Ala. Admin. Code r. 810-6-3-.67.02

Current through Register Vol. 43, No. 1, October 31, 2024

Section 810-6-3-.67.02 - Ships, Sales Of

(1) Vessels Over Five Tons

(a) The gross proceeds of the sale or sales of vessels, barges and commercial fishing vessels of over five tons load displacement are exempt from sales and use tax when sold by the manufacturer or builder thereof. (§§ 40-23-4(a)(12) and 40-23-62(17))

(b) 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 or commercial fishing vessels of over five tons load displacement are exempt from sales or use tax regardless of where they are constructed or built. (§§ 40-23-4(a)(13) and 40-23-62(14))

(c) The Court of Civil Appeals in the case State of Alabama v. Springle Net Shop, Inc., 351 So. 2d 608 (1977), held that nets, trawl boards, cables, and related equipment sold to commercial fishing vessels become component parts of such commercial fishing vessels. Sales of the aforementioned items to commercial fishing vessels of over five tons load displacement are exempt regardless of where the vessel was constructed or built. This exemption is not limited to new vessels but also applies to the replacement of the same items on the old vessels of over five tons load displacement.

(2) Other Commercial Fishing Vessels

(a) The gross proceeds of the sale or sales of commercial fishing vessels, machinery, or equipment, including attachments and parts, whose master or owners are regularly and exclusively engaged in commercial fishing, as defined by § 40-23-1, are subject to the reduced sales and use tax rate of 1.5%.

1. Commercial fishing, pursuant to § 40-23-1, is the activity of catching or processing fish or other seafood regularly and exclusively as a means of livelihood by a holder of a commercial license issued pursuant to Chapter 12 of Title 9. This includes shellfish farmers, shrimpers, oysterers, lobsterers, and crabbers.

2. The commercial fisherman must present a copy of the commercial license issued under Chapter 12 of Title 9 at the time of purchase to receive the reduced sales and use tax rate of 1.5% on the purchase of a commercial fishing vessel, machinery, or equipment, including attachments and parts, used in the capture, attempted capture, or processing of fish or other seafood by means of commercial fishing.

Ala. Admin. Code r. 810-6-3-.67.02

Adopted June 12, 1978. Filed September 28, 1982. Amended: Filed January 19, 1988; May 6, 1992.

Amended by Alabama Administrative Monthly Volume XLII, Issue No. 11, August 30, 2024, eff. 10/14/2024.

Author: Dan DeVaughn and Christy Vandevender

Statutory Authority:Code of Ala. 1975, §§ 40-2A-7(a)(5), 40-23-1, 40-23-4, 40-23-31, 40-23-37, 40-23-63, 40-23-83.