Code of Alabama
Part 4 - Tax, Rental.
Section 45-51-243.03 - Exemptions.

The rental tax authorized by this part does not apply to the following transactions:
(1) The leasing or rental of a film or films by a lessee who charges, or proposes to charge, admission for viewing the film or films.
(2) The use of docks or docking facilities furnished for boats or other craft operated on waterways.
(3) Any charge paid by a tenant to a landlord with respect to the leasing or furnishing of tangible personal property to be used on the premises of real property leased by the same landlord to the same tenant for use as a residence or dwelling place, including a mobile home.
(4) The leasing or rental of tangible personal property to a lessee who acquires possession of the property for the purpose of leasing or renting to another the same property under a leasing or rental transaction subject to this part.
(5) Any charge paid by a tenant to a landlord with respect to the leasing or furnishing of tangible personal property to be used on the premises of any room or rooms, lodging, or accommodations leased or rented to transients in any hotel, motel, inn, tourist camp, tourist cabin, or any other place in which rooms, lodgings, or accommodations are regularly furnished to transients for a consideration.
(6) The leasing or rental of tangible personal property which the county or the state is prohibited from taxing under the Constitution or laws of the United States or under the constitution of the state.
(7) The leasing or rental of nuclear fuel assemblies together with the nuclear material contained therein and other nuclear material used or useful in the production of electricity and assemblies containing ionizing radiation sources together with the ionizing radiation sources contained therein used or useful in medical treatment or scientific research.
(8) A transaction whereunder the lessor leases a truck or tractor-trailer or semi-trailer for operation over the public roads and highways and the lessor furnishes a driver or drivers for the vehicle shall be deemed to constitute the rendition of service and not a leasing or rental within the meaning of this part.
(9) The leasing or rental of vehicles in interchange between regulated motor carriers on a per diem basis.
(10) The leasing or rental of all structures, devices, facilities, and identifiable components of any thereof acquired primarily for the control, reduction, or elimination of air or water pollution, and the leasing or rental of all materials used or intended for use in structures built primarily for the control, reduction, or elimination of air and water pollution.
(11) The leasing or rental of tangible personal property when the lessor and lessee, including a sublessee, are wholly owned subsidiary corporations of the same parent corporation or one is the wholly owned subsidiary of the other; provided, that the appropriate sales or use tax, if any was due, has been paid on such item of personal property; and provided further, that in the event of any subsequent subleasing of such tangible personal property to any person other than any such sister, parent, or subsidiary corporation, any tax due and payable with respect to the subsequent subleasing under this part is paid.
(12) The leasing or rental of vessels or railroad equipment engaged in interstate or foreign commerce, or both.
(13) The leasing or rental of aircraft, replacement parts, components, systems, sundries, and supplies affixed or used on the aircraft and all ground support equipment and vehicles used by or for the aircraft to or by a certificated or licensed air carrier with a hub operation within this state, for use in conducting intrastate, interstate, or foreign commerce for transporting people or property by air. For the purpose of this subdivision, the phrase "hub operation within this state" shall be construed to have all of the following criteria:
a. There originates from the location 15 or more flight departures and five or more different first-stop destinations five days per week for six or more months during the calendar year.
b. Passengers or property, or both, are regularly exchanged at the location between flights of the same or a different certificated or licensed air carrier.
(14) The leasing or rental of any other tangible personal property that would be exempted or excluded from the computation of the state rental tax.
(15) The leasing or rental of rental passenger vehicles and rental trucks.