject to the state sales tax. All transfers of ophthalmic materials by opticians or optometrists shall be considered retail sales subject to the state sales tax. The term supplier shall include but not be limited to optical laboratories, ophthalmic material wholesalers, or anyone selling ophthalmic materials to ophthalmologists.

(e) Notwithstanding the above, the withdrawal, use, or consumption of a manufactured product by the manufacturer thereof in quality control testing performed by employees or independent contractors of the taxpayer, for purposes of this division, shall not be deemed or considered to constitute a transaction subject to sales tax, nor shall a gift by the manufacturer of a manufactured product, withdrawn from the manufacturer's inventory, to an entity listed in 26 U.S.C. Sections 170(b) or (c), be considered a transaction subject to sales tax.

There is levied, in addition to all other taxes of every kind now imposed by law, and shall be collected as herein provided, a privilege or license tax against the person on account of the business activities and in the amount to be determined by the application of rates against gross sales, or gross receipts, as the case may be, as follows:

(1) Upon every person, firm, or corporation, (including the State of Alabama and its Alcoholic Beverage Control Board in the sale of alcoholic beverages of all kinds, the University of Alabama, Auburn University, and all other institutions of higher learning in the state, whether the institutions be denominational, state, county, or municipal institutions, any association or other agency or instrumentality of the institutions) engaged or continuing within this state, in the business of selling at retail any tangible personal property whatsoever, including merchandise and commodities of every kind and character, (not including, however, bonds or other evidences of debts or stocks, nor sales of material and supplies to any person for use in fulfilling a contract for the painting, repair, or reconditioning of vessels, barges, ships, other watercraft, and commercial fishing vessels of over five tons load displacement as registered with the U.S. Coast Guard and licensed by the State of Alabama Department of Conservation and Natural Resources), an amount equal to four percent of the gross proceeds of sales of the business except where a different amount is expressly provided herein. Provided, however, that any person engaging or continuing in business as a retailer and wholesaler or jobber shall pay the tax required on the gross proceeds of retail sales of the business at the rates specified, when his or her books are kept so as to show separately the gross proceeds of sales of each business, and when his or her books are not kept he or she shall pay the tax as a retailer, on the gross sales of the business.

Where any used part including tires of an automotive vehicle or a truck trailer, semitrailer, or house trailer is taken in trade, or in a series of trades, as a credit or part payment on the sale of a new or rebuilt part or tire, the tax levied herein shall be paid on the net difference, that is, the price of the new or used part or tire sold less the credit for the used part or tire taken in trade, provided, however, this provision shall not be construed to include batteries.

(2) Upon every person, firm, or corporation engaged or continuing within this state in the business of conducting or operating places of amusement or entertainment, billiard and pool rooms, bowling alleys, amusement devices, musical devices, theaters, opera houses, moving picture shows, vaudevilles, amusement parks, athletic contests, including wrestling matches, prize fights, boxing and wrestling exhibitions, football and baseball games, (including athletic contests, conducted by or under the auspices of any educational institution within this state, or any athletic association thereof, or other association whether the institution or association be a denominational, a state, or county, or a municipal institution, or association or a state, county, or city school, or other institution, association or school), skating rinks, race tracks, golf courses, or any other place at which any exhibition, display, amusement, or entertainment is offered to the public or place or places where an admission fee is charged, including public bathing places, public dance halls of every kind and description within the State of Alabama, an amount equal to four percent of the gross receipts of any such business. Provided, however, notwithstanding any language to the contrary in the prior portion of this subdivision, the tax provisions so specified shall not apply to any athletic event conducted by a public primary or secondary school or any football playoff conducted by or under the auspices of the Alabama High School Athletic Association. The tax amount which would have been collected pursuant to this subdivision shall continue to be collected by the public primary or secondary school but shall be retained by the school which collected it and shall be used by the school for school purposes.

(3) Upon every person, firm, or corporation engaged or continuing within this state in the business of selling at retail machines used in mining, quarrying, compounding, processing, and manufacturing of tangible personal property an amount equal to one and one-half percent of the gross proceeds of the sale of the machines. The term 'machine,' as herein used, shall include machinery which is used for mining, quarrying, compounding, processing, or manufacturing tangible personal property, and the parts of the machines, attachments, and replacements therefor, which are made or manufactured for use on or in the operation of the machines and which are necessary to the operation of the machines and are customarily so used.

(4) Upon every person, firm, or corporation engaged or continuing within this state in the business of selling at retail any automotive vehicle or truck trailer, semitrailer, or house trailer, or mobile home set-up materials and supplies including but not limited to steps, blocks, anchoring, cable pipes, and any other materials pertaining thereto an amount equal to two percent of the gross proceeds of sale of the automotive vehicle or truck trailer, semitrailer, or house trailer, or mobile home set-up materials and supplies provided, however, where a person subject to the tax provided for in this subdivision withdraws from his or her stock in trade any automotive vehicle or truck trailer, semitrailer, or house trailer for use by him or her or by his or her employee or agent in the operation of the business, there shall be paid, in lieu of the tax levied herein, a fee of five dollars ($5) per year or part thereof during which the automotive vehicle, truck trailer, semitrailer, or house trailer shall remain the property of the person. Each year or part thereof shall begin with the day or anniversary date, as the case may be of such withdrawal and shall run for the 12 succeeding months or part thereof during which the automotive vehicle, truck trailer, semitrailer, or house trailer shall remain the property of the person.

Where any used automotive vehicle or truck trailer, semitrailer, or house trailer is taken in trade or in a series of trades, as a credit or part payment on the sale of a new or used vehicle, the tax levied herein shall be paid on the net difference, that is, the price of the new or used vehicle sold less the credit for the used vehicle taken in trade.

Sales of automobiles, motorcycles, trucks, truck trailers, or semitrailers that will be registered or titled outside Alabama, that are exported or removed from Alabama within 72 hours by the purchaser or his or her agent for first use outside Alabama are not subject to the Alabama sales tax. Sales of other vehicles such as mobile homes, motor bikes, all terrain vehicles, and boats do not qualify for the export exemption provision and are taxable unless the dealer can provide factual evidence that the vehicle was delivered outside of Alabama or to a common carrier for transportation outside Alabama. In order for the sale to be exempt from Alabama tax, the information relative to the exempt sale shall be documented on forms approved by the Revenue Department.

The total $.02 tax on each dollar of sale provided in this subdivision (4) shall be distributed as follows:

a. From July 1, 2004, through the fiscal year ending September 30, 2005, 48.7 percent shall be deposited into the Education Trust Fund and 51.3 percent shall be deposited into the State General Fund;

b. From October 1, 2005, through the fiscal year ending September 30, 2006, 39.4 percent shall be deposited into the Education Trust Fund and 60.6 percent shall be deposited into the State General Fund.

(5) Upon every person, firm, or corporation engaged or continuing within this state in the business of selling through coin-operated dispensing machines, food and food products for human consumption, not including beverages other than coffee, milk, milk products, and substitutes therefor, there is levied a tax equal to three percent of the cost of the food, food products, and beverages sold through the machines, which cost for the purpose of this subdivision shall be the gross proceeds of sales of the business.

(a) If a sales tax, gross receipts tax in the nature of a sales tax, as defined in Section 40-2A-3(8), use tax, or rental tax levied by or on behalf of an Alabama municipality is paid under a requirement of law, the property which is the subject of such tax, when imported for use, storage, or consumption into another Alabama municipality, is not subject to the sales tax, use tax, or rental tax regardless of rate, which is required by the second municipality under any municipal ordinance or any act of the Legislature. The collecting agency shall require such proof of payment of tax to another municipality as is deemed necessary and proper.

(b) If a sales tax, gross receipts tax in the nature of a sales tax, use tax, or rental tax levied by or on behalf of an Alabama county is paid under a requirement of law, the property which is the subject of such tax, when imported for use, storage, or consumption into another Alabama county, is not subject to the sales, use, or rental tax, regardless of rate, which is required by the second county under any county ordinance, resolution, or any act of the Legislature. The collecting agency shall require such proof of payment of the tax to another Alabama county as is deemed necessary and proper.

(c) This section applies to all municipalities in Alabama levying or administering a sales tax, gross receipts tax in the nature of a sales tax, use tax, or rental tax and all counties in Alabama levying or administering a sales tax, gross receipts tax in the nature of a sales tax, use tax, or rental tax. It is the intent of this section that only one municipal sales, use, rental, or gross receipts tax in the nature of a sales tax, and only one county sales, use, rental, or gross receipts tax in the nature of a sales tax be collected or paid on the same sale or rental transaction. To that end, if a sales tax, gross receipts tax in the nature of a sales tax, use tax, or rental tax owed to one municipality or county, hereinafter referred to as the 'proper locality,' is erroneously paid to a different municipality or county in good faith, based on a reasonable interpretation of the enabling ordinance, resolution, or act levying or authorizing the tax, but not under a requirement of law, the municipality or county receiving the erroneous payment shall refund the overpaid tax, without interest, to the taxpayer within 60 days of the taxpayer's compliance with the applicable refund procedures. In order to avoid the accrual of interest and any otherwise applicable penalties on the tax due the proper locality, the taxpayer making the erroneous payment must comply with the applicable refund procedures within 60 days of receiving notice from a county, municipality, or its agent of the erroneous payment. If the taxpayer complies with the refund procedure in a timely manner, the proper locality shall not assess or attempt to assess the tax, or any related interest or otherwise applicable penalty thereon, and no interest or penalty thereon shall accrue, until the date of receipt of the overpayment by the taxpayer or the taxpayer's agent. However, the taxpayer's failure to comply with the refund procedures within the requisite 60-day period shall cause interest and any applicable penalties to accrue on the tax to which the proper locality is entitled from the sixty-first day and until such time as the tax is paid. The taxpayer shall remit the disputed tax to the proper localities within 15 days after receipt. Provided, that if the applicable rate of sales tax or gross receipts tax in the nature of a sales tax imposed by the municipality or county receiving an erroneous payment of the sales or gross receipts tax exceeds the rate of sales or gross receipts tax imposed by the proper locality under a requirement of law, the municipality or county that erroneously received the tax shall not be obligated to refund the difference unless the taxpayer properly files the applicable petition for refund.

Municipal privilege license taxes which are levied and collected by the application of a flat percentage rate of gross sales, or gross receipts from sales, and which are passed on directly by the licensee-seller to the purchaser-consumer shall be excluded from gross sales, or gross receipts, as the case may be, in the computation of the sales tax levied by this state, under the provisions of this division.

(a) There are exempted from the provisions of this division and from the computation of the amount of the tax levied, assessed, or payable under this division the following:

(1) The gross proceeds of the sales of lubricating oil and gasoline as defined in Sections 40-17-30 and 40-17-170 and the gross proceeds from those sales of lubricating oil destined for out-of-state use which are transacted in a manner whereby an out-of-state purchaser takes delivery of such oil at a distributor's plant within this state and transports it out-of-state, which are otherwise taxed.

(2) The gross proceeds of the sale, or sales, of fertilizer when used for agricultural purposes. The word 'fertilizer' shall not be construed to include cottonseed meal, when not in combination with other materials.

(3) The gross proceeds of the sale, or sales, of seeds for planting purposes and baby chicks and poults. Nothing herein shall be construed to exempt or exclude from the computation of the tax levied, assessed, or payable, the gross proceeds of the sale or sales of plants, seedlings, nursery stock, or floral products.

(4) The gross proceeds of sales of insecticides and fungicides when used for agricultural purposes or when used by persons properly permitted by the Department of Agriculture and Industries or any applicable local or state governmental authority for structural pest control work and feed for livestock and poultry, but not including prepared food for dogs and cats.

(5) The gross proceeds of sales of all livestock by whomsoever sold, and also the gross proceeds of poultry and other products of the farm, dairy, grove, or garden, when in the original state of production or condition of preparation for sale, when such sale or sales are made by the producer or members of his immediate family or for him by those employed by him to assist in the production thereof. Nothing herein shall be construed to exempt or exclude from the measure or computation of the tax levied, assessed, or payable hereunder, the gross proceeds of sales of poultry or poultry products when not products of the farm.

(6) Cottonseed meal exchanged for cottonseed at or by cotton gins.

(7) The gross receipts from the business on which, or for engaging in which, a license or privilege tax is levied by or under the provisions of Sections 40-21-50, 40-21-53, and 40-21-56 through 40-21-60; provided, that nothing contained in this subdivision shall be construed to exempt or relieve the person or persons operating the business enumerated in said sections from the payments of the tax levied by this division upon or measured by the gross proceeds of sales of any tangible personal property, except gas and water, the gross receipts from the sale of which are the measure of the tax levied by said Section 40-21-50, merchandise or other tangible commodities sold at retail by said persons, unless the gross proceeds of sale thereof are otherwise specifically exempted by the provisions of this division.

(8) The gross proceeds of sales or gross receipts of or by any person, firm, or corporation, from the sale of transportation, gas, water, or electricity, of the kinds and natures, the rates and charges for which, when sold by public utilities, are customarily fixed and determined by the Public Service Commission of Alabama or like regulatory bodies.

(9) The gross proceeds of the sale, or sales of wood residue, coal, or coke to manufacturers, electric power companies, and transportation companies for use or consumption in the production of by-products, or the generation of heat or power used in manufacturing tangible personal property for sale, for the generation of electric power or energy for use in manufacturing tangible personal property for sale or for resale, or for the generation of motive power for transportation.

(10) The gross proceeds from the sale or sales of fuel and supplies for use or consumption aboard ships, vessels, towing vessels, or barges, or drilling ships, rigs or barges, or seismic or geophysical vessels, or other watercraft (herein for purposes of this exemption being referred to as 'vessels') engaged in foreign or international commerce or in interstate commerce; provided, that nothing in this division shall be construed to exempt or exclude from the measure of the tax herein levied the gross proceeds of sale or sales of material and supplies to any person for use in fulfilling a contract for the painting, repair, or reconditioning of vessels, barges, ships, other watercraft, and commercial fishing vessels of over five tons load displacement as registered with the U.S. Coast Guard and licensed by the State of Alabama Department of Conservation and Natural Resources.

For purposes of this subdivision, it shall be presumed that vessels engaged in the transportation of cargo between ports in the State of Alabama and ports in foreign countries or possessions or territories of the United States or between ports in the State of Alabama and ports in other states are engaged in foreign or international commerce or interstate commerce, as the case may be. For the purposes of this subdivision, the engaging in foreign or international commerce or interstate commerce shall not require that the vessel involved deliver cargo to or receive cargo from a port in the State of Alabama. For purposes of this subdivision, vessels carrying passengers for hire, and no cargo, between ports in the State of Alabama and ports in foreign countries or possessions or territories of the United States or between ports in the State of Alabama and ports in other states shall be engaged in foreign or international commerce or interstate commerce, as the case may be, if, and only if, both of the following conditions are met: (i) The vessel in question is a vessel of at least 100 gross tons; and (ii) the vessel in question has an unexpired certificate of inspection issued by the United States Coast Guard or by the proper authority of a foreign country for a foreign vessel, which certificate is recognized as acceptable under the laws of the United States. Vessels which are engaged in foreign or international commerce or interstate commerce shall be deemed for the purposes of this subdivision to remain in such commerce while awaiting or under repair in a port of the State of Alabama if such vessel returns after such repairs are completed to engaging in foreign or international commerce or interstate commerce. For purposes of this subdivision, seismic or geophysical vessels which are engaged either in seismic or geophysical tests or evaluations exclusively in offshore federal waters or in traveling to or from conducting such tests or evaluations shall be deemed to be engaged in international or foreign commerce. For purposes of this subdivision, proof that fuel and supplies purchased are for use or consumption aboard vessels engaged in foreign or international commerce or in interstate commerce may be accomplished by the merchant or seller securing the duly signed certificate of the vessel owner, operator, or captain or their respective agent on a form prescribed by the department that the fuel and supplies purchased are for use or consumption aboard vessels engaged in foreign or international commerce or in interstate commerce. Any person filing a false certificate shall be guilty of a misdemeanor and upon conviction shall be fined not less than $25 nor more than $500 for each offense. Each false certificate filed shall constitute a separate offense. Any person filing a false certificate shall be liable to the department for all taxes imposed by this division upon the merchant or seller, together with any interest or penalties thereon, by reason of the sale or sales of fuel and supplies applicable to such false certificate. If a merchant or seller of fuel and supplies secures the certificate herein mentioned, properly completed, such merchant or seller shall not be liable for the taxes imposed by this division, if such merchant or seller had no knowledge that such certificate was false when it was filed with such merchant or seller.

(11) The gross proceeds of sales of tangible personal property to the State of Alabama, to the counties within the state and to incorporated municipalities of the State of Alabama.

(12) The gross proceeds of the sale or sales of railroad cars, vessels, barges, and commercial fishing vessels of over five tons load displacement as registered with the U.S. Coast Guard and licensed by the State of Alabama Department of Conservation and Natural Resources, when sold by the manufacturers or builders thereof.

(13) The gross proceeds of the sale or sales of materials, equipment, and machinery which, at any time, enter into and become a component part of ships, vessels, towing vessels or barges, or drilling ships, rigs or barges, or seismic or geophysical vessels, other watercraft and commercial fishing vessels of over five tons load displacement as registered with the U.S. Coast Guard and licensed by the State of Alabama Department of Conservation and Natural Resources.

(14) The gross proceeds of the sale or sales of fuel oil purchased as fuel for kiln use in manufacturing establishments.

(15) The gross proceeds of the sale or sales of tangible personal property to county and city school boards, independent school boards, and all educational institutions and agencies of the State of Alabama, the counties within the state, or any incorporated municipalities of the State of Alabama.

(16) The gross proceeds from the sale of all devices or facilities, and all identifiable components thereof, or materials for use therein, acquired primarily for the control, reduction, or elimination of air or water pollution and the gross proceeds from the sale of all identifiable components of or materials used or intended for use in structures built primarily for the control, reduction, or elimination of air and water pollution.

(17) The gross proceeds of sales of tangible personal property or the gross receipts of any business which the state is prohibited from taxing under the Constitution or laws of the United States or under the Constitution of this state.

(18) When dealers or distributors use parts taken from stocks owned by them in making repairs without charge for such parts to the owner of the property repaired pursuant to warranty agreements entered into by manufacturers, such use shall not constitute taxable sales to the manufacturers, distributors, or to the dealers, under this division or under any county sales tax law.

(19) The gross proceeds received from the sale or furnishing of food, including potato chips, candy, fruit and similar items, soft drinks, tobacco products, and stationery and other similar or related articles by hospital canteens operated by Alabama state hospitals at Bryce Hospital and Partlow State School for Mental Deficients at Tuscaloosa, Alabama, and Searcy Hospital at Mt. Vernon, Alabama, for the benefit of the patients therein.

(20) The gross proceeds of the sale, or sales, of wrapping paper and other wrapping materials when used in preparing poultry or poultry products for delivery, shipment, or sale by the producer, processor, packer, or seller of such poultry or poultry products, including pallets used in shipping poultry and egg products, paper or other materials used for lining boxes or other containers in which poultry or poultry products are packed together with any other materials placed in such containers for the delivery, shipment, or sale of poultry or poultry products.

(21) The gross proceeds of the sales of all antibiotics, hormones and hormone preparations, drugs, medicines or medications, vitamins, minerals or other nutrients, and all other feed ingredients including concentrates, supplements, and other feed ingredients when such substances are used as ingredients in mixing and preparing feed for fish raised to be sold on a commercial basis, livestock, and poultry. Such exemption herein granted shall be in addition to exemptions now provided by law for feed for fish raised to be sold on a commercial basis, livestock, and poultry, but not including prepared foods for dogs or cats.

(22) The gross proceeds of the sale, or sales, of seedlings, plants, shoots, and slips which are to be used for planting vegetable gardens or truck farms and other agricultural purposes. Nothing herein shall be construed to exempt, or exclude from the computation of the tax levied, assessed, or payable, the gross proceeds of the sale, or the use of plants, seedlings, shoots, slips, nursery stock, and floral products, except as hereinabove exempted.

(23) The gross proceeds of the sale, or sales, of fabricated steel tube sections, when produced and fabricated in this state by any person, firm, or corporation for any vehicular tunnel for highway vehicular traffic, when sold by the manufacturer or fabricator thereof, and also the gross proceeds of the sale, or sales, of steel which enters into and becomes a component part of such fabricated steel tube sections of said tunnel.

(24) The gross proceeds from sales of admissions to any theatrical production, symphonic or other orchestral concert, ballet, or opera production when such concert or production is presented by any society, association, guild, or workshop group, organized within this state, whose members or some of whose members regularly and actively participate in such concerts or productions for the purposes of providing a creative outlet for the cultural and educational interests of such members, and of promoting such interests for the betterment of the community by presenting such productions to the general public for an admission charge. The employment of a paid director or conductor to assist in any such presentation described in this subdivision shall not be construed to prohibit the exemptions herein provided.

(25) The gross proceeds of sales of herbicides for agricultural uses by whomsoever sold. The term 'herbicides,' as used in this subdivision, means any substance or mixture of substances intended to prevent, destroy, repel, or retard the growth of weeds or plants. It shall include preemergence herbicides, postemergence herbicides, lay-by herbicides, pasture herbicides, defoliant herbicides, and desiccant herbicides.

(26) The Alabama Chapter of the Cystic Fibrosis Research Foundation and the Jefferson Tuberculosis Sanatorium and any of their departments or agencies, heretofore or hereafter organized and existing in good faith in the State of Alabama for purposes other than for pecuniary gain and not for individual profit, shall be exempted from the computation of the tax on the gross proceeds of all sales levied, assessed, or payable.

(27) The gross proceeds from the sale or sales of fuel for use or consumption aboard commercial fishing vessels are hereby exempt from the computation of all sales taxes levied, assessed, or payable under the provisions of this division or levied under any county or municipal sales tax law.

The words 'commercial fishing vessels' shall mean vessels whose masters and owners are regularly and exclusively engaged in fishing as their means of livelihood.

(28) The gross proceeds of sales of sawdust, wood shavings, wood chips, and other like materials sold for use as 'chicken litter' by poultry producers and poultry processors.

(29) The gross proceeds of the sales of all antibiotics, hormones and hormone preparations, drugs, medicines, and other medications including serums and vaccines, vitamins, minerals, or other nutrients for use in the production and growing of fish, livestock, and poultry by whomsoever sold. Such exemption as herein granted shall be in addition to the exemption provided by law for feed for fish, livestock, and poultry, and in addition to the exemptions provided by law for the above-enumerated substances and products when mixed and used as ingredients in fish, livestock, and poultry feed.

(30) The gross proceeds of the sale or sales of all medicines prescribed by physicians for persons who are 65 years of age or older, and when said prescriptions are filled by licensed pharmacists, shall be exempted under this division or under any county or municipal sales tax law. The exemption provided in this section shall not apply to any medicine purchased in any manner other than as is herein provided.

For the purposes of this subdivision, proof of age may be accomplished by filing with the dispensing pharmacist any one or more of the following documents:

a. The name and claim number as shown on a 'Medicare' card issued by the United States Social Security Administration.

b. A certificate executed by any adult person having knowledge of the fact that the person for whom the medicine was prescribed is not less than 65 years of age.

c. An affidavit executed by any adult person having knowledge of the fact that the person for whom the medicine was prescribed is not less than 65 years of age.

For the purposes of this subdivision, any person filing a false proof of age shall be guilty of a misdemeanor and upon conviction thereof shall be punished by a fine of $100.

(31) There shall be exempted from the tax levied by this division the gross receipts of sales of grass sod of all kinds and character when in the original state of production or condition of preparation for sale, when such sales are made by the producer or members of his family or for him by those employed by him to assist in the production thereof; provided, that nothing herein shall be construed to exempt sales of sod by a person engaged in the business of selling plants, seedlings, nursery stock, or floral products.

(32) The gross receipts of sales of the following items or materials which are necessary in the farm-to-market production of tomatoes when such items or materials are used by the producer or members of his family or for him by those employed by him to assist in the production thereof: Twine for tying tomatoes, tomato stakes, field boxes (wooden boxes used to take tomatoes from the fields to shed), and tomato boxes used in shipments to customers.

(33) The gross proceeds from the sale of liquefied petroleum gas or natural gas sold to be used for agricultural purposes.

(34) The gross receipts of sales from state nurseries of forest tree seedlings.

(35) The gross receipts of sales of forest tree seed by the state.

(36) The gross receipts of sales of Lespedeza bicolor and other species of perennial plant seed and seedlings sold for wildlife and game food production purposes by the state.

(37) The gross receipts of any aircraft manufactured, sold, and delivered in this state if said aircraft are not permanently domiciled in Alabama and are removed to another state within three days of delivery.

(38) The gross proceeds from the sale or sales of all diesel fuel used for off-highway agricultural purposes.

(39) The gross proceeds from sales of admissions to any sporting event which:

a. Takes place in the State of Alabama on or after January 1, 1984, regardless of when such sales occur; and

b. Is hosted by a not-for-profit corporation organized and existing under the laws of the State of Alabama; and

c. Determines a national championship of a national organization, including but not limited to the Professional Golfers Association of America, the Tournament Players Association, the United States Golf Association, the United States Tennis Association, and the National Collegiate Athletic Association; and

d. Has not been held in the State of Alabama on more than one prior occasion, provided, however, that for such purpose the Professional Golfers Association Championship, the United States Open Golf Championship, the United States Amateur Golf Championship of the United States Golf Association, and the United States Open Tennis Championship shall each be treated as a separate event.

(40) The gross receipts from the sale of any aircraft and replacement parts, components, systems, supplies, and sundries affixed or used on said aircraft and ground support equipment and vehicles used by or for the aircraft to or by a certificated or licensed air carrier with a hub operation within this state, for use in conducting intrastate, interstate, or foreign commerce for transporting people or property by air. For the purpose of this subdivision, the words 'hub operation within this state' shall be construed to have all of the following criteria:

a. There originates from the location 15 or more flight departures and five or more different first-stop destinations five days per week for six or more months during the calendar year; and

b. Passengers and/or property are regularly exchanged at the location between flights of the same or a different certificated or licensed air carrier.

(41) The gross receipts from the sale of hot or cold food and beverage products sold to or by a certificated or licensed air carrier with a hub operation within this state, for use in conducting intrastate, interstate, or foreign commerce for transporting people or property by air. For the purpose of this subdivision, the words 'hub operation within this state' shall be construed to have all of the following criteria:

a. There originates from the location 15 or more flight departures and five or more different first-stop destinations five days per week for six or more months during the calendar year; and

b. Passengers and/or property are regularly exchanged at the location between flights of the same or a different certificated or licensed air carrier.

(42) The gross proceeds of the sale or sales of the following:

a. Drill pipe, casing, tubing, and other pipe used for the exploration for or production of oil, gas, sulphur, or other minerals in offshore federal waters.

b. Tangible personal property exclusively used for the exploration for or production of oil, gas, sulphur, or other minerals in offshore federal waters.

c. Fuel and supplies for use or consumption aboard boats, ships, aircraft, and towing vessels when used exclusively in transporting persons or property between a point in Alabama and a point or points in offshore federal waters for the exploration for or production of oil, gas, sulphur, or other minerals in offshore federal waters.

d. Drilling equipment that is used for the exploration for or production of oil, gas, sulphur, or other minerals, that is built for exclusive use outside this state and that is, on completion, removed forthwith from this state.

The delivery of items exempted by this subdivision to the purchaser or lessee in this state does not disqualify the purchaser or lessee from the exemption if the property is removed from the state by any means, including by the use of the purchaser's or lessee's own facilities.

The shipment to a place in this state of equipment exempted by this subdivision for further assembly or fabrication does not disqualify the purchaser or lessee from the exemption if on completion of the further assembly or fabrication the equipment is removed forthwith from this state. This subdivision applies to a sale that may occur when the equipment exempted is further assembled or fabricated if on completion the equipment is removed forthwith from this state.

(43) The gross receipts derived from all bingo games and operations which are conducted in compliance with validly enacted legislation authorizing the conduct of such games and operations, and which comply with the distribution requirements of the applicable local laws; provided that the exemption from sales taxation granted by this subdivision shall apply only to gross receipts taxable under subdivision (2) of Section 40-23-2. It is further provided that this exemption shall not apply to any gross receipts from the sale of tangible personal property, such as concessions, novelties, food, beverages, etc. The exemption provided for in this section shall be limited to those games and operations by organizations which have qualified for exemption under the provisions of 26 U.S.C. § 501 (c) (3), (4), (7), (8), (10), or (19), or which are defined in 26 U.S.C. § 501(d).

(44) The gross receipts derived from the sale or sales of fruit or other agricultural products by the person or corporation that planted, cultivated, and harvested such fruit or agricultural product.

(45) The gross receipts derived from the sale or sales of all domestically mined or produced coal, coke, and coke by-products used in cogeneration plants.

(46) The gross proceeds derived from the sale or sales of tangible personal property to a company which is actively engaged in the production of an approved project authorized by the Alabama Film Office and which meets criteria established by the Alabama Film Office through the Alabama Administrative Procedure Act.

(b) Any violation of any provision of this section shall be punishable in a court of competent jurisdiction by a fine of not less than $500 and no more than $2,000 and imprisonment of not less than six months nor more than one year in the county jail.

(a) The term 'drugs' shall include any medicine prescribed by physicians when the prescription is filled by a licensed pharmacist, or sold to the patient by the physician, for human consumption or intake.

(b) In addition to any and all items exempt from gross sales tax, certain drugs, as defined in subsection (a) of this section, shall be exempt from state gross sales taxes as defined in Section 40-23-2.

(a) As used in this section the following terms shall have the following meanings:

(1) FOOD STAMPS. The stamps provided by the United States Department of Agriculture for issuance to qualified recipients under the federal Food Stamp Act, 7 U.S.C. §2011 et seq.

(2) FOOD STAMP SALES TAX AMENDMENT. Section 1505 of the Food Security Act of 1985 (Public Law 99-198) which amended 7 U.S.C. §2013(a) and provides that a state may not participate in the food stamp program if state or local taxes are collected on purchases of food made with food stamps.

(b) It is hereby declared by the Legislature that this exemption is enacted in response to the coercive threat of Congress contained in the Food Stamp Sales Tax Amendment in order to insure that all eligible citizens within the State of Alabama will continue to receive food stamp benefits; that the State of Alabama has challenged the constitutionality of the Food Stamp Sales Tax Amendment and the case is currently pending in the federal courts; and that it is intended that this exemption shall remain in effect only so long as federal law requires such exemption in order for Alabama citizens to be entitled to receive food stamp benefits.

(c) All purchases made with food stamps shall be exempt from state, county and municipal sales and use taxes.

(d) If, at any time after the passage of this section, the Food Stamp Sales Tax Amendment is either ruled unconstitutional or unenforceable by a federal court, or is repealed by Congress, then the provisions of this section shall immediately become inoperative, null and void and automatically repealed.

In connection with the purchases of tangible personal property described in subdivisions (2), (4), and (22) of subsection (a) of Section 40-23-4, and therefore exempt from taxation as therein provided, the filing by the purchaser at retail of such property with the seller of a certificate in substantially the following form shall relieve the seller of any obligation to collect tax under Chapter 23 of this title with respect to the sales described therein:

The seller shall furnish a copy of said certificate, with receipt attached, to the purchaser and must retain the original thereof for examination by the Department of Revenue for a period of not less than one year from the date thereof.

(a) The Diabetes Trust Fund, Inc., and any of its branches or agencies, heretofore or hereafter organized and existing in good faith in the State of Alabama for purposes other than for pecuniary gain and not for individual profit, are hereby exempted from paying any state, county or municipal sales or use taxes.

(b) The Chilton County Rescue Squad is hereby exempted from paying any sales or use taxes.

(c) The state headquarters only of the American Legion, the American Veterans of World War II, Korea and Vietnam, also known as AMVETS, the Disabled American Veterans, the Veterans of Foreign Wars, also known as VFW, Alabama Goodwill Industries and the Alabama Sight Conservation Association are hereby exempted from paying any state, county or municipal sales or use taxes.

(d) The Grand Chapter of all Orders of the Eastern Star and the South Alabama State Fair Association Southeastern Livestock Exposition of the State of Alabama and any of its agencies, heretofore or hereafter organized and existing in good faith in the State of Alabama for purposes other than for pecuniary gain and not for individual profit, are hereby exempted from paying any state, county or municipal sales and use taxes.

(e) The Alabama Goodwill Industries, Inc., of Birmingham is hereby exempted from paying any state, municipal, or county sales and use taxes.

(f) The Alabama Federation of Women's Clubs is hereby exempted from paying any state, county or municipal sales or use taxes.

(g) The National Conference of State Legislatures and the Council of State Governments are hereby exempted from paying any state, county or municipal sales or use taxes.

(h) All blind vendors associated with the Business Enterprise Program of the Department of Rehabilitation Services are hereby exempted from paying any state, county or municipal sales or use taxes.

(i) All vendors who are blind as defined by Section 1-1-3, and who are certified by the Department of Rehabilitation Services, are hereby exempted from paying any state, county or municipal sales or use taxes.

(j) The Elks Club, B.P.O.E., No. 1887, a corporation, is hereby exempted from paying any state, county or municipal sales or use taxes. Provided, however, that the exemption provided by this subsection shall not extend to any bar or dining room operation conducted by said Elks Club.

(k) The King's Ranch, Inc., is hereby exempted from paying any state, county or municipal sales or use taxes.

(l) The Eye Foundation, Inc., and any of its branches or agencies, heretofore, or hereafter organized and existing in good faith in the State of Alabama for purposes other than for pecuniary gain and not for individual profit, are hereby exempted from paying any state, county, or municipal sales or use taxes.

(m) Any county public hospital association or any Alabama nonprofit membership corporation if one or more of its members is a county public hospital association, and any of its, or their, branches, agencies, lessees or successors organized pursuant to Section 10-3A-1 et seq., and which operates or maintains hospitals for purposes other than for pecuniary gain and not for individual profit, is hereby exempted from paying any state, county, or municipal sales and use tax of any nature whatsoever. Any of the taxes which were or may be assessed or collected subsequent to December 31, 1993, against any Alabama nonprofit membership corporation or any lessee of any county public hospital association organized as herein stated, pursuant to a lease in writing, will be remitted to the entity which paid them; and no action or proceeding against the association or nonprofit corporation may be instituted after the date by the State of Alabama or any county or municipality thereof or any agent or person acting on behalf thereof for the collection or enforcement of any sales or use tax of any nature whatsoever.

(n) There is hereby exempted from all state, county and municipal sales taxes the sale of food pursuant to the food distribution program conducted by Christian Service Mission, Inc., an Alabama not-for-profit corporation, in cooperation with World Share, Inc., to enable needy persons to purchase food at substantially discounted prices and in consideration of the performance of charitable or community work by such persons.

(o) Rescue service organizations operating within the State of Alabama which are exempt from federal income taxes under the Internal Revenue Code of 1986, §501(c)(3) and which are members of the Alabama Rescue Services Association, Incorporated, are hereby exempted from any state, county and municipal sales and use taxes.

(p) Alabama Goodwill Industries, Inc., Goodwill Industries of Mobile Area, Inc., and Goodwill Industries of Central Alabama, Inc., are exempted from paying any state, county, and municipal sales or use taxes.

(q) The gross receipts from the sale of admissions to a sporting event conducted by the Senior Professional Golfers Association are exempted from any state, county, and municipal sales taxes.

(r) Volunteer, non-profit rescue units operating within the state which do not meet the criteria in subsection (o) but are licensed by the State Board of Health are exempt from any state, county, and municipal sales and use taxes.

If any person shall engage in or continue in any business for which a privilege tax is imposed by Section 40-23-2 as a condition precedent to engaging or continuing in such business, he shall apply for and obtain from the Department of Revenue a license to engage in and to conduct such business for the current tax year upon the condition that he shall pay the taxes accruing to the State of Alabama under the provisions of this division; provided, that no license shall be issued under the provisions of this division to any person who has not complied with the provisions of this division, and no provision of this division shall be construed as relieving any person from the payment of any license or privilege tax now or hereafter imposed by law.

(a) The taxes levied under the provisions of this division, except as otherwise provided in subsection (d), shall be due and payable in monthly installments on or before the 20th day of the month next succeeding the month in which the tax accrues.

(b) Except as otherwise provided in subsection (d) on or before the 20th day of each month, every person on whom the taxes levied by this division are imposed shall report to the department, on a form prescribed by the department, a true and correct statement showing such information as the department may require, and shall pay to the department the amount of taxes shown to be due.

(c) Any taxpayer liable for taxes under the provisions of this division whose average monthly state sales tax liability was one thousand dollars ($1,000) or greater during the preceding calendar year shall make estimated payments to the department on or before the 20th day of the month in which the liability occurs as follows:

(1) The amount of the first estimated payment shall be 66 2/3 percent of the taxpayer's actual tax liability for the month of October 1983; thereafter the amounts of the payment shall be the lesser of 66 2/3 percent of the taxpayer's actual tax liability for the same calendar month of the preceding year or 66 2/3 percent of the current month's estimated liability.

(2) Any outstanding credit or deficit arising from the taxpayer's overpayment or underpayment of his final liability shall be applied to either increase or reduce, as the case may be, that month's final tax liability which shall be reported and paid not later than the 20th day of the month next succeeding the month in which the tax accrues.

(3) The provisions of this subsection shall not apply to the provisions of Sections 11-51-180, 11-51-200, 40-12-4, nor to any municipal or county taxes levied by past or future special or local acts of the Legislature.

(d) When the total state sales tax for which any person is liable under this division averages less than two hundred dollars ($200) per month during the preceding calendar year, a quarterly return and remittance in lieu of the monthly returns may be made, by election of the taxpayer to the department, on or before the 20th day of the month next succeeding the end of the quarter for which the tax is due under any rules and regulations as may be prescribed. The election to file quarterly shall be made in writing no later than February 20 of each year and shall be filed with the department. Notwithstanding the above, no state sales tax return shall be due until January 20 of each year unless the total state sales tax for which any person is liable under this division during the preceding calendar year exceeds ten dollars ($10).

(e) The department, for good cause, may extend the time for making any state or state-administered return required under the provisions of this division, but the time for filing any such return shall not be extended for a period greater than 30 days from the date such return is due to be made.

Any person taxable under this division, having cash and credit sales, may report such cash sales, and the taxpayer shall thereafter include in each monthly report all credit collections made during the month preceding, and shall pay the taxes due thereon at the time of filing such report, but in no event shall the gross proceeds of credit sales be included in the measure of the tax to be paid until collections of such credit sales shall have been made.

It shall be the duty of every person engaging or continuing in this state in any business for which a privilege tax is imposed by this division, to keep and preserve suitable records of the gross sales, gross proceeds of sales, and gross receipts or gross receipts of sales of such business and such other books or accounts as may be necessary to determine the amount of tax for which he is liable, under the provisions of this division. It shall be the duty of every person to keep and preserve all invoices of goods, wares, and merchandise purchased, for resale or otherwise, and all such books, invoices, and other records shall be open for examination by the Department of Revenue or its duly authorized agent. Any person selling both at wholesale and retail shall keep his books so as to show separately the gross proceeds of wholesale sales and the gross proceeds of retail sales. All sales shall be subject to tax in the absence of such separate records.

The monthly reports herein required to be made are not required to be made on oath, but wherever in this division any report is required to be sworn to, the same shall be sworn to by the taxpayer or his agent before some officer authorized to administer oaths, and any false statement to a material fact made with intent to defraud shall constitute perjury, and upon conviction thereof, the person so convicted shall be punished as provided by law.

Any person subject to the provisions of this division who shall fail to make the reports or any of them, as herein required, or who shall fail to keep the records as herein required, shall be guilty of a misdemeanor, and upon conviction shall be fined not less than $25 nor more than $500 for each offense. Each month of such failure shall constitute a separate offense.

Any person subject to the provisions of this division willfully refusing to make the reports herein required, or who shall refuse to permit the examination of his records by the Department of Revenue, or its duly authorized agents, shall be guilty of a misdemeanor, and upon conviction shall be fined not less than $50 nor more than $500 for each offense, and in addition may be imprisoned in the county jail for a period not to exceed six months. Each month of failure to make such reports shall constitute a separate offense, and each refusal of a written demand of the department to examine, inspect or audit such records shall constitute a separate offense.

For the purpose of securing the payment of any tax, penalties or interest due or which may become due under the provisions of this division, every itinerant vendor engaged in the business of selling tangible personal property at retail in this state is required to file a bond with the Department of Revenue, conditioned upon the payment of any tax, penalty or interest due or to become due under this division and upon faithful observance of the provisions of the division. Such bond shall be effective for a period of one year from date of issuance and shall be fixed by the department in an amount equal to the tax estimated due or to become due under the provisions of this division, but not less than $100 nor more than $1,000, and shall have a surety or sureties satisfactory to the department. It shall be filed with the department within 10 days after notice in writing has been issued by the commissioner or any person designated by him in writing for this purpose, and sent by registered or certified mail to the last known address of any itinerant vendor or has been personally served upon him by a duly accredited representative of the department. If such itinerant vendor fails to make any return due under this division or to pay any taxes or penalties due under this division or to keep books and records as required by this division or fails to perform any other duty or obligation imposed on him under this division, such bond shall thereupon be forfeited, and the department shall institute an action upon such bond in the name of the State of Alabama for the entire amount of said bond and costs.

Any person subject to the provisions hereof who shall sell out his business or stock of goods, or shall quit business, shall be required to make out the return provided for under Section 40-23-7 within 30 days after the date he sold out his business or stock of goods, or quit business, and his successor in business shall be required to withhold sufficient of the purchase money to cover the amount of said taxes due and unpaid until such time as the former owner shall produce a receipt from the Department of Revenue showing that the taxes have been paid, or a certificate that no taxes are due. If the purchaser of a business or stock of goods shall fail to withhold purchase money as above provided the taxes shall be due and unpaid after the 30-day period allowed, he shall be personally liable for the payment of the taxes accrued and unpaid on account of the operation of the business by the former owner. If in such cases the department deems it necessary in order to collect the taxes due the state, it may make a jeopardy assessment as provided in Chapter 29 of this title.

(a) Every person, firm, corporation, association or copartnership engaged in or continuing within this state in the business for which a license or privilege tax is required by this division shall add to the sales price and collect from the purchaser on all sales upon the gross receipts or gross proceeds of which there is levied by this division a sales tax at the rate of four percent, $.04 tax for each whole dollar of sales price; provided, that on that part of the sales price which is a fractional part of a dollar, in addition to whole dollars, and on sales of less than a dollar there shall be collected in addition to the tax collected on whole dollars, no tax on $.01 to and including $.10 of sales price, $.01 tax on $.11 to and including $.30 of sales price, $.02 tax on $.31 to and including $.54 of sales price, $.03 tax on $.55 to and including $.73 of sales price, and $.04 tax on $.74 to and including $.99 of sales price. Upon sales the gross receipts or gross proceeds of which are taxed by this division at a rate less than four percent, there shall be added to the sales price and collected from the purchaser by such person, firm, corporation, association or copartnership described in this section an amount equal to the prescribed percentage of such sales price.

(b) It shall be unlawful for any person, firm, corporation, association or copartnership described in this section to fail or refuse to add to the sales price and collect from the purchaser the amount required by this section to be so added to the sales price and collected from the purchaser; and it shall likewise be unlawful to refund or offer to refund all or any part of the amount collected, or to absorb or advertise directly or indirectly the absorption or refund of the amount required to be added to the sales price and collected from the purchaser, or any portion of such amount. Any person, firm, corporation, association or copartnership violating any of the provisions of this section shall be guilty of a misdemeanor, and upon conviction shall be fined in a sum of not less than $50 nor more than $100, or may be imprisoned in the county jail for not more than six months, or may be punished by both such fine and imprisonment, and each act in violation of the provisions of this division shall constitute a separate offense. The provisions of this section that there shall be added to the sale price and collected from the purchaser the amounts provided herein shall in no way relieve the person, firm, corporation, association or copartnership described in this section of the tax levied by this article; nor shall the inability, impracticability, refusal or failure to add to the sales price and collect from the purchaser the amounts provided herein relieve such person, firm, corporation, association or copartnership from the tax levied by this division.

(c) All taxes paid in pursuance to this division or any other statute enacted in this connection shall conclusively be presumed to be a direct tax on the retail consumer, precollected for the purpose of convenience and facility only.

(d) In the event that any sum is collected from a consumer that purports to be collected because of this section, whether or not the amount is actually provided for hereunder, then any such sum, except such as is collected solely because of rounding the correct amount of tax upward to the nearest cent, shall be paid to the Department of Revenue for the purposes provided in Section 40-23-35.

Any taxpayer who shall violate any of the provisions of this division may be restrained from continuing in business, and the proper prosecution shall be instituted in the name of the State of Alabama by its Attorney General, by the counsel of the Department of Revenue or under their direction by any district attorney of the state until such person shall have complied with the provisions of this division.

The tax imposed by this division shall be in addition to all other licenses and taxes levied by law as a condition precedent to engaging in any business taxable hereunder, except as in this division otherwise specifically provided.

The administration of this division is vested in and shall be exercised by the Department of Revenue, except as otherwise herein provided, and the enforcement of any of the provisions of this division in any of the courts of the state shall be under the jurisdiction and supervision of the department, and the department may require the assistance of, and act through the district attorney and the Attorney General of the state, and any legal counsel of the Department of Revenue.

The department shall appoint as needed such agents, clerks and stenographers as may be necessary to enforce provisions of this division under the provisions of the merit system, who shall perform such duties as may be required, and such duly appointed and qualified agents are authorized to act for the department as it may direct and as is authorized by law.

Before entering upon the duties of their office, all agents of the department for the administration of the sales tax shall execute to the State of Alabama a bond, to be approved by the Governor, in the amount of $5,000, for the faithful performance of their duties.

The Department of Revenue shall from time to time promulgate such rules and regulations for making returns and for ascertainment, assessment and collection of the tax imposed hereunder as it may be deemed necessary to enforce its provisions; and upon request shall furnish any taxpayer with a copy of such rules and regulations. The department may adopt rules and regulations providing for the issuance of permits to manufacturers to purchase tangible personal property without the payment to the vendor of the sales tax, and providing for such manufacturer to report and pay such tax directly to the department, in instances where the department determines that it is practically impossible at the time of purchase for such manufacturer or his vendors to determine with any degree of certainty the applicability of such tax, and that such provisions will facilitate and expedite the collection of the tax which may be due from such consumer; and such provisions may also be made applicable to persons engaged in the business of mining, quarrying, compounding or processing tangible personal property, railroads, transportation companies and others.

All taxes or other funds received or collected by the Department of Revenue under the provisions of this division shall be without delay deposited in the Treasury.

(a) Such amount of money as shall be appropriated for each fiscal year by the Legislature to the Department of Revenue with which to pay the salaries, the cost of operation and management of said department shall be deducted, as a first charge thereon, from the taxes collected under the provisions of this division; provided, that the expenditure of said sum so appropriated shall be budgeted and allotted pursuant to Article 4 of Chapter 4 of Title 41, and limited to the amount appropriated to defray the expenses of operating said department for each fiscal year. After the payment of the expenses, so much of the amount remaining as may be necessary, after first applying all sums of money received by reason of the application of the surplus in the income tax as provided by Section 40-18-58, for the replacement in the public school fund of the three-mill constitutional levy for schools and in the General Fund of the one-mill levy for soldiers' relief and the two and one-half mills for general purposes lost by exemption of homestead provided for in this division shall be first charges against the proceeds of said licenses, taxes or receipts levied or collected under this division. The Comptroller, with the approval of the Governor, is hereby directed to draw his warrants payable out of the total proceeds of said licenses, taxes or receipts levied or collected under this division as herein provided in such sum as shall be found necessary to take care of and replace the three-mill constitutional school levy, the one-mill soldiers' relief levy and the two and one-half mill levy for general purposes of the state ad valorem taxes lost as above set forth.

(b) Of the amounts of such collections in any fiscal year, remaining after the payment of the expenses of administration and replacement of the amounts in the several funds as herein provided there shall be paid into the Treasury sums to be credited as follows:

(1) To the credit of the 67 counties of the state, to be divided and distributed as hereinafter provided, $378,000;

(2) To the Department of Human Resources, $1,322,000;

(3) Beginning June 1, 2000, to the Department of Conservation and Natural Resources for capital outlay for acquisition of land contiguous to existing state parks and land acquired for lakes and or water reservoirs, provision, construction, improvement, renovation, equipping, and maintenance of the state parks system only and not for use by the Department of Conservation and Natural Resources for personnel or administrative use, the sum equal to the increase in receipts accruing to the State of Alabama due to the cap on discounts per license holder in Section 40-23-36(b), which increase shall be equal to the difference between the discount rate or amount allowed under Section 40-23-36(b) and the maximum discount rate allowable under Section 40-23-36(a); provided, however, if at any time any bonds of the Alabama State Parks System Improvement Corporation or the Alabama Public Historical Sites and Parks Improvement Corporation are outstanding (excluding bonds that have been refunded by the establishment of an escrow trust for the payment thereof consisting solely of bonds or other obligations which as to principal and interest constitute direct obligations of, or are unconditionally guaranteed by, the United States of America) there shall first be paid into the State General Fund from such collections an amount equal to the debt service (principal, interest, and premium, if any) payable on such bonds in the then current fiscal year of the state. Provided, however, that one million dollars ($1,000,000) of such increase in receipts per fiscal year shall be credited to the Department of Human Resources beginning October 1, 1996, until September 30, 2002, and shall be expended for the foster children program.

(4)a. On October 1, 2002, to the Department of Conservation and Natural Resources for capital outlay, repairs and maintenance of the state parks system only, the minimum sum of five million dollars ($5,000,000) from the increase in receipts accruing to the State of Alabama due to the cap on discounts per license holder in Section 40-23-36(b) as calculated in Section 40-23-35(b)(3). Beginning October 1, 2003, annually, to the Department of Conservation and Natural Resources for capital outlay, repairs, and maintenance of the state parks system only, the sum calculated by a fraction, the numerator of which is five million dollars ($5,000,000) and the denominator of which is equal to the increase in receipts as calculated in Section 40-23-35(b)(3) for fiscal year 2002 accruing to the State of Alabama multiplied by the increase in receipts as calculated in Section 40-23-35(b)(3) for the then current fiscal year, or the sum of five million dollars ($5,000,000), whichever is greater.

b. Beginning October 1, 2002, to the credit of the State General Fund, the balance of the sum equal to the increase in receipts accruing to the State of Alabama due to the cap on discounts per license holder in Section 40-23-36(b).

(c) One-half of the amount deposited to the credit of the 67 counties as above provided, shall be divided and distributed proportionately among the 67 counties of the state according to the population of the said counties as shown by the last federal census as proclaimed, published or certified by the Director of the Bureau of the Census; and one-half of said proceeds shall be divided or distributed equally among 67 counties; provided, that the funds divided and distributed to the several counties of the state as hereinabove provided for shall be used exclusively for full-time health service in cooperation with the State Board of Health or the federal government, and for extension services in cooperation with the Alabama Agriculture Extension Service or the federal government, at the discretion of the county commissions of the several counties of the state.

(d) The amounts provided in subsection (b) for the Department of Human Resources shall be used for general welfare purposes. For purposes of this division, 'general welfare purposes' means:

(1) The administration of public assistance as set out in Sections 38-2-5 and 38-4-1;

(2) Services, including supplementation and supplementary services under the federal Social Security Act, to or on behalf of persons to whom such public assistance may be given under said Section 38-4-1;

(3) Services to and on behalf of dependent, neglected or delinquent children; and

(4) Investigative and referral services to and on behalf of needy persons.

(e) In addition, there shall be paid, commencing on January 1, 1978, and on the first day of each fiscal quarter thereafter, to the Department of Human Resources for a statewide, state-administered food stamp program, as authorized by the Food Stamp Act of 1964, Public Law 88-525, 88th Congress, and amendments thereto, an amount equal to five percent of the value of food stamp benefits issued statewide in excess of the amount paid by recipients (bonus or free stamps) during the immediate prior fiscal quarter, which sum so appropriated shall be paid quarterly to the Department of Human Resources Trust Fund for administration of the food stamp program in conformity with rules and regulations promulgated by the United States Department of Agriculture and in conformity with Sections 38-1-1 through 38-6-9. Such administrative funds shall be limited to and based on fiscal year 1976-77 administrative costs, normal inflationary increases and mandated administration requirements of the Alabama Legislature and the United States Department of Agriculture. The Department of Human Resources will not staff any county food stamp office at a level which exceeds the average staff-to-recipient ratios which existed in Alabama during fiscal year 1976-77. This restriction will apply in coordination with those provided hereinabove and, should conflict occur, the lesser amount of expenditure shall be required. At the end of each fiscal year, an accounting shall be made of said sum so that any unexpended and unencumbered balance of funds may be determined for the purpose of paying such balance to the Education Trust Fund.

(f) The amount of the proceeds of all taxes levied by this division remaining after the payment of the expenses of administration and enforcement and the replacement in the several funds of the amount lost by any homestead exemptions and the distribution as provided in subsections (b) and (e), shall be paid into the Education Trust Fund except as provided in subdivision (4) of Section 40-23-2 and subsection (c) of Section 40-23-61.

(a) The Governor may, by executive order, authorize the Department of Revenue to provide by proper rules and regulations for the allowance of a discount, not to exceed five percent of the first $100 of taxes levied and two percent of the taxes levied over $100 by this division and due and payable to the state by any person licensed under the provisions hereof; provided, that no discount shall be authorized or allowed upon any taxes which are not paid before delinquency, as in this division provided.

(b) For any taxes collected by the license holder on or after June 1, 1996, the Governor may, by executive order, authorize the Department of Revenue to provide by proper rules and regulations for a maximum discount amount or rate to any license holder and shall be limited to that amount or rate for each retail license holder regardless of the number of retail locations of that license holder within the state.

There is hereby levied, in lieu of the state sales tax levied by Section 40-23-2, a privilege or license tax against the person on account of the business activities engaged in and in the amount to be determined by the application of rates against gross sales, or gross receipts, as the case may be as follows:

Upon every person, firm or corporation engaged or continuing within this state in the business of selling at retail any machine, machinery or equipment which is used in planting, cultivating and harvesting farm products, or used in connection with the production of agricultural produce or products, livestock or poultry on farms, and the parts of such machines, machinery or equipment, attachments and replacements therefor which are made or manufactured for use on or in the operation of such machine, machinery or equipment, and which are necessary to and customarily used in the operation of such machine, machinery or equipment, an amount equal to one and one-half percent of the gross proceeds of the sale thereof; provided, that the one and one-half percent rate herein prescribed with respect to parts, attachments and replacements shall not apply to any automotive vehicle or trailer designed primarily for public highway use, except farm trailers used primarily in the production and harvesting of agricultural commodities.

Where any used machine, machinery or equipment which is used in planting, cultivating and harvesting farm products, or used in connection with the production of agricultural produce or products, livestock and poultry on farms is taken in trade or in a series of trades as a credit or part payment on a sale of a new or used machine, machinery or equipment, the tax levied herein shall be paid on the net difference, that is, the price of the new or used machine, machinery or equipment sold, less the credit for the used machine, machinery or equipment taken in trade.

Section 40-23-37 shall be enforced by the Commissioner of Revenue and the Department of Revenue in the same way, and subject to the same rules and regulations as the state sales tax is enforced as provided in this division, and the administrative and enforcement provisions of this division shall be applicable to the enforcement of Section 40-23-37 to the same extent as in the collection and enforcement of the state sales tax.

(a) Notwithstanding any other provision of law, the purchaser of tangible property purchased in the state, with the intent that the property is to be retained in the state only temporarily and is solely for export to a foreign country, shall be entitled to a refund from the Department of Revenue against the total amount of all sales taxes paid if the purchaser's records reflect that it was the intent of the purchaser to use the property in a foreign country at the time of purchase and that, in fact, the property was exported from Alabama, and that when ocean transportation is required and scheduled service to the desired port overseas is available through the Port of Mobile, the Port of Mobile is used for shipment. This subsection shall apply to purchases made and stockpiled after July 1, 1996.

(b) Notwithstanding subsection (a) or any other provision of law, the purchase of a new passenger vehicle or new truck with a gross weight not exceeding 8,000 pounds:

(1) which is manufactured in Alabama;

(2) which is purchased by a nonresident of the United States;

(3) which is delivered to the purchaser in Alabama by the manufacturer or an affiliated corporation;

(4) which at the time of purchase the purchaser intends to export to and permanently license in a foreign country within 90 days after the date of delivery; and

(5) for which the purchaser obtains a temporary metal license plate and a temporary registration certificate from the judge of probate or license commissioner of the county in which the manufacturer is located,

(c) This section shall be read in pari materia with all other vehicle registration laws, specifically, Section 32-6-210.

(a) There is hereby levied, in addition to all other taxes of every kind now imposed by law, and shall be collected, as herein provided, a privilege or license tax against the person on account of the business activities engaged in and in the amount to be determined by the application of rates against gross receipts, as follows:

Upon every person, firm or corporation engaged or continuing within this state in the business of contracting to construct, reconstruct or build any public highway, road, bridge, or street, an amount equal to five percent of the gross receipts derived from performance of such contracts. The term 'gross receipts' is herein defined to include only those amounts derived and received by the contractor from the performance of such contracts.

(b) The proceeds of the taxes levied by this section, after deduction of the cost of administration and collection of such taxes, shall be distributed as follows:

(1) Fifteen percent of the residue remaining after deduction of the cost of administration and collection shall be paid into the State Treasury and shall be credited to the Pensions and Security Trust Fund to be used for general welfare purposes, and

(2) Eighty-five percent of the residue remaining after deduction of the cost of administration and collection shall be paid into the State Treasury and shall be credited to the Alabama Special Mental Health Fund to be used for mental health purposes.

(c) The taxes imposed pursuant to this section shall constitute a debt due the state and may be collected by civil action, in addition to all other methods provided by law and in this section. The said taxes, together with interest and penalties with respect thereto, shall constitute and be secured by a lien upon the property of any person from whom said taxes are due or who is required to pay said taxes. All provisions of the revenue laws of this state which apply to the enforcement of liens for license taxes due the state shall apply fully to the collection of the taxes levied herein, and the Department of Revenue shall collect such taxes and enforce this section and shall have and exercise for such collection and enforcement all rights and remedies that this state or the department has for collection of the state sales tax. All provisions of the state sales tax, with respect to definitions, except the definition of 'gross receipts' contained therein, payment and assessment of the state sales tax, making of reports and keeping and preserving records with respect thereto, interest after the due date of tax, penalties for failure to pay tax or otherwise complying with the state sales tax statutes, the promulgation of rules and regulations and the administration and enforcement of the state sales tax statutes, which are not inconsistent with the provisions of this section when applied to the tax levied pursuant to subsection (a) of this section, shall apply to the tax levied herein. The Commissioner of Revenue and the state Department of Revenue shall have and exercise the same powers, duties and obligations with respect to the taxes levied herein as are imposed on the commissioner and the department by the state sales tax statutes. All provisions of the state sales tax statutes that are made applicable in this section to the taxes levied herein and to the administration of this section are incorporated herein by reference and made a part hereof as if fully set forth herein; provided, that the provisions of the state sales tax with respect to the collection by the taxpayer of the tax levied therein shall not apply, the taxes levied herein being levied against the person required to pay the tax to the state.

(d) The taxes levied herein shall not apply with respect to contracts made by the contractor with any county or incorporated city or town, except that contracts in which the State of Alabama is a joint party with the city, town or county shall be subject to the tax, nor to that portion of the gross receipts received by the contractor constituting additional amounts paid to the contractor under contractual escalation provisions allowing for an increase in the contract price for escalations in the cost of fuels, materials, and/or labor.

For the purpose of this article, the following terms shall have the respective meanings ascribed to them in this section:

(1) PERSON or COMPANY. Any individual, firm, company, partnership, association, corporation, receiver or trustee, or any other group or combination acting as a unit, and the plural as well as the singular number, unless the intention to give a more limited meaning is disclosed by the context.

(2) DEPARTMENT. The Department of Revenue of the State of Alabama.

(3) COMMISSIONER. The Commissioner of Revenue of the State of Alabama.

(4) WHOLESALE SALE or SALE AT WHOLESALE. Any one of the following:

a. A sale of tangible personal property by wholesaler to licensed retail merchants, jobbers, dealers or other wholesalers for resale and does not include a sale by wholesalers to users or consumers, not for resale.

b. A sale of tangible personal property or products, including iron ore, and including the furnished container and label of such property or products, to a manufacturer or compounder which enter into and become an ingredient or component part of the tangible personal property or products which the manufacturer or compounder manufactures or compounds for sale, whether or not such tangible personal property or product used in manufacturing or compounding a finished product is used with the intent that it become a component of the finished product; provided, however, that it is the intent of this section that no sale of capital equipment, machinery, tools, or product shall be included in the term 'wholesale sale.' The term 'capital equipment, machinery, tools, or product' shall mean property that is subject to depreciation allowances for Alabama income tax purposes.

c. A sale of containers intended for one-time use only, and the labels thereof, when such containers are sold without contents to persons who sell or furnish such containers along with the contents placed therein for sale by such persons.

d. A sale of pallets intended for one-time use only when such pallets are sold without contents to persons who sell or furnish such pallets along with the contents placed thereon for sale by such persons.

e. A sale to a manufacturer or compounder, of crowns, caps and tops intended for one-time use employed and used upon the containers in which such manufacturer or compounder markets his products.

f. A sale of containers to persons engaged in selling or otherwise supplying or furnishing baby chicks to growers thereof where such containers are used for the delivery of such chicks or a sale of containers for use in the delivery of eggs by the producer thereof to the distributor or packer of such eggs even though such containers used for delivery of baby chicks or eggs may be recovered for reuse.

g. A sale of bagging and ties used in preparing cotton for market.

h. A sale of commercial fish feed including concentrates, supplements and other feed ingredients when such substances are used as ingredients in mixing and preparing feed for fish raised to be sold on a commercial basis.

i. A sale of tangible personal property to any person engaging in the business of leasing or renting such tangible personal property to others, if such tangible personal property is purchased for the purpose of leasing or renting it to others under a transaction subject to the privilege or license tax levied in Article 4 of Chapter 12 of this title against any person engaging in the business of leasing or renting tangible personal property to others.

j. A purchase or withdrawal of parts or materials from stock by any person licensed under this article where such parts or materials are used in repairing or reconditioning the tangible personal property of such licensed person which tangible personal property is a part of the stock of goods of such licensed person, offered for sale by him and not for use or consumption of such licensed person.

k. A sale to meat packers, manufacturers, compounders or processors of meat products of all casings used in moulding or forming wieners and Vienna sausages, even though such casings may be recovered for reuse.

(5) SALE AT RETAIL or RETAIL SALE. All sales of tangible personal property except those above defined as wholesale sales. The quantities of goods sold or prices at which sold are immaterial in determining whether or not a sale is at retail. Sales of building materials to contractors, builders or landowners for resale or use in the form of real estate are retail sales in whatever quantity sold. Sales of building materials, fixtures or other equipment to a manufacturer or builder of modular buildings for use in manufacturing, building or equipping a modular building ultimately becoming a part of real estate situated in the State of Alabama are retail sales, and the use, sale or resale of such building shall not be subject to the tax. Sales of tangible personal property to undertakers and morticians are retail sales and subject to the tax at the time of purchase, but are not subject to the tax on resale to the consumer. Sales of tangible personal property or products to manufacturers, quarry operators, mine operators or compounders, which are used or consumed by them in manufacturing, mining, quarrying or compounding and do not become an ingredient or component part of the tangible personal property manufactured or compounded as provided in subdivision (4) are retail sales. The term 'sale at retail' or 'retail sale' shall also mean and include the withdrawal, use or consumption of any tangible personal property by anyone who purchases same at wholesale, except property which has been previously withdrawn from the business or stock and so used or consumed and with respect to which property the tax has been paid because of such previous withdrawal, use or consumption, except property which enters into and becomes an ingredient or component part of tangible personal property or products manufactured or compounded for sale as provided in subdivision (4); and not for the personal and private use or consumption of any person so withdrawing, using or consuming the same, and such wholesale purchaser shall report and pay the taxes thereon; and except refinery, residue, or fuel gas, whether in a liquid or gaseous state, that has been generated by, or is otherwise a by-product of, a petroleum-refining process, which gas is then utilized in the process to generate heat or is otherwise utilized in the distillation or refining of petroleum products. The term 'retail sale' or 'sale at retail' shall also mean and include the sale of tangible personal property previously purchased at wholesale for the purpose of leasing or renting under a transaction subject to the privilege or license tax levied in Article 4 of Chapter 12 of this title, regardless of whether such sale is to the person who theretofore leased or rented the said tangible personal property or to some other person.

(6) BUSINESS. All activities engaged in, or caused to be engaged in, with the object of gain, profit, benefit or advantage, either direct or indirect, and not excepting subactivities producing marketable commodities used or consumed in the main business activity, each of which subactivities shall be considered business engaged in, taxable in the class in which it falls.

(7) STORAGE. Any keeping or retention in this state for any purpose except sale in the regular course of business or subsequent use solely outside this state of tangible personal property purchased at retail.

(8) USE. The exercise of any right or power over tangible personal property incident to the ownership of that property, or by any transaction where possession is given, except that it shall not include the sale of that property in the regular course of business.

(9) PURCHASE. Acquired for a consideration, whether such acquisition was effected by a transfer of title, or of possession or of both, or a license to use or consume; whether such transfer shall have been absolute or conditional, and by whatsoever means the same shall have been effected; and whether such consideration be a price or rental in money, or by way of exchange or barter.

(10) SALES PRICE. The total amount for which tangible personal property is sold, including any services, including transportation, that are a part of the sale, valued in money, whether paid in money or otherwise, and includes any amount for which credit is given to the purchaser by the seller, without any deduction therefrom on account of the cost of the property sold, the cost of the materials used, labor or service cost, interest charged, losses or any other expenses whatsoever; provided, that cash discounts allowed and taken on sales shall not be included and sales price shall not include the amount charged for property returned by customers when the entire amount charged therefor is refunded either in cash or by credit.

(11) IN THIS STATE or IN THE STATE. Within the exterior limits of the State of Alabama, and includes all territory within such limits owned by or ceded to the United States of America.

(12) AUTOMOTIVE VEHICLE. A power shovel, dragline, crawler, crawler crane, ditcher or any similar machine which is self-propelled, in addition to self-propelled machines which are used primarily as instruments of conveyance.

(13) PREPAID TELEPHONE CALLING CARD. A sale of a prepaid telephone calling card or a prepaid authorization number, or both, shall be deemed the sale of tangible personal property subject to the tax imposed pursuant to this chapter.

(a) An excise tax is hereby imposed on the storage, use or other consumption in this state of tangible personal property, not including, however, materials and supplies bought for use in fulfilling a contract for the painting, repairing or reconditioning of vessels, barges, ships, other watercraft and commercial fishing vessels of over five tons load displacement as registered with the U.S. Coast Guard and licensed by the State of Alabama Department of Conservation and Natural Resources, purchased at retail on or after October 1, 1965, for storage, use or other consumption in this state at the rate of four percent of the sales price of such property or the amount of tax collected by the seller, whichever is greater; provided, however, when the seller follows the Department of Revenue's suggested use tax brackets and his records prove that his following said brackets resulted in a net undercollection of tax for the month, he may report the tax due or tax collected, whichever is less, except as provided in subsections (b) and (c) of this section.

(b) An excise tax is hereby imposed on the storage, use or other consumption in this state of any machines used in mining, quarrying, compounding, processing and manufacturing of tangible personal property, purchased at retail on or after October 1, 1965, at the rate of one and one-half percent of the sales price of any such machine or the amount of tax collected by the seller, whichever is greater; provided, however, when the seller follows the Department of Revenue's suggested use tax brackets and his records prove that his following said brackets resulted in a net undercollection of tax for the month, he may report the tax due or tax collected, whichever is less; provided, that the term 'machine,' as herein used, shall include machinery which is used for mining, quarrying, compounding, processing, or manufacturing tangible personal property, and the parts of such machines, attachments and replacements therefor, which are made or manufactured for use on or in the operation of such machines and which are necessary to the operation of such machines and are customarily so used.

(c) An excise tax is hereby imposed on the storage, use or other consumption in this state of any automotive vehicle or truck trailer, semitrailer or house trailer, and mobile home set-up materials and supplies including but not limited to steps, blocks, anchoring, cable pipes and any other materials pertaining thereto, purchased at retail on or after October 1, 1965, for storage, use or other consumption in this state at the rate of two percent of the sales price of such automotive vehicle, truck trailer, semitrailer or house trailer, and mobile home set-up materials and supplies as specified above, or the amount of tax collected by the seller, whichever is greater; provided, however, when the seller follows the Department of Revenue's suggested use tax brackets and his records prove that his following said brackets resulted in a net undercollection of tax for the month, he may report the tax due or tax collected, whichever is less. Where any used automotive vehicle or truck trailer, semitrailer or house trailer is taken in trade, or in a series of trades, as a credit or part payment on the sale of a new or used vehicle, the tax levied herein shall be paid on the net difference, that is, the price of the new or used vehicle sold less the credit for the used vehicle taken in trade.

Of the total $.02 tax on each dollar of sale provided hereunder, 58 percent of the total tax generated by this subsection shall be deposited to the credit of the Education Trust Fund; and 42 percent of the total tax generated by this subsection shall be deposited to the credit of the State General Fund.

(d) Every person storing, using or otherwise consuming in this state tangible personal property purchased at retail shall be liable for the tax imposed by this article, and the liability shall not be extinguished until the tax has been paid to this state; provided, that a receipt from a retailer maintaining a place of business in this state or a retailer authorized by the department, under such rules and regulations as it may prescribe, to collect the tax imposed hereby and who shall for the purpose of this article be regarded as a retailer maintaining a place of business in this state, given to the purchaser in accordance with the provisions of Section 40-23-67, shall be sufficient to relieve the purchaser from further liability for tax to which such receipt may refer.

(e) An excise tax is hereby imposed on the classes of tangible personal property, and at the rates imposed on such classes, specified in subsections (a), (b) and (c) of this section, on the storage, use, or other consumption in the performance of a contract in this state of any such tangible personal property, new or used, the tax to be measured by the sales price or the fair and reasonable market value of such tangible personal property when put into use in this state, whichever is less; provided, that the tax imposed by this subsection shall not apply where the taxes imposed by subsection (a), (b), or (c) of this section apply.

The storage, use or other consumption in this state of the following tangible personal property is hereby specifically exempted from the tax imposed by this article:

(1) Property, on which the sales tax imposed by the provisions of Article 1 of this chapter is paid by the consumer to a person licensed under the provisions of Article 1 of this chapter.

(2) Property, the storage, use or other consumption of which this state is prohibited from taxing under the Constitution or laws of the United States of America or under the constitution of this state.

(3) Tangible personal property, not to be used in the performance of a contract, brought into this state by a nonresident thereof for his own storage, use or consumption while temporarily within this state.

(4) Lubricating oil and gasoline as defined in Sections 40-17-30 and 40-17-170, the storage, use or other consumption of which is otherwise taxed.

(5) All fertilizer; provided, that the word 'fertilizer' as used in this article shall not be construed to include cottonseed meal when not in combination with other material.

(6) All seeds for planting purposes and baby chicks and poults; provided, that nothing herein shall be construed to exempt plants, seedlings, nursery stock or floral products.

(7) Insecticides and fungicides and feed for livestock and poultry, but not including prepared foods for dogs and cats.

(8) The use, storage or consumption of all livestock by whomsoever sold; and also the gross proceeds of poultry and other products of the farm, dairy, grove or garden, when in the original state of production or condition of preparation for sale, when such sale or sales are made by the producer or members of his immediate family or for him by those employed by him to assist in the production thereof. Nothing herein shall be construed to exempt or exclude from the measure or computation of the tax levied, assessed or payable hereunder, the gross proceeds of sales of poultry or poultry products when not products of the farm.

(9) Cottonseed meal exchanged for cottonseed at or by cotton gins.

(10) Transportation, gas, water or electricity, of the kinds and natures, the rates and charges for which when sold by public utilities, are customarily fixed and determined by the Public Service Commission of Alabama or like regulatory bodies.

(11) Coal or coke to be stored, used or consumed by manufacturers, electric power companies and transportation companies for use or consumption in the production of by-products or the generation of heat or power used:

a. In manufacturing tangible personal property for sale;

b. For the generation of electric power or energy for use in manufacturing tangible personal property for sale or for resale; or

c. For the generation of motive power for transportation.

(12) Fuel and supplies for use or consumption aboard ships, vessels, towing vessels, or barges, or drilling ships, rigs or barges, or seismic or geophysical vessels, or other watercraft (herein for purposes of this exemption being referred to as 'vessels') engaged in foreign or international commerce or in interstate commerce; provided, that nothing in this article shall be construed to exempt or exclude from the measure of the tax herein levied the gross proceeds of sale or sales of material and supplies to any person for use in fulfilling a contract for the painting, repair or reconditioning of vessels, barges, ships, other watercraft and commercial fishing vessels of over five tons load displacement as registered with the U.S. Coast Guard and licensed by the State of Alabama Department of Conservation and Natural Resources. For purposes of this subdivision, it shall be presumed that vessels engaged in the transportation of cargo between ports in the State of Alabama and ports in foreign countries or possessions or territories of the United States or between ports in the State of Alabama and ports in other states are engaged in foreign or international commerce or interstate commerce, as the case may be. For the purposes of this subdivision, the engaging in foreign or international commerce or interstate commerce shall not require that the vessel involved deliver cargo to or receive cargo from a port in the State of Alabama. For purposes of this subdivision, vessels carrying passengers for hire, and no cargo, between ports in the State of Alabama and ports in foreign countries or possessions or territories of the United States or between ports in the State of Alabama and ports in other states shall be engaged in foreign or international commerce or interstate commerce, as the case may be, if, and only if, both of the following conditions are met: (i) The vessel in question is a vessel of at least 100 gross tons; and (ii) the vessel in question has an unexpired certificate of inspection issued by the United States Coast Guard or by the proper authority of a foreign country for a foreign vessel, which certificate is recognized as acceptable under the laws of the United States. Vessels which are engaged in foreign or international commerce or interstate commerce shall be deemed for the purposes of this subdivision to remain in such commerce while awaiting or under repair in a port of the State of Alabama if such vessel returns after such repairs are completed to engaging in foreign or international commerce or interstate commerce. For purposes of this subdivision, seismic or geophysical vessels which are engaged either in seismic or geophysical tests or evaluations exclusively in offshore federal waters or in traveling to or from conducting such tests or evaluations shall be deemed to be engaged in international or foreign commerce. For purposes of this subdivision, proof that fuel and supplies purchased are for use or consumption aboard vessels engaged in foreign or international commerce or in interstate commerce may be accomplished by the merchant or seller securing the duly signed certificate of the vessel owner, operator or captain or their respective agent on a form prescribed by the department that the fuel and supplies purchased are for use or consumption aboard vessels engaged in foreign or international commerce or in interstate commerce. Any person filing a false certificate shall be guilty of a misdemeanor and upon conviction shall be fined not less than $25 nor more than $500 for each offense. Each false certificate filed shall constitute a separate offense. Any person filing a false certificate shall be liable to the department for all taxes imposed by this division upon the merchant or seller, together with any interest or penalties thereon, by reason of the sale or sales of fuel and supplies applicable to such false certificate. If a merchant or seller of fuel and supplies secures the certificate herein mentioned, properly completed, such merchant or seller shall not be liable for the taxes imposed by this division, if such merchant or seller had no knowledge that such certificate was false when it was filed with such merchant or seller.

(13) Property stored, used or consumed by the State of Alabama, by the counties within the state or by incorporated municipalities of the State of Alabama.

(14) The use, storage or consumption of materials, equipment and machinery which, at any time, enter into and become a component part of ships, vessels, towing vessels or barges, or drilling ships, rigs or barges, or seismic or geophysical vessels, other watercraft and commercial fishing vessels of over five tons load displacement as registered with the U.S. Coast Guard and licensed by the State of Alabama Department of Conservation and Natural Resources.

(15) The use, storage or consumption of fuel oil purchased as fuel for kilns used in manufacturing establishments.

(16) Tangible personal property stored, used or consumed by county and city school boards, independent school boards and all educational institutions and agencies of the State of Alabama, the counties within the state or any incorporated municipality of the State of Alabama.

(17) The storage, use or consumption of railroad cars, vessels, and barges and commercial fishing vessels of over five tons load displacement as registered with the U.S. Coast Guard and licensed by the State of Alabama Department of Conservation and Natural Resources when purchased from the manufacturers or builders thereof.

(18) The storage, use or consumption of all devices or facilities, and all identifiable components thereof or materials for use therein, used or placed in operation primarily for the control, reduction or elimination of air or water pollution, and the storage, use or consumption of all identifiable components of or materials used or intended for use in structures built primarily for the control, reduction or elimination of air or water pollution.

(19) When dealers or distributors use parts taken from stocks owned by them in making repairs without charge for such parts to the owner of the property required pursuant to warranty agreements entered into by manufacturers, such use shall not constitute taxable sales to the manufacturers, distributors or to the dealers, under this article, or under any county use tax law.

(20) The storage, use or other consumption in this state of religious magazines and publications. For the purpose of this subdivision the words 'religious magazines and publications' shall be construed to mean printed or illustrated lessons, notes and explanations distributed by churches or other religious organizations free of charge to pupils or students in Sunday schools, Bible classes or other educational facilities established and maintained by churches or similar religious organizations in this state.

(21) The storage, use or other consumption of wrapping paper and other wrapping materials when used in preparing poultry or poultry products for delivery, shipment or sale by the producer, processor, packer or seller of such poultry or poultry products including pallets used in shipping poultry and egg products, paper or other materials used for lining boxes or other containers in which poultry or poultry products are packed together with any other materials placed in such containers for the delivery, shipment or sale of poultry or poultry products.

(22) The storage, use or other consumption of all antibiotics, hormones and hormone preparations, drugs, medicines or medications, vitamins, minerals or other nutrients and all other feed ingredients including concentrates, supplements and other feed ingredients when such substances are used as ingredients in mixing and preparing feed for livestock and poultry. Such exemption herein granted shall be in addition to exemptions now provided by law for feed for livestock and poultry, but not including prepared foods for dogs and cats.

(23) The use of seedlings, plants, shoots, and slips which are to be used for planting vegetable gardens or truck farms. Nothing herein shall be construed to exempt, or exclude from the computation of the tax levied, assessed or payable, the use of plants, seedlings, shoots, slips, nursery stock and floral products except as hereinabove exempted.

(24) Fabricated steel tube sections, when produced and fabricated in this state by any person, firm or corporation, for any vehicular tunnel for highway vehicular traffic, when sold by the manufacturer or fabricator thereof, and also steel which enters into and becomes a component part of such fabricated steel tube sections of said tunnel, shall be exempted from the provisions of this article and from the computation of the amount of the tax levied, assessed or payable under this article.

(25) The storage, use or other consumption of herbicides for agricultural uses by whomsoever sold. The term 'herbicides' as used in this subdivision means any substance or mixture of substances intended to prevent, destroy, repel or retard the growth of weeds or plants. It shall include preemergence herbicides, postemergence herbicides, lay-by herbicides, pasture herbicides, defoliant herbicides and desiccant herbicides.

(26) The Alabama Chapter of the Cystic Fibrosis Research Foundation, and the Jefferson Tuberculosis Sanatorium and any of their departments or agencies, heretofore or hereafter organized and existing in good faith in the State of Alabama for purposes other than for pecuniary gain and not for individual profit, shall be exempted from the payment of the state use tax levied under this article.

(27) Fuel for use or consumption aboard commercial fishing vessels are hereby exempt from the payment of the state use tax levied under this article, or levied under any county or municipal use tax law.

The words 'commercial fishing vessels' shall mean vessels whose masters and owners are regularly and exclusively engaged in fishing as their means of livelihood.

(28) The storage, use or withdrawal of sawdust, wood shavings, wood chips and other like materials purchased for use as 'chicken litter' by poultry producers and poultry processors shall be exempt under this article.

(29) The storage, use or other consumption of all antibiotics, hormones and hormone preparations, drugs, medicines and other medications including serums and vaccines, vitamins, minerals or other nutrients for use in the production and growing of fish, livestock and poultry are hereby specifically exempted from the payment of the state use tax levied by this article. Such exemption as herein granted shall be in addition to the exemptions now provided by law for feed for fish, livestock and poultry, and in addition to the exemptions now provided by law for the above-enumerated substances and products when mixed and used as ingredients in fish, livestock and poultry feeds.

(30) All medicines prescribed by physicians for persons who are 65 years of age or older, and when said prescriptions are filled by licensed pharmacists, shall be exempted from the operation of the state use tax law levied by this article, or by any county or municipal use tax law. The exemptions provided in this subdivision shall not apply to any medicine purchased in any manner other than as is herein provided.

For the purposes of this subdivision, proof of age may be accomplished by filing with the dispensing pharmacist any one or more of the following documents:

a. The name and claim number as shown on a 'Medicare' card issued by the United States Social Security Administration.

b. A certificate executed by any adult person having knowledge of the fact that the person for whom the medicine was prescribed is not less than 65 years of age.

c. An affidavit executed by any adult person having knowledge of the fact that the person for whom the medicine was prescribed is not less than 65 years of age.

For the purposes of this subdivision any person filing a false proof of age shall be guilty of a misdemeanor and upon conviction thereof shall be punished by a fine of $100.

(31) All diesel fuel used for off-highway agricultural purposes.

(32) The storage, use or other consumption of any aircraft and replacement parts, components, systems, supplies and sundries affixed or used on said aircraft and ground support equipment and vehicles used by or for the aircraft by a certificated or licensed air carrier with a hub operation within this state, for use in conducting intrastate, interstate or foreign commerce for transporting people or property by air. For the purpose of this subdivision, the words 'hub operation within this state' shall be construed to have all of the following criteria:

a. There originates from the location 15 or more flight departures and five or more different first-stop destinations five days per week for six or more months during the calendar year; and

b. Passengers and/or property are regularly exchanged at the location between flights of the same or a different certificated or licensed air carrier.

(33) The storage, use or other consumption of hot or cold food and beverage products by a certificated or licensed air carrier with a hub operation within this state, for use in conducting intrastate, interstate or foreign commerce for transporting people or property by air. For the purpose of this subdivision, the words 'hub operation within this state' shall be construed to have all of the following criteria:

a. There originates from the location 15 or more flight departures and five or more different first-stop destinations five days per week for six or more months during the calendar year; and

b. Passengers and/or property are regularly exchanged at the location between flights of the same or a different certificated or licensed air carrier.

(34) The storage, use or other consumption of the following:

a. Drill pipe, casing, tubing, and other pipe used for the exploration for or production of oil, gas, sulphur, or other minerals in offshore federal waters.

b. Tangible personal property exclusively used for the exploration for or production of oil, gas, sulphur, or other minerals in offshore federal waters.

c. Fuel and supplies for use or consumption aboard boats, ships, aircraft and towing vessels when used exclusively in transporting persons or property between a point in Alabama and a point or points in offshore federal waters for the exploration for or production of oil, gas, sulphur, or other minerals in offshore federal waters.

d. Drilling equipment that is used for the exploration for or production of oil, gas, sulphur, or other minerals, that is built for exclusive use outside this state and that is, on completion, removed forthwith from this state.

e. All domestically mined or produced coal, coke, and coke by-products used in cogeneration plants in Alabama.

The delivery of items exempted by this subdivision to the purchaser or lessee in this state does not disqualify the purchaser or lessee from the exemption if the property is removed from the state by any means, including by the use of the purchaser's or lessee's own facilities.

The shipment to a place in this state of equipment exempted by this subdivision for further assembly or fabrication does not disqualify the purchaser or lessee from the exemption if on completion of the further assembly or fabrication the equipment is removed forthwith from this state. This subdivision applies to a sale that may occur when the equipment exempted is further assembled or fabricated if on completion the equipment is removed forthwith from this state.

(35) The storage, use, or other consumption of tangible personal property brought into this state by a company which is actively engaged in the production of an approved project authorized by the Alabama Film Office and which meets criteria established by the Alabama Film Office through the Alabama Administrative Procedure Act.

There is hereby levied and imposed an excise tax on the storage, use or other consumption in this state of any machine, machinery, or equipment which is used in planting, cultivating and harvesting farm products, or used in connection with the production of agricultural produce or products, livestock or poultry, or farms, and the parts of such machines, machinery or equipment, attachments and replacements therefor which are made or manufactured for use on or in the operation of such machine, machinery or equipment, and which are necessary to and customarily used in the operation of such machine, machinery or equipment, which is purchased at retail after October 1, 1966, for storage, use or other consumption in this state, at the rate of one and one-half percent of the sales price of such property or the amount of tax collected by the seller, whichever is greater, provided, however, when the seller follows the Department of Revenue's suggested use tax brackets and his records prove that his following said brackets resulted in a net undercollection of tax for the month, he may report the tax due or tax collected whichever is less, regardless of whether the retailer is or is not engaged in business in this state. The tax herein levied and imposed shall be in lieu of the excise tax levied and imposed by Section 40-23-61; provided, that the one and one-half percent rate herein prescribed with respect to parts, attachments and replacements shall not apply to any automotive vehicle or trailer designed primarily for public highway use except farm trailers used primarily in the production and harvesting of agricultural commodities.

Every person storing, using or otherwise consuming in this state such tangible personal property purchased at retail shall be liable for the tax imposed by this article, and the liability shall not be extinguished until the tax has been paid to this state; provided, that a receipt from a retailer maintaining a place of business in this state or a retailer authorized by the Department of Revenue under such rules and regulations as the Commissioner of Revenue may prescribe, to collect the tax imposed hereby and who shall for the purpose of this article be regarded as a retailer maintaining a place of business in this state, given to the purchaser in accordance with the provisions of Section 40-23-67, shall be sufficient to relieve the purchaser from further liability for a tax to which such receipt may refer.

Section 40-23-63 shall be enforced by the Commissioner of Revenue and state Department of Revenue in the same way, and subject to the same rules and regulations as the state use tax is enforced as provided in this article; and the administrative and enforcement provisions of this article shall be applicable to the enforcement of Section 40-23-63 to the same extent as in the collection and enforcement of the state use tax.

If a sales or use tax equal to or greater than the amount of the Alabama tax is paid to another state under a requirement of law, the property which is the subject of such tax when imported for use or consumption in Alabama is not subject to the use tax, which is required to be paid by Section 40-23-61. If the amount of tax paid to the other state is less than the Alabama tax, then the difference between the out-of-state tax and the Alabama tax must be paid. No credit will be allowed for taxes paid on tangible personal property in any state which does not give credit for taxes paid on similar property in Alabama. The Commissioner of Revenue shall require such proof of payment of tax to another state as he deems to be necessary and proper.

The Commissioner of Revenue shall adopt such rules and regulations as he deems necessary for the proper administration of this section.

Every seller engaged in making retail sales of tangible personal property for storage, use or other consumption in this state, who:

(1) Maintains a place of business;

(2) Qualifies to do business;

(3) Solicits and receives purchases or orders by agent or salesman; or

(4) Distributes catalogs or other advertising matter and by reason thereof receives and accepts orders from residents, within the State of Alabama,

shall register with the department and give the name and address of each agent operating in this state, the location of any and all distribution or sales houses or offices or other places of business in this state, the number of persons in Alabama to whom catalogs are delivered, by mail or otherwise, the number of persons in Alabama from whom orders are received, by mail or otherwise, together with the amount of the purchase price charged and received and such other information as the department may require with respect to matters pertinent to the enforcement of this article; provided, that this section shall not apply to a seller, holding a license obtained pursuant to the provisions of Division 1 of Article 1 of this chapter.

Every such seller making sales of tangible personal property for storage, use or other consumption in this state, not exempted under the provisions of Section 40-23-62, shall at the time of making such sales or, if the storage, use or other consumption of the tangible personal property is not then taxable hereunder, at the time such storage, use or other consumption becomes taxable hereunder, collect the tax imposed by this article from the purchaser, and give to the purchaser a receipt therefor in the manner and form prescribed by the department. The tax required to be collected by the seller from the purchaser shall be displayed separately from the list, advertised in the premises, marked or other price on the sales check or other proof of sales. It shall be unlawful for any such seller to advertise or hold out or state to the public or to any customer, directly or indirectly, that the tax or any part thereof imposed by this article will be assumed or absorbed by the seller or that it will not be added to the selling price of the property sold, or if added that it or any part thereof will be refunded. Any person violating any of the provisions of this section shall be guilty of a misdemeanor. The tax herein required to be collected by the seller shall constitute a debt owned by the seller to this state.

(a) Except as otherwise provided in subsection (f), the tax imposed by this article shall be due and payable to the department monthly on or before the 20th day of the month next succeeding each month during which the storage, use or other consumption of tangible personal property became taxable hereunder.

(b) Every seller or person engaged in making retail sales of tangible personal property for storage, use or other consumption in this state, who alternatively:

(1) Maintains, occupies, or uses, permanently or temporarily, directly or indirectly, or through a subsidiary, or agent by whatever name called, an office, place of distribution, sales or sample room or place, warehouse or storage place or other place of business;

(2) Qualifies to do business or registers with the state to collect the tax levied by this chapter;

(3) Employs or retains under contract any representative, agent, salesman, canvasser, solicitor or installer operating in this state under the authority of the person or its subsidiary for the purpose of selling, delivering, or the taking of orders for the sale of tangible personal property or any services taxable under this chapter or otherwise solicits and receives purchases or orders by any agent or salesman;

(4) Solicits, pursuant to a contract with a broadcaster or publisher located in this state, orders for tangible personal property by means of advertising which is disseminated primarily to consumers located in this state and only secondarily to bordering jurisdiction;

(5) Solicits orders for tangible personal property by mail if the solicitations are substantial and recurring and if the retailer benefits from any banking, financing, debt collection, telecommunication, or marketing activities occurring in this state or benefits from the location in this state of authorized installation, servicing, or repair facilities. Notwithstanding the previous sentence, a seller who contracts with a provider of call center services shall not be deemed to benefit from telecommunication activities occurring in this state or from the location in this state of authorized installation, servicing, or repair facilities merely as a result of contracting for and receiving only call center services from a call center located in this state. The preceding sentence shall only apply for call centers, as authorized or specified in Division 3 of Article 17 of Chapter 10 of Title 41, and placed in service in this state on or before October 1, 2003;

(6) Has, under a franchise or licensing arrangement or contract, a franchisee or licensee operating under its trade name;

(7) Solicits, pursuant to a contract with a cable television operator located in this state, orders for tangible personal property by means of advertising which is transmitted or distributed over a cable television system in this state;

(8) Solicits orders for tangible personal property by means of a telecommunication or television shopping system which is intended by the person to be broadcast by cable television or other means of broadcasting, to consumers located in this state;

(9) Maintains any other contact with this state that would allow this state to require the seller to collect and remit the tax due under the provisions of the Constitution and laws of the United States; or

(10) Distributes catalogs or other advertising matter and by reason thereof receives and accepts orders from residents, within the State of Alabama,

(c) The return shall be accompanied by a remittance of the amount of tax herein required to be collected by the seller during the period covered by the return. Returns shall be signed by the seller or his duly authorized agent but need not be verified by oath.

(d) Except as otherwise provided in subsection (f), every person purchasing tangible personal property, the storage, use, or other consumption of which is subject to the tax imposed by this article, and who has not paid the tax due with respect thereto to a seller required or authorized hereunder to collect the tax, shall on or before the 20th day of the month following the close of each month file with the department a return for the preceding month in such form as may be prescribed by the department showing the total sales price of the tangible personal property purchased by such person, the storage, use, or other consumption of which became subject to the tax imposed by this article during the preceding month and with respect to which the tax was not paid to a seller required or authorized hereunder to collect the tax, and such other information as the department may deem necessary for the proper administration of this article. The return shall be accompanied by a remittance of the amount of tax herein imposed and not paid to a seller required or authorized hereunder to collect the tax during the period covered by the return. Returns shall be signed by the person liable for the tax or his duly authorized agent, but need not be verified by oath.

(e) For the purpose of the proper administration of this article and to prevent evasion of the tax and the duty to collect the same herein imposed, it shall be presumed that tangible personal property sold by any person for delivery in this state is sold for storage, use, or other consumption in this state unless the person selling such property has taken from the purchaser a certificate signed by and bearing the name and address of the purchaser to the effect that the property was purchased for resale, and it shall be further presumed that tangible personal property shipped to this state by the purchaser thereof was purchased from a retailer on and after March 1, 1939, for storage, use, or other consumption in this state. Except as otherwise provided in subsection (f), any seller making cash and credit sales for storage, use, or other consumption in Alabama may report such cash sales and shall thereafter include in each monthly report all credit collections made during the preceding month, and shall pay the taxes due thereon at the time of filing such report, but in no event shall the gross proceeds of credit sales be included in the measure of the tax to be paid until collections of such credit sales shall have been made.

(f) When the total state use tax for which any person is liable under this division averages less than two hundred dollars ($200) per month during the preceding calendar year, a quarterly return and remittance in lieu of the monthly returns may be made, by election of the taxpayer to the department, on or before the 20th day of the month next succeeding the end of the quarter for which the tax is due under such rules and regulations as may be prescribed by the department. The election to file quarterly shall be made in writing no later than February 20 of each year and shall be filed with the department. Notwithstanding the above, no state use tax return shall be due until January 20 of each year unless the total state use tax for which any person is liable under this division during the preceding calendar year exceeds ten dollars ($10).

The department for good cause may extend for not to exceed 30 days the time for making any return required under the provisions of this article.

The department, whenever it deems it necessary to insure compliance with the provisions of this article, may require any person subject thereto to deposit with it such security as the department may determine. The same may be sold by the department at public auction if it becomes necessary so to do in order to recover any tax, or any amount herein required to be collected, interest or penalty due. Notice of such sale may be served upon the person who deposited such security personally or by certified or registered mail; if by mail, service shall be made by certified or registered notice, return receipt requested, addressed to the person at his address as the same appears in the records of the department. Upon any such sale, the surplus, if any, above the amounts due under this article shall be returned to the person who deposited the security.

A discount of three percent of the taxes levied by this article due and payable to the state shall be allowed to the seller or vendor; provided, that the taxes due by such seller are paid before same becomes delinquent, as in this article provided.

Effective June 1, 2001, the Governor may, by executive order, authorize the Department of Revenue to provide by proper rules and regulations for the allowance of a discount, not to exceed three percent (3%) of the taxes levied by this article due and payable to the state by the seller or vendor; provided that the taxes due by such seller are paid before same becomes delinquent, as in this article provided.

For any taxes collected by the seller or vendor on or after June 1, 2001, the Governor may, by executive order, authorize the Department of Revenue to provide by proper rules and regulations for a maximum discount amount or rate for each seller or vendor regardless of the number of locations of that seller or vendor within the state.

Beginning June 1, 2001 until September 30, 2002 the balance of the sum equal to the increase in receipts due to any maximum discount amount or rate as provided herein shall first be credited to the Department of Conservation and Natural Resources for (1) the sum equal to the interest the Game and Fish Fund and the Seafoods Fund would have earned on the sale of hunting and/or fishing licenses, which is required to be credited to the funds by Federal Regulation 50 CFR 80.4a(3), and (2) a sum equal to one million dollars ($1,000,000) for the Coastal Programs; and any remaining balance shall be credited to the State General Fund.

Beginning October 1, 2002 and each fiscal year thereafter the lesser of five hundred thousand dollars ($500,000) or the entire amount of the sum equal to the increase in receipts due to any maximum discount amount or rate as provided herein shall be credited to the Department of Human Resources and expended for the foster children program. Any remaining balance shall first be credited to the Department of Conservation and Natural Resources to be allocated in whole or in part to the following: (1) To the Game and Fish Fund and the Seafoods Fund in an amount at least equal to the interest that each fund would have earned on the sale of hunting and/or fishing licenses which is required to be credited to the funds by the Federal Regulation 50 CFR 80.4a(3), and (2) to the Coastal Programs, a sum equal to one million dollars ($1,000,000); and any remaining balance shall be credited to the State General Fund.

If any retailer liable for an amount of tax herein required to be collected shall sell out his business or stock of goods or shall quit the business, he shall make a final return and payment within 15 days after the date of selling or quitting business. His successor, successors or assigns, if any, shall be required to withhold sufficient of the purchase money to cover the amount of such taxes herein required to be collected and interest or penalties due and unpaid until such time as the former owner shall produce a receipt from the department showing that they have been paid, or a certificate stating that no amount is due. If the purchaser of a business or stock of goods shall fail to withhold purchase money as above provided, he shall be personally liable for the payment of the amount of taxes herein required to be collected by the former owner, interest and penalties accrued and unpaid by any former owner, owners or assignors.

Every seller and every person storing, using or otherwise consuming in this state tangible personal property purchased from a retailer shall keep such records, receipts, invoices and other pertinent papers in such form as the department may require. The department or any person authorized in writing by it is hereby authorized to examine the books, papers, records and equipment of any person selling tangible personal property and any person liable for the tax imposed by this article and to investigate the character of the business of any such person in order to verify the accuracy of any return made, or if no return was made by such person, to ascertain and determine the amount required to be paid hereunder.

The department is hereby charged with the enforcement of the provisions of this article and is hereby authorized and empowered to prescribe, adopt and enforce rules and regulations relating to the administration and enforcement of the provisions of this article and to employ such accountants, auditors, investigators, assistants and clerks as may be determined to be necessary for the efficient administration of this article, under the provision of the merit system.

All taxes, fees, interest or penalties imposed and all amounts of tax herein required to be paid to the state under this article must be paid to the Department of Revenue at Montgomery, Alabama, with remittance payable to the Treasurer of Alabama. Such amount of money as shall be appropriated for each fiscal year by the Legislature to the Department of Revenue with which to pay the salaries, the cost of operation and the management of the said department shall be deducted, as a first charge thereon, from the taxes collected under and pursuant to Section 40-23-61; provided, that the expenditure of said sum so appropriated shall be budgeted and allotted pursuant to Article 4 of Chapter 4 of Title 41, and limited to the amount appropriated to defray the expenses of operating said department for each fiscal year. The balance of the tax collected under and pursuant to said Section 40-23-61 shall remain in the State Treasury to the credit of the Education Trust Fund and shall be withdrawn as other moneys in said fund.

Any seller or other person failing or refusing to furnish any return hereby required to be made, or failing or refusing to furnish a supplemental return or other data required by the department, or rendering a false or fraudulent return, shall be guilty of a misdemeanor and subject to a fine of not exceeding $500 for each such offense. Any person required to make, render, sign or verify any report as aforesaid who makes any false or fraudulent return, with intent to defeat or evade the determination of an amount due required by law to be made shall be guilty of a misdemeanor, and shall for each such offense be fined not less than $300 and not more than $5,000 or be imprisoned not exceeding one year in the county jail or be subject to both said fine and imprisonment in the discretion of the court. Any violation of the provisions of this article, except as otherwise herein provided, shall be a misdemeanor and punishable as such.

As used in this article, unless the context otherwise requires, the following terms shall have the following meanings:

(1) JUDGE OF PROBATE. The judge of probate or other licensing authority in a county.

(2) LICENSING OFFICIAL. The county official required by law to issue licenses for any automotive vehicle, motorboat, truck trailer, trailer, semitrailer, or travel trailer taxed under this article.

(3) MOTOR BOAT. A boat with one or more built-in motors or a boat with an outboard type motor or motors attached thereto by attachments intended to be permanent rather than readily removable and which motor or motors are controlled with remote controls built on or into the hull of the boat.

(a) There is hereby levied and shall be collected as herein provided a sales tax upon every person, firm, or corporation purchasing within this state, other than at wholesale, any automotive vehicle, motorboat, truck trailer, trailer, semitrailer, or travel trailer required to be registered or licensed with the judge of probate of any county in this state from any person, firm or corporation that is not a licensed dealer engaged in selling automotive vehicles, motorboats, truck trailers, trailers, semitrailers, or travel trailers in an amount equal to two percent of the purchase price.

(b) Commencing October 1, 1989, there is hereby levied and shall be collected, as provided for under the provisions of subsection (e) of Section 40-23-104, a sales tax in the amount equal to two percent of the purchase price on the sale of any manufactured home as defined in subsection (n) of Section 40-12-255, purchased other than at wholesale in this state from any person, firm, or corporation which is not a licensed dealer engaged in selling manufactured homes.

(c) In addition to the two percent state sales tax, there shall also be collected any applicable municipal gross receipts or sales taxes and county sales taxes on the vehicles listed in subsection (a) of this section authorized by general or local law for the local taxing jurisdiction in which the purchaser resides or, if a business, the business location. Penalties for falsifying or misrepresenting the correct taxing jurisdictions shall be as provided in subsection (b) of Section 40-29-115.

(a) There is hereby levied and shall be collected as herein provided, in lieu of the excise tax levied by subsection (c) of Section 40-23-61, an excise or use tax upon every person, firm, or corporation purchasing outside the state, other than at wholesale, any automotive vehicle, motorboat, truck trailer, trailers, semitrailer, or travel trailer, required to be registered or licensed with the judge of probate of any county in this state for use, storage, or other consumption within this state a tax in an amount equal to two percent of the purchase price.

(b) Commencing October 1, 1989, there is hereby levied and shall be collected, as provided for under the provisions of subsection (e) of Section 40-23-104, an excise or use tax in the amount equal to two percent of the purchase price on the storage, use, or other consumption in the state of any manufactured home as defined in subsection (n) of Section 40-12-255 purchased other than at wholesale outside the state on or after October 1, 1989, for storage, use, or other consumption in this state.

(c) In addition to the two percent state use tax, there shall also be collected any applicable municipal and county use tax authorized by general or local law for the local taxing jurisdiction in which the purchaser resides, or, if a business, the business location on any automotive vehicle, motorboat, truck trailer, trailer, semitrailer, or travel trailer purchased from dealers doing business outside the State of Alabama and from licensed Alabama dealers where municipal and county sales taxes were not collected at the time of purchase. Penalties for falsifying or misrepresenting the correct taxing jurisdiction shall be as provided in subsection (b) of Section 40-29-115.

Where any used automotive vehicle, motorboat, truck trailer, semitrailer, or house trailer is taken in trade or in a series of trades as a credit or part payment on the sale of a new or used automotive vehicle, motorboat, truck trailer, semitrailer, or house trailer, the tax levied in this article shall be paid on the net difference, that is, the price of the new or used vehicle, motorboat, or trailer sold less the credit for the used vehicle, motorboat, or trailer taken in trade.

(a) The licensing official shall collect all of the following:

(1) The taxes levied by this article.

(2) The municipal gross receipts or sales taxes and county sales taxes authorized by general or local law on sales made by a person or firm other than a licensed dealer.

(3) The municipal and county use taxes authorized by general or local law on sales made by dealers doing business outside the State of Alabama and on sales made by licensed Alabama dealers where municipal and county sales taxes were not collected at the time of purchase.

(4) The state use tax on any such automotive vehicle, motorboat, truck trailer, trailer, semitrailer, or travel trailer required to be registered or licensed by the judge of probate.

(b) The licensing official shall require, as proof of the purchase price of the automotive vehicle, motorboat, truck trailer, trailer, semitrailer, or travel trailer to be taxed, when purchased from a licensed dealer in this state, documentation of the price upon which any state, county, or municipal sales tax was paid and which reflects the amount of such state, county, or municipal sales tax paid and any other evidence of the purchase price as shall be prescribed by the Department of Revenue. All licensed dealers in this state shall furnish to the purchaser of any of the vehicles documentation showing the amount and rate of sales or gross receipts tax collected at the time of purchase for the state and for the municipality and county where the sale was made.

(c) The licensing official shall require, as proof of the purchase price of any other automotive vehicle, motorboat, truck trailer, trailer, semitrailer, or travel trailer to be taxed, the presentment of a sworn report by the purchaser reflecting such purchase price on a form to be provided by the Department of Revenue accompanied by a properly executed bill of sale or other satisfactory evidence prescribed by the Department of Revenue.

(d) In lieu of the requirements contained in subsection (c) of this section, the purchaser may stipulate to the licensing official that the purchase price of the automotive vehicle, motorboat, truck trailer, trailer, semitrailer, or travel trailer to be taxed is equivalent to a standard value for the year, make, and model established by the Department of Revenue for the taxable item. The purchase price so stipulated shall be conclusively presumed to be the purchase price of the item for all purposes under this article.

(e) Before the registration of or licensing of any such automotive vehicle, motorboat, truck trailer, trailer, semitrailer, or travel trailer, the licensing official shall require proof of payment of the tax levied under this article deemed necessary and proper.

(f) Before the decal, which is provided for by Section 40-7-1, is issued to evidence payment of the ad valorem tax due on a manufactured home in this state, and before any homestead exemption is granted for a manufactured home, payment of the tax levied either under Section 40-23-101(b) or Section 40-23-102(b) shall be made to the licensing official of the county in which the manufactured home will be initially sited as evidenced by a properly executed bill of sale. If, however, the sales or use tax specified in either Sections 40-23-101(b) or 40-23-102(b) has been paid prior to the due date of the ad valorem tax on the manufactured home, then proof of payment for the sales or use taxes will be evidenced by a receipt and shall be deemed acceptable by the licensing official.

(g) Any law to the contrary notwithstanding, the licensing official shall remit all county and municipal sales, gross receipts, and use taxes collected directly to the appropriate county or municipal tax recipient as otherwise provided by law, within 20 days following the last day of the month in which those taxes were collected. In addition to all other penalties, the penalty for failure to comply with this section shall be as provided in Chapter 29, Article 6.

Except as herein otherwise provided, the tax herein shall be subject to all definitions, exceptions, exemptions, proceedings, requirements, rules, regulations, provisions, penalties, fines, punishments, deductions, and discounts in accordance with the provisions of Sections 40-23-1 through 40-23-36 and the assessment and refund procedures set out in Chapter 2A of this title.

If a sales or use tax equal to or in excess of the amount of the tax imposed by this article is paid to another state under a requirement of the law of that state, the automotive vehicle, motorboat, truck trailer, semitrailer, or house trailer which is the subject of the tax when it is imported for use, storage, or consumption in this state shall not be subject to the use tax imposed by this article. If the amount of the tax paid to another state is less than that imposed by this article, then the difference shall be paid. However, no credit shall be allowed for taxes paid on any automotive vehicles, motorboats, truck trailers, semitrailers, or house trailers in any other state which does not extend credit for taxes paid on similar property in Alabama. The licensing official shall require proof of payment of tax in another state deemed necessary and proper.

For making the collection of taxes levied under authority of this article, the licensing official shall be entitled to a fee in an amount equal to five percent of all revenue collected under this article each month. The fee shall be for the use of the licensing official. The fee shall be deducted from the tax collections each month and the remainder of the collections shall be remitted to the Department of Revenue. Notwithstanding the foregoing, the fee shall be disallowed unless the collections are remitted to the Department of Revenue within the time allowed by law. In all counties where the licensing official is paid on a salary instead of a fee basis, all fees allowed under the terms of this section to be paid to the licensing official shall be paid, by the licensing official, into the county treasury, or to the official performing the duties of county treasurer.

The licensing official shall, after the deduction of the fee as provided in Section 40-23-107, remit the revenue collected hereunder to the Department of Revenue for deposit as follows:

Of the total two cents ($.02) tax on each dollar of sale, 58% of the total tax generated shall be deposited to the credit of the Education Trust Fund; and 42% of the total tax generated shall be deposited to the credit of the State General Fund. Provided, however, of the total of those funds derived from the state sales and use taxes collected on motorboats, 50 percent shall be paid to the State General Fund and 50 percent to the Education Trust Fund.

Any person failing to pay the tax levied under the provisions of this article shall be guilty of a Class C misdemeanor and upon conviction thereof, be punished as prescribed by law for such offense.

The Department of Revenue is authorized to adopt, promulgate, and enforce reasonable rules and regulations relating to the administration and enforcement of Article 3, commencing with Section 40-23-100, Chapter 23, Title 40, not in conflict with the specific provisions hereof.

Any law to the contrary notwithstanding, any retailer, who relies in good faith on any state sales tax exemption number that has been authorized by the state Revenue Department and the exemption claim has been made on a form provided or approved for use by the Revenue Department, when a state tax exemption number holder violates the tax exempt privilege or uses such number illegally, shall not subsequently be liable to the state Revenue Department or others for the sales tax on purchases.

The state Revenue Department is authorized to use its powers and responsibilities, in accord with the general laws of this state, to collect or recover any sales taxes due on purchases made illegally with state tax exempt numbers from the party or parties using such number and the person or persons who benefited from such illegal use of the tax exempt number, if the retailers acted in good faith and reasonably believe the purchase was legal.

Any gross receipts tax imposed by a municipality or county on the sale of gasoline and motor fuel shall be based on the gross receipts from the sale of gasoline and motor fuel minus any taxes imposed on the sale of gasoline and motor fuel by the state, federal, or local governments.

(a) Effective for the first full fiscal year following the enactment of legislation by the U.S. Congress that provides for states to enforce collection of a sales or use tax levy on remote sellers, and the collection of such additional revenues, the Commissioner of the Department of Revenue shall certify to the Finance Director and the Chairs of the House of Representatives Committee on Ways and Means-Education and the Senate Finance and Taxation Committee-Education the amount of estimated increase in sales and use tax revenues attributed to the tax collected on such previously uncollected remote sales transactions. The certified increase in sales and use taxes due to the State of Alabama on such remote sales shall be deposited within 60 days of September 30 of each year into the Education Trust Fund Rainy Day Account, created by a constitutional amendment proposed in the 2001 Fourth Special Session, in an amount that maintains six percent of the previous year's Education Trust Fund appropriations. In the event withdrawals are made from the Education Trust Fund Rainy Day Account, receipts shall be deposited into the fund until the six percent level is reached and maintained. Any other law to the contrary notwithstanding, any funds deposited into the Education Trust Fund Rainy Day Account shall not be included in the revenue base to compute the growth calculation as provided for in the national average pay legislation for teachers enacted in the 2000 Regular Session.

(b) After the required deposits are made into the Education Trust Fund Rainy Day Account pursuant to the provisions of subsection (a), the remaining increase in sales and use tax revenues attributed to the tax collected on previously uncollected remote sales transactions that are not necessary to replenish or maintain the six percent reserve in the Education Trust Fund Rainy Day Account shall be deposited into the State General Fund Rainy Day Fund (Fund No. 1100) until such fund reaches and maintains the amount of six percent of the previous year's State General Fund appropriations. In the event withdrawals are made from the State General Fund Rainy Day Fund, receipts shall be deposited into such fund until the six percent reserve level is reached and maintained.

(c) Any remaining proceeds from the increase in sales and use tax revenues attributed to the tax collected on previously uncollected remote sales transactions after the deposits required in subsection (a) and subsection (b) shall be deposited to the Education Trust Fund.

(d) In the event that Congress authorizes the collection from remote sellers of previously uncollected revenue on remote sales by changing the base from a tax on sales to a tax or fee on a different base, any new revenue generated shall be distributed as provided in this section.

(e) This section shall apply only to the distribution of the state sales and use tax. Taxes due to municipalities and counties shall be distributed as provided under the authority levying such local taxes.

The Legislature finds that the State of Alabama should participate in negotiations with other states to simplify and modernize tax administration in order to substantially reduce the burden of tax compliance for all sellers, to reduce the costs of the administration, and to provide a means by which sales and use taxes may be levied and collected from those remote sellers located outside of this state which deliver inside this state items sold through catalogs, Internet, and other means.

As used in this division, the following terms shall have the following meanings:

(1) AGREEMENT. An interstate agreement for simplification and uniformity of taxation among member states in order to reduce the burden of tax compliance for sellers and for all types of commerce and to provide a means by which sales and use taxes may be collected from remote sellers.

(2) REMOTE SELLER. An individual, trust, estate, fiduciary, partnership, limited liability company, limited liability partnership, corporation, or other similar legal entity that sells tangible personal property or a service, but does not have nexus in this state.

(3) SALES AND USE TAXES. Sales and use taxes and gross receipts taxes in the nature of a sales tax imposed pursuant to Alabama law.

(4) STATE. A state of the United States and the District of Columbia.

(a) There is created a delegation to participate in multistate discussions regarding the simplification and modernization of tax administration. Delegates shall be appointed as follows:

(1) One representative of municipal government appointed by the Alabama League of Municipalities.

(2) One representative of county government appointed by the Association of County Commissions of Alabama.

(3) The Commissioner of the Alabama Department of Revenue or his or her designee.

(4) One representative of the retail community appointed by the Alabama Retail Association.

(5) One representative of the accounting profession appointed by the Alabama Society of Certified Public Accountants.

(b) Delegates shall serve at the pleasure of the appointing authority. Delegates shall be reimbursed by the State of Alabama for all reasonable and necessary expenses in the discharge of their duties.

(c) Delegates shall, by majority vote of the membership, make recommendations to the Legislature and to the Governor.

(d) The delegation shall reflect the racial and ethnic diversity of the state.

(a) Delegates shall enter into multistate discussions on behalf of the State of Alabama to consider whether the state should enter into an agreement with one or more states to do the following:

(1) Simplify and modernize tax administration in order to substantially reduce the burden of tax compliance for sellers and for all types of commerce and to provide a means by which sales and use taxes may be collected from remote sellers.

(2) Establish requirements for multistate sellers.

(b) The agreement may provide a mechanism among the member states to establish and maintain a cooperative, simplified system for the application and administration of sales and use taxes from remote sellers under the duly adopted law of each state. No law of this state, nor the application thereof, may be declared invalid as to any person or circumstance on the ground that the provision or application is inconsistent with the agreement. No provision of this division, in whole or in part, invalidates or amends any provision of law in Alabama. Implementation of any condition of any agreement, whether adopted before, at, or after membership of this state in the agreement, must be made by law enacted by the Legislature of this state.

(a) Should the enactment of a national agreement for the collection of sales and use taxes from remote sellers establish a single national tax rate on such remote sales or should the agreement provide for the State of Alabama to establish a single statewide rate on such remote sales, the proceeds shall be distributed as follows:

(1) One-half of such proceeds shall be distributed to the State of Alabama and deposited into the Education Trust Fund.

(2) One-quarter shall be distributed to the governing body of the municipality in which the delivery is made, if the delivery is made into a municipality.

(3) The remainder shall be distributed to the county governing body in the county in which the delivery is made.

(b) The tax proceeds distributed to a municipality or county shall be expended by the governing body of the municipality or county as required and provided by law for other sales and use tax proceeds levied and collected by the county or municipality including any bonded indebtedness.

(a) An out-of-state vendor has substantial nexus with this state for the collection of both state and local use tax if:

(1) The out-of-state vendor and an in-state business maintaining one or more locations within this state are related parties; and

(2) The out-of-state vendor and the in-state business use an identical or substantially similar name, tradename, trademark, or goodwill, to develop, promote, or maintain sales, or the in-state business and the out-of-state vendor pay for each other's services in whole or in part contingent upon the volume or value of sales, or the in-state business and the out-of-state vendor share a common business plan or substantially coordinate their business plans, or the in-state business provides services to, or that inure to the benefit of, the out-of-state business related to developing, promoting, or maintaining the in-state market.

(b) Two entities are related parties under this section if one of the entities meets at least one of the following tests with respect to the other entity:

(1) One or both entities is a corporation, and one entity and any party related to that entity in a manner that would require an attribution of stock from the corporation to the party or from the party to the corporation under the attribution rules of Section 318 of the Internal Revenue Code owns directly, indirectly, beneficially, or constructively at least 50 percent of the value of the corporation's outstanding stock;

(2) One or both entities is a limited liability company, partnership, estate, or trust and any member, partner, or beneficiary, and the limited liability company, partnership, estate, or trust and its members, partners, or beneficiaries own directly, indirectly, beneficially, or constructively, in the aggregate, at least 50 percent of the profits, or capital, or stock, or value of the other entity or both entities; or

(3) An individual stockholder and the members of the stockholder's family, as defined in Section 318 of the Internal Revenue Code, owns directly, indirectly, beneficially, or constructively, in the aggregate, at least 50 percent of the value of both entities' outstanding stock.