Alabama Durable Medical Equipment Update

The Alabama Department of Revenue recently made changes to the tax codes in connection with health care providers that claim a sales and use tax exemption for the purchase of durable medical equipment and supplies. 

New Requirements for Tax Exemption on Durable Medical Equipment 

Effective September 1, 2024, any health care provider claiming the exemption must obtain and maintain a certificate of exemption from the Department of Revenue before the purchase and provide it to the seller at the time of the purchase. 

Validity and Renewal of the Certificate 

The certificate of exemption shall be valid for one year from the date of issuance and shall be renewed annually each subsequent year. Any person or company that fails to obtain or renew a certificate of exemption prior to its expiration may not make tax exempt purchases or rent tax exempt accommodations after the expiration. 

Compliance and Penalties 

The Department of Revenue may assess any person or company with state and local sales, use, and lodgings tax for any transaction conducted with a certificate of exemption not properly accounted for and reported, as required in Section 40-9-61. 

How to Stay Compliant with the Alabama Durable Medical Equipment Update 

Staying compliant with the Alabama Durable Medical Equipment Update requires proactive measures, including:

• Obtain and maintain the exemption certificate prior to making any exempt purchases 
• Renew the certificate annually 
• Keep detailed records of all exempt transactions
• Train staff on the new requirements 
• Consult with a tax professional to maintain compliance with all tax regulations 

Do you need help assessing which tax exemptions apply to your organization? EisnerAmper has a depth of resources and tax specialists. Contact us today to find out how we can assist.