The Alabama Senate Finance and Taxation Education Committee voted to advance a bill that would exempt airports from sales and use taxation. Senate Bill 11 is sponsored by Sen. Sam Givhan, R-Huntsville, who said that historically airport authorities have been tax exempt; however, “a new interpretation of the law says that airport authority are not exempt from taxes.”
“They are creatures of the state,” Givhan said. “I am trying to restore where they were before this reinterpretation.”
According to the bill synopsis:
“Under current law, airport authorities are exempt from certain taxes. Also under current law, certain governmental entities that are otherwise sales and use tax exempt may be issued certificates of exemption from sales and use taxes on certain projects. A sales and use tax exemption certificate may be issued to certain contractors and subcontractors working on these projects. Also under current law, certain governmental entities that are otherwise exempt from sales, use, or lodgings tax are required to annually obtain a certificate of exemption. This bill would exempt airport authorities from paying sales and use taxes. Also, this bill would include airport authorities in the list of governmental entities that may be issued a certificate of exemption from sales and use taxes on certain projects and in the list of governmental entities that shall obtain an annual certificate of exemption.”
The committee gave the bill a favorable report after a short discussion. For profit businesses have to pay sales and use taxes. Governments do not. Nonprofit corporations are a mixed bag in Alabama. Some do pay sales and use taxes, while many have gotten tax exemptions from the Legislature over the years.
The Senate Finance and Taxation Education Committee is chaired by state Sen. Arthur Orr, R-Decatur. The primary purpose of the committee is to prepare the Education Trust Fund Budget, generally referred to by the acronym ETF.
Orr said that the ETF will be considered by the committee in a special meeting of the committee on Tuesday at 1 p.m. Orr hopes to have the budget on the floor of the full Senate on Thursday, March 18, which will be the 16th legislative day of the 2021 Legislative Session. The state General Fund budget has already passed the Alabama House of Representatives and is being considered by the Senate Finance and Taxation General Fund Committee. Passing the two budgets for the coming fiscal year is the primary purpose for the legislative session.
