Alabama

Agency: Dept. of Revenue – Sales, Use & Business Tax Division

Tel. No.: (334) 242-1490

Fax No.: (334) 353-7867

1. If your State exempts fundraising sales by certain groups from sales or use taxes, please indicate which of the following are exempt in your State.

Public Schools (K-12) - Exempt

Private Schools (K-12) - Exempt

School Groups (e.g., clubs, bands, teams) - Exempt

PTAs - Exempt

PTOs - Exempt

Other (booster clubs) - Exempt

Church Groups - Not Exempt

Youth Sports League - Not Exempt

501 (c)(3) organizations - Not Exempt

501 (c)(6) organizations - Not Exempt

Other (specify:__________________)

1a. Are local sales and use taxes in your State applied to these groups in the same manner as State sales and use taxes are applied to these groups?

YES

1b. Please set forth any comments including a list of groups not listed above whose fundraising activities are exempt from sales and use taxation in your State.

Those groups marked as "exempt for fundraising purposes" are exempt pursuant to Section 40-9-31, Code of Alabama 1975. Sales and Use Tax Rule 810-6-2-.88.04 also addresses this exemption.

None of the groups marked as "not exempt" enjoy a "group" exemption. Certain individual organizations within these groups may be exempt pursuant to a special act of the Legislature. Sales and Use Tax Rule 810-6-3-.07-.05 lists charitable and nonprofit organizations that are exempt by special act.

 

2. If your State exempts fundraising sales of certain products from sales and use tax, please indicate which of the following products are exempt.

NO EXEMPTIONS ALLOWED

Candies and Confections

Cookies and Other Baked Goods

Cheese Products

Meat Products

Nuts, popcorn and other snack food

Other edible items (please identify)

Magazine subscriptions

Paper products (e.g., calendars, cards

stationery, books, gift wrap)

Decorative tins, baskets, other containers

Decorative novelties (mugs, ornaments)

Sundry items (please specify item below)

Clothing and accessories

Jewelry

Plant and seeds

Other hard good items

2a Are local sales and use taxes in your State applied to these products in the same manner as State sales and use taxes are applied to these products?

YES

2b Please set forth any comments including a list of products not listed above that are exempt from sales and use taxation for fundraising purposes in your State.

N/A

 

3. If some or all fundraising groups or products qualify for exemption from sales and use tax in your State, please indicate any exceptions to or limitations on such exemptions. (Check all that apply and specify the limitation.)

Limits on number of fundraiser events per year

Limits on duration of fundraisers

Limits on dollar amount of each item

Limits on total amounts raised per year

Other_________________________________

The groups marked as "exempt for fundraising purposes" are exempt provided the net proceeds from the fundraising sales are used solely for the benefit of the elementary or secondary school (K-12).

 

4. If some or all fundraising groups qualify for exemption from sales and use tax in your State, please set forth the procedure through which a group may establish its qualification for the exemption. Attach relevant statutes, regulations, procedures, etc.

Section 40-9-31 and Sales and Use Tax Rule 810-6-2-.88.04 do not prescribe a specific procedure to establish a group’s qualification for the exemption. A qualifying group, however, may obtain a certificate of exemption (Form STE-1) pursuant to Sales and Use Tax Rule 810-6-5-.02 as evidence of its exemption.

 

5. If some or all fundraising products qualify for exemption from sales and use tax in your State, please set forth the procedure for establishing a product’s qualification for the exemption. Attach relevant statutes, regulations, procedures, etc.

N/A

 

6. In instances where a fundraising product or group is not exempt from sales or use tax, please indicate who bears the responsibility for collecting and remitting the tax.

The fundraising group (e.g., school, PTA, church) and the company distributing goods to the fundraising group.

If the nonexempt fundraising group has a sales tax license, it is responsible for collecting and remitting the sales tax. Otherwise, the distributor must collect the sales tax from the nonexempt fundraising group and remit the tax to the Revenue Department.

 

7. In instances where a fundraising product or group is not exempt from sales or use tax, what is the basis for calculating the sales/use tax?

Price paid by fundraising group to distributor and price paid by consumer to fundraising group.

The party responsible for collecting the tax must calculate the tax on the price paid by the party to whom it makes the taxable sale.

 

8. Provide any additional information regarding the sales and use tax treatment of fundraising transactions and/or groups in your State. Also set forth any statements, disclosures, disclaimers, etc., to be provided as part of the clearinghouse regarding your state’s practices and procedures. Attach additional sheets if necessary.

N/A