We manufacture and will sell equipment that mounts to the back of a truck, used for lift containers. We paid sales tax on all the parts used to build the lift. Would we (or the buyer) need to pay sales tax on the sale of the equipment. It seems like if so those parts would be getting taxed twice? Note: We do not sell the truck, the purchaser would provide their own truck.

ANSWER

The BIDaWIZ Team's Answer:

We reviewed the Alabama state sales tax code. The end customer should be subject to sales tax for purchasing the part. However, your company should be able to claim a manufacturing exemption for purchasing the components which go into the final part that is sold. Per the Alabama Department of Revenue Regulations 810-6-1-.137 and 810-6-1-.80, materials used by manufacturers or compounders used as an ingredient or component part of their manufactured or compounded product are specifically exempt from sales and use taxation.