As a public university created by the Constitution of the State of Alabama, UAB is also treated as a state governmental entity. As a governmental entity of the State of Alabama, all property owned by UAB is state property. Therefore, real estate owned by UAB located in the State of Alabama is exempt from property taxes imposed by the State of Alabama or by Alabama counties and cities.
The Alabama lodging tax law does not contain any exemption for governmental entities. Therefore, UAB must pay state lodging taxes at hotels or other lodging facilities required by the state to collect lodging taxes.
Lease or Rental Tax
Rental or lease tax associated with the leasing or rental of tangible personal property are generally the responsibility of the lessor, not the lessee. However, some vendors leasing tangible personal property to UAB choose to pass on the associated rental tax (sometimes known as lease tax) to UAB as the lessee.
These taxes may be incorporated into the rental rate or may be separately designated. If UAB is contractually obligated to pay the rental of lease tax, they should be accounted for as additional rent expense.