--- title: Do You Make Retail Sales To Entities That Are Exempt From Paying Sales, Use, Or Lodging Taxes? description: In most cases if you make retail sales of tangible personal property or lodging accommodations, you must collect and remit the applicable tax associated with that transaction. However, there are three types of customers that are tax-exempt: image: https://info.machen.cpa/hubfs/71011795_thumbnail-428065-edited.jpg --- [Family of Services](http://machenmcchesney.com/about-us/family-of-companies/)  |  [CPA & Business Advisory](http://machenmcchesney.com)  |  [Payroll, HR & Benefits](http://focuspaysolutions.com/)  |  [Wealth Management](http://machenmcchesney.com/services/financial-planning-and-wealth-mangement-services/) Auburn-Opelika (334) 887-7022 | Montgomery (334) 244-8900 [![mm-re-cobrand-fd-blues](https://info.machen.cpa/hs-fs/hubfs/mm-re-cobrand-fd-blues.png?width=279&height=100&name=mm-re-cobrand-fd-blues.png)](http://machenmcchesney.com) Search this site on Google Search Google Search this site on Google Search Google - [Client Portal](https://machenmcchesney.sharefile.com/Authentication/Login) - [1040 Electronic Organizer](https://www.my1040data.com/account/login/HT7902990) - [LinkedIn](https://www.linkedin.com/company/675439?trk=tyah&trkInfo=idx%3A1-1-1%2CtarId%3A1424436970395%2Ctas%3Amachen+mcchesney) - [Facebook](https://www.facebook.com/machenmcchesney) - [Google](https://plus.google.com/101356546927388458481) - [Twitter](https://twitter.com/machenmcchesney) - About Us - [Welcome](http://machenmcchesney.com/about-us/welcome/) - [Affiliations and Associations](http://machenmcchesney.com/about-us/affiliations-and-associations/) - [Community Events](http://machenmcchesney.com/about-us/community-events/) - [Family of Companies](http://machenmcchesney.com/about-us/family-of-companies/) - [History](http://machenmcchesney.com/about-us/firm-profile-history/) - [Mission and Values](http://machenmcchesney.com/about-us/mission-and-values/) - [Team Directory](http://machenmcchesney.com/about-us/team-directory/) - Services - [Accounting & Outsourcing](http://machenmcchesney.com/services/accounting-outsourcing/) - [Audit and Assurance Services](http://machenmcchesney.com/services/audit-assurance/) - [Business Advisory Services](http://machenmcchesney.com/services/business-advisory/) - [Business Valuation Services](http://machenmcchesney.com/services/business-valuation-services/) - [Family Office Services](http://machenmcchesney.com/services/family-care/) - [Financial Planning & Wealth Mangement Services](http://machenmcchesney.com/services/financial-planning-and-wealth-mangement-services/) - [Individual Services](http://machenmcchesney.com/services/individuals/) - [Taxation](http://machenmcchesney.com/services/taxation/) - Who We Serve - [Construction & Real Estate](http://machenmcchesney.com/industries/construction-real-estate/) - [Credit Unions](http://machenmcchesney.com/industries/credit-unions/) - [Government & Not-For-Profits](http://machenmcchesney.com/industries/governmental-not-for-profit/) - [Healthcare & Professional Services](http://machenmcchesney.com/industries/healthcare-and-professional-services/) - [Hospitality, Restaurant & Retail](http://machenmcchesney.com/industries/hospitality-restaurant-retail/) - [Manufacturing, Distribution & Automotive](http://machenmcchesney.com/industries/manufacturing-distribution-automotive/) - [Success Stories](http://machenmcchesney.com/success-stories) - Resources - [Blog](https://info.machenmcchesney.com/blog) - [E-Newsletter Archive](http://machenmcchesney.com/resources/e-newsletter-archive/) - [Financial Calculators](http://machenmcchesney.com/resources/financial-calculators/) - [Financial Terms Glossary](http://machenmcchesney.com/resources/financial-terms-glossary/) - [Helpful Articles](http://machenmcchesney.com/resources/newsletter/) - [Tax Calendar](http://machenmcchesney.com/resources/tax-calendar/) - [Tax Links](http://machenmcchesney.com/resources/tax-links/) - [Track Your Refund](http://machenmcchesney.com/resources/track-your-refund/) - [Sign Up for Our E-Newsletter](http://machenmcchesney.com/resources/e-newsletter/) - [Subscribe to Our Blog](http://machenmcchesney.com/resources/subscribe-to-the-machen-mcchesney-blog/) - News & Events - [Press Releases](http://machenmcchesney.com/news-events/press-releases/) - [Upcoming Events](http://machenmcchesney.com/news-events/upcoming-events/) - Careers - [Our Culture](http://machenmcchesney.com/careers/culture/) - [Benefits](http://machenmcchesney.com/careers/benefits/) - [Our Stories](http://machenmcchesney.com/careers/our-stories/) - [Current Openings](http://machenmcchesney.com/careers/current-openings-send-resume/) - [Accounting Internship Opportunities](http://machenmcchesney.com/careers/students/) - Contact Us - [Auburn-Opelika Office](http://machenmcchesney.com/contact-us/contact-us-auburn-office/) - [Montgomery Office](http://machenmcchesney.com/contact-us/contact-us-montgomery-office/) # Returning Value Blog ## [Do You Make Retail Sales To Entities That Are Exempt From Paying Sales, Use, Or Lodging Taxes?](https://info.machen.cpa/blog/do-you-make-retail-sales-to-entities-that-are-exempt-from-paying-sales-use-or-lodging-taxes) Posted by [Lisa Albritton](https://info.machen.cpa/blog/author/lisa-albritton) on Feb 18, 2016, 11:49:10 AM - [Tweet](https://twitter.com/share) ![71011795\_thumbnail-661286-edited.jpg](https://info.machen.cpa/hubfs/71011795_thumbnail-661286-edited.jpg "71011795_thumbnail-661286-edited.jpg")In most cases if you make retail sales of tangible personal property or lodging accommodations, you must collect and remit the applicable tax associated with that transaction. However, there are three types of customers that are tax-exempt: - Customers who have provided you with a copy of their sales tax license as evidence that they are not the end user of the product and will be reselling the products - Customers who have furnished you with a copy of their \*Certificate of Exemption from the State of Alabama - Customers who are governmental entities The term “governmental entity” means the Federal Government, the State of Alabama public schools, Alabama public universities, healthcare authorities, Alabama counties and municipalities, and public corporations incorporated under any provisions of Chapter 50 of Title 11, Chapter 50A of Title 11, Chapter 5 of Title 37, or Chapter 7 of Title 39. Governmental entities are not required to obtain a Certificate of Exemption but may do so for ease of tax-free purchasing. \*Just because an entity is a not-for-profit does not mean that they are exempt from sales, use, or lodging taxes. The phrase not-for-profit or non-profit is used to refer to a variety of exempt organizations, but does not automatically mean that the organization is exempt from paying sales or lodging taxes. Starting in January of 2016, all certificate of exemptions have an expiration date. The burden of proof that a sale is exempt is upon the vendor who grants the sale which is why having a properly executed reseller ID or certificate of exemption should be exchanged prior to the sale of tax exempt personal property or tax exempt lodging. Any sale for which an exemption has been claimed but a properly executed reseller ID or exemption certificate has not been retained, may be deemed a sale at retail by the Department of Revenue. In this instance, a seller may be held liable for any tax ultimately owed. If you are interested in the types of transactions that are taxable here is a link to the Alabama matrix: [https://www.ttrus.com/utm/alabama-utm.pdf](https://www.ttrus.com/utm/alabama-utm.pdf) If you have a customer who needs to register for a Certificate of Exemption, the customer must complete Form ST: EX-A1 at the link below: [http://revenue.alabama.gov/salestax/stexa1.pdf](http://revenue.alabama.gov/salestax/stexa1.pdf) [![New Call-to-action](https://no-cache.hubspot.com/cta/default/471263/9183aa4d-ab7b-45ac-9e74-78e0c9aedea3.png)](https://cta-redirect.hubspot.com/cta/redirect/471263/9183aa4d-ab7b-45ac-9e74-78e0c9aedea3) ***To learn more about  [state and local tax planning and compliance services](http://machenmcchesney.com/services/taxation/state-and-local-tax-planning-and-compliance) contact Lisa Albritton at  334-887-7022 or fill out the contact form below.***   Topics: [Tax Updates](https://info.machen.cpa/blog/topic/tax-updates) Search this site on Google Search Google ### Recent Posts ### Subscribe to Blog ### Posts by Category - [Business Tax (356)](https://info.machen.cpa/blog/topic/business-tax) - [Business Advisory (239)](https://info.machen.cpa/blog/topic/business-advisory) - [Payroll, HR & Benefits (124)](https://info.machen.cpa/blog/topic/payroll-hr-benefits) - [Audit & Assurance (113)](https://info.machen.cpa/blog/topic/audit-assurance) - [Accounting & Outsourcing (81)](https://info.machen.cpa/blog/topic/accounting-outsourcing) - [Individual Tax (75)](https://info.machen.cpa/blog/topic/individual-tax) - [Tax Planning (33)](https://info.machen.cpa/blog/topic/tax-planning) - [Tax Updates (25)](https://info.machen.cpa/blog/topic/tax-updates) - [Retirement & Wealth Management Planning (18)](https://info.machen.cpa/blog/topic/retirement-wealth-management-planning) - [Taxation (15)](https://info.machen.cpa/blog/topic/taxation) - [Alerts (13)](https://info.machen.cpa/blog/topic/alerts) - [Business Valuation (11)](https://info.machen.cpa/blog/topic/business-valuation) - [News & Events (11)](https://info.machen.cpa/blog/topic/news-events) - [Tax News (11)](https://info.machen.cpa/blog/topic/tax-news) - [Individual Tax Planning (10)](https://info.machen.cpa/blog/topic/individual-tax-planning) - [Not For Profit (10)](https://info.machen.cpa/blog/topic/not-for-profit) - [Retirement Planning (9)](https://info.machen.cpa/blog/topic/retirement-planning) - [Estate Planning (8)](https://info.machen.cpa/blog/topic/estate-planning) - [Manufacturing Industry Insights (7)](https://info.machen.cpa/blog/topic/manufacturing-industry-insights) - [Individuals (1)](https://info.machen.cpa/blog/topic/individuals) - [Insider (1)](https://info.machen.cpa/blog/topic/insider) - [Professional Standard News (1)](https://info.machen.cpa/blog/topic/professional-standard-news) see all [![Returning\_Value](https://info.machen.cpa/hs-fs/file-2504250850-jpg/Machen-Blog-Image/Returning_Value.jpg)](http://machenmcchesney.com/about-us/mission-and-values/) - [![AICPA](https://machenmcchesney.com/img/logos/aicpa.jpg)](https://www.aicpa-cima.com/) - [![NACVA](https://machenmcchesney.com/img/logos/nacva.jpg)](http://www.nacva.com/) - ![2026 INSIDE Public Accounting Top 400](https://machenmcchesney.com/img/2026-ipa-top-400.jpg) - ![2026 Best of Auburn-Opelika](https://machenmcchesney.com/img/2026-best-of-auburn-opelika.jpg) - [![2025 Best of OA](https://machenmcchesney.com/img/2025-best-of-oa.jpg)](https://oanow.com/exclusive/readerschoice/ballot-2025/) - ![2026 Best of OA Winner](https://machenmcchesney.com/img/2026-best-of-oa-winner.jpg) - [![2025 Accounting Today Regional Leaders](https://machenmcchesney.com/img/2025-accounting-today-regional-leaders.jpg)](https://www.accountingtoday.com/) - [![ClearlyRated Best of Accounting](https://machenmcchesney.com/img/2024-best-of-accounting.jpg)](https://www.clearlyrated.com/accounting) - [![ClearlyRated Best of Accounting Employee](https://machenmcchesney.com/img/2024-best-of-accounting-employee.jpg)](https://www.clearlyrated.com/accounting) 1820 East University Drive, Auburn, AL 36830 | Tel: (334) 887-7022 | Fax: (334) 887-7221 1761 Taliaferro Trail, Montgomery, AL 36117 | Tel: (334) 244-8900 | Fax: (334) 364-0927 † This is not a CPA firm. \* Assurance, attest, and audit services provided by Frazier & Deeter, LLC. “Frazier & Deeter” is the brand name under which Frazier & Deeter, LLC\* and Frazier & Deeter Advisory, LLC† and its subsidiary entities provide professional services. Frazier & Deeter, LLC\* and Frazier & Deeter Advisory, LLC (and its subsidiary entities)† practice as an alternative practice structure in accordance with the AICPA Code of Professional Conduct and applicable law, regulations and professional standards. Frazier & Deeter, LLC\* is a U.S. licensed independent public accounting firm that provides attest services to its clients. Frazier & Deeter Advisory, LLC† and its subsidiary entities provide tax and business consulting services to their clients. Frazier & Deeter Advisory, LLC† and its subsidiary entities are not licensed U.S. CPA firms. - [LinkedIn](https://www.linkedin.com/company/675439?trk=tyah&trkInfo=idx%3A1-1-1%2CtarId%3A1424436970395%2Ctas%3Amachen+mcchesney) - [Facebook](https://www.facebook.com/machenmcchesney) - [Google](https://plus.google.com/101356546927388458481) - [Twitter](https://twitter.com/machenmcchesney) [Powered by Strategic 7 Marketing](https://strategicseven.com)