State and Local Tax (SALT) partner Bruce Ely was quoted in State Tax Notes regarding Alabama Gov. Robert Bentley’s issue of an executive order creating the Tax Exemption Advisory Council, which advises the Department of Revenue (DOR) on implementing a new reporting law enacted during the special legislative session.
Lawmakers in the first special session passed SB 24, which requires all persons exempt from the payment of Alabama sales, use, and lodging taxes to obtain annual certificates of exemption (COEs) from the DOR and file annual information reports unless expressly excused.
“Unless the organization holds a current COE, it will be barred from purchasing otherwise taxable items or renting a hotel room or other lodging without paying the tax -- despite its statutory exemption,” said Ely. “There are also severe penalties imposed on the nonprofit if it uses a COE in a ‘transaction not properly accounted for’ -- an undefined term.”