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Sales and Use Tax Certificate

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Application for Sales and Use Tax Certificate of Exemption

For an Industrial or Research Enterprise Project

This Certificate of Exemption will be limited to purchases which qualify for an abatement of sales and use taxes pursuant to Code of Alabama 1975, Section 40-9B-1, et seq., 40-9C-1, et seq., and/or 40-9G-1, et seq.

A general contractor must attach a letter from the private user that they will be making purchases of tangible personal property to be incorporated into the project referenced above. A contractor or subcontractor must attach a letter from the private user or the general contractor that they will be making purchases of tangible personal property to be incorporated into the project referenced above.

The undersigned hereby makes application for a certificate of exemption (form ST:Ex-A2) in accordance with the provisions of Sales and use Tax rule 810-6-4-.24 and further agrees to abide by the procedures outlined in Sales and use Tax rule 810-6-4-.24.01. See instructions for preparation of form ST:Ex-A2.

(PLEASE PRINT)

Mail or Email to:

Alabama Department of Revenue

Attn: Abatement Program Administrator

P. O. Box 327001

Montgomery, AL 36132-7001

(334) 242-1175

incentives@revenue.alabama.gov

Instructions for Preparation of Form ST:EX-A2

Sales and Use Tax Certificate of Exemption for an Industrial or Research Enterprise Project

NOTE: Exemption certificates will not be issued unless Form ST:EX-A2 is completed and all supporting documentation is provided to substantiate the issuance of the certificate of exemption.

The certificate of exemption is effective on the date the abatement is granted by resolution by the granting authority. Only those purchases made after the abatement is granted will qualify for the sales and use tax abatement.

Once the private user (company granted the abatement) has been issued a certificate of exemption, contractors may apply for a certificate of exemption to work on behalf of the project.

Private User

Please include the following documentation to make a complete abatement packet:

1) Signed ST:EX-A2 application

2) A copy of the executed abatement agreement

3) A copy of the certified resolution by the authorized public body

4) A copy of the combined application for abatement of taxes (Form CO:CAA, CAAC or CAAG).

5) Documentation that the private user is enrolled in the E-Verify program.

6) Proof that a copy of the resolution and abatement agreement was provided to the county commission by certified mail, email, or physical delivery if an authority other than the county was the granting authority.

7) Project notification with the Alabama Department of Commerce. Contact the local economic development agency for issuance of notification.

General Contractor Application

1) Signed ST:EX-A2 application. Include the name of the private user that was granted the abatement.

2) Signed letter from the private user approving the general contractor to make purchases of tangible personal property to be incorporated into the project and should include the anticipated contract completion date which will serve as the expiration date for the contractor’s certificate of exemption.

3) List of subcontractors. List must be provided on General Contractor’s letterhead. List can be updated as needed.

Subcontractor Application

1) Signed ST:EX-A2 application. Include the name of the private user that was granted the abatement by the local granting authority.

2) Signed letter from the private user or general contractor approving the subcontractor to make purchases of tangible personal property to be incorporated into the project and should include the anticipated contract completion date which will serve as the expiration date for the contractor’s certificate of exemption.

General Information

Once the exemption application is approved, an exemption certificate is mailed or emailed to the certificate holder to present to vendors for purchases of building materials, construction materials, and personal property to be incorporated into the Industrial or Research Enterprise Project related to the specific project.

All certificate holders that qualify to make purchases for an Industrial or Research Enterprise Project for qualifying projects are required to report and remit unabateable sales and use taxes, including county and municipal sales and use taxes designated for educational purposes. Unabated taxes should not be remitted to the vendor. These returns are required to be filed through the department’s online tax return filing and payment portal, My Alabama Taxes or through the local tax administering agency.

Certificates are not transferable and may only be used by the person, firm, or corporation whose name appears at the bottom of the certificate. The certificate is not authorized to be used for purchases which do not qualify for abatement.

Extension Request

Certificates of exemption can be extended by the Department of Revenue up to one year from the original expiration date stated in the abatement agreement. The extension request must be made in writing by the private user on the company letterhead and the granting authority must be copied in the letter.

If an extension request is beyond one year or if the original expiration date has been expired for over a year, the granting authority must approve the extension by sending a letter to the private user and copying the abatement administrator.

Mailing Address:

Attn: Abatement Program Administrator

Commissioner’s Office

Alabama Department of Revenue

P.O. Box 327001

Montgomery, AL 36132-7001

(334) 242-1175

Email Address:

incentives@revenue.alabama.gov

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What a Sales and Use Tax Certificate Is and when it applies

A Sales and Use Tax Certificate documents a purchaser’s claim that a specific sale is exempt from sales tax, most commonly because the item is purchased for resale, used as a manufacturing input, or falls under a statutory exemption. Sellers keep certificates as documentary proof to support exempt transactions and reduce exposure to audit assessments. States vary in form, acceptance rules, and retention periods; many permit electronic certificates and signatures under the ESIGN Act (15 U.S.C. ch. 96) and UETA. Accurate certificates help prevent retroactive tax assessments and simplify compliance.

Why a clear, complete certificate matters

A properly completed Sales and Use Tax Certificate allows eligible buyers to avoid paying sales tax at the point of sale and gives sellers documentary support to accept exempt sales. Complete certificates reduce audit risk, limit retroactive tax liability, and streamline vendor onboarding and tax reporting across jurisdictions.

Why a clear, complete certificate matters

Organizations and teams that handle these certificates

Common users include retail and wholesale sellers, purchasing teams, finance and compliance personnel, and vendors who must accept or validate exemption claims.

  • Retail sellers documenting exempt sales to resellers to avoid collector liability.
  • Wholesale distributors accepting resale certificates as proof of tax-exempt resale.
  • Purchasing departments providing certificates to sellers to confirm exemption status.

External advisors, auditors, and platform integrators also review certificates during audits, vendor onboarding, and system integrations to confirm ongoing compliance.

Step-by-step: complete and retain a Sales and Use Tax Certificate

Follow these steps to complete and retain a Sales and Use Tax Certificate so sellers can accept exempt sales with documentary proof and minimal audit exposure.

  • 01
    Gather Buyer Details: Collect legal name, address, and federal/state tax ID.
  • 02
    Identify Exemption: Select the applicable exemption reason and cite statutory basis.
  • 03
    Complete Form: Enter purchase description, quantity, value, and effective date.
  • 04
    Sign & Deliver: Obtain buyer signature and provide certificate to seller, retain copy.

Common questions about signing, accepting, and retaining certificates

Frequently asked questions about completing, signing, delivering, and retaining Sales and Use Tax Certificates for exempt transactions and audit support.


Need help? Contact support

eSignature plan comparison for submitting Sales and Use Tax Certificates

Compare basic eSignature plan features relevant to submitting Sales and Use Tax Certificates; signNow is listed first for vendor comparison.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial Yes — 7-day trial Varies by plan Varies by plan Varies by plan Varies by plan
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No envelope cap 100 envelopes/user/year Varies by plan Varies by plan Varies by plan

Primary penalties and risks from incorrect certificates

Audit Assessment: Back tax, interest, and penalties.
Civil Penalties: State civil fines per statute.
Criminal Risk: Fraud charges if intentional.
Revoked Exemption: Certificate acceptance withdrawn.
Reputational Risk: Supplier compliance issues.
Withholding Requirement: Backup withholding possible.

Timing considerations for issuing and renewing certificates

Key timing: provide certificates when requested, update when circumstances change, and follow renewal expectations required by some states.

When to Provide:

At time of purchase or by seller request.

Effective Date:

Date entered determines when exemption begins.

Renewal:

Some states require periodic renewal or updated certificates.

Request Window:

Sellers may request certificates during audits or onboarding.

Record Retention:

Retain per federal/state rules; typically three to six years.

Practical tips to reduce rejection and audit exposure

Practical tips to reduce audit risk, speed seller acceptance, and maintain compliant records for Sales and Use Tax Certificates.

Verify Tax Identification
Confirm the buyer’s EIN or SSN before accepting a certificate. Use IRS TIN-matching where available and store evidence; incorrect TINs may invalidate exemptions and trigger backup withholding or penalties.
Standardize Forms
Use state-specific certificate templates rather than generic forms. Include required statutory language and codes to reduce rejections during compliance reviews and state audits.
Use Electronic Workflows
Collect and store certificates electronically with tamper-evident audit trails. Ensure e-signatures meet ESIGN/UETA requirements and implement access controls and versioning to support examinations.
Maintain Audit Trail
Retain signed certificates with metadata—signer identity, IP address, timestamp, and delivery records—to demonstrate good-faith acceptance during audits or disputes.

Security and compliance highlights for electronic certificates

Encryption (In Transit): TLS 1.2/1.3 encrypted transport.
Encryption (At Rest): AES-256 data at rest.
Certifications: SOC 2 Type II, ISO 27001.
HIPAA Support: HIPAA compliant (BAA required).
Legal Frameworks: ESIGN and UETA compliant.
Accessibility: WCAG 2.0 Level AA support.

Setting up an online workflow to collect certificates

Configure online workflows to collect, validate, and store Sales and Use Tax Certificates efficiently while enforcing required fields and retention policies.

Field Configuration
Required Fields Legal name, TIN, exemption reason, description, signature, date.
Authentication Email + SMS code or stronger KBA for high-value sales.
Auto-Detection Automatic field detection and validation rules.
Storage Location Encrypted cloud storage with access controls.
Notifications Email alerts to finance and compliance teams.

Technical checklist for eSubmission and integrations

Checklist of technical capabilities to collect and submit Sales and Use Tax Certificates electronically across systems.

  • File Formats: PDF, DOCX, HTML supported.
  • Integrations: Connects to Salesforce, NetSuite, Google Workspace.
  • Authentication: Email, SMS, SSO, KBA support.

Ensure integration with accounting, ERP, and vendor management systems so exemption status, certificate copies, and audit trails synchronize with tax reporting workflows; confirm access controls and retention settings meet federal and state recordkeeping requirements.

How electronic submission typically flows

Typical electronic submission flow describes how buyers complete, sign, and transmit Sales and Use Tax Certificates to sellers, and how sellers store proof for audit.

  • Upload: Buyer uploads completed certificate in signed PDF.
  • Authentication: Signer verifies identity via SMS or email.
  • Transmit: Certificate delivered to seller and archived.
  • Audit Trail: System captures timestamp, IP, and signer data.

How organizations use certificates in practice

Real-world examples illustrate how buyers, sellers, and platforms use Sales and Use Tax Certificates to support exempt transactions and audits.

Retail Chain

A regional retail chain implemented standardized resale certificates to collect exemption documentation from thousands of vendors across multiple states.

  • Reduced audit adjustments and processing time.
  • By centralizing certificates and using consistent validation checks they decreased manual review time, improved compliance during state audits, and ensured consistent application of exemption rules across jurisdictions.

Construction Supplier

A construction supplier accepts certificates for materials purchased for resale and for exempt project use, tracking certificates by job site and purchase order.

  • Avoided post-sale tax liabilities on large projects.
  • Maintaining organized digital certificates tied to purchase orders allowed the supplier to demonstrate exemption during audits, reduce retroactive assessments, and streamline subcontractor onboarding across state lines.

Core elements that make a certificate professionally defensible

Include these core elements in a Sales and Use Tax Certificate to improve acceptance, legal sufficiency, and audit defensibility across jurisdictions.

Buyer Details

Full legal name, DBA (if any), street address, and contact information. Use the buyer’s legal entity name as registered; abbreviations or partial names can lead to acceptance issues in audits.

Tax Identifiers

Provide the buyer’s EIN or SSN in nine-digit format and indicate the issuing jurisdiction. Accurate TINs are critical because incorrect numbers may invalidate exemptions and trigger penalties.

Exemption Basis

Clearly state the exemption reason (resale, manufacturing, exempt organization) and include any required statute or state code. Citing the correct code improves seller acceptance.

Goods Description

Itemize the goods or services covered, quantities, and intended use. Detailed descriptions prevent misclassification and support the exemption during audits or inquiries.

Signature & Date

Provide an authorized signer’s name, title, a handwritten or compliant electronic signature, and the date in MM/DD/YYYY format. Signatures must evidence signer intent and authority.

Retention Statement

Include language assigning responsibility for retention and a statement authorizing the seller to rely on the certificate until revoked; note renewal requirements if applicable.

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