The AI workspace for legal professionals
- Legal research with access to more than 1 million sources
- Document automation
- Matter management
- Hosted in the EU and Switzerland
Try it free for 14 days (10 questions/day during trial)
The AI workspace for legal professionals
Try it free for 14 days (10 questions/day during trial)
title-40•Title 40 — Revenue and Taxation
For purposes of this title, and subject to additional definitions which are applicable to specific chapters or parts thereof, and unless the context otherwise requires, the following terms shall have the respective meanings ascribed by this section:
(1) BLIND PERSONS. All persons who have a vision with adjusted glasses suitable to the eye or to the individual not greater than what is known as 20/200 vision.
(2) FORM. This term shall be synonymous with the term “Return.”
(3) INCOMPETENT VETERAN. Any veteran who has been rated totally and permanently disabled by reason of insanity by the veterans’ bureau and for whom a guardian has been appointed under the provisions of Sections 26-9-2 through 26-9-18.
(4) IMPROVEMENTS. All buildings, structures, walls, fences, and any other things erected upon or affixed to the land.
(5) MERCHANT. All persons, partnerships, trustees, receivers, corporations or other entities engaged in trading or dealing in any kind of goods, wares, or merchandise.
(6) MASCULINE GENDER. All words importing the masculine gender shall also apply to females.
(7) MONEY. Coins and paper currency of the United States of America used as a circulating medium of exchange.
(8) PERSON. Any individual, association, estate, trust, partnership, corporation, or other entity of any kind.
(9) PERSONAL PROPERTY. All things other than real property.
(10) PLURAL NUMBER. All words in the plural number shall apply to single individuals in all cases in which the spirit and intent of this title require it.
(11) PRESENT TENSE. All words importing the present tense shall also apply to the future.
(12) PROPERTY. Real and personal property.
(13) REAL PROPERTY. Land and all things thereunto pertaining, all structures, and all things annexed or attached thereto which would pass to a vendee by the conveyance of the land or property.
(14) RETURN. Information submitted in a form allowed by the Department of Revenue for the reporting of tax liabilities or payments, and other reports required by the department. A tax return must identify the taxpayer as prescribed by regulation and must include other information required by the department.
(15) SIGNATURE. A unique mark, process, or verification as allowed by regulation of the Department of Revenue identifying the natural person, natural persons or agent of a taxpayer or the person responsible for the preparation of the tax return or other document. Nothing in this definition shall be construed to make a paid preparer responsible for the tax liability of the taxpayer as identified by the return through signature.
(16) VALUE. The fair and reasonable market value of property, estimated at the price which the property would bring at a fair voluntary sale.
(Acts 1932, Ex. Sess., No. 68, p. 88; Acts 1935, No. 194, p. 256; Acts 1936-37, Ex. Sess., No. 72, p. 90; Code 1940, T. 51, §1; Acts 1997, No. 97-493, p. 878, §7.)
(a) If any person liable to pay any tax, other than ad valorem taxes, neglects or refuses to pay the same the amount, including any interest, penalty, additional amount, or addition to such tax, together with any costs which may accrue in addition thereto, shall be a lien in favor of the State of Alabama upon all property and the rights to property, real or personal, belonging to such person. Unless another date is specifically fixed by law, the lien shall arise at the time the assessment list, return therefor or the payment thereof, as the case may be, was due to have been filed with or made to the Department of Revenue or other agency of the state or county and shall continue until the liability for such amount is satisfied or becomes unenforceable by reason of the lapse of time.
(b) Such lien shall not be valid against any mortgagee, purchaser in the usual course of trade, or conventional judgment creditor with an actual money judgment of some court until after the time a notice thereof has been filed by the Department of Revenue or other agency of the state or county in the office of the judge of probate of the county in which such property, real or personal, is located, but the recordation thereof as to any other person, receiver, trustee, creditor, or committee shall not be required.
(c) The Department of Revenue or other agency of the state or county with whom the assessment list, return or to whom the payment of the tax was due to have been made or paid may file in the office of the judge of probate of any county in this state a certificate which shall show the agency of the state filing the same, the amount and kind of the tax for which a lien is claimed, including any interest, penalty, additional amount, or addition to such tax, together with any costs that may have accrued in addition thereto, the names of all persons against whose property a lien for such tax is claimed and the date of the said notice. Any error in the certificate of the amount shall not invalidate the lien for the amount actually due. If the taxpayer shall file with the Department of Revenue a bond in double the amount of the lien filed, with surety or sureties satisfactory to the Commissioner of Revenue, such surety or sureties to be either a surety company authorized to do business in Alabama or such individual resident property owners, not less than three in number, as are recommended by the judge of probate of the county in which the notice of lien is recorded, conditioned to pay all such tax, interest, penalty, additional amount, or addition to such tax, together with any costs which may accrue in addition thereto as may be assessed against the taxpayer, principal in said bond, the Commissioner of Revenue, upon approving the same, may withdraw or cancel said certificate of lien filed under the provisions of this section, and, upon a determination that the said taxpayer owes any of said taxes to the state, the assessment (judgment) therefor shall be entered against said taxpayer and the surety or sureties on said bond; and, if not paid within 30 days from the date of said final assessment (judgment), then execution shall issue therefor against said principal and the surety or sureties on said bond. If the bond hereinabove provided for is not given and approved by the said commissioner, and a final assessment (judgment) is entered against said taxpayer and he duly and legally appeals therefrom within the time and in the manner provided for by this title, the Commissioner of Revenue may cancel or withdraw from record said certificate of lien.
(d) Such certificate shall be indexed and recorded under the same provision of law of this state relating to the filing and recording of certificate of judgment, without cost, but no acknowledgment or probate of such certificate shall be required.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §883; Acts 1953, No. 691, p. 942; Acts 1992, No. 92-186, p. 349, §16.)
From and after October 1 of each year, when property becomes assessable the state shall have a lien upon each and every piece or parcel of property owned by any taxpayer for the payment of all taxes which may be assessed against him and upon each piece and parcel of property real or personal assessed to owner unknown, which lien shall continue until such taxes are paid, and the county shall have a like lien thereon for the payment of the taxes which may be assessed by it; and, if such property is within the limits of a municipal corporation, such municipal corporation shall have a like lien thereon for the payment of the taxes which may be assessed by it. These liens shall be superior to all other liens and shall exist in the order named, and each of such liens may be enforced and foreclosed by sale for taxes as provided in this title, or as other liens upon property are enforced, except as otherwise provided by laws.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §884; Acts 1953, No. 692, p. 944; Act 99-665, 2nd Sp. Sess., p. 131, §7.)
When a taxpayer makes a general assignment of his property for the payment of his debts or is declared a bankrupt, or when dead and his estate is or becomes insolvent, any unpaid taxes assessed against him or against his estate shall be a preferred claim and shall be paid by the assignee, trustee, or personal representative out of the first money received by him belonging to the trust or estate.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §885.)
(a) Whenever in this title a tax is payable to the Department of Revenue, or to the judge of probate or to any other officer on a monthly, quarterly, or other periodic basis, and reports of gross receipts, gross loans, gross sales, the gross tonnage, capital invested, daily, monthly, quarterly, or other period for computing capacity or other similar reports are required to be made, except as otherwise specifically provided or when not in conflict with such specific provisions, such reports shall show substantially the following:
(1) The name of the person, firm, or corporation;
(2) The president or managing officer;
(3) The principal office or place of business;
(4) Its principal office or place of business within this state;
(5) The total amount of gross sales, gross receipts, gross loans, gross tonnage, capital invested, daily, monthly, quarterly, or other period of capacity applicable to the computation of a tax on its business, or other matter to be reported;
(6) Where the basis of the license is capital invested, the license shall be based on the full capital employed, and such report shall show the value as carried on the books of the person, firm, or corporation;
(7) Any other information, general or special, required by the Department of Revenue, or the probate judge, or other collecting officer;
(8) Such report shall be made under oath by an officer or other person familiar with the facts.
(b) In all cases where a tax is due as shown by said report, payment shall be remitted to the Department of Revenue. If payment is made by check, draft, or post office or other money order, such check, draft, or money order shall be made payable to the Treasurer; provided, that no payment shall be considered made until the money is actually received by the state.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §886; Acts 1992, No. 92-186, p. 349, §17.)
When taxes are levied on the gross or net receipts of any person, company, corporation, or association doing business in this state by any agent, such agent shall be personally liable for such taxes, and the tax collector may collect the same from such agent by garnishment or by the seizure and sale of any personal property belonging to him, as if such taxes were assessed against him.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §887.)
Whenever a corporation, either foreign or domestic, is in receivership or trusteeship, the provisions of this title shall apply to the receiver or trustee thereof, and such receiver or trustee shall be liable for any taxes to the same extent as the corporation would be if there were no receivership or trusteeship. Such receiver or trustee shall make all reports as herein required and shall be subject to all penalties as would be the corporation.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §888.)
No tax levied by the State of Alabama, whether upon property, franchise, income, or otherwise shall be levied upon or applicable to a bank chartered by the banking authorities of the State of Alabama unless said tax is levied upon and applicable to all banks and banking institutions, including national banks, doing business in the State of Alabama.
(Acts 1967, Ex. Sess., No. 242, p. 323.)
In all counties where state officials are paid on a salary basis instead of a fee basis, all fees required under the terms of this title to be paid to or collected by such officials shall by said officials be paid to the treasurer of said county or to such official performing the duties of county treasurer, except where otherwise provided.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §889.)
In any action against any officer for the refund of taxes or other action involving the revenue laws, the Attorney General or the district attorney may, at his direction, if in his opinion the best interests of the state require it, with or without the consent of such officer appear for him and shall be authorized to take an appeal, and no bond or security for costs shall be required.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §892.)
Any court costs taxed against the state shall be paid by the state and the various taxing subdivisions thereof in proportion to the amount of taxes levied by each. The sworn certificate of the clerk or register approved by the Comptroller shall be authority for the issuance of any payment of warrants therefor by the proper officers of each taxing authority and shall be treated as a preferred claim.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §893.)
Whenever any execution is issued by the Department of Revenue for the collection of any taxes assessed by it, such execution duly attested by the secretary of commission shall be sufficient warrant to the officer to whom directed to levy on the property of the person against whom directed, and the sheriff or other officer shall forthwith execute such writ without demanding or requiring any indemnifying bond or other protective obligation, but the writ issued by the Department of Revenue under authority of law for the collection of taxes due the state shall be sufficient defense to any action for damages on any ground other than the willful, wanton, or malicious conduct of the officer making the levy.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §894.)
In any action against any tax assessor, tax collector, judge of probate, or other officer charged with the performance of any duties under this title and his sureties, or either, for failure to pay over any money collected by him for the state or to perform any other duty required of him by law, a copy of any bond, record, book, paper, contract, return, or other document, or of the official statement of any account between him and the state in the Office of the Comptroller, Treasurer, State Land Commissioner, or Department of Revenue properly certified by such officer, if the original is in his office under seal of the office, shall be received as evidence in any case in which the original would be competent, unless the defendant shall deny under oath that he made or executed such original.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §895.)
Upon a verdict being rendered in favor of the state in any action brought by the state against any officer charged with the collection of any revenue for the state and his sureties, or either, for the recovery of any such revenue collected by him, a judgment must be rendered for the amount of such verdict and 20 percent thereon.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §896.)
Any taxes assessor or deputy tax assessor who returns the tax list of any taxpayer as having been sworn to by such taxpayer, when in fact it was not sworn to, is guilty of a misdemeanor.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §897.)
Any president or cashier of any bank or banking association who willfully fails or refuses to make out, swear to, and deliver to the tax assessor the statement required by law within the time prescribed must, on conviction, be fined not less than $200 and must also be sentenced to hard labor for the county for not less than three months.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §898.)
It shall be unlawful for the Commissioner of Revenue or tax assessor, or any employee or deputy or agent of either to act as agent or attorney for any taxpayer in the matters of assessment of property for taxation, and any such person who violates the provisions of this section shall be guilty of a misdemeanor and shall be fined in a sum not greater than $100 and may be sentenced to hard labor for the county for not more than three months.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §899.)
Any revenue officer of the state who refuses to allow the Department of Revenue, or the agents or deputies thereof, full and free access to all books and records belonging to or pertaining to his office shall be guilty of a misdemeanor and, on conviction, shall be fined not less than $10 nor more than $500.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §900.)
Any officer on whom any duty is imposed by the revenue law who fails or neglects to perform such duty, if there is no other punishment provided for such failure or neglect, must, on conviction, be fined not less than $20 nor more than $1,000.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §901.)
Any probate judge, clerk of a court of record, register, sheriff, coroner, tax collector, county treasurer, trustee of public schools, notary public, constable, or other public officer who knowingly converts to his own use or permits another to use any of the revenue of the state or of any county or municipality thereof or any money paid into his office or received by him in his official capacity is liable to indictment and, on conviction, must be punished as if he had stolen it.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §902.)
When any sheriff or other officer shall sell any property under execution or other process, or under any decree, judgment, or order of any court, it shall be his duty to ascertain what taxes are a lien upon such property and, upon a sale thereof, to first apply the proceeds of such sale to the payment of such taxes.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §903.)
Any tax collector or other person engaged in collecting the revenues of the state who buys, sells, or otherwise trades in state warrants, state certificates, or other securities of the state must, on conviction, be imprisoned in the penitentiary for not less than one nor more than five years and fined not more than $1,000.
(Code 1876, §4271; Code 1886, §3901; Code 1896, §5151; Code 1907, §7443; Code 1923, §5035; Code 1940, T. 41, §217.)
Any person who fraudulently obtains from the Comptroller under the provisions of this title any duplicate warrants upon the Treasury of the State or who shall with intent to defraud obtain any warrants to which he is not entitled must, on conviction, be punished as if he had stolen the amount specified in the warrant.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §905.)
The holder of any lien on real or personal property may pay the tax thereon with interest and penalties and upon such payment shall be subrogated to the lien of the state, county, or municipality, and the sum so paid shall bear legal interest from the date of payment and may be collected in the same manner as the original claim of the lienholder.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §906.)
All officers provided for in this title may be impeached in the same manner and for the same cause provided for in the Constitution of the State of Alabama or as provided for in Chapter 11 of Title 36 and may be tried as therein provided for other officers.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §907.)
Whenever and wherever a notice is required by law to be given by the Department of Revenue, the Board of Equalization, the tax assessor or the collector relating to the assessment and collection of taxes, and the method of giving such notice is not prescribed, then such notice shall be given by either first class U.S. mail, or, at the option of the department, certified or registered mail, return receipt demanded, addressed to the last known address of the taxpayer.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §908; Acts 1992, No. 92-186, p. 349, §18.)
All notices now required to be mailed by the tax assessors, tax collectors, and boards of equalization of the several counties by registered mail may be mailed by certified mail.
(Acts 1959, No. 85, p. 507.)
All revenues collected under the provisions of Sections 40-12-128, 40-12-310 through 40-12-319, 40-25-1 through 40-25-28 and 40-25-40 through 40-25-47 shall, after deduction of the cost of collection, be deposited in the State Treasury to the credit of the Alabama Education Trust Fund. All revenues collected under the provisions of Sections 40-21-56, 40-21-57, 40-21-60, and 40-21-61 shall, after deduction of the cost of collection, be distributed in the following manner:
(1) Fifty-eight percent of the balance remaining after deduction of the cost of collection shall be deposited in the Special Mental Health Fund to be used for mental health purposes; and
(2) Forty-two percent of the balance remaining after deduction of the cost of collection shall be deposited in the State Treasury to the credit of the Alabama Education Trust Fund to be used for educational purposes.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §910; Acts 1971, No. 1414, p. 2410; Acts 1992, No. 92-623, p. 1466, §15.)
All of the fees provided for in Sections 40-4-5, 40-4-6, 40-5-14, 40-5-17, 40-7-19, 40-7-32, and 40-10-27, when collected, shall be refunded to the fund or official paying the administrative costs of performing the functions for which said fees are provided.
(Acts 1980, No. 80-630, p. 1087, §8.)
All laws to the contrary notwithstanding, in all cases involving distribution of revenues to counties and municipalities, the state agency charged with the responsibility of apportionment of such funds shall eliminate all payments of less than $5 to a municipality and shall include the amount so eliminated in any payment to be made to the county in which such municipality is located.
(Acts 1983, No. 83-648, p. 1012.)
[Repealed]
Repealed by Act 2011-003, p. 90, §7, effective March 11, 2011.
(Acts 1988, 2nd Ex. Sess., No. 88-981, p. 703, §§1-7; Act 99-514, p. 1135, §1; Act 2008-544, p. 1184, §1.)
The courts of the State of Alabama shall recognize and enforce the liability for taxes lawfully imposed by the laws of any other state that extends like comity to the State of Alabama, and the officials of such other state are hereby authorized to bring action in the courts of this state for the collection of such taxes. The certificate of the Secretary of State of such other state that such officials have the authority to collect the taxes so to be collected by such action shall be conclusive proof of that authority.
The term “taxes” as used in this section shall include:
(1) Any and all tax assessments lawfully made;
(2) Any and all taxes, including contributions under an unemployment compensation law or other contributions in the nature of a tax, whether such taxes, including contributions, are assessed or not, licenses, and fees;
(3) Any and all penalties lawfully imposed pursuant to a taxing statute; and
(4) Interest charges lawfully added to the tax liability which constitutes the subject of the action.
(Acts 1947, No. 671, p. 513.)
Every election heretofore held in any municipality or in any county on the question of the levy of a special tax for any purpose under the Constitution of Alabama, including any amendment thereto, at which election a majority of the votes cast were in favor of the levy of the said tax but which election was irregular by reason of failure prior to the holding of the election to give notice thereof in a newspaper or by posting in the manner or for the time required by any statute applicable to the election, or because of the failure to comply with any other statutory requirement applicable to the election, or because of any other irregularity with respect to the holding of the election or canvassing and recording the results thereof, shall be and every such election is hereby ratified and confirmed and given effect in all respects as if all provisions of law relating to such election had been duly and legally complied with, and the said tax may be levied and collected pursuant to the authorization purported to have been granted at such election; provided, that this section shall not apply to any election which, prior to July 1, 1998, has been held invalid by the Supreme Court of Alabama or by final judgment of the circuit court in the county in which the election was held and from which judgment an appeal was not taken to the Supreme Court of Alabama within the time provided by law for the taking of such appeals or to any election the validity of which is an issue in any pending civil action commenced prior to July 1, 1998.
(Acts 1971, No. 163, p. 438; Acts 1977, No. 754, p. 1292; Act 98-369, p. 669, §1.)
[Repealed]
Repealed by Act 99-427, p. 759, §12, effective June 10, 1999.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §20.)
It shall be the duty of the Comptroller to see that the returns, reports, payments, and settlements required by law to be made by any and all officers charged with the collection of revenues of the state under this title are promptly made by such officers at the times they are required to be made, and, in default of the performance by any of them of any such duties, he shall promptly direct such prosecutions or other legal proceedings as may be by law authorized or directed.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §335.)
It shall be the duty of the Comptroller to cause suit to be brought, in the name of the state, against any and all persons by law charged with the collection of state taxes, or with any duty in regard to the state revenue, and their sureties, for failure to collect such taxes or to perform such duty; and he may also in such cases, as in his judgment the interest of the state requires it, cause suit to be brought against defaulting taxpayers for the taxes claimed from them by the state; and, in cases in which a reasonable doubt may exist as to the construction or validity of the law under which taxes are claimed, he may authorize an agreed statement of the facts of the case to be made for the speedy adjudication of the matter in controversy.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §336.)
When the Comptroller finds that he has failed to give any tax collector credit for commissions to which he is entitled, he is authorized to correct such error in his settlement with such collector; and if the account of such collector has been closed and such commissions have been paid into the Treasury, the Comptroller shall draw his warrant on the Treasurer for the amount thereof in favor of such collector.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §337.)
The Comptroller must draw his warrant on the State Treasurer in favor of any judge of probate, tax collector, county treasurer, clerk of the circuit court, or other officer paying money into the State Treasury for any amount overpaid into the Treasury by such judge of probate, tax collector, county treasurer, clerk of the circuit court, or other officer.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §338.)
It shall be unlawful for any officer, employee, agent, or former employee or agent of the Department of Revenue to use a federal tax return, or information reflected on such federal return, for any purpose other than in the administration of the revenue laws administered by the Department of Revenue or to disclose to any person, except as authorized by the Internal Revenue Code, 26 U.S.C. §1 et seq., any federal return information, whether received from the Internal Revenue Service under an exchange of information agreement or from the taxpayer as an attachment to his state tax return. Any person violating the provisions of this section shall be deemed guilty of a misdemeanor, and shall be fined not to exceed $1,000 or sentenced to hard labor for the county for not more than one year, one or both for each offense, and upon conviction thereof, any such person shall thereafter be ineligible to hold the office of commissioner or become or be an employee or agent of the Department of Revenue or under the Department of Revenue.
(Acts 1978, No. 675, p. 975.)
(a) Interest shall be added as provided herein to any tax or other amount due the department which is not paid by the due date. Interest on any delinquency shall be charged from the due date of the tax, except (1) interest on delinquent license taxes levied under Chapter 12 of this title shall be charged from the delinquent date provided in subsection (e) of Section 40-12-10; and (2) interest on delinquent license tax and registration fees levied on motor vehicles shall be charged beginning after the period allowed for registration or renewal; and (3) interest on the freight lines and equipment companies tax levied in Section 40-21-52 shall be charged from the delinquent date thereof. The interest shall be computed based on the underpayment rate established by the Secretary of the Treasury under the authority of 26 U.S.C. §6621.
(b)(1) Except as provided in subdivision (2) of this subsection (b), interest shall be paid by the department on any refund of tax erroneously paid directly to the department. Interest shall be computed on any overpayment from the date of overpayment to the department; except, a. interest on any refund resulting from a net operating loss carryover or carryback shall be computed from the date the claim giving rise to the refund is filed, b. interest on any overpayment of tax withheld and paid over to the state pursuant to Article 2 of Chapter 18 of this title and estimated tax paid pursuant to Section 40-18-83, shall be paid beginning 90 days after the due date of the return required by Section 40-18-27 for individuals, and Section 40-18-39 for corporations, or the date the return is filed, whichever is later. Interest as required above shall be computed at the same rate as provided herein for interest on underpayments.
(2) No interest shall be paid on any overpayment of the following taxes:
a. Taxes paid by entities for which a refund is allowed by Sections 40-9-12 and 40-9-13;
b. License taxes which are refunded pursuant to Sections 40-12-23 and 40-12-24;
c. Gasoline taxes paid on gasoline used for agricultural purposes for which a refund is allowed by Division 3, Article 2, Chapter 17 of this title;
d. Gasoline taxes paid on gasoline used for the static testing of engines for which a refund is allowed by Division 4, Article 2, Chapter 17 of this title;
e. The motor fuels excise tax levied by Section 40-17-141 for which a refund or credit is allowed by Section 40-17-142;
f. The tobacco taxes levied by Chapter 25 of this title; and
g. The motor fuels excise tax levied under the Alabama Terminal Excise Tax Act, which has been paid to a supplier by a licensed distributor or end user who is authorized to obtain a refund under Section 40-17-329, if the refund is paid within 90 days of the receipt of the proper documentation.
(Acts 1981, No. 81-258; Acts 1981, 1st Ex. Sess., No. 81-988, p. 174; Acts 1992, No. 92-186, p. 349, §19; Acts 1995, No. 95-410, p. 881, §1; Act 2011-565, p. 1084, §44.)
(a) General rule.
(1) DATE OF DELIVERY. If any return, claim, statement, or other document required to be filed, or any payment required to be made, within a prescribed period or on or before a prescribed date under authority of any provision of this title is, after such period or such date, delivered by United States mail to the agency, officer, or office with which such return, claim, statement, or other document is required to be filed, or to which such payment is required to be made, the date of the United States postmark stamped on the cover in which such return, claim, statement, or other document, or payment, is mailed shall be deemed to be the date of delivery or the date of payment, as the case may be.
(2) MAILING REQUIREMENTS. This subsection shall apply only if -
a. The postmark date falls within the prescribed period or on or before the prescribed date -
For the filing (including any extension granted for such filing) of the return, claim, statement, or other document, or
For making the payment (including any extension granted for making such payment), and
b. The return, claim, statement, or other document, or payment was, within the time prescribed in paragraph a., deposited in the mail in the United States in an envelope or other appropriate wrapper, postage prepaid, properly addressed to the agency, officer, or office with which the return, claim, statement, or other document is required to be filed, or to which such payment is required to be made.
(b) Postmarks. This section shall apply in the case of postmarks not made by the United States Postal Service only if and to the extent provided by the Department of Revenue.
(c) Registered and certified mailing.
(1) REGISTERED MAIL. For purposes of this section, if any such return, claim, statement, or other document, or payment, is sent by United States registered mail
a. Such registration shall be prima facie evidence that the return claim, statement, or other document was delivered to the agency, officer, or office addressed to, and
b. The date of registration shall be deemed the postmark date.
(2) CERTIFIED MAIL. The Department of Revenue is authorized to provide by regulations the extent to which the provisions of subdivision (1) of this subsection with respect to prima facie evidence of delivery and the postmark date shall apply to certified mail.
(d) Exceptions. This section shall not apply with respect to -
(1) The filing of a document in, or the making of a payment to any court.
(2) Currency or other medium of payment unless actually received and accounted for, or
(3) Returns, claims, statements, or other documents, or payments which are required under any provision of this title to be delivered by any method other than by mailing.
(Acts 1985, No. 85-515, §2.)
(a) Any appraiser, mapper, or tax administrator who successfully completes the Department of Revenue Professional Education and Training Program, and is awarded the designation “Alabama Certified Appraiser,” “Alabama Certified Mapper” or “Alabama Certified Tax Administrator” shall be paid the amount of $1,200 annually by the Department of Revenue for his or her professional achievement.
(b) The department shall make such payment to a certified appraiser, mapper, or tax administrator while such individual is in the employment of the county, in the ad valorem tax field. Each individual is limited to payment for one certification. The department shall make the payments from the funds now appropriated under the provisions of Section 40-7-70. The payments made to a certified appraiser, mapper, or tax administrator shall be in addition to any other salary or compensation. Any person obtaining and retaining certified designation shall be prima facie qualified for the position designated. To receive this compensation the individual must have been certified for six months prior to October first. The Department of Revenue will provide the rules and regulations to implement payment, during the first quarter of the fiscal year.
(Acts 1985, 2nd Ex. Sess., No. 85-923, p. 207.)
On and after October 1, 1988, all tax collectors, elected assistant tax collectors, revenue commissioners, license commissioners, and other officials charged with assessing and/or collecting ad valorem taxes in the various counties of this state shall invest the ad valorem taxes collected by such officials in short term investments for the period of time between collection of said taxes and distribution of same as required by law. All interest earned on such investments shall be paid into the county general fund for use as determined by the county governing body, except that 10 percent of said interest earned on such investments shall be maintained by the county treasurer in separate funds designated as the special fund of the tax assessor, tax collector, and if elected the assistant tax assessor or assistant tax collector, and the revenue commissioner, license commissioner, or such other official charged with assessing and/or collecting ad valorem taxes by whatever designation, as the case may be; however, any such official who is under a civil service system shall not be entitled to such fund. Such special funds shall not accumulate in excess of $10,000 during any ad valorem tax year.
(Acts 1989, No. 89-913, p. 1808, §1.)
The special funds herein established shall be used and expended by the officials for which the funds are established by such officials requisitioning expenditures from the fund for the payment of any and all reasonable and necessary expenses incurred in carrying out their official duties, including but not necessarily limited to the following: Official educational expenses for such officials and/or their employees; provided, that such funds may not be expended for the usual and ordinary expenses of operating such officials’ office otherwise required by law to be furnished by the county governing body.
(Acts 1989, No. 89-913, p. 1808, §2.)
(a) The Department of Revenue, by administrative rule, shall suspend the collection of a tax or fee which it is authorized to collect when the cost of administering the collection of such tax or fee has exceeded the total amount of the tax or fee collected for each of the previous three fiscal years.
Should it be determined that the suspension of a tax or fee collection would result in reduced local revenues, the department shall notify the affected localities prior to filing a notice, pursuant to the Administrative Procedure Act, to promulgate an administrative rule to suspend the tax or fee.
(b) Notwithstanding subsection (a), the department shall not suspend the collection of a tax or fee in any of the following cases:
(1) If such tax or fee is mandated by federal law or regulation.
(2) If discontinuing the collection of such tax or fee would result in reduced federal funding received from the federal government that exceeds the state costs of collecting the tax or fee.
(3) If discontinuing the collection of a tax or fee would result in reduced state and local revenues that exceeds the state costs of collecting the tax or fee.
(4) If suspending collection of the tax or fee would negatively affect the public health, safety, or welfare.
(c) No administrative rule promulgated pursuant to this section shall be applied retroactively.
(d) In accordance with Sections 41-22-5.1 and 41-22-5.2, also known as the Red Tape Reduction Act, any rule promulgated pursuant to this section shall be reviewed not less than every five years. Should it be determined that the administrative cost of collecting a tax or fee no longer exceeds the total amount of tax or fee that could be collected, any corresponding rule suspending the collection of the tax or fee shall be repealed by the department.
If such rule is repealed, no tax or fee shall be due for any periods for which the rule was in effect.
(Act 2014-331, p. 1224, §1.)
(a) For the purpose of this section, the term economic tax incentive shall mean any tax credits, deductions, exemptions, abatements, preferential rates, or rebates given as an economic incentive. For the purpose of this section, the term economic incentive shall mean an inducement provided by the government, where the government promises to forgo tax revenues to which it is otherwise entitled or to provide some other benefit to an individual or an entity and in exchange the individual or entity promises to take specific action that contributes to economic development. In order for the Legislature to get accurate and complete information regarding the costs and benefits of economic tax incentives, each state agency that administers an economic tax incentive shall annually report the information required herein to the Legislature.
(b) The head of each state agency that administers any economic tax incentive shall prepare and submit to the Legislature a report regarding each economic tax incentive that the agency administers as set forth in the schedule provided by the Alabama Department of Revenue pursuant to subsection (f)(2) no later than the second Legislative day of the Regular Session beginning in the 2018 Regular Session of the Legislature and each year thereafter. The report shall include an assessment of each economic tax incentive based on the following criteria:
(1) Whether or not each economic tax incentive has been successful in meeting the purpose for which it was enacted, in particular, whether each economic tax incentive benefits those originally intended to be benefited, and if not, those who do benefit.
(2) Whether or not the state receives a positive return on investment, specifically the direct and indirect impact on state and local tax revenues, from the business or industry for which the economic tax incentive is intended to benefit and any other economic benefits produced by such tax incentive.
(3) The economic results of each economic tax incentive, taking into account the extent to which the incentive successfully changes business behavior, and the unintended or inadvertent effects, benefits, or harm caused by the economic tax incentive, including whether the economic tax incentive conflicts with other state laws or regulations.
(c)(1) Nothing in this section shall be construed to require the disclosure of proprietary or trade secret information that has been submitted to any state agency with respect to an economic tax incentive.
(2) Nothing in this section shall be construed to supercede any provision with respect to the confidentiality of taxpayer records.
(d) Each state agency required to submit a report pursuant to the provisions of this section may request from any other state or local agency, official, recipient of funds, or the Alabama Department of Revenue, any information necessary to complete the required report. Any such agency, official, or recipient shall comply with this request.
(e) For purposes of this section, the term state agency shall mean any office, department, board, commission, institution, or division within the executive branch of state government, excluding the Alabama Department of Revenue. Administration of an economic tax incentive shall be evidenced by a legal requirement or authorization to undertake any of the following actions for purposes of administration of the tax incentive:
(1) Promulgation of rules or regulations; in cases where more than one agency has rulemaking authority, the report shall be prepared collaboratively.
(2) Determination, review, or confirmation of eligibility or qualifications.
(3) Entering into a contract with an entity for purposes of a tax credit.
(4) Facilitating economic tax incentives by distributing funds to non-state agencies.
(5) Conducting oversight or substantial administrative functions for an economic tax incentive when the public purpose associated with the economic tax incentive is within the core mission of the agency.
(f)(1) The Department of Revenue shall develop a format for reports required herein. The format shall be made available to all state agencies for use in preparation of their required reports.
(2) The Department of Revenue shall prepare, every four years, a four-year schedule of the economic tax incentives to be reported to the Legislature beginning with the 2018 Regular Session of the Legislature.
(3) The Department of Revenue shall provide state agencies with any tax information necessary to complete the required report relating to an economic tax incentive of such agency.
(g) The House Ways and Means Committees and the Senate Finance and Taxation Committees referred to in this subsection as committees, shall conduct hearings on the reports every odd-numbered year, to be concluded thirty days before the beginning of the Regular Session of the Legislature. The committees shall analyze and consider each economic tax incentive and shall provide a recommendation to modify, discontinue, or take no action with respect to each economic tax incentive.
(Act 2016-389, §1.)
(a) Beginning in the 2024 Regular Session of the Legislature, all new tax credit legislation shall include the following:
(1) For every bill enacting a new tax credit, a tax credit performance statement which must state the legislative purpose for the new tax credit. The tax credit performance statement must indicate one or more of the following as the legislative purpose of the new tax credit:
a. Tax credits intended to induce certain designated behavior by taxpayers.
b. Tax credits intended to improve industry competitiveness.
c. Tax credits intended to create or retain jobs.
d. Tax credits intended to reduce structural inefficiencies in the tax structure.
e. Tax credits intended to provide tax relief for certain businesses or individuals.
(2) A statement providing that new tax credits shall expire on the first day of the calendar year following the calendar year that is five years from the effective date of the tax credit. With respect to any new property tax exemption, the exemption does not apply to taxes levied for collection beginning in the calendar year following the calendar year that is five years from the effective date of the tax credit.
(3) A statement establishing the limit on the amount of tax credits that may be provided during any applicable period of the tax credit.
(4) A statement limiting the number of years for carryforward of unused credits to no more than five years.
(5) A statement limiting the transfer or sale of tax credits.
(b) For tax years beginning after December 31, 2024, taxpayers claiming a new tax credit shall report the amount of the tax credit claimed by the taxpayer in accordance with the taxpayer’s regular tax reporting duties to the Department of Revenue. The amount of the tax credit claimed shall be considered as confidential taxpayer information, and the Department of Revenue shall not be required under this section to disclose confidential information.
(c) The term tax credit as used in this section shall mean a credit allowed against the amount of tax imposed by Chapter 16 or Chapter 18.
(Act 2023-546, §12.)
There shall be a Department of Revenue, hereinafter referred to as “the department.”
(Acts 1939, No. 4, p. 1; Code 1940, T. 51, §114.)
The Department of Revenue may employ a secretary and such other persons as experts, engineers, stenographers, clerks, or assistants as may be necessary for the performance of the duties which may be required of said department subject to the provisions of the Merit System. All compensation for the expenses of said department shall be paid out of the appropriation made for the annual expenses of the Department of Revenue or out of the fund or funds out of which said expenses are properly payable upon warrants drawn by the Comptroller upon said fund or funds.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §125.)
The secretary of said department shall keep full and correct minutes and records of all hearings, transactions, proceedings, and findings of the department and shall perform such other duties as may be required of him by law or by said department from time to time.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §126.)
Before entering upon the duties of their respective offices, all employees in the Department of Revenue shall execute to the State of Alabama a bond, to be approved by the Governor, in amounts to be fixed by the Commissioner of Revenue, for the faithful performance of the duties of their offices.
(Acts 1943, No. 122, p. 123; Acts 1961, Ex. Sess., No. 208, p. 2190.)
Oaths of witnesses in any matter under the investigation or consideration of the department may be administered by the commissioner, or by the secretary thereof, or by any chief clerk, field agent, or auditor. Any person swearing falsely to any material matter shall be guilty of perjury and shall be punished as provided by law.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §128.)
The Department of Revenue shall have and maintain its offices at the Capitol in Montgomery and shall be provided with suitable rooms, necessary office furniture, supplies, stationery, books and maps, and all expenses of the department incurred in discharge of its duties, and the administration of its duties and the administration of its functions shall be paid by the Treasurer out of the appropriation made for the annual expenses of the Department of Revenue, upon a warrant drawn by the Comptroller on the certificate or voucher of the department, approved by the Governor; provided, that the Department of Finance may at its discretion provide other or additional offices in the City of Montgomery for the use of the Department of Revenue.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §129.)
The Commissioner of the Department of Revenue, the secretary of the department and all stenographers, experts, engineers, and assistants who may be employed by the department shall be entitled to receive their actual expenses while traveling or acting on the business of the department, such expenses to be itemized and sworn to by the person who incurs the same, and vouchers attached as now provided by law, and shall be approved by said department and also by the Governor, such expenses not to exceed any maximum fixed by law. Such expenses shall be paid by the Treasurer out of the appropriation made for the annual expenses of the Department of Revenue or out of the fund or funds out of which such expenses are properly payable upon warrant drawn by the Comptroller upon such fund or funds.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §130.)
The Department of Revenue is hereby authorized to prepay to employees of the department an amount of money to be determined by the Commissioner of Revenue to pay necessary travel expenses for such employees on authorized official state business outside the State of Alabama. Such payment shall be made in accordance with rules and regulations promulgated by the Commissioner of Revenue and approved by the Governor and the Chief Examiner of Public Accounts. No traveler shall have expenses prepaid in excess of four thousand dollars ($4,000) for any one period of travel, nor shall the expenses so prepaid exceed twenty thousand dollars ($20,000) in the aggregate for all travelers at any time.
The Department of Examiners of Public Accounts shall examine the expenditure of funds used in accordance with this section annually and report its findings to the Legislative Committee on Public Accounts.
(Acts 1967, No. 394, p. 981; Act 2009-499, p. 923, §1.)
The Commissioner of the Department of Revenue may designate and appoint qualifying employees or agents of the Department of Revenue as law enforcement officers as defined by the Alabama Rules of Criminal Procedure.
(1) Qualifying employees or agents designated as peace officers shall be appointed by the Commissioner of the Department of Revenue provided that they have complied with the requirements set forth by the Alabama Peace Officers’ Standards and Training Commission.
(2) Law enforcement officers of the Department of Revenue shall investigate the commission or suspected commission of tax evasion, tax fraud, and other matters administered by the Department of Revenue including the enforcement and administration of tobacco tax, gasoline tax, and tax on motor fuels or any substitute thereof, licensing and registration of motor vehicles, and violations of Title 13A, Title 32, and this title. Revenue law enforcement officers so designated are authorized to issue or cause to be issued citations, tickets, complaints, subpoenas, and other process so as to commence and direct actions, prosecutions, and proceedings to be instituted to enforce the laws of this state.
(Acts 1967, No. 393, p. 980; Act 2011-565, p. 1084, §44.)
(a) It shall be the duty of the department, and it shall have the power and authority, in addition to the authority now in it vested by law:
(1) To have and exercise general and complete supervision and control of the valuation, equalization, and assessment of property, privilege, or franchise and of the collection of all property, privilege, license, excise, intangible, franchise, or other taxes for the state and counties, and of the enforcement of the tax laws of the state, and of the several county tax assessors and county tax collectors, judges of probate, and each and every state and county official, board, or commission charged with any duty in the enforcement of tax laws, to the end that all taxable property in the state shall be assessed and taxes shall be imposed and collected thereon in compliance with the law and that all assessments on property, privileges, intangibles, and franchises in the state shall be made in exact proportion to the fair and reasonable market value thereof in substantial compliance with the law.
(2) To equalize, value, and assess or cause to be equalized, valued, and assessed any property subject to taxation, and such valuations and assessments it shall enter or cause to be entered in the proper assessment book, record, or minutes of the proper official, board, or tribunal; to set aside all assessments so entered in any assessment book, record, or minutes within any time before the end of the assessment year and, after 10 days’ notice given the taxpayer, which notice shall be given by certified or registered mail, return receipt demanded, of the time and place of hearing, revalue and reassess the property and cause such revaluation and reassessment to be entered in the proper assessment book, record, or minutes in lieu of the original valuation and assessment; provided, that no reassessment or revaluation shall be made of any particular assessment from which an appeal is then pending, or if the valuation of the property for that year has been fixed on appeal by the circuit court or Supreme Court; provided further, that parties may appeal from such revaluation and assessment to the circuit court within like time and in like manner as from the valuation and assessment as fixed by the board of equalization.
(3) To confer with, advise, and direct the several county tax assessors, county tax collectors, judges of probate, boards, or commissions and every state and county official charged with the assessment and collection of taxes as to their duties under the laws of this state.
(4) To direct actions to be instituted by the Attorney General, district attorneys, or attorneys especially employed for such purposes, with the approval of the Attorney General for the collection of any taxes or penalties due the state or any county, or to compel any officer or taxpayer to comply with the provisions of the tax laws; to direct actions, prosecutions, and proceedings to be instituted to enforce the laws of this state relating to taxes, penalties, forfeitures, and liabilities, and for the punishment of any public officers or any person or any officer or agent of any corporation, company, or association, trustee, or receiver for failure or neglect to comply with the provisions of the tax laws, and to cause complaints, informations, actions, or prosecutions to be made or instituted against any tax assessor, tax collector, judge of probate, or other public official for the removal of such officers for official misconduct or neglect of duty and to further direct actions as may become necessary to obtain an order from a circuit court enjoining or restraining a taxpayer from continuing in business in Alabama whenever such taxpayer fails to collect, account for, and/or pay over any trust fund tax imposed by Sections 40-17-220, 40-17-325, 40-18-71, 40-21-82, 40-21-102, 40-21-121, 40-23-2, 40-23-61, 40-23-193, 40-26-1, or any other local sales, use, and gross receipts taxes collected by the department. Such actions and proceedings may be instituted in the circuit court of any county in which the taxpayer resides or does business, or in the Circuit Court of Montgomery County, Alabama, and shall remain in effect until such time as the taxpayer has come into full compliance with the tax laws.
(5) To require district attorneys and the Attorney General of the state to commence and prosecute, within the respective jurisdictions or spheres of official duty of the officers, actions, proceedings, and prosecutions for penalties, forfeitures, impeachments, and punishments for violations of the tax laws of the state, to enter into agreements with district attorneys and the Attorney General of the state to reimburse those offices for reasonable fees or costs of actions, proceedings, and prosecutions, and to fund the reimbursements, in whole or in part, from penalties assessed and collected pursuant to Section 40-2A-11.
(6) To require any public official in the state to report information as to valuation, equalization, and assessment of property, privileges, franchises or intangibles, gross receipts, collections of taxes, receipts from licenses and other sources, methods of taxation, values or franchises, or intangible property, or assets subject to taxation, and such other information as may be needful in the work of the Department of Revenue in such forms and upon such blanks as the department may prescribe and furnish.
(7)a. To require individuals, partnerships, associations, corporations, trustees, and receivers, and the agents, officers, and employees thereof, to furnish information concerning their capital, funded or otherwise, gross receipts, net profits or income, excess profits, current assets and liabilities, values of franchises, intangibles, value of property, earnings, operating and other expenses, bonds, deeds, conduct of business, and all other facts, records, books, papers, documents, and other information of any kind demanded which may be needful in order to enable the department to ascertain the value and relative burden to be borne by every kind of property in this state and to ascertain the proper amount of license, privilege, excise, corporation, franchise, income, or ad valorem taxes.
b. To require reporting of retail sales and customer notification, within constitutional limitations, when the seller does not collect sales, use, or simplified sellers use tax on Alabama sales transactions, and to provide for penalties pursuant to Section 40-2A-11.
c. To require reporting of rental transactions of tangible personal property as defined in Section 40-12-220, when the property is classified as Class II or Class IV property under Section 40-8-1, by persons facilitating the transactions and to require notifications to the lessor when the lessor has not furnished evidence that it has acquired a license as required under Section 40-12-221, and to provide for penalties pursuant to Section 40-2A-11.
(8) To cause the deposition of witnesses residing within or without the state to be taken upon such notice to the interested party, if any, as the department may prescribe, in like manner as depositions of witnesses are taken in actions pending in circuit court, in any matter which the department has authority to investigate and determine. The depositions shall be taken upon a commission issued by the Department of Revenue, or the secretary thereof, in the name of the department, and returnable to the department.
(9) To visit, by the commissioner or by duly authorized agents, the several counties in the state for the purpose of investigating the work and methods of county tax assessors, tax collectors, judges of probate, or other officers or boards charged with the duty of administering the tax laws of the state; to examine carefully into all cases where evasions or violations of the tax laws are alleged, complained of, or discovered, and to ascertain wherein existing laws are defective or are improperly or negligently administered and to report the result of the investigation and the facts ascertained to the Governor from time to time when required by the Governor.
(10) To investigate the tax system of other states; to thoroughly inform itself upon the subject of taxation and of the progress made in other states and counties in improving their tax system, to formulate and recommend such legislation as may be deemed expedient to prevent evasion of existing tax laws and to secure just and equal taxation and improvements in the system of taxation in this state.
(11) To consult and confer with the Governor upon the subject of taxation and the administration of the laws and progress of the work of the department, and to furnish to the Governor from time to time such information as the Governor may require.
(12) To transmit to the Governor, 30 days before the meeting of the Legislature, a written report showing all the taxable property in the state and the value of the same, in tabulated form, with recommendations for improvements in the system of taxation in the state, together with suggestions of such measures as the department may formulate for the consideration of the Legislature in regard thereto.
(13) To, for good reason shown and entered on the minutes of the department, do either of the following:
a. Extend the time for filing any report or written statement required to be filed with the department.
b. Temporarily waive the motor fuel importer, exporter, or transporter licensing requirements under Section 40-17-332, during a state of emergency or disaster. A waiver authorized by this subdivision shall be effective only for persons importing, exporting, or transporting motor fuel to areas within a state or territory of the United States for which the President of the United States or the Governor of that state or territory has declared a state of emergency or disaster, and only where the import, export, or transport takes place during the time the declaration is in effect. A temporary waiver of the motor fuel importer, exporter, or transporter licensing requirements under this subdivision shall not be construed to permit any waiver of any additional requirements or payment of any taxes due under the Alabama Terminal Excise Tax.
c. Temporarily waive the requirements associated with the International Registration Plan under Section 32-6-56 and the International Fuel Tax Agreement under Section 40-17-272, during a state of emergency or disaster. A waiver authorized by this subdivision shall be effective only for motor vehicles engaged in interstate disaster relief efforts traveling to areas within a state or territory of the United States for which the President of the United States or Governor of that state or territory has declared a state of emergency or disaster, and only when the travel takes place during the time the declaration is in effect. A temporary waiver of the requirements under the International Registration Plan or International Fuel Tax Agreement under this subdivision shall not be construed to allow a motor vehicle to operate in the State of Alabama without valid registration and insurance from its base state, nor allow any motor vehicle to exceed weight limits posted for bridges and like structures, or relieve any vehicle or the carrier, owner, or driver of any vehicle from compliance with any other restrictions, statutes, orders, or other legal requirements.
(14) To inspect and examine at all reasonable business hours any books, documents, records, or papers kept by any person, firm, corporation, trustee, or receiver.
(15) To make all assessments of taxes or penalties which it is authorized to enforce or collect and report the same to the Attorney General.
(16) To issue writs of garnishment by certified or standard mail on any final assessment or judgment made or rendered by the department; or to issue executions or writs of garnishment directed to any sheriff of Alabama, on any final assessment or judgment made or rendered by the department, and upon such executions the sheriff shall proceed as in cases issued out of the circuit court and shall make return thereof to the department within 60 days after the receipt thereof.
(17) To perform such other duties as are or may be imposed on it by law.
(b) The department may adopt rules for the implementation and administration of this section.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §131; Acts 1992, No. 92-186, p. 349, §20; Act 2017-82, §2; Act 2018-415, §1; Act 2019-164, §1; Act 2022-182, §1.)
Notwithstanding any provision of law to the contrary, and commencing on October 1, 2021, all allocations, disbursements, and distributions made pursuant to any of the following sections for taxes and fees collected by the Department of Revenue shall be made by the Department of Revenue and not the State Treasurer:
(1) Section 8-17-91, relating to the motor fuel excise tax.
(2) Sections 40-17-223 and 40-17-225, relating to the lubricating oil tax.
(3) Section 40-17-274, relating to the motor fuel tax and fees distributed under the International Fuel Tax Agreement.
(4) Section 40-17-359, relating to the highway gas tax and supplemental excise taxes.
(5) Section 40-17-361, relating to the diesel excise tax.
(Act 2019-247, §1.)
The Commissioner of Revenue of the State of Alabama is authorized to make or to have made microfilm copies, photostatic copies, or other similar photographic reproductions of, or electronic reproduction or computer output microfilm of the data from, any books, records, returns, files, minutes, letters, correspondence, motor vehicle registration cards, reports, petitions, permits, applications, receipts, assessments, notices, and any other document required to be maintained or kept by the Department of Revenue or any agency, division, or employee thereof. The Commissioner of Revenue is authorized to destroy or cause to be disposed of, at any time after validation of the reproduction, any of the above named documents which have been microfilmed, photostated, or otherwise photographed or the data from which have been electronically or photographically recorded. Such microfilm, photostat, other photograph, computer output microfilm, or electronically recorded data shall be retained and kept in lieu of such documents required to be kept or maintained. The Revenue Department, in the disposition of its records, shall comply with the provisions of Title 41, Chapter 13.
(Acts 1947, No. 703, p. 541, §1; Acts 1953, No. 65, p. 96; Acts 1979, No. 79-797, p. 1455, §8; Acts 1989, No. 89-403, p. 800, §1.)
Such microfilm copies, photostatic copies, other similar photographic reproductions, computer output microfilm, or electronically recorded data of such above named documents shall for all purposes be deemed to be and have the force and effect of such documents themselves. A photostatic copy, photographic reproduction, or other similar photograph, or typewritten copy or other copy of such original microfilm copy, photostatic copy, other similar photographic reproduction of such documents, computer output microfilm, or electronically reproduced data, which has been duly certified to by the officer having custody of such original microfilm copy, photostatic copy, other similar photographic reproduction, computer output microfilm, or electronically recorded data in the Department of Revenue must be received as evidence in all courts in the same manner and to the same extent as would be a duly certified copy of such document itself.
(Acts 1947, No. 703, p. 541, §2; Acts 1989, No. 89-403, p. 800, §2.)
It is hereby declared to be the legislative intent to permit the Commissioner of Revenue to dispose of any documents required by law to be kept or maintained by the Department of Revenue in the event that photographic reproductions of such documents, computer output microfilm, or electronically reproduced data are made or caused to be made by such commissioner and to give such photographic reproduction, computer output microfilm, or electronically reproduced data the same force and effect as the document which has been so photographed, electronically recorded, or recorded on computer output microfilm and disposed of. The Revenue Department, in the disposition of its records, shall comply with the provisions of Title 41, Chapter 13.
(Acts 1947, No. 703, p. 541, §3; Acts 1989, No. 89-403, p. 800, §3.)
Whenever the Department of Revenue has set aside and held for naught any assessment of property, except as otherwise provided herein, it shall give notice by mail of such action to the tax assessor of the county in which the property involved is located and to the owner of such property, by certified or registered mail, return receipt demanded. As soon as practicable after any property assessment has been set aside by the Department of Revenue, the department shall make a revaluation and, in the same notice, set a date for hearing objections, if any are made, to the valuation so fixed, and the hearing of objections shall be held at the office of the Department of Revenue, in Montgomery, Alabama, or at the courthouse of the county in which is located the property involved in the assessment, if demanded by the taxpayer, his agent or attorney, and when such assessment shall have been completed and made final by the department it shall notify the tax assessor of each county in which such property so revalued and assessed is situated of the amount of the assessment in such county, together with a general description of the property as assessed, which the assessor must enter in the book of assessments in addition to the assessments of other real estate and personal property.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §132.)
It shall be the duty of the Department of Revenue to examine such of the tax records of the several counties as will enable it to ascertain whether the tax valuation of the various classes of property as made in the respective counties of the state, is reasonably uniform as between the respective counties and is in proportion to the fair and reasonable market value of the property assessed. The purpose and intent of this title is to bring about as far as practicable an equalization throughout the state of the value of the various classes of property subject to taxation, so that the proportion of the fair and reasonable market value of the property as fixed for assessment in one county shall be in due proportion to the fair and reasonable market value of the same classes of property in other counties, fixed on the same basis for assessment, and that such classes of property in every county shall bear their proportion of the tax provided by law. If it shall appear to the said Department of Revenue that in any one or more counties of this state, or in any municipality or precinct of any county, the taxable values upon any one or more classes of property are not reasonably uniform with the values fixed upon the same classes of property in other counties or are not in proportion to the fair and reasonable market value of such property, the Department of Revenue shall investigate and inquire as to the reason therefor and, after making such investigation and comparison, shall have authority to order and direct the board of equalization to readjust and reequalize the same for the current or succeeding tax year, so that each item of property will bear its just proportion of the taxes as provided for herein. And the Department of Revenue shall thereupon notify the secretary of the board of equalization of the county affected and the Comptroller that the county, precinct, or municipal valuations upon the classes of property specified in said notice will be readjusted as provided herein, and the Comptroller shall thereupon return to said county its tax abstract and other tax returns for correction accordingly.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §133.)
Upon the giving of such notice by the Department of Revenue of the revaluing and reassessment ordered to be made of property within said county, it shall be the duty of the secretary of the board of equalization receiving such notice to call without delay a meeting of said board of equalization and to notify the Department of Revenue of the date on which said board is called to meet, and it shall be the duty of said board to convene on the day named in such notice, and at such meeting the board shall revalue and equalize the class or classes of property within the county, precinct, or municipality, as specified by the Department of Revenue, so as to conform to the findings and orders of the Department of Revenue by so revaluing and equalizing each item of said classes of property so that such item will bear its just proportion of tax as provided by law. If the board of equalization fails or refuses to make the changes and corrections thus ordered to be made by the state department, then the Department of Revenue shall itself, from such information it has or may obtain, revalue and equalize the property involved, and the expense of such revaluation and equalization shall be paid by the county so affected and by the state in the same proportion that the state tax levy and the county tax levy bear to the total state and county levy for ad valorem taxation. In counties where the Department of Revenue makes a revaluation and equalization of property for assessment, the tax assessor shall receive commissions only on the basis of the original assessment as made by him.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §134.)
(a) Whenever the work of revaluing and equalizing any class or classes of property has been completed by order of the Department of Revenue, as provided herein, and the revised valuation has been entered on the tax return list, the county board of equalization shall certify over their signatures to the correctness thereof and shall deliver the tax return list showing the assessment and revaluation to the assessing official of the county as their report, and the assessing official shall hold them in his or her office subject to public inspection. The assessing official shall then give notice by publication once a week for three consecutive weeks in a newspaper published in the county, if any are published in the county and, if no newspaper is published in the county, by posting notices in at least three public places in the county that the county board of equalization has returned its report and that the same is open to public inspection and that the board will convene at the courthouse in the county on a day to be named and fixed in the notice to correct any errors in the valuations.
(b)(1) If the property of any taxpayer is increased by the county board of equalization when revaluing and equalizing assessments as provided in this section over the assessed value as originally fixed by the board, the taxpayer shall be furnished by mail or in person, with a statement showing separately the revised value of his or her personal property and his or her real property no later than July 1, unless otherwise approved by the Department of Revenue, and also that the taxpayer may file in writing with the secretary of the county board of equalization, within 30 calendar days from the date of the notice, objections, if any are made, to the revaluation made as herein provided, and that the county board of equalization will sit on a day to be named and fixed in the notice, when the complaining taxpayer, his or her agent, or attorney may appear and produce evidence in support of any objection as filed.
(2) Notwithstanding the foregoing, failure to give or receive the notice shall not invalidate any assessment and the taxpayer shall have the right at any time before the taxes become delinquent to appear before the county board of equalization and have the assessment of his or her property reopened, if satisfactory proof is made that the taxpayer or his or her agent did not receive notice of the increase.
(c)(1) It shall be the duty of the county board of equalization to convene and sit at the courthouse in its respective county on the day named and fixed in the notices and to remain in session as long as may be necessary for the purpose of hearing objections, if any, that have been filed in writing against the revaluation or equalization so fixed by the board. The complaining property owner may appear before the board in person or by agent or attorney and produce evidence in support of objections to assessment valuations as fixed on his or her property.
(2) It shall be the duty of the county board of equalization to examine the complainant under oath and to examine any other witnesses under oath, as to the fair and reasonable market value of the property of the owner, and, if it finds from the evidence the revaluation placed by it on the property was not the amount specified by law on the fair and reasonable market value of the property, then it shall correct the valuations and enter the corrected value upon the tax return on which the property is listed for taxation, so that the return will show the amount specified by law on the fair and reasonable market value, and the corrected amount so entered by the board shall constitute the taxable value of the property.
(3) If the board finds from all the evidence that the revaluations placed by it on the property were the amount specified by law on the fair and reasonable market value, the valuation thus made shall remain and stand as the assessable value for taxation of the property. The revised and corrected property valuation thus made shall be fixed as the legal valuation of the property for the payment of the taxes, and it shall be the duty of the taxpayer to pay his or her taxes thereon accordingly.
(d)(1) If the revaluation and equalization provided for herein is made by the Department of Revenue, the Department of Revenue shall certify to the correctness of the revised tax assessments, and the newspaper publication shall be made and notices given as when the board of equalization revalues and equalizes property, that the Department of Revenue will sit on the date fixed in the notices to hear evidence in support of objections, if any, filed in writing with the assessing official to revaluations and equalizations made by it.
(2) The complaining property owner may appear in person or by agent or attorney and produce evidence in support of objections filed by him or her in writing to any revaluation of his or her property. The Department of Revenue shall examine any other witnesses under oath as to the fair and reasonable market value of the property of the owner. If the department finds from the evidence that the readjusted value placed by it on the property was not the amount specified by law on the fair and reasonable market value of the property, the department shall correct the valuations and enter the corrected value upon the tax return on which the property is listed, so that the return will show the amount specified by law on the fair and reasonable market value, and the corrected amount so entered by the Department of Revenue shall constitute the taxable value of the property.
(3) Notwithstanding the foregoing, if the Department of Revenue finds from all the evidence that the valuation placed by it on the property was the amount specified by law on the reasonable market value, the valuations thus made shall remain and stand as the assessable value for taxation of the property.
(e) From the revaluation and equalization made as herein provided, the taxpayer may appeal to the circuit court in the manner as provided for appeal from the county board of equalization.
(f) The Department of Revenue may adopt rules for the implementation and administration of this act.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §135; Act 2007-381, p. 757, §1; Act 2023-499, §§ 1, 2.)
No witness shall be excused from attending or testifying or from producing books, papers, records, accounts, and other documents before the department or in obedience to the subpoena issued by or in the name of the department on the ground or for the reason that the testimony, documentary or otherwise, required of him may tend to incriminate him or subject him to penalty or forfeiture. But no person shall be prosecuted or subject to any penalty or forfeiture for or on account of any transaction, matter, or thing concerning which he may testify or produce evidence, documentary or otherwise, before the commission or in obedience to its subpoena, but no person so testifying shall be exempt from prosecution and punishment for perjury committed in so testifying.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §137.)
Every witness who shall appear before the department by its order shall receive for his attendance the fees and mileage allowed by law for witnesses in civil cases in courts of record, which shall be audited and paid by the state in the same manner as other expenses of the Department of Revenue are audited and paid, upon the presentation of the proper vouchers sworn to by such witness and approved by the department; but witnesses summoned by parties other than the department shall be paid by parties causing the witnesses to be summoned.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §138.)
The department shall perform such necessary audits and examinations of the payroll tax records and returns of all contractors performing construction services for projects allowed the tax abatements or qualified for capital credits authorized or provided by the amendments to Sections 40-18-190, 40-18-194, 40-9B-3, 40-9B-4, and 40-9B-11 to determine that Alabama income taxes are being correctly withheld on construction wages paid to employees working in Alabama and that appropriate withholding allowances are being claimed.
(Act 2008-275, p. 402, §13.)
The chief executive officer of the Department of Revenue shall be known as the Commissioner of Revenue, and all the powers, authority, and duties vested in the Department of Revenue shall be exercised by the Commissioner of Revenue.
(Acts 1939, No. 4, p. 1; Code 1940, T. 51, §115.)
The Commissioner of Revenue shall be appointed by the Governor and shall hold office at the pleasure of the Governor. He shall be a qualified elector and known to possess high character and knowledge of the general subject of taxation and matters pertaining thereto. He shall not hold another office under the government of the United States or under any other state or of this state, or any political subdivision thereof, during his incumbency in such office and shall not hold any position of trust or profit or engage in any occupation or business the conduct of which shall interfere or be inconsistent with the duties he assumes as Commissioner of Revenue under the provisions of this title; provided, that no one shall be eligible to serve as Commissioner of Revenue while employed by or financially interested in any public service corporation, nor unless he shall have been a citizen of Alabama for a period of five years and shall be over 30 years of age.
(Acts 1935, No. 194, p. 256; Acts 1939, No. 4, p. 1; Code 1940, T. 51, §116.)
The Commissioner of Revenue, before entering upon the discharge of his duties, shall take, subscribe, and file with the Secretary of State the following special oath of office in addition to the general oath of office prescribed for public officers by the Constitution of Alabama: “I, _____, do hereby solemnly swear that I will faithfully, impartially perform the duties of office as Commissioner of Revenue, to which I have been appointed and which I now assume, without fear or favor, bias, or thought of personal gain or advantage, to the best and utmost of my ability, capacity, and power.” This oath shall be taken before any officer qualified to administer oaths in the State of Alabama and thereupon shall be filed with the Secretary of State.
(Acts 1935, No. 194, p. 256; Acts 1939, No. 4, p. 1; Code 1940, T. 51, §117.)
Before entering the duties of his office, the Commissioner of Revenue shall execute to the State of Alabama a bond, to be approved by the Governor, in the amount of $5,000, for the faithful performance of his duties.
(Acts 1943, No. 122, p. 123; Acts 1961, Ex. Sess., No. 208, p. 2190.)
There is hereby created the office of Assistant Commissioner of Revenue of the Department of Revenue. Such Assistant Commissioner of Revenue shall possess the qualifications and take the oath of office required by law of the Commissioner of Revenue and shall be appointed and hold office under and according to the provisions of the state Merit System as provided now or hereafter by Chapter 26 of Title 36.
The Assistant Commissioner of Revenue shall perform such duties as are assigned to him by the Commissioner of Revenue. In the absence of the Commissioner of Revenue, the Assistant Commissioner of Revenue shall assume the duties of the office of the Commissioner of Revenue. He shall have and exercise in all matters the full authority granted by law to the Commissioner of Revenue if the Commissioner of Revenue shall have delegated such duties and authority to him in writing.
(Acts 1949, No. 423, p. 600.)
(a) For purposes of this section, a local official eligible for service on the committee is an elected or appointed official charged with the assessing or collecting, or both, of ad valorem taxes and other fees on real and personal property at the county level.
(b)(1) To ensure consistent and purposeful communication between the Commissioner of the Alabama Department of Revenue and local officials on matters pertaining to the assessment and collection of ad valorem taxes and other fees on real and personal property, the Alabama Ad Valorem Advisory Committee is established. The committee shall consist of all of the following:
a. One local official from each of the congressional districts appointed by the commissioner from a list of three recommendations per district submitted by the Association of Alabama Tax Administrators.
b. The presiding president and vice president of the Association of Alabama Tax Administrators.
c. Two local officials appointed by the commissioner.
d. Two taxpayers appointed by the commissioner who have paid taxes in the State of Alabama for at least five years and have paid all tax liabilities.
(2) If the Association of Alabama Tax Administrators fails to timely submit a list of recommendations for appointment to the committee, the commissioner may appoint a local official from that respective congressional district.
(3) If a vacancy on the committee occurs, the commissioner shall fill the vacancy from the list of three recommendations submitted by the Association of Alabama Tax Administrators or request that a new list of three recommendations be provided by the association.
(4) The commissioner and the Association of Alabama Tax Administrators shall assure that the recommendations and appointments reflect the racial, gender, geographic, urban, rural, and economic diversity of the state.
(c) The members of the committee shall serve one-year terms and are eligible for reappointment if recommended by the Association of Alabama Tax Administrators. The initial appointment recommendations shall be made no later than August 1, 2023, and each August 1 thereafter. The commissioner shall appoint the members of the committee no later than September 1 of each year.
(d) Committee members shall receive no compensation or reimbursement of expenses from the state for serving on the committee. The local officials may be reimbursed for travel as provided by law for their official duties.
(e) The committee shall hold its first meeting no later than October 1, 2023. The commissioner shall set the date, time, and location of the first meeting. The advisory committee may elect a chair and vice chair and shall determine the timing and frequency of subsequent meetings. The advisory committee shall meet no less than four times per year.
(f) The committee shall meet with the commissioner or his or her designee and other employees of the Department of Revenue as the commissioner deems appropriate. The commissioner shall present specific questions, issues, policy considerations, or other matters deemed appropriate to the committee for input, review, and possible recommendation. Likewise, the committee may present additional questions, issues, policy considerations, or other matters for input, review, and possible recommendation. The committee shall make no review or recommendation pertaining to any other department matter.
(g) Formal recommendations from the committee shall be made to the commissioner by affirmative vote of a majority of the membership. The commissioner shall respond to the recommendations as he or she deems appropriate, including a written response to the committee, or the appointment of additional committees or work groups composed of employees of the Department of Revenue and local officials.
(Act 2023-505, §1; Act 2025-392, §1.)
There is hereby created the Office of Legal Counsel for the Department of Revenue.
(Acts 1939, No. 10, p. 5; Code 1940, T. 51, §119.)
The Commissioner of Revenue shall, with the approval of the Attorney General, appoint a competent attorney as legal counsel for the Department of Revenue, who shall hold office at the pleasure of the Governor. Such legal counsel shall be at least 30 years of age, of good moral and ethical character, learned in the law, and experienced in the legal phases of taxation. Such legal counsel shall be commissioned as an Assistant Attorney General and shall, in addition to the powers and duties herein conferred, have the authority and duties of an Assistant Attorney General; except, that his entire time shall be devoted to the Department of Revenue. He shall take the oath required of other assistant attorneys general.
(Acts 1939, No. 10, p. 5; Code 1940, T. 51, §120.)
Before entering upon the duties of his office, the legal counsel for the Department of Revenue shall execute to the State of Alabama a bond, to be approved by the Governor, in the amount of $3,000, for the faithful performance of his duties.
(Acts 1943, No. 122, p. 123; Acts 1961, Ex. Sess., No. 208, p. 2190.)
The legal counsel shall be furnished with an office by the Department of Revenue together with necessary stenographic and clerical help, office equipment, stationery, and postage and shall be allowed reasonable traveling expenses, when traveling on business of the state, all to be paid by the Department of Revenue, to be charged so far as practicable to the division for which the expense was incurred.
(Acts 1939, No. 10, p. 5; Code 1940, T. 51, §121.)
The Commissioner of Revenue, with the approval of the Attorney General, shall be authorized, subject to the provisions of the Merit System law, to appoint not more than 15 assistant counsel as may be necessary to transact the legal business of the Department of Revenue. Each such assistant counsel shall be at least 25 years of age, shall have the other qualifications and duties of the legal counsel, shall be commissioned as an Assistant Attorney General and take the oath required of other assistant attorneys general, and shall have the authority and duties of an Assistant Attorney General.
(Acts 1939, No. 10, p. 5; Code 1940, T. 51, §122; Acts 1947, No. 405, p. 293; Acts 1957, No. 500, p. 688; Acts 1965, 2nd Ex. Sess., No. 59, p. 85; Acts 1992, No. 92-186, p. 349, §21.)
The legal counsel and assistant counsel shall devote all their time to the Department of Revenue and shall not, during their incumbency in office, engage in the private practice of law.
Such legal counsel shall confer with and advise the Commissioner of Revenue on matters relating to taxation. He shall furnish either verbal or written opinions when requested by the commissioner on questions relating to taxation and to tax laws, but such opinions shall not have the force and effect of official opinions of the Attorney General unless approved by the Attorney General. Such legal counsel shall appear for the state in all matters, in litigation of the state involving taxation, both civil and criminal, when authorized to do so by the commissioner and the Attorney General.
(Acts 1939, No. 10, p. 5; Code 1940, T. 51, §123.)
Whenever any matter is pending before any court affecting the revenue laws of the state and in which the state is an interested party and the interest is very important, the Department of Revenue may, with the approval of the Governor and Attorney General, employ special counsel to represent the interest of the state on the trial thereof; provided, that the Attorney General certifies to the Governor in writing that neither he nor any of his assistants are available for service, and no case pending before a court affecting the revenue laws of the state shall be dismissed by counsel representing the state, whether specially employed counsel or otherwise, except by order of the Department of Revenue.
(Acts 1947, No. 703, p. 541.)
This chapter shall be known and may be cited as the “Alabama Taxpayers’ Bill of Rights and Uniform Revenue Procedures Act.”
(Acts 1992, No. 92-186, p. 349, §1(b).)
(1) LEGISLATIVE INTENT.
a. The legislative intent of this chapter is to provide equitable and uniform procedures for the operation of the department and for all taxpayers when dealing with the department. This chapter is intended as a minimum procedural code and the department may grant or adopt additional procedures not inconsistent with this chapter. This chapter shall be liberally construed to allow substantial justice.
b. The provisions of this chapter shall be complementary and in addition to all other provisions of law. In the event of any conflict between the provisions of this chapter and those of any other specific statutory provisions contained in other chapters of this title, or of any other title, it is hereby declared to be the legislative intent that, to the extent such other specific provisions are inconsistent with or different from the provisions of this chapter, the provisions of this chapter shall prevail.
(2) SCOPE. The provisions contained herein shall govern all matters administered by the department except as otherwise provided by law or by agreement entered into pursuant to lawful authority. However, nothing herein shall be construed to apply to the assessment of ad valorem taxes on real or personal property which is administered by the various counties of the State of Alabama, except that the determination and assessment of value of property of public utilities under Chapter 21 of this title, and the determination and assessment of value of corporate shares of stock under Article 4 of Chapter 14 of this title shall be governed by the procedures set forth in this chapter.
(3) PROCEDURES EXCLUSIVE. The department shall not be subject to the declaratory judgment, declaratory ruling, or contested case provisions of the Alabama Administrative Procedure Act, Chapter 22 of Title 41.
(Acts 1992, No. 92-186, p. 349, §2; Act 2000-233, p. 368, §1.)
For the purposes of this chapter and Chapter 2B, the following terms shall have the following meanings:
(1) ASSOCIATE ALABAMA TAX TRIBUNAL JUDGE. An associate judge as defined in Section 40-2B-2.
(2) AUTHORIZED REPRESENTATIVE. Any individual, including, but not limited to, an attorney or certified public accountant with written authority or power of attorney to represent a taxpayer before the department or the Alabama Tax Tribunal; provided however, that nothing herein shall be construed as entitling any such individual who is not a licensed attorney to engage in the practice of law.
(3) CHIEF ALABAMA TAX TRIBUNAL JUDGE or CHIEF JUDGE. The chief judge as defined in Section 40-2B-2.
(4) COMMISSIONER. The commissioner of the department or his or her delegate.
(5) COMPTROLLER. The Comptroller of the State of Alabama.
(6) DELEGATE. When used with reference to the commissioner means any officer or employee of the department duly authorized by the commissioner, directly or indirectly, by one or more redelegations of authority, to perform the function described in the context.
(7) DEPARTMENT or DEPARTMENT OF REVENUE. The Alabama Department of Revenue.
(8) GROSS RECEIPTS TAX IN THE NATURE OF A SALES TAX. A privilege or license tax, imposed by a municipality or county, measured by gross receipts or gross proceeds of sale and which: (i) was in effect on or before February 25, 1997, or is an amendment to a tax which was in effect on that date; (ii) is levied against those selling tangible personal property at retail, those operating places of amusement or entertainment, those making street deliveries, and those leasing or renting tangible personal property; and (iii) is due and payable to a county or municipality monthly or quarterly.
(9) FINAL ASSESSMENT. The final notice of value, underpayment, or nonpayment of any tax administered by the department.
(10) INTEREST. That amount computed under Section 40-1-44, on any overpayment or underpayment of tax or under Section 40-2A-18 on a final assessment.
(11) INTERNAL REVENUE SERVICE. The agency of the United States principally responsible for the determination, assessment, and collection of taxes established by Title 26 of the United States Code.
(12) NOTICE OF APPEAL. Any written notice sufficient to identify the name of the taxpayer or other party appealing, the specific matter appealed from, the basis for that appeal, and the relief sought.
(13) PERSON. Any individual, association, estate, trust, partnership, corporation, or other entity of any kind.
(14) PETITION FOR REFUND. Any written request for a refund of any tax previously paid, including in the form of an amended return. Unless otherwise provided by law, the request shall include sufficient information to identify the type and amount of tax overpaid, the taxpayer, the consumer/purchaser, the period included, and the reasons for the refund.
(15) PETITION FOR REVIEW. A written document filed with the department in response to a preliminary assessment in which the taxpayer sets forth reasonably specific objections to the preliminary assessment.
(16) PRELIMINARY ASSESSMENT. The preliminary notice of value or underpayment of any tax administered by the department.
(17) PRIVATE AUDITING OR COLLECTING FIRM. Any person in the business of collecting, through contract or otherwise, local sales, use, rental, lodgings or other taxes or license fees for any county or municipality, or auditing any taxpayer, through the examination of books and records, for any county or municipality. The term shall also be referred to as a third-party auditing firm, a third-party collecting firm, or a third-party administrator. The term shall not include any of the following:
a. The Department of Revenue.
b. A county or municipality that has entered into a contract or other arrangement to collect local sales, use, rental, lodgings, or other taxes or license fees on behalf of another county or municipality, or to audit a taxpayer, through the examination of books and records, on behalf of another county or municipality.
c. A person or firm whose sole function and purpose on behalf of a municipality or group of municipalities is to collect delinquent insurance premium license fees levied by that municipality or group of municipalities, and who has no authority to determine the amount of license fee, interest, court cost, or penalty owed to the municipality or group of municipalities.
(18) PUBLICATION 1A. A written pamphlet to be distributed by the department to all taxpayers whose books and records are being examined by the department, at or before the commencement of an examination, explaining in simple and nontechnical terms, the role of the department and the rights of the taxpayer whose books and records are being examined by the department during the examination and which shall be promptly revised from time to time to reflect any changes in the applicable law or rules.
(19) RETURN. Any report, document, or other statement required to be filed with the department for the purpose of paying, reporting, or determining the proper amount of value or tax due.
(20) SECRETARY. The secretary of the department.
(21) SELF-ADMINISTERED COUNTY OR MUNICIPALITY. A county or municipality that administers its own sales and use taxes or other local municipal or county taxes levied or authorized to be levied by a general or local act, or contracts out all or part of that function to a private auditing or collecting firm. The term does not include any of the following:
a. A county or municipality that allows the department to administer a sales, use, rental, or lodgings tax which is levied by or on behalf of that county or municipality.
b. A municipality or county that levies a gross receipts tax in the nature of a sales tax, as defined in subdivision (8). A county or municipality that both self-administers a sales, use, rental, or lodgings tax and allows the department to administer a sales, use, rental, or lodgings tax that is levied by or on behalf of the county or municipality is only a self-administered county or municipality with respect to those sales, use, rental, or lodgings taxes that the county or municipality administers itself or for those taxes that it contracts for the collection.
(22) TAX. Any amount, including applicable penalty and interest, levied or assessed against a taxpayer and which the department or any county, municipality, or their designees are required or authorized to administer under the provisions of Alabama law.
(23) ALABAMA TAX TRIBUNAL. The Alabama Tax Tribunal as described in Chapter 2B.
(24) TAXPAYER. Any person subject to or liable for any state or local tax; any person required to file a return with respect to, or to pay, or withhold and remit any state or local tax or to report any information or value to the department, a county, municipality, or its designee; or any person required to obtain or holding any interest in any license, permit, or certificate of title issued by the department, a county, municipality, or its designee, or any person that may be affected by any act or refusal to act by the department, a county, municipality, or its designee, or to keep any records required by this chapter.
(25) TAXPAYER ADVOCATE. The person so designated from time to time by the commissioner to assist the taxpayers of the State of Alabama with regard to tax issues resulting from any taxes administered or collected by the department.
(26) TAXPAYER ASSISTANCE ORDER. A written order issued by the Taxpayer Advocate and approved by either the commissioner or assistant commissioner which, among other items, states the facts and grants relief to a taxpayer concerning an issue in dispute with the department with regard to tax issues resulting from any taxes administered or collected by the department.
(Acts 1992, No. 92-186, p. 349, §3; Act 98-192, p. 310, §9; Act 2000-233, p. 368, §1; Act 2014-146, p. 378, §3; Act 2016-406, p. 1082, §1; Act 2018-180, §1.)
(a) Rights of the taxpayer.
(1) For purposes of this subsection and subsections (c) and (d), the term “department” shall include the Department of Revenue, a self-administered county or municipality, or a private examining or collecting firm, depending on whether the Department of Revenue, a self-administered county or municipality, or private examining or collecting firm is conducting the examination of the taxpayer.
(2) At or before the commencement of an examination of the books and records of a taxpayer, the department shall provide to the taxpayer the current version of Publication 1A. Publication 1A shall provide, in simple and non-technical terms, a statement of the taxpayer’s rights. Those rights include the right to be represented during an examination, an explanation of their appeal rights, and the right to know the criteria and procedures used to select taxpayers for an examination.
(3) At or before the issuance of a preliminary assessment, the department shall provide to the taxpayer in simple and non-technical terms:
a. A written description of the basis for the assessment and any penalty asserted with respect to the assessment.
b. A written description of the method by which the taxpayer may request an administrative review of the preliminary assessment.
(4) At or before the issuance of a final assessment, the department shall inform the taxpayer by a written statement of his or her right to appeal to the Alabama Tax Tribunal or to the circuit court.
(5) Except in cases involving suspected criminal violations of the tax law or other criminal activity, the department shall conduct an examination of a taxpayer during regular business hours after providing reasonable notice to the taxpayer. A taxpayer who refuses a proposed time for an examination on the grounds that the proposed examination would cause inconvenience or hardship must offer reasonable alternative times and dates for the examination.
(6) At all stages of an examination or the administrative review of the examination, and in any appeal to the Alabama Tax Tribunal, a taxpayer is entitled to be assisted or represented, at his or her own expense, by an authorized representative. The department shall prescribe a form by which the taxpayer may designate a person to represent him or her in the conduct of any proceedings, including collection proceedings, resulting from actions of the department. In the absence of this form, the department or the Alabama Tax Tribunal may accept such other evidence that a person is the authorized representative of a taxpayer as it considers appropriate. This subdivision shall not be construed as authorizing the practice of law before the department, Alabama Tax Tribunal, or any court in this state by a person who is not a licensed attorney.
(7) A taxpayer shall be allowed to make an audio recording of any in-person interview with any officer or employee of the department relating to any examination or investigation by the department, provided, however, the taxpayer shall give reasonable advance notice to the department of his or her intent to record and the recording shall be at the taxpayer’s own expense and with the taxpayer’s own equipment. The department shall also be allowed to record any interview if the taxpayer is recording the interview, or if the department gives the taxpayer reasonable advance notice of its intent to record the interview. The department shall provide the taxpayer with a copy of the recording, but only if the taxpayer provides reimbursement for the cost of the transcript and reproduction of the copy. The cost shall be reasonable as prescribed by rules issued by the department.
(8) This section shall not apply to criminal investigations or investigations relating to the integrity of any officer or employee of the department.
(b) Department responsibilities generally.
(1) The commissioner shall appoint one or more taxpayer advocates from among the employees of the department. These officers shall receive and review inquiries or complaints concerning matters that have been pending before the department for an unreasonable length of time, or matters where the taxpayer has been unable to obtain a reasonable response after several attempts to communicate with the department employee assigned to the taxpayer’s case, or his or her immediate superiors. In addition, these officers shall review and have the authority to waive a penalty for reasonable cause as provided in subsection (h) of Section 40-2A-11, shall promptly review inquiries concerning release of property levied upon, the erroneous filing of liens, the failure to release a lien for good cause, or other matters complained of by a taxpayer or other affected party. A taxpayer advocate shall have no authority nor issue any ruling with regard to any taxes collected by or on behalf of a self-administered county or municipality.
a. A taxpayer advocate, subject to the approval of the commissioner or the assistant commissioner, shall issue taxpayer assistance orders in the form and manner prescribed herein and by department rules.
b. Notwithstanding any statute of limitation or other provision in this title, a taxpayer assistance order may declare that any tax, including a final assessment, was erroneously assessed or reported and is not a liability due the state, or that a petition for refund was erroneously denied by the department.
c. A taxpayer assistance order shall grant relief as deemed appropriate, including the voiding of any erroneously issued final assessment for a tax which was not a debt due the state, granting of any refund due the taxpayer, or abating an assessment of interest that has accrued because of undue delay by department personnel.
d. At the request of the Alabama Tax Tribunal, a taxpayer advocate shall review a final order issued by the Alabama Tax Tribunal that was not appealed pursuant to Section 40-2B-2, if there is newly discovered evidence which by due diligence could not have been discovered in time to file an application for rehearing pursuant to Section 40-2B-2, and may propose relief as the taxpayer advocate deems appropriate and approved by the commissioner or the assistant commissioner.
e. All taxpayer assistance orders shall be dated and signed by a taxpayer advocate and approved either by the commissioner or the assistant commissioner, and shall state the underlying facts, the reasons for granting relief, and the relief granted. Any taxpayer assistance order, for good cause, may be modified or rescinded in writing by a taxpayer advocate and either the commissioner or the assistant commissioner.
f. A taxpayer advocate shall have full access to department personnel, books, and records subject, however, to the confidentiality restrictions imposed by this chapter.
g. Taxpayer assistance orders shall not be subject to the confidentiality provisions of this title, and shall be maintained by the secretary of the department and shall be open to review upon written request. A taxpayer advocate shall have no authority nor issue any ruling with regard to any taxes collected by or on behalf of a self-administered county or municipality.
h. The commissioner shall make an annual report to the Legislature of all taxpayer assistance orders approved in accordance with this section and Sections 40-2A-2 and 40-2A-3. The report shall contain the total amount of relief granted and the types of taxes for which relief was granted.
(2) The department shall maintain a continuing education program to train employees of the department and to provide them with a current knowledge of state and applicable federal tax laws.
(3) In addition to any other information provided by law, the commissioner shall include in the department’s annual report information about the number or kind of audits or assessments conducted in the year covered by the report.
(4) The department shall not use the amounts of taxes assessed by an employee of the department as:
a. The basis of a production quota system for employees; or
b. The basis for evaluating an employee’s performance.
(5) The department shall establish procedures for monitoring the performance of department employees which may include the use of evaluations obtained from taxpayers.
(6) INSTALLMENT PAYMENTS.
a. The commissioner is authorized to enter into written agreements to allow any taxpayer to pay any tax in installment payments if the commissioner determines that such agreement will facilitate collection of such tax. Notwithstanding the preceding sentence, such agreements shall be entered into only regarding a tax that has been finally assessed by the department. The commissioner shall only be authorized to enter such an agreement with regard to a tax administered or collected by the department.
b. The commissioner may terminate, alter, or modify any agreement entered into hereunder if:
Information provided by the taxpayer to the commissioner prior to the date of such agreement was inaccurate or incomplete;
The taxpayer fails to pay any installment at the time such installment payment is due under such agreement;
The taxpayer fails to pay any other tax liability due the department at the time such liability is due, unless the taxpayer has appealed such other liability pursuant to the terms of this chapter;
The financial condition of the taxpayer has significantly changed;
The taxpayer fails to provide a financial condition update as requested by the commissioner; or
The commissioner believes that collection of any tax to which an agreement under this subdivision relates is in jeopardy.
c. The commissioner shall have sole authority or discretion to enter into or amend, modify, or terminate any installment payment agreement provided for herein. The commissioner shall adopt rules necessary for the implementation of this subdivision.
d. Any self-administered county or municipality shall have the same authority as provided to the commissioner by this subdivision relating to installment payments with respect to taxes administered or collected by the self-administered county or municipality.
(c) Department failure to comply with this section. The failure of the department to comply with this section shall not prohibit the department from assessing any tax as provided in this chapter, nor excuse the taxpayer from timely complying with any time limitations under this chapter. However, if the department fails to substantially comply with this section, the commissioner, upon application by the taxpayer or other good cause shown, shall abate any penalties otherwise arising from the examination or assessment.
(d) Abatement of penalty. The department shall abate any penalty attributable to erroneous written advice furnished to a taxpayer by an employee of the department. However, this section shall apply only if the department employee provided the written advice in good faith while acting in his or her official capacity, the written advice was reasonably relied on by the taxpayer and was in response to a specific written request of the taxpayer, and the penalty did not result from the taxpayer’s failure to provide adequate or accurate information.
(Acts 1992, No. 92-186, p. 349, §3; Act 1998-192, p. 310, §9; Act 2000-233, p. 368, §1; Act 2014-146, p. 378, §3; Act 2019-101, §1.)
(a) The commissioner may, in addition to all other powers and authority now granted by law, issue “revenue rulings” describing the substantive application of any law or regulation administered by the department. Revenue rulings may also govern procedures applicable to the department, and in that event, shall be called “revenue procedures.” Revenue rulings shall be binding on the department and the state, its political subdivisions, and taxing authorities only with respect to the taxpayer making the request and only with respect to the facts contained in the request. The department attorney assigned to review the request for a revenue ruling shall consult with the taxpayer or its authorized representative, if requested by the taxpayer or the authorized representative, prior to issuing the revenue ruling. A revenue ruling shall constitute the department’s interpretation of the law or regulations as applied to the facts contained in the request, but only pertaining to the particular facts described in the request, and only to the taxpayer making the request.
(b) Revenue rulings may be issued only if no taxes have accrued with respect to the transactions, events, or facts contained in the request at the time of the issuance of the ruling.
(c) Revenue rulings may be revoked or modified by the commissioner at any time; but any revocation or modification shall not be effective retroactively unless one of the following has occurred:
(1) The person making the request misstated or omitted facts material to the ruling.
(2) The ruling was issued with respect to a matter involving the computation or payment of a tax that was due and payable at the time the ruling was requested.
(3) The law applied by the commissioner in the revenue ruling is changed in a manner to alter the commissioner’s conclusions in the ruling and the change in the law is made effective as of the date of the ruling.
The taxpayer may petition for a hearing with the Alabama Tax Tribunal to determine the propriety, under subsections (a), (b), or (c), of any retroactive revocation of a ruling.
(d) All revenue rulings issued by the department shall be published, maintained as a public record, and made available by the department for public inspection and copying, within a reasonable time following their issuance, at a reasonable cost to be determined by the department. Prior to publication, the department shall delete from the text of the ruling all names, addresses, titles, figures, dates, and other information which may identify the particular taxpayer who requested the ruling. If a revenue ruling contains trade secrets or other confidential information, the department shall, upon written request of the taxpayer, delete that information prior to publication.
(e) Requests for revenue rulings shall be submitted in writing to the secretary in the form and manner as prescribed by department regulations, accompanied by a fee of two hundred dollars ($200). The commissioner shall either issue or refuse to issue a ruling within 120 days after receipt of the request unless the taxpayer consents to an extension of time. If the commissioner refuses to issue a ruling within the time prescribed, the two hundred dollar ($200) fee shall be refunded to the taxpayer. A request may be withdrawn at any time prior to the issuance of the requested ruling, in which case there shall be no refund of the two hundred dollar ($200) fee.
(f) Revenue rulings shall be issued in the name of the commissioner.
(g) Subject to the provisions of this section, the commissioner may also issue a revenue ruling in response to a written request by a governing body of a self-administered county or municipality, or by a taxpayer, regarding the substantive application of a sales, use, rental, or lodgings tax levied by or on behalf of the self-administered municipality or county; provided, however, that the commissioner may not (i) issue a revenue ruling interpreting any tax levied by or on behalf of a self-administered municipality or county which levies a gross receipts tax in the nature of a sales tax, as defined in Section 40-2A-3(8), or (ii) issue a revenue ruling that would establish a rule of nexus determining the locality to which sales and use taxes, or gross receipts taxes in the nature of a sales tax as defined by Section 40-2A-3(8), are due if the locality is a self-administered county or municipality, as defined by Section 40-2A-3(20). Revenue rulings shall be binding on a self-administered county or municipality only with respect to the specific taxpayer making the request and only with respect to the specific facts contained in the request. Any ruling shall, if the other requirements of this section are met, be issued within 45 days of receipt of the request, and if the requesting party is a self-administered municipal or county governing body, the fee for issuance of the ruling shall be waived. If the requesting party is a taxpayer, the department shall, promptly upon receipt, forward a copy of the ruling request to the appropriate municipal or county governing body and shall consult with and accept written comments from representatives of the municipality or county prior to issuance of the ruling.
(Acts 1992, No. 92-186, p. 349, §5; Acts 1995, No. 95-607, p. 1279, §2; Act 98-191, p. 297, §2; Act 2014-146, p. 378, §3.)
(a) The state or any county or municipal governing authority may not enter into any contract or arrangement for the examination of a taxpayer’s books and records, written or otherwise, with a private auditing or collecting firm, if any part of the compensation or other benefits paid or payable to the private auditing or collecting firm is contingent upon or in any manner related to the amount of tax, license fee, interest, court cost, penalty, or any other item assessed against or collected from the taxpayer. Any such contract or arrangement, if made or entered into, is void and unenforceable. Any assessment or preliminary assessment of taxes, license fees, penalties, court costs, interest, or other items proposed or asserted by, or based upon the recommendation of, a private auditing or collecting firm compensated under any such contract or arrangement shall be void and unenforceable. This provision does not prohibit or restrict the state or any county or municipal governing authority from entering into contracts or arrangements for the collection of any tax, interest, court cost, or penalty when the private auditing or collecting firm has no authority to determine the amount of tax, interest, court cost, or penalty owed the state, county, or municipal governing authority.
(b) The compensation or other benefits paid or payable to any employee or other agent of a private auditing or collecting firm or to any employee or other agent of the state or county or municipal governing authority serving in the capacity of a hearings or appeals officer, including an attorney serving in that capacity, may not be contingent upon, in whole or in part, or otherwise related to in any manner, the amount of tax, license fee, interest, court cost, penalty, or other item assessed against or collected from the taxpayer. Any contract or arrangement based, in whole or in part, on any such contingency is void and unenforceable. Any assessment or preliminary assessment of taxes, license fees, penalties, court cost, interest, or other items proposed or asserted by or upon the recommendation of a private auditing or collecting firm, compensated under any such contract or arrangement, is void and unenforceable.
(c) Any person violating this section, for each violation, shall have committed a Class A misdemeanor. Violators shall also forfeit any certification granted under Section 40-2A-14. Any private auditing or collecting firm that violates subsections (a) or (b) shall forfeit its license issued under Section 40-12-43.1 until such time as it and each of its examiners or other employees or agents involved in the violation meet any remedial requirements prescribed by the board created under Section 40-2A-15. This provision may not, however, preclude employees of a private auditing or collecting firm from participating in a profit-sharing arrangement generally made available to other employees of the firm who are not engaged in examining taxpayers’ books and records, provided that the formula utilized in calculating the profit-sharing allocations is based primarily on the overall profitability of the firm and secondarily on non-monetary criteria such as age or years of service.
(d) Except as otherwise provided in this subsection, the state or any county or municipal governing authority may not assess or attempt to assess a taxpayer for any costs incurred by, or charged to, the state, county, or municipality in connection with performing an examination of the taxpayer’s books and records, including lodging, meals, or mileage charges, and any assessment or proposed assessment of such costs is void and unenforceable. A self-administered county or municipality may, however, assess and collect from the taxpayer the reasonable costs, based on the then current state government employee per diem rates incurred by, or charged to, the county or municipality in connection with performing an examination of the taxpayer’s books and records, if the taxpayer received notice by certified U.S. mail, return receipt requested, at least 30 days prior to the date on which the examination was to commence and the taxpayer either failed or refused to respond or did not propose a reasonable alternative date on which the examination was to commence within 15 days of receipt of notice of the pending examination, or the taxpayer and the self-administered county or municipality agreed in writing as to an alternative date on which the examination was to commence but the taxpayer then failed or refused to permit reasonable access to its books and records on the alternative date. This subsection does not apply to examinations of the books and records of a taxpayer with respect to the insurance premium license tax levied by Chapter 4A, Title 27, or examinations for gasoline or motor fuel taxes if authorized by local law in effect on July 1, 1998.
(Acts 1992, No. 92-186, p. 349, §5A; Act 98-191, p. 297, §3; Act 2016-406, §1.)
(a) Maintenance of records; audit and subpoena authority; authority to adopt rules.
(1) In addition to all other recordkeeping requirements otherwise set out in this title, taxpayers shall keep and maintain an accurate and complete set of records, books, and other information sufficient to allow the department to determine the correct amount of value or correct amount of any tax, license, permit, or fee administered by the department, or other records or information as may be necessary for the proper administration of any matters under the jurisdiction of the department. The books, records, and other information shall be open and available for inspection by the department upon request at a reasonable time and location.
(2) The department may examine and audit the records, books, or other relevant information maintained by any taxpayer or other person for the purpose of computing and determining the correct amount of value or correct amount of any tax, license, or fee administered by the department, or for any other purpose necessary for the proper administration of any matter under the jurisdiction of the department.
(3) A taxpayer, or any officer of a corporation or association, or partner of a partnership, or fiduciary of a trust, or responsible individual of any entity under a duty to maintain books and records pursuant to this subsection who fails or refuses to maintain such records and books, or permit inspection, shall be subject to contempt proceedings in the circuit court of the judicial circuit in which the person resides or has a principal place of business, and upon proof of the fact to the court, may be punished for contempt as provided in cases of contempt in circuit court.
(4) The department may summon any witness to appear and give testimony, and summon by subpoena duces tecum any records, books, or other information of any kind relating to any matter which the department has authority to administer. The witness may be summoned by subpoena issued by the secretary of the department, any circuit judge, any magistrate, or any district judge, in the name of the department, directed to any sheriff of Alabama and returnable to the department. The subpoena may be served in like manner as subpoenas issued out of any circuit court, or the subpoena may be served by an authorized employee of the department or by either U.S. mail with delivery confirmation or certified mail, return receipt requested. A fee shall be paid to banking institutions, other similar entities, or any other person except the taxpayer, for copying, searching for, reproducing, and transporting any records, books, papers, or other documents requested or subpoenaed by the department and to persons who are required to appear as a witness equal to the fee authorized to be paid by the Internal Revenue Service for similar services or appearances pursuant to 26 U.S.C. § 7610, as amended. If any witness has been subpoenaed to appear and testify or appear and produce records, books, or other information, and fails or refuses to appear or testify or to produce the books, records, or other information, that witness shall be subject to contempt proceedings in the circuit court of the judicial circuit in which the witness resides, and upon proof of the fact to a circuit court may be punished for contempt as is provided in cases of contempt in circuit court.
(5) The department may issue forms and make reasonable regulations concerning any matter administered by the department. Regulations adopted by the department shall be issued in accordance with the procedures set forth in the Alabama Administrative Procedure Act, Chapter 22 of Title 41.
(b) Procedures governing entry of preliminary and final assessments; appeals therefrom.
(1) ENTRY OF PRELIMINARY ASSESSMENT; FINAL ASSESSMENT OF UNCONTESTED TAX; EXECUTION OF PRELIMINARY AND FINAL ASSESSMENTS.
a. If the department determines that the amount of any tax as reported on a return is incorrect, or if no return is filed, or if the department is required to determine value, the department may calculate the correct tax or value based on the most accurate and complete information reasonably obtainable by the department. The department may thereafter enter a preliminary assessment for the correct tax or value, including any applicable penalty and interest.
b. Where the amount of tax or value reported on a return is undisputed by the department, or the taxpayer consents to the amount of any deficiency, determination of value, or preliminary assessment in writing as provided by regulation, the department may immediately enter a final assessment for the amount of the tax or value, plus applicable penalty and interest; provided, the department may at any time enter a final jeopardy assessment pursuant to Sections 40-17A-12, 40-29-90, and 40-29-91.
c. All preliminary and final assessments issued by the department shall be executed as provided by regulations adopted by the department.
(2) TIME LIMITATION FOR ENTERING PRELIMINARY ASSESSMENT. Any preliminary assessment shall be entered within three years from the due date of the return, or three years from the date the return is filed with the department, whichever is later, or if no return is required to be filed, within three years of the due date of the tax, except as follows:
a. A preliminary assessment may be entered at any time if no return is filed as required, or if a false or fraudulent return is filed with the intent to evade tax.
b. A preliminary assessment may be entered within six years from the due date of the return or six years from the date the return is filed with the department, whichever is later, if the taxpayer omits from the taxable base an amount properly includable therein which is in excess of 25 percent of the amount of the taxable base stated in the return.
For purposes of this paragraph:
The term “taxable base” means the gross income, gross proceeds from sales, gross receipts, net worth, or other amounts on which the tax paid with the return is computed; and
In determining the amount omitted from the taxable base, there shall not be taken into account any amount which is omitted from the taxable base stated in the return if the amount is disclosed in the return, or in a statement attached to the return, in a manner adequate to apprise the department of the nature and amount of the item.
c. A preliminary assessment entered pursuant to Sections 40-29-72 and 40-29-73, may be entered within five years from the due date of the return on which the underlying tax is required to be reported or within five years of the date the return is filed, whichever is later.
d.1. In the case of income received during the lifetime of a decedent, or by his or her estate during the period of administration, the preliminary assessment of any income tax shall be entered within 18 months after written request therefor, filed after the return is made, by the executor, administrator, or other fiduciary representing the estate of the decedent, but not after the expiration of three years from the due date of the return or three years from the date the return is filed with the department, whichever is later.
e. If a taxpayer has made the election provided in Section 40-18-8(d) or (e), a preliminary assessment based on the gain realized as a result of the involuntary conversion (in the case of Section 40-18-8(d)) or a rollover of gain on the sale of a personal residence (as provided in Section 40-18-8(e)) may be entered within three years from the date the taxpayer notified the department of the replacement of the property in accordance with Section 40-18-8(d) or (e), as the case may be, or of his or her intention not to replace the property.
f. If a taxpayer has validly elected to have the provisions of Section 40-18-6(a)(7) and Section 40-18-8(l) apply to an acquisition of stock before January 1, 1985, any liability of the taxpayer under this title, solely from amendment of its returns to be consistent with that election may be assessed at any time within five years from the date on which the taxpayer filed the amended returns with the department.
g.1. When the Internal Revenue Service changes the amount of federal income tax or federal estate tax in any manner and the change results in an increase in additional income tax or estate tax owed under this title, the department, at any time within one year after the department is notified or otherwise learns that the change has become final, may enter a preliminary assessment for additional tax due. The department shall be allowed to assess the tax within the time period otherwise allowed by this section. Any tax assessed within the additional one year period allowed shall be limited to those items changed on the federal income tax return or federal estate tax return affect the income tax liability or the estate tax liability imposed by this title.
When a federal income tax return or federal estate tax return is changed in any manner after it has been filed with the Internal Revenue Service, other than by an amended return, and the change results in an overpayment of taxes imposed by this title, a petition for refund of the overpayment may be filed within the later of one year after the federal changes become final, or within the time allowed for the filing of a petition for refund as provided in this chapter. The refund shall be limited to those items changed on the federal income tax return or federal estate tax return which affect the income tax liability or estate tax liability imposed by this title.
For purposes of this subdivision, the date that a federal change becomes final is the date on which the taxpayer and the Internal Revenue Service formally agree to the changes, or the date of any administrative or judicial order, judgment, or decree from which no further appeal was or may be taken.
h. The running of the period of limitations provided herein for entering a preliminary assessment shall be suspended for the period that:
The taxpayer or the assets of the taxpayer are involved in a case under Title 11 of the United States Code, Bankruptcy, and for a period of six months thereafter; or
The assets of the taxpayer are in the control or custody of a court in any proceeding, and for a period of six months thereafter.
i. The department and the taxpayer, prior to the expiration of the period for entering a preliminary assessment or the filing of a petition for refund, may agree in writing to extend the time provided for entering the assessment or filing the petition in this chapter. The tax may be assessed, or the petition for refund may be filed, at any time prior to the expiration of the period agreed upon. The period agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon.
j. Additional tax may be assessed by the department within any applicable period allowed above, even though a preliminary or final assessment has been previously entered by the department against the same taxpayer for the same or a portion of the same tax period. No taxpayer, however, shall be subject to unnecessary examination or investigation, and only one inspection of a taxpayer’s books and records relating to each type of tax administered by the department shall be made for each taxable year, unless the taxpayer requests otherwise or unless the commissioner after investigation, notifies the taxpayer in writing that an additional inspection is necessary. The commissioner shall adopt regulations consistent with those followed by the Internal Revenue Service with respect to second inspection of a taxpayer’s books and records.
k. The three-year statute of limitations provided by this subdivision for entering a preliminary assessment shall be extended as provided in the following sentence, for the benefit of a self-administered county or municipality, in cases where: (i) the department has audited a taxpayer and has entered a final assessment against the taxpayer for additional sales, use, rental, or lodgings tax; (ii) the taxpayer owes the same type of tax to the self-administered county or municipality for the same tax period or periods; and (iii) the taxpayer or its authorized representative has not contacted the county or municipality or its private auditing firm, pursuant to its voluntary disclosure program, prior to the date of entry of the final assessment. In such cases, the statute of limitations shall not expire until the earlier of six months from the date of entry of the final assessment or 60 days following the date of mailing or transmittal by electronic mail by the department to the self-administered county or municipality or its private auditing firm of a copy of the notice of final assessment and any attachments thereto. Any tax assessed by the self-administered county or municipality within the additional time period allowed by this subdivision shall be limited to those items changed or adjustments included in the final assessment entered by the department. The Alabama Tax Tribunal, during the months of January and July of each year, shall publish a list of pending appeals and the tax or taxes at issue.
(3) SERVICE OF PRELIMINARY ASSESSMENT UPON TAXPAYER. The preliminary assessment entered by the department, or a copy thereof, shall be promptly mailed by the department to the taxpayer’s last known address by either first class U.S. mail or certified mail with return receipt requested, but at the option of the department, the preliminary assessment may be delivered to the taxpayer by personal service.
(4) PROCEDURE FOR REVIEW OF DISPUTED PRELIMINARY ASSESSMENTS; ENTRY AND NOTICE OF FINAL ASSESSMENT.
a. If a taxpayer disagrees with a preliminary assessment as entered by the department, the taxpayer may file a written petition for review with the department within 30 days from the date of mailing or personal service, whichever occurs earlier, of the preliminary assessment setting out the specific objections to the preliminary assessment. If a petition for review is timely filed, or if the department otherwise deems it necessary, the department shall schedule a conference with the taxpayer for the purpose of allowing the taxpayer and the department to present their respective positions, discuss any omissions or errors, and attempt to agree upon any changes or modifications to their respective positions.
b. If a written petition for review: (i) is not timely filed; or (ii) is properly filed, and upon further review the department determines the preliminary assessment is due to be upheld in whole or in part, the department may make the assessment final in the amount of tax due as computed by the department, with applicable interest and penalty computed to the date of entry of the final assessment.
c. If a preliminary assessment is not withdrawn or made final by the department within five years from the date of entry, the taxpayer may appeal the preliminary assessment to the Alabama Tax Tribunal or to the appropriate circuit court as provided by subdivision (b)(5) for an appeal of a final assessment.
d. The final assessment entered by the department, or a copy thereof, shall be mailed by the department to the taxpayer’s last known address by either: (i) first class U.S. mail or certified mail with return receipt requested in the case of assessments of tax of five hundred dollars ($500) or less; or (ii) certified mail with return receipt requested in the case of assessments of tax of more than five hundred dollars ($500). In either case and at the option of the department, the final assessment, or a copy thereof, may be delivered to the taxpayer by personal service.
(5) PROCEDURE FOR APPEAL FROM FINAL ASSESSMENT.
a. A taxpayer may appeal to the Alabama Tax Tribunal from any final assessment entered by the department by filing a notice of appeal with the Alabama Tax Tribunal within 60 days from the date of mailing or personal service, whichever occurred earlier, of the final assessment, and the appeal, if timely filed, shall proceed as provided in Chapter 2B for appeals to the Alabama Tax Tribunal.
b.1. In lieu of the appeal under paragraph a., at the option of the taxpayer, the taxpayer may appeal from any final assessment to the Circuit Court of Montgomery County, Alabama, or to the circuit court of the county in which the taxpayer resides or has a principal place of business in Alabama, as appropriate, by filing notice of appeal within 60 days from the date of mailing or personal service, whichever occurs earlier, of the final assessment with both the secretary of the department and the clerk of the circuit court in which the appeal is filed.
(i) Pay the tax, interest, and any penalty shown on the final assessment.
(ii) File a supersedeas bond with the court for 125 percent of the amount of the tax, interest, and any penalty shown on the final assessment. The supersedeas bond shall be executed by a surety company licensed and authorized to do business in Alabama and shall be conditioned to pay the amount of tax, interest, and any penalties shown on the final assessment, plus applicable interest and any court costs relating to the appeal, payable to the department, or the self-administered county or municipality, if applicable.
(iii) File an irrevocable letter of credit with the circuit court in an amount equal to 125 percent of the amount of the tax, interest, and any penalty shown on the final assessment. The irrevocable letter of credit shall be issued by a financial institution designated as a qualified public depository by the Board of Directors of the Security for Alabama Funds Enhancement (SAFE) Program pursuant to Chapter 14A, Title 41. The department or the self-administered county or municipality, if applicable, shall be named the beneficiary of the irrevocable letter of credit. The irrevocable letter of credit shall be conditioned to pay the assessment plus applicable interest and any court costs relating to the appeal. The taxpayer may not issue an irrevocable letter of credit as to a final assessment entered against the same taxpayer.
(iv) File a pledge or collateral assignment of securities with the circuit court that constitute eligible collateral under Chapter 14A, Title 41, in an amount equal to 200 percent of the amount of the tax, interest, and penalty shown on the final assessment. The pledge or collateral assignment shall be in favor of the department or the self-administered county or municipality, if applicable, and conditioned to pay the assessment plus applicable interest and any court costs relating to the appeal.
(v) Show to the satisfaction of the clerk of the circuit court to which the appeal is taken that the taxpayer has a net worth, on the basis of fair market value, of two hundred fifty thousand dollars ($250,000) or less, including his or her homestead.
c.1. The filing of the notice of appeal with the Alabama Tax Tribunal or, in the case of appeals to the circuit court, the filing of the notice of appeal with both the secretary of the department and the clerk of the circuit court in which the appeal is filed and also the payment of the assessment in full and applicable interest or the filing of a supersedeas bond, an irrevocable letter of credit, or a pledge or collateral assignment of securities as provided herein, are jurisdictional. Except as set forth in subparagraph 2., if such prerequisites are not satisfied within the time provided for appeal, the appeal shall be dismissed for lack of jurisdiction.
Notwithstanding subparagraph 1., should the circuit court determine that the taxpayer has not satisfied the requirements of subparagraph b.2., the circuit court shall order that the taxpayer satisfy the requirements. The taxpayer may satisfy the requirements at any time within 30 days after service of the court order. No order of dismissal for lack of jurisdiction shall be entered within 30 days after service of the court order, and no order of dismissal shall thereafter be entered if the requirement is satisfied within the 30-day period.
On appeal to the circuit court or to the Alabama Tax Tribunal, the final assessment shall be prima facie correct, and the burden of proof shall be on the taxpayer to prove the assessment is incorrect.
d.1. The Alabama Tax Tribunal, circuit court, or the appellate court on appeal may increase or decrease the assessment to reflect the correct amount due.
If a final assessment is reduced on appeal, any overpayment of tax paid by the taxpayer shall immediately be refunded to the taxpayer by the state, county, municipality, or other entity to which the overpayment was distributed.
No court shall have the power to enjoin the collection of any taxes due on an assessment so appealed or to suspend the payment thereof.
(c) Procedure governing petitions for refund; appeals therefrom.
(1) PETITION FOR REFUND ALLOWED, GENERALLY. Any taxpayer may file a petition for refund with the department for any overpayment of tax or other amount erroneously paid to the department or concerning any refund that the department is required to administer. If a final assessment for the tax has been entered by the department, a petition for refund of all or a portion of the tax may be filed only if the final assessment plus applicable interest has been paid in full prior to or with the filing of the petition for refund. The department may also issue automatic refunds pursuant to Section 40-29-71. In the case of a petition for refund of public utilities taxes pursuant to Chapter 21, sales or use taxes pursuant to Chapter 23, and any transient occupancy tax pursuant to Chapter 26, a petition may be filed by the consumer/purchaser who paid the tax directly to the taxpayer that collected the tax, or by the taxpayer if the taxpayer remitted in excess of the tax due, however never collected the tax from the consumer/purchaser, or by the taxpayer if the consumer/purchaser paid the tax directly to the taxpayer, provided that a refund shall not be paid to the taxpayer until after the tax has been credited or repaid to the consumer/purchaser by the taxpayer. The department may adopt rules and establish procedures regarding petitions for refund, including establishing procedures for claiming such refunds on an annual basis when the amount of a refund is less than twenty-five dollars ($25) and offsetting any state use tax liability against any refund otherwise due prior to paying a refund.
(2) TIME LIMITATION FOR FILING PETITION FOR REFUND; AUTOMATIC REFUND.
a. Generally. A petition for refund shall be filed with the department or an automatic refund issued pursuant to Section 40-29-71, or a credit allowed, within: (i) three years from the date that the return was filed; or (ii) two years from the date of payment of the tax, whichever is later, or, if no return was timely filed, two years from the date of payment of the tax. For purposes of this paragraph, taxes paid through withholding or by estimated payment shall be deemed paid on the original due date of the return.
b. Net Operating Loss Carryback. In lieu of the periods provided in paragraph a., in the case of a net operating loss carryback, the period for filing a petition for refund, the department making an automatic refund or allowing a credit shall be the period prescribed in 26 U.S.C. § 6511(d)(2) for the claiming of a credit or refund.
(3) DEPARTMENT REQUIRED TO GRANT OR DENY REFUNDS; TIME LIMITATIONS. The department shall either grant or deny a petition for refund within six months from the date the petition is filed, unless the period is extended by written agreement of the taxpayer and the department. The taxpayer shall be notified of the department’s decision concerning the petition for refund by first class mail, or by either United States mail with delivery confirmation or by certified mail, return receipt requested, sent to the taxpayer’s last known address. If the department fails to grant a refund within the time provided herein, the petition for refund shall be deemed to be denied.
(4) PROCEDURES IF REFUNDS GRANTED; CREDIT OF REFUND; PAYMENT OF OTHER TAXES; PAYMENT OF INTEREST. If a petition is granted, or the department, the Alabama Tax Tribunal, or a court otherwise determines that a refund is due, the overpayment shall be refunded to the taxpayer by the state, county, municipality, or other entity to which the overpayment was distributed. If the department determines that a refund is due, the amount of overpayment plus accrued interest may first be credited by the department against any outstanding final tax liabilities due and owing by the taxpayer to the department, and the balance of any overpayment shall, subject to the setoff provisions of Article 3 of Chapter 18, be refunded to the taxpayer. If any refund or part thereof is credited to any other tax by the department, the department shall provide a written detailed statement to the taxpayer showing the amount of overpayment, the amount credited for payment to other taxes, and the amount refunded.
(5) PROCEDURES IF REFUND DENIED; APPEAL.
a. A taxpayer may appeal from the denial in whole or in part of a petition for refund by filing a notice of appeal with the Alabama Tax Tribunal within two years from the date the petition is denied, and the appeal, if timely filed, shall proceed as hereinafter provided for appeals to the Alabama Tax Tribunal.
b. In lieu of appealing to the Alabama Tax Tribunal, the taxpayer may appeal from the denial of a petition for refund by filing a notice of appeal with the Circuit Court in Montgomery County, Alabama, or the circuit court of the county in which the taxpayer resides or has a principal place of business in Alabama, as appropriate, by filing the notice of appeal within two years from the date the petition is denied. The circuit court shall hear the appeal according to its own rules and procedures and shall determine the correct amount of refund due, if any.
c. If an appeal is not filed with the Alabama Tax Tribunal or the circuit court within two years of the date the petition is denied, then the appeal shall be dismissed for lack of jurisdiction.
(d) The Department of Revenue shall revise existing rules or administrative guidance, or issue new rules or administrative guidance, as appropriate, in conformance with this section.
(e) This section shall apply to all appeals filed after June 15, 2007. Notwithstanding the prior sentence, in any appeal to a circuit court which is pending on June 15, 2007, and in which a supersedeas bond was filed pursuant to, and in compliance with, the requirements of this section, for double the amount of the tax, interest, and any penalty shown on the final assessment, or for double the amount of the final order of the administrative law judge, the bond may be reduced to 125 percent of such amount shown on the final assessment or in the final order of the administrative law judge.
(Acts 1992, No. 92-186, p. 349, §6; Acts 1995, No. 95-607, p. 1279, §2; Act 2007-504, p. 1086, §§1-3; Act 2014-146, p. 378, §3; Act 2018-180, §1; Act 2025-343, §1.)
(a) The department shall notify a taxpayer in writing of any act or proposed act or refusal to act concerning the denial or revocation of a license, permit, or certificate of title concerning which the taxpayer has any interest. The notice must be mailed by either first-class U.S. mail, U.S. mail with delivery confirmation, or certified U.S. mail to the taxpayer’s last known address. Any taxpayer aggrieved by any act or proposed act or refusal to act concerning the denial or revocation of a license, permit, or certificate of title by the department shall be entitled to file a notice of appeal from such act or proposed act or refusal to act with the Alabama Tax Tribunal. Such notice of appeal must be filed within 60 days of the date notice of such act or refusal to act is mailed to the taxpayer, and such appeal, if timely filed, shall proceed as herein provided for appeals to the Alabama Tax Tribunal.
(b) A taxpayer may elect, but is not required, to file a notice of appeal with the Alabama Tax Tribunal regarding a notice of proposed adjustment issued by the department affecting the taxpayer’s net operating loss deductions or carryovers for purposes of the taxes imposed by Chapters 16 and 18 of this title. The notice of appeal shall be filed within the time period prescribed in subsection (a), and the Alabama Tax Tribunal shall have jurisdiction to determine the amount of the taxpayer’s net operating loss deductions or carryovers for the tax periods in question.
(c) The department may proceed with the intended action if no appeal is filed by the taxpayer with the Alabama Tax Tribunal within the time allowed under subsection (a). If a designated agent has failed to provide the department with a bond and any qualifying license as provided in Section 32-8-34, the revocation of designated agent status by the department shall be effective immediately upon electronic notice through the system the designated agent uses to process applications for certificates of title or receipt of written notice of revocation, whether by U.S. mail or hand delivery. Otherwise, the revocation of a designated agent status shall be effective after the time for appeal under this section has expired. If a new or used motor vehicle dealer, motor vehicle wholesaler, motor vehicle reconditioner, or motor vehicle rebuilder licensee has failed to provide the department with or maintain the required bond or insurance, the revocation of the regulatory license shall be effective immediately upon electronic notice through the system the licensee uses to apply for or renew the regulatory license or upon written notice or revocation, whether by U.S. mail or hand delivery. Otherwise, the revocation of the regulatory license shall be effective after the time for appeal under this section has expired. The revocation of any motor vehicle certificate of title or license by the department shall not be final until either the titled owner and lien holder, if any, consent to the revocation or the time for filing an appeal to the Alabama Tax Tribunal has expired. The department may obtain an injunction in the appropriate circuit court at any time enjoining a licensee or designated agent from continuing to operate under a disputed license or designated agent authority, if the continued operation may cause substantial loss of revenue, would cause substantial harm to the state or public, or for such other good reason as determined by the circuit court. The department may suspend the designated agent’s access to process new applications for certificate of title until such time as any outstanding title applications not properly filed by the designated agent are properly filed with the department.
(d) This section shall not apply to the procedures governing assessments and refunds which are otherwise provided for by this chapter, or to intradepartmental personnel actions or any matter which is the subject of any action then pending in state or federal court, or to the collection of any liability due the department.
(e) A taxpayer may appeal any matter governed by this section in accordance with Section 40-2B-2(m) only after exhausting his or her appeal rights provided under this section. Any appeal must be from a final or appealable order issued by the Alabama Tax Tribunal.
(Acts 1992, No. 92-186, p. 349, §7; Act 2014-146, p. 378, §3; Act 2025-343, §1.)
Notwithstanding Section 40-2A-8, any appeal concerning competing ownership claims related solely to who is the proper party to have possession of the motor vehicle or manufactured home and the certificate of title to the motor vehicle or manufactured home shall be filed in circuit court. Court costs incurred by such appeal shall be prepaid by the appealing party. Any claim by an interested party for damages or for other action must be brought as a separate action as provided by law.
(Act 2018-556, §1.)
[Repealed]
Repealed by Act 2014-146, §2, effective October 1, 2014.
(Acts 1992, No. 92-186, p. 349, §8; Acts 1995, No. 95-607, p. 1279, §2; Act 2007-504, p. 1086, §§1-3.)
(a) Except as otherwise provided in this section, it shall be unlawful for any person to print, publish, or divulge, without the written permission or approval of the taxpayer, the return of any taxpayer or any part of the return, or any information secured in arriving at the amount of tax or value reported, for any purpose other than the proper administration of any matter administered by the department, a county, or a municipality, or upon order of any court, or as otherwise allowed in this section. Statistical information pertaining to taxes may be disclosed at the discretion of the commissioner or his or her delegate to the legislative or executive branch of the state. Upon request, the commissioner or his or her delegate may make written disclosure as to the status of compliance of entities subject to state taxes administered by the department. A compliance certificate shall be issued to a requesting person with respect to a business entity if the entity has filed all state tax returns and paid the taxes shown as payable in accordance with those returns except as provided for in this section. The department shall charge a fee of ten dollars ($10) for each certificate of compliance issued. In addition to any and all funds heretofore or heretoafter appropriated, for the fiscal year beginning October 1, 2015, there is appropriated to the department the fees collected for the certificates of compliance. This fee shall be used by the department for administrative purposes. Any person found guilty of violating this section, for each act of disclosure, shall have committed a Class A misdemeanor. Additionally, to the extent provided in 26 U.S.C. § 7213A, it shall be unlawful for any state employee willfully to inspect, except as authorized in 26 U.S.C. § 6103, any federal tax return or federal tax return information acquired by the employee or another person under a provision of 26 U.S.C. § 6103 referred to in 26 U.S.C. § 7213(a)(2).
(b) This section shall not apply to returns filed and information secured under laws of the state (1) governing the registration and titling of motor vehicles, (2) levying or imposing excise taxes or inspection fees upon the sale of, use, and other disposition of gasoline and other petroleum products, (3) governing the licensing of motor vehicle dealers, reconditioners, rebuilders, wholesalers, and automotive dismantlers and parts recyclers, (4) governing the privilege licenses as provided in Chapter 12, other than Article 4, of this title, or (5) governing the issuance or affixing of tobacco stamps and governing the online web site listing of permitted and registered tobacco distributors required under Chapter 25.
(c) This section shall not apply to the disclosure of the amount of local privilege license or franchise fees paid to counties and municipalities by any taxpayer possessing a franchise (whether or not exclusive) granted by the respective county or municipality. However, any information other than the amount of license or franchise fees paid, including returns or parts thereof or documents filed with or secured by any municipality or county or their authorized agent and relating to local privilege licenses and franchises shall remain confidential information subject to subsection (a).
(d) Except as otherwise provided in subdivision (3) of subsection (k) of Section 40-2B-2, the orders of the Alabama Tax Tribunal judge and all evidence, pleadings, and any other information offered or submitted in any appeal before the Alabama Tax Tribunal are not subject to this section.
(e) The commissioner shall adopt reasonable rules permitting and governing the exchange of tax returns, information, records, and other documents secured by the department, with tax officers of other agencies of the state, municipal, and county government agencies in the state, federal government agencies, any association of state government tax agencies, any state government tax agencies of other states, and any foreign government tax agencies. However, (1) any tax returns, information, records, or other documents remain subject to the confidentiality provisions set forth in subsection (a); (2) the department may charge a reasonable fee for providing information or documents for the benefit of self-administered counties and municipalities; (3) self-administered counties and municipalities may charge a reasonable fee for providing information or documents for the benefit of the department; and (4) any exchange shall be for one or more of the following purposes:
a. Collecting taxes due.
b. Ascertaining the amount of taxes due from any person.
c. Determining whether a person is liable for, or whether there is probable cause for believing a person might be liable for, the payment of any tax to a federal, state, county, municipal, or foreign government agency.
(f)(1) Nothing herein shall prohibit the use of tax returns or tax information by the department or county tax collecting officials in the proper administration of any matter administered by the department or county tax collecting officials. The department, a municipality, or county tax official may also divulge to a purchaser, prospective purchaser, as defined pursuant to the rules of the department, or successor of a business or stock of goods the outstanding sales, use, or rental tax liability of the seller for which the purchaser, prospective purchaser, as defined pursuant to the rules of the department, or successor may be liable pursuant to Section 40-23-25, 40-23-82, or 40-12-224. This section shall not preclude the inspection of returns by federal or foreign state agents pursuant to Section 40-18-53.
(2) Upon a request by the State Treasurer, the commissioner may provide the State Treasurer with the names and addresses of those persons entitled to property acquired by the state under Article 2, commencing with Section 35-12-20, of Chapter 12 of Title 35, the Uniform Disposition of Unclaimed Property Act. The information shall be used by the State Treasurer solely for the purpose of administering the Uniform Disposition of Unclaimed Property Act.
(3) Upon a request by the Secretary of Information Technology, the commissioner may provide to the Secretary of Information Technology an annual report outlining the measures employed by the department to maintain the security of taxpayer information protected from disclosure under this section or under federal law, to include federal tax information as defined from time to time in Internal Revenue Service Publication 1075 and which is subject to the confidentiality protections of the Internal Revenue Code, or personal information subject to the confidentiality provisions of the federal Driver’s Privacy Protection Act under Public Law 103-322. Except as provided in this subdivision, the development, implementation, and maintenance of the information technology systems of the department shall not be subject to oversight by any other state agency.
(g) Nothing herein shall prohibit the exchange of information between and among county or municipal governments, provided that any exchange shall be subject to the same restrictions and criminal penalties imposed on the department and its personnel as described in this section.
(h) In no event shall any damages, attorney fees, or court costs be assessed against the state, a county, or a municipal government under this section, nor shall any damages, attorney fees, or court costs be assessed against elected officials, officers, or employees of a state, county, or municipal government.
(Acts 1992, No. 92-186, p. 349, §9; Acts 1995, No. 95-607, p. 1279, §2; Act 98-191, p. 297, §4; Act 98-502, p. 1083, §1; Act 2000-705, p. 1442, §3; Act 2000-738, p. 1617, §1; Act 2002-496, p. 1276, §1; Act 2006-577, p. 1518, §1; Act 2014-262, p. 827, §1; Act 2015-316, §1; Act 2015-368, §1; Act 2015-382, §1; Act 2019-101, §1.)
(a) Failure to timely file return. Except in the case of an individual income tax return filed with no tax due at the time of filing, if a taxpayer fails to file any return required to be filed with the department on or before the date prescribed therefor, determined with regard to any extension of time for filing, there shall be assessed as a penalty the greater of 10 percent of any additional tax required to be paid with the return or fifty dollars ($50).
(b) Failure to timely pay tax.
(1) If a taxpayer fails to pay to the department the amount of tax shown as due on a return required to be filed on or before the date prescribed for payment of the tax, determined with regard to any extension of time for payment, there shall be added as a penalty one percent of the amount of the tax due if the failure to pay is for not more than one month, with an additional one percent for each additional month or fraction thereof during which failure to pay continues, not exceeding 25 percent in the aggregate. In lieu of the penalty provided in the immediately preceding sentence, for any tax for which a monthly or quarterly return is required, or for which no return is required, the department shall add a failure to timely pay penalty of 10 percent of the unpaid amount shown as tax due on the return or the amount stated in the notice and demand.
(2) If a taxpayer fails to pay to the department any amount of any tax required to be shown on any return, which is not so shown, within 30 calendar days from the date of the first notice and demand therefore, there shall be added as a penalty one percent of the amount of the tax due if the failure to pay is for not more than one month, with an additional one percent for each additional month or fraction thereof during which failure to pay continues, not exceeding 25 percent in the aggregate. In lieu of the penalty provided in the immediately preceding sentence, for any tax for which a monthly or quarterly return is required, or for which no return is required, the department shall add a failure to timely pay penalty of 10 percent of the unpaid amount stated in the notice and demand unless payment is received within 30 calendar days from the date of the first notice and demand.
(c) Underpayment due to negligence. If any part of any underpayment of tax is due to negligence or disregard of rules or regulations, there shall be added to the tax an amount equal to five percent of that part of the tax attributable to negligence or disregard of rules or regulations.
For purposes of this subsection, the term “negligence” includes any failure to make a reasonable attempt to comply with Title 40, and the term “disregard” includes any careless, reckless, or intentional disregard.
(d) Underpayment due to fraud. If any part of any underpayment of tax required to be shown on a return is due to fraud, there shall be added to the tax an amount equal to 50 percent of that portion of the underpayment which is attributable to fraud.
For purposes of this section, the term “fraud” shall have the same meaning as ascribed to the term under 26 U.S.C. Section 6663, as in effect from time to time.
(e) Frivolous return penalty. If a taxpayer files a “frivolous return,” as that term is used in 26 U.S.C. Section 6702, that taxpayer may be liable for a penalty of up to two hundred fifty dollars ($250).
(f) Frivolous appeal penalty. If any appeal to the Alabama Tax Tribunal or circuit court is determined to be frivolous or primarily for the purpose of delay or to impede collection of any tax, a penalty of two hundred fifty dollars ($250) or 25 percent of the tax in question, whichever is greater, shall be assessed in addition to any tax due.
(g) Penalties not exclusive. The penalties provided in this section for failure to timely file a return, failure to timely pay tax, filing a frivolous return, filing a frivolous appeal, or negligence may be asserted against the same taxpayer for the same tax period. If the fraud penalty is asserted, no other penalties shall be asserted.
(h) Waiver of penalties. Notwithstanding the foregoing, any penalty under this title or Section 10-2B-15.02 shall be waived upon a determination of reasonable cause. Reasonable cause shall include, but not be limited to, those instances in which the taxpayer has acted in good faith. The burden of proving reasonable cause shall be on the taxpayer.
(i) Discount sustained for just causes. All other provisions of tax laws notwithstanding, the Commissioner of the Department of Revenue, upon review of the circumstances involved, may authorize continuance of a statute-allowable discount when timely payment is made, but filing is delayed for just causes.
(j) Penalty and interest assessed as tax. All penalties and interest administered by the department shall be assessed and collected in the same manner as taxes.
(k) Penalty not to apply to registration and titling of motor vehicles. The penalties provided herein shall not apply to the registration or titling of motor vehicles.
(Acts 1992, No. 92-186, p. 349, §10; Acts 1995, No. 95-607, p. 1279, §2; Act 98–637, p. 1406, §1; Act 2009-144, p. 268, §11; Act 2012-378, p. 994, §1; Act 2015-316, §1; Act 2015-368, §1.)
(a) For purposes of the individual income tax imposed by Chapter 18, if there is an understatement of liability on a return that would cause a tax return preparer to be subject to the penalties imposed by 26 U.S.C. §6694, except §6694(c), §6700, or §6701, and if any of the failures enumerated in 26 U.S.C. §6695, except §6695(e) and (g), occurs, the department may impose upon the tax return preparer a penalty in accordance with 26 U.S.C. §§6694(a), (b), (d), (e), and (f); §§6695(a), (b), (c), (d), and (f); §§6696(a) and (c), §6700, and §6701, as in effect from time to time.
(b) For purposes of this section:
(1) “Subject to this title” shall be substituted for references in the specified federal statutes to “imposed by subtitle A.”
(2) “Commissioner” will be substituted for references in the specified federal statutes to “secretary.”
(3) References in these federal statutes to federal district courts for appeal purposes shall apply in the same manner to Alabama circuit courts.
(4) “Tax return preparer” and “revenue laws” will be substituted for references in the specified federal statutes to “income tax return preparer” and “internal revenue laws,” respectively, as in effect from time to time.
(c)(1) A civil action in the name of the State of Alabama may be commenced at the request of the commissioner to enjoin any person who is a tax return preparer, or an employer having knowledge of an employee tax return preparer, who is doing business in this state and engaging in conduct described in this subsection, from further engaging in preparing tax returns. This action may be brought by the department in the circuit court for the judicial circuit of the tax return preparer’s residence or principal place of business, or in which the taxpayer with respect to whose tax return the action is brought resides. The court may exercise its jurisdiction over the action separate and apart from any other action brought by the State of Alabama against the tax return preparer or any taxpayer.
(2) In an action under this subsection, the court may issue an injunction prohibiting a person from acting as a tax return preparer if the court finds that the individual has done any of the following:
a. Engaged in any pattern of conduct subject to a civil penalty under subsection (a) or a violation of Section 40-29-115.
b. Misrepresented the preparer’s eligibility to practice before the department, or otherwise misrepresented the preparer’s experience or education as a tax return preparer.
c. Guaranteed the payment of any tax refund or the allowance of any tax credit.
d. Aided or assisted in, counseled, or advised the preparation or presentation under, or in connection with any matter arising under, the state revenue laws, of any returns, affidavits, claims, or other documents, which may constitute a significant congruous pattern of any of the following:
Omissions of income.
Excessive or nonexistent deductions.
Claims of nonexistent dependents.
Fictitious business schedules.
Excessive losses.
Documents that are fraudulent or false as to any material matter, whether or not such falsity or fraud is with the knowledge or consent of the person authorized or required to present the return, affidavit, claim, or document.
(d) For purposes of this section, the term “understatement of liability” means an understatement of the net amount payable with respect to the individual income tax imposed by Chapter 18, or an overstatement of the net amount creditable or refundable with respect to the individual income tax imposed by Chapter 18. The determination of whether there is an understatement of liability must be made without regard to any administrative or judicial action involving the taxpayer. For purposes of this section, the amount determined as an underpayment of estimated income tax under either Sections 40-18-80 or 40-18-80.1 is not considered an understatement of liability.
(e) For purposes of this section, the term “tax refund preparer,” “return preparer,” or “tax return preparer” means an individual who prepares for compensation, or who employs one or more individuals who prepare for compensation, a tax return or a claim for refund of tax. The preparation of a substantial part of a return or claim for refund is treated as if it were the preparation of the entire return or claim for refund. An individual is not considered a tax return preparer merely because the individual does any of the following:
(1) Furnishes typing, reproducing, or other mechanical assistance.
(2) Prepares a return or claim for refund of the employer, or an officer or employee of the employer, by whom the individual is regularly and continuously employed.
(3) Prepares a return or claim for refund of any person as a fiduciary for that person.
(4) Prepares a claim for refund for a taxpayer in response to an assessment issued to the taxpayer.
(f)(1) A civil action in the name of the State of Alabama to enjoin any person from further engaging in conduct subject to penalty under 26 U.S.C. §6700, relating to penalty for promoting abusive tax shelters, or 26 U.S.C. §6701, relating to penalties for aiding and abetting understatement of tax liability, may be commenced at the request of the commissioner. Any action under this section shall be brought in the circuit court of Alabama for the judicial circuit in which that person resides, has his or her principal place of business, or has engaged in conduct subject to penalty under §6700 or §6701. The court may exercise its jurisdiction over such action separate and apart from any other action brought by the State of Alabama against that person.
(2) In any action under subdivision (1), the court may enjoin a person from engaging in conduct or in any other activity subject to penalty under 26 U.S.C. §6700 or 26 U.S.C. §6701 if the court finds both of the following:
a. The person has engaged in any conduct subject to penalty under 26 U.S.C. §6700 or 26 U.S.C. §6701.
b. Injunctive relief is appropriate to prevent recurrence of such conduct.
(3) If any citizen or resident of the United States does not reside in, and does not have his or her principal place of business in, any Alabama judicial circuit, that citizen or resident shall be treated for purposes of this section as residing in Montgomery County.
(g) This section shall apply solely to the individual income tax imposed by Chapter 18.
(Act 2006-589, p. 1593, §1.)
No contract between a self-administered municipality or county and a private auditing or collecting firm entered into for the purpose of examining or collecting municipal or county taxes shall have a term in excess of three years, including any renewal or extension options, and any contract between a self-administered municipality or county and a private auditing or collecting firm shall terminate automatically, whether or not it is stated in the contract, if the private auditing or collecting firm loses or forgoes its license under Sections 40-2A-13 or 40-2A-14. The limitation on the term of a contract between a self-administered county or municipality and a private auditing or collecting firm does not prohibit the negotiation of a new contract between the parties following expiration of a properly executed contract. Contracts executed on or after October 1, 2016, shall be subject to termination upon either party giving 90 days’ written notice to the other party.
(Act 98-191, p. 297, §5; Act 2016-406, §1.)
(a) The Department of Revenue, a governing body of a self-administered county or municipality, or an agent of such a municipality or county may not conduct an examination of a taxpayer’s books and records for compliance with applicable sales, use, rental, or lodgings tax laws except in accordance with this section and with the Alabama Taxpayers’ Bill of Rights and Uniform Revenue Procedures Act.
(b) Additional sales, use, rental, or lodgings tax may be assessed by the Department of Revenue, a governing body of a self-administered county or municipality, or an agent of such a municipality or county within any applicable period allowed pursuant to Section 40-2A-7(b), even though a preliminary or final assessment has previously been entered by the Department of Revenue, a governing body of a self-administered county or municipality, or an agent of such a municipality or county against the same taxpayer for the same or a portion of the same tax period. No taxpayer, however, shall be subject to unnecessary examination or investigation, and no more than one examination of a taxpayer’s books and records by each respective taxing entity relating to each type of tax shall be made every three taxable years, unless the taxpayer requests otherwise or unless the commissioner, or the corresponding governing body of a self-administered county or municipality, after investigation, notifies the taxpayer in writing that an additional examination is necessary, together with the basis or bases for the additional examination.
(c) The Department of Revenue and each governing body of a self-administered county or municipality shall promulgate regulations or procedures consistent with those followed by the Internal Revenue Service with respect to second examinations of a taxpayer’s books and records. Provided, however, an examination of a taxpayer’s books and records may be conducted and shall not constitute an unnecessary examination pursuant to this section or the Alabama Taxpayers’ Bill of Rights and Uniform Revenue Procedures Act if the examination is necessary to meet one or more of the following criteria: (i) fulfill an obligation to another state pursuant to a Southeastern Association of Tax Administrators (“SEATA”) exchange of information agreement or to the Multistate Tax Commission; (ii) follow up on leads furnished by the Multistate Tax Commission or pursuant to a SEATA exchange agreement; (iii) verify a direct or joint refund claim and to determine if there is any offsetting tax liability to be credited against or that may exceed the refund claim; (iv) secure a tax return and the tax, penalty, interest, and service charge, if any, due thereon for any reporting period for which the taxpayer has failed to file a return by the due date of the return; (v) collect any tax, penalty, interest, or service charge which the taxpayer has failed to remit within 30 days after receiving notification that the amount is due; (vi) secure a corrected return and the additional tax, penalty, interest, or service charge due thereon, if any, when the taxpayer has failed to file a corrected return and remit any additional amount due thereon within 30 days of receiving a request for a corrected return; (vii) collect any tax due based upon substantial evidence of fraud or tax evasion discovered since the prior examination, and then only if the Department of Revenue or the governing body of the self-administered municipality or county explains to the taxpayer in writing the basis for the alleged fraud or tax evasion; or (viii) follow up on representations by the taxpayer that it is going out of business or the taxpayer has gone out of business.
(d) Any person examining a taxpayer’s books and records on behalf of a self-administered municipality or county shall disclose in writing, upon first contact with the taxpayer, the identity of the self-administered municipalities and counties represented, and provide signed and dated written authorization, or a copy of signed and dated written authorization, from each self-administered municipality and county represented. Also, a copy of the contract between the entity and the self-administered municipality or county, and a statement as to whether the municipality or county has elected out of the tax tribunal shall be provided upon first contact with the taxpayer.
(e) On or before January 15 of each year, beginning in 1999, each private auditing or collecting firm shall disclose in writing to the department, and to the self-administered municipalities and counties it represents as of the date of disclosure, the identity of all municipalities and counties for which it at any time during the preceding calendar year performed examinations of taxpayers’ books and records for compliance with applicable sales, use, rental, or lodgings tax laws or collected sales, use, rental, or lodgings taxes.
(f) A private auditing or collecting firm representing more than one self-administered municipality or more than one self-administered county on the date of the first contact with a taxpayer shall examine the taxpayer’s books and records for all such self-administered municipalities and counties simultaneously. A private auditing or collecting firm or its examiners or other agents may not disclose or encourage others to disclose, either directly or indirectly, to any non-client municipality or county or its agents, the fact that the firm is presently conducting an examination of the taxpayer’s books and records.
(g) If a private auditing or collecting firm is engaged by a self-administered municipality or county not represented by the firm on the date of the first contact with the taxpayer, and is not in violation of subsection (f), the private auditing or collecting firm may conduct an examination of the taxpayer’s books and records on behalf of the newly-represented self-administered municipality or county, but the examination may not commence until at least three years following the date of completion of the previous examination, as certified in writing by the private auditing or collecting firm to the taxpayer, unless one of the grounds for early examination described in subsection (c) exists, or unless the delay would result in the closing of a tax year by virtue of the applicable statute of limitations and the taxpayer fails or refuses, within a reasonable time after written request, to agree in writing to an applicable statute of limitations in favor of the newly-represented self-administered municipality or county.
(h) Whenever the private auditing or collecting firm becomes aware that a taxpayer may be owed a refund by, or may owe tax to, one or more self-administered counties or municipalities represented by the firm, the firm shall promptly notify the taxpayer in writing and, simultaneously, the respective self-administered counties and municipalities, of the reason or reasons for, and the estimated amount of, the refund due or tax owed and shall also advise the taxpayer of the general procedure by which to make a claim for refund or pay the tax. If the private auditing or collecting firm refuses or willfully fails to comply with this subsection, and the taxpayer ultimately receives a refund from or pays a tax to a self-administered county or municipality represented by the firm during the course of an examination of more than one hundred dollars ($100) of taxes for which the firm examined the taxpayer’s books and records, the firm shall forfeit its license granted pursuant to Section 40-12-43.1 for a period of six months, and each examiner who participated in the examination of the taxpayer’s books and records, but did not advise the firm in writing of the possible refund due or tax liability owed at, or prior to completion of, the examination, shall forfeit his or her license granted under Section 40-12-43.1 for a period of six months. At the expiration of the suspension period, any examiner or private auditing or collecting firm desiring to reinstate their license must reapply under the provisions of Section 40-12-43.1.
(i) A final assessment or forced collection action based upon an audit conducted by a private auditing or collecting firm shall not be issued and applicable to a taxpayer until signed by a public official or employee designated by the self-administered county or municipality. This document shall not be subject to Section 36-12-40.
(j) A self-administered county or municipality, which has chosen to opt-out of participation in the Alabama Tax Tribunal as per Section 40-2B-2, shall retain the services of an independent hearing or appeals officer who is not affiliated with the private auditing or collecting firm to conduct any hearings held pursuant to Section 40-2B-2.
(Act 98-191, p. 297, §5; Act 2016-406, §1.)
(a) Except as provided in subsection (c), any examiner employed by a private auditing or collecting firm to examine books and records of taxpayers on behalf of any self-administered county or municipality shall be certified by the Alabama Local Tax Institute of Standards and Training established pursuant to Section 40-2A-15. Any examiner employed by a private auditing or collecting firm to examine books and records of taxpayers on behalf of any self-administered county or municipality as of July 1, 1998, shall have two years from the effective date of the rules and regulations of the certification program to obtain the certification required by this subsection and may continue to conduct examinations during this two-year period.
(b) Except as provided in subsection (c), every private auditing or collecting firm shall maintain fidelity bonds with respect to each of its examiners, in accordance with Section 40-23-30. A private auditing or collecting firm may not employ unbonded auditors, or examiners who have failed to receive or maintain their certification under subsection (a). Any violation of this subsection of which the private auditing or collecting firm knew or should have known shall have the effect of doing all of the following:
(1) Automatically terminate any contract or arrangement between a self-administered county or municipality and the private auditing or collecting firm.
(2) Void any assessment or proposed assessment issued by the self-administered county or municipality or its agent as a result of any examination conducted, in whole or in part, by the examiner, but shall not prohibit a self-administered county or municipality from sending a qualified examiner to reexamine the taxpayer’s books and records even though the required waiting period between examinations has not expired or the applicable statute of limitations has expired with respect to the period at issue.
(3) Cause the private auditing or collecting firm to forfeit its license granted pursuant to Section 40-12-43.1 for a period of six months.
(c) Certified public accountants and public accountants licensed by the State Board of Public Accountancy are exempt from the following requirements:
(1) To be certified by the Alabama Local Tax Institute of Standards and Training pursuant to subsection (a).
(2) To maintain fidelity bonds with respect to each of its examiners pursuant to subsection (b).
(d) At the expiration of any suspension period, any examiner or private auditing or collecting firm desiring to reinstate their license must reapply under the provisions of Section 40-12-43.1. The requirements, restrictions, and penalties imposed by this section and Section 40-2A-13 with respect to examiners shall apply equally to those who are employees, as well as those who are independent contractors, of private auditing or collecting firms.
(e) For the purposes of this chapter, a private auditing or collecting firm is subject to the confidentiality requirements of Section 40-2A-10.
(Act 98-191, p. 297, §5; Act 2016-406, §1.)
(a) There is hereby created the Alabama Local Tax Institute of Standards and Training. All costs of operating the institute shall be paid from public funds appropriated, contributions received, or fees and license revenues collected for this purpose.
(b) The institute shall operate under the direction and supervision of a board of directors. The board shall organize, administer, control, oversee, and advise the institute so that the institute may carry out the purposes of this section. The board shall promulgate reasonable rules and regulations to effectuate this intent.
(c) The board shall consist of six members as follows:
(1) Three representatives appointed by the Alabama League of Municipalities, who shall either be municipal officers, employees, or attorneys, at least one of whom shall be a municipal revenue officer or finance officer.
(2) Three representatives appointed by the Association of County Commissions of Alabama, who shall either be county officers, employees, or attorneys, at least one of whom shall be a county revenue officer or finance officer.
(d) The board may accept appropriations, grants, gifts, donations, or contributions from: The federal government; the state government; a county, municipal, or local government; a board, bureau, commission, agency, or establishment of any such government; any other organization, firm, or corporation, public or private; and an individual or groups of individuals in furtherance of the services, purposes, duties, responsibilities, or functions vested in the board and institute.
(e) The board shall, as its first order of business, develop a proposed examiner certification program for the examiners of private auditing or collecting firms. The program shall require minimum qualifications for certification, which shall include a bachelor’s degree in accounting from an accredited university or college and satisfactory completion of the certification program adopted by the board. Beginning October 1, 2016, the program shall include a course on customer relations and professional courtesy. The program shall also impose continuing education rules which shall be substantially similar to the continuing professional education requirements imposed by the State Board of Public Accountancy with respect to public accountants. Once the board has developed a proposed program, copies thereof shall be distributed for comment to all counties and municipalities, the Business Council of Alabama, the Alabama Retail Association, the Alabama Chapter of the National Federation of Independent Business, and the department. Copies may be sold to other interested parties at cost. Written comments may be submitted to the board within 45 days of initial distribution of the proposed program. Following expiration of the comment period, the board shall adopt a final examiner certification program to be administered by the institute. Notwithstanding any provision of this subsection to the contrary, any certified public accountant or public accountant who is licensed by the State Board of Public Accountancy shall be exempt from any certification requirement or any separate continuing professional education requirement. When any certified public accounting or public accounting firm is employed for the first time by a self-administered county or municipality for local tax examinations, the firm shall notify the board in writing of such employment.
(f) The institute may, however, contract out the examiner certification program to any one of the following:
(1) The Alabama League of Municipalities or the Association of County Commissions of Alabama, or any successor or assignee to, or designee of, either of those organizations.
(2) Any two-year or four-year college or university in the state.
(3) Any organization which the board believes can and will conduct the program in a manner which is consistent with this section.
Any examiner certification program contracted out pursuant to this subsection shall be conducted pursuant to the rules and regulations promulgated by the board pursuant to subsection (b). The institute or the organization with which it contracts shall be authorized to charge a registration fee to all participants in the certification and continuing education programs.
(g) The board shall also develop for the benefit of all municipal, county, or private examiners conducting examinations of taxpayers’ books and records on behalf of self-administered counties and municipalities, a minimum standard examination program, not in conflict with the Alabama Taxpayers’ Bill of Rights and Uniform Revenue Procedures Act, to be followed by municipal, county, or private examiners when examining a taxpayer’s books and records for compliance with applicable sales, use, rental, or lodgings tax laws of self-administered counties and municipalities. Once the board has developed a proposed program, copies thereof shall be distributed for comment to all counties and municipalities, the Business Council of Alabama, the Alabama Retail Association, the Alabama Chapter of the National Federation of Independent Business, and the department. Copies may be sold to other interested parties at cost. Written comments may be submitted to the board within 45 days of initial distribution of the proposed program. Following expiration of the comment period, the board shall adopt a minimum standard examination program.
(h) The institute shall have in place no later than January 1, 2017, a toll free number identified as a hotline for taxpayers to submit complaints related to the auditing or collection activities of a private auditing or collecting firm. A notice advising taxpayers of the hotline, including the toll free number, shall at all times be posted in conspicuous places in appropriate offices of any self-administered county or municipality utilizing the services of a private auditing or collecting firm and on the website of the county or municipality, if available. Additionally, a notice advising taxpayers of the hotline, including the toll free number, shall be posted on the website of the Alabama Department of Revenue. The institute shall be responsible for transcribing any complaints received through the hotline, and shall on a quarterly basis beginning April 1, 2017, prepare a report of each complaint filed against an auditing or collecting firm and forward the report, including transcripts, to the auditing or collecting firm receiving the complaints. The institute shall maintain reports for a period of three years, and the reports shall be made available to a self-administered county or municipality utilizing the services of a private auditing or collecting firm which has had complaints filed through the hotline. The records shall otherwise be confidential and not subject to Section 36-12-40.
(Act 98-191, p. 297, §5; Act 2016-406, §1.)
RESERVED.
For purposes of the tax imposed in Chapter 18 of this title, the following rules shall apply:
(a) In any case of two or more organizations, trades, or businesses (whether or not affiliated within the meaning of 26 U.S.C. § 1504) owned or controlled directly or indirectly by the same interests, the Commissioner of the Alabama Department of Revenue may distribute, apportion, or allocate gross income, deductions, credits, or allowances, if the commissioner determines that such distribution, apportionment, or allocation is necessary in order to prevent evasion of Alabama income taxes or to clearly reflect the income of any such organization, trade, or business.
(b) Any transaction based upon tax planning advice, tax return preparation advice, or tax return preparation services with respect to which an improper contingent fee is directly or indirectly paid by the taxpayer shall be evidence of the evasion of Alabama income taxes.
(c) Any paid tax return preparer or tax planner who provides to a taxpayer tax planning advice, tax return preparation advice, or tax return preparation services in consideration for an improper contingent fee shall be subject to a penalty as if such paid tax return preparer or tax planner was subject to the penalties imposed by 26 U.S.C. § 6701.
(d) “Improper contingent fee” shall mean compensation received by a person or entity that is subject to the Code of Professional Conduct of the American Institute of Certified Public Accountants (or the applicable state version of such code) for tax planning advice or tax return advice or preparation that would be improper under the terms of the code rendered after December 31, 2001. With respect to any person or entity that renders tax planning advice, tax return advice, or tax return preparations, but is not a certified public accountant, an improper contingent fee shall be defined in regulations prescribed by the Alabama Department of Revenue on a basis consistent with the Code of Professional Conduct of the American Institute of Certified Public Accountants.
(e) Subsections (b), (c), and (d) shall not apply to any contingent fee contract executed prior to January 1, 2002.
(f) The Commissioner of the Alabama Department of Revenue shall exercise such authority in a manner consistent with Act 2001-1088 and, to the extent applicable, 26 U.S.C. § 482 and the rulings and regulations issued thereunder. The commissioner is authorized and directed to promulgate such additional regulations as are necessary to enforce the provisions of Act 2001-1088.
(Act 2001-1088, 4th Sp. Sess., p. 1095, §2.)
Interest on any final assessment accrues from the date of entry of the final assessment on the total amount of its components including tax, interest, and any penalty, as one lump sum amount. The preceding sentence is a restatement of current law as it applies to interest accrual after final assessment. Notwithstanding any provision of Act 2001-1088, this section shall apply to all open tax years as of the effective date of Act 2001-1088 and for all subsequent tax years.
(Act 2001-1088, 4th Sp. Sess., p. 1095, §6.)
To increase public confidence in the fairness of the state tax system, the state shall provide an independent agency to be known as the Alabama Tax Tribunal to hear appeals of tax and other matters administered by the Department of Revenue and certain self-administered counties and municipalities that choose to participate with the Alabama Tax Tribunal to hear appeals of taxes levied by or on behalf of self-administered counties or municipalities. Any judge of the Alabama Tax Tribunal shall have the requisite knowledge and experience to hear and resolve disputes between taxpayers and the Department of Revenue or taxpayers and any self-administered county or municipality that has elected to participate with the Alabama Tax Tribunal. Such hearing shall take place only after the taxpayer has had a full opportunity to settle any matter with the Department of Revenue or with a self-administered county or municipality. There shall be no requirement of the payment of the amounts in issue or the posting of a bond. This independent Alabama Tax Tribunal shall exist within the executive branch of the government.
(Act 2014-146, p. 378, §1.)
The Alabama Tax Tribunal shall not be subject to the declaratory judgment, declaratory ruling, or contested case provisions of the Alabama Administrative Procedure Act, Chapter 22 of Title 41.
(Act 2017-441, §2.)
(a) Statement of Purpose.
(1) To increase public confidence in the fairness of the state tax system, the state shall provide an independent agency with tax expertise to resolve disputes between the Department of Revenue and taxpayers, prior to requiring the payment of the amounts in issue or the posting of a bond, but after the taxpayer has had a full opportunity to attempt settlement with the Department of Revenue based, among other things, on the hazards of litigation. By establishing an independent Alabama Tax Tribunal within the executive branch of government, this chapter provides taxpayers with a means of resolving controversies that ensures both the appearance and the reality of due process and fundamental fairness.
(2) The tax tribunal shall provide hearings in all tax matters, except those specified by statute, and render decisions and orders relating thereto. A tax tribunal hearing shall be commenced by the filing of a notice of appeal protesting a tax determination made by the Department of Revenue, including any determination that cancels, revokes, suspends, or denies an application for a license, permit, or registration. A final decision of the tax tribunal shall have the same force and effect, and shall be subject to appeal in the same manner, as a final decision of a state circuit court.
(3) It is the intent of the Legislature that this chapter foster the settlement or other resolution of tax disputes to the extent possible and, in cases in which litigation is necessary, to provide the people of Alabama with a fair and independent dispute resolution forum with the Department of Revenue. The chapter shall be interpreted and construed to further this intent.
(b) Tax Tribunal: Establishment.
(1) A tax tribunal is established in the executive branch of government. The tribunal is referred to in this chapter as the “Alabama Tax Tribunal.”
(2) The Alabama Tax Tribunal shall be separate from and independent of the authority of the Commissioner of Revenue and the Department of Revenue. For purposes of this chapter, the term “Department of Revenue” means the Alabama Department of Revenue and does not include the governing body of any self-administered county or municipality.
(3) The Alabama Tax Tribunal shall be created and exist as of October 1, 2014, but the chief judge shall be appointed by July 1, 2014, to take any action that is necessary to enable the Alabama Tax Tribunal to properly exercise the duties, functions, and powers given the Alabama Tax Tribunal under this chapter.
(4) The Alabama Tax Tribunal shall maintain an official docket and other records as deemed necessary by the chief judge. Such records may be maintained in electronic format.
(5) Any judge, or any employee of the Alabama Tax Tribunal as designated in writing by the chief judge, may administer oaths.
(c) Judges: Number; Appointment; Term of Office; Removal.
(1) The Alabama Tax Tribunal shall consist of at least one full-time judge, and there shall be no more than three judges serving at any one time. If there is more than one judge, each shall exercise the powers of the Alabama Tax Tribunal.
(2) The judges of the Alabama Tax Tribunal shall be appointed by the Governor for a term of six years. If the tribunal has more than one judge, the judges initially appointed should be given terms of different lengths not exceeding six years, so that all judges’ terms do not expire in the same year.
(3) The Chief Judge of the Alabama Tax Tribunal shall receive a salary equivalent to the top of the pay range assigned to the chief administrative law judge classification within the state Merit System. Associate judges shall receive a salary that shall not exceed the top of the pay range assigned to the administrative law judge classification within the state Merit System, as determined by the chief judge. The judges shall receive no other monetary compensation.
(4) Once appointed and confirmed, the judge shall continue in office until his or her term expires and until a successor has been appointed, unless otherwise removed as provided in this section.
(5) A vacancy in the Alabama Tax Tribunal occurring otherwise than by expiration of term shall be filled for the unexpired term in the same manner as an original appointment.
(6) If more than one judge is appointed, the Governor shall designate one of the members as chief judge, in this chapter referred to as the “chief judge.” The chief judge shall be the executive of the Alabama Tax Tribunal, shall have sole charge of the administration of the Alabama Tax Tribunal, and shall apportion among the judges all causes, matters, and proceedings coming before the Alabama Tax Tribunal. The individual designated as chief judge shall serve in that capacity at the pleasure of the Governor.
(7) The Governor, subject to the dismissal provisions of a classified state employee as provided in Section 36-26-10, may remove a judge, after notice and an opportunity to be heard, for neglect of duty, inability to perform duties, or malfeasance in office.
(8) Whenever the Alabama Tax Tribunal trial docket or business becomes congested or any judge of the Alabama Tax Tribunal is absent, is disqualified, or for any other reason is unable to perform his or her duties as judge, and it appears to the Governor that it is advisable that the services of an additional judge or judges be provided, the Governor may appoint a judge, or judges, pro tempore of the Alabama Tax Tribunal. Any individual appointed judge pro tempore of the Alabama Tax Tribunal shall have the qualifications set forth in subdivisions (d)(1) and (d)(2) and shall be entitled to serve for a period no longer than six months.
(9) A judge may disqualify himself or herself on his or her own motion in any matter, and may be disqualified for any of the causes specified in Title 12, including, but not limited to, Sections 12-1-12 and 12-1-13.
(d) Judges: Qualifications; Prohibition Against Other Gainful Employment.
(1) Each judge of the Alabama Tax Tribunal shall be a citizen of the United States and, during the period of his or her service, a resident of this state. No individual shall be appointed as a judge unless, at the time of appointment, the individual has substantial knowledge of the tax law and substantial experience making the record in a tax case suitable for judicial review.
(2) Before entering upon the duties of office, each judge shall take and subscribe to an oath or affirmation that he or she will faithfully discharge the duties of the office, and such oath shall be filed in the office of the Secretary of State.
(3) Each judge shall devote his or her full time during business hours to the duties of his or her office. A judge shall not engage in any other gainful employment or business, nor hold another office or position of profit in a government of this state, any other state, or the United States. Notwithstanding the foregoing provisions, a judge may own passive interests in business entities and earn income from incidental teaching or scholarly activities unless the activities conflict with his or her duties as a judge.
(4) Alabama Tax Tribunal judges shall be subject to disciplinary proceedings before the Judicial Inquiry Commission to the same extent as circuit judges. The Judicial Inquiry Commission shall have the authority to remove any Alabama Tax Tribunal judge from office, after notice and an opportunity to be heard, for neglect of duty, inability to perform duties, malfeasance in office, or other good cause.
(5) Alabama Tax Tribunal judges shall be classified state employees as provided in Section 36-26-10. As such, a judge, except for appointment, reconfirmation, removal, and dismissal as provided herein, shall be entitled to all benefits and protections available to classified state employees.
(6) The chief judge may employ one Executive Assistant III as an unclassified service state employee, as provided in Section 36-26-10(c). All other Alabama Tax Tribunal personnel shall be appointed or hired by the chief judge, as necessary for the proper operation of the Alabama Tax Tribunal and shall be state employees under the state Merit System. The Executive Assistant III employed in the Administrative Law Division as of September 30, 2014, shall be transferred to the Alabama Tax Tribunal, along with any other Merit System employees employed by the Administrative Law Division on that date.
(e) Principal Office: Locations; Facilities.
(1) The Alabama Tax Tribunal’s principal office shall be located in Montgomery, Alabama.
(2) The Alabama Tax Tribunal shall conduct hearings at its principal office. The Alabama Tax Tribunal may also hold hearings at any place within the state, with a view toward securing to taxpayers a reasonable opportunity to appear before the Alabama Tax Tribunal with as little inconvenience and expense as practicable.
(3) If the appeal involves a tax levied by or on behalf of only one self-administered county or municipality, the Alabama Tax Tribunal, if so requested by the self-administered county or municipality or the taxpayer, shall hold the hearing either in the county seat of the affected county or the county seat of the county in which the affected municipality is located or in the appropriate Department of Revenue taxpayer service center, according to the proximity of the municipality or county to the taxpayer service center.
(4) The principal office of the Alabama Tax Tribunal shall be located in a building that is separate and apart from the building in which the Department of Revenue is located.
(f) Appointment of Employees, Expenditures of the Alabama Tax Tribunal.
(1) The Alabama Tax Tribunal shall appoint employees and may employ temporary court reporters and make such other expenditures, including expenditures for library, publications, and equipment, as are necessary to permit the tribunal to efficiently execute its functions.
(2) No employee of the Alabama Tax Tribunal shall act as attorney, representative, or accountant for others in a matter involving any tax imposed or levied by this state.
(3) A nonmerit system employee of the Alabama Tax Tribunal may be removed by the chief judge, after notice and an opportunity to be heard, for neglect of duty, inability to perform duties, malfeasance in office, or for other good cause.
(4) In addition to the services of a court reporter, the Alabama Tax Tribunal may contract the reporting of its proceedings and, in the contract, fix the terms and conditions under which transcripts will be supplied by the contractor to the Alabama Tax Tribunal and to other persons and agencies.
(g) Jurisdiction of the Alabama Tax Tribunal.
(1) Except as permitted by subsection (m) relating to judicial review, or the Constitution of Alabama of 2022, the Alabama Tax Tribunal shall be the sole, exclusive, and final authority for the hearing and determination of questions of law and fact arising under the tax laws of this state. The Alabama Tax Tribunal shall have jurisdiction to hear and determine all appeals pending before the Department of Revenue’s Administrative Law Division on October 1, 2014, and all subsequent appeals filed with the Alabama Tax Tribunal pursuant to Chapters 2A, 27, and 29 of this title, Chapters 6, 7A, 8, 13, and 20 of Title 32, relating to motor vehicles; subdivision (2) of this subsection, relating to self-administered counties and municipalities; business license or privilege taxes or fees levied by counties; or Section 11-51-90, relating to the license of trades, businesses, professions, or other similar activities.
a. However, except for business license or privilege taxes or fees when levied by counties or license taxes or fees charged under Section 11-51-90, such jurisdiction shall also be limited to only those self-administered counties and municipalities that choose to participate under the auspices of the Alabama Tax Tribunal.
b. Such jurisdiction shall not apply to appeals filed directly with the circuit court from a final assessment entered by the department or from the department’s denial in whole or in part of a claim for refund.
c. Such jurisdiction shall not apply to the assessment of ad valorem taxes, except that appeals from final assessments of value of property of public utilities under Chapter 21 may be heard by the Alabama Tax Tribunal in accordance with the procedures set forth in this chapter.
(2) a. Unless a self-administered county or municipality elects, in the manner prescribed below, to divest the Alabama Tax Tribunal of jurisdiction over appeals of final assessments or denied refunds in whole or in part, of any sales, use, rental, or lodgings taxes levied or collected from time to time by or on behalf of the self-administered county or municipality, a taxpayer may appeal a final assessment or denied refund involving any such tax to the Alabama Tax Tribunal in accordance with the procedures and requirements provided in Section 40-2A-7 and this chapter. For purposes of any appeal filed by a taxpayer pursuant to this section, the term “department” as used in Section 40-2A-7 means the governing body of the applicable self-administered county or municipality and not the Department of Revenue, and the term “secretary” as used in Section 40-2A-7 means the clerk of the governing body of the applicable self-administered county or municipality.
b. Subject to the limitation imposed by paragraph e., the election-out under this section shall be made by serving a copy of the ordinance or resolution evidencing the election-out, adopted by the governing body of the self-administered county or municipality pursuant to this section, with the Alabama Tax Tribunal. Service may be accomplished by mailing a copy of the ordinance or resolution, certified by an appropriate official, by either U.S. mail with delivery confirmation or certified U.S. mail, return receipt requested, by hand delivery, or by an expedited courier service to the Alabama Tax Tribunal’s office. The Alabama Tax Tribunal shall promptly publish notice of the election-out pursuant to paragraph d., and the election shall be effective on the date that notice is published. Notwithstanding the foregoing, appeals of final assessments or denied refunds involving the electing county or municipality that were pending before the Alabama Tax Tribunal on the date that notice of the election-out is published shall continue to be heard and decided by the Alabama Tax Tribunal as if the election-out had not been made.
c. Subject to the limitation imposed by paragraph e., an election-out may be revoked, prospectively, by the governing body of the self-administered county or municipality at any time by resolution or ordinance, a certified copy of which shall be served on the Alabama Tax Tribunal in the manner prescribed above. The revocation of an election-out vests jurisdiction in the Alabama Tax Tribunal over all appeals of final assessments or denied refunds, in whole or in part, of the county’s or municipality’s sales, use, rental, and lodgings taxes that are entered or denied on or after the date that notice of revocation is published by the Alabama Tax Tribunal.
d. At least once a month, the Alabama Tax Tribunal shall provide the Department of Revenue with a list of all self-administered counties and municipalities that have elected-out pursuant to paragraph b. or that have filed a notice of revocation of their election-out pursuant to paragraph c. The Department of Revenue shall publish the list on its website and otherwise make available to the public in the same manner that the rates and administrators of certain county and municipal taxes are published by the Department of Revenue. The Alabama Tax Tribunal may also publish the list on its own website.
e. A self-administered county or municipality may make only one election-out under paragraph b. or one revocation under paragraph c. during each calendar year. If an appeal is timely filed with the Alabama Tax Tribunal after the notice of an election-out by the self-administered county or municipality is published by the Alabama Tax Tribunal, the appeal shall be deemed timely filed with and transferred to the self-administered county or municipality. If an appeal is timely filed with a self-administered county or municipality after the notice of revocation by the self-administered county or municipality is published by the Alabama Tax Tribunal, the appeal shall be deemed timely filed with and transferred to the Alabama Tax Tribunal.
f. The appeals process for a self-administered county or municipality that has elected to divest the Alabama Tax Tribunal of jurisdiction shall function in a manner similar to the procedures prescribed for appeals to the Alabama Tax Tribunal. The hearing or appeals officer shall function and conduct hearings in a manner similar to the Chief Judge of the Alabama Tax Tribunal and must be impartial and reasonably knowledgeable of the sales, use, rental, and lodgings tax laws and the taxing jurisdiction’s applicable code or ordinances.
(3) Except as permitted by subsection (m) relating to judicial review, no person shall contest any matter within the jurisdiction of the Alabama Tax Tribunal in any action, suit, or proceeding in any other court of the state. However, exclusive jurisdiction shall not be required of those self-administered counties and municipalities that choose not to participate under the auspices of the Alabama Tax Tribunal. With the aforementioned exceptions noted, if a person attempts to contest any matter with the remaining jurisdiction, then the action, suit, or proceeding shall be dismissed without prejudice. The improper commencement of any action, suit, or proceeding will not extend the time period for commencing a proceeding in the Alabama Tax Tribunal.
(4) Except in cases involving the denial of a claim for refund and except as provided in Alabama statute regarding jeopardy assessments, the taxpayer shall have the right to have his or her case heard by the Alabama Tax Tribunal prior to the payment of any of the amounts asserted as due by the Department of Revenue and prior to the posting of any bond.
(5) If, with or after the filing of a timely notice of appeal, the taxpayer pays all or part of the tax or other amount in issue before the Alabama Tax Tribunal has rendered a decision, the Alabama Tax Tribunal shall treat the taxpayer’s notice of appeal as a protest of a denial of a claim for refund of the amount so paid.
(6) The Alabama Tax Tribunal shall decide questions regarding the constitutionality of the application of statutes to the taxpayer and the constitutionality of rules adopted by the Department of Revenue, but shall not have the power to declare a statute unconstitutional on its face. A taxpayer desiring to challenge the constitutionality of a statute on its face, at the taxpayer’s election, may do so by one of the following methods:
a. Commence a declaratory action in the courts of Alabama with respect to the constitutional challenge and file a notice of appeal with the Alabama Tax Tribunal with respect to the remainder of the matter, which proceeding shall be stayed by the Alabama Tax Tribunal pending final resolution of the constitutional challenge.
b. File a notice of appeal with the Alabama Tax Tribunal with respect to issues other than the constitutional challenge, in which the taxpayer preserves the constitutional challenge until the entire matter, including the constitutional challenge and the facts related to the constitutional challenge, is presented to the appellate court.
c. Commence and simultaneously prosecute a declaratory action in the courts of Alabama with respect to the constitutional challenge and a proceeding in the Alabama Tax Tribunal with respect to the remainder of the issues.
(h) Pleadings.
(1) A taxpayer may commence a proceeding in the Alabama Tax Tribunal by filing a notice of appeal protesting the Department of Revenue’s determination imposing a liability for tax, penalty, or interest; denying a refund or credit application; canceling, revoking, suspending, or denying an application for a license, permit, or registration; or taking any other action that gives a person the right to a hearing under the law. The notice of appeal shall be filed in accordance with the time periods required by Sections 40-2A-7 and 40-2A-8, or any other applicable provision that is within the jurisdiction of the Alabama Tax Tribunal. For purposes of this chapter, the term “taxpayer” includes a person: (i) who is challenging the state’s jurisdiction over the person; and (ii) who has standing to challenge the validity or applicability of the tax. The notice of appeal filed by the taxpayer with the Alabama Tax Tribunal shall identify the final assessment, denied refund, or other act or refusal to act by the department which is the subject of the appeal, the position of the appealing party, the basis on which relief should be granted, and the relief sought. A notice of appeal that does not include all of the above information shall be sufficient to invoke the jurisdiction of the Alabama Tax Tribunal. The judge may require a taxpayer to file an amended notice of appeal if more information is deemed necessary.
(2) If the appeal involves a tax levied by or on behalf of a self-administered county or municipality, the Alabama Tax Tribunal shall promptly mail a copy of the notice of appeal by either U.S. mail with delivery confirmation or certified U.S. mail to the governing body of the affected county or municipality and shall provide the taxpayer or its authorized representative with written notification of the date the copy was mailed to the governing body. The affected county or municipality shall file a written answer with the Alabama Tax Tribunal within 45 days of the date of mailing the notice of appeal to the affected county or municipality. The judge may allow the county or municipality additional time, not to exceed 45 days, within which to file an answer. The answer shall state the facts and the issues involved and the county’s or municipality’s position relating thereto. The judge may require the county or municipality to file an amended answer if more information is deemed necessary. The county or municipality and its authorized representatives may consult with the Legal Division of the Department of Revenue concerning the appeal.
(3) The Alabama Tax Tribunal shall notify the Legal Division of the Department of Revenue in writing that an appeal has been filed and shall mail a copy of such notification to the taxpayer or its authorized representative. The Department of Revenue shall file its answer in the Alabama Tax Tribunal no later than 45 days after its receipt of the Alabama Tax Tribunal’s notification that the taxpayer has filed a notice of appeal. Upon written request, the Alabama Tax Tribunal may grant up to 45 additional days to file an answer. The Department of Revenue shall serve a copy on the taxpayer’s representative or, if the taxpayer is not represented, on the taxpayer, and shall file proof of service with the answer.
(4) The taxpayer may file a reply in the Alabama Tax Tribunal within 30 days after receipt of the answer. The taxpayer shall serve a copy on the authorized representative of the Department of Revenue and shall file proof of service with the reply. When a reply has been filed, or if no reply has been filed, then 30 days after the filing of the answer, the controversy shall be deemed at issue and shall be scheduled for hearing.
(5) Either party may amend a pleading once without leave at any time before the period for responding to it expires. After such time, a pleading may be amended only with the written consent of the adverse party or with the permission of the Alabama Tax Tribunal. The Alabama Tax Tribunal shall freely grant consent to amend upon such terms as may be just. Except as otherwise ordered by the Alabama Tax Tribunal, there shall be an answer or reply to an amended pleading if an answer or reply is required to the pleading being amended. Filing of the answer, or, if the answer has already been filed, the amended answer, shall be made no later than 75 days after filing of the amended notice of appeal. Filing of the reply, or if the reply has already been filed, the amended reply, shall be made within 30 days after filing of the amended answer. The taxpayer may not amend a notice of appeal after expiration of the time for filing a notice of appeal if the amendment would have the effect of conferring jurisdiction on the Alabama Tax Tribunal over a matter that would otherwise not come within its jurisdiction. An amendment of a pleading shall relate back to the time of filing of the original pleading, unless the Alabama Tax Tribunal shall order otherwise either on motion of a party or on the Alabama Tax Tribunal’s own initiative.
(i) Fees. No filing fee shall be imposed for any appeal filed with the Alabama Tax Tribunal.
(j) Discovery and Stipulation.
(1) The parties to a proceeding shall make every effort to achieve discovery by informal consultation or communication before invoking the discovery mechanisms authorized by this section.
(2) The parties to a proceeding shall stipulate all relevant and non-privileged matters to the fullest extent to which complete or qualified agreement can or fairly should be reached. Neither the existence nor the use of the discovery mechanisms authorized by this section shall excuse failure to comply with this provision.
(3) Subject to reasonable limitations prescribed by the Alabama Tax Tribunal, a party may obtain discovery by written interrogatories; requests for the production of returns, books, papers, documents, correspondence, or other evidence; depositions of parties, nonparty witnesses, and experts; and requests for admissions. The Alabama Tax Tribunal may provide for other forms of discovery.
(4) A judge of the Alabama Tax Tribunal, on the request of any party to the proceeding, may issue subpoenas requiring the attendance of witnesses and giving of testimony and subpoenas duces tecum requiring the production of evidence or things.
(5) Any employee of the Alabama Tax Tribunal designated in writing for the purpose by the chief judge may administer oaths.
(6) Any witness subpoenaed or whose deposition is taken shall receive the same fees and mileage as a witness in a circuit court of Alabama.
(7) The Alabama Tax Tribunal may enforce its orders on discovery and other procedural issues, among other means, by deciding issues wholly or partly against the offending party.
(k) Hearings.
(1) Proceedings before the Alabama Tax Tribunal shall be tried de novo and without a jury.
(2) Except as set forth in this chapter or otherwise precluded by law, the Alabama Tax Tribunal shall take evidence, conduct hearings, and issue final and preliminary orders. An appeal may be held in abeyance at the discretion of the judge or may be submitted for decision on a joint stipulation of facts without a hearing or as otherwise agreed by the parties. A judge of the Alabama Tax Tribunal, with or without a hearing, may dismiss any appeal or grant appropriate relief to any party if a party refuses to comply with any rule or statute concerning appeals before the Alabama Tax Tribunal or if a party refuses to comply with any preliminary order directing the party to take such action as deemed appropriate by a judge of the Alabama Tax Tribunal.
(3) Hearings shall be open to the public and shall be conducted in accordance with such rules of practice and procedure as the Alabama Tax Tribunal may adopt. Notwithstanding the foregoing, on motion of either party, the Alabama Tax Tribunal shall issue a protective order or an order closing part or all of the hearing to the public if the party shows good cause to protect certain information from being disclosed to the public.
(4) The Alabama Tax Tribunal shall not be bound by the rules of evidence applicable to civil cases in the circuit courts of this state. The Alabama Tax Tribunal shall admit relevant evidence, including hearsay, if the evidence is probative of a material fact in controversy. The Alabama Tax Tribunal shall exclude irrelevant and unduly repetitious evidence. Notwithstanding the foregoing, the rules of privilege recognized by law shall apply.
(5) Testimony may be given only on oath or affirmation.
(6) The notice of appeal and other pleadings in the proceeding shall be deemed to conform to the proof presented at the hearing, unless a party satisfies the Alabama Tax Tribunal that presentation of the evidence would unfairly prejudice the party in maintaining its position on the merits or unless deeming the taxpayer’s notice of appeal to conform to the proof would confer jurisdiction on the Alabama Tax Tribunal over a matter that would not otherwise come within its jurisdiction.
(7) In the case of an issue of fact, the taxpayer shall have the burden of persuasion by a preponderance of the evidence in the record, except that the Department of Revenue shall have the burden of persuasion in the case of an assertion of fraud and in other cases provided by law.
(8) Proceedings before the Alabama Tax Tribunal shall be officially reported. The state shall pay the expense of reporting from the appropriation for the Alabama Tax Tribunal.
(l) Decisions.
(1) The Alabama Tax Tribunal shall render its decision in writing, including therein a concise statement of the facts found and the conclusions of law reached. The Alabama Tax Tribunal’s decision, subject to law, shall grant such relief, invoke such remedies, and issue such orders as it deems appropriate to carry out its decision. A judge may enter a preliminary order directing one or more parties to take such action as deemed appropriate or referring any issue or issues in dispute to the Department of Revenue’s Taxpayer Advocate for consideration if the issue or issues relate to a tax administered by the Department of Revenue. A judge, after a hearing or after a case is otherwise submitted for decision, may issue an opinion and preliminary order, which shall include findings of fact and conclusions of law. The opinion and preliminary order may direct the department to recompute a taxpayer’s liability or the amount of a refund due or for any party to take such action as specified in the preliminary order.
(2) The Alabama Tax Tribunal shall render its preliminary or final order, as applicable, no later than six months after submission of the last brief filed subsequent to completion of the hearing or, if briefs are not submitted, then no later than six months after completion of the hearing. The Alabama Tax Tribunal may extend the six-month period for good cause up to three additional months.
(3) If the Alabama Tax Tribunal fails to render either a preliminary order or a final order within the prescribed period, either party may institute a proceeding in the circuit court to compel the issuance of a decision.
(4) The Alabama Tax Tribunal’s decision shall finally decide the matters in controversy, unless any party to the matter timely appeals the decision as provided in this chapter.
(5) Any party may apply for rehearing from any final order or opinion and preliminary order of the Alabama Tax Tribunal; provided, however, the application must be filed within 15 days from the date of entry of the order. The application for rehearing shall specify the reasons and supporting arguments why the order is incorrect and should be reconsidered. The timely filing of an application for rehearing from a final order shall suspend the time period for filing an appeal to circuit court as provided in this chapter. If an application for rehearing is timely filed, the judge shall thereafter issue a final or other order on rehearing, either with or without a hearing on the application, at the discretion of the judge. The time for filing a notice of appeal to circuit court shall begin anew on the date of entry of the final order on rehearing.
(6) The Alabama Tax Tribunal’s final order shall have the same effect and shall be enforced in the same manner as a judgment of a circuit court of the state, unless altered or amended on appeal or rehearing.
(7) The Alabama Tax Tribunal’s interpretation of a taxing statute subject to contest in one case shall be followed by the Alabama Tax Tribunal in subsequent cases involving the same statute, and its application of a statute to the facts of one case shall be followed by the Alabama Tax Tribunal in subsequent cases involving similar facts, unless the Alabama Tax Tribunal’s interpretation or application conflicts with that of an appellate court or the Alabama Tax Tribunal provides satisfactory reasons for reversing prior precedent.
(m) Appeals.
(1) Other than an application for rehearing to the Alabama Tax Tribunal, the exclusive remedy for review of any final or other appealable order issued by the Alabama Tax Tribunal shall be by appeal to the appropriate circuit court.
(2) The taxpayer, a self-administered county or municipality whose tax is within the jurisdiction of the Alabama Tax Tribunal, or the Department of Revenue may appeal to circuit court from a final or other appealable order issued by the Alabama Tax Tribunal by filing a notice of appeal with the appropriate circuit court within 30 days from the date the final or other appealable order was entered. A copy of the notice of appeal shall be submitted to the Alabama Tax Tribunal within the 30-day appeal period. The Alabama Tax Tribunal shall thereafter prepare a record on appeal, which shall include the orders of the Alabama Tax Tribunal, the stenographic transcript of the hearing before the Alabama Tax Tribunal, the pleadings, and all exhibits and documents admitted into evidence. The appeal shall be filed in the following circuit courts:
a. Any appeal by the Department of Revenue or a self-administered county or municipality whose tax is within the jurisdiction of the Alabama Tax Tribunal shall be filed with the circuit court of the county in which the taxpayer resides or has a principal place of business in Alabama.
b. Any appeal by the taxpayer shall be filed with the Circuit Court of Montgomery County, Alabama, or with the circuit court of the county in which the taxpayer resides or has a principal place of business in Alabama.
c. Notwithstanding paragraphs a. and b., if the taxpayer does not reside in Alabama or have a principal place of business in Alabama, any appeal by the taxpayer, the Department of Revenue, or a self-administered county or municipality whose tax is within the jurisdiction of the Alabama Tax Tribunal shall be filed with the Circuit Court of Montgomery County, Alabama.
(3) If the appeal to circuit court pursuant to paragraph (2)b. is by a taxpayer from a final order involving a final assessment, the taxpayer, within the 30-day period allowed for appeals, shall satisfy one of the requirements under Section 40-2A-7(b)(5)b.2., relating to appeals to circuit court.
(4) The appeal to circuit court from a final or other appealable order issued by the Alabama Tax Tribunal shall be a trial de novo, except that the order shall be presumed prima facie correct and the burden shall be on the appealing party to prove otherwise. The circuit court shall hear the case by its own rules and shall decide all questions of fact and law. The administrative record and transcript shall be transmitted to the reviewing court as provided herein and shall be admitted into evidence in the trial de novo, subject to the rights of either party to object to any testimony or evidence in the administrative record or transcript. With the consent of all parties, judicial review may be on the administrative record and transcript. The circuit court shall affirm, modify, or reverse the order of the Alabama Tax Tribunal, with or without remanding the case for further hearing, as justice may require.
(n) Representation.
(1) Appearances in proceedings conducted by the Alabama Tax Tribunal may be by the taxpayer; by an attorney admitted to practice in this state, including an attorney who is a partner or member of, or is employed by, an accounting or other professional services firm; by an accountant licensed in this state; or by an authorized representative. The Alabama Tax Tribunal may allow any attorney or accountant authorized to practice or licensed in any other jurisdiction of the United States to appear and represent a taxpayer in proceedings before the Alabama Tax Tribunal for a particular matter. In addition, the Alabama Tax Tribunal may adopt rules permitting a taxpayer to be represented by an officer, employee, partner, or member.
(2) The department shall be represented by an authorized representative in all proceedings before the Alabama Tax Tribunal.
(o) Publication of Decisions.
The Alabama Tax Tribunal shall index and publish its final decisions in print or electronic form as it deems best adapted for public convenience. The publications shall be made permanently available and constitute the official reports of the Alabama Tax Tribunal.
(p) Service of Process.
(1) Mailing by first class or certified or registered mail, postage prepaid, to the address of the taxpayer given on the taxpayer’s notice of appeal, or to the address of the taxpayer’s representative of record, if any, or to the usual place of business of the Department of Revenue, shall constitute personal service on the other party. The Alabama Tax Tribunal, by rule, may prescribe that notice by other means shall constitute personal service and, in a particular case, may order that notice be given to additional persons or by other means.
(2) Mailing by registered or certified mail and delivery by a private delivery service approved by the Internal Revenue Service in accordance with 26 U.S.C. § 7502(f), as amended, shall be deemed to have occurred, respectively, on the date of mailing and the date of submission to the private delivery service.
(3) A timely mailed document is considered to be timely filed.
(q) Rules and Forms.
The Alabama Tax Tribunal may adopt all reasonable rules pursuant to the Alabama Administrative Procedure Act and forms as may be necessary or appropriate to carry out the intent and purposes of this chapter.
(r) Budget of Alabama Tax Tribunal.
The Chief Judge of the Alabama Tax Tribunal may contract or enter into agreements with any private or governmental agency, upon approval of the Director of Finance, for the rental of office space, and the rental or purchase of equipment, administrative or other support services, supplies, and all other property or services necessary for the operation of the Alabama Tax Tribunal. The funds for the operation of the Alabama Tax Tribunal shall be administered by the Alabama Tax Tribunal, through the chief judge. The Chief Judge of the Alabama Tax Tribunal shall prepare an annual budget and funds shall be appropriated annually by the Legislature from the Revenue Department Administrative Fund to be used exclusively for the operation of the Alabama Tax Tribunal.
(Act 2014-146, p. 378, §4; Act 2025-343, §2; Act 2025-408, §6.)
Act 2014-146 shall apply to (1) all proceedings commenced in the Alabama Tax Tribunal on or after October 1, 2014, and (2) all administrative proceedings commenced prior to October 1, 2014, that have not been the subject of a final and irrevocable administrative action as of October 1, 2014, to the extent Act 2014-146 can be made applicable thereto. Any administrative proceeding in which a hearing has commenced prior to the effective date of Act 2014-146 shall be transferred to the Alabama Tax Tribunal, which shall render the decision in such proceeding unless there is a prior settlement. Act 2014-146 shall not affect any proceeding, prosecution, action, suit, or appeal commenced in the judicial branch before its effective date.
(Act 2014-146, p. 378, §5.)
There shall be in each county in the State of Alabama a county board of equalization, to consist of three members, each of whom shall have been a resident of the county in which he is to serve for at least five years. The members of the several county boards of equalization, as now constituted, shall hold office until their successors are appointed and qualified under the provisions of Section 40-3-2 and shall have the powers and perform the duties provided for in this article.
In counties in which the assessed valuation of all taxable property using the year of 1955 as the basis exceeds $600,000,000 according to the tax assessor’s abstracts of assessments for said year, the board in such counties shall be known as the board of equalization and adjustments; provided, that where any duties or powers are conferred upon any board of equalization, it shall mean and include any board of equalization and adjustments.
(Acts 1939, No. 143, p. 178; Code 1940, T. 51, §88; Acts 1964, 1st Ex. Sess., No. 217, p. 299, §3.)
(a) This subsection shall apply to every county in the state except a county subject to subsection (b). During the month of August, 1943, and during the month of August of each fourth year thereafter, the county commission of each county, the county board of education, and the governing body of the largest municipality in each county shall each submit in writing to the Commissioner of Revenue the names of three persons, and the governing body of each other incorporated municipality within the county shall, in like manner, submit the name of one person, all of whom are residents of the county, who are each owners of taxable real property that is located within the county, who are each qualified electors in the county and who are, in the opinion of the nominating body, persons competent to serve as members of the county board of equalization. In those counties where there is no incorporated municipality, the commission of the county shall nominate six persons as competent persons for appointment to membership on the board of equalization. From each group of three nominees submitted by the county governing bodies and the county board of education and from the total group of nominees submitted by the governing bodies of the municipalities, the Commissioner of Revenue, within 30 days after receipt of the lists of nominees, with the approval of the Governor shall appoint one person to membership on the county board of equalization so that the membership of the board shall be composed of three members, one of whom was nominated by the governing body of the county, one by the county board of education, and one by the governing body of the incorporated municipalities in the county, except, however, that in those counties having no incorporated municipality, two of the three members of the board shall be selected from the six nominees of the county governing body; provided, that the Commissioner of Revenue may reject any group of nominees, in which event the body nominating them shall submit additional names, one of whom shall be appointed by the Commissioner of Revenue with the approval of the Governor. The members of the several county boards of equalization appointed from the nominees as in this section provided shall hold office for four years beginning October 1, 1943, and every fourth year thereafter. In all counties having a population of 400,000 or more persons according to the 1940 federal census or any subsequent census, where there is now or hereafter may be a countywide civil service system, all nominees must take an examination and qualify by a civil service examination to be conducted by the civil service system, except any member of any board of equalization now duly appointed as a member of the board of equalization shall be deemed qualified for appointment. In the event the names submitted by either the county commission of the county, the county board of education, and the governing body of the largest municipality in the county having a countywide civil service system have already been submitted by either of the nominating parties, the Commissioner of Revenue shall so notify the nominating bodies, and the nominating bodies shall forthwith submit the names of another person or persons qualified under the civil service examination not theretofore nominated by the other nominating bodies. In the event that any nominating body fails to timely submit a list of nominations for appointments to the county’s board of equalization, the Commissioner of Revenue may appoint members derived from the remaining nominees previously submitted by other nominating bodies.
(b)(1)Notwithstanding subsection (a), this subsection shall apply to any county of this state which has a population of 600,000 or more according to the last or any subsequent federal census. On October 1, 1975, the office of the chair of the board is created. The chair shall be the executive officer of the board and shall supervise the assignment of duties to members and employees. The provisions of the Merit System law, including the provisions thereof governing appointment and compensation of persons subject to the Merit System law, shall apply to the office of the chair and to the chair, until July 1, 2024.
Until July 1, 2024, the governing body of the county shall appoint the chair subject to the Merit System law.
After October 1, 1975, the associate members of the board shall serve the remainder of the term for which they were appointed under subsection (a) to serve. Upon the expiration of the term of office mentioned in the prior sentence, the associate members of the board shall be appointed in the manner hereinafter provided for in this subsection.
The county board of education and the governing body of the largest municipality in the county shall each submit in writing to the Commissioner of Revenue the names of three persons, and the governing body of each other municipality within the county shall, in like manner, submit the name of one person, all of whom are residents of the county, who are each owners of taxable property which is located within this state, who are qualified electors in the county and who are, in the opinion of the nominating board, persons competent to serve as members of the board.
Within 30 days after the receipt of the list of nominees, the Commissioner of Revenue, with the approval of the Governor, shall nominate an associate member of the board from the nominees of the county board of education and one associate member of the board from the nominees of the governing bodies of the municipalities of the county. The Commissioner of Revenue may reject any group of nominees, in which event the body nominating them shall submit additional names, one of whom shall be appointed by the Commissioner of Revenue with the approval of the Governor. The associate members of the board appointed from the nominees as provided for in this subsection shall hold office for the four-year terms provided for in subsection (a).
(2) Notwithstanding any other provision of this subsection, the associate members of the board serving on May 17, 2024, shall serve the remainder of the term for which they were appointed to serve.
(3)a. Notwithstanding any other provision of this subsection, beginning July 1, 2024, the board of equalization shall be constituted as provided by this subdivision and shall be comprised of five members, designated respectively as member number one, member number two, member number three, member number four, and member number five.
b. All board members must be residents of, own real property in, and claim their homestead in the respective county for which board they are appointed. Except as provided in subparagraph e. 1., each board member shall have a minimum of five years of experience in real estate, accounting, or finance.
c. Except as provided in this subdivision regarding the initial terms of office, each board member shall serve for a term of four years. No board member shall be appointed to more than two consecutive terms. Vacancies in unexpired terms shall be filled by the appropriate appointing authority within 30 days of the vacancy, as provided by this subdivision.
d. Notwithstanding any other provision of this subdivision, if the Commissioner of Revenue does not receive at least three names of qualified nominees, pursuant to subparagraph e.2. through 4., the commissioner, upon approval of the Governor, may appoint an individual to the board who meets the qualifications provided by this subdivision.
e.1. Member Number One.
This member shall be appointed by the governing body of the county and shall serve as the chair and the executive officer of the board. This member shall have a minimum of 10 years of experience in an executive capacity in real estate, accounting, finance, or banking. The initial term shall begin on July 1, 2024.
(i) Except as provided in item (ii), this member shall be appointed by the Commissioner of Revenue, upon approval by the Governor, from a list consisting of three names submitted by the county board of education, three names submitted by the largest municipality in the county, and one name from each municipality in the county with a population over 15,000.
(ii) The individual serving on the board as an associate member nominated by the county board of education on May 17, 2024, shall hold this office for the remainder of the term provided under subdivision (1).
(i) Except as provided in item (ii), this member shall be appointed by the Commissioner of Revenue, upon approval by the Governor, from a list consisting of three names submitted by the county board of education, three names submitted by the largest municipality in the county, and one name from each municipality in the county with a population over 15,000.
(ii) The individual serving on the board as an associate member nominated by a municipality in the county on May 17, 2024, shall hold this office for the remainder of the term provided under subdivision (1).
(i) This member shall be appointed by the Commissioner of Revenue, upon approval by the Governor, from a list consisting of one name submitted by each municipality in the county with a population over 15,000.
(ii) The initial term of office shall be three years and shall begin on July 1, 2024.
(i) This member shall be appointed by the county commission.
(ii) The initial term of office shall be two years and shall begin on July 1, 2024.
(4) The board shall act independently from any county department or office of equalization and shall preside over all real and personal property protests consistent with this chapter. The board may adopt rules for the conduct and perfection of protests in the county, subject to the approval of the Alabama Department of Revenue.
(5)a. There shall be an at-will employee that serves as the head of the county department or office of equalization, who shall supervise the assignment of duties to employees consistent with, ratifying, curative to, and in furtherance of any other laws applicable to the county. The at-will department head shall supervise the employees of the county department of equalization, including the appraisal and reappraisal staff.
b. If there is an at-will employee that serves as the department head on May 17, 2024, that individual shall continue in that capacity, subject to and consistent with this section.
(Acts 1939, No. 531, p. 827; Code 1940, T. 51, §89; Acts 1943, No. 350, p. 333; Acts 1975, No. 441, p. 1057, §1; Act 2021-173, §1; Act 2024-440, §1.)
Each person appointed to membership on any county board of equalization shall, before entering upon the duties of such office, take and subscribe to the following oath, in addition to the oath required of regularly elected state and county officials: “I do solemnly swear that I will faithfully discharge the duties imposed upon me by law as a member of the county board of equalization, and that I will adjust, equalize, and fix the taxable value of all property listed for taxation and submitted for review to the board of which I am a member on a basis of its fair and reasonable market value to the best of my knowledge and ability, so help me God.” Said oath, together with the other official oath required of such board member shall be filed for record in the office of the judge of probate of the county in which such board member is to serve.
(Acts 1939, No. 143, p. 178; Code 1940, T. 51, §90.)
Should any person appointed to membership of any board of equalization fail or refuse to take and subscribe to the oaths required by Section 40-3-3 within five days after being notified of his or her appointment to membership on the board, or shall for any other reason herein enumerated become disqualified to serve as a member on the board, or should a vacancy on any board occur from death, resignation, or any other cause, the following replacement procedure shall be used:
(1) The Commissioner of Revenue shall select from the remaining nominees on the list from which such original nominee was taken a person to fill the position to which such disqualified person was first appointed or to fill the vacancy on the board.
(2) If no nominees remain on the list from which the original nomination was taken, the Commissioner of Revenue may request from the nominating body that submitted the nomination that resulted in a vacancy additional nominations up to a total of not more than three nominees, and from such additional nominees a person shall be selected to fill the vacancy occasioned by the disqualification of the original nominee or nominees or other vacancy. When requesting additional nominations under this subdivision, the Commissioner of Revenue may require the nominating body to submit nominations within a prescribed time period.
(3) If no nominees remain on the list of the original nominating body and if it fails to timely submit a nominee as provided by subdivision (2), the Commissioner of Revenue may appoint a member from the remaining nominations previously submitted by other nominating bodies. If no nominees remain on those lists, the Commissioner of Revenue may request that the other nominating body or bodies name a total of not more than three additional nominees, and from the additional nominees a member shall be selected to fill the vacancy occasioned by the disqualification of the original nominee or nominees or other vacancy.
(4) If no appropriate nominee is submitted by any nominating body, the Commissioner of Revenue shall appoint a member.
(5) Pending an appointment by the Commissioner of Revenue to fill a vacancy as prescribed in this section, the chairperson of the county commission may appoint a temporary board member for a period not to exceed 45 days.
(6) With the exception of the temporary appointment, any appointment to fill a vacancy on any board of equalization shall be for the unexpired term only.
(Acts 1939, No. 143, p. 178; Code 1940, T. 51, §91; Acts 1953, No. 313, p. 369; Act 2021-173, §1.)
No member of any county board of equalization shall hold employment or office of profit with the United States, the State of Alabama, any county or other political subdivision of said state or with any board, department, or other agency of the United States, of the State of Alabama, of any county or other political subdivision of said state or with any county school board, or with any municipality while holding office as a member of said board.
(Acts 1939, No. 143, p. 178; Code 1940, T. 51, §91.)
The county tax assessor shall be and serve as the secretary of the county board of equalization, and he shall not receive any compensation for his services as such. He shall have no vote or voice in the government or in the business of said board except as may be provided in this chapter.
(Acts 1939, No. 143, p. 178; Code 1940, T. 51, §93.)
The annual term of service and compensation of members of the several county boards of equalization shall be on a basis of total assessed value of all taxable property, using the year 1955 as the basis, to be determined as follows:
(1) In those counties in which the total assessed value of all taxable property exceeds six hundred million dollars ($600,000,000) according to the tax assessor’s abstract of assessments for the year, except in a county subject to subdivision (2), the members of the county boards of equalization shall serve on a full-time basis, and each associate member shall be paid at the rate of nineteen thousand four hundred twenty-five dollars ($19,425) per annum, and the chair shall be paid at the rate of twenty-one thousand ninety dollars ($21,090) per annum, payable in monthly installments.
(2)a. This subdivision shall apply to any county of this state which has a population of 600,000 or more according to the last or any subsequent federal census and in which the total assessed value of all taxable property exceeds six hundred million dollars ($600,000,000) according to the tax assessor’s abstract of assessments for the year.
b. In any county subject to this subdivision, the members of the county board of equalization shall serve on a full-time basis. Each associate member shall be paid at the rate of nineteen thousand four hundred twenty-five dollars ($19,425) per annum as provided by existing law, and shall be paid additional compensation in the amount of nine thousand dollars ($9,000) per annum from the Jefferson County Mapping and Reappraisal Fund, for a total compensation of twenty-eight thousand four hundred twenty-five dollars ($28,425). The chair’s total compensation shall be determined as provided for by the merit system law applying to the county, and the chair shall be subject to and entitled to the benefits of the law establishing the merit system. The chair’s total compensation shall be payable from the general funds of the county, and the chair shall promptly pay to the county any compensation he or she receives from the State of Alabama and from the largest municipality of the county for serving as chair. In addition to the salary provided for the chair under the merit system law, the county shall make for and on the chair’s account an employer’s matching payment to the county pension system fund, if the chair is or becomes a member of the county pension system.
(3) In those counties in which the total assessed value of all taxable property exceeds four hundred million dollars ($400,000,000) and does not exceed six hundred million dollars ($600,000,000) according to the tax assessor’s abstract of assessments for the year, the members of the county board of equalization shall serve on a full-time basis, and each associate member shall be paid at the rate of eight thousand seven hundred dollars ($8,700) per annum, and the chair shall be paid at the rate of nine thousand two hundred dollars ($9,200) per annum, payable in monthly installments.
(4) In those counties in which the total assessed value of all taxable property is not less than eighty million dollars ($80,000,000) and does not exceed four hundred million dollars ($400,000,000) according to the tax assessor’s abstract of assessments for the year, the members of the county board of equalization shall serve for not less than six months, the exact working period to be fixed or approved by the Department of Revenue, and each member shall be paid at the rate of two hundred fifty dollars ($250) per month; and the board shall be allowed annual traveling expenses to be approved by the Department of Revenue not to exceed the sum of two hundred fifty dollars ($250) for any tax year.
(5) In those counties in which the total assessed value of all taxable property is not less than thirty million dollars ($30,000,000) and does not exceed eighty million dollars ($80,000,000) according to the tax assessor’s abstract of assessments for the year, the members of the county board of equalization shall serve for not more than 150 working days, the exact working period to be fixed or approved by the Department of Revenue, and each member shall be paid at the rate of one hundred dollars ($100) per diem; and the board shall be allowed mileage at the same rate as that paid to state employees, for official business, payable in the same manner and from the same source as expense allowances; provided however, the total allowance for such mileage shall not exceed the sum of one thousand dollars ($1,000) per annum.
(6) In those counties in which the total assessed value of all taxable property is not less than twenty-five million dollars ($25,000,000) and does not exceed thirty million dollars ($30,000,000), according to the tax assessor’s abstract of assessments for the year, the members of the county board of equalization shall serve for not more than 80 working days, the exact working period to be fixed or approved by the Department of Revenue, and shall be paid at the rate of one hundred dollars ($100) each per diem, payable in monthly installments; and the board shall be allowed mileage at the same rate as that paid to state employees, for official business, payable in the same manner and from the same source as expense allowances; provided however, the total allowance for such mileage shall not exceed the sum of one thousand dollars ($1,000) per annum.
(7) In those counties in which the total assessed value of all taxable property does not exceed twenty-five million dollars ($25,000,000) according to the tax assessor’s abstract of assessments for the year, the members of the county board of equalization shall serve for not more than 80 working days, the exact working period to be fixed or approved by the Department of Revenue, and each member shall be paid at the rate of one hundred dollars ($100) per diem, payable in monthly installments. The board shall be allowed mileage at the same rate as that paid to state employees, for official business, payable in the same manner and from the same source as expense allowances; provided however, the total allowance for such mileage shall not exceed the sum of one thousand dollars ($1,000) per annum.
(Acts 1939, No. 531, p. 827; Code 1940, T. 51, §94; Acts 1945, No. 462, p. 693, §1; Acts 1947, No. 560, p. 395; Acts 1949, No. 399, p. 570; Acts 1951, No. 588, p. 1051; Acts 1953, No. 218, p. 284; Acts 1957, No. 413, p. 575; Acts 1957, No. 418, p. 582; Acts 1964, 1st Ex. Sess., No. 217, p. 299; Acts 1971, No. 1155, p. 2002; Acts 1973, No. 784, p. 1198; Acts 1975, No. 441, p. 1057, §1; Acts 1982, 2nd Ex. Sess., No. 82-775, p. 275, §1; Act 2019-452, §1; Act 2021-173, §1.)
(a) In every county except a county subject to subsection (b), the compensation of the members of any board of equalization and adjustments, as provided in Section 40-3-7, shall be prorated in the county mapping and appraisal budget by each county governing body to each agency therein on the basis of the proportion of the net real and personal property taxes remitted to each agency in the county to the total amount received by all agencies of the county.
(b) This subsection shall apply to any county of the state having a population of 600,000 or more according to the last or any subsequent federal census.
In each county subject to this subsection, the compensation of the members of any board of equalization and adjustments, as provided in Section 40-3-7, shall be paid 22 1/2 percent by the state, 38 3/4 percent by the county and 38 3/4 percent by the largest municipality in the county.
(c) The county board of equalization of any county may employ appraisers, engineers, stenographers, clerks, or assistants as may be necessary for the performance of the duties which may be required of the boards of equalization, subject to all the provisions of any merit system law now or hereafter in effect in the county. The number of persons to be employed by the board of equalization shall be subject to the approval of the county commission or like governing body and the state Commissioner of Revenue. If the compensation of the employee is governed by the provisions of any merit system law in effect, then the provisions of the law shall govern, otherwise the compensation of the employee shall be fixed by the county commission or like governing body, subject to the approval of the Commissioner of Revenue, all compensation to be paid in the same manner as the law provides for the payment of compensation to the members of the county board of equalization of the county.
The county board of equalization in any county may further provide for an inventory of all property in the county, which inventory shall be under the supervision and control of the board. The state, county, and governing body of all municipalities in the county and all boards of education or boards of school commissioners are hereby authorized to contribute so much of the cost of the inventory as may be approved by the various governing bodies in the county and the board of education or boards of school commissioners. In the event the state elects to contribute to the cost of the inventory, the amount to be contributed shall be approved by the state Commissioner of Revenue and the Governor.
In all counties having a population of 140,000 or more according to the last or any subsequent federal census, it shall be the duty of the county commission or other like governing bodies of such counties in this state, to furnish and supply the county boards of equalization with adequate office space, necessary furniture and equipment, all necessary books, maps, stationery, and printed blanks, and transportation or reasonable compensation for transportation expense actually incurred in performance of official duties.
(Acts 1939, No. 143, p. 178; Acts 1939, No. 531, p. 827; Code 1940, T. 51, §95; Acts 1945, No. 462, p. 693, §2; Acts 1964, 1st Ex. Sess., No. 217, p. 299, §5; Acts 1975, No. 441, p. 1057, §1; Act 2021-173, §1.)
Any inventory of property in any such county as provided for in Section 40-3-8 shall not be taken or made unless the same is first authorized or approved by the county governing body, which body shall also have the right from time to time to fix and determine the number of employees to be used in making any such inventory.
(Acts 1939, No. 531, p. 827; Code 1940, T. 51, §96.)
The county boards of equalization or other like boards or agencies with final authority to fix the value of property for the purposes of taxation, in all counties of the state having a population of 140,000 or more according to the last or any subsequent federal census, shall have the power and authority, from time to time, subject to the approval of the governing body of any such county, to provide for the inventory and appraisal of all taxable property of such counties, except that subject to assessment by the Department of Revenue, as a basis for the final appraisal, valuation, and equalization of the assessments of property in such counties.
(Acts 1939, No. 400, p. 524; Code 1940, T. 51, §97; Acts 1945, No. 520, p. 760.)
The county commission of all such counties shall have the power and authority to provide for the payment of the cost and expenses of such inventories and to prorate such cost and expenses between the county, the state, each municipality, the county board of education, and each city board of education in the county, such proration to be approximately in the proportion that the revenue received by the state, the county, such municipalities, and such boards of education, respectively, bears to the total amount of ad valorem taxes collected in the county. When the board of equalization or like boards or agencies, with final authority to fix the value of property for the purposes of taxation of any such county shall provide for the taking of any such inventory and appraisal, the Comptroller, subject to the approval of the Governor, shall have the authority to pay the state’s pro rata thereof, and each municipality and each board of education in such county shall have authority to pay its pro rata of said cost and expenses, and the county governing body shall have authority to provide for the payment of the county’s pro rata thereof; provided, that the failure of either the state or any of said municipalities or boards of education to provide for the payment of their pro rata portion of said cost and expenses shall not prevent the county, or any of the other governmental bodies or agencies mentioned herein, continuing such inventory and appraisal and paying the entire cost thereof, upon such terms as may be agreed upon between the county and such other governmental bodies or agencies.
(Acts 1939, No. 400, p. 524; Code 1940, T. 51, §98.)
The cost and expenses of any inventory taken under the provisions of this chapter shall be due monthly on the first day of each month as the inventory is being taken, and the state and all other governmental subdivisions and agencies contributing to the payment of the cost and expenses of the same shall be required to pay their pro rata portion of such cost and expenses into the county treasury upon requisition by the presiding officer of the county commission, accompanied by an itemized statement showing the amount due by the particular governmental unit, subdivision, or agency. The Comptroller shall have authority, subject to the approval of the Governor, to draw his warrant on the State Treasurer, payable to the treasurer of any such county, in payment of the state’s pro rata of the cost and expenses of any inventory or appraisal.
(Acts 1939, No. 400, p. 524; Code 1940, T. 51, §99.)
Any inventory or appraisal of property taken or made under the provisions of this chapter shall be under the supervision and control of the county board of equalization or such other like board or agency vested with the final authority to inspect, review, revise, and fix the value of property for the purpose of taxation. All appraisers, clerks, or other employees employed for the purpose of making an inventory or appraisal under the provisions of this chapter shall be selected under and governed by the provisions of any countywide civil service law now or hereafter in effect in any such county. The governing body of any such county shall at all times have the right to determine the number of employees that shall be engaged in the making of any inventory or appraisal under the authority of this chapter and may increase or reduce the number of said employees at any time. The state Department of Revenue shall have authority to provide such supervision, supplies, and personnel to each of the several counties of the state as its appropriation budget and current activity will justify.
(Acts 1939, No. 400, p. 524; Code 1940, T. 51, §100; Acts 1945, No. 462, p. 693.)
All payments for compensation of the members of the county boards of equalization shall be made upon claims of the board members, duly verified as other claims against the state, county, or city, and approved by the Department of Finance, and shall constitute preferred claims.
(Acts 1939, No. 143, p. 178; Code 1940, T. 51, §101.)
It shall be the duty of the members of each board of equalization at the first meeting held after January first in each year to select one of its members to act as chairman of the board of equalization for the ensuing year and to make such rules and regulations as may be necessary to carry out the provisions of this chapter as to the assessment and valuation of property for taxation.
The board of equalization shall have authority at any time to make such rules and regulations as it may deem necessary to carry out the provisions of this chapter not in conflict with the provisions hereof.
(Acts 1939, No. 143, p. 178; Code 1940, T. 51, §102.)
It shall be the duty of the boards of equalization to inspect, review, revise, and fix the value of all the property returned to or listed with the assessing official for taxation each year; provided, that nothing in this chapter shall be construed to require the assessing official or boards of equalization to value any property required by the law to be assessed for taxation by the Department of Revenue.
The majority of the board of equalization shall constitute a quorum of the board for the performance of the duties required herein; provided, that at any time the Department of Revenue shall deem it necessary it may go or send or use agents or representatives in any county with authority to act in an advisory capacity and in conjunction with the board of equalization and perform other duties, with respect to the valuation and assessment of property for taxation, as may be required of them.
Agents or representatives of the Department of Revenue assigned to any county or counties for the purpose of advising with the boards of equalization with respect to valuing real and personal property for assessment for taxation shall have the power and authority to inspect, review, value, and assess any property subject to taxation, and the agents or representatives are authorized to fix values for assessment, subject to the approval of the board of equalization of the county in which the property is located. In cases where the agents or representatives have fixed a value for assessment, the value must be entered on the tax return of the taxpayer showing the day and date when value was fixed, and the agents or representatives shall certify to all values fixed by them.
It shall be the duty of each agent or representative assigned for duty in a given county or counties, as soon as letters of protest are filed with the board of equalization, to attempt to adjust, equalize, and settle the protest. To that end he or she shall notify as many of the protesting taxpayers, by mail at the address shown on the tax return, as he or she can reasonably interview, to meet him or her at the courthouse of the county on a given day, and others for the other days intervening prior to the date specified by the Department of Revenue, then and there to attempt to adjust the protest. If the taxpayer at the interview agrees with the tax agent on a valuation and consents in writing thereto on his or her return, the valuation shall be final, unless the board of equalization shall disapprove the same and notify the taxpayer, by mail at his or her address shown upon the return, of the disapproval and the date specified by the Department of Revenue when the board of equalization will hear the taxpayer on the assessment. All protests filed within time, which it shall be impossible for the tax agent or agents assigned to a given county to notify the taxpayer to report for an interview or having notified they fail to interview, and all protests of taxpayers who fail to report for the preliminary interview and all protests of taxpayers who so report and fail to agree upon a final valuation or whose agreed final valuation shall be disapproved by the board of equalization, shall be listed or docketed by the board of equalization for hearing by it. This list or docket shall be made up as nearly as may be in the order in which the protests were received by the board of equalization and shall be heard by the board of equalization substantially in the order so listed or docketed. At the hearing of these protests, beginning on the date specified by the Department of Revenue following the making of the assessments as herein elsewhere provided, the board of equalization shall accord each a reasonable time and opportunity within which to be heard, taking into consideration the total time available for hearing the protests, the number of protests pending, the amount and nature of the property involved in the given assessment, and all other relevant circumstances. The board of equalization shall cause each protesting taxpayer to be notified by mail at his or her address shown upon his or her assessment of the day and place when the board proposes to hear the taxpayer; and, if he or she shall present himself or herself on that day and not be heard, he or she shall be assigned another day certain for hearing and so on until he or she is heard. No taxpayer, agent, attorney, or adjuster shall be heard out of the order in which the protested assessment proposed to be heard appears upon the list or docket of protests if any other taxpayer whose protest appears first on the list or docket is present and ready to be heard.
The duties herein imposed upon boards of equalization are declared to be of prior and paramount importance; and, if any member of a board of equalization fails or refuses without good cause and legal excuse to attend upon and perform the duties, the failure or refusal shall constitute official misconduct and nonfeasance in office and subject the offender to removal from office.
No salary or compensation shall be paid any member of a board of equalization for any part of the period commencing on the date specified by the Department of Revenue of each year during which he or she shall be required to sit as a member of the board until he or she shall have first made and filed with the public officer disbursing the salary or compensation a sworn statement that during the period for which the salary or compensation is claimed he or she has performed faithfully and to the best of his or her ability his or her duties as a member of the board of equalization.
Every agent or representative of the Department of Revenue assigned to any county under the provisions of this chapter shall file each month with the Department of Revenue a sworn statement that he or she has performed faithfully and to the best of his or her ability the duties required of him or her hereunder before compensation for service is paid.
Immediately after January 1, of each year, the assessing official shall deliver to the board of equalization all assessments as returned to him or her, and thereafter shall deliver all additional assessments returned to him or her. The assessment sheet shall show the valuation fixed by the assessing official; and, if the valuation be agreed to by the taxpayer, the taxpayer shall endorse on the assessment sheet valuation accepted: _____ taxpayer, this _____ day of __, 2. If the valuation is satisfactory to the board of equalization, it shall endorse thereon: Approved _____ board of equalization and the date and signed by the chair; the approved assessments shall be final and no appeal shall lie therefrom.
(Acts 1939, No. 143, p. 178; Code 1940, T. 51, §103; Act 2007-381, p. 757, §1.)
When the assessor shall have completed the assessment, valuation, and equalization work in his county as provided by law, he shall notify each member of the board of equalization, if such board is not required by law to serve full time, and such board shall meet on the second Monday in February or at such other date prior thereto as may be made possible by the completion of the work of the tax assessor and sit at the courthouse of the county, from day to day, until its duties are completed or its allotted number of days exhausted, and shall review, revise, correct, and fix the assessment values made by the tax assessor by raising or lowering the assessment of any person, partnership, corporation, or association, except such assessments as have been approved by the Department of Revenue, as to any or all of the items of his assessment, in such manner as to secure the assessment of property at the amount specified by law on its fair and reasonable market value. The majority of a board of equalization shall govern in fixing the value for assessment of all property before it for termination.
(Acts 1939, No. 143, p. 178; Code 1940, T. 51, §104; Acts 1945, No. 462, p. 693; Acts 1959, No. 537, p. 1315.)
It shall be the duty of the board of equalization to meet on the second Monday in March and sit as long as may be necessary to carefully examine and inspect all tax returns and assessments delivered to it by the county tax assessor. If the board finds that any taxpayer has neglected to make a return or has omitted from his return any property that should be returned, it shall be its duty to make up a return upon the proper blank with a description of the property to be assessed, which property it shall then proceed to value and equalize in the same manner as other property is valued and equalized by it, and to the value thus placed thereon shall be added a penalty of 10 percent for failure of the owner of such property to properly return the same. The secretary of the board shall by certified or registered mail, return receipt demanded, or in person give notice to the owner of any property which has been omitted from the tax return and has been assessed as provided in this section.
(Acts 1939, No. 143, p. 178; Code 1940, T. 51, §105.)
For the purpose of hearing objections filed in writing to any assessments or valuations fixed as provided for herein, the boards of equalization shall sit at the courthouse in their respective counties on the date specified by the Department of Revenue in each year, and shall continue as long as may be necessary; provided, that the sitting shall not be extended beyond the second Monday in July, unless otherwise ordered by the Department of Revenue, to dispose of all cases where objections to valuations or assessments have been filed in writing by any taxpayer, as provided in this chapter.
For the purpose of hearing objections filed in writing to any assessments or valuations fixed as provided for herein, in counties where the board of equalization serves full time, the boards of equalization shall sit at the courthouse in their respective counties, beginning on the date specified by the Department of Revenue, to dispose of all cases where objections to valuations or assessments have been filed in writing by any taxpayer, as provided in this chapter. At the sitting the property owner may appear in person, or by agent or attorney, and produce evidence in support of objections, if any, to any assessment or valuation heretofore made, and it shall be the duty of the county board of equalization to examine under oath any complaining property owner and to examine any other witnesses under oath as to the fair and reasonable market value of the property of the owner, and if it is found from the evidence that the valuation theretofore placed was not the amount specified by law based on the reasonable market value of the property, whether more or less, then the valuation or assessment shall be corrected so that it will show the amount specified by law based on a fair and reasonable market value, and the corrected amount shall constitute the assessed value of the property. But if it is found from the evidence that the assessed value placed on the property was the amount specified by law based on a fair and reasonable market value thereof, the value shall stand as the assessed value of the property, unless an appeal is taken therefrom as provided by this chapter.
(Acts 1939, No. 143, p. 178; Code 1940, T. 51, §107; Acts 1964, 1st Ex. Sess., No. 217, p. 299, §6; Act 2007-381, p. 757, §1.)
Immediately upon the completion of the work of reviewing and adjusting assessed valuation under the provisions of this chapter, the assessing official shall give notice by publication once a week for two consecutive weeks in a newspaper published in the county. If no newspaper is published in the county, the notices shall be posted in three public places in each precinct of the county. The notices shall state that the assessed valuations of all property listed for taxation have been fixed as provided by law, that the tax return lists showing the assessed valuations are in his or her office and open for public inspection, that the board of equalization will sit at the courthouse of the county on the date specified by the Department of Revenue to consider any protests that may be filed by any taxpayer as herein provided, and that any taxpayer, who is not satisfied with the valuations of his or her property as fixed and entered on the return lists as required herein, may file objections in writing to the assessed valuations with the secretary of the board, within 30 calendar days of the date of final publication of the notice. The taxpayer shall set out in the objections filed the description of each item of property and his or her reason for making objections to the assessed valuation placed thereon.
(Acts 1939, No. 143, p. 178; Code 1940, T. 51, §106; Acts 1945, No. 462, p. 693; Act 2007-381, p. 757, §1.)
(a) When the work of hearing objections against values fixed on taxable property has been completed by the board of equalization, the secretary of the board shall immediately send notice by mail to each taxpayer with a notification of the board’s decision. The secretary of the board shall enter upon the tax return lists the corrected values, if any changes have been made therein, which changed or altered value shall be the taxable value of the property or properties, unless an appeal is taken as herein provided or unless otherwise ordered by the Department of Revenue.
(b) The Department of Revenue may adopt rules for the implementation and administration of this act.
(Acts 1939, No. 143, p. 178; Code 1940, T. 51, §108; Act 2023-499, §§ 1, 2.)
The failure of the tax assessor, board of equalization, or the Department of Revenue or its agents to perform any of the duties of assessing and valuing property or hearing objections to assessment valuations, at the time prescribed, or to complete such duties within the time prescribed by this chapter, shall not invalidate any assessment or any act of such tax assessor, board of equalization, or Department of Revenue or its agents made or done after the expiration of such time. The duty of the tax assessor to inspect and examine real property in his county is directory, and failure to do so shall not invalidate assessments and valuations made by the assessor or the board of equalization or the Department of Revenue or its agents.
(Acts 1939, No. 143, p. 178; Code 1940, T. 51, §111.)
Whenever under the provisions of this title any notice, subpoena, or writing is required to be given or served, the same shall be served by any sheriff in this state or his deputy or by any lawful constable of this state, except as otherwise provided by this title. The compensation of such officer for serving such notice, subpoena, or writing shall be the same as is now allowed the sheriff for summoning witnesses for the circuit court in civil cases, which shall be paid by the county commission of the county.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §112.)
In cases where objection has been made by any taxpayer, his agent or attorney, as provided herein, to the taxable value fixed by the board of equalization on any property assessed against such taxpayer, and such objections have been overruled by said board, such taxpayer, his agent or attorney may take an appeal from the action of said board in overruling his objection to such valuation to the circuit court of the county in which the taxpayer’s property is located.
(Acts 1939, No. 143, p. 178; Code 1940, T. 51, §109.)
(a) All appeals from the rulings of the board of equalization fixing the value of property shall be taken within 30 calendar days of the date of the notice required under Section 40-3-21. The taxpayer shall file notice of the appeal with the secretary of the board of equalization and with the clerk of the circuit court and shall file bond with and approved by the clerk of the circuit court, conditioned to pay all costs, and the taxpayer or the state shall have the right to demand a trial by jury by filing a written demand within 10 days after the appeal is taken.
(b) When an appeal is taken, the taxpayer shall pay the taxes due as fixed for assessment for the preceding tax year before the same becomes delinquent. In cases where the board of equalization has not issued its final ruling fixing the assessed value of the property on or before November 30, the taxpayer shall be granted 30 calendar days from the final decision to either pay the taxes due without penalty or to file an appeal with the circuit court and pay the taxes due as fixed for assessment for the preceding tax year without penalty. Upon failure to pay the taxes due as fixed for assessment for the preceding tax year, the court upon motion ex mero motu must dismiss the appeal, unless at the time of taking the appeal the taxpayer has executed a supersedeas bond with sufficient sureties to be approved by the clerk of the circuit court in double the amount of taxes, payable to the State of Alabama, conditioned to pay all taxes, interest, and costs due the state, county, or any agency or subdivision thereof.
(c) Appeals under this section shall be preferred cases. If from all the evidence the court is of the opinion that the valuation is either too high or too low, it shall render a judgment fixing the valuation as it may deem fit. The circuit court shall so far as practicable hear the appeals according to the general rules and procedure of courts, but, when acting under this chapter or acquiring jurisdiction as provided herein, it shall have no power to enjoin or suspend the collection of any taxes due. It shall decide all questions as to the legality of the assessment and the valuation of the property. The original assessment sheet or a certified copy, showing the assessment by the board of equalization, shall be sufficient appearance by the state and shall make out a prima facie case.
(d) From the judgment of the circuit court, either the state or the taxpayer may appeal directly to the Supreme Court of Alabama within 42 days of the entry of the judgment. Upon the filing of the appeal to the circuit court or to the Supreme Court, the court shall ascertain and determine by its judgment the amount of tax which was invalid or which was excessive both as to the amount paid to the state, counties, county boards of education, municipalities, or other governmental agencies receiving any part of the taxes. Upon presentation of a certified copy of the judgment to the Comptroller, the Comptroller shall draw a warrant on the State Treasurer in favor of the taxpayer for the amount determined by the judgment of the court to have been erroneously paid to the state together with interest from the date of payment, and a warrant of the Comptroller shall be paid out of any funds in the State Treasury as a current obligation of the year in which the refund is ordered.
(e) Upon presentation of a certified copy of the judgment to the county commission, or upon presentation of a certified copy of the judgment to a county board of education or to the city council or other governing body of any municipality, or upon presentation of a certified copy to the governing body of any other agency of the state which may have received any part of the tax erroneously paid as determined by the judgment, it shall be the duty of the county commission or the county board of education or of the city council or other governmental body of a municipality or of the governmental body of any other agency receiving any part of the taxes to draw its warrants on the treasurer of the county, school board, municipality, or other agency in favor of the taxpayer for the amount of the tax as may have been erroneously paid to the county, school board, municipality, or other agency, together with interest from the date of payment, and the amount shall constitute a preferred claim of the current year in which the refund is ordered, and the respective treasurers shall refund the amounts received by the county, school board, municipality, or other agency, with interest as herein provided.
(f) If the judgment of the court shall fix an assessment greater than that upon which the taxes have been paid on the assessment appealed from, the court shall fix and determine the amount of excess, and the taxpayer and the sureties on the taxpayer’s appeal bond shall be adjudged to pay taxes due by reason of the increased assessment with interest from the date of judgment, and the lien and priorities of the state and counties or other agencies shall apply to the additional amount as in other cases. The court, in fixing the assessment, shall order the assessing authorities to apportion the same and the collecting authorities to collect taxes thereon for the several taxing subdivisions in the manner provided by law.
(g) The Department of Revenue may adopt rules for the implementation and administration of this act.
(Acts 1939, No. 143, p. 178; Code 1940, T. 51, §110; Act 2023-499, §§ 1, 2.)
(a) The county commission shall be responsible for securing legal counsel to represent the state and county in all property tax cases appealed to the circuit court in the county. The district attorneys and state and county officials are prohibited from representing taxpayers in any controversy between taxpayers and the state or county. However, a district attorney or county official may appear where the value of his or her own property is in controversy. The county may retain legal counsel to handle a property tax appeal or, when available pursuant to coverage provided by a self-insurance fund created under Chapter 30 of Title 11, utilize legal counsel provided through that coverage. In each case where the county commission employs its own legal counsel for a property tax case appeal, the county commission, in consultation with the local tax official, shall adopt a resolution approving the employment of the counsel. All expenses incurred by the county commission in complying with this section shall be paid from the budget of the county board of equalization as provided in Section 40-7-68.
(b) In addition to the appearance specifications provided in Section 40-3-25, the county tax assessing official may appear in his or her official capacity and defend on behalf of the state in any appeal in which the taxable value of real or personal property is at issue. The appearance of the tax assessing official in the action shall be considered an appearance of the state, unless the Department of Revenue files a notice of appearance or subsequently intervenes on behalf of the state. The tax assessing official may act in the appeal as appropriate and necessary to defend the taxable value of real or personal property. The appearance provided for in this subsection shall not extend beyond this section unless otherwise provided by law.
(c) In addition to all other powers granted to the board of trustees of a self-insurance fund created pursuant to Chapter 30 of Title 11, the board of trustees of the fund may provide legal counsel for property tax cases appealed to the circuit court. Coverage, when available, shall be treated as a claim filed under Chapter 30.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §113; Act 2016-127, p. 287, §1; Act 2022-183, §1.)
(a) For protests and appeals of commercial and industrial property, operating as such at the time of valuation, any party that intends to offer into evidence a sale or lease transaction as evidence of the value of the property that is the subject of the protest before the board of equalization or appeal before the circuit court, shall have an affirmative duty to disclose both of the following:
(1) Whether the proposed comparable property was occupied or unoccupied at the time of the transaction.
(2) Whether the proposed comparable property was subject to any use, deed, or lease restriction at the time of the transaction that prohibits the property, on which a building or structure sits, from being used for the purpose for which the building or structure was designed, constructed, altered, renovated, or modified.
(b) The purpose of the disclosure is to allow the court to determine whether the proposed comparable property is similarly situated to the subject property. Failure to disclose this information at the time the sale or lease transaction is offered into evidence shall result in the proffered evidence being deemed inadmissible.
(Act 2018-265, §1.)
The tax assessor in every county in the State of Alabama shall, before entering upon the discharge of the duties of his office as tax assessor, execute in duplicate a bond in the sum of not less than $5,000. Such bond shall be payable to the State of Alabama, with sufficient surety or sureties, to be approved by the judge of probate, and conditioned faithfully to discharge the duties of his office, which are or may be required by law during the time he continues therein or discharges any of the duties thereof. One of such duplicates must be filed and recorded in the office of the judge of probate, and the other must be filed in the office of the Comptroller on or before September 1 next after his election.
(Acts 1935, No. 194, p. 256; Code 1940, T. 41, §79.)
The tax assessor shall be entitled to receive from the tax collector, out of the first money collected by him, giving duplicate receipts therefor, one of which receipts shall be forwarded to the Comptroller by the tax collector, the following commissions: In counties where the collections, not including taxes on real estate bid in by the state at tax sales and taxes which would be due on property except for the provisions of the law exempting homesteads from state taxes, do not exceed $12,000, the rate shall be 10 percent on the first $5,000, five percent on the next $4,000 and four percent on the remainder. The commission herein provided for is to be calculated on collections for real property and personal property, except motor vehicles, for the general fund of the state and county. In counties where collections, not including taxes on property bid in by the state at tax sales and taxes which would be due on property except for the provisions of the presently applicable law exempting homesteads from state taxes, exceed $12,000, the commission shall be as above declared up to $12,000, and one and one-half percent on the remainder up to $15,000, and one percent on the remainder above $15,000. The commissions for assessment of taxes on motor vehicles for the general fund of the state and county shall be calculated on the same basis and at the same rate as provided for the assessment of taxes on real property and personal property other than motor vehicles for the general fund of the state and county. The amount of the commission on taxes which would be due on property except for the provisions of the presently applicable law exempting homesteads from state taxes shall inure to the benefit of the General Fund of the state only and shall be covered into the State Treasury to the credit of said fund. He shall also be entitled to receive two percent on all collections made by the tax collector of special taxes, whether such special taxes are levied for the state or county, to be paid out of such special taxes. The tax assessor shall receive two percent commission on all special county or district taxes levied for school purposes, but he shall not receive such commissions on such special school taxes unless he has properly apportioned such special taxes.
In Jefferson County, no fees or commissions shall be allowed for assessing the three-mill county school tax and the three-mill district school tax.
In all counties having a population of 225,000 or more inhabitants according to the last or any subsequent decennial federal census, the license commissioner, director of revenue, or other official now charged with the duty of assessing motor vehicles for ad valorem taxation shall continue to assess said motor vehicles for state and county ad valorem tax, and all fees, charges, and commissions for assessing state and county ad valorem tax on motor vehicles provided in this section to be paid to the tax assessor shall be paid to said license commissioner, director of revenue, or other official now charged with the assessing of motor vehicles for ad valorem taxes in such counties, and he shall pay said commissions into the county treasury, and all commissions collected by the tax assessor in such counties who is on a salary basis shall be paid into the county treasury, and said commissions so collected and paid into the county treasury shall be the property of the county.
(Acts 1935, No. 194, p. 256; Acts 1939, No. 326, p. 467; Code 1940, T. 51, §30; Acts 1955, No. 563, p. 1224.)
In all counties where the tax assessor is paid on a salary instead of a fee basis, all fees allowed under the terms of this title shall by said tax collector be paid into the county treasury, or to such officials performing the duties of county treasurer.
(Acts 1939, No. 326, p. 467; Code 1940, T. 51, §31.)
The tax assessor shall not receive commissions on errors made in assessments, on abatements or deductions from assessments allowed the taxpayer, nor on taxes on real estate bid in by the state at tax sales, nor on taxes which would be due on property except for the provisions of the law exempting homesteads from state taxes, nor shall he, after the abstract book has been turned over to the tax collector, receive commissions on any assessment to which an objection by the taxpayer, regularly entered, may then be pending, until such objection has been disposed of and proper assessment ascertained and determined.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §32.)
For making the demand on the taxpayer for his list of property to be returned and for each return of property to “owner unknown,” to be charged to the taxpayer or property assessed and collected with the taxes, the assessor shall be entitled to $5, to be entered upon the return and assessment. But the assessor shall be entitled to only one demand fee against each taxpayer. For serving each subpoena for state witnesses or notice issued by order of the Department of Revenue or board of equalization, the assessor shall be entitled to receive $5, to be taxed against the taxpayer and collected with the taxes, if the case made against such taxpayer is sustained; otherwise, he shall receive no fees for the serving of such subpoena.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §33; Acts 1980, No. 80-630, p. 1087, §1; Acts 1990, No. 90-535, p. 837, §1.)
The tax assessor is authorized to appoint deputies, and the acts of such deputies shall be recognized as his acts, and he shall be responsible for any loss sustained by any taxpayer or by the state or county by reason of any unlawful act done by any such deputies. Such deputies shall receive no compensation for their services out of the state or county revenue, except in cases otherwise provided by law.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §34.)
It is the duty of the assessor to have printed, at the expense of the county, a sufficient number of assessment blank forms in the form furnished and prepared by the Department of Revenue; and, upon request of any taxpayer or state deputy tax assessor, the assessor shall furnish him with a copy or copies for the use of such taxpayer in listing his property for taxation. Said blank forms when filled out and returned to the tax assessor shall be known as the “tax return.” Upon demand of any person making a return of property for taxation, the assessor shall furnish him with a copy of such return.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §35.)
It shall be the duty of the county commissions of the several counties in this state to supply the tax assessor, tax collector, and such other tax officials or agents whose duty it is to assess and value property for taxation under this title with all necessary books, stationery, and printed blanks for the proper conduct of their several offices.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §36.)
As used in this chapter, the term “tax collecting official” means the elected or appointed official charged with collecting ad valorem taxes and other prescribed fees on real and personal property in the county.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §189; Acts 1951, No. 658, p. 1116; Act 2021-515, §1.)
The tax collecting official may appoint deputies. The deputies shall be responsible for any errors that they make. The bond for each deputy shall be not less than 50 percent of the tax collecting official’s bond. The expense of the bond shall be paid from the county general fund.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §190; Act 2021-515, §1.)
Before assuming office, the tax collecting official shall execute a bond in duplicate with a surety company authorized to do business in Alabama, payable to the State of Alabama, in an amount to be determined for every county by the Comptroller. The amount of the bond for each tax collecting official shall be set at the beginning of his or her elected or appointed term for the duration of the term. A new bond for an additional amount may be required whenever, in the judgment of the Comptroller, the public welfare demands such action. The amount of the bond shall be determined by the use of the following table based on a percentage of the total annual taxes collected, as recorded in the latest audit report for each office published at least four months prior to the date the bond is required to be filed:
TABLE FOR COMPUTING AMOUNT OF TAX COLLECTING OFFICIAL’S BOND.
OverBut Not OverAmount of BondOf Excess OverZero$250,000$25,000_____$250,000$1,000,000$25,000 + 5%$250,000$1,000,000_____$62,500 + 1%$1,000,000
The bond of the tax collecting official shall be approved by the Comptroller, conditioned on the faithful performance of the duties of his or her office. The bond, in duplicate, shall be sent to the office of the Comptroller on or before September 1, next after his or her election or, if appointed, prior to the date that he or she is to assume the duties of the office, for the Comptroller’s approval. One copy shall be retained and filed in the Comptroller’s office, and one copy shall be returned to the office of the judge of probate to be filed and recorded in his or her office. The cost of the bond required by this section shall be paid out of the general fund of the county on a warrant of the county commission, and the same shall be a preferred claim against the county.
(Acts 1935, No. 194, p. 256; Acts 1935, No. 328, p. 754; Code 1940, T. 41, §77; Acts 1973, No. 1215, p. 2061; Act 2021-515, §1.)
(a) Not including taxes on real estate bid in by the state at tax sales and taxes that would be due on property except for the provisions of the presently applicable law exempting homesteads from state taxes, the tax collecting official, in addition to the commissions on assessments pursuant to Section 40-4-2, shall collect commissions from the state and county general funds at the following rates of commission:
(1) Ten percent on the first five thousand dollars ($5,000).
(2) Five percent on the next four thousand dollars ($4,000).
(3) Four percent on the next three thousand dollars ($3,000).
(4) One and one-half percent on the remainder up to fifteen thousand dollars ($15,000).
(5) One percent on the remainder above $15,000.
(b) The tax collecting official, pursuant to Section 40-4-2, shall collect and disburse all commissions on special taxes at a rate of 2 percent for collecting and 2 percent for assessing to the county general fund, unless specifically exempted by law.
(c) In Jefferson County, no fees or commissions shall be allowed for collecting the three-mill county school tax and the three-mill district school tax.
(Acts 1935, No. 194, p. 256; Acts 1939, No. 325, p. 466; Code 1940, T. 51, §191; Acts 1955, No. 567, p. 1230; Act 2021-515, §1.)
[Repealed]
REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-515 EFFECTIVE OCTOBER 1, 2021. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §192.)
[Repealed]
REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-515 EFFECTIVE OCTOBER 1, 2021. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §193; Acts 1980, No. 80-630, p. 1087, §2; Acts 1990, No. 90-535, p. 837, §1.)
After January 1, the tax collecting official shall make a demand in writing by first class mail upon delinquent taxpayers or their agents charged with the duty of paying their taxes. The demand fee shall be five dollars ($5) for each property. It shall be the duty of the delinquent taxpayer to pay the taxes and fees assessed and charged against the taxpayer, but failure to comply with the requirements of this section shall not invalidate the title to any property sold for taxes.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §194; Act 2021-515, §3.)
If the taxes are paid after they become delinquent, the taxpayer shall pay all costs, fees, charges, and interest, if any, that may at the time of payment have lawfully accrued.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §195; Act 2021-515, §3.)
Notwithstanding Section 40-1-44, all ad valorem taxes becoming delinquent bear interest at the rate of 12 percent per annum. The interest shall be added to and collected as part of the taxes and shall be reported in the manner prescribed by the Comptroller.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §196; Acts 1988, 1st Ex. Sess., No. 88-824, p. 265, §8; Act 2021-515, §3.)
Upon the payment by any taxpayer of the taxes, fees, and costs, if any, assessed and charged against the taxpayer, the tax collecting official shall give the taxpayer a receipt showing the name of the taxpayer, the date of the payment, and the total assessed value of real and personal property, separately, and stating the amount of the state, county, and special taxes separately, together with the interest, costs, and fees.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §197; Act 2021-515, §3.)
The tax collecting official shall maintain a historic file of all individual tax payments.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §198; Act 2021-515, §3.)
A purchaser, lienholder, or mortgagee of real estate or personal property included in an assessment may discharge the tax lien against the real estate or personal property purchased or on which a lien or mortgage is held by paying the actual amount of the taxes due to the tax collecting official of the county in which the taxes are due and payable.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §199; Act 2021-515, §3.)
THIS SECTION WAS AMENDED BY ACT 2021-515 IN THE 2021 REGULAR SESSION, EFFECTIVE OCTOBER 1, 2021. TO SEE THE AMENDED VERSION, SEE THE VERSION LABELED PENDING.
Any person listing for assessment more than one piece or parcel of real property which has been listed and valued separately may pay taxes on any one or more of said pieces; provided, that he shall first pay taxes on all personal property listed by him in said assessment.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §200.)
(a) After January 1 of each year, the tax collecting official may levy upon the personal property of delinquent taxpayers for the payment of their taxes and, after having first given 10 days’ notice of the time and place of sale, with a description of the property to be sold, by certified mail and by posting on an online website controlled by the tax collecting official and accessible from the tax collecting official’s website.
(b) The tax collecting official shall sell the property, or as much of the property as may be necessary to satisfy the taxes, fees, and expenses of the sale, including the expenses of keeping the property and moving the property to the place of sale in front of the courthouse of the county, or at the residence or place of business of the delinquent taxpayer, or at any other place in the precinct in which the notice was posted, at public outcry to the highest bidder. Property sold under this section is not subject to redemption. For making such sale, the tax collecting official shall be allowed a fee of five dollars ($5), to be collected out of the property.
(c) In lieu of physically securing the property or storing or transporting the property to another location for sale, the sale may be held at any place of business, warehouse, storeroom, or facility owned or under the possession of the taxpayer, including without limitation the current location of the property to be sold.
(d) The taxpayer, at any time before the sale, may pay the taxes, interest, fees, and expenses, including the tax collecting official’s fees for the sale, the same as if it had been made, and thereby discharge the levy.
(e) A person who knowingly removes, destroys, or defaces personal property subject to levy and sale under this section or who, on the date of the sale of the personal property, knowingly interferes with or obstructs the tax collecting official or sheriff, or an agent or deputy thereof, from accessing or selling the property is guilty of a Class B misdemeanor.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §201; Acts 1980, No. 80-630, p. 1087, §3; Acts 1990, No. 90-535, p. 837, §1; Act 2021-515, §3.)
(a) The proceeds arising from a sale for taxes under this chapter shall be applied to the payment of the expenses of the sale and of the taxes, interest, and fees due from the taxpayer, and any balance remaining shall be paid to the owner of the property. If the owner of the property is not present on the day of the sale to receive the remaining balance, the tax collecting official shall maintain the funds for 60 days during which time the owner may apply for the remaining balance. If any remaining balance is not collected or claimed within 60 days after the sale by the person entitled to receive the remaining balance, the tax collecting official shall deposit the excess money with the county treasurer, or another officer entrusted with the county funds, to the credit of the county general fund. The county treasurer shall make record of the deposit on his or her books, and the excess money shall thereafter be treated as a part of the county general fund.
(b) If any remaining balance is not collected or claimed within 60 days after the sale by the person entitled to receive the remaining balance, the county treasurer shall transfer the excess money to the credit of the general fund of the county and make record of the transfer on his or her books, and the excess money shall thereafter be treated as a part of the general fund of the county.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §202; Act 2021-515, §3.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., p. 131, §9. As to effective date, see the Code Commissioner’s Notes.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §207.)
(a) When a tax collecting official has information that any person owing taxes in the county, whether due or not, has left the county, the tax collecting official shall make out and certify to the judge of probate a bill against the person and procure the approval of the bill by the judge of probate in all respects as provided in Section 40-5-31. The bill shall operate as a writ of fieri facias.
(b) The writ may be executed by the tax collecting official if the assessed personal property of the taxpayer is found in the county of the tax collecting official.
(c) The tax collecting official may forward a copy of the writ to the tax collecting official of any other county in which the delinquent taxpayer has any property, and the tax collecting official of the other county, on receipt of the writ, shall file the writ for record in the probate office in his or her county and shall give notice to the delinquent taxpayer in person or by certified or registered mail, return receipt demanded.
(d) On failure of the delinquent taxpayer to satisfy after 30 days from the date of the notice, the taxes, fees, and costs due under the writ, in addition to the recording fee and a fee of five dollars ($5) for executing the writ, the tax collecting official shall proceed to execute the writ as if issued in his or her county. The tax collecting official shall remit collections thereon to the tax collecting official sending the writ.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §219; Acts 1980, No. 80-630, p. 1087, §4; Acts 1990, No. 90-535, p. 837, §1; Act 2021-515, §3.)
No property is exempt from the levy and sale for the payment of taxes and the fees and charges that are lawfully incurred in assessing and collecting the taxes against the owner of the property.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §203; Act 2021-515, §3.)
(a) When no personal property can be found out of which the taxes of any delinquent taxpayer can be collected, or an amount insufficient to fully satisfy the taxes, the real estate of the delinquent taxpayer or the real estate upon which the delinquent taxpayer’s taxes are a lien shall be sold for the payment of the taxes, or of the balance due thereon, as provided in this chapter.
(b) Notwithstanding subsection (a), the failure of the tax collecting official to exhaust the personal property of the delinquent taxpayer does not invalidate the sale of any real estate.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §208; Act 2021-515, §3.)
(a)(1) If the tax upon assessed tangible personal property of a taxpayer remains unpaid after January 1 in any year, the county tax collecting official shall present the account for taxes to any person or entity who the collecting official ascertains or has just cause to believe may be indebted to the delinquent taxpayer, or has in his or her possession or under his or her control any money, property, or choses in action belonging to any delinquent taxpayer in the county, and demand the payment of the taxes and fees due from the taxpayer. The demand shall operate as a levy upon any assets of the delinquent taxpayer in the possession or control of the third party indebted to the delinquent taxpayer and shall have the force and effect of a writ of garnishment. The tax collecting official shall also immediately give the delinquent taxpayer, if in the county, written notice of the service of the garnishment. If the delinquent taxpayer resides in the state but is not in the county, and his or her address is known or can be ascertained, the tax collecting official shall give notice to the delinquent taxpayer and return the executed garnishment and notice to the court before which the garnishee is cited to appear.
(2) The person to which the account for delinquent taxes is presented shall pay over to the county tax collecting official the amount of the taxes and fees that the delinquent taxpayer owes and shall take the tax collecting official’s receipt for the payment. The receipt shall be taken in all courts of this state as payment on the delinquent taxpayer’s indebtedness to the full amount expressed on the receipt.
(b) If, on demand, the person fails or refuses to pay over the amount of the tax that the delinquent taxpayer owes to the tax collecting official, the tax collecting official shall file a statement of the amount of the tax and fees with the person so refusing. The statement shall operate as a garnishment upon the person so served. The tax collecting official shall proceed to collect the taxes in the manner fixed by law in cases of garnishment.
(c) It shall be the duty of the tax collecting official to ascertain what persons are indebted to or have in their possession any money, property, or choses in action belonging to any delinquent taxpayer.
(d) A delinquent taxpayer may not be compelled to pay any debt before the debt is due, nor be compelled to pay a greater amount than is owed.
(e) The cost of garnishment shall be paid by the party refusing to pay the taxes when so requested.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §204; Act 2021-515, §3.)
Garnishment proceedings shall be conducted in the name of the state and before the circuit court.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §205; Act 2021-515, §3.)
The clerk and the sheriff shall be entitled to the same fees as in cases of garnishment on judgments, and the county general fund shall be entitled to two dollars ($2).
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §206; Act 2021-515, §3.)
(a)(1) On or before the first regular county commission meeting in June of the current tax year, the tax collecting official shall submit a report to the county commission on a form provided by the Department of Revenue showing all errors in assessments, taxes in litigation, insolvents, lands bid in to the state, and tax liens that were not auctioned or sold, including a list of insolvents.
(2) The list of insolvents required to be reported in subdivision (1) shall include the name, residential or business address, and all taxes, cost, and interest charged against each listed person. The tax collecting official shall cause the list to be published for two weeks in July on a website of the tax collecting official or the county website of which the tax collecting official has access, or in a local newspaper published and printed in the county.
(3) A tax collecting official who fails to publish and display the list of insolvents as required in subdivision (2) shall be guilty of a Class C misdemeanor.
(b) The cost, if any, for advertisement of the list of insolvents required under this section shall be paid from the county general fund and any money collected from insolvents shall include the cost of advertisement and repaid to the county general fund.
(c) All reports submitted to the county commission under this section shall be certified by the tax collecting official and forwarded to the Comptroller upon the tax collecting official’s final settlement to allow credits to the tax collecting official.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §209; Act 2021-515, §3.)
(a) The county commission shall make a careful examination of all reports submitted to the county commission pursuant to Section 40-5-23 and, in consultation with the tax collecting official, shall determine which taxes on insolvents on the list could not be collected.
(b) The county commission shall direct the tax collecting official to provide to the official responsible for issuing state, county, and municipal business or manufacturing licenses that no license shall be issued for any person that has insolvent status until confirmation is provided by the tax collecting official that the insolvent’s taxes have been paid. As provided in this subsection, payment of insolvent taxes includes all taxes, fees, and interest that have accrued and any cost incurred to collect the taxes.
(c) After all reports have been examined and approved, the county commission shall provide a letter of approval and acceptance for credits to the Comptroller for final settlement for the tax collecting official.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §210; Act 2021-515, §3.)
[Repealed]
REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-515 EFFECTIVE OCTOBER 1, 2021.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §211.)
Upon the allowance and credit to the tax collecting official for insolvents and taxes in litigation, a new account must be stated by the county commission for county taxes and by the Comptroller for state taxes for the credits allowed the tax collecting official and shall remain charges for no more than three years from the tax lien date of the initial tax insolvency. For taxes in litigation, termination shall be at the discretion of the state Comptroller.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §212; Act 2021-515, §5.)
[Repealed]
REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-515 EFFECTIVE OCTOBER 1, 2021.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §213.)
[Repealed]
REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-515 EFFECTIVE OCTOBER 1, 2021.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §214.)
At the first regular meeting of the county commission in January of the year next succeeding, the tax collecting official shall make a final report of the uncollected insolvent taxes and taxes in litigation. The county commission shall issue a credit to the tax collecting official for the satisfaction of final settlement with the Comptroller. The accounts of taxes in litigation that are remaining shall be kept in a manner as prescribed by the Comptroller.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §215; Act 2021-515, §7.)
[Repealed]
REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-515 EFFECTIVE OCTOBER 1, 2021.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §216.)
It shall be the duty of the tax collecting official, whenever upon information or otherwise he or she has good reason to believe that any person owing taxes, whether due or not, is about to leave or remove his or her property from the county, or that the person is closing out or going out of business or disposing of substantially all of his or her personal property and the collection of the taxes is endangered, to make out and certify to the judge of probate a bill against the person for the amount of the taxes and any fees due to the assessor or collecting official. Upon the approval of the bill by the judge of probate in writing endorsed thereon, the bill shall operate as a writ of fieri facias that the collecting official may execute by levy and sale in the same manner as sheriffs are authorized to execute writs when issued out of the circuit court. The writ may be executed in any county of the state where property of the taxpayer is found. The tax collecting official of the county shall execute the writ forwarded to him or her by the tax collecting official of the county where the assessment was made, the same as if issued in his or her own county. The tax collecting official shall remit collections on the writ to the other tax collecting official who sent the writ and is liable on his or her bond for any neglect of duty under this section. Advertisements in newspapers or otherwise of sales of any personal property as a closing out sale, fire sale, bankrupt sale, or any sale of like character shall be prima facie evidence that the collection of taxes due on property so advertised is endangered within the meaning of this section.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §217; Act 2021-515, §9.)
(a) As used in this section, the term partial payment means a payment that is less than the full amount of taxes due.
(b) At the discretion of the tax collecting official, the tax collecting official may accept one or more partial payments of any amount per tax account for payment of taxes and assessments on tangible personal property.
(c) Each partial payment, less a 10 dollar ($10) processing fee payable to the tax collecting official, shall be credited to the tax account. The taxpayer has the responsibility to ensure that the remaining amount due is paid.
(d) The tax collecting official shall prepare and mail at least one notice with the balance due. The tax collecting official shall mail the notice in the form as he or she considers proper and necessary or as may be required by rule of the Department of Revenue.
(e) At the tax collecting official’s discretion, an underpayment of 10 dollars ($10) or less may be deemed a payment in full, rather than a partial payment, in accordance with the rules, policies, and procedures of the Comptroller.
(f) The Comptroller shall adopt rules to implement and administer this section.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §218; Act 2021-515, §9.)
[Repealed]
REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-515 EFFECTIVE OCTOBER 1, 2021.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §221.)
(a) It is the duty of the tax collecting official, when engaged in the collection of taxes for any year, upon discovering that any person or property within the county has not been assessed with any taxes lawfully chargeable to the person or property for that year, or any preceding year, not more than five years before the time of discovery, to notify the tax assessing official that certain property has escaped taxation.
(b) The tax assessing official shall prepare an assessment up to five prior years at the time of discovery with an assessment to the person with ownership of the property. The assessment shall be made with other like property and shall charge a 10 percent penalty on the total assessed value, plus one five dollar ($5) fee. The tax assessing official shall notify the tax collecting official in writing of the total amount of taxes, fees, and costs to be collected. The tax assessing official shall enter the same in the tax collecting official’s abstract, provided the escape exists prior to final settlement for the tax collecting official. If the escape occurs after final settlement, the tax collecting official shall make a report to the state and disburse the proceeds to each agency, withholding the commission at the rate that was applicable prior to final settlement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §220; Act 2021-515, §11.)
[Repealed]
REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-515 EFFECTIVE OCTOBER 1, 2021.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §222.)
(a) The tax collecting official, on October 15 of each year and on the first and fifteenth day of each month thereafter, shall provide a detailed report showing the total gross receipts, including the calculation of taxes for each, interest collected, commissions withheld, and all other documented withholdings from each agency that receives taxes. The report shall have a detailed showing for each millage rate assessed for each agency. The report shall be a sworn statement that is duplicated for each agency, a copy of the report shall be available to each agency receiving disbursements upon request. No later than five days after this report must be provided, the tax collecting official shall make disbursements to each agency that receives taxes.
(b) Should the report and payment of taxes, interest, and penalties herein required not be made within 10 days after the same is due, the Comptroller shall immediately notify the Chief Examiner of Public Accounts, who shall forthwith cause the books of the official to be examined, and the Comptroller shall also immediately notify the tax collecting official’s bondsmen, who may within 30 days from date of notice from the Comptroller withdraw from further responsibility as the bondsmen by giving 15 days’ notice by certified or registered mail to the tax collecting official, the judge of probate of the county, and the Comptroller, but the bondsmen shall not be relieved of any responsibility with respect to the tax collecting official arising during the time they are on the tax collecting official’s bond. When the bondsmen on a tax collecting official’s bond serve notice of their desire to withdraw from the responsibility as bondsmen as herein provided, the tax collecting official shall make, on or before the withdrawal date of his or her then bondsmen, a new bond in an amount and with sufficient surety as required by law. Upon failure of the tax collecting official to make the new bond, the Comptroller shall notify the Governor that a vacancy exists in the office of tax collecting official of the county, and the Governor shall appoint a tax collecting official to serve the remainder of the term for which the former tax collecting official was elected or appointed to serve. The tax collecting official appointed to serve the remainder of the term, before entering upon the duties of the office, shall make bond in the amount and with such surety as is required by this code.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §223; Acts 1943, No. 509, p. 482; Acts 1953, No. 696, p. 951; Acts 1983, 1st Ex. Sess., No. 83-79, p. 84; Act 2021-515, §13.)
[Repealed]
REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-515 EFFECTIVE OCTOBER 1, 2021.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §224.)
[Repealed]
REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-515 EFFECTIVE OCTOBER 1, 2021.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §227.)
[Repealed]
REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-515 EFFECTIVE OCTOBER 1, 2021.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §228.)
[Repealed]
REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-515 EFFECTIVE OCTOBER 1, 2021.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §229.)
When the object for which special taxes were levied and collected has been accomplished or for any other reason the special taxes are no longer required for the purpose for which they were levied, the parties charged with the administration or application of the taxes shall notify the county commission.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §230; Act 2021-515, §15.)
(a) In cases where there is no provision by law authorizing the collection of taxes by an action after the taxes have become delinquent, the taxes may be collected by the state or by any county, city, or municipality, or the county or city board of education, or by an action in any court of competent jurisdiction.
(b) In addition to the remedy here given to public agencies for the collection of taxes due them by an action, the tax collecting official of every county is authorized to sue in his or her own name and in the capacity of his or her office for the recovery of all taxes collectable by his or her office which are due. The county tax collecting officials may act in their own names and in the capacity of their office in any bankruptcy or other insolvency proceeding, or any other type of litigation or court proceedings in which taxes due to any public agency which are collectable by a tax collecting official may be recovered, and to take any action in the proceedings as may be appropriate or necessary for the collection of the taxes due to any of the public agencies.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §231; Acts 1967, No. 392, p. 979; Act 2021-515, §15.)
[Repealed]
REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-515 EFFECTIVE OCTOBER 1, 2021.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §226.)
(a)(1) On or before November 1 in each year, all tax collectors, elected assistant tax collectors, revenue commissioners, license commissioners, and judges of probate charged with collecting ad valorem taxes on motor vehicle tags shall make final settlement, under oath, with the Comptroller of all matters pertaining to the respective office’s collection of ad valorem taxes on motor vehicle tags.
(2) Failure of any official to make the settlement required by this subsection by November 10 of each year shall forfeit ten dollars ($10) per day which shall be deducted from the amount of commission or other public compensation due and payable to the official on the settlement respectively. The Comptroller, the county treasurer, or the custodian of the county funds shall withhold all commissions or other public compensation in cases where settlements are not made by December 10 of each year.
(3) Final determinations shall be made in accordance with rules adopted by the state Comptroller regarding the format of the final settlement, the time frame to be covered by the final settlement, and the date when final settlement will be made with the state Comptroller’s Office and approved by the Chief Examiner of Public Accounts.
(b) On or before July 1 of each year, each tax collecting official, under oath, shall make final settlement with the Comptroller and shall pay to the State Treasurer the balance which may be found due from charges from the abstract of taxes pursuant to Section 40-7-35. Final settlement shall be made in accordance with rules adopted by the Comptroller.
(c) Unless otherwise excepted by the Comptroller, a tax collecting official who fails to make settlement as provided in this section by the tenth day of July of each year shall be assessed a fine of 10 dollars ($10) per day until the final settlement is made in accordance with this section. The fine shall be assessed in the official’s personal capacity.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §232; Acts 1995, No. 95-408, p. 864, §2; Act 2019-458, §1; Act 2021-515, §17.)
The tax collecting official shall receive the rate per mile allowed by law for state officers and employees, once each year, in going and returning from the respective county seat for the purpose of making the final settlement provided for in Section 40-5-44.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §233; Act 2021-515, §17.)
[Repealed]
REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-515 EFFECTIVE OCTOBER 1, 2021.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §236.)
(a) Unless authorized by local law, the county revenue departments are prohibited from charging and retaining any collection fees for collecting and otherwise administering any special two mills of ad valorem tax authorized by referendums on June 4, 1996 and levied in any county for fire protection and emergency services.
(b) This section shall become effective retroactive to the date authorized by referendums on June 4, 1996, and approved by the Governor. The intent of this legislation is for all monies collected under this referendum to go to fire and emergency services outlined above in subsection (a).
(Act 98-309, p. 519, §§1, 2.)
(a) A tax collecting official who collects ad valorem tax on real property, in addition to the ad valorem tax on motor vehicles collected pursuant to Section 40-12-253, may disburse the collections with each semi-monthly report.
(b) A tax collecting official who has the responsibility to assess and collect the ad valorem tax on motor vehicles under Section 40-12-253 and to also collect the annual motor vehicle license taxes and registration fees under Section 40-12-242 shall disburse all ad valorem tax collections as provided under Sections 40-5-4 and 40-4-2 during the same time period set out under Section 40-12-269.
(c) Manufactured home fees, commissions, or penalties charged and collected pursuant to Section 40-12-255 shall be disbursed on or before the twentieth day of the following month.
(Act 2021-515, §19.)
(a) In the various counties of the State of Alabama having a population of less than 600,000 inhabitants according to the last or any subsequent federal decennial census, any tax collector, tax assessor, revenue commissioner, license commissioner, or other elected or appointed official charged with the assessment or collection, or both, of ad valorem taxes in any county of the State of Alabama:
(1) Who has served for 14 years as such an official in any county of Alabama and who has become permanently and totally disabled, proof of disability being made by certificate of three reputable physicians; or
(2) Who has served for 12 years as a county official for any county of Alabama, at least 10 years or more continuously as tax collector, tax assessor, license commissioner, revenue commissioner, or other elected or appointed official charged with the assessment or collection, or both, of ad valorem taxes, and who is not less than age 60;
May elect to become a supernumerary tax collector, tax assessor, revenue commissioner, license commissioner, or other elected or appointed official charged with the assessment or collection, or both, of ad valorem taxes of the county in which the official serves by filing a written declaration to that effect with the Governor. If the Governor finds any declarant qualified either under subdivision (1) or (2) of this subsection, a commission as supernumerary tax collector, tax assessor, revenue commissioner, license commissioner, or other elected or appointed official charged with the assessment or collection, or both, of ad valorem taxes for the county in which the official has served shall be issued to the declarant by the Governor. In computing length of service, the time served as any other county-wide elected official or the time served as chief clerk of the tax collector, tax assessor, license commissioner of any county, shall be counted.
(b) In the various counties of the State of Alabama having a population of less than 600,000 inhabitants according to the last or any subsequent federal decennial census, any person who has served 18 years as a county official for any county of Alabama, the last six or more years as tax collector, tax assessor, revenue commissioner, license commissioner, or other elected or appointed official charged with the assessment or collection, or both, of ad valorem taxes, and previously at least 12 years as chief clerk to the tax collector, tax assessor, revenue commissioner, license commissioner, or other elected or appointed official charged with the assessment or collection, or both, of ad valorem taxes, or previously at least 12 years as a county commissioner, who is not less than age 60 or who has become permanently and totally disabled, proof of that disability being made by certificate of three reputable physicians, may elect to become a supernumerary tax collector, tax assessor, revenue commissioner, license commissioner, or other elected or appointed official charged with the assessment or collection of taxes, or both, by filing a written declaration to that effect with the Governor. If the Governor finds that any declarant is qualified under this subdivision, a commission as supernumerary tax collector, tax assessor, revenue commissioner, license commissioner, or other elected or appointed official charged with the assessment or collection, or both, of ad valorem taxes, for the county in which the official has served shall be issued to the declarant.
(Acts 1967, No. 755, p. 1609, §1; Acts 1971, No. 1943, p. 3138, §1; Acts 1973, No. 935, p. 1438, §1; Acts 1977, No. 309, p. 410, §2; Acts 1983, No. 83-643, p. 999, §1; Acts 1986, Ex. Sess., No. 86-684, p. 78; Acts 1987, No. 87-666, p. 1180, §1; Acts 1988, 1st Ex. Sess., No. 88-878, p. 420, §1; Acts 1994, No. 94-592, p. 1095, §1.)
Such supernumerary tax collector, tax assessor, license commissioner, or other elected official charged with the assessment and/or collection of any ad valorem taxes in the various counties of the State of Alabama shall take the oath of office prescribed for tax collectors, tax assessors, license commissioners, or other elected officials charged with the assessment and/or collection of any ad valorem taxes in this state; and, if a vacancy shall occur in the office in the county in which the supernumerary tax collector, tax assessor, license commissioner, or other elected official charged with the assessment and/or collection of any ad valorem taxes holds his commission, he shall immediately assume and exercise all of the duties, power, and authority of such official in said county until a successor is appointed by the Governor of the State of Alabama.
(Acts 1967, No. 755, p. 1609, §2.)
(a) Every supernumerary official shall serve for life and shall receive from the county governing body, in equal monthly installments on the first of each month, or in such installments as other county officials or employees are paid, an annual salary as follows:
(1) For 12 years’ service the official shall receive 60 percent of the average compensation during the last four years served as an official charged with assessing and collecting ad valorem taxes.
(2) For 14 years’ service the official shall receive 65 percent of the average compensation.
(3) For 16 years the official shall receive 70 percent of the average compensation.
(4) For 18 or more years the official shall receive 75 percent of the average compensation; provided, however, no person shall receive more than forty-nine thousand six hundred dollars ($49,600) per year.
The county governing body may, by majority vote of the membership, elect to increase or remove this monetary limitation on compensation for any person who assumed supernumerary status after September 30, 1993.
The tax collector, if there is a supernumerary tax assessor or tax collector in the county, or the license commissioner or person charged with the collection of ad valorem taxes other than the tax collector, if there is a supernumerary license commissioner or other official charged with the assessing or collecting, or both, of ad valorem taxes in the county, shall from the first money collected by the official pay to the county governing body the sum which shall be paid to the supernumerary official as heretofore set forth. The sum shall be deducted on a pro rata millage basis from payments to the state, county, and all subdivisions and agencies thereof, except municipalities, to which the person collecting ad valorem taxes is charged with the distributing of ad valorem taxes collected under the law. Notwithstanding the foregoing, if the official dies without leaving a surviving spouse, or otherwise becomes disqualified as a supernumerary official, any money remaining in the fund shall be refunded to the person by whom it is paid to the county, and the person shall distribute the money refunded to the state, county, and other subdivisions and agencies on the same pro rata millage basis that it was originally withheld.
If any official covered under this chapter dies prior to attaining the age of 60 years, but being otherwise qualified to be appointed a supernumerary official, except for age, and is survived by a spouse lawfully married to the official at the time of his or her death, then the surviving spouse shall be paid a monthly allowance equal to 50 percent of the salary which would have been paid to the official had he or she survived to the age of 60. The monthly allowance shall be paid in the same manner as provided for payment to a qualified official and shall continue for 15 years or until the marriage of the surviving spouse, whichever first occurs. Upon the death of any official covered under this chapter after he or she has become fully qualified for appointment as a supernumerary official, including age, whether appointed as a supernumerary official or whether still serving in active office, the surviving spouse of the official shall be paid a monthly allowance equal to 50 percent of the supernumerary salary being paid to the official or to which he or she would be entitled if appointed as supernumerary. The monthly allowance shall be paid in the same manner as provided for the official and shall continue for 15 years or until the marriage of the surviving spouse, whichever first occurs.
(b) Beginning with the fiscal year commencing on October 1, 2006, the supernumerary officials of a county provided for in this section shall be entitled to receive the same cost-of-living increases in compensation, that are granted to county retirees by the county commission, if approved by a resolution of a majority of the county commission. The increases shall be in the same amount or percentage and at the same time, as the case may be, as that amount or percentage increase provided to the other retirees of the county and, if not uniform, the increase shall be equal to the average increase granted to all county retirees who receive an increase.
(Acts 1967, No. 755, p. 1609, §3; Acts 1973, No. 935, p. 1438, §1; Acts 1977, No. 309, p. 410, §2; Acts 1983, No. 83-643, p. 999, §2; Acts 1985, 2nd Ex. Sess., No. 85-985, p. 331; Acts 1988, 1st Ex. Sess., No. 88-878, p. 420, §2; Acts 1994, No. 94-592, p. 1095, §2; Act 2000-696, p. 1418, §1; Act 2001-484, p. 821, §1; Act 2006-108 p. 157, §1.)
Anything to the contrary in this chapter notwithstanding, the annual salary of every supernumerary official serving under this chapter on October 1, 1994, shall be increased by five thousand dollars ($5,000). Notwithstanding the foregoing, the percentages provided in Section 40-6-3, as amended by Acts 1994, No. 94-592, for computing supernumerary compensation, shall not apply to any supernumerary official appointed on or before April 22, 1994.
(Acts 1994, No. 94-592, p. 1095, §4.)
The governing body shall deduct from the salary of the tax collector, tax assessor, revenue commissioner, license commissioner, or other elected official charged with the assessment or collection, or both, of any ad valorem taxes of the county, if the officials are paid by salary, an amount equal to seven percent of the annual salary paid the official by the county. The sum shall be deducted monthly and distributed at the end of the fiscal year on a pro rata millage basis to the state, county, and all subdivisions and agencies thereof, except municipal corporations, to which ad valorem taxes are paid. If the officials are compensated by fees and commissions, the tax collector shall deduct from the money paid to the tax collector, tax assessor, revenue commissioner, license commissioner, or other elected official charged with the assessment or collection, or both, of ad valorem taxes, an amount equal to seven percent of the sum paid, and the amounts shall be distributed immediately to the state, county, and all subdivisions and agencies thereof, except municipal corporations, to which ad valorem taxes are paid. If any person coming under this chapter shall end his or her tenure of office prior to becoming supernumerary as provided in Section 40-6-1, the official whose tenure of office has ended may elect to have the total amount paid by him or her refunded or, if qualified by length of service but not age, may elect to wait until reaching age 60 and then receive the annual salary as provided for in Section 40-6-3. In the event the person dies in office prior to becoming supernumerary, and leaves no surviving spouse, the amount paid in by him or her shall be paid to his or her estate. Any surplus remaining from contributions made by a supernumerary official who dies after becoming supernumerary, and without leaving a surviving spouse, but before he or she has drawn out as much as he or she had paid in prior to becoming supernumerary, shall be paid to his or her estate. In the event an official dies in office prior to serving the minimum length of time to qualify as a supernumerary, and leaves a surviving spouse, the amount paid in by him or her shall be paid to the surviving spouse. Any person desiring to come under this chapter pursuant to subdivisions (a)(2) or (b) of Section 40-6-1, shall pay to the county tax collector such proportionate sum as to equal the amount he or she would have been required to pay if he or she were employed as a tax collector, tax assessor, revenue commissioner, license commissioner, or other elected or appointed official charged with the assessment or collection, or both, of ad valorem taxes of the county, and the proportionate sum shall be distributed by the tax collector as provided in this section.
(Acts 1967, No. 755, p. 1609, §4; Acts 1971, No. 1943, p. 3138, §1; Acts 1977, No. 309, p. 410, §3; Acts 1983, No. 83-643, p. 999, §3; Acts 1988, 1st Ex. Sess., No. 88-878, p. 420, §3; Acts 1994, No. 94-592, p. 1095, §3.)
Any official who is eligible to participate in the supernumerary program provided by this chapter, and who is participating or eligible to participate in any other state or county retirement program, shall elect whether he or she shall participate in the supernumerary program or in the other retirement program. Election to participate in the supernumerary program shall be made in writing to the county governing body of the county in which the official is serving within 60 days following April 22, 1994; or within 60 days after taking office as the official, whichever last occurs. If the official is participating in any other state or county retirement program, he or she shall simultaneously withdraw from that program. Upon election to participate in the supernumerary program, the official shall immediately pay to the county tax collector or other official charged with collecting ad valorem taxes, for each prior year of eligible service to which he or she is entitled credit, that sum as he or she would have paid had the official been participating in the supernumerary program during that year of service, and the tax collector or other official shall distribute that sum as provided in Section 40-6-4. The official shall thereafter be subject to the other applicable provisions of this chapter.
(Acts 1994, No. 94-592, p. 1095, §5.)
In the event that an elected official’s retirement system should hereafter be established by law, any official elected after the establishment of such retirement system who otherwise would have been covered by the provisions of this chapter shall automatically be subject to provisions of such retirement system as a matter of law.
(Acts 1977, No. 309, p. 410, §5.)
The Legislature recognizes the necessity of an equitable, fair, and efficiently administered ad valorem tax program to the revenue producing functions of government, both state and local, and it further recognizes that since the implementation of statewide reappraisal of property and the equalization of ad valorem taxes in this state, the complexity and burden on the officials charged with assessing and collecting such taxes has greatly increased. Likewise, great disparity has developed among the various counties of this state in both the adequacy of compensation of such officials and the distribution of the cost of administering the ad valorem tax program among the various agencies and funds receiving such taxes. Therefore, in order to secure the services of competent officials in all counties of this state to administer the ad valorem tax program and to fairly distribute the burden of funding the costs of such program, it is the intent of this chapter to establish an equitable, minimum basis of compensation of such officials and distribution of the costs of administering such program.
(Acts 1982, No. 82-620, p. 1172, §1.)
On and after May 3, 1990, and upon approval by the county governing body of a resolution of authorization, the tax assessors, tax collectors, revenue commissioners, license commissioners, or other officials whose primary duty is assessing and/or collecting ad valorem taxes in the various counties of this state, shall be compensated by an annual salary, each of such officials to receive as a minimum, except as hereinafter provided, an annual salary in the amount specified by the following schedule:
IN COUNTIES HAVING A POPULATION OF:ANNUAL SALARY25,000 or less$32,500.0025,001 to 75,00037,500.0075,001 to 119,00040,000.00More than 119,00042,500.00
Provided, however, that in all counties wherein an elected assistant tax assessor or assistant tax collector has been or may hereafter be established by law to function separate and apart from the office of tax assessor or tax collector in such counties, the salary for such elected assistant officials shall be 90 percent of the salary established herein for the tax assessor or tax collector in such counties. Provided further, that in all counties wherein the offices of tax assessor and tax collector have been or may hereafter be combined, the official holding such combined office, by whatever title, shall receive a minimum annual salary of $10,000 greater than the minimum prescribed for his county in the above schedule. The salary for such officials in each of the various counties of this state shall be determined according to the above specified schedule based upon the 1980 federal decennial census. The salaries, as above determined, shall be paid on a pro rata basis out of the money collected each tax year into the general fund of each respective county of the state, and thereafter paid from said fund to such officials in equal installments. The pro rata share of the officials’ salaries to be paid by each fund or agency receiving ad valorem taxes, shall be determined in each county by computing the percentage that the total collections for each fund or agency bears to the total collections of ad valorem taxes. With respect to any municipality in which that municipality’s pro rata share of the officials’ salaries provided for in this section is greater than the fees or commissions being paid by said municipality for assessment and collection of ad valorem taxes for the tax year immediately prior to such municipality becoming subject to the provisions of this section, the payment of such pro rata share by the municipality shall be in lieu of such fees or commissions. With respect to any municipality in which that municipality’s pro rata share of the officials’ salaries provided for in this section is equal to or less than the fees or commissions being paid by said municipality for assessment and collection of ad valorem taxes for the tax year immediately prior to such municipality becoming subject to the provisions of this section, the payment of such fees or commissions by the municipality shall be in lieu of such pro rata share. The pro rata share of salaries each fund or agency shall pay during the first year after implementation of this section shall be based upon the collections made during the tax year next preceding, the effective date of election to come under this section, and adjusted from year to year as may be necessary.
(Acts 1982, No. 82-620, p. 1172, §2; Acts 1985, 2nd Ex. Sess., No. 85-791, p. 34; Acts 1990, No. 90-694, p. 1348, §1.)
Notwithstanding the provisions of Section 40-6A-2, all such officials who are presently compensated by salaries which are higher than the salaries specified in the foregoing schedule shall continue to be compensated at their present salaries, subject to any other provisions of this chapter, until subsequently changed by passage of legislation affecting their respective counties. The term salary as respects such officials for purposes of this section, shall include the total compensation presently received by such officials on a salary basis of compensation, whether designated as salary or expense allowance or otherwise, provided such compensation is paid directly to such officials. Any official presently compensated on a salary basis whose total compensation as defined in this section equals or exceeds the minimum salary prescribed in Section 40-6A-2 hereof, shall be deemed to satisfy the minimum salary mandated by this chapter.
(Acts 1982, No. 82-620, p. 1172, §3.)
All officials who are being converted from a fee basis to a salary basis by this chapter, whose net personal income from fees, commissions, allowances, or other compensation for the tax year next preceding May 4, 1982 are higher than the salaries specified in the foregoing schedule, shall be placed on a salary equal to their net personal income for such year. Such salary for said officials being converted from a fee basis to a salary basis shall continue, subject to the other provisions of this chapter, for as long as said officials continuously remain in office, and upon vacation of their office for whatever cause the salary of their successor shall be determined according to the schedule set forth in Section 40-6A-2 hereof, unless otherwise provided by the passage of local legislation affecting any of such counties. The net personal income of such officials during the tax year next preceding the effective date of this chapter shall be certified by said officials to the governing body of their respective counties, and such net personal income must be verified by the office of Examiners of Public Accounts. The term “net personal income” as used herein shall mean the total fees, commissions, allowances, and other compensation for the tax year next preceding May 4, 1982 less the total amount paid by such official in said tax year for the operation of his or her office, including salaries of any employees in such office paid by such official.
(Acts 1982, No. 82-620, p. 1172, §4.)
The governing bodies of each of the counties of this state shall provide the tax assessor, tax collector, revenue commissioner, license commissioner or such other official charged with assessing and collecting ad valorem taxes with such office personnel, clerks, and deputies, and such quarters, books, stationery, furniture, equipment, and other such conveniences and supplies as may be necessary for the proper and efficient conduct of such offices. The compensation of any personnel so provided shall be fixed by said governing body and shall be paid in equal installments out of the general fund of the county. Notwithstanding the Alabama Ethics Act, any employees working in such offices prior to the passage of such act may be continued as employees in such offices by the county governing body. All employees in such offices in counties which operate a merit system for county employees shall automatically become participants in such system.
(Acts 1982, No. 82-620, p. 1172, §5.)
All fees, commissions, allowances, or other compensation heretofore collected by or paid to officials on a fee basis of compensation shall hereafter be paid into the general fund of their respective counties.
(Acts 1982, No. 82-620, p. 1172, §6.)
Any fees, commissions, allowances, or other compensation due to officials who are converted from a fee basis to a salary basis hereunder, which have been fully earned but remain unpaid on May 4, 1982, shall be paid to such officials in the same manner as such fees, commissions, allowances, or other compensation was paid to them prior to May 4, 1982.
(Acts 1982, No. 82-620, p. 1172, §7.)
This chapter shall be effective on October 1 immediately following the adoption and ratification of a constitutional amendment authorizing the implementation of this chapter, or on the first day of the next term of office of the officials affected herein, whichever first occurs.
(Acts 1982, No. 82-620, p. 1172, §10.)
(a) The tax assessor or other assessing official in each of the several counties shall have the right and authority to assess all real estate, together with improvements thereon, and all personal property to the party last assessing the same, or to the owner of record, except such real estate and personal property which is now or may hereafter be assessed by the Department of Revenue. The failure of the tax assessor or other assessing official to assess said property to the true owner shall not invalidate the assessment. The tax assessor or other assessing official shall have the right and authority to prescribe the proper bookkeeping method to carry out the provisions of this article, subject to the approval of the Chief Examiner of Public Accounts. Should the owner of any real estate make improvements on such property, or should any improvements be removed or destroyed or partially removed or destroyed during any taxable year, it shall be the duty of such owner to make a tax return between October 1 and prior to January 1 covering all such changes made subsequent to October 1 of the preceding tax year. Improvements partially completed on October 1 shall be reported to the tax assessor or other assessing official by the owner thereof and shall be assessed as incomplete for that tax year. It shall be the duty of any person who purchases real estate prior to October 1 of any taxable year and who owns said real estate on that date to report such purchase to and assess that property with the tax assessor or other assessing official between October 1 and prior to January 1 following such purchase. No penalty shall be charged such taxpayer for failure to report the purchase or sale of any real estate.
(b) Every person, firm, or corporation who owns, maintains, or keeps a manufactured home shall receive a decal upon the payment of the ad valorem tax on said manufactured home. Said decals shall be designed by the state Department of Revenue and displayed on the manufactured home for which the ad valorem taxes were paid, as set out in subsection (a) of Section 40-12-255.
This decal shall take the place of all other decals of any county or municipality, and there will be no other decals required. Said decal shall be proof of payment of said ad valorem taxes.
(Acts 1951, No. 344, p. 632, §2; Acts 1957, No. 452, p. 613, §1; Acts 1988, 1st Ex. Sess., No. 88-824, p. 265, §2; Acts 1991, No. 91-694, p. 1340, §1.)
The return and listing of property for taxation by the tax assessor must commence on October 1 in every year and shall be finished by him on January 1 following, but the assessor may be allowed through the third Monday in January in each year to make a supplemental return or list of property which he may have failed to have returned or listed prior to January 1, and such supplemental return must be entered as any other return and shall be embraced in the abstracts made for the Department of Finance, tax collector, and Department of Revenue.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §37.)
AMENDED BY ACT 2026-598, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
(a) This amendatory act shall be known as the 1983 Taxpayer Convenience Act.
(b) Notwithstanding any other law to the contrary, the county tax assessor may assess property for tax purposes and perform related tax assessing functions and requirements, including the acceptance of applications for homestead exemptions, from January 1 to September 30 of each taxable year and the assessment, including the homestead exemption, shall become effective on the following October 1. Provided, however, nothing herein contained shall be construed to relieve a person claiming a homestead exemption under Sections 40-9-19 to 40-9-21, inclusive, or any other law of the responsibility of furnishing proof of age, or disability, and total gross income for the year preceding the year for which the exemption will be effective as required by law. Any person who has qualified for the homestead exemption because of age or disability and income shall not be required to reapply for the personal exemption based on age, disability, and income until the eligibility ceases. The person shall only be required to verify by signature, on a form provided by the county tax assessor, that the qualifying conditions continue to exist and return the form by mail.
(c) Notwithstanding any other law to the contrary, an attorney in a timely manner may apply to the county tax assessor for a homestead exemption on behalf of a person entitled to claim the exemption.
(Acts 1981, No. 81-694, p. 1166; Acts 1983, 3rd Ex. Sess., No. 83-814, p. 27; Acts 1989, No. 89-740, p. 1468; Act 99-368, p. 593, §1.)
(a) After each county-wide reappraisal, as provided by Article 2, and the resulting assessed value of property for ad valorem tax purposes, the tax assessor shall annually compare the assessed value of each real property reappraised or reassessed to the prior year’s assessed value. If the assessed value of the property increased, the tax assessor shall adjust the assessed value of the property pursuant to this section.
(b)(1) Class III properties, as defined in Section 40-8-1, shall be limited to not more than a seven percent increase in the assessed value of the property from the previous year’s assessed value.
(2) Class II properties, as defined in Section 40-8-1, shall be limited to not more than a seven percent increase in the assessed value of the property from the previous year’s assessed value.
(c) The limitations provided for in subsection (b) shall not apply to:
(1) Real property that has never been assessed.
(2) Additions or improvements to real property, including new construction. This subdivision shall not include repairs to or ordinary maintenance of an existing structure or the grounds of the property.
(3) Change to the classification of the property.
(4) Change in ownership of the property, except for any of the following:
a. Transfers between spouse or family members for no or nominal consideration, including upon death of owner.
b. Transfers due to redemption after foreclosure of a mortgage, tax sale, or tax lien.
(5) Property located in a tax increment district created pursuant to Chapter 99 of Title 11.
(d) The limitations provided for in subsection (b) shall be effective October 1, 2024, and shall continue through the fiscal year beginning October 1, 2027.
(Act 2024-344, §1.)
Between October 1 and January 1 of each year, the tax assessor shall in all counties having a population of 100,000 or less visit each voting place in each precinct for the purpose of listing property for taxation, and he shall remain there one day in all county precincts and towns of less than 1,000 inhabitants from 8:00 A.M. until 4:00 P.M. In towns, other than county seats, of 5,000 inhabitants or more, he shall remain at each place of appointment for one week, either by himself or deputy. In places of 1,000 inhabitants and not over 5,000, he shall remain at the place of appointment for three days, either by himself or deputy. The assessor shall give at least 10 days’ notice by advertisement in a newspaper, if there is one published in the county, and by bills posted at five or more public places in each election precinct of the time when he will attend to receive the tax returns. Upon the failure of the tax assessor to give the notice required by this section or to attend any appointment made by him in any precinct, he shall, after legal notice, fill new appointments or forfeit all claims to fees from such persons in such precinct as were disappointed by his nonattendance. He shall keep the office open at the courthouse all the year around. The county commission may, by order duly entered on its minutes as other orders and decrees of the commission are entered, relieve the tax assessor from making visits to each voting place in each precinct as above provided when, in the opinion of the commission, it is deemed advisable.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §38.)
It is the duty of every person in every election precinct to attend in person before the assessor on the first day of the appointment in the precinct of the taxpayer’s residence and then and there to render to the assessor under oath a full and complete list of all property of which he was owner, or in which he had any interest whatever, or of which he was trustee or agent on October 1 of that year. The land and improvements thereon and homesteads must be separately listed and valued. On failure of the taxpayer for 30 days after demand or notice by the tax assessor to furnish a sufficient description of his real estate, said tax assessor shall secure such description from the records of conveyance in the office of the probate court of his county, and if he is unable to get a sufficient description from such records, then by a survey of property by the county surveyor or otherwise, and the reasonable expenses incident thereto shall be allowed by the county commission and paid out of the general fund of the county wherein the property involved is located, and such amount as is allowed shall be added as costs to the taxes assessed against such taxpayer and, when collected, shall be covered into the general fund of the county.
(Acts 1935, No. 194, p. 256; Acts 1936, Ex. Sess., No. 6, p. 4; Code 1940, T. 51, §39; Acts 1951, No. 551, p. 965.)
The tax assessor or his deputy or any other officer administering the oath to the person making the return of property for taxation must orally administer the following oath to every taxpayer before making his returns: “You do solemnly swear that you will true answers make to all lawful questions which may be put to you touching the return you are about to make and that you will make a full and complete return of all property owned by you or in which you had any interest whatever or of which you were trustee or agent on the first day of October of the present tax year, and this return is made upon your personal knowledge, so help you God.”
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §40; Acts 1951, No. 551, p. 965.)
After administering the foregoing oath, the assessor, his deputy, or other officer shall particularly inquire of the taxpayer as to the items of property and subjects of taxation owned by the taxpayer and for which he is liable to be taxed, and property exempt from taxation, which shall be listed by items, in order that he may elicit from the taxpayer a complete statement of the whole amount and specified items of property, and subjects of taxation with which he should be charged for purposes of assessment and taxation, and the same shall be entered upon the proper blank, and the tax assessor, his deputy, or other officer administering the oath shall require the taxpayer to give an estimate of the value of each item of personal property. Each taxpayer shall give to the assessor his occupation and post-office address. All property claimed exempt from taxation under the provisions of this title shall be listed with the tax assessor by the taxpayer and entered on his return showing the items of property sought to be exempted, and no property omitted from said return shall be exempted.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §41; Acts 1951, No. 551, p. 965.)
When a taxpayer resides out of the county, or by reason of any infirmity or disability is unable to attend any of the appointments of the assessor, or is a woman, such taxpayer may send in his or her list, duly sworn to by any other person or by mail, postage prepaid, or such list may be rendered by an agent having knowledge of his or her taxable property. The land and the improvements thereon must be separately listed. Any person who knowingly subscribes to a list of property which is false is guilty of a misdemeanor and shall upon conviction be subject to a fine of not more than $500 and may also be imprisoned in the county jail or sentenced to hard labor for not more than six months.
Any person who owns personal property may make a return of such property to the tax assessor by mail or by an authorized agent having knowledge of such taxable property.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §42; Acts 1951, No. 551, p. 965; Acts 1953, No. 316, p. 373.)
Each person making return of property for assessment shall, after the same shall have been listed, make and subscribe to the following oath, which shall be printed or written at the bottom of the assessment sheet and which may be administered by the tax assessor, his deputy, or any other officer authorized by law to administer oaths: “I do solemnly swear that the foregoing list of property returned by me (if not his own property, here state the capacity in which he returns such property for assessment) is a full and complete return of all the property owned by (here state ‘me’ if the property returned is his own property and, if not his own property, state the name of the person, corporation, or estate for whom the property is returned), or in which (here designate the owner for whom return is made) had any interest whatever, the situs of which for taxation, or exemption from taxation, is in this county, on the first of October of the present tax year, so help me God.” _____ (Person giving in list will sign here) _____ Subscribed and sworn to before me this the _____ day of _____ (Officers will sign here) _____ (Give name and style of office here) _____
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §43; Acts 1951, No. 551, p. 965.)
Whenever a manifest error is found in the calculation of the amount of taxes due or any mechanical error is found by the tax assessor in computing the tax due upon an assessment legally made, he is authorized to correct the same in his records; provided, that he file in the record the proper evidence to support his action.
(Acts 1945, No. 486, p. 723.)
Whenever an error is found in the assessment, computation, or calculation of the amount of ad valorem taxes, penalties, or fees due thereon; or any mechanical error is found in the tax return, listing, and valuing of property upon assessments legally made or upon collections based thereon; the official charged with assessing and/or collecting such taxes, penalties, or fees is hereby authorized to correct the same in his records; provided, however, he shall file in the record the proper evidence to support his action. In the case of a tax assessor, he shall immediately certify same to the tax collector for collection, or if a refund of taxes is due, the tax collector shall refund said taxes out of the next moneys collected. In the case where the same official assesses and collects the taxes, he shall make the corrections herein authorized and collect any additional sums due, or if a refund of taxes is due, he shall make such refund out of the next moneys collected. Provided further, that the taxpayer shall furnish proof of such payment to the satisfaction of such official within two years from the date of such payment.
(Acts 1989, No. 89-861, p. 1716.)
The tax assessor shall have the right and authority beginning October 1, 1951, and annually thereafter, to credit any person entitled to a statutory ad valorem exemption that the tax assessor has the authority and right to grant, and who has heretofore claimed such exemption, such statutory exemption, without such person claiming same annually. Any person who shall hereafter become entitled to such statutory exemption shall make a claim to the tax assessor between October 1 and prior to January 1 of any taxable year and, if such claim is allowed, shall not be required to annually thereafter repeat such claim. Any person who has claimed a homestead exemption and is entitled to same shall be annually credited with such exemption, and such homestead exemption shall encompass all additions or extensions made to the homestead structure or structures since the homestead exemption was claimed and shall encompass any additional buildings, being a part of the homestead, erected since the homestead exemption was claimed, any provision of the law to the contrary notwithstanding.
If on October 1 of any year any such exempted property shall have become subject to taxation, it shall be the duty of the person or persons who are liable for the tax on such property to notify the tax assessor between October 1 and prior to January 1 of that tax year that the property is no longer subject to exemption, and the tax assessor shall list the property for taxation. If the tax assessor discovers, at any time, that property so exempted is no longer entitled to exemption and such fact has not been reported to him as required above, he may list such property as an escape in accordance with the procedure pertaining to escaped taxes in this title.
(Acts 1951, No. 344, p. 632, §3; Acts 1957, No. 452, p. 613, §2.)
Should any person making improvements on a structure or building fail to report the same to the tax assessor as required above, a penalty may be added to the assessed value of such improvements, and such penalty shall be arrived at by taking 10 percent of the difference between the current assessed value as finally determined and the prior year’s assessed value of such structure or building. If a structure or building has not been assessed heretofore, has no prior year’s value and is unreported to the tax assessor by the owner thereof, then a penalty of 10 percent of the current tax value as finally determined of such structure or building may be added.
(Acts 1951, No. 344, p. 632, §4.)
Any person who fraudulently fails, neglects, or refuses to notify the tax assessor of any change in the condition of his property or of the relinquishment, abandonment, or loss of his homestead exemption or of any other exemptions as required herein shall be guilty of a misdemeanor.
(Acts 1951, No. 344, p. 632, §6.)
Commission merchants and all persons trading and dealing on commission, assignees and consignees authorized to sell and persons having in their possession goods, wares, or merchandise belonging to another and subject to taxation in any county, city, or town of Alabama, where said property is located, when the owner of the property does not reside in the county, are deemed to be owners of the property in their possession for the purpose of assessment, and unless such goods, wares, or merchandise have been otherwise listed for taxation, the same shall be listed separately from any other goods, wares, or merchandise owned by such person, firm, or corporation for taxation, and the name of the assignor or consignor shall be listed on the return, the same shall be assessed for taxation to the person, firm, or corporation who has such goods, wares, or merchandise in their possession, and in no case shall the assessment be less than the amount specified by law on the fair and reasonable market value of the average amount of goods, wares, and merchandise so held during the 12 months next preceding October 1 when same are due to be assessed for taxation. In assessing such stock of goods, wares, or merchandise, the assessor shall require the production of the last inventory taken and attach the same to the tax return list, and if in the judgment of the assessor such inventory is incorrect or if such time has elapsed since the inventory was taken that it shall have ceased to be reliable as to the value or amount thereof, he shall have the right to examine the books of the person who has the property in his possession or the property itself or use such other information as he can obtain.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §44.)
The person giving in property for taxation shall enter upon said list his estimated value of every item of personal property listed, for the information of the official or officials whose duty it is to fix the assessment valuation of taxable property, but nothing in this title shall be construed as requiring the taxpayer to make oath as to the value of the property. It shall be the duty of the tax assessor to enter upon the tax return in the column provided the next preceding year’s valuation for assessment of real estate and improvements and also to note on the tax return list whether there has been any physical change, such as in improvements, etc., since the preceding year’s assessment was made. Every person shall enter upon the assessment list his occupation and post-office address.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §45.)
Except as otherwise provided by law, for the purpose of assessment, real and personal property shall be appraised at its fair and reasonable market value, according to the best judgment the assessor, the board of equalization, and agents of the Department of Revenue can form upon information, inspection, or otherwise, taking into consideration all elements or factors bearing on such value as heretofore or hereafter authorized; mineral, coal, oil, gas, timber, and turpentine interests, when they have been severed in ownership from the soil, by sale or otherwise, shall be separately appraised and assessed. Notwithstanding the above, all property under lease as of October 1, 1978, which lease does not provide for a direct passthrough of property taxes to the lessee, shall be appraised solely on the basis of the economic net return to the owner.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §46; Acts 1978, 2nd Ex. Sess., No. 135, p. 1868, §2.)
The description of real estate may be as follows:
(1) If it is an entire section, it may be described by the number of the section, township, and range.
(2) If it is a subdivision of a section authorized by the United States for the sale of public lands, it may be described by a designation of such subdivision, with the number of section, township, and range.
(3) If it is less or other than a subdivision, it may be described by metes and bounds, or in some way by which it may be known; provided, that such description shall be sufficient without more to definitely locate and identify the property so listed and shall give the acreage included therein as nearly as known.
(4) If it is in a city, town, or village, surveyed and laid off, and a plat thereof is recorded in the office of the judge of probate of the county, or if a plat is accessible and if it is as a whole lot or block, it shall be described by the designation of the number thereof.
(5) If it is in a part of a whole lot or block, it may be described by metes and bounds, or in some other way by which it may be known; provided, that such description shall be sufficient without more to definitely locate and identify the property so listed and shall show the quantity of such land so listed.
(6) If it is a tract of which the subdivision is not known to the assessor it may be described by metes and bounds, or in some way by which it may be known; provided, that such description shall be sufficient without more to definitely locate and identify the property so listed and shall show the quantity of such land so listed.
(7) It shall be sufficient to describe lands to be assessed or sold for taxes by initials, abbreviations, and figures.
(8) Mineral, coal, oil, gas, timber, and turpentine interests, when they have been so severed in ownership from the soil, or trees, by sale, or otherwise, shall be separately returned for assessment, which return shall show the land in or on which said mineral, coal, oil, gas, timber, and turpentine, interest is located.
(9) If the surface right only is assessed for taxation, the description of the land may be preceded or followed by the letters S.R., and if the mineral interest only is assessed, the description of the land may be preceded or followed by the letters M.R., or other notation showing the nature of the interest assessed and giving the acreage in or on which such right or rights is or are located.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §47.)
The property of every minor shall be listed by his guardian, if he has one; if he has no guardian, by his father, if living; if the father is dead, by his mother, if living; if the mother is also dead or married, by the person having it in charge; of the wife, by the husband, if living and sane, and the parties reside together; if the husband is dead or insane, or he is not living with his wife, by the wife; of any person for whose benefit the property is held in trust, by the trustee; of every deceased person, by the executor or administrator, but if there be no executor or administrator by any person having an interest in the estate of said decedent by bequest or devise or under the laws of descent and distribution; of those whose property is in the hands of receivers, by such receivers; of every firm or body corporate, by the partner, president, principal officer, or agent thereof; property in the hands or custody of any public officer or appointee of a court, by such officer or appointee; of those absent or unknown, by their agents; or by the person having it in charge; of insane or idiotic persons of full age, by their guardians, if they have any; if they have no guardian, by the person having it in charge; of the lessors of real property, by such lessors; and all persons herein required to list property for others shall list it separately from their own and in the name of the owner thereof, and shall also, as far as practicable, give the residence and address of the owner, but the failure to give such residence and address shall not invalidate the assessment.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §48.)
(a) The public interest lying in the promotion of business and industry in this state, it is the intent of the Legislature and declared to be the policy of the State of Alabama by the passage of this section to promote and encourage industry and business in Alabama and specifically to induce the location within this state of the principal administrative office, principal distribution or manufacturing plant, or principal place of business of foreign corporations engaged in manufacturing, industrial, commercial, business, transportation, utility, public service, and research enterprise. This section shall be liberally construed in conformity with the said intention.
(b) When any real or personal property within this state is sold to, acquired by or transferred to any foreign corporation during any property tax year in connection with locating within this state its principal administrative office, its principal distribution or manufacturing plant, or its principal place of business or in connection with such foreign corporation becoming the successor or assignee of all or a substantial portion of the taxable property within this state of any foreign or domestic corporation theretofore qualified or admitted to engage in or transact business in this state, so much of the property tax upon such property as is properly allocable to that part of such year which ends on the day before the date of such sale, acquisition, or transfer shall be the tax obligation of the person, firm, or corporation selling, disposing, or transferring such property, and so much of such tax as is properly allocable to that part of the year which begins on the date of the sale, acquisition, or transfer shall be the tax obligation of such foreign corporation; provided, that nothing contained in this section shall relieve the property of any tax lien that may have attached to such property prior to such date for all periods of time prior thereto.
(Acts 1967, Ex. Sess., No. 168, p. 214.)
After December 31 in each year, the assessor shall in person or by deputy make a demand upon all taxpayers who have failed to make return to him for a list of their taxable property, and such demand may be made by written notice left with the taxpayer at his residence or place of business, or sent postpaid by certified or registered mail, with return receipt demanded, to the taxpayer’s last known place of residence, and it shall be the duty of such taxpayer to return such list to the assessor on or before the third Monday in January following. For making this demand the tax assessor shall be entitled to a fee of $5 to be paid by the taxpayer, which shall be added to the tax receipt and collected with the tax.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §49; Acts 1980, No. 80-630, p. 1087, §5; Acts 1990, No. 90-535, p. 837, §1.)
Every person of full age and sound mind and every firm or body corporate or politic and every trustee and receiver shall, when legally called on by the assessor, forthwith make a full, true, and distinct statement of all real and personal property, with a correct description thereof of land and improvements, separately, of which he is the owner or holder, individually or as guardian, parent, husband, wife, trustee, administrator, executor, receiver, accounting officer, partner, agent, or factor, and including all money hoarded, held, or owned on October 1 of the current tax year or any time preceding or succeeding October 1 of the current year.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §50.)
(a) It shall be a Class C misdemeanor for any taxpayer, or attorney or agent of any taxpayer having authority to make tax returns, to fail, neglect, or refuse on demand of the tax assessor, county revenue commissioner, or other assessing official, to fill out or have filled out the schedule or list herein provided for, or to fail to give the information herein provided for, or to fail, refuse, or neglect, to take and subscribe to the oath or affirmation required to such schedules or fail to return the same to the assessing official as prescribed by law.
(b) The county tax assessor, the county revenue commissioner, or other county assessing official, the Department of Revenue, their agents, and designated representatives, shall have authority to audit, examine, and inspect any and all records and property as needed to enforce the taxes imposed by this chapter.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §51; Acts 1988, 1st Ex. Sess., No. 88-824, p. 265, §17.)
Having failed to procure on verbal or written demand from any delinquent his list of taxable property on or before the third Monday in January, the assessor shall ascertain from inquiry or otherwise the property and other subjects of taxation upon which such person is liable to be taxed and shall list and make return thereof upon the proper blank and note upon such returns the failure of the owner after notice to make such return and the accrual of a penalty of 10 percent of the taxes to be assessed thereon.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §52.)
(a) Whenever the tax assessor, county revenue commissioner, or other assessing official shall discover that any property, including any improvements on real estate assessed as vacant property, has escaped taxation in any assessment within five years next preceding the current year, he shall list, return, and value said property for assessment for the years during which same has escaped taxation and shall also endorse on such returns the year or years for which the property has escaped taxation and, except as provided in subsection (b) hereinafter, the accrual of a penalty of 10 percent of the taxes assessed thereon for each year.
(b) Any taxpayer who escaped assessment of tangible personal property for taxable years ending on or before September 30, 1988 shall not have accrued to his account the 10 percent penalty, provided:
(1) He files a proper tax return and assesses such property not later than June 30, 1989;
(2) He makes or agrees to be subject to an escape assessment for the tax year ending September 30, 1988; and
(3) He pays the tax due on such escape assessment without any penalty not later than June 30, 1989.
(c) Any taxpayer who fulfills the requirements of subsection (b) of this section to avoid penalty, shall not be liable for any unpaid ad valorem tax on the tangible personal property so assessed for the tax years ending on or before September 30, 1987.
(d) The assessing official shall give notice of an escape assessment by certified or registered mail, return receipt requested, to the owner or to the agent or attorney of such owner, notifying such person to appear before the assessing official in person, or by agent or attorney, within 20 days after such notice is given, if there is an objection to the assessment, and notifying such person that if no objection is made said assessment will be made final on the twentieth day after the mailing of such notice of escape assessment. If on the date set for hearing such objection the person against whom the assessment is made fails to appear or if in the opinion of the assessing official the assessment should not be changed and the assessment is proper, then the assessing official shall make the assessment final. The property owner, if he has filed objection to such assessment, may appeal from the assessment to the circuit court of the county in which the property is located within 30 days after such assessment becomes final, by giving notice in writing to the assessing official and by filing a copy of such notice with the clerk of the circuit court and giving bond to be approved by and filed with the clerk of the circuit court to cover costs, and thereafter such case shall be tried as other tax cases appealed to the circuit court from the board of equalization. The taxpayer or the state shall have the right to demand a trial by jury by filing a written demand therefor, within 10 days after the appeal is taken.
(e) Whenever any escape assessment is made final the taxes shall immediately become due, and the assessor, deputy assessor, or other assessing official shall forthwith certify the assessment to the tax collector, or other collecting official, who shall forthwith collect same, unless at the time of taking the appeal the taxpayer has executed a supersedeas bond with sufficient sureties to be approved by the clerk of the circuit court in double the amount of the taxes, payable to the State of Alabama, conditioned to pay all taxes, interest, and costs due the state, county, or any agency or subdivision thereof.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §53; Acts 1953, No. 236, p. 302; Acts 1988, 1st Ex. Sess., No. 88-824, p. 265, §1; Acts 1989, No. 89-710, p. 1418.)
When any person or any company, corporation, or association existing under the laws of this state, or under the laws of any other state or country, doing business in this state is required to make to the assessor returns of the gross or net receipts or commissions of such business, and such returns are not made within the time required by law, but shall remain in default for the space of 10 days thereafter, the assessor, after notice to the party required to make such returns or, if he is absent from the county, without notice, shall upon the best information he can obtain list and make up such returns upon the proper blank, describing the property to be assessed as other items of property are described, noting thereon the failure of the owner after notice to make such return and the accrual of a penalty of 10 percent of the taxes to be assessed thereon.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §54.)
(a)(1) Except as provided in subdivision (2) or as otherwise provided by law, the assessing official, from information entered on the tax return list and from all other information known to him or her or which he or she may procure, shall proceed to ascertain what, in his or her best judgment, is a fair and reasonable market value of each item of property returned by or listed to any taxpayer.
(2) The assessed value of any real estate or improvements as fixed for taxation for the year next preceding the then current tax year shall be prima facie the basis of the value of the property for assessment for the current tax year, and the property shall not be assessed for taxation at a less valuation unless, upon evidence submitted to the county board of equalization, as provided for herein, it is found that the assessed valuation of the property reviewed should be reduced.
(b) The assessing official shall in separate columns enter on the list the amount and value and the deduction for exemption to which the taxpayer is entitled. The assessing official shall also add to the list any item of property subject to taxation owned by the taxpayer, or in which he or she has any interest whatever and which he or she had failed or omitted to place on the list; and the taxpayer shall be given notice by the assessing official, by mail or in person, of the items of property added to his or her assessment list or items claimed as exempt which are disallowed by the assessing official after the list has been filed and before the assessing official has completed his or her assessment, and the assessing official, upon demand, shall furnish the taxpayer with a certified copy of his or her assessment list so amended.
(c) If the value of real or personal property of any taxpayer is increased by the county board of equalization, herein created, over the assessed value thereof for the next preceding year, the taxpayer shall be furnished by mail or in person, by the secretary of the county board of equalization, with a statement showing separately the value of his or her personal property and his or her real property, and improvements thereon, no later than July 1, unless otherwise provided by the Department of Revenue. The statement shall be signed by the chair of the county board of equalization.
(d) The taxpayer may file in writing, with the secretary of the county board of equalization, within 30 calendar days of the date of the statement, objections to any assessed valuation fixed as herein provided. Failure to give or receive the notices required in this section shall not invalidate the assessment. The taxpayer shall have the right any time before the taxes become delinquent to appear before the county board of equalization and have the assessment of his or her property reopened, if satisfactory proof is made that the taxpayer or his or her agent did not receive notice of the increase.
(e) The expense of postage incurred in carrying out this section shall be paid in equal proportions by the county and state, upon a certified statement thereof by the secretary of the county board of equalization, filed with the court of county commissioners, or the board or court of like jurisdiction and with the Department of Finance.
(f) The Department of Revenue may adopt rules for the implementation and administration of this act.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §55; Acts 1978, 2nd Ex. Sess., No. 135, p. 1868, §3; Act 2007-381, p. 757, §1; Act 2023-499, §§ 1, 2.)
(a) For ad valorem tax years beginning on and after October 1, 1978, with respect to taxable property defined in Section 40-8-1, as amended, as Class III property and upon request by the owner of such property as hereinafter provided, the assessor shall base his appraisal of the value of such property on its current use on October 1 in any taxable year and not on its fair and reasonable market value. Failure of an owner of Class III property to request appraisal at current use value shall mean that the property shall be valued on its fair and reasonable market value as otherwise provided in this title until such time as the owner thereof shall request valuation on the basis of current use value. As used in this chapter, “current use value” shall be deemed to be the value of eligible taxable property based on the use being made of that property on October 1 of any taxable year; provided, that no consideration shall be taken of the prospective value such property might have if it were put to some other possible use. It is not the intent of the Legislature to establish in this section any presumption as to the fair and reasonable market value of any property, or any minimum such value. This section shall govern only determination of the current use value of eligible property with respect to which a timely request for appraisal at current use value shall have been made.
(b) In determining the current use value, on and after October 1, 1981, of eligible taxable property the owner of which shall elect current use valuation of such property hereunder, the assessor shall utilize the standard value method of current use valuation outlined herein. (No new application form need be filed under Section 40-7-25.2 in order for this method to be utilized with respect to property the owner of which, prior to October 1, 1981, shall have elected to have had assessed at the ratio of its assessed value to its current use value, and which property was in fact so assessed; however, the tax assessor of the county in which the property is located may request of the owner such additional information as may be required to compute current use value hereunder.) To utilize the standard value method of current use valuation, the tax assessor shall first determine the character of the property with respect to which current use valuation is elected as agricultural (which characterization shall cover all of the types of real property described in subdivision (3) of subsection (b) of Section 40-8-1 with the exception of real property used for the growing and sale of timber and forest products), forest (meaning real property used for the growing and sale of timber and forest products), residential (as defined in subdivision (2) of subsection (b) of Section 40-8-1, or historic building and site (as defined in subdivision (6) of subsection (b) of Section 40-8-1). With respect to Class III property consisting of parcels of five acres or less, the owners of which shall have elected current use valuation respecting those parcels, the tax assessor may require the submission of additional data as may be necessary to establish that the use being made of the parcels of property in question is agricultural, forest, or residential or historic building and site, as the case may be; such data may include site management plans from the Alabama Forestry Commission, photographs and surveys, or verification of use from the county farm agent or the U.S. Soil Conservation Service.
(c) With respect to agricultural and forest property, the tax assessor shall determine, utilizing the soil groups defined herein, the productivity rating or ratings applicable to such property based on the following schedule:
| Soil Group | Agricultural Productivity Rating | Forest Productivity Rating | | --- | --- | --- | | 1 | Good | Good | | 2 | Good | Good | | 3 | Average | Average | | 4 | Average | Average | | 5 | Average | Average | | 6 | Poor | Average | | 7 | Nonproductive | Poor | | 8 | Good | Good | | 9 | Poor | Average | | 10 | Nonproductive | Nonproductive |
The soil groups of agricultural and forest property shall be determined using the following general definitions (to fall within a particular soil group property need not exhibit all the general characteristics described herein for that group, but must generally be describable by a preponderance of those characteristics; the Department of Revenue prior to issuing any regulations further defining soil groups hereunder shall consult with the U.S. Soil Conservation Service and the Alabama Cooperative Extension Service):
(1) SOIL GROUP #1. Nearly level soils on uplands; mostly deep and well drained (zero to two percent slopes). Soils in this group have no limitations that significantly restrict their use for agriculture. They are well suited to a wide range of plants and may be used for cultivated crops, small grains, hay crops, pasture, or woodland. They have moderate to high available water capacity and are responsive to fertilization.
(2) SOIL GROUP #2. Nearly level soils on uplands; mostly deep, imperfectly drained (zero to two percent slopes). Soils in this group have a wetness limitation that restricts their use for agriculture. The choice of plants may be restricted on some soils but as a group they are suited for cultivated crops, small grains, hay crops, pasture, or woodland. The wetness limitation can be partially overcome by drainage. The soils have high available water capacity and are responsive to fertilization.
(3) SOIL GROUP #3. Nearly level soils on uplands; mostly deep, well drained with thick sandy surface layers (zero to five percent slopes). Soils in this group have a low available water capacity that restricts their use for agriculture. The choice of plants is restricted and the soils require special considerations when used for cultivated crops and small grains. Most soils in this group are well suited for hay crops, pasture, and woodland. Special practices must be used to prevent deterioration of soils and to maintain yields if used for cultivated crops. Most soils in this group have low fertility levels that are not easily corrected by fertilization.
(4) SOIL GROUP #4. Gently sloping to sloping soils on uplands (two to six percent slopes). Soils in this group have moderate limitations that restrict their use for agriculture. The choice of plants may be restricted on some soils but as a group they are well suited for cultivated crops, small grains, hay crops, pasture, or woodland. Limitations can be overcome by conventional practices but the soils require careful management to prevent deterioration and maintain maximum crop yields. Limitations include one or more of the following: Slopes of about two to six percent, a somewhat restricted rooting zone, very slow permeability of the subsoil, and low available water capacity. Most soils in this group are responsive to fertilization.
(5) SOIL GROUP #5. Sloping to strongly sloping soils on uplands (six to 10 percent slopes). Soils in this group have severe limitations that restrict their use for agriculture. The choice of plants is restricted and the soils require special considerations when used for cultivated crops and small grains. Most soils in this group are well suited for hay crops, pasture, and woodland. Special practices must be used to prevent deterioration of the soils and to maintain yields if used for cultivated crops. Limitations include one or more of the following: Slopes of about six to 10 percent, very slow permeability of the subsoil, shallow rooting zone, and low available water capacity. Some sandy soils in this group have low fertility levels that are not easily corrected by fertilization.
(6) SOIL GROUP #6. Moderately steep soils on uplands (10 to 15 percent slopes). Soils in this group have very severe limitations that restrict their use for agriculture. The choice of plants is restricted and very careful management is required to prevent soil deterioration, protect crops, and to maintain crop yields. Soils in this group are generally poorly suited for row crops and small grains. They are suited to pasture and woodland but steep slopes restrict their use for hay crops. Limitations include one or more of the following: slopes of about 10 to 15 percent, shallow rooting depth, low available water capacity, and surface stoniness that interferes with tillage. Some sandy soils in this group have low fertility levels that are not easily corrected by fertilization.
(7) SOIL GROUP #7. Steep soils on uplands (15+ percent slopes). Soils in this group have very severe limitations that make them unsuited for cultivated crops, small grains, or hay crops. They are suited for pasture only to a limited extent and are used mainly for woodland. Limitations include one or more of the following: Slopes greater than 15 percent, shallow rooting depth, low available water capacity, and surface stoniness that seriously interferes with or prohibits tillage.
(8) SOIL GROUP #8. Bottomland soils that are well suited for cultivated crops, hay crops, and pasture. Subject to occasional water overflow with only slight damage to crops. Soil wetness is normally correctable by surface drainage. Soils in this group are well suited for woodland.
(9) SOIL GROUP #9. Bottomland soils subject to frequent overflow with severe crop damage. Excessive wetness that persists after drainage restricts the use of these soils to mainly pasture and woodland. Woodland growth potential is excellent but equipment limitations and seedling mortality limit intensive forest management.
(10) SOIL GROUP #10. Soils in this group have such severe limitations that they are capable of only limited production of vegetative growth. It includes soils that are normally covered with water, soils that are saline, soils that are severely gullied, and have extensive rock outcrops.
(d) The tax assessor shall then use, on and after October 1, 1981, the following formulas and methods to determine the assessed value of each type of Class III property, with respect to which a current use valuation election has been made:
(1) AGRICULTURAL PROPERTY. The current use standard value for agricultural property in the state shall be determined in the following manner. The owner of agricultural property desiring to elect current use valuation shall submit to the assessor satisfactory evidence indicating the soil group or groups, as defined herein, applicable to the property in question. Such evidence may, with respect to property located in counties for which countywide soil survey maps are not available from the U.S. Soil Conservation Service, include a soil survey map describing the soils of the property in question prepared by the U.S. Soil Conservation Service or other governmental or private soil mapping agency. The Department of Revenue, utilizing statistics from the Alabama Crop and Livestock Reporting Service, the Alabama Cooperative Extension Service and the Alabama Agricultural Experiment Station, shall determine annually not later than November 15 (except that, for the tax year beginning October 1, 1981, the determination shall be made 30 days after April 20, 1982), for use in assessing property for taxation as of the immediately preceding October 1, the current use standard value for agricultural property as follows:
a. The state’s top three crops in terms of acreage harvested (not including hay of all types) for the most recent calendar year for which statistics are available shall be determined;
b. Total crop production in the state of the three crops shall be multiplied by the seasonal average price received for these crops in each of the 10 most recent calendar years since 1973 for which statistics are available, and divided by the acreage harvested for each crop for each year, giving the gross return per year per crop (provided, that if corn is determined to be one of the three crops for which such calculation is made, the same formula shall be followed, but utilizing southeastern United States statistics in determining average yields per acre);
c. From the gross return figures thus obtained, costs of production for each crop (determined for each crop using U.S. Department of Agriculture cost of production data [excluding land costs and general farm overhead costs] or such similar data as may be available to the department) shall be subtracted, giving the net return to land per year per crop;
d. The net return per year to land per crop shall be totalled, the total being weighted to give effect to the average number of acres of each crop being harvested in the state in the 10 most recent calendar years since 1973 for which statistics are available, such total yielding income flow per acre; and
e. Income flow per acre shall be capitalized by dividing it by the average of the annual effective interest rates on new federal land bank loans (determined in the same manner as the effective interest rates utilized under Section 2032A(e)(7)(A)(ii) of the Internal Revenue Code of 1954, as presently determined pursuant to regulation Section 20.2032A-4(e) issued by the U.S. Department of the Treasury) charged by the New Orleans District Federal Land Bank for the 10 most recent calendar years since 1973 for which figures are available as of October 1 of each tax year, such rate to be reduced by four and one-half percent for determinations made for the first tax year to which the provisions of this chapter shall apply; with respect to tax years thereafter, the income flow per acre shall be divided by the average of said annual effective interest rates determined for the 10 most recent calendar years since 1973 for which figures are available, such rate to be reduced by the lesser of four and one-half percent or the difference between such rate and two percent.
The figure obtained using this formula, increased by 20 percent with respect to property having a productivity rating of good, decreased by 30 percent with respect to property having a productivity rating of poor, and by 75 percent with respect to property having productivity rating of nonproductive, and unchanged with respect to property having a productivity rating of average, shall be the current use standard values per acre of property in agricultural use in the state with respect to which current use valuation is elected by the owner thereof; provided, however, that such current use standard values per acre as computed hereunder shall, for the first tax year for which values are computed pursuant to the standard value method provided herein, be computed without utilizing any statistics or interest rates available for the calendar year 1981, and all calculations hereunder for the tax year beginning October 1, 1981, shall be made as if such 1981 statistics and interest rates were not available; and provided further that for each tax year following the first tax year for which values are computed pursuant to the standard value method provided herein, with respect to property of each productivity rating, the current use standard values per acre shall be adjusted so that such standard values shall not be less than 100 percent of such standard values as computed for the first tax year for which values are computed hereunder, and shall not be more than 100 percent of such standard values as computed for the first tax year for which values are computed hereunder plus, with respect to each such value, amounts equal to three percent of such values multiplied by the number of tax years elapsed since the tax year beginning October 1, 1981. Utilizing the department’s determination of standard values, the tax assessor shall enter the standard value or values per acre determined hereunder, multiplied by the number of acres of agricultural property of each productivity rating included in the property with respect to which a current use valuation election is in effect, on his records and proceed to assess the property at that value for ad valorem tax purposes utilizing the assessment ratio or ratios then applicable to Class III property. In making the annual determination provided for in this subparagraph (1), the statistics utilized by the Department of Revenue shall be (except as otherwise provided herein) those most current statistics available to the department (including preliminary statistics) at the time such determinations are made as required herein; the determinations so made by the department shall not be subject to change solely because such statistics are later revised, corrected, or otherwise altered by the Alabama Crop and Livestock Reporting Service, the Alabama Cooperative Extension Service, the Alabama Agricultural Experiment Station, the U.S. Department of Agriculture or the New Orleans District Federal Land Bank.
(2) FOREST PROPERTY. The current use standard value for forest property in the state shall be determined in the following manner. The owner of timberland desiring to elect current use valuation shall submit to the assessor satisfactory evidence indicating the soil group or groups, as defined herein, applicable to the property in question. Such evidence may, with respect to property located in counties for which county-wide soil survey maps are not available from the U.S. Soil Conservation Service, include a soil survey map describing the soils of the property in question prepared by the U.S. Soil Conservation Service or other governmental or private soil mapping agency. For each calendar year immediately preceding October 1 in each year the Alabama Forestry Commission shall determine the average pulpwood price per cord received by timber growers in the state by estimating the average pine pulpwood price per cord and the average hardwood pulpwood price per cord received in the state during such year and determining the weighted average of those two average prices, weighting those prices on the basis of the ratio that the approximate number of cords of each of those two types of pulpwood harvested in Alabama bears to the total cords of both of such types of pulpwood harvested in Alabama, and provide that information to the Department of Revenue. The Department of Revenue shall utilize timber yields of 1.38 cords per acre per year, 1.05 cords per acre per year, .75 cords per acre per year and .6 cords per acre per year for land having good, average, poor, and nonproductive productivity ratings respectively to establish annual yields per acre in cords and multiply the yield per acre of timber property of each rating by the average pulpwood price per cord as provided by the Alabama Forestry Commission. From the products thus obtained, 15 percent thereof shall be subtracted therefrom for expenses of ownership and management, and the result of that subtraction shall equal imputed timberland net income per acre for property of each productivity rating. The imputed net income per acre figures for property of each productivity rating shall then be divided by the average of the annual effective interest rates charged on new federal land bank loans (determined as in subsection (d)(1)e. of this section) by the New Orleans District Federal Land Bank for the 10 most recent calendar years since 1973 for which figures are available as of October 1 of each tax year, such rate to be reduced by four and one-half percent for determinations made for the first tax year to which the provisions of this act shall apply; with respect to tax years thereafter, the imputed net income per acre figures shall be divided by the average of said annual effective interest rates for the 10 most recent calendar years since 1973 for which figures are available, such rate to be reduced by the lesser of four and one-half percent or the difference between such rate and two percent. The results thus obtained shall be the current use standard values per acre for property of each of the timber productivity ratings with respect to which current use valuation is elected by the owner thereof; provided, however, that for each tax year following the first tax year for which values are computed hereunder, with respect to property of each productivity rating, the current use standard values per acre shall (a) be adjusted so that such standard values shall not be less than 100 percent of such standard values as computed for the first tax year for which values are computed hereunder, and (b) not be more than 100 percent of such standard values as computed for the first tax year for which values are computed hereunder plus, with respect to each such value, amounts equal to three percent of such values multiplied by the number of tax years elapsed since the tax year beginning October 1, 1981. Utilizing the department’s determination of standard values, the tax assessor shall enter such standard values per acre, multiplied by the number of acres of forest property of each productivity rating with respect to which a current use valuation election is in effect, on his records and proceed to assess the property at that value for ad valorem tax purposes utilizing the assessment ratio or ratios then applicable to Class III property. In making the annual determinations provided for in this subparagraph (2), the statistics utilized by the Alabama Forestry Commission and the Department of Revenue shall be (except as otherwise provided herein) those most current statistics available to the commission and the department (including preliminary statistics) at the time such determinations are made as required herein; the determinations so made by the commission and the department shall not be subject to change solely because such statistics are later revised, corrected, or otherwise altered by the sources thereof, including the commission and the New Orleans District Federal Land Bank.
(3) RESIDENTIAL PROPERTY AND HISTORIC BUILDINGS AND SITES. The current use standard values for individual parcels of residential property and historic buildings and sites in each county in the state shall be determined by each county tax assessor annually utilizing comparative fair and reasonable market values of comparable residential or historic building and site property located in the county, which property cannot ordinarily be used other than as residential property or as an historic building or site, the tax assessor to presume that there is no possibility of the property being used for any other purpose than as residential property or an historic building and site, as if there were a legal prohibition against its use for any other purpose. The Department of Revenue shall promulgate appropriate regulations and orders for use by tax assessors in determining such comparable values. The tax assessor shall enter the standard values so determined on his records concerning property with respect to which a current use valuation election is in effect and proceed to assess the property at that value for ad valorem tax purposes utilizing the assessment ratio or ratios then applicable to Class III property.
(e) Following notice to the owners of Class III property who shall request appraisal of such property at its current use value of the current use values thereof computed using the current use standard values provided for herein, those owners may, within 30 days after receipt of such notice, submit to the assessor a statement outlining any errors asserted by the owner to have been made in such appraisal. The assessor shall review such statement and determine whether the value contained in the appraisal as submitted satisfactorily represents the current use value of the property with respect to which it is submitted, and he shall promptly forward the statement to the county board of equalization with his written determination and recommendation with respect thereto, for use by the board in carrying out its duties under Section 40-3-16 and hearing any properly filed objection to the current use valuation of any parcel of property computed using the standard current use value formulas provided in this section. Such objections shall be filed and heard, and final determinations of the board respecting such objections and assessments based on current use value appealed from, in the same manner as that provided in Section 40-3-19 regarding assessments, and objections filed with respect thereto, based on fair and reasonable market value.
(Acts 1978, 2nd Ex. Sess., No. 135, p. 1868, §4; Acts 1982, No. 82-302, p. 383.)
(a) Any owner of eligible taxable property described in Section 40-7-25.1 may apply to have such property assessed for purposes of ad valorem taxation at the appropriate ratio of assessed value to the current use value of such property by filing a written application, in form as prescribed by the Department of Revenue, with the tax assessor of the county in which such property is located, on and after October 1 but not later than January 1 in any taxable year; provided, however, that with respect to assessments of eligible taxable property respecting the taxable year that began on October 1, 1981, such applications may be filed with the tax assessor not later than June 30, 1982.
(b) The application form for qualification of real property as agricultural property shall set forth a description of the real property, a general description of the use to which it is being put and such other information as the tax assessor may require to aid him or her in determining whether the real property qualifies for assessment based on its current use value.
(c) The application form for qualification of real property as forest property shall include a description of the real property, a general description of the uses to which it is being put, aerial photographs, if available, and such other information as the tax assessor may require to aid him in determining whether the land qualifies for assessment based on its current use value.
(d) Any person aggrieved by the denial of any application for the qualification of eligible taxable property for assessment based on its current use value shall have the same rights and remedies for appeal and relief as are provided by law for taxpayers claiming to be aggrieved by the actions of tax assessors or boards of equalization.
(e) If any application for assessment of any taxable property based on its current use value is granted by the tax assessor, the owner of such property shall not be required to repeat the application for subsequent taxable years. Following the sale or other disposition of such property, the new owner thereof shall be notified in writing by the tax assessor or revenue commissioner, as the case may be, that the new owner is required to make application for current use valuation of the property and the new owner may then apply for current use valuation for such property as provided in this section; otherwise, such property shall be assessed at its fair and reasonable market value. In the assessment book described in Section 40-7-33, the tax assessor shall show, in addition to the other information specified therein, that the owner of the taxable property eligible for current use valuation under this section has applied for and been granted current use valuation of that property for purposes of assessment.
(Acts 1978, 2nd Ex. Sess., No. 135, p. 1868, §5; Acts 1982, 1st Ex. Sess., No. 82-683, p. 124; Act 2005-193, p. 387, §1.)
If the sale or other disposition of taxable property qualified for assessment based on its current use value results in or is followed by the conversion of such property, within two years from the date of sale or other disposition, to a use that is not so qualified, then with respect to such property, there shall be levied and collected, in the ad valorem tax year beginning on the October 1 next succeeding the conversion of such property, an amount of additional taxes to be computed in the manner provided by this section. If taxable property qualified for assessment at its current use value is converted to a use not so qualified, then the tax assessor shall thereupon appraise such property in accordance with the provisions of Section 40-7-15 and Section 40-7-25, as amended, and shall compute the amount of additional taxes payable with respect to such property in the manner provided in this section. The owner of taxable property qualified for assessment at its current use value which is converted to a use not so qualified shall so notify the tax assessor of the county in which such property is located, on and after October 1 but not later than January 1 in the taxable year next succeeding the taxable year in which such conversion is made. The tax assessor shall compute the amount of ad valorem property taxes that would have been payable with respect to such converted property if the sales price or the fair and reasonable market value of such property at the time of its conversion, whichever is greater, had been used instead of the current use value of such property in computing the amount of taxes payable with respect to such property for each of the three ad valorem tax years preceding the tax year beginning on the October 1 next succeeding the conversion of such property. Such amount shall be additional taxes to be levied and collected on the first assessment lists prepared subsequent to such conversion in the same manner and at the same time as other taxes and shall constitute a lien on such property to the same extent as other taxes, as provided in Section 40-1-3. If such converted property constitutes only a portion of a parcel so qualified on the assessment lists, the tax assessor shall apportion the assessment of such parcel on the first assessment lists prepared subsequent to the conversion and enter the apportioned amount attributable to the portion converted as a separately assessed parcel on the assessment lists. Such apportionment shall be made for each of the years to which additional taxes apply.
(Acts 1978, 2nd Ex. Sess., No. 135, p. 1868, §6.)
(a) The governing body of a county may grant an abatement of all or a portion of the taxes otherwise due under Section 40-7-25.3 with respect to property located within the county.
(b) The abatement provided by subsection (a) may only be granted if all of the following are satisfied:
(1) The property will be used for a qualifying project as defined in Section 40-18-372 (1).
(2) The qualifying project shall create at least the number of new jobs specified in Section 40-18-372 (2).
(3) The property is an area within which not less than fifty million dollars ($50,000,000) of capital expenditures in connection with the establishment, expansion, construction, equipping, development, or rehabilitation of such qualifying project is anticipated to be made based upon representations and information provided by the anticipated user or users of the qualifying project and such other information as the county shall have available to it and deems appropriate.
(4) If the property is located within a municipality, the abatement shall be consented to by resolution of the governing body of the municipality.
(c) The abatement granted by a county pursuant to this section shall be embodied in an agreement between the county and the owner or user of the property. The agreement shall be filed with the Department of Revenue within 90 days after the granting of the abatement, the contents of which the Department of Revenue shall use solely for its statistical and recordkeeping activities but shall otherwise keep confidential unless consented to in writing by the owner or user of the property.
(Act 2018-53, §1.)
The Department of Revenue or the agents or assistants thereof may work in an advisory capacity with the several county tax assessors of the state in the assessment and valuation of property.
Any valuation fixed by the tax assessor on any property returned for taxation may be approved by the Department of Revenue, which approval, if made, must be shown on each separate return so approved. When a tax return has been so approved by the Department of Revenue, the state has no appeal from such approved assessment. The taxpayer, however, may appeal from such assessment in the same manner and within the same time as appeals are allowed from nonapproved assessments.
The several county tax assessors are required to keep a docket of all nonapproved assessments in such form and containing such data as may be prescribed by the Department of Revenue. Such docket shall be furnished to the assessors by the Department of Revenue. The payment for such dockets shall be made out of the general appropriation for printing.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §56.)
When the assessor shall have completed his work of assessing, valuing, and equalizing property which has been listed for taxation in his county, and such valuation shall have been entered on the assessments lists, which shall not be later than the last Monday in February of each year, he shall certify over his signature to the correctness of his returns, showing valuations fixed by him, and he shall at once notify the Department of Revenue by certified or registered mail that he has completed his assessment, valuation, and equalization work and that the tax returns are ready for the review and inspection as provided for in this title. Such lists of property shall be by the assessor delivered to the board of equalization not later than the second Monday in March.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §57.)
When, prior to March 1 next after the close of any ad valorem tax year, any taxpayer, his agent, or attorney shall make proof satisfactory to the county tax assessor of the county in which such real estate is assessed that improvements have been assessed against him as being on said real estate when in fact there were no improvements thereon, as of the close of any ad valorem tax year the tax assessor shall be, and he hereby is, authorized and empowered to correct said assessment to speak the truth by deleting therefrom said improvements and the assessed value thereof. The tax assessor shall promptly thereafter give written notice of such correction of said assessment to the tax collector and to the board of equalization of said county and shall securely attach a copy of said notice to the corrected assessment record.
(Acts 1953, No. 317, p. 374.)
No penalties assessed against any property owner or his property for failure to return property for taxation shall be remitted except by order of the Department of Revenue upon proof that the delinquent taxpayer was absent from the state and had no resident agent therein during the time for making returns of property for taxation, or when such taxpayer labors under the disabilities of minority, or is a lunatic, or upon proof made that he was unable, by reason of sickness, to make such return in the time required by law.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §58.)
It shall be the duty of the judges of probate, clerks of the circuit court, or the clerks of other courts of record in this state to notify the tax assessor of each county of the appointment of every administrator, executor, guardian, trustee, accounting officer, or receiver within 30 days after such appointment.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §59.)
Whenever the tax assessor knows or learns of any property, real or personal, subject to taxation in his county, the owner of which he does not know and which is not embraced in any tax return made to him on or before the third Monday in January by any taxpayer, he shall list and make upon the proper blank a return describing said property according to the best information he can obtain and assess the same “owner unknown” at the amount specified by law on a fair and reasonable market value, and in any notice or advertisement or motion for judgment of sale it shall be described as so returned; and he shall also note the failure of the owner to make such return and shall also note the accrual of the penalty of 10 percent of the taxes to be assessed thereon. No lands shall be returned to “owner unknown” until the assessor shall have made a demand upon the person, if resident in the county, or by certified or registered mail, if nonresident, whose address is known, to whom such lands or property was last assessed, and the said assessor shall make a diligent inquiry to ascertain the name of the owner of said lands or property. Any assessor or deputy assessor who fails to comply with the requirements of this section shall be guilty of a misdemeanor and fined not less than $25 nor more than $500.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §60.)
The assessor shall be entitled to a fee for making returns of property which has escaped taxation of $5 for each assessment provided if the escape is for more than one year, all back years shall be made on one assessment blank, and the current year’s escape on a separate assessment for which he shall be entitled to an additional fee of $5, such fee to be added to and collected with taxes due. In case of lands lying in one body, other than lands platted and subdivided into lots, the return shall be made on said lands as a whole, unless the assessor has reason to believe that they belong to different owners, in which case when lands lying in one body and supposed to belong to the same owner, must be included in one return, and no fee shall be allowed the assessor for any return made in disregard of this provision, but the assessment of any such property thereafter made shall not for that reason be invalid.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §61; Acts 1980, No. 80-630, p. 1087, §6; Acts 1990, No. 90-535, p. 837, §1.)
The tax assessor must make and enter in an assessment book, suitably ruled and substantially bound, in forms as prescribed by the Department of Revenue, a condensed statement of all assessments made during each tax year, showing in separate columns the name of the owner, a description of the real estate and improvements thereon, the assessed value thereof and the value of the personal property assessed for taxation; and the assessor shall compute and enter opposite the name of each taxpayer the aggregate amount of state, county, and special taxes with which such taxpayer is charged, except as may otherwise be provided herein. When the hearing of objection to assessments has been completed as herein provided, the tax assessor shall complete the said book by making the proper entries therein, and foot up at the bottom of each page the aggregate of all such taxes. When appeals have been taken to the circuit court, this fact must be stated.
In counties where assessors are now allowed by law to use assessment lists in lieu of a book of assessments, the assessor shall not be required to prepare a book of assessments as provided for in this section, but in lieu thereof shall be required to arrange in alphabetical order original assessment lists and cause the same to be permanently bound, and such assessment lists, when bound, shall constitute the book of assessments as herein provided, and the certificate of the Department of Revenue or the agent or assistant thereof provided for in Section 40-7-34, shall be entered upon each of said bound volumes of assessments. Such assessment lists when bound shall be preserved permanently as a matter of record. In making the tax collectors’ abstracts, such abstracts shall be made directly from the assessment lists. The tax assessor in counties having a population of not less than 225,000 nor more than 400,000 inhabitants, according to the last or any subsequent federal decennial census, shall not be required to compute and enter opposite the name of each taxpayer the aggregate amount of state, county, and special taxes with which such taxpayer is charged.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §62; Acts 1957, No. 453, p. 615.)
After the book of assessments has been completed as provided in this title, the Department of Revenue or the agent or assistant thereof shall certify on the book of assessments that the same has been examined and corrected by him by comparing the book of assessments with the tax returns showing final valuations, both as to items of property and amounts of assessments, and that the amount of state tax is $ ______ (here give amount)______, the amount of county tax is $ ______ (here give amount) ______, the amount of special taxes is $ ______ (here give amount) ______, specifying the total amount of each of such taxes, and such certificate is to be the warrant to the tax collector of the county to proceed to collect such taxes in the manner directed by law.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §63.)
When the book of assessments has been completed, the county tax assessor must without delay make out in triplicate, upon forms to be furnished by the Department of Revenue, a complete abstract of all real and personal property as contained in the assessment book of the county, identified by each public school system of the county and listing the same for each public school system of the county therein, showing the total amount and value of each class of taxable property, including specifically the total amount and value of each class of taxable property defined in Section 40-8-1, as amended, as Class III property that is appraised according to its current use value and the total amount and value of such Class III property that is appraised according to its fair and reasonable market value, property exempt from taxation and the amount of taxes of each item, extended in a column; such abstract of assessment must be approved and certified to by the Department of Revenue, one copy of which the said tax assessor must forward to the Department of Finance not later than the second Monday in August of each year, one to the Department of Revenue at Montgomery, and the other to the tax collector by said date. The Department of Finance shall report to the Governor any tax assessor who for five days after the date required has failed to forward to the Department of Finance the abstract of assessment of the county, identified by each public school system of the county and listing the same for each public school system of the county therein, and the Governor shall forthwith require of the tax assessor an official report of the cause of the failure.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §64; Acts 1978, 2nd Ex. Sess., No. 135, p. 1868, §7; Acts 1992, No. 92-599, p. 1239, §8.)
After the book of assessments has been completed as provided in this title, the tax assessor must enter in a book in concise form the amount of taxes assessed against each taxpayer, showing separately the amount of taxes on real estate and personal property and other subjects of taxation, and the total amount of tax due, and the address of the taxpayer and the fees of the assessor with a blank for the fees of the collector, and such book he must turn over to the tax collector on or before September 15. For the services rendered by him in preparing such book he shall receive compensation to be allowed by the county commission as follows: In counties where the aggregate assessed value of real and personal property amounts to $2,000,000 or less, $100; when the assessed value amounts to more than $2,000,000 and not exceeding $4,000,000, $125; when the assessed values amount to more than $4,000,000 and not exceeding $6,000,000, $175; when the assessed values amount to more than $6,000,000 and not exceeding $8,000,000, $200; when the assessed values amount to more than $8,000,000, such compensation as may be fixed by the county commission, not less than $250 and not exceeding $600; but any assessor who fails to complete such abstract by the time required shall forfeit all right to compensation.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §65.)
It is the duty of the tax assessor of every county in the state to procure at the expense of the county a book in the form to be prescribed by the Department of Revenue, in which he shall enter a complete map and list of all the blocks and lots which have been platted, and the maps of which are recorded in the office of the judge of probate or can be procured within his county, beginning with the lowest numbered block and lot and proceeding in numerical order to the highest, with the name of the owner set opposite each block and lot. Each subdivision or addition to any town or city shall be shown by proper headings at the top of each page of such lot book and by index in the front thereof. The tax assessor shall annually make the entries thereon, for which he shall be allowed a reasonable compensation to be fixed by the governing body of the county at not less than $150 for each book of 400 pages or more; provided, that in Jefferson County, the tax assessor shall keep map books as above prescribed which shall only show the unit number of each and every parcel of property and shall show annually any change in any unit number, but not otherwise; provided, that in any county where the tax assessor is on a salary basis, the additional compensation provided for in this section shall not be applicable.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §66; Acts 1945, No. 413, p. 658, §1; Acts 1951, No. 360, p. 648.)
The tax assessor shall make, or cause to be made, a complete plat book or books of all real estate in the county, unless such book or books have already been provided, in a form to be prescribed by the Department of Revenue, in which the name of the owner shall be entered on each separate subdivision. To the person performing the work of making the plat books required by this section and Section 40-7-37, there shall be paid out of the general fund of the county a reasonable compensation, to be fixed by the governing body of the county at not less than $150 for each book of 400 pages or more, which debt shall be a preferred claim against the county; provided, that in any county where the tax assessor is on a salary basis, the additional compensation provided for in this section shall not be applicable.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §67; Acts 1945, No. 413, p. 658, §2; Acts 1951, No. 360, p. 648.)
The tax assessor shall each year, before October 1 in such year, revise the plat book provided for by Sections 40-7-37 and 40-7-38 so as to correspond with the tax returns for such year and as otherwise provided by law or by the order of the Department of Revenue.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §68; Acts 1951, No. 360, p. 648.)
In the event the tax assessor shall fail to comply with the requirements of Sections 40-7-37 through 40-7-39 in any year, he shall forfeit to the State of Alabama the sum of $500, which may be collected by the state by an action upon his official bond.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §69.)
Such maps and plat books shall be kept in the office of the tax assessor, open to the inspection of the public at all times when not in use by the assessor or the board of equalization.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §70.)
(a) The county commission, at the first regular meeting in February 2015, shall levy the amount of general taxes required for the expenses of the county, not to exceed one half of one percent of the value of the taxable property as assessed for revenue for the state as shown by the book of assessments after it shall have been corrected, at the same time levying the amount of special taxes required for the county, which levy shall be made upon the same basis of valuation provided above and, when the levy shall be made, shall certify the rate or rates of taxation and the purpose or purposes for which the tax is levied to the tax assessor of the county. The levies established as provided herein shall be assessed and collected in all subsequent tax years unless altered by the county commission in compliance with a change in the tax rate by general law not later than the last day of February prior to the effective date of the change in tax rate.
(b) Any general or special taxes levied by the county commission prior to April 10, 2014, are hereby ratified and confirmed irrespective of whether the general or special taxes were levied during the first county commission meeting held in February of any year.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §71; Act 2014-433, p. 1597, §1.)
When the tax assessor has reason to believe that any person whose property has been or is due to be assessed for taxation, either for the current tax year or any preceding year, has removed or is about to remove from the county, or that such person is closing out or going out of business by selling or disposing of substantially all of his personal property on which taxes would be due on the next following October 1, or where insolvency is impending, or where goods, wares, or merchandise are advertised for sale at auction, bankrupt, insolvent, assignment, or fire sale, or where goods, wares, or merchandise are to be sold or advertised to be sold for the satisfying of creditors, he shall at once notify the tax collector in writing, if the property has been assessed; and, if the property has not been assessed, the assessor shall at once make an assessment against the same and deliver the assessment so made to the tax collector, and on his failure to do so, he shall be liable for the full amount of the tax due on or to become due on such assessment. Advertisements in the newspapers or otherwise of a sale of any property as a closing out sale, bankrupt sale, fire sale, or any sale of like character shall be prima facie evidence that the collection of taxes due or to become due on the next following October 1 on such property is endangered within the meaning of this section.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §72.)
The tax assessor shall assess the taxes against each auctioneer, provided by law, and shall enter the same on his books as in cases of other assessments, and such assessor shall immediately make a statement of such assessment and deliver the same to the tax collector for collection. Such taxes become assessable and payable immediately upon the expiration of each such auction sale.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §73.)
From any final assessment or valuation of property for taxation made by any officer, board, or commission, when no other specific mode of appeal to or review by the circuit court of such assessment or valuation is provided, the taxpayer may appeal to the circuit court of the county in which such assessment or valuation is made. Such appeal shall be taken within 15 days from the time such assessment or valuation is entered upon the tax books or tax rolls. On such appeal the property shall be revalued for assessment by the court unless a jury is demanded by the taxpayer at the time of taking the appeal.
(Code 1923, §6096; Code 1940, T. 51, §74.)
Any taxpayer desiring to appeal under Section 40-7-45 shall file with the officer, board, or commission, or some member thereof, a notice in writing that he appeals to the circuit court, together with a bond in the sum of $100, with at least one solvent surety, payable to the State of Alabama, conditioned to prosecute such appeal to effect and, upon failure so to do, to pay all costs and damages which may be adjudged against him by the circuit court on such appeal; the bond to be approved by the probate judge or circuit clerk of the county.
(Code 1923, §6097; Code 1940, T. 51, §75.)
In the trial on appeal, the court shall direct or formulate the issue to be tried and shall determine both the facts and the law, unless a jury is demanded in writing by the taxpayer at the time of taking the appeal or within 10 days thereafter, which demand shall be filed in the court to which the appeal is taken.
(Code 1923, §6099; Code 1940, T. 51, §77.)
Upon the notice being given and bond filed as required in Section 40-7-46, the officer, board, or commission making such assessment or revaluation shall certify a statement of the assessment or valuation to the clerk of the circuit court, and the case shall be docketed in the circuit court and shall stand for trial within 10 days after it is so entered upon the docket. The valuation of the property so adjudged by the court on appeal shall be the valuation for the assessment of such property, which valuation shall be certified by the clerk of the court to the officer, board, or commission charged with the duty of valuing such property for taxation.
(Code 1923, §6098; Code 1940, T. 51, §76.)
The Department of Revenue is hereby authorized to adopt, promulgate, and enforce reasonable rules and regulations relating to the administration and enforcement of the provisions of this act not in conflict with the specific provisions thereof.
(Acts 1991, No. 91-694, p. 1340, §7.)
(a) A minimum annual contribution of three dollars ($3) may be voluntarily contributed to the Alabama Association of Rescue Squads, Inc., on the ad valorem tax return of the contributor by indicating on a check-off box which shall be provided on annual ad valorem tax statements. The check-off shall be described as the “Alabama Association of Rescue Squads, Inc.” If a taxpayer voluntarily indicates, three dollars ($3) or more may be added to his or her ad valorem tax payment and shall be paid to the appropriate person or authority administering the association.
(b) The total amount of all contributions, less costs of administration not to exceed three percent of revenue produced, shall be remitted by the person or authority collecting the amount to the executive director of the association by the tenth day of each month next succeeding that in which the contribution is paid.
(c) Each annual ad valorem tax statement form for the lien date October 1, 2015 tax year and each year thereafter shall contain a designation as follows:
“Alabama Association of Rescue Squads, Inc.
“Check ( ) if you wish to designate $3 or more to be added to your ad valorem tax payment.”
(d) Each taxpayer required to make an ad valorem tax payment who wishes to contribute to the Alabama Association of Rescue Squads, Inc., may designate, by placing an “X” in the appropriate box on the ad valorem tax payment form and the contribution shall be credited to the association.
(e) The commissioner of the department may prescribe and implement such forms and rules as shall be necessary to carry out the intent of this section.
(Act 2015-208, §1.)
(a) Prior to October 1, 2014, the Department of Revenue shall design a non-itemized business personal property tax return short form “short form tax return” which, at the taxpayer’s option, may be utilized for reporting total taxable tangible business personal property assets with original acquisition costs equal to or less than ten thousand dollars ($10,000) under the provisions of this article and any rules promulgated by the department related thereto. Any taxpaying entity utilizing the short form return agrees to a business personal property tax liability for that applicable tax year that is based upon taxable tangible business personal property assets valued at ten thousand dollars ($10,000), and that the submission of such short form return by the taxpayer is a declaration to the county assessing official or other applicable agency that the property is to be valued at ten thousand dollars ($10,000) for all taxable tangible business personal property assets.
(b) Effective October 1, 2014, and subject to the provisions of this article, any taxpaying entity required to file a business personal property tax return with a county assessing official or other applicable agency may file the short form tax return if: (1) the taxpayer has previously filed with the county assessing official or other applicable agency an itemized business personal property tax return in which the total original acquisition cost of all the taxpaying entity’s taxable tangible business personal property assets resulted in a total amount equal to or less than ten thousand dollars ($10,000); and (2) the taxpayer’s total original acquisition cost of all taxable tangible business personal property assets for the current tax year results in the taxpaying entity’s total amount of taxable tangible business personal property assets being equal to or less than ten thousand dollars ($10,000). The tax liability for any taxpayer filing the short form tax return shall be calculated by the county assessing official or other applicable agency based upon a value of ten thousand dollars ($10,000), and otherwise in accordance with subsection (a).
(c) Once a taxpaying entity has filed a business personal property tax return which includes a detailed itemized listing of all taxable tangible business personal property assets with the county assessing official or other applicable agency as required in subsection (b)(1), the taxpayer may file the short form tax return in each consecutive year that the total original acquisition cost of all taxable tangible business personal property assets remains equal to or less than ten thousand dollars ($10,000).
(d) In the event the total original acquisition cost of all the taxpayer’s taxable tangible business personal property assets exceeds ten thousand dollars ($10,000), the taxpayer shall be required to file a business personal property tax return which includes an itemized listing of all taxable tangible business personal property assets with the county assessing official or other applicable agency as otherwise required by law and shall pay taxes calculated based upon the assets itemized in the tax return.
(e) All short form tax returns shall be subject to audit by the appropriate county assessing official or other applicable agency, in the discretion of such official or agency. Such an audit may include the requirement that the taxpaying entity provide an itemized listing of all taxable tangible business personal property. Additionally, any taxpayer who knowingly submits a false or incorrect short form tax return shall be subject to penalties equaling 50 percent of any additional taxes owed. Further, any relevant and otherwise applicable state or local laws providing for penalties, fines, or fees for violations of tax return filings shall have full effect under the tax returns applicable to this article and shall not be limited or abrogated by any provision hereunder.
(Act 2014-415, p. 1520, §1.)
(a) No later than September 30, 2016, the Department of Revenue shall develop, maintain, and administer an online business personal property tax filing system that allows any taxpayer required to file a business personal property tax return with any county assessing official or applicable agency the ability and option to electronically file the return through the electronic filing system which will be submitted to the county assessing official or applicable agency where the tax return is required to be filed. The system shall be optional for any taxpayer and shall be known as the Optional Personal Property Assessment Link or OPPAL. All Alabama taxing jurisdictions shall allow taxpayers to utilize and access the OPPAL system for filing any business personal property return. The online system shall be available for use in tax periods beginning on and after October 1, 2016, provided the taxpayer complies with this article and any rules promulgated by the Department of Revenue for the administration and use of the system. The OPPAL system shall be utilized only for the filing of business personal property tax returns and shall not provide for the administration or enforcement of business personal property taxes. The OPPAL system shall allow a third party authorized by the taxpayer to file a business personal property tax return on behalf of the taxpayer utilizing a standardized web interface as prescribed by the department.
(b) There shall be no charge to either the taxpayer or a local taxing jurisdiction for the utilization or access of the OPPAL system.
(c) The system developed and implemented pursuant to subsection (a) shall have the capability to allow any applicable taxpayer to electronically file a business personal property tax return with the county assessing official or other applicable agency in each taxing jurisdiction in which the taxpayer is required to file a business personal property tax return. The electronically filed return shall contain all information included in the standard paper tax return and all information included in the electronically filed return shall be electronically available to each appropriate local taxing jurisdiction at the time filed by the taxpayer.
(Act 2014-415, p. 1520, §2.)
(a) No taxpayer shall be required to use the OPPAL system for filing business personal property tax returns; provided, however, that any taxpayer utilizing the system shall comply with this article and any rules promulgated by the Department of Revenue for the administration of this article. Additionally, any taxpayer utilizing the system shall comply with any rules of the local taxing jurisdiction regarding payment, administration, and enforcement of the business personal property tax law.
(b) All penalties and interest assessed according to state law for failure to properly and timely file a business personal property tax return or for payment of such taxes shall apply to filings made through the OPPAL system.
(Act 2014-415, p. 1520, §3.)
(a)(1) To ensure that local taxing jurisdictions have meaningful input into the development and operation of OPPAL, a state and local advisory committee is hereby established to review the design and operation of the system and to make recommendations regarding the system requirements and functionality to the Commissioner of Revenue.
(2) The advisory committee shall consist of the following individuals:
a. Two local tax officials appointed by the Association of Alabama Tax Administrators.
b. Two local tax officials appointed by the Alabama Association of Assessing Officials.
c. One county commissioner appointed by the Association of County Commissioners of Alabama.
d. One probate judge who serves as chair of the county commission appointed by the Alabama Probate Judges Association.
e. One representative of the business community, appointed by the Business Council of Alabama.
f. One representative of the retail community appointed by the Alabama Retailers Association.
g. One representative of the business community, appointed by the Alabama Chapter of the National Federation of Independent Businesses.
h. One representative of the Alabama Department of Revenue, appointed by the Revenue Commissioner, who shall serve as chair of the advisory committee.
(3) The advisory committee members shall receive no compensation or reimbursement of expenses from the state for serving on the advisory committee.
(b) The advisory committee shall meet with the Commissioner of Revenue and other employees of the Department of Revenue as the commissioner deems appropriate. The initial meeting of the advisory committee shall be at a time and place to be determined by the chair of the advisory committee and shall be held no later than September 30, 2014. At the initial meeting, the advisory committee shall organize itself and shall determine the timing and frequency of subsequent meetings.
(c) The role of the advisory committee shall be limited to providing input and recommendations on the development and functionality of the OPPAL system with relation to the filing of business personal property tax returns utilizing the OPPAL system. The advisory committee shall make no review of the Department of Revenue’s administration of property taxes or any other department matter beyond the OPPAL system.
(d) If the Revenue Commissioner fails to act on recommendations made by the advisory committee regarding OPPAL, the advisory committee, by majority vote, may appeal to the Legislative Council for a determination on whether the committee’s recommendations shall be implemented. The determination of the Legislative Council shall be final.
(Act 2014-415, p. 1520, §4.)
Notwithstanding any other provision of this article, no county property tax commissioner, county revenue commissioner, or similar county tax assessing or tax collecting official shall be prevented from providing an electronic system for the filing of any applicable business personal property tax returns through a system other than and as an alternative to the OPPAL system, nor shall any county property tax commissioner, county revenue commissioner, or similar county tax assessing or tax collecting official be prevented from enforcing mandatory electronic filing of a business personal property tax return pursuant to any local act of the Legislature.
(Act 2014-415, p. 1520, §5.)
It shall be the function, duty, and responsibility of the Department of Revenue to periodically inspect and supervise the implementation and program of reappraisal of all property in the State of Alabama and to regulate, according to a definite schedule, the individual county-by-county reappraisal of such property.
(Acts 1971, 3rd Ex. Sess., No. 160, p. 4404, §1.)
The Department of Revenue shall prescribe procedures and shall set standards for the work to be done under this program. Any contract for services required by a county pursuant to the appraisal of property under this division shall be approved by the Department of Revenue, and the work required to be performed shall not be considered finished until the standards of work applied and performed have been inspected and approved by the Department of Revenue.
(Acts 1971, 3rd Ex. Sess., No. 160, p. 4404, §2.)
Each county governing body of this state, through its respective tax assessor, shall have the property of such county appraised at its fair and reasonable market value, which fair and reasonable market value shall be the basis of assessments for ad valorem taxes.
(Acts 1971, 3rd Ex. Sess., No. 160, p. 4404, §3.)
The appraisal of property shall be commenced and completed for each county at the earliest dates consistent with good business and sound appraisal practices, but in any event completed not later than two years from January 19, 1972.
(Acts 1971, 3rd Ex. Sess., No. 160, p. 4404, §4.)
The Department of Revenue shall prescribe for the counties the procedures to be followed, standards to be met, forms to be used, records to be kept and progress reports to be filed. The Department of Revenue shall also design a permanent uniform record system which shall be used by all counties for maintaining records of property ownership and property values.
(Acts 1971, 3rd Ex. Sess., No. 160, p. 4404, §5.)
The Department of Revenue may, with the approval of the Governor, employ any appraisal firms employing a duly accredited member or members of the American Institute of Real Estate Appraisers as consultants to inspect the various systems of assessing in each county and to advise the Department of Revenue of the best procedures to be followed in the several counties so as to expedite the statewide reappraisal as required by law; provided, that any firms or appraisers hired by the state Department of Revenue or by local government shall be bona fide residents of the State of Alabama and shall have resided in the state for at least one year prior to January 19, 1972.
(Acts 1971, 3rd Ex. Sess., No. 160, p. 4404, §6.)
The Department of Revenue shall consult and advise with the governing bodies and tax assessors as to its findings in each county and, after consultation, determine the chosen system of appraisal to be put into effect without delay in order that the assessments for ad valorem taxes in each such county may be equalized at the earliest possible date. Furthermore, a general schedule for completion of the various stages of appraisal for each county shall be agreed upon by the Department of Revenue and respective tax assessor and county governing body within the limits prescribed by this division and shall be forthwith certified by the Department of Revenue.
(Acts 1971, 3rd Ex. Sess., No. 160, p. 4404, §7.)
(a) Should any county fail or refuse for any reason to comply with the provisions of this division, the Department of Revenue shall employ qualified appraisers and/or let any contract necessary to accomplish the requirements of its directives and legal requirements as to property reappraisal.
(b) When it becomes necessary for the Department of Revenue to reappraise any county for the purpose of ad valorem taxation equalization, the Department of Revenue shall hire the necessary personnel from an employment register furnished them by the State Personnel Department. When any of the several counties elects to reappraise its particular county under the requirements and criteria set up by the Department of Revenue for such reappraisal program, the employees of the several counties shall meet the same requirements as set forth by the Department of Revenue for the state without becoming employees of the state Merit System. Approved appraisers must be certificate holders or members of a recognized appraisal association or have at least five years’ appraisal experience certified to by recognized lending associations, such as banks or companies who are approved by the Veterans Administration or the U.S. Department of Housing and Urban Development or Federal Reserve Board.
(Acts 1971, 3rd Ex. Sess., No. 160, p. 4404, §8.)
The cost of any program for the equalization of ad valorem taxes shall be prorated by each county governing body to each agency therein on the basis of the proportion of the moneys received by each agency in the county to the total amount received by all agencies of such county.
(Acts 1971, 3rd Ex. Sess., No. 160, p. 4404, §9.)
The county governing bodies of the several counties are hereby authorized to issue any revenue bonds or warrants deemed essential in accordance with existing statutes and laws of the State of Alabama to meet their financial obligations under a property reappraisal program; provided, that any revenue bonds or warrants issued for a property reappraisal program other than that required by this article shall be approved by the Legislature. The heretofore stated provision for financing is hereby authorized to be applied by the state to cover the expenses necessarily incurred to finance the reappraisal of property in any and all counties, whenever it shall become necessary for the Department of Revenue to conduct the property reappraisal program in such county. The proceeds from such bonds or warrants issued by the state or county shall be repaid on the same proration basis as set out previously in Section 40-7-68.
(Acts 1971, 3rd Ex. Sess., No. 160, p. 4404, §10.)
There is hereby appropriated to the Department of Revenue the sum of $250,000 per annum to be used by said department to pay the expense of its compliance with the provisions of this division and to establish a fund which shall be used by the said department to maintain a program for the equalization of ad valorem tax assessments in this state. Whenever the amount in this fund exceeds the sum of $2,500,000, such excess shall revert to the General Fund of the state. This appropriation shall commence on January 19, 1972. This appropriation shall be over and above any expense incurred by the Department of Revenue in the event it becomes necessary for the Department of Revenue to reappraise any particular county or contract for the reappraisal of any county. Furthermore, the aforementioned appropriation of $250,000 per annum shall be credited against the state’s portion of that expense for carrying out the reappraisal program in each of the several counties of the state. Should it become necessary for the Department of Revenue to reappraise and equalize, or make any contract for the reappraisal and property equalization of any county, the state is hereby authorized to charge the respective county governing body with only that part of the expense which would be the pro rata share normally charged to each local governmental agency of the county; and the state shall contribute its pro rata share, and the same shall be credited against the total expenditure involved for each such county.
(Acts 1971, 3rd Ex. Sess., No. 160, p. 4404, §11.)
Where the property of a county has been appraised at its fair and reasonable market value as required by this division to the reasonable satisfaction of the Department of Revenue, this fact shall be certified to the county board of equalization and to the tax assessor of such county, and such values shall be the basis for the equalization of the assessments for ad valorem taxes in such county for the next tax year. The fair and reasonable market values certified shall be prima facie correct for assessments for such tax year, but shall be subject to review by the county board of equalization which after a hearing of the complaint of a property owner shall fix the fair and reasonable market value at the amount it deems to be proper. The county board of equalization shall not hold a hearing as provided herein without giving due notice of such hearing to the county governing body and the Department of Revenue, one or both of which shall be represented at such hearing. Either the property owner or the state may appeal from the finding of the county board of equalization. Such appeal shall be to the circuit court of the county where the property is located. The hearing granted by the county board of equalization shall be in accordance with the procedure set out in Section 40-3-16; provided, that the board may begin the hearing of protests as soon as property owners have been notified of the fair and reasonable market value attributed to their property and shall continue sitting for the purpose of such hearings until all who protest have been heard. Where the members of the county board of equalization are paid on a per diem basis, compensation for any days the members are required to perform duties under this division which are in addition to the days for which they will be paid under normal appropriations and allocations shall be paid by the county governing body from the funds provided by this division.
(Acts 1971, 3rd Ex. Sess., No. 160, p. 4404, §12.)
There is hereby appropriated to the Department of Revenue to be used in the program of ad valorem tax equalization provided for in this division, and shall be paid over to the Department of Revenue for this purpose, any other law to the contrary notwithstanding, for the fiscal year ending September 30, 1972, $1,000,000, and for the year ending September 30, 1973, $3,000,000, which amounts shall be the first claim against the funds from which appropriated. The funds here appropriated shall be drawn one third from any Alabama Beverage Control Board income otherwise required by law to be distributed to the several counties and two thirds from the tax levied by Section 40-21-58. This division shall in no way change the distribution of the remainder of the funds from which these appropriations are made.
The funds hereby appropriated shall be used by the Department of Revenue to finance the reappraisal program required by this division in any county which for any reason cannot issue the bonds or warrants provided for in Section 40-7-69. Any amount expended by the Department of Revenue on behalf of any county, less the part of the cost to be borne by the state, shall be repaid to the state with interest at the rate of five percent per annum, one tenth of the total for each of 10 successive years beginning with the fiscal year next following the year for which the reappraised values are used as a basis for ad valorem tax assessments. This obligation shall be the first claim against any ad valorem taxes collected in a county for which the funds provided herein are used. The state and each agency of such county shall bear its pro rata share of the costs on the basis of the revenue received from ad valorem taxes. The amounts repaid to the state shall be redistributed to the funds from which appropriated.
(Acts 1971, 3rd Ex. Sess., No. 160, p. 4404, §13.)
The statewide property reappraisal program shall be administered by the Commissioner of Revenue, State of Alabama, and supervised by the chief of the ad valorem tax division.
(Acts 1971, 3rd Ex. Sess., No. 160, p. 4404, §15.)
Any public official having responsibility in the statewide equalization program who deliberately commits any act or deed to avoid or in any way frustrate the provisions or intent of this article shall be charged with a misdemeanor and shall, if convicted, be subject to a fine of not more than $500 for each such offense.
(Acts 1971, 3rd Ex. Sess., No. 160, p. 4404, §14.)
(a) Pursuant to this division, the Alabama Department of Revenue shall immediately initiate the implementation of a program of reappraisal of all taxable property in Marshall County.
(b) Prior to the completion of the reappraisal provided in subsection (a), the valuations of taxable property in Marshall County for the current taxable year shall be the same as the valuations for the 1995 taxable year.
(Act 97-811, 1st Ex. Sess., §§1, 2.)
For purposes of this division, the following terms shall have the respective meanings ascribed by this section:
(1) COUNTY. Each county in the state.
(2) GOVERNING BODY. The commission or other governing body of a county.
(3) MUNICIPALITY. A municipal corporation in the state.
(4) STATE. The State of Alabama.
(5) PROPERTY REAPPRAISAL ACT. Division 1 of this article.
(6) APPRAISAL COSTS. The costs of the appraisal of property in a county made pursuant to the requirements of the Property Reappraisal Act.
(7) TAX RECIPIENT BODY. The state, the county, each municipality located wholly or partly within the corporate limits of such county, the board of education of such county, each city board of education organized with respect to a municipality located wholly or partly within the county, each public hospital corporation (including each public hospital board, public hospital association, or other public hospital corporation) that receives, under any statute or constitutional amendment, any part of an ad valorem tax levied for public hospital purposes, and every other public body or public entity that receives, pursuant to any statute or constitutional amendment, any part of the proceeds from any ad valorem tax levied in the county or in any part thereof.
(Acts 1973, No. 1092, p. 1855, §2.)
It is the intention of the Legislature by the passage of this division to authorize each county in the state to finance, by the sale and issuance of interest-bearing warrants of such county, the payment of all or part of the costs of the appraisal of property in such county that is required by the provisions of Division 1 of this article. This division shall be liberally construed in conformity with the said intention.
(Acts 1973, No. 1092, p. 1855, §1.)
Each county shall have the power from time to time to sell and issue interest-bearing warrants of such county for the purpose of paying appraisal costs or any part thereof. Such warrants may be in such denomination or denominations, may have such maturity or maturities not exceeding 20 years from their date, may bear interest from their date at such rate or rates payable at such times, may be payable at such place or places within or without the state, may be sold at such time or times and in such manner, whether publicly or privately, may be executed in such manner and may contain such terms not in conflict with the provisions of this division, all as the governing body of such county may provide in the proceedings wherein the warrants are authorized to be issued. All such warrants shall evidence general obligation indebtedness of the county by which they are issued, and the full faith and credit of the county shall be irrevocably pledged for the payment of the principal thereof and interest thereon. The proceeds derived from the sale of any such warrants shall be used solely for the purpose for which they are authorized to be issued, including the payment of any expenses incurred in connection with the issuance thereof.
(Acts 1973, No. 1092, p. 1855, §3.)
The governing body of the county issuing any such warrants may, in its discretion, assign and specially pledge for the payment of the principal of and interest on such warrants, so much as may be necessary for said payment of any one or more of the following (or any part thereof):
(1) The general annual ad valorem tax of one half of one percent which the county is authorized to levy without reference to the purpose thereof under the provisions of Section 215 of the Constitution of Alabama of 1901.
(2) The proceeds from any other tax (including any ad valorem tax and any privilege, license, or excise tax) that at the time of the issuance of the said warrants may lawfully be used by the county for payment of such principal and interest.
(3) Any other revenues of, or funds available to, the county that at the time of the issuance of the said warrants may lawfully be used by the county for payment of such principal and interest, including (but without limiting the generality of the foregoing) any payments that may be payable to the county under the proration provisions of Division 1 of this article.
To the extent necessary and sufficient for making the payments in respect of which such pledge is made, any tax or other revenues or funds pledged pursuant to the provisions of this section shall constitute a trust fund or funds which shall be impressed with a lien in favor of the holders of the warrants to the payment of which such sums are pledged. In the event that more than one pledge should be made with respect to any tax, revenues, or funds, the pledge of which is herein authorized, then such pledges shall take precedence in the order in which they are made unless the proceedings making such pledge shall expressly provide that such pledge shall be on a parity with or subordinate to a subsequent pledge thereof. All warrants for which the pledge authorized in this section may be made shall constitute preferred claims against that portion of the said tax or taxes, revenues, or funds so pledged (subject to any prior lawful pledges thereof that may then have been made pursuant to the provisions of this or any other statute) and shall have preference over claims incurred for appraisal costs and any other claims for any other purpose whatsoever.
(Acts 1973, No. 1092, p. 1855, §4.)
Each such county may in like manner from time to time issue refunding warrants, either by sale or by exchange, for the purpose of refunding a like or greater principal amount of warrants then outstanding which were issued under the provisions of this division and the interest thereon and paying any premium necessary to be paid to retire the outstanding warrants refunded thereby. The provisions of this division applicable to the warrants so refunded shall likewise be applicable to such refunding warrants.
(Acts 1973, No. 1092, p. 1855, §5.)
Unless otherwise directed by the court having jurisdiction thereof or by the document that is the source of authority, a trustee, executor, administrator, guardian, or one acting in any other fiduciary capacity may, in addition to any other investment powers, invest trust funds in warrants issued under the provisions of this division.
(Acts 1973, No. 1092, p. 1855, §6.)
The issuance of warrants and any interest coupons applicable thereto, pursuant to the provisions of this division and in accordance with the authorization of the governing body of the county issuing such warrants, shall be deemed to constitute an audit and allowance by such governing body of a claim, in the aggregate principal amount of such warrants and interest coupons, against the county and against any tax proceeds and any revenues or funds, or any thereof, pledged for payment of such warrants pursuant to the provisions of this division. No proof of registration or other audit or allowance of such claim shall be required, and such warrants and interest coupons shall, from and after the date of their lawful issuance, be deemed to be allowed claims against the county by which they were issued and against any tax proceeds, revenues and funds, or any of them, so pledged thereof.
(Acts 1973, No. 1092, p. 1855, §7.)
Insofar as the provisions of this division may be inconsistent with the provisions of any other law, the provisions of this division shall control, it being hereby specifically declared that the provisions of Section 11-8-10 shall not be applicable to the warrants issued under the provisions of this division.
(Acts 1973, No. 1092, p. 1855, §8.)
The principal of and interest on the warrants issued under the provisions of this division are hereby declared to be lawful costs of the equalization program referred to in Division 1 of this article and to be lawful and necessary governmental costs of the assessment and collection of ad valorem taxes levied in the county issuing said warrants required by law to be paid as part of the current governmental operating expenses of each tax recipient body receiving proceeds from ad valorem taxation in said county. The principal and interest shall be paid pro rata by each such tax recipient of such county and by the State of Alabama in the proportions which the amount of ad valorem tax received by each tax recipient body, including the State of Alabama, bears to the total amount of ad valorem tax received by all. For that purpose, the tax collector of each county issuing warrants under this division is hereby ordered and directed to withhold and pay over to said county, from the gross proceeds of each annual collection of ad valorem taxes on property in said county, the pro rata shares to be borne by each tax recipient body of the principal of and interest on said warrants maturing in that same fiscal year. The said shares shall be payable solely out of the proceeds from said ad valorem taxes collected during the then current fiscal year and allocable to each tax recipient body, including the State of Alabama. Notwithstanding the foregoing provisions of this section, the principal of and interest on any warrants issued under the provisions of this division shall, in any and all events, be payable as general obligations of said county and from any taxes, revenues, or funds referred to in Section 40-7-93 that may have been specifically pledged for such payment, regardless of the sufficiency for any reason whatsoever of the payment to the county of the aforesaid pro rata shares by or in behalf of any other tax recipient body.
(Acts 1973, No. 1092, p. 1855, §9.)
Any warrants issued by a county under the provisions of this division for the purpose of paying the cost of reappraisal of property as required by Division 1 of this article are hereby exempted from the laws of the State of Alabama governing usury or prescribing or limiting interest rates, including, without limitation, the provisions of Chapter 8 of Title 8.
(Acts 1975, No. 1129, p. 2223, §1.)
The provisions of and powers conferred by this division shall be supplemental to the provisions of and powers conferred by Division 1 of this article.
(Acts 1973, No. 1092, p. 1855, §10.)
(a) On and after October 1, 1978, with respect to ad valorem taxes levied by the state, and, unless otherwise provided, with respect to ad valorem taxes levied by a county, municipality, or other taxing authority other than the state, all taxable property shall be divided into the following classes and no other and shall be assessed for ad valorem tax purposes at the following ratios of assessed value to the fair and reasonable market value of such property, or, as may be provided by law, to the current use value of such property:
CLASS I. All property of utilities used in the business of such utilities, 30 percent.
CLASS II. All property not otherwise classified, 20 percent.
CLASS III. All agricultural, forest, and residential property, and historic buildings and sites, 10 percent.
CLASS IV. All private passenger automobiles and motor trucks of the type commonly known as “pickups” or “pickup trucks” owned and operated by an individual for personal or private use and not for hire, rent, or compensation, 15 percent.
(b) As used herein, the following terms shall have the following meanings, respectively, unless the context clearly indicates otherwise:
(1) AGRICULTURAL AND FOREST PROPERTY. All real property used for raising, harvesting, and selling crops or for the feeding, breeding, management, raising, sale of, or the production of livestock, including beef cattle, sheep, swine, horses, ponies, mules, poultry, fur-bearing animals, honeybees, and fish, or for dairying and the sale of dairy products, or for the growing and sale of timber and forest products, or any other agricultural or horticultural use or animal husbandry and any combination thereof.
(2) HISTORIC BUILDINGS AND SITES. Regardless of the use to which such property is put, all buildings or structures (i) determined eligible by the state historic preservation officer for listing on the National Register of Historic Places; or (ii) located in a registered historic district and certified by the United States Secretary of the Interior as being of historic significance to the district.
(3) PRIVATE PASSENGER AUTOMOBILES AND MOTOR TRUCKS OF THE TYPE COMMONLY KNOWN AS “PICKUPS” OR “PICKUP TRUCKS” OWNED AND OPERATED BY AN INDIVIDUAL FOR PERSONAL OR PRIVATE USE AND NOT FOR HIRE, RENT, OR COMPENSATION. All private passenger automobiles, as that term is defined in Sections 40-12-240, subdivision (17), and 40-12-241; and all motor trucks of the type commonly known as “pickups” or “pickup trucks,” weighing not exceeding 8,000 pounds gross weight.
(4) PROPERTY NOT OTHERWISE CLASSIFIED. All real and personal property which does not fall within any one or more of Classes I, III, and IV.
(5) PROPERTY OF UTILITIES. All property assessed for taxation by the Department of Revenue pursuant to the provisions of Chapter 21 of this title; provided, that after September 30, 1979, and only to the extent required by Title III, § 306 of Pub. L. 94-210 (the Railroad Revitalization and Regulatory Reform Act of 1976, codified as 49 U.S.C. § 26c), “transportation property,” as that term is defined in the aforesaid statute, as heretofore or hereafter amended, or in any subsequent statute of similar import, shall not be assessed as Class I property and customer-owned coin-operated telephone companies shall not be assessed as Class I property.
(6) RESIDENTIAL PROPERTY. a. Real property, used by the owner thereof exclusively as the owner’s single-family dwelling. This includes an owner who resides on the property and remains in possession of the property after it is sold at a tax sale.
b. Residential property shall include single-family dwellings and the fully-developed underlying lot owned by a home builder holding a valid and current license from the Home Builders Licensure Board or who is otherwise authorized by the board to construct single-family homes until sold or used for a purpose other than as a single-family dwelling; provided that this classification shall not exceed a period of 24 months from the date the owner home builder applies for the classification as provided herein.
(c) The single-family dwelling and the fully-developed underlying lot as described in paragraph b. of subdivision (6) of subsection (b) may be reclassified as Class III, rather than Class II, as authorized by Act 2011-544 based on the property owner filing documentary evidence of the date construction begins or the date the lot is fully developed pursuant to rules promulgated by the Department of Revenue, which rules shall include what documents may be accepted to qualify as Class III. The property shall be reclassified as Class II property until approved documentation is properly filed with the tax assessing official pursuant to the rules of the department. The authorization for the property to be reclassified as residential property shall not exempt the property from the provisions of Section 40-7-25.3, which shall apply to all property seeking the reclassification as residential property authorized by Act 2011-544.
(d) The reclassification of property authorized by subsection (c) shall terminate when one of the following occurs:
(1) The classification has been in place for 24 months.
(2) The owner no longer holds a valid license or authorization from the Home Builders Licensure Board.
(3) The sale, transfer, or any other action or inaction resulting in the single-family dwelling or the fully-developed underlying lot no longer being held by the person, firm, or corporation first seeking the reclassification.
(e) Fully-developed lots that on September 1, 2011, are within a platted and recorded subdivision and fully comply with the subdivision regulations applying to the subdivision, classified as Class II property, and owned by the person or firm originally platting the subdivision or owned by a person or firm authorized or licensed by the Home Builders Licensure Board to construct single-family homes may be reclassified as Class III property for the two tax years immediately following September 1, 2011. Notwithstanding the foregoing, in order to qualify for the reclassification, the owner shall properly file with the tax assessing official documentation required pursuant to the rules of the department.
(f) Wherever any statute provides for, limits, or measures the power or authority of any county, municipality, or other taxing authority to levy taxes, borrow money, or incur indebtedness in relation to the assessment of property therein for state taxes or for state and county taxes, such provision shall mean as assessed for county or municipal taxes.
(g) The following property shall be exempted from ad valorem taxation: The real and personal property of the state, counties, and municipalities and real and personal property devoted exclusively to religious, education, or charitable purposes. The property of Masonic lodges, Knights of Columbus homes, and union halls shall be exempt when used exclusively for the purposes and business of such organizations. All property now exempt by law shall continue to be exempt from taxation until changed by law.
(h) The Department of Revenue shall have authority to promulgate rules and regulations for the uniform identification and assessment of manufactured homes.
(i) In the event an owner’s single-family dwelling is destroyed or damaged to the extent that the dwelling is uninhabitable, the property shall retain its classification as residential property while the dwelling is being rebuilt or restored to an inhabitable state for a period of not to exceed 24 months from the date of the destruction or damage. If the destroyed or damaged dwelling is not rebuilt or restored to an inhabitable state as the owner’s single-family dwelling within 24 months from the date of the destruction or damage or the property is converted at any time to a use other than as the owner’s single-family dwelling, the property shall lose its classification as residential property.
The owner may request an extension not to exceed an additional 24 months upon submission of proof that the work necessary to rebuild or restore the destruction or damage could not be contracted or if contracted could not be completed within 24 months from the date of the destruction or damage.
(j) Property classified as residential property shall not lose its classification as residential property for a period of 24 months if the property is not used as the owner’s single-family dwelling because the property is not inhabitable or is otherwise under repair after being damaged by a natural disaster such as a tornado or hurricane.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §17; Acts 1961, Ex. Sess., No. 153, p. 2101; Acts 1967, No. 502, p. 1215; Acts 1971, 3rd Ex. Sess., No. 166, p. 4416, §1; Acts 1973, No. 1216, p. 2062; Acts 1978, 2nd Ex. Sess., No. 46, p. 1724, §2; Acts 1988, 1st Ex. Sess., No. 88-824, p. 265, §3; Acts 1989, No. 89-639, p. 1249; Acts 1991, No. 91-694, p. 1340, §5; Act 99-399, p. 663, §1; Act 2009-508, p. 937, §1; Act 2011-544, p. 996, §2; Act 2011-710, p. 2192, §1.)
The rate of taxation for state purposes shall be sixty-five one-hundredths of one percent per annum on the assessed value of the taxable property within this state.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §18.)
There is hereby levied for the purpose and upon the property hereinafter named and not specifically exempted from taxation annual taxes, as follows:
(1) For the maintenance of the public schools of this state, $.30 on each $100 of the assessed value of taxable property.
(2) For the relief of needy Confederate soldiers and sailors, resident citizens of Alabama and their widows, $.10 on each $100 of the assessed value of taxable property of which one percent of the gross amount collected will be expended by the Alabama Historical Commission to provide for capital improvements and maintenance at the Confederate Memorial Park at Mountain Creek, Chilton County, Alabama.
(3) For the use of the state and to raise revenue therefor, $.25 on each $100 of the assessed value of taxable property.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §19; Acts 1975, No. 1187, p. 2319, §1.)
(a) During the ad valorem tax year beginning October 1, 1978, with respect to any ad valorem tax levied by a county, municipality, or other taxing authority other than the state, the governing body of any such county, municipality, or other taxing authority may at any time, effective for ad valorem tax years beginning on and after October 1, 1978, increase or decrease the ratio of assessed value to the fair and reasonable market value or, as may otherwise be provided by law, to the current use value, as the case may be (herein called “the assessment ratio”), of any class of taxable property within the limits prescribed in the Constitution; provided, that the county, municipality, or other taxing authority meets the criteria contained in this section. If the receipts from any ad valorem tax with respect to which any assessment ratio has been so adjusted by any taxing authority during the ad valorem tax year beginning October 1, 1978, exceed by more than five percent, or are less than 95 percent of, the receipts from such ad valorem tax for the ad valorem tax year beginning October 1, 1977, then for the ad valorem tax years beginning on and after October 1, 1979, the taxing authority may adjust any assessment ratio with respect to such ad valorem tax in the manner provided for adjustments made during the ad valorem tax year beginning October 1, 1978. On and after October 1, 1979, the governing body of any county, municipality, or other taxing authority may at any time increase or decrease the assessment ratio applicable to any class of taxable property; provided, that any proposed adjustment to an assessment ratio to be made pursuant to this sentence, whether an increase or a decrease, shall have been (1) proposed by the governing body of the taxing authority after a public hearing on such proposal, (2) thereafter approved by an act of the Legislature and (3) subsequently approved by a majority vote of the qualified electors residing in the taxing authority who vote on the proposal at a special election called and held in accordance with the law governing special elections; and provided further, that the county, municipality, or other taxing authority meets the criteria contained in this section.
(b) In determining whether any assessment ratio applicable to any class of taxable property may be increased or decreased by any such county, municipality, or other taxing authority pursuant to this section, the following criteria shall be applied:
(1) If, on any October 1, the total assessed value of all property classified in any one class of taxable property located in the county, municipality, or other taxing authority constitutes more than 50 percent of the assessed valuation of all taxable property in the county, municipality, or other taxing authority, the assessment ratio with respect to that class of taxable property may be decreased up to a maximum of five percent differential from the rates set forth in subsection (a) of Section 40-8-1, as amended.
(2) If, on any October 1, the total assessed value of all properties classified in any one class of taxable property located in the county, municipality, or other taxing authority constitutes less than 20 percent of the assessed valuation of all taxable property in the county, municipality, or other taxing authority, the assessment ratio with respect to that class of taxable property may be increased up to a maximum of five percent differential from the rates set forth in subsection (a) of Section 40-8-1, as amended.
(3) If, on any October 1, the total assessed value of all properties classified in any one class of taxable property located in the county, municipality, or other taxing authority constitutes more than 75 percent of the assessed valuation of all taxable property in the county, municipality, or other taxing authority, the assessment ratio with respect to that class of taxable property may be decreased up to a maximum of five percent differential, and each assessment ratio of properties classified in any class of taxable property other than the aforementioned class of taxable property may be increased up to a maximum of five percent differential, from the rates set forth in subsection (a) of Section 40-8-1, as amended.
(c) Any action authorized by this section to be taken by a taxing authority or the governing body thereof shall, if there is no such governing body, be taken by resolution of the governing body of the county in which such taxing authority is located acting on behalf of such taxing authority.
(Acts 1978, 2nd Ex. Sess., No. 46, p. 1724, §3.)
Each taxpayer who was assessed and who paid a higher amount of state, county, or municipal ad valorem tax as a result of the completion of a countywide property reappraisal, and the implementation of the newly appraised property values as the tax base in that county, between October 1, 1975, and November 7, 1978, shall be entitled to a credit against his tax liability arising under the same tax or taxes, in the amount of the increase which resulted from said reappraisal, to be used during such tax year or years as the taxpayer elects until the credit is exhausted.
(Acts 1978, 2nd Ex. Sess., No. 46, p. 1724, §4.)
The following property and persons shall be exempt from ad valorem taxation and none other:
(1) All bonds of the United States and this state and all county and municipal bonds issued by counties and municipalities in this state, all property, real and personal, of the United States and this state and of county and municipal corporations in this state; all cemeteries, all property, real and personal, used exclusively for religious worship, for schools or for purposes purely charitable; provided, that property, real or personal, owned by any educational, religious, or charitable institution, society or corporation let for rent or hire or for use for business purposes shall not be exempt from taxation, notwithstanding that the income from such property shall be used exclusively for education, religious, or charitable purposes; all mortgages, together with the notes, debts, and credits secured thereby on real and personal property situated in this state, which mortgages have been filed for record and the privilege tax paid thereon; all security agreements and security interests under the Uniform Commercial Code, together with the notes, debts, and credits secured thereby; all money on deposit in any bank or banking institution and all other solvent credits; and all warrants issued by county boards of education and city boards of education for the purpose of erecting, repairing, or furnishing school buildings, or for other school purposes.
(2) All property, real or personal, used exclusively for hospital purposes, to the amount of seventy-five thousand dollars ($75,000), where such hospitals maintain wards for charity patients or give treatment to such patients; provided, that the treatment of charity patients constitutes at least 15 percent of the business of such hospitals; provided further, that such hospital need not be assessed for taxation if the owner or manager shall file with the county tax assessor wherein such hospital is located within the time allowed for assessing the property for taxation a certificate that such hospital has done 15 percent charity work in the preceding tax year; and further provided, that such hospital through its owner or manager shall have until the expiration of the preceding tax year to class its work and ascertain whether or not such hospital has done 15 percent of its treatment of patients as charity work.
(3) The shares of the capital stock of any corporation owning and operating a hospital, to the extent of seventy-five thousand dollars ($75,000) in value; provided, that the corporation maintains wards for charity patients and gives treatment to such patients, which treatment constitutes at least 15 percent of the business of the hospital of the corporation; provided, that the total exemption granted to any such corporation shall not exceed seventy-five thousand dollars ($75,000), taking into consideration its real and personal property and the value of its shares of capital stock.
(4) All property owned by the American Legion or by Veterans of Foreign Wars or by the Disabled American Veterans, or any post thereof; provided, that such property is used and occupied exclusively by the organization.
(5) All the property of literary and scientific institutions and literary societies, when employed or used in the regular business of the institutions.
(6) The libraries of ministers of the gospel, all libraries other than those of a professional character and all religious books kept for sale by ministers of the gospel and colporteurs.
(7) The property of individuals who are deaf, hard of hearing, or insane to the extent of three thousand dollars ($3,000) and the property of blind individuals to the extent of twelve thousand dollars ($12,000).
(8) All family portraits.
(9) All cotton, livestock, or agricultural products that have been raised or grown in the State of Alabama and remain in the hands of the producer thereof, or his or her landlord, or in the hands of a cooperative association for all time, and for a period of one year in the hands of the purchaser or the manufacturer.
(10) All cotton, wherever grown, stored in licensed warehouses in the State of Alabama for a period not exceeding 12 months.
(11) Provisions and supplies on hand for the current year for the use of the family and the making of crops; all wearing apparel; farming tools; tools and implements of mechanics to the value of two hundred dollars ($200); all livestock, including mules, studs, jacks and jennets, cattle, horses, cows, calves, hogs, sheep, and goats; and household and kitchen furniture and one sewing machine.
(12) No license or taxation of any character, except franchise taxes provided by Section 229 of the Constitution of Alabama of 2022, shall be collected or required to be paid to the state or any county or municipality therein by any state or county fair, agricultural association, or stock, kennel, or poultry show. Athletic stadiums owned and controlled by universities, schools, or colleges and which are used exclusively for the purpose of promoting intercollegiate or interschool athletics; provided, that the revenue received from athletic stadiums, when admission is charged, shall be used for the benefit of athletic associations of such universities, colleges, or schools. Nothing contained in this subdivision shall be construed to prohibit any municipality, county, or state from imposing any license tax upon or for the privilege of engaging in the business of supplying services for hire or reward or selling commodities other than livestock, farm products, or farm implements or conducting or operating devices or games of skill or amusements or other games or devices, or conducting or operating shows, displays or exhibits other than shows, displays or exhibits of agricultural implements, farm products, livestock, and athletic prowess.
(13) All material, including, without limitation, coke, to be compounded or further manufactured, when stocked at any plant or furnace for manufacturing purposes in Alabama.
(14) All articles manufactured in Alabama, including pig iron, in the hands of the producer or manufacturer thereof, for 12 months after its production or manufacture.
(15) All property, both real and personal, owned by any unit or organization of the Alabama National Guard officially recognized as such by the federal government and organized and maintained by the state, and all property owned by shares and used exclusively by and kept exclusively in the possession of any such unit or organization of the Alabama National Guard, the annual rent or hire of which is not in excess of the annual state, county, and municipal taxes on the property shall be exempt from taxation by the state, and the county and municipality in which the same may be situated.
(16) All poultry.
(17) The property of all incompetent veterans to the value of three thousand dollars ($3,000).
(18) The following items of personal property when owned by individuals for personal use in the home or usually kept at the home of the owner and not carried as stocks of merchandise, namely: Libraries; phonographs; pianos and other musical instruments; paintings; precious stones, jewelry, plate silverware, ornaments, and articles of taste; watches and clocks; wagons, buggies, bicycles, guns, pistols, canes, golf sticks, golf bags, and sporting goods; money hoarded; radios; mechanical and electrical refrigerators; and electrical appliances.
(19) All property owned by the Benevolent and Protective Order of Elks, Fraternal Order of Police, Fraternal Order of Eagles, or Loyal Order of Moose, or lodge thereof; provided, that such property is used and occupied exclusively by such organization.
(20) All devices, facilities, or structures, and all identifiable components thereof or materials for use therein, acquired or constructed primarily for the control, reduction, or elimination of air or water pollution.
(21) Tobacco leaf stored in hogsheads.
(22) All farm tractors, as that term is defined in Section 32-1-1.1; and all farming implements, as that term is used in Section 40-11-1(b)(5), when used exclusively in connection with agricultural property as defined in Section 40-8-1(b)(1).
(23) All grain bins used exclusively for the purpose of storing, holding, drying, preserving, or otherwise preparing a grain, as defined in Section 2-31-1, for market. For purposes of this chapter, “grain bin” means a structure and its component parts.
(24) All stocks of goods, wares, and merchandise described in Section 40-11-1(b)(4).
(25) All aircraft, replacement parts, components, systems, supplies, and sundries affixed or used on the aircraft, and ground support equipment and vehicles used by or for the aircraft, when used 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 words “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.
(26) All property described in 12 U.S.C. § 1701q, commonly known as HUD 202 property, is hereby exempt from any and all ad valorem taxes.
(27) All vessels and equipment thereon, used predominantly in the business of commercial fishing, as defined in Section 40-23-1, by the owners thereof.
(28)a. The tangible personal property owned by a business and reported in accordance with Article 1 of Chapter 7 to the extent of one hundred thousand dollars ($100,000) in market value is exempt from the state levied ad valorem tax.
b. Any county or municipality, by resolution or ordinance, may adopt the exemption provided in paragraph a. for county or municipal ad valorem taxes levied on tangible personal property. The ordinance or resolution must be adopted at least 90 days prior to October 1 of the electing year.
(Acts 1935, No. 194, p. 256; Acts 1936-37, Ex. Sess., No. 84, p. 95; Acts 1936-37, Ex. Sess., No. 177, p. 208; Code 1940, T. 51, §2; Acts 1947, No. 639, p. 491; Acts 1951, No. 953, p. 1626; Acts 1957, No. 115, p. 160; Acts 1963, No. 519, p. 1107, §1; Acts 1965, No. 549, p. 811; Acts 1966, Ex. Sess., No. 230, p. 351; Acts 1969, No. 1137, p. 2123; Acts 1973, No. 490, p. 714; Acts 1973, No. 1167, p. 1960; Acts 1975, No. 1048, p. 2103, §1; Acts 1978, No. 672, p. 967; Acts 1978, 2nd Ex. Sess., No. 47, p. 1729; Acts 1986, No. 86-214, p. 282, §3; Acts 1989, No. 89-830, p. 1661; Acts 1989, No. 89-914, p. 1809; Acts 1990, No. 90-533, p. 832; Act 2022-295 §1; Act 2022-199 §1; Act 2022-53, §4; Act 2025-344, §1.)
(a) The board of trustees of the Susie Parker Stringfellow Memorial Hospital established and created under the last will and testament of Susie P. Stringfellow, deceased, and Stringfellow Memorial Hospital Non-Profit Realty Company, a nonprofit corporation, and all real and personal property of said board of trustees or said nonprofit corporation shall be exempt from the payment of any and all state, county and municipal ad valorem taxes.
(b) Any ad valorem taxes which were, are or may be collected subsequent to May 4, 1982, as the result of any assessment against the board of trustees of the Susie Parker Stringfellow Memorial Hospital established and created under the last will and testament of Susie P. Stringfellow, deceased, or Stringfellow Memorial Hospital Non-Profit Realty Company, a nonprofit corporation, or any real or personal property of said board of trustees or said nonprofit corporation, will be remitted to the entity which paid them; and no action or proceeding against said board of trustees or said nonprofit corporation may be instituted after such date by the State of Alabama or any county or municipality thereof or any person acting on behalf of any thereof for the collection or enforcement of any such ad valorem tax.
(Acts 1982, No. 82-496, p. 824, §§1, 2.)
The Alabama Eye Bank is exempted from paying any state, county, and municipal sales and use taxes until September 30, 2024.
(Act 2019-479, §1.)
Any person who is entitled to a homestead exemption under the provisions of Section 84 of Title 51 of the 1940 Code of Alabama, as amended, and who is also entitled to an exemption of household and kitchen furniture under the provisions of subdivision (11) of Section 40-9-1, shall not be required to claim annually the said personal property exemption. Any such person is authorized to make a claim of said personal property prior to January 1 of any tax year; and if said claim is granted by the tax assessor, it shall be unnecessary to repeat the claim for subsequent tax years so long as such person is entitled to an exemption of such household and kitchen furniture; provided, that such claimed exemption shall not inure to the benefit of the grantee or successor of such person. It is the intent that the grantee or successor is required to make his own claim for such personal property exemption. In the event that any said household and kitchen furniture that has been previously claimed and allowed as exempt shall be or become for any tax year no longer exempt, the person required to pay the tax thereon shall notify the tax assessor prior to January 1 of the tax year in which such property becomes subject to tax of the fact that such property is no longer exempt; and the tax assessor shall thereupon list such property for taxation.
Any household and kitchen furniture that is legally claimed and allowed as exempt under this section or which shall become subject to tax after having been legally claimed and allowed as exempt or which is subject to taxation may be assessed as an escape for a period not exceeding five years and, in addition to all other penalties, fees, charges, taxes and interest allowed by law, shall bear a penalty of 15 percent of the taxes due.
The applicability of the provisions of this section shall be limited to persons who are entitled to a homestead exemption under said Section 84 of Title 51 of the 1940 Code of Alabama, as amended, and who are, in addition to said homestead exemption, entitled to an exemption of household and kitchen furniture under the provisions of subdivision (11) of Section 40-9-1.
(Acts 1949, No. 225, p. 323.)
In addition to the persons and property exempt from ad valorem taxation as prescribed in Section 40-9-1, the following property shall also be exempt from ad valorem taxation: All peanuts and pecans, wherever grown, stored in licensed warehouses in the State of Alabama for a period not exceeding 12 months.
(Acts 1965, No. 457, p. 659.)
In addition to the persons and property exempt from ad valorem taxation as prescribed in Section 40-9-1, the following properties shall also be exempt from ad valorem taxation:
All products or materials, including natural and man-made fibers and cloth, when stored by a textile manufacturer or processor for the purpose of using such products or materials in such a way that they become a part of the finished product of such plant.
(Acts 1971, No. 2405, p. 3838.)
All factories and manufacture plants manufacturing calcium cyanamide (lime nitrogen), aluminum or aluminum products shall be exempted from state, county and municipal taxation for 10 years after the beginning of the construction of such plant or factory. The exemption provided herein shall apply solely to the factory or plant and to the personal property used therein or connected therewith in the manufacturing of said articles, but shall not apply to the land upon which such factory or plant is located.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §10.)
(a) In addition to the persons and property exempt from ad valorem taxation as prescribed in Section 40-9-1, the following property shall also be exempt from state, county and municipal ad valorem taxation and shall be deemed to have acquired no situs in this state for purposes of ad valorem taxation: All personal property which is consigned to or stored in a public or private warehouse or other storage facility for the purpose of shipment to a destination outside this state, whether final destination is specified when transportation begins or afterwards, for a period not exceeding 36 months following such consignment or storage. Such property shall not be deprived of such exemption because while in the warehouse or storage facility the property is assembled, disassembled, bound, joined, divided, cut, broken in bulk, labeled, relabeled, repackaged or otherwise processed or fabricated. No exemptions shall be allowed under this section for any such property which was exempt from ad valorem taxation pursuant to this section in any prior exemption period.
(b) It is hereby declared to be the policy of this state, through the exemption of the aforementioned property from ad valorem taxation, to encourage the development of the State of Alabama as a distribution center.
(c) All property claimed to be exempt under this section shall be designated “in transit” upon the books and records of the warehouse or storage area wherein the same is located. The records shall include a full, true and correct inventory of all such property together with the date of receipt or completion of process or manufacture, date of withdrawal, point of origin and, if known, the point of ultimate destination of the property. Such books and records shall at all times be open to inspection of all taxing authorities of this state and any political subdivisions thereof.
(Acts 1975, No. 788, p. 1574, §§1-3.)
(a) Personal property manufactured, compounded or processed remaining the property of the manufacturer, compounder or processor, held for him by a licensed public warehouseman for distribution shall be exempted from ad valorem taxation by the State of Alabama and the counties and municipalities of the state.
(b) A warehouseman holding personal property exempted by this section shall keep records of the receipt and disposal of all such property which shall be open to inspection during business hours by any duly constituted official responsible for the administration of any ad valorem tax law. The license of any warehouseman who fails to keep the records required by this section may be revoked by the Commissioner of Revenue after due notice and a hearing if requested by the warehouseman.
(c) The Commissioner of Revenue shall issue such rules and regulations as he deems necessary or appropriate to the administration of this section.
(Acts 1975, No. 838, p. 1673, §§1-3.)
The capital stock and physical property of all corporations and the physical property of any person, which said capital stock and physical property consists entirely of an artesian well or wells, and equipment pertaining thereto, which well or wells are leased to any municipality of this state under a lease, sale, contract or option agreement to purchase, shall, during the life of such lease, sale, contract or option agreement, be exempt from ad valorem taxation so long as such well or wells are operated exclusively by such city or town; provided, that this section shall apply only to corporations or persons under contract with not more than one municipality.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §11.)
All Young Men’s Christian Associations and all real and personal property of all Young Men’s Christian Associations, and of any branch or department of same heretofore or hereafter organized and existing in good faith in the State of Alabama, for other than pecuniary gain and not for individual profit, when such real or personal property shall be used by such associations, their branches or departments, in and about the conducting, maintaining, operating and carrying out of the program, work, principles, objectives and policies of such associations, their branches or departments, in any city or county of the State of Alabama, are exempt from the payment of any and all state, county and municipal taxes, licenses, fees and charges of any nature whatsoever, including any privilege or excise tax heretofore or hereafter levied by the State of Alabama or any county or municipality thereof. The receipt, assessment or collection of any fee, admission, service charge, rent, dues or any other item or charge by any such association, its branches or departments from any person, firm or corporation for any service rendered by any such association, its branches or departments, or for the use or occupancy of any real or personal property of any such association, its branches or departments, in or about the conducting, maintaining, operating and carrying out of the program, work, principles, objectives and policies of any such association, its branches or departments shall not be held or construed by any court, agency, officer or commission of the State of Alabama or any county or municipality thereof to constitute pecuniary gain or individual profit by any such association, its branches or departments, or the doing of business in such a manner as to prejudice or defeat, in any manner, the right and privilege of any such association, its branches or departments to claim or rely upon or receive the exemption of such association, its branches or departments and of all real and personal property thereof from taxation, as herein provided.
(Acts 1919, No. 180, p. 176; Code 1923, §7192; Code 1940, T. 51, §12; Acts 1957, No. 753, p. 1188.)
All Young Women’s Christian Associations, and all real and personal property of all Young Women’s Christian Associations, and of any branch or department of same heretofore or hereafter organized and existing in good faith in the State of Alabama, for other than pecuniary gain and not for individual profit, when such real or personal property shall be used by such associations, their branches or departments in and about the conducting, maintaining, operating and carrying out of the program, work, principles, objectives and policies of such associations, their branches or departments, in any city or county of the State of Alabama, are exempt from the payment of any and all state, county and municipal taxes, licenses, fees and charges of any nature whatsoever, including any privilege or excise tax heretofore or hereafter levied by the State of Alabama or any county or municipality thereof. The receipt, assessment or collection of any fee, admission, service charge, rent, dues or any other item or charge by any such association, its branches or departments, from any person, firm or corporation for any service rendered by any such association, its branches or departments, or for the use or occupancy of any real or personal property of any such association, its branches or departments, in or about the conducting, maintaining, operating and carrying out of the program, work, principles, objectives and policies of any such association, its branches or departments shall not be held or construed by any court, agency, officer or commission of the State of Alabama or any county or municipality thereof to constitute pecuniary gain or individual profit by any such association, its branches or departments, or the doing of business in such a manner as to prejudice or defeat, in any manner, the right and privilege of any such association, its branches or departments to claim or rely upon or receive the exemption of such association, its branches or departments and of all real and personal property thereof from taxation, as herein provided.
(Acts 1959, 1st Ex. Sess., No. 73, p. 125.)
All Young Women’s Christian Organizations, and all real and personal property of all Young Women’s Christian Organizations, and of any branch or department of same heretofore or hereafter organized and existing in good faith in the State of Alabama, for other than pecuniary gain and not for individual profit, when such real or personal property shall be used by such organizations, their branches or departments in and about the conducting, maintaining, operating and carrying out of the program, work, principles, objectives and policies of such organizations, their branches or departments, in any city or county of the State of Alabama, are exempt from the payment of any and all state, county and municipal taxes, licenses, fees and charges of any nature whatsoever, including any privilege or excise tax heretofore or hereafter levied by the State of Alabama or any county or municipality thereof. The receipt, assessment or collection of any fee, admission, service charge, rent, dues or any other item or charge by any such organization, its branches or departments from any person, firm or corporation for any service rendered by any such organization, its branches or departments, or for the use or occupancy of any real or personal property of any such organization, its branches or departments, in or about the conducting, maintaining, operating and carrying out of the program, work, principles, objectives and policies of any such organization, its branches or departments shall not be held or construed by any court, agency, officer or commission of the State of Alabama, or any county or municipality thereof to constitute pecuniary gain or individual profit by any such organization, its branches or departments, or the doing of business in such a manner as to prejudice or defeat, in any manner, the right and privilege of any such organization, its branches or departments to claim or rely upon or receive the exemption of such organization, its branches or departments and of all real and personal property thereof from taxation, as herein provided.
(Acts 1962, Ex. Sess., No. 156, p. 199.)
(a) The March of Dimes Inc., all Young Men’s Hebrew Associations (Y.M.H.A.) also known as Jewish Community Centers (J.C.C.), and all real and personal property of all Young Men’s Hebrew Associations (Y.M.H.A.) also known as Jewish Community Centers (J.C.C.), the Seamen’s Home of Mobile, incorporated under Act No. 145, Acts of Alabama 1844-45, the Girl Scouts of America and the Boy Scouts of America, and any council, troop or other subdivision thereof now existing or hereafter created and all real and personal property of the Girl Scouts of America and the Boy Scouts of America, and any council, troop or other subdivision thereof now existing or hereafter created, the Catholic Maritime Club of Mobile, Inc., the Knights of Pythias Lodges, the Salvation Army, Inc., the Elks Memorial Center, and all real and personal property of the Salvation Army, Inc., and the Elks Memorial Center, all United Way organizations and United Way member agencies in Alabama, other qualifying united appeal funds and their recipients as provided in subsection (d), and the real and personal property of all United Way organizations and United Way member agencies in Alabama, other qualifying united appeal funds and their recipients as provided in subsection (d), and the Alabama Masonic Home, the American Cancer Society, and all real and personal property of American Cancer Society, the New Hope Industries of Dothan, and all real and personal property of the New Hope Industries of Dothan, the Helping Hand Club of Anniston, and all real and personal property of the Helping Hand Club of Anniston, Childhaven, Inc., and all real and personal property of Childhaven, Inc., Presbyterian Home for Children and all real and personal property of Presbyterian Home for Children, Freewill Baptist Children’s Home and all real and personal property of Freewill Baptist Children’s Home, Methodist Homes for the Aging and all real and personal property of Methodist Homes for the Aging, and United Methodist Children’s Home and all real and personal property of United Methodist Children’s Home, Birmingham Building Trades Towers of Birmingham, Alabama, a nonprofit corporation, the Holy Comforter House, Inc., of Gadsden, Alabama, a nonprofit corporation, the University of Alabama Huntsville Foundation and all real and personal property of the University of Alabama Huntsville Foundation, the Birmingham Football Foundation, Inc., a nonprofit corporation, and all real and personal property of the Birmingham Football Foundation, Inc., and of any branch or department of any of same heretofore or hereafter organized and existing in good faith in the State of Alabama, for other than pecuniary gain and not for individual profit, when such real or personal property shall be used by such associations or nonprofit corporations, their branches or departments in and about the conducting, maintaining, operating and carrying out of the program, work, principles, objectives, and policies of such associations or nonprofit corporations, their branches or departments, in any city or county of the State of Alabama, are exempt from the payment of any and all state, county, and municipal taxes, licenses, fees, and charges of any nature whatsoever, including any privilege or excise tax heretofore or hereafter levied by the State of Alabama or any county or municipality thereof. The receipt, assessment or collection of any fee, admission, service charge, rent, dues, or any other item or charge by any such association or nonprofit corporation, its branches or departments from any person, firm, or corporation for any services rendered by any such association or nonprofit corporation, its branches or departments or for the use or occupancy of any real or personal property of any such association or nonprofit corporation, its branches or departments in or about the conducting, maintaining, operating, and carrying out of the program, work, principles, objectives, and policies of any such association or nonprofit corporation, its branches, or departments shall not be held or construed by any court, agency, officer, or commission of the State of Alabama, or any county or municipality thereof, to constitute pecuniary gain or individual profit by any such association or nonprofit corporation, its branches or departments, or the doing of business in such a manner as to prejudice or defeat, in any manner, the right and privilege of any such association or nonprofit corporation, its branches or departments to claim or rely upon or receive the exemption of such association or nonprofit corporation, its branches or departments and of all real and personal property thereof from taxation, as herein provided.
(b) With respect to gasoline, tobacco, playing card tax or any other tax required by law to be prepaid by the retailer, the associations, nonprofit corporations, or organizations exempt under this section shall pay the appropriate tax at the time purchases are made, and the amount of such tax shall be refunded to such associations, nonprofit corporations, or organizations by the Department of Revenue pursuant to the procedures for refunds provided in Chapter 2A of this title.
(c) For purposes of this section, the following words and phrases shall have the following meanings:
(1) SUPPORTED CHARITY. Any charitable, civic, or eleemosynary institution for which a united appeal fund solicits funds.
(2) UNITED APPEAL FUND. Any nonprofit entity that demonstrates to the reasonable satisfaction of the Department of Revenue that it has all of the following characteristics:
a. Is an Alabama nonprofit corporation, or another type of legal entity, whether formed in Alabama or in another jurisdiction, which is required by its principal governing documents to be operated as a charity.
b. Is one of a class, donations to which are deductible for federal and Alabama income tax purposes under Section 170(c) of the Internal Revenue Code.
c. Has as its principal purpose, as stated by its principal governing documents, the raising of funds or the aggregation or consolidation of fund raising efforts, to support other charities which are not themselves united appeal funds, known as supported charities.
d. Has been issued a Certificate of Exemption from Alabama sales, use, and lodgings tax prior to July 1, 2017, and has continually maintained the Certificate of Exemption as required by Section 40-9-60.
e. With respect to the distribution of funds raised by the united appeal fund, the entity’s principle governing documents must require that no supported charity, as defined in this subsection, will receive de minimis support.
(3) UNITED WAY MEMBER AGENCY. Any nonprofit organization that receives funding through the approval of the board of a United Way organization, but only if the nonprofit organization is:
a. Accountable to the granting United Way organization for the expenditure of any funds received from such United Way organization.
b. Included on a list of such nonprofit organizations to be submitted to the Department of Revenue under subsection (e) by all United Way organizations on or before a date provided for in a rule of the Department of Revenue.
(4) UNITED WAY ORGANIZATION. Any nonprofit corporation legally authorized and licensed to operate under the name United Way and use the name United Way and the associated logo and trademarks.
(d)(1) Each supported charity must be separately identified by name in the principal governing documents of the united appeal fund entity, and by name and federal employer identification number at the request of the Department of Revenue. Each supported charity must agree, in its own principal governing documents, to become or remain a member of the united appeal fund that funded the supported charity.
(2) The special rules provided in this subsection shall not apply to any United Way organization or any United Way member agency.
(e)(1) Each United Way organization shall provide the Department of Revenue with a list of its constituent United Way member agencies on an annual basis.
(2) The Department of Revenue, by rule, shall provide the date on which United Way organizations shall submit the list required by this subsection.
(Acts 1961, Ex. Sess., No. 47, p. 1904; Acts 1963, No. 297, p. 768; Acts 1964, 1st Ex. Sess., No. 256, p. 352; Acts 1964, 1st Ex. Sess., No. 259, p. 358; Acts 1965, No. 864, p. 1611; Acts 1966, Ex. Sess., No. 261, p. 403, §1; Acts 1967, No. 761, p. 1616, §1; Acts 1969, No. 1102, p. 2038; Acts 1969, No. 1250, p. 2352, §§1, 2; Acts 1971, No. 1202, p. 2087; Acts 1971, No. 1591, p. 2722; Acts 1971, No. 1944, p. 3140; Acts 1971, No. 2080, p. 3350; Acts 1984, No. 84-664, p. 1331; Acts 1992, No. 92-186, p. 349, §22; Act 2017-149, §2; Act 2021-299, §6; Act 2023-496, §1.)
(a) United appeal fund organizations and supported charities that otherwise satisfied the definitions provided under Section 40-9-12(c) as of July 1, 2017, but failed to acquire or maintain their exemption certificates as of July 1, 2017, or lost their exemption certificate due to failure to timely file an informational report as required by Section 40-9-60 and rules adopted thereunder, are allowed a grace period through September 30, 2018, within which to obtain the certificate of exemption required under Section 40-9-12(c)(2) d. and to come into compliance with the informational reporting requirements of Section 40-9-60.
(b) In order for a united appeal fund to be eligible for the grace period provided in subsection (a), the united appeal fund, as of July 1, 2017, must have met the following requirements in their entirety:
(1) Satisfied the definitional requirements imposed by Section 40-9-12(c)(2).
(2) Previously held or been eligible to hold a sales and use tax Certificate of Exemption.
(3) Provided more than de minimis funding to supported charities.
(c) In order for a supported charity to be eligible for the grace period provided in subsection (a), the supported charity, as of July 1, 2017, must have met the following requirements in their entirety:
(1) Satisfied the definitional requirement imposed by Section 40-9-12(c)(1).
(2) Received more than de minimis funding from a qualified united appeal fund.
(d) No refunds shall be issued to such united appeal fund entity or supported charity, as defined in subsection (b) and (c) and those as defined in Section 40-9-12(c), for any purchases or transactions during a time period in which a certificate of exemption was not in effect regardless of whether such united appeal fund or supported charity falls under the provisions of this section.
(e) The Department of Revenue may make available to the public a record of statutorily exempt entities that have been issued a certificate of exemption. Such listing shall be limited to the entity name, the date of issuance, and the current status of the certificate as either valid or invalid, including the date such certificate of exemption became invalid.
(f) The Department of Revenue may adopt and enforce reasonable rules for the enforcement and administration of this section.
(Act 2018-198, §1.)
(a) All volunteer fire departments in this state, and all real and personal property of all volunteer fire departments in this state, the Alabama Society of the Daughters of the American Revolution, and all real and personal property of the Alabama Society of the Daughters of the American Revolution, the Annual Shrine Circus as well as all other charitable Shrine amusement and fund raising events, and all real and personal property of the Annual Shrine Circus, the Episcopal Foundation of Jefferson County, and all real and personal property of the Episcopal Foundation of Jefferson County, the Alabama Heart Association and all real and personal property of the Alabama Heart Association, and the Presbyterian Apartments, Incorporated, and all real and personal property of the Presbyterian Apartments, Incorporated, when such real and personal property shall be used as provided in Section 40-9-12, are exempt from the payment of any and all state, county and municipal taxes, licenses, fees and charges of any nature whatsoever, including any privilege or excise tax heretofore or hereafter levied by the State of Alabama or any county or municipality thereof.
(b) All volunteer fire departments in this state, the Alabama Society of the Daughters of the American Revolution, the Annual Shrine Circus as well as all other charitable Shrine amusement and fund raising events, the Episcopal Foundation of Jefferson County, the Alabama Heart Association and the Presbyterian Apartments, Incorporated, shall be subject to all the provisions of Section 40-9-12, as are all other organizations named therein.
(Acts 1973, No. 1204, p. 2026; Acts 1984, 1st Ex. Sess., No. 84-739, p. 80.)
Lands in the purchase of which any municipality of the state has invested money pursuant to the terms of a lease sale contract or option agreement shall, during the life of such lease sale contract or option agreement, be exempt from ad valorem taxation so long as said lands are being used by such municipalities for park, municipal or other public purpose, or where the same are contracted for and in the possession of such municipalities with the bona fide intention of being so used.
(Acts 1927, No. 121, p. 85; Code 1940, T. 51, §13.)
(a) For the purposes of this section, the term governmental entity means the State of Alabama and its political subdivisions, including a county, a municipality, an industrial or economic development board or authority, airport authority, and any public water or sewer authority, district, system, or board that otherwise is sales and use tax exempt. A governmental entity shall also include an educational institution of any of the foregoing Alabama political subdivisions including a public college or university, a county or city board of education, and the State Board of Education.
(b)(1) The Department of Revenue shall issue a certificate of exemption to the governmental entity for each tax exempt project.
(2) The Department of Revenue shall grant a certificate of exemption from state and local sales and use taxes to any contractor licensed by the State Licensing Board for General Contractors, or any subcontractor working under the same contract, for the purchase of building materials, construction materials and supplies, and other tangible personal property that becomes part of the structure that is the subject of a written contract for the construction of a building or other project for and on behalf of a governmental entity which is exempt from the payment of sales and use taxes.
(c) The use of a certificate of exemption for the purchase of tangible personal property pursuant to this section shall include only tangible personal property that becomes part of the structure that is the subject of the construction contract. Any contractor or subcontractor purchasing any tangible personal property pursuant to a certificate of exemption shall maintain an accurate cost accounting of the purchase and use of the property in the construction of the project.
(d) A contractor who has an exemption from sales and use tax for the purchase of materials to use on a government project shall file, in a manner as prescribed by the department, reports of all exempt purchases. The reports shall be filed as a prerequisite to renewal of a certificate of exemption.
(e)(1) The department may assess any contractor or subcontractor with state and local sales or use taxes on any item purchased with a certificate of exemption not properly accounted for and reported as required.
(2) Any contractor or subcontractor who intentionally uses a certificate of exemption in violation of this section, in addition to the actual sales or use tax liability due, shall be subject to a civil penalty levied by the department in the amount of not less than two thousand dollars ($2,000) or two times any state and local sales or use tax due for the property and, based on the contractor’s or subcontractor’s willful misuse of the certificate of exemption, may be barred from the use of any certificate of exemption on any project for up to two years.
(f) The department may adopt rules to implement this section in order to effectuate the purposes of this section and to provide for accurate accounting and enforcement of this section.
(g) In bidding the work on a tax exempt project, the bid form shall provide for an accounting for the tax savings.
(h) The intent of this section is to lower the administrative cost for the governmental entity, contractor, and subcontractor for public works projects. It is not the intent of this section to change the basis for determining professional services from fair market value, which may include sales and use taxes.
(i)(1) Except as provided for a contract for the construction of a highway, road, or bridge as provided in subdivision (2), this section shall be operative for contracts entered into with governmental entities as defined in subsection (a), not including public water or sewer authorities, districts, systems, or boards that otherwise are sales and use tax exempt, on January 1, 2014, or thereafter, and shall not apply to any contract entered into prior to January 1, 2014. This section shall be operative for contracts entered into with public water or sewer authorities, districts, systems, or boards that otherwise are sales and use tax exempt on January 1, 2019, and thereafter, and shall not apply to any contract entered into with such entities prior to January 1, 2019. In addition, this section shall not apply to any contract change orders or contract extensions, including revised, renegotiated, or altered contracts, when the original contract was entered into prior to January 1, 2014, with a governmental entity. Nor shall this section apply to any contract change orders or contract extensions, including revised, renegotiated, or altered contracts with any public water or sewer authority, district, system, or board that otherwise is sales and use tax exempt, when the original contract was entered into prior to January 1, 2019.
(2) This section shall be operative for any contracts with a governmental entity defined in subsection (a) for the construction of a highway, road, or bridge entered into on or after January 1, 2022, and shall not apply to any contracts for the construction of a highway, road, or bridge entered into prior to January 1, 2022, nor shall this section apply to any contract change order or contract extensions, including revised, renegotiated, or altered contracts, when the original contract was entered into prior to January 1, 2022.
(j) The Department of Revenue may adopt rules to implement this section.
(Act 2013-205, p. 439, §§1, 2; Act 2018-234, §1; Act 2021-298, §2; Act 2021-372, §1.)
Notwithstanding any other provision of law, beginning January 1, 2020, all airport authorities established pursuant to Chapter 3 of Title 4 or by local law and contracts entered into by airport authorities on or after January 1, 2020, are exempted from paying any state, county, and municipal sales and use tax.
(Act 2021-298, §1.)
(a) For the purposes of this section, the term “statutorily exempt entity” means any person or company, as those terms are defined under Section 40-23-1, that has been granted a statutory exemption from the payment of Alabama sales and use taxes levied pursuant to Chapter 23, including any person or company listed in this article. The term does not include any governmental entity, as defined in Section 40-9-14.1(a).
(b)(1) The Department of Revenue shall issue a certificate of exemption to the statutorily exempt entity for each tax exempt project.
(2) The Department of Revenue shall grant a certificate of exemption from state and local sales and use taxes to any contractor licensed by the State Licensing Board for General Contractors, or any subcontractor working under the same contract, for the purchase of building materials, construction materials and supplies, and other tangible personal property that becomes part of the structure that is the subject of a written contract for the construction of a building or other project for and on behalf of a statutorily exempt entity that is exempt from the payment of sales and use taxes.
(c) The use of a certificate of exemption for the purchase of tangible personal property pursuant to this section shall include only tangible personal property that becomes part of the structure that is the subject of the construction contract. Any contractor or subcontractor purchasing any tangible personal property pursuant to a certificate of exemption shall maintain an accurate cost accounting of the purchase and use of the property in the construction of the project.
(d) A contractor who has an exemption from sales and use tax for the purchase of materials to use on a statutorily exempt entity project shall file, in a manner as prescribed by the department, reports of all exempt purchases. The reports shall be filed as a prerequisite to renewal of a certificate of exemption.
(e)(1) The department may assess any contractor or subcontractor with state and local sales or use taxes on any item purchased with a certificate of exemption not properly accounted for and reported as required.
(2) Any contractor or subcontractor who intentionally uses a certificate of exemption in violation of this section, in addition to the actual sales or use tax liability due, shall be subject to a civil penalty levied by the department in the amount of two times any state and local sales or use tax due for the property but not less than two thousand dollars ($2,000) and, based on the contractor’s or subcontractor’s willful misuse of the certificate of exemption, may be barred from the use of any certificate of exemption on any project for up to two years.
(f) The department may adopt rules to implement this section in order to effectuate the purposes of this section and to provide for accurate accounting and enforcement of this section.
(g) In bidding the work on a tax exempt project, the bid form shall provide for an accounting for the tax savings.
(h) The intent of this section is to lower the administrative cost for the statutorily exempt entity, contractor, and subcontractor for construction projects on behalf of a statutorily exempt entity. It is not the intent of this section to change the basis for determining professional services from fair market value, which may include sales and use taxes.
(i) This section shall be operative for any contracts with a statutorily exempt entity entered into on or after January 1, 2024, and shall not apply to any contracts entered into prior to January 1, 2024, nor shall this section apply to any contract change order or contract extensions, including revised, renegotiated, or altered contracts, when the original contract was entered into prior to January 1, 2024.
(Act 2023-526, §1.)
The Alabama State Fair and Exhibit Association and all persons, firms, or corporations who may conduct business with said association on its fairgrounds in Jefferson County during the annual fairs of said association are exempt from the payment of all state, county and municipal taxes and licenses.
(Code 1907, §2072; Code 1923, §3028; Code 1940, T. 51, §14.)
The property of corporations or associations formed and organized in good faith for the social or literary advancement of their members and not for pecuniary purposes nor for individual profit and used as an adjunct of or in connection with any college or university and approved by the governing body of said college or university in this state shall be exempt from all state, county and municipal taxation, but if used for any other purpose or not as an adjunct of or in connection with any college or university it shall not be so exempt.
(Acts 1945, No. 127, p. 115.)
All property owned and used by a college for the purpose of housing students, members of the faculty or other employees of the college is exempt from taxation.
All property owned by a college and held for the bona fide purpose of being used for enlargement of a campus or for the development of a new campus is exempt from taxation.
(Acts 1950, 5th Ex. Sess., No. 40, p. 85.)
(a) There shall be exempted from any and all state, county and municipal taxes, licenses, fees and charges of any nature whatsoever on all real and personal property of any nonprofit membership corporation:
(1) Which is organized under Alabama law as a benevolent society for the purpose of aiding and benefiting retired teachers and supervisory staff personnel of any one or more public school systems in the state,
(2) Which is organized for other than pecuniary gain and not for individual profit, and
(3) When such real or personal property is used by such corporation for the occupancy of its members and for professional or social meetings and functions sponsored by such corporation or its members.
(b) The clause “for other than pecuniary gain and not for individual profit,” as used in the preceding subsection, shall not include any fee, admission, service charge or dues assessed, charged or collected by any such corporation from any person or persons for any service rendered by such corporation, or for the use or occupancy of any of the real or personal property of such corporation.
(Acts 1959, No. 548, p. 1355.)
(a)(1) Homesteads, as defined by the Constitution and laws of Alabama, are exempt from all state ad valorem taxes. In no case shall the exemption apply to more than one person or head of the family, nor shall the exemption exceed $4,000 in assessed value or 160 acres in area for any resident of this state who is not over 65 years of age.
(2) The homesteads of residents of this state, over 65 years of age, or who are retired due to permanent and total disability, regardless of age, or who are blind as defined in Section 1-1-3, regardless of age or whether such person is retired, shall be exempt from all state ad valorem taxes.
(3) The state Commissioner of Revenue may define and specify the condition or state of health that makes a person “permanently and totally disabled” and may issue certificates of disability to the person as he or she may find meets such specifications. Any person who is drawing any pension or annuity from the armed services or a company or governmental agency as being permanently and totally disabled shall automatically be granted a certificate of permanent and total disability by the state Commissioner of Revenue.
(b) For tax years beginning on and after October 1, 1981, for residents of this state not over 65 years of age, homesteads, as defined by the Constitution and laws of Alabama, are exempt from all ad valorem property taxes levied, except countywide and school district ad valorem taxes levied for school purposes, by any county of this state. In no case shall the exemption apply to more than one person or head of the family, nor shall the exemption exceed $2,000 in assessed value or 160 acres in area for any resident of this state who is not over 65 years of age except as provided in subsection (c).
(c) For tax years beginning on and after October 1, 1981, the governing body of any county, municipality, or other local taxing authority may at any time grant by resolution or ordinance an exemption from any levy of ad valorem property taxes levied by such county, municipality, or other local taxing authority on homesteads, as defined by the Constitution and laws of Alabama, of residents of this state not over 65 years of age. In no case shall such exemption allowed in this section apply to more than one person or head of the family, nor shall the exemption, when added to any other homestead exemption applicable to the same ad valorem tax levy, exceed $4,000 in assessed value or 160 acres in area. Any homestead exemption granted pursuant to this subsection (c) may be adjusted, rescinded, or reinstated at any time by resolution or ordinance of the governing body of the county, municipality, or other local taxing authority granting such exemption. Any action authorized by this subsection to be taken by a taxing authority, or the governing body thereof, other than in the case of a municipality, shall be taken by resolution of the governing body of the county in which such taxing authority is located acting on behalf of such taxing authority; provided however, any action authorized by this subsection to be taken by a taxing authority, or the governing body thereof, which action shall affect countywide or district ad valorem taxes levied solely for the support of county or city school districts, shall be taken by resolutions of the governing bodies and boards of the school systems that are recipients of the proceeds of the ad valorem tax so affected by such action. This subsection shall in no way annul or reduce exemptions provided under subsections (a), (b), and (d).
(d) For tax years beginning on and after October 1, 1981, for residents of this state, over 65 years of age who have an annual adjusted gross income of less than $12,000 as reflected on the most recent state income tax return or some other appropriate evidence, or who are retired due to permanent and total disability, regardless of age, or who are blind as defined in Section 1-1-3, regardless of age or whether such person is retired, homesteads, as defined in the Constitution and laws of Alabama, are exempt from ad valorem property taxes levied by any county of this state, including such taxes levied for school districts. In no case shall the exemption exceed $5,000 in assessed value or 160 acres in area. With respect to homesteads situated in more than one county, the exemption shall be prorated between the counties in which the homestead is situated in the proportion that the area of the homestead in each county bears to the total area of the homestead claimed for exemption.
The Department of Revenue, by rule, may define and specify the condition or state of health that makes a person “permanently and totally disabled” and may issue certificates of disability to any person that meets such specifications. Any person who is drawing any pension or annuity from the armed services, a private company, or any governmental agency because he or she is permanently and totally disabled shall automatically be granted a certificate of permanent and total disability by the Department of Revenue.
(e) The grant of any homestead exemption provided under this section shall not be allowed if such grant shall prevent the payment of any bonded indebtedness secured by any tax to which the homestead exemption would apply.
(f) Any homestead exemption under this section or Section 40-9-21 shall not be affected during any period the homestead is being repaired after being damaged by a natural disaster such as a tornado or hurricane.
(Acts 1936-37, Ex. Sess., No. 107, p. 113; Acts 1939, No. 488, p. 702; Code 1940, T. 51, §15; Acts 1971, 1st Ex. Sess., No. 125, p. 207, §1; Acts 1973, No. 1212, p. 2048, §1; Acts 1978, 2nd Ex. Sess., No. 48, p. 1734, §1; Acts 1978, 2nd Ex. Sess., No. 91, p. 1785; Acts 1980, No. 80-731, p. 1476; Acts 1981, No. 81-579, p. 965; Acts 1982, 2nd Ex. Sess., No. 82-789, p. 294, §1; Acts 1986, No. 86-530, p. 1026; Act 2011-710, p. 2192, §1; Act 2012-313, p. 708, §1; Act 2013-295, p. 1003, §2; Act 2019-320, §1.)
(a) The governing body of any municipality may, upon the request of the board of education of such municipality, grant, by resolution, an exemption in whole or in part from the increased portion of any ad valorem property tax which has been increased pursuant to the procedures specified in paragraph (f) of Amendment No. 373 to the Constitution of Alabama of 1901 for public school purposes, on homesteads of residents of such municipality over 65 years of age, or who are retired due to permanent and total disability, regardless of age, or who are blind, as defined in Section 1-1-3, regardless of age or whether such person is retired. Any homestead exemption granted pursuant to this section may be adjusted, rescinded or reinstated at any time upon the request of the board of education of such municipality by resolution of the governing body of such municipality. Any request made by a board of education regarding an exemption pursuant to this section shall be made by a resolution adopted by such board of education.
(b) The provisions of this section shall in no way annul or reduce exemptions provided under any other provisions of the Constitution and laws of Alabama.
(Acts 1991, No. 91-563, p. 1043, §§1, 2.)
The home of any veteran which is or was acquired by him pursuant to the provisions of Public Law 702, 80th Congress, as heretofore amended (38 U.S.C.A. 701 and Chapter 12), regardless of its value shall be exempt from all ad valorem taxation so long as the same is owned and occupied as a home by such veteran or his unremarried widow.
(Acts 1957, No. 557, p. 776.)
(a) In addition to the persons and property exempt from ad valorem taxation as prescribed in Section 40-9-1, the following shall also be exempt from ad valorem taxation: The principal residence and 160 acres adjacent thereto of any person who is permanently and totally disabled or who is 65 years of age or older having a net annual taxable income of twelve thousand dollars ($12,000) or less, as shown on such person’s and spouse’s latest United States income tax return or some other appropriate evidence acceptable to the department. In the event that such person and spouse are not required to file a United States income tax return, then an affidavit indicating that the net taxable income of such person and spouse for the preceding taxable year was twelve thousand dollars ($12,000) or less shall be sufficient proof. Proof of age shall be furnished when the exemption provided herein is claimed. On and after May 22, 2013, if a permanently and totally disabled person does not qualify for the exemption under this section, and has not previously submitted written certification of such permanent and total disability by any two physicians licensed to practice in this state, he or she may submit as proof of permanent and total disability affidavits from two physicians licensed to practice in this state, provided that at least one of these physicians is actively providing treatment directly related to the permanent and total disability of the person seeking the exemption; provided, however, this requirement shall not apply to any person receiving the exemption on May 22, 2013. As provided under this section, any person who is drawing any pension or annuity from the armed services or a company or governmental agency because he or she is permanently and totally disabled shall automatically be granted a certificate of permanent and total disability by the department. In order to qualify for exemption under this section, the property must be a single-family home owned and occupied during the tax year as the principal residence of the person qualifying under this section.
(b) The department shall by rule establish the criteria and proof required for an exemption in this section based upon a person being “permanently and totally disabled” and shall issue certificates of disability to any person that meets such criteria and provides the required proof. The rule shall provide that any person who is drawing any pension or annuity from the armed services, a private company, or any governmental agency because he or she is permanently and totally disabled shall automatically be granted a certificate of permanent and total disability by the department.
(Acts 1973, No. 1000, p. 1532; Acts 1978, 2nd Ex. Sess., No. 48, p. 1734, §2; Acts 1979, Ex. Sess., No. 79-42, p. 60; Acts 1980, No. 80-731, p. 1476; Act 2012-313, p. 708, §1; Act 2013-295, p. 1003, §2.)
AMENDED BY ACT 2026-598, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
(a) Any person who qualifies for the homestead exemption in Section 40-9-19 or Section 40-9-21 shall initially claim the exemption in person or by mail on a form affidavit provided by the tax assessing official. The tax assessing official may also elect to establish a process to receive the form affidavit electronically as provided in this subsection.
(b) Any law to the contrary notwithstanding, any person who qualifies for the homestead exemptions in Section 40-9-19(a)(2) or (d) or Section 40-9-21 shall not be required to annually claim the exemptions after the initial qualification, but shall verify eligibility for the exemptions, as required by law, each year thereafter in person or by mail on a form affidavit provided by the tax assessing official. The tax assessing official may also elect to establish a process to receive the form affidavit electronically as provided in this subsection.
(c) Any cost necessary to establish and operate a process to receive the homestead exemption form affidavit electronically, as authorized in this section, shall be paid from the funds available for the cost of equalization of ad valorem taxes as established in Chapter 7. No later than October 1, 2021, the Association of Alabama Tax Administrators shall develop and forward to the Commissioner of the Department of Revenue a form affidavit and procedures, to be used by the tax assessing officials, electing to provide for the acceptance of the form affidavit electronically. The commissioner shall approve and distribute the form affidavit and procedures to all tax assessing officials no later than January 1, 2022.
(Acts 1987, No. 87-589, p. 974; Act 2012-313, p. 708, §1; Act 2013-295, p. 1003, §2; Act 2019-320, §1; Act 2021-422, §2.)
(a) Any person who knowingly and willfully gives false information for the purpose of claiming a homestead exemption, or for the purpose of assisting another person in claiming a homestead exemption, shall be ordered to pay twice the amount of any ad valorem tax which would have been due retroactive for a period of up to 10 years plus interest at a rate of 15 percent per annum from the date the tax would have been due.
(b) The penalties and interest assessed against any person who obtained an exemption based upon false information or any person who assisted another in claiming an exemption with false information shall be paid within thirty days of written demand by the local taxing official or the department. If payment is not made as provided herein, the State of Alabama shall bring a civil action to recover the penalties and interest due. The amount recovered shall be paid to the local taxing official in the county where the exemption was granted. The local taxing official shall then distribute the monies on a pro rata basis to each of the entities which would have received a portion of the assessed ad valorem tax had the exemption not been granted based upon false information.
(Act 2013-295, p. 1003, §4.)
(a) This section shall be known and may be cited as the Disabled Veterans Property Tax Debt-To-Income Ratio Exemption Act.
(b) A tax assessing official shall issue a veteran who has received a 100 percent disability rating from the United States Department of Veterans Affairs and who may claim an exemption under Section 40-9-19 or 40-9-21 for permanent and total disability a tentative certificate of permanent and total disability prior to purchasing a homestead upon receiving all of the following:
(1) An affidavit on a form supplied by the Department of Revenue that includes all of the following information:
a. The name of the disabled veteran and the name of his or her spouse, if applicable.
b. Whether the homestead will be jointly owned by the disabled veteran and his or her spouse, if applicable.
c. An attestation by the veteran that the homestead is to be occupied as the veteran’s principal place of residence.
(2) The purchase agreement for the homestead.
(3) Documentation from the United States Department of Veterans Affairs, or its successor agency, indicating that the veteran has a 100 percent service-connected, permanent, and total disability.
(c) A tax assessing official shall issue a tentative certificate of permanent and total disability within 20 days of receiving all of the information required pursuant to subsection (b).
(d) A tentative certificate of permanent and total disability shall be considered a valid certificate of permanent and total disability pursuant to Sections 40-9-19 and 40-9-21 upon the purchase of a homestead by a veteran.
(e) A settlement agent or loan closing officer may not consider ad valorem taxes for a homestead when calculating the debt-to-income ratio of a potential borrower who has provided a tentative certificate of permanent and total disability to the agent or officer.
(f) The department shall establish the form of the tentative certificate of permanent and total disability which shall include a section indicating that the disabled veteran, with a 100 percent permanent and total disability rating, is eligible for exemption from ad valorem taxes pursuant to Section 40-9-19 or 40-9-21 on a homestead property.
(Act 2026-268, §1.)
All nuclear fuel assemblies, together with the nuclear materials contained therein, and all reprocessed, recycled or residual nuclear fuel by-products, fissionable or otherwise used or useful in the production of electricity by persons regularly engaged in furnishing electricity to any person or persons shall be exempt from state, county and municipal taxes, excises, licenses, fees or other charges of any nature whatsoever. Nuclear fuel assemblies as used herein shall not include permanently installed equipment or structures.
It is the intention of the Legislature of Alabama that the exemptions herein provided shall not be repealed or otherwise diminished unless the statute effecting such repeal shall make specific reference to this section and shall clearly demonstrate a legislative intention to repeal or otherwise affect the exemptions provided in this section.
(Acts 1971, No. 2488, p. 3984; Acts 1971, 3rd Ex. Sess., No. 332, p. 4619.)
All corporations organized for the purpose of establishing regional mental health programs and facilities which are certified or licensed by the State Board of Health under the provisions of Sections 22-50-1 through 22-50-24 shall be exempt from all taxation.
(Acts 1971, 2nd Ex. Sess., No. 21, p. 4147.)
There is hereby set up in the Treasury a Property Tax Relief Fund to be used to reimburse the State General Fund, the State Soldiers’ Relief Fund and the Public School Fund by such amounts as are lost to such funds by reason of exemption of homesteads, in whole or in part, from the payment of the state levy of $.25 on each $100 of taxable property for the State General Fund; $.10 on each $100 of taxable property for the State Soldiers’ Relief Fund and $.30 on each $100 of taxable property for the Public School Fund. The Comptroller, with the approval of the Governor, is hereby directed to draw warrants payable out of the Property Tax Relief Fund payable to the State General Fund, the State Soldiers’ Relief Fund and the Public School Fund in amounts sufficient to reimburse each of said funds for revenues lost by the exemption of homesteads, in whole or in part, from state ad valorem taxation.
(Acts 1936-37, Ex. Sess., No. 127, p. 142; Code 1940, T. 51, §16; Acts 1943, No. 191, p. 181.)
The George Lindsey Celebrity Benefit, Inc., and the Alabama Special Olympics or any predecessor organizations or entities, are hereby exempt from paying any state, county or municipality sales or use taxes.
(Acts 1984, No. 84-187, p. 294.)
Magic Moments, Inc., is exempted from paying any state, county, and municipal sales or use taxes.
(Acts 1994, No. 94-212, p. 298, §1.)
Habitat for Humanity Organizations and West Alabama Youth Services, Inc. (WAYS), are exempted from paying state, county, and municipal sales and use taxes and all property owned and used by the organization is exempted from state, county, and local ad valorem taxation.
(Acts 1995, No. 95-394, p. 805, §1.)
The Rainbow Omega, Inc., is exempted from paying any state, county, and municipal sales or use taxes.
(Acts 1995, No. 95-586, p. 1245, §1.)
All property owned by the Farley L. Berman Foundation, Inc., and used by that organization is hereby exempted from any state, county, and local ad valorem taxation.
(Acts 1995, No. 95-654, p. 1367, §1.)
The American Bowling Congress or any predecessor organization or entity is exempted from paying any state, county, and municipal sales or use taxes applicable to its entry fees.
(Acts 1995, No. 95-724, p. 1548, §1.)
The Christian Children Homes, Inc., is exempted from paying any state, county, and municipal sales or use taxes.
(Acts 1996, No. 96-426, p. 541, §1.)
The Franklin Memorial Clinic, Inc., is exempted from paying any municipal gross receipts taxes and municipal business license taxes.
(Acts 1996, No. 96-466, p. 580, §1.)
The Birmingham Civil Rights Institute, Inc., a nonprofit corporation organized under the laws of the State of Alabama, the directors of which are appointed by the City Council of the City of Birmingham, which is sponsored by the City of Birmingham to present exhibits, educational programming, and maintain archives for educational and historical research respecting civil rights and human rights in Alabama, the United States, and the world, is exempted from all state, county, and municipal income, license, and sales and use taxes.
(Acts 1996, No. 96-745, p. 1306 §1.)
The Bridge, Incorporated, is exempted from paying any state, county, and municipal sales and use taxes.
(Acts 1997, No. 97-420, p. 709, §1.)
The Anniston Fellowship House, Inc., the Wings of Life, Inc., the Jacksonville Christian Outreach Center, Inc., Wiregrass Children’s Home, Inc., DoDa Parade, Lee County Humane Society, and Huntsville Emergency Medical Services, Inc., are exempted from paying any state, county, and municipal sales or use taxes.
(Acts 1997, No. 97-709, p. 1460, §1.)
The Little Sisters of the Poor is exempted from paying any state, county, and municipal sales and use taxes.
(Acts 1997, No. 97-943, 1st Ex. Sess., p. 514, §1.)
The Service Guild of Birmingham, Incorporated, Early Intervention Program, is exempted from paying any state, county, and municipal sales and use taxes.
(Act 98-380, p. 715, §1.)
The Big Oak Ranch, Incorporated, Administrative Office in Springville, Alabama, is exempted from paying or collecting any state, county, and municipal sales and use taxes.
(Act 2006-250, §1.)
(a) The Barber Vintage Motorsports Museum, hereinafter referred to as the Barber Museum, is exempted from paying any state, county, and municipal sales and use taxes with respect to tangible personal property purchased solely for display as a museum exhibit primarily within the confines of the museum property.
(b) All personal property owned by and all real property leased to the Barber Museum by the City of Birmingham and improvements thereon, at such time as the leased real property may be purchased by the Barber Museum, and all improvements made subsequent to the purchase, are hereby or shall upon their purchase be exempted from any state, county, and local ad valorem taxation. Provided, however, this exemption shall not apply to any portion of the property that is not used in connection with the organization’s museum or motorsports park operations, or that may be sold to any third party, or that may be leased to any third party for any purpose not connected with the museum or motorsports park operations, nor shall it apply to any real property purchased after July 1, 2006, and added to the Barber Museum complex, except as described herein, nor to any other property owned by the Barber Museum.
(Act 2006-556, §1.)
The Christian Service Centers of Covington Baptist Association, Incorporated, are exempted from paying or collecting any state, county, and municipal sales and use taxes.
(Act 2006-615, §1.)
(a) All food banks within the state are hereby exempted from the payment and collection of any state, county and municipal sales and use taxes.
(b) As used in this section, food bank shall be defined as any entity located within Alabama that is an affiliated food bank of the America’s Second Harvest national food bank network or their subsidiary distribution organizations.
(Act 2007-453, p. 938, §§1, 2.)
Eagles’ Wings, Incorporated, is exempted from paying or collecting any state, county, and municipal sales and use taxes.
(Act 2010-749, p. 1901, §1.)
The Alabama Marine Corps League is exempted from paying or collecting any state, county, and municipal sales and use taxes.
(Act 2012-513, p. 1529, §1.)
(a) All property owned by the Lurleen B. Wallace Community College Foundation and the Calhoun Community College Foundation and used by that organization in furtherance of its charitable purposes is hereby exempted from any state, county, and local ad valorem taxation.
(b) All purchases by the Lurleen B. Wallace Community College Foundation and the Calhoun Community College Foundation which are used by that organization in the furtherance of its charitable purpose are hereby exempted from the state, county, and local sales and use taxes.
(Act 2013-170, p. 317, §§1, 2.)
The Community Action Association of Alabama and its member agencies are exempted from paying or collecting any state, county, and municipal sales and use taxes, except this exemption shall not apply to county or municipal sales and use taxes unless approved by resolution of the respective local governing body.
(Act 2014-407, p. 1505, §1.)
LifeSouth Community Blood Centers are exempted from paying or collecting any state, county, and municipal sales and use taxes.
(Act 2016-246, §1.)
(a) The Southern Research Institute is exempted from paying any state, county, and municipal sales and use taxes.
(b) The Southern Research Institute shall file an annual informational report in a manner as prescribed by the Department of Revenue. The information on such reports shall be consistent with the information required by the Department of Revenue pursuant to Section 40-9-61 and rules promulgated thereunder. Information provided pursuant to this section is exempted from the confidentiality provisions of Section 40-2A-10, and shall be provided by the Department of Revenue to the Legislative Services Agency, Fiscal Division on an annual basis.
(Act 2017-386, §1.)
The Most Worshipful Prince Hall Grand Lodge Free and Accepted Masons of Alabama and the Most Worshipful Grand Lodge F. and A.M. of Alabama are exempted from paying all state, county, and municipal fees and taxes until September 30, 2027, unless extended by an act of the Legislature.
(Act 2022-350, §1.)
(a) The Alabama Judicial College Education Fund is exempt from paying state sales and use taxes.
(b) Any county or municipality may exempt this entity from the payment of county or municipal sales and use taxes in accordance with Section 40-23-4.01.
(c) The exemption provided by this section is effective September 1, 2026, through August 31, 2031.
(Act 2026-269, §2.)
(a) For the period commencing on October 1, 2026, and ending on September 30, 2031, unless extended by an act of the Legislature, Precision Ocular is exempt from paying any state sales and use taxes.
(b) Precision Ocular may be exempted from paying county and municipal sales and use taxes upon approval of the county or municipality pursuant to Section 40-23-4.01.
(Act 2026-576, §1.)
The Presbyterian Apartments of Birmingham, Inc., the Presbyterian Homes of Decatur, Inc., the Shoals Presbyterian Apartments, Inc., and the Presbyterian Apartments in Northport, Alabama, and the East Alabama Services for the Elderly, Inc., a nonprofit corporation in Lee County, Alabama, the Mayfair Towers Corporation in Huntsville, Alabama or any predecessor organization or entity, are hereby exempt from the payment of all state, county and municipal ad valorem taxation.
(Acts 1984, No. 84-611, p. 1251.)
The Birmingham Regional Paratransit Consortium, Inc., doing business as ClasTran, is exempted from paying any state, county, and municipal sales and use taxes until September 30, 2024.
(Act 2019-474, §1.)
TWG 2021 Birmingham Foundation, an Alabama nonprofit corporation, is exempted from paying or collecting any state, county, and municipal sales, use, and license taxes with respect to the World Games 2022 event to be conducted by the TWG 2021 Birmingham Foundation in Alabama, including, without limitation, taxes with respect to the purchase or use of property by TWG 2021 Birmingham Foundation and the gross proceeds from the sale or use of property by TWG 2021 Birmingham Foundation or admissions to the World Games 2022 event. All property owned by TWG 2021 Birmingham Foundation and used for the World Games 2022 event is exempted from all state, county, and local ad valorem taxes. The exemptions provided in this section shall expire on December 31 of the year following the year the World Games 2022 event has concluded.
(Act 2021-170, §1.)
The Victims of Crime and Leniency, Incorporated, is exempted from paying any state, county, and municipal sales and use taxes.
(Act 2021-496, §1.)
(a) Any vitamins, minerals and dietary supplements, which are used, sold, furnished, dispensed and prescribed by any physician licensed to practice medicine, chiropractor, orthodontist, and podiatrist in the performance of his professional services shall be exempt from any city, county and state sales tax. This exemption shall apply only to vitamins, minerals, and dietary supplements dispensed by prescription by the professionals listed in this subsection.
(b) The exemption provided for in subsection (a) shall be in addition to any and all exemptions from sales tax provided for in Article 1 of Chapter 23 of Title 40, Revenue and Taxation, as last amended.
(Acts 1985, p. 960, No. 85-630.)
In addition to any other exemptions provided by law, any items used for the treatment of diabetes purchased by or on behalf of an individual pursuant to a valid prescription shall be exempt from state, county, and municipal sales and use taxes, including, but not limited, to any of the following: Insulin and insulin syringes, and any equipment, supplies, devices, chemical reagents, and any related items that may be used by a diabetic to treat diabetes or to test or monitor blood or urine.
(Act 2012-309, p. 680, §1.)
All property owned by the Selma-Dallas County Historic Preservation Society and the Valegrande Community Center and used by said organizations is hereby exempted from all state, county or local ad valorem taxation and all state, county or local sales and use taxation.
(Acts 1990, No. 90-566, p. 963.)
All property owned by Community Health Systems, Inc. and the Walker Regional Medical Center is hereby exempted from any state, county, and local ad valorem taxes.
(Acts 1992, No. 92-603, p. 1251, §1.)
(a) As used in this section, the term “durable medical equipment” means equipment that can stand repeated use, is used to serve a purpose for medical reasons, and is appropriate and suitable for use in the home.
(b) Oxygen or durable medical equipment dispensed under orders from a duly licensed physician by a participating provider to a recipient of benefits under the Medicare program shall be exempt from state and local sales and use taxes.
(c) A provider who rents or leases oxygen or durable medical equipment to a recipient of benefits under the Medicare or Medicaid program under orders from a duly licensed physician shall be exempt from all state and local rental and leasing taxes.
(d)(1) In addition to any other exemptions provided in subsection (b) or (c), any items used for the treatment of illness or injury or to replace all or part of a limb or internal body part purchased by or on behalf of an individual pursuant to a valid prescription and covered by and billed to Medicare, Medicaid, or a health benefit plan shall be exempt from state, county, and municipal sales, use, and rental and leasing taxes, including, but not limited to, any of the following: Durable medical equipment, including repair parts and the disposable or single patient use supplies required for the use of the equipment; medical oxygen and related equipment and supplies; prosthetic and orthotic devices; and medical supplies, as defined and covered under the Medicare program, including, but not limited to, items such as catheters, catheter supplies, ostomy bags and supplies related to ostomy care, specialized wound care products, and similar items that are covered by and billed to Medicare, Medicaid, or a health benefit plan.
(2) Beginning September 1, 2024, any health care provider claiming an exemption pursuant to this subsection shall obtain and maintain a certificate of exemption from the Department of Revenue, in accordance with Section 40-9-60, prior to the purchase and shall provide the certificate to the seller at the time of the purchase.
(Acts 1993, No. 93-353, p. 548, §§1-3; Act 2014-453, p. 1685, §1; Act 2024-391, §1.)
(a) The taxes imposed pursuant to Chapter 23 of this title, (commencing with Section 40-23-1), and any county and municipal sales and use taxes do not apply to sales by elementary or secondary schools or nonprofit elementary or secondary school-sponsored clubs and organizations or any nonprofit, elementary, or secondary school affiliated groups, such as parent-teacher organizations and booster clubs, whose membership may be composed of individuals other than students, provided the net proceeds from such sales are used solely for the benefit of the elementary or secondary school. Such nontaxable sales shall include sales resulting from agreements or contracts entered into with resident or nonresident organizations to participate in fund-raising campaigns for a percentage of the gross receipts where students act as agents or salesmen for the organizations by selling or taking orders for the sale of tangible personal property, and no one shall be required to pay sales or use taxes on such sales.
(b) The Department of Revenue may make any rules and regulations necessary to carry out the intent of this section.
(Acts 1996, No. 96-653, p. 1050, §1.)
Notwithstanding any other provision of law, the Alabama School of Fine Arts Foundation, Incorporated, the Alabama High School of Mathematics and Science Foundation, the Alabama School of Cyber Technology and Engineering Foundation, and the Alabama School of Healthcare Sciences Foundation are exempted from paying any state, county, and municipal sales and use taxes.
(Act 2021-130, §1; Act 2025-329, §1.)
Shares of stock in corporations or associations incorporated under the laws of this state or otherwise shall be exempt from ad valorem taxation in this state.
(Act 99-665, 2nd Sp. Sess., p. 131, §8.)
[Repealed]
Repealed by Act 2004-638, p. 1461, §1, effective July 1, 2004.
(Act 2000-684, p. 1389, §1.)
(a) The following is hereby found and declared by the Legislature of Alabama:
(1) The lack of content in natural and bio-science education offered to students in kindergarten through high school is a nationwide problem.
(2) Such lack in curricular offerings to students will be detrimental in the long-term to the economy of the state and the welfare of the citizens during the scientific revolution now engulfing the world.
(3) The biotechnology institute can provide to education leaders of the distance learning program of the state cutting edge biotechnology curriculum recommendations and content for Alabama high schools, by providing information about cutting edge biotechnology curriculum and content to students in kindergarten through high school pursuant to the distance learning program of the state, the state course of study, and state textbooks.
(4) By educating Alabama high school students in the field of biotechnology, such students are more likely to pursue careers in the biological sciences, thereby providing the state with a better educated workforce able to support the growing biotechnology industry, in turn attracting and encouraging biotechnology companies to locate in the state and create additional challenging and rewarding job opportunities for the citizens of the state.
(5) The reputation, economic status, and educational system of the state will be further enhanced by the addition of an internationally renowned biotechnology institute that will support internationally recognized scientists and researchers, with a focus on scientific discoveries that are intended, when possible, to be proven in the state and provided by companies in the state to patients suffering from diseases.
(6) By establishing a biotechnology campus, the biotechnology institute will be in a better position to join with the economic development leaders of the state to attract biotechnology companies to the campus and to the state, thereby creating additional job opportunities for the citizens of the state.
(b) The Hudson-Alpha Institute for Biotechnology, a nonprofit corporation, and any real and personal property owned by the corporation, shall be exempt from the payment of any and all state, county, and municipal taxes, licenses, fees, and charges of any nature whatsoever, including any privilege or excise tax heretofore or hereafter levied by the State of Alabama or any county or municipality thereof.
(c)(1) In exchange for the tax exemption granted in subsection (b), beginning October 1, 2008, and for each year thereafter, the Hudson-Alpha Institute for Biotechnology shall make a report to the State Board of Education detailing the curricular content in biotechnology which could enhance the state distance learning program. This subdivision shall not apply in the event that the distance learning program is discontinued, or is no longer in existence. Further, the Hudson-Alpha Institute for Biotechnology shall report annually to the State Board of Education, the State Course of Study Committee, and the State Textbook Committee all new developments in the field of biotechnology which could be integrated into the curriculum for high school courses in science and health.
(2) Further, in exchange for the tax exemption granted in subsection (b), the Hudson-Alpha Institute for Biotechnology shall certify to the Legislative Fiscal Office and to the House and Senate education appropriations committees on or before September 30, 2008, that the following levels of investment, employment, and property improvements have been made in the State of Alabama:
a. The Hudson-Alpha Institute for Biotechnology has made an investment in the State of Alabama equal to or in excess of fifty million dollars ($50,000,000) in property and equipment.
b. The Hudson-Alpha Institute for Biotechnology has equal to or in excess of 100 employees.
c. For-profit companies have made property improvements on property in the State of Alabama owned by the Hudson-Alpha Institute for Biotechnology equal to or in excess of five million dollars ($5,000,000).
(3) In the event that the Hudson-Alpha Institute for Biotechnology fails to meet the requirements in subdivision (1), all tax exemptions granted in subsection (b) are null and void as of October 1, 2008, and the Hudson-Alpha Institute for Biotechnology shall repay all taxes exempt under subsection (b) that were not otherwise exempt by law, beginning as of the effective date of the exemption until September 30, 2008. The Hudson-Alpha Institute for Biotechnology shall repay the taxes in equal installments each year beginning October 1, 2008, and ending October 1, 2018.
(d)(1) Each for-profit entity leasing or otherwise owning property located on property owned by the Hudson-Alpha Institute for Biotechnology shall be subject to sales, use, and ad valorem taxes, and each for-profit entity leasing property located on property owned by the Hudson-Alpha Institute for Biotechnology shall be subject to property tax on the leased property, fixtures, and equipment thereof except as otherwise allowed under Chapter 9B of this title, or any amendment or successor statute thereto.
(2) No for-profit entity shall be entitled to an exemption under subsection (b) directly or indirectly, including any property that is contributed to the Hudson-Alpha Institute for Biotechnology by a for-profit entity if the contributing for-profit entity uses that contributed property in its for-profit activities.
(Act 2005-305, 1st Sp. Sess., §§2-5; Act 2010-219, p. 362, §1.)
(a) Motor fuels used by vehicles of rescue squads who are members in good standing of the Alabama Association of Rescue Squads in Alabama shall be exempt from all state and local motor fuel taxes.
(b) Motor vehicles used by rescue squads who are members in good standing of the Alabama Association of Rescue Squads in Alabama shall be exempt from all tax and motor vehicle license fees.
(Act 2009-660, p. 2028, §1.)
Vehicles owned and operated by volunteer fire departments and fire protection districts in Alabama shall be exempt from all state and local motor fuel taxes.
(Act 2009-717, p. 2115, §1.)
(a) This section shall be known and may be cited as the Jason Barfield Act.
(b) Any payment made by the United States Department of Defense as a result of the death of a member of the Armed Forces of the United States who has been killed in action in a United States Department of Defense designated combat zone and was a resident of the State of Alabama at the time of his or her death shall be exempt from Alabama income tax during the taxable year in which the individual is declared deceased by the Armed Forces. Any income earned by the spouse of a member of the Armed Forces of the United States who has been killed in action in a United States Department of Defense designated combat zone shall be exempt from Alabama income tax during the taxable year in which the individual is declared deceased by the Armed Forces.
(c) In any case where income tax has been paid upon any income exempt pursuant to subsection (b), the tax monies shall be refunded to the person or personal representative of the person. The refund shall be made by the Department of Revenue.
(d) This section shall have retroactive effect to January 1, 2011.
(e) The provisions of this section shall be liberally construed to accomplish its purpose and the statute of limitations with respect to refunds of income taxes shall not apply to taxpayers covered by this section.
(Act 2012-486, p. 1399, §§1, 2.)
The Alabama Association of Volunteer Fire Departments, county volunteer fire associations, the Alabama Association of Rescue Squads, Incorporated, all volunteer rescue squads that are members of the Alabama Association of Rescue Squads, all county volunteer rescue associations, and all local fire districts that are not under the auspices of their county commission are exempt from any state, county, and local sales and use taxes and ad valorem taxes.
(Act 2012-544, p. 1613, §1.)
(a) For the purposes of this section, a food pantry is a charitable, nonprofit organization which collects, purchases, or otherwise accumulates food and food related items for distribution without any charge for charitable purposes.
(b) A food pantry in Talladega County is exempt from all state, county, and municipal sales and use taxes on the purchase or distribution of food and food related items for charitable purposes provided the food pantry has been granted status as a tax exempt organization under Section 501(c)(3) of the federal Internal Revenue Code and provided it pays no person any salary or expenses for the performance of any duties related to its charitable operations.
(Act 2013-442, p. 1761, §1.)
[Repealed]
Repealed by Act 2014-453, §2, effective August 1, 2014.
(Act 2013-443, p. 1761, §1.)
The Birmingham Regional Paratransit Consortium, Inc., doing business as ClasTran, is exempt from state gasoline, motor fuel excise taxes, and inspection fees. The Birmingham Regional Paratransit Consortium, Inc., shall pay the appropriate tax at the time purchases are made, and the amount of tax shall be refunded by the Department of Revenue pursuant to the procedures for refunds provided in Chapter 2A. Any refunds granted pursuant to this exemption shall be subject to the provisions of paragraph (b)(2)a. of Section 40-1-44.
(Act 2021-374, §1.)
(a) The Birmingham Holocaust Education Center is exempt from paying any state, county, and municipal sales and use taxes associated with any and all capital expenditures.
(b) The exemption provided pursuant to subsection (a) shall be available until December 31, 2023.
(c) The Birmingham Holocaust Education Center shall report annually to the Department of Revenue on the sales for which the exemption is granted. The Department of Revenue shall prescribe the format of such annual report.
(Act 2021-374, §2.)
[Repealed]
THIS SECTION WAS REPEALED BY ACT 2026-510, EFFECTIVE JANUARY 1, 2027.
(a) All of the following community foundation entities are exempted from paying any state, county, and municipal sales and use taxes:
(1) The Community Foundation of South Alabama.
(2) The Community Foundation of West Alabama.
(3) The Black Belt Community Foundation.
(4) The Community Foundation of Northeast Alabama.
(5) The Community Foundation of Greater Birmingham.
(6) The Community Foundation of Greater Huntsville.
(7) The Community Foundation of Greater Decatur.
(8) The Limestone Area Community Foundation.
(9) The Central Alabama Community Foundation.
(10) The Community Foundation of East Alabama.
(11) The Walker Area Community Foundation.
(b) Each entity listed in subsection (a) shall file an annual informational report in a manner as prescribed by the Department of Revenue. The information on such reports shall be consistent with the information required by the Department of Revenue pursuant to Section 40-9-61, and rules adopted thereunder. Information provided pursuant to this section is exempted from the confidentiality provisions of Section 40-2A-10, and shall be provided by the Department of Revenue to the Legislative Services Agency, Fiscal Division on an annual basis.
(c) The sales and use tax exemption authorized under this section shall be effective January 1, 2022, for the 2022 tax year and shall continue through the 2026 tax year, unless extended by an act of the Legislature.
(Act 2021-374, §3.)
(a) All of the following community foundation entities are exempted from paying any state sales and use taxes:
(1) The Black Belt Community Foundation.
(2) The Central Alabama Community Foundation.
(3) The Community Foundation of Greater Birmingham.
(4) The Community Foundation of Greater Decatur.
(5) The Community Foundation of Greater Huntsville.
(6) The Community Foundation of Northeast Alabama.
(7) The Community Foundation of South Alabama.
(8) The Community Foundation of West Alabama.
(9) The Limestone Area Community Foundation.
(10) The Walker Area Community Foundation.
(b) Each entity listed in subsection (a) shall file an annual informational report in a manner as prescribed by the Department of Revenue. The information on the reports shall be consistent with the information required by the Department of Revenue pursuant to Section 40-9-61 and rules adopted thereunder. Information provided pursuant to this section is exempted from the confidentiality provisions of Section 40-2A-10 and shall be provided by the Department of Revenue to the Legislative Services Agency, Fiscal Division, on an annual basis.
(c) The sales and use tax exemption authorized under this section shall be effective September 1, 2026, and shall continue through August 31, 2031.
(d) Any county or municipality may exempt the entities listed in subsection (a) from county or municipal sales and use taxes in accordance with Section 40-23-4.01.
(Act 2026-510, §1.)
(a) All persons or companies, including, but not limited to, those cited in this chapter, other than governmental entities, which have statutory exemption from the payment of Alabama sales and use taxes levied in, including, but not limited to, Chapter 23, or lodgings taxes levied in Chapter 26, regardless of the type of transaction or whether the tangible personal property is subject to sales and use tax or whether the accommodations are subject to lodgings tax, shall be required to annually obtain a certificate of exemption from the Department of Revenue. This requirement does not supersede or replace the provisions of Section 40-9-14.1 or any other provision of statute requiring an entity to obtain a certificate of exemption. Except as otherwise provided in this title, this article only applies to entities that have been granted a general exemption from sales, use, or lodging taxes. Except as otherwise provided in this title, the requirements of this article are not triggered by the purchase of tangible personal property that is exempt from sales and use tax.
(1) For purposes of this article, the term governmental entity means the federal government, the State of Alabama, Alabama public schools, Alabama public universities, healthcare authorities, airport authorities, Alabama counties and municipalities, and public corporations incorporated under any of the provisions of Chapter 50 of Title 11, Chapter 50A of Title 11, Chapter 5 of Title 37, or Chapter 7 of Title 39.
(2) The term governmental entity does not include public corporations, other than those public corporations described in subdivision (1), private schools, or private universities.
(3) For purposes of this article, the term lodgings tax means Transient Occupancy Tax, levied in Chapter 26.
(4) For the purposes of this article, the terms person or company shall have the same meaning as prescribed in Section 40-23-1.
(b) Certificates 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. 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. Any reports required by the Department of Revenue shall be filed as a prerequisite to the renewal of a certificate of exemption.
(c) Any person or company that intentionally uses a certificate of exemption in violation of its intended purpose, in addition to the actual sales, use, and lodgings tax liability due, shall be subject to a civil penalty levied by the Department of Revenue in an amount of not less than two thousand dollars ($2,000) or two times any state and local sales, use, and lodgings tax due for the transactions, whichever is greater, and based on the person or company’s willful misuse of the certificate of exemption, may be barred from the use of any certificate of exemption for up to two years.
(d) Except as otherwise provided in this title, this section shall be operative for all applicable exempt persons or companies on January 1, 2016.
(e) The Department of Revenue may adopt rules to administer and implement this section and may adopt rules requiring an annual exemption certificate for persons or companies not subject to subsection (a), other than government entities, providing for an annual information report from such persons or companies, and imposing penalties equivalent to the penalties provided for in subsection (c) for noncompliance by such persons or companies in order to verify exemptions and make reports to the Legislature.
(Act 2015-534, 1st Sp. Sess., p. 1898, §1; Act 2021-298, §2; Act 2024-391, §1.)
(a) All persons or companies, other than governmental entities as defined in Section 40-9-60, exempt from the payment of Alabama sales, use, and lodgings tax, regardless of the type of transaction or whether the tangible personal property is subject to sales and use tax, or whether the accommodations are subject to lodgings tax, may be required to file an information report in a manner as prescribed by the Department of Revenue.
(b) Any person or company that does not comply with the reporting requirements of this article and any rules promulgated thereunder, may be barred from the use of any certificate of exemption for up to six months for the first offense and one year for the second offense. On the third offense, the person or company shall be barred from the use of any certificate of exemption until the time as the person or company is authorized to obtain a certificate of exemption pursuant to a joint resolution by the Legislature.
(c) Notwithstanding any provision of law to the contrary, a person or company receiving an exemption from the payment of sales or use tax for the gross proceeds of the sales of gold, silver, platinum, and palladium bullion, and money under Section 40-23-4 shall not be required to file a report relating to that exemption by the Department of Revenue under this section.
(Act 2015-534, 1st Sp. Sess., p. 1898, §2; Act 2022-373, §1.)
For purposes of this chapter, the following words and phrases mean:
(a) PRIVATE USER. Any individual, partnership, or corporation organized for profit that is or will be treated as the owner of private use property for federal income tax purposes.
(b) PRIVATE USE PROPERTY. Any real and/or personal property which is or will be treated as owned by a private user for federal income tax purposes even though title may be held by a public authority or municipal or county government.
(c) PUBLIC AUTHORITY. A corporation created for public purposes pursuant to a provision of the Constitution of Alabama of 1901 or a general or local law that authorized it to issue bonds, the interest on which is exempt from the Alabama income tax, as in effect on May 21, 1992.
(Acts 1992, No. 92-598, §1.)
(a) Any private user of private use property leased by the private user from a municipality, county, or public authority of the State of Alabama shall, not later than January 1, 1993, file with the tax assessor of the county in which the leased property is located, the information required by subsection (c) of this section.
(b) In the event any lessee described in subsection (a) of this section is unable to file the information required by subsection (c) of this section by January 1, 1993, such lessee shall on or before January 1, 1993, notify the tax assessor in writing, setting forth the item or items of required information which the lessee is unable to ascertain or calculate, the reason or reasons for such inability, and if the inability to file any one or more of the items of required information can be corrected with additional time, the additional time, not to exceed four months, which the lessee shall require. In the event any lessee described in subsection (a) of this section shall not have filed either the information required by subsection (c) of this section or the notification described in the preceding sentence of this subsection (b) by January 1, 1993, or having requested additional time as described in the preceding sentence of this subsection (b), shall not have filed within the additional time stated to be required the item or items for the ascertainment or calculation of which the additional time was required, the tax assessor of the county in which the leased property is located shall notify the lessee in writing by certified mail, specifying the action required of the lessee and stating that the same must be performed within 60 days of the date such notice is given, whereupon the lessee shall, within the required period, either file the items or items of missing information or a notification of inability to comply as described in the preceding sentence of this subsection (b). Notwithstanding the preceding sentence, any lessee who receives an extension shall file with both the tax assessor and the Department of Revenue the required information by April 30, 1993.
(c) Every lessee of property described in subsection (a) of this section shall file the following information:
(1) The location of the real property subject to the lease with the public authority, county, or municipality of the State of Alabama.
(2) A list of all improvements to the property since the effective date of the lease with the public authority, county, or municipality of the State of Alabama.
(3) A list of all personal property subject to the lease with the public authority, county, or municipality of the State of Alabama.
(4) The purchase price and date of acquisition, or a reasonable estimate thereof, of such real and personal property.
(5) An estimate of the fair and reasonable market value of the property; provided, however, that such estimate may be made without obtaining an appraisal of the property.
(6) The effective date and term of the lease with the public authority, county, or municipality of the State of Alabama, including any extension or renewal options provided in the lease.
(Acts 1992, No. 92-598, p. 1235, §2.)
Every tax assessor shall, not later than March 1, 1993, forward to the Department of Revenue the following information:
(a) A complete listing of all real property located in the county which is subject to a lease with a public authority, county, or municipality of the State of Alabama.
(b) A complete listing of all personal property located in the county which is subject to a lease with a public authority, county, or municipality of the State of Alabama.
(c) A complete listing of the purchase price and date of acquisition of such real and personal property.
(d) A complete listing of the estimated fair and reasonable market value of such real and personal property.
(e) The estimated tax revenue produced by such real and personal property if taxed at the rates applicable to taxable property located in the same jurisdiction.
(f) A list of all lessees which have not filed the required information by January 1, 1993, including within such list a separate category of those lessees, if any, which shall have submitted a notification of inability as described in the first sentence of subsection (b) of Section 40-9A-2 and attaching to such list a copy of each such notification of inability. The completeness of the information required to be provided by the tax assessor pursuant to subsections (a) through (e) of this section shall be deemed subject to the list required to be provided pursuant to this subsection (f).
(Acts 1992, No. 92-598, p. 1235, §3.)
The Department of Revenue shall, not later than May 1, 1993, compile the information submitted pursuant to Section 40-9A-3 and provide to the Legislature the following information:
(a) A complete listing of all real and personal property located in the state which is subject to a lease with a public authority, county, or municipality of the State of Alabama.
(b) A complete listing of the estimated fair and reasonable market value of such real and personal property.
(c) The estimated tax revenue produced by such real and personal property if taxed at the rates applicable to taxable property located in the respective jurisdictions.
(d) A copy of all lists, if any, received by the department from tax assessors pursuant to subsection (f) of Section 40-9A-3. The completeness of the information required to be provided by the department pursuant to subsections (a) through (c) of this section shall be deemed subject to the list required to be provided pursuant to this subsection (d).
(e) A list of all lessees which have not filed the information required by Section 40-9A-1 by January 1, 1993.
(Acts 1992, No. 92-598, p. 1235, §4.)
A county tax assessor may require any public authority, county, or municipality of the State of Alabama that owns property which must be reported to the assessor under the provisions of Section 40-9A-2 to provide any information in its possession to such assessor for use in ascertaining the completeness and accuracy of the information provided under Section 40-9A-2.
(Acts 1992, No. 92-598, p. 1235, §5.)
(a) If any lessee which is required to file the information required by Section 40-9A-2 fails to file either such information or a notification of inability as described in the first sentence of subsection (b) of Section 40-9A-2 within the time frames set forth in said subsection (b), or files false information, or files information that is so incomplete or inaccurate that the county tax assessor is unable to determine the information required by Section 40-9A-3 with reasonable accuracy, then such lessee shall be liable for a penalty equal in amount to $50 for each month or part of a month during which the act or omission subjecting the lessee to a penalty under this section occurs or continues.
(b) The Department of Revenue is authorized to enforce the reporting requirements of Section 40-9A-1 by injunctive relief in the courts of this state and shall be entitled to recover from the defendant in such action any court costs incurred and reasonable attorney’s fees.
(Acts 1992, No. 92-598, p. 1235, §6.)
This chapter shall be known and may be cited as the “Tax Incentive Reform Act of 1992.”
(Acts 1992, No. 92-599, p. 1239, §1.)
The Legislature recognizes the importance of industrial development to the well being of the people of the state. The Legislature also recognizes that industries are attracted by a number of factors, including natural resources, a well-trained workforce, good roads, and excellent education. The Legislature also recognizes that in some cases additional incentives are required to succeed in attracting new industries and encouraging existing industries to expand and therefore intends to continue to allow county and municipal governments and certain public corporations to provide substantial tax incentives.
(Acts 1992, No. 92-599, p. 1239, §2.)
(a) For purposes of this chapter, the following words and phrases mean:
(1) ABATE, ABATEMENT. A reduction or elimination of a taxpayer’s liability for tax or payments required to be made in lieu thereof. An abatement of transaction taxes imposed under Chapter 23, or payments required to be made in lieu thereof, shall relieve the seller from the obligation to collect and pay over the transaction tax as if the sale were to a person exempt, to the extent of the abatement, from the transaction tax.
(2) ALTERNATIVE ENERGY RESOURCES. The definition given in Section 40-18-1.
(3) CONSTRUCTION RELATED TRANSACTION TAXES. The transaction taxes imposed by Chapter 23, or payments required to be made in lieu thereof, on tangible personal property and taxable services incorporated into an industrial development property, the cost of which may be added to capital account with respect to the property, determined without regard to any rule which permits expenditures properly chargeable to capital account to be treated as current expenses.
(4) DATA PROCESSING CENTER. An establishment at which not less than 20 new jobs are located, the average annual total compensation, including benefits, of such new jobs to be not less than forty thousand dollars ($40,000), and such establishment is engaged in the provision of complete processing and specialized reports from data, the provision of automated data processing and data entry services, the provision of an infrastructure for hosting or data processing services, the provision of specialized hosting activities, the provision of application service provisioning, the provision of general time-share mainframe facilities, the provision or operation of computer equipment or enabling software for the processing, storage, backup, retrieval, communication, or distribution of data, or some combination of the foregoing, without regard to whether any other activities are conducted at the establishment.
(5) EDUCATION TAXES. Ad valorem taxes, or payments required to be made in lieu thereof, that must, pursuant to the Constitution of Alabama of 2022, as amended, legislative act, or the resolution or other action of the governing board authorizing the tax, be used for educational purposes or for capital improvements for education and local construction related transaction taxes levied for educational purposes or for capital improvements for education.
(6) HEADQUARTERS FACILITY. Any trade or business described in NAICS Code 551114, at which not less than 50 new jobs are located.
(7) HYDROPOWER PRODUCTION. The definition given in Section 40-18-1.
(8) INDUCEMENT. Refers to an agreement, or an “inducement agreement,” entered into between a private user and a public authority or county or municipal government and/or a resolution or other official action, an “inducement resolution,” “inducement letter,” or “official action” adopted by a public authority or county or municipal government, in each case expressing, among other things, the present intent of such public authority or county or municipal government to issue bonds in connection with the private use property therein described. Notwithstanding any provision in this chapter to the contrary, neither an inducement nor a request for inducement shall be required to apply for, grant, or receive any abatement of taxes allowed to be abated under this chapter.
(9) INDUSTRIAL DEVELOPMENT PROPERTY. Real and/or personal property acquired in connection with establishing or expanding an industrial or research enterprise in Alabama.
(10) INDUSTRIAL OR RESEARCH ENTERPRISE.
a. Any trade or business predominantly consisting of any one or more of the following:
Described by NAICS Code 1133, 115111, 2121, 22111, 221330, 31 (other than 311811), 32, 33, 423, 424, 482, 4862, 48691, 48699, 48819, 4882, 4883 (other than 48833), 493, 5121 (other than 51213), 5122, 513, 517, 518 (without regard to the premise that data processing and related services be performed in conjunction with a third party), 51929, 52232, 54133 (if predominantly in furtherance of another activity described in this article), 54134 (if predominantly in furtherance of another activity described in this article), 54138, 5415, 541614, 5417, 55 (if not for the production of electricity), 561422 (other than establishments that originate telephone calls), 562213, 56291, 56292, 611512, 927, or 92811.
A target of the state’s economic development efforts pursuant to either of the following:
(i) The comprehensive economic development plan, CatALyst, or any amended version or successor document thereto; or
(ii) A type listed in a rule adopted by the Department of Commerce, other than a rule submitted as an emergency rule.
Notwithstanding the foregoing, the activities described in this definition shall not predominantly concern farming activities involving trees, animals, or crops, nor the retail sale of tangible personal property or services. This provision shall not be deemed to exclude customer service centers or call centers otherwise allowed or provided for herein.
b. With respect to abatements granted in accordance with Section 40-9B-9, and only with respect to such abatements, “industrial or research enterprise” means any trade or business described in NAICS Code 493, 488310, or 488320, when such trade or business is conducted on premises in which the Alabama Port Authority has an ownership, leasehold, or other possessory interest and such premises are used as part of the operations of the Alabama Port Authority.
c. “Industrial or research enterprise” includes the above-described trades and business and any others as may hereafter be reclassified in any subsequent publication of the NAICS or similar industry classification system developed in conjunction with the United States Department of Commerce or Office of Management and Budget.
d. “Industrial or research enterprise” also includes any underground natural gas storage facility which is located in the Gulf Opportunity Zone, as that phrase is defined in the Gulf Opportunity Zone Act of 2005, developed from existing geologic reservoirs, including, without limitation, salt domes, and placed in service on or before December 31, 2013.
e. “Industrial or research enterprise” also includes any plant, property, or facility that meets both of the following:
(i) Alternative energy resources and has capital costs of at least one hundred million dollars ($100,000,000); or
(ii) Hydropower production and has capital costs of at least five million dollars ($5,000,000).
(i) A utility described in Section 37-4-1(7)a.
(ii) An entity organized under the provisions of Chapter 6 of Title 37.
(iii) An authority both organized and existing pursuant to Chapter 50A of Title 11 and subject to the payments required to be made in lieu of ad valorem, sales, use, license, and severance taxes imposed by Section 11-50A-7.
(iv) An entity in which one or more of the foregoing owns an interest.
f. “Industrial or research enterprise” also includes any headquarters facility.
g. “Industrial or research enterprise” also includes any data processing center.
h. “Industrial or research enterprise” also includes any research and development facility.
i. “Industrial or research enterprise” also includes any renewable energy facility.
j. “Industrial or research enterprise” also includes any tourism destination attraction.
(11) MAJOR ADDITION. Any addition to an existing industrial development property that equals the lesser of: 30 percent of the original cost of the industrial development property or two million dollars ($2,000,000). For purposes of this subdivision, the original cost of existing industrial development property shall be the amount of industrial development property with respect to which an abatement was granted under this chapter when the property was constructed, or if the existing industrial development property was constructed before January 1, 1993, the maximum amount that would have been allowed if the provisions of this chapter had applied at the time it was constructed. Only property that constitutes industrial development property shall be taken into account in making the determination in the previous sentence. “Major addition” shall include any addition costing at least two million dollars ($2,000,000) which constitutes an industrial or research enterprise, regardless of whether added to an existing industrial development property.
(12) MAXIMUM EXEMPTION PERIOD. Except as provided in Section 40-9B-11, a period equal to the shorter of:
a. Either of the following:
Twenty years from and after: (i) the date of initial issuance by a county, city, or public authority of bonds to finance any costs of a private use property; or (ii) if no such bonds are ever issued, the later of: A. the date on which title to the property was acquired by or vested in the county, city, or public authority; or B. the date on which the property is or becomes owned, for federal income tax purposes, by a private user.
Exclusively with respect to one or more private users of a data processing center, the following:
(i) A period of 10 years from and after the date on which private use property is or becomes owned, for federal income tax purposes, by such private user or users (including the lessor and any lessee with respect to co-location centers), if the aggregate capital investment in the data processing center by such private user or users does not exceed two hundred million dollars ($200,000,000) within 10 years from the date on which a private user commences the acquisition, construction, and equipping of the data processing center.
(ii) For any abatement granted prior to January 1, 2027, a period of 20 years from and after the date on which private use property is or becomes owned, for federal income tax purposes, by such private user or users, including the lessor and any lessee with respect to co-location centers, if the aggregate capital investment in the data processing center by such private user or users exceeds two hundred million dollars ($200,000,000) but is not greater than four hundred million dollars ($400,000,000) within 10 years from the date on which a private user commences the acquisition, construction, and equipping of the data processing center. For any abatement granted on or after January 1, 2027, a period of 20 years from and after the date on which the private use property is or becomes owned, for federal income tax purposes, by such private user or users, including the lessor or any lessee with respect to co-location centers, if the aggregate capital investment in the data processing center by such private user or users exceeds two hundred million dollars ($200,000,000) within 10 years from the date on which a private user commences the acquisition, construction, and equipping of the data processing center.
(iii) For any abatement granted until January 1, 2027, a period of 30 years from and after the date on which private use property is or becomes owned, for federal income tax purposes, by such private user or users, including the lessor and any lessee with respect to co-location centers, if the aggregate capital investment in the data processing center by such private user or users exceeds two hundred million dollars ($200,000,000) within 10 years from the date on which a private user commences the physical work of constructing and equipping the data processing center and exceeds four hundred million dollars ($400,000,000) within 20 years from the date on which a private user commences the acquisition, construction, and equipping of the data processing center. This item (iii) shall not apply to any abatement granted after January 1, 2027.
(iv) For abatements granted on or after January 1, 2027, a private user or users may qualify for an additional 10 years of abatement, for a total maximum exemption period not to exceed 30 years, if the private user or users: (1) satisfy the capital investment thresholds contained in this section; and (2) enter into a binding written agreement, approved by the Department of Revenue, the Department of Commerce, and the affected local governing body, committing to provide qualified local investments for the benefit of the benefited community. The agreement shall describe the nature, timing, dollar value, and verification procedures applicable to the qualified local investments. Qualified local investments consist of:
A. Infrastructure improvements, including roads, bridges, or other public facilities that support local development;
B. Improvements to broadband in locations determined to be an unserved area as defined in Section 41-23-212;
C. Water or wastewater system upgrades that serve the local community; or
D. Local education support, including capital improvements, equipment, or programmatic support for public K-12 schools, public charter schools, career technical centers, or community college programs, that serve the benefited community.
For purposes of this item (iv), “benefited community” means: (1) the county in which the project is located; (2) any municipality located in whole or in part within that county; or (3) any county or municipality adjacent to the physical project site as determined by the written agreement, regardless of county lines, provided such jurisdiction consents in writing to receive the investment. The county and, as applicable, any municipality in which the project is located, by mutual written agreement with any jurisdiction described in this paragraph, may designate the recipient or recipients of any portion of the qualified local investments.
If the private user or users fail to satisfy any material obligation contained in the binding agreement required under this item (iv), the additional 10-year abatement authorized under this item (iv) shall be revoked, and the abatement shall revert to the 20-year maximum exemption period otherwise applicable. Upon such revocation, the private user or users shall repay all state taxes abated during the extended period, together with interest as provided by law.
For purposes of this subparagraph 2., a private user’s aggregate capital investment in a data processing center shall include all real and personal property comprising a data processing center, the costs of which may be capitalized for federal income tax purposes. In no event shall abatements of construction related transaction taxes or noneducational ad valorem taxes granted for a data processing center apply beyond the expiration of the applicable maximum exemption period; or
b. The period ending on the date on which the property has ceased, for six consecutive months, to be used in the active conduct of an industrial or research enterprise.
(13) MORTGAGE AND RECORDING TAXES. The taxes imposed by Chapter 22.
(14) NAICS CODE. Any sector, subsector, industry group, industry, or national industry of the 2022 North American Industry Classification System, or any similar classification system developed in conjunction with the United States Department of Commerce or Office of Management and Budget.
(15) NONEDUCATIONAL AD VALOREM TAXES. Ad valorem taxes, or payments required to be made in lieu thereof, imposed by the state, counties, municipalities, and other taxing jurisdictions of Alabama which are not required to be used for educational purposes or for capital improvements for education.
(16) PERSON. Includes any individual, partnership, trust, estate, or corporation.
(17) PRIVATE USER. Any individual, partnership, or corporation organized for profit that is or will be treated as the owner of private use property for federal income tax purposes, any entity organized under Chapter 6 of Title 37, and any authority both organized and existing pursuant to Chapter 50A of Title 11 and subject to the payments required to be made in lieu of ad valorem, sales, use, license, and severance taxes imposed by Section 11-50A-7.
(18) PRIVATE USE INDUSTRIAL PROPERTY. Private use property that also constitutes industrial development property.
(19) PRIVATE USE PROPERTY. Any real and/or personal property that is or will be treated as owned by a private user for federal income tax purposes even though title may be held by a public authority or municipal or county government; any real and/or personal property that is owned by any entity organized under Chapter 6 of Title 37; and any real and/or personal property that is owned by any authority both organized and existing pursuant to Chapter 50A of Title 11 and subject to the payments required to be made in lieu of ad valorem, sales, use, license, and severance taxes imposed by Section 11-50A-7.
(20) PUBLIC AUTHORITY. A corporation created for public purposes pursuant to a provision of the Constitution of Alabama of 2022, or a general or local law that authorized it to issue bonds, the interest on which is exempt from the Alabama income tax, as in effect on May 21, 1992.
(21) PUBLIC INDUSTRIAL AUTHORITY. A public authority authorized to issue bonds to acquire, construct, equip, or finance industrial development property.
(22) RENEWABLE ENERGY FACILITY. Any plant, property, or facility that either:
a. Produces electricity or natural gas, in whole or in part, from biofuels as such term is defined in Section 2-2-90(c)(2) or from renewable energy resources as such term is defined in Section 40-18-1(30) with the exception that hydropower production shall be excluded from such definition; or
b. Produces biofuel as such term is defined in Section 2-2-90(c).
(23) RESEARCH AND DEVELOPMENT FACILITY. An establishment engaged in conducting original investigations undertaken on a systematic basis to gain new knowledge or applying research findings or other scientific knowledge to create new or significantly improved products or processes, or both.
(24) STATEMENT OF INTENT. A written statement of intent to claim an abatement provided in this chapter, or to petition for local tax abatement, relating to an industrial or research enterprise described in paragraph (10)e. which is filed with the Department of Revenue at any time prior to the date on which the industrial or research enterprise described in paragraph (10)e. is placed in service in accordance with such procedures and on such form or forms as may be prescribed by the Department of Revenue. A statement of intent shall contain a description of the industrial or research enterprise described in paragraph (10)e.; the date on which the acquisition, construction, installation, or equipping of the industrial or research enterprise described in paragraph (10)e. was commenced or is expected to commence; the actual or, if not known, the estimated capital costs of the industrial or research enterprise described in paragraph (10)e.; the number of new employees to be employed at the industrial or research enterprise described in paragraph (10)e.; and any other information required by the Department of Revenue.
(25) TOURISM DESTINATION ATTRACTION. a. A commercial enterprise that is open to the public not less than 120 days during a calendar year and is designed to attract visitors from inside or outside of the State of Alabama, typically for its inherent cultural value, historical significance, natural or man-made beauty, or entertainment or amusement opportunities. The term shall include, but not be limited to, a cultural or historical site; a botanical garden; a museum; a wildlife park or aquarium open to the public that cares for and displays a collection of animals or fish; an amusement park; a convention hotel and conference center; a water park; or a spectator venue or arena.
b. A “tourism destination attraction” shall not include a facility primarily devoted to the retail sale of goods; a shopping center; a restaurant; a movie theater; a bowling alley; a fitness center; a miniature golf course; or a nightclub. The capital costs of the construction of a tourism destination attraction may include the capital costs associated with the construction of any retail establishment, restaurant or other portion of the tourism destination attraction. The term also does not include any gaming facility or establishment that the Secretary of the Department of Commerce deems to be serving the local community.
(b) The abatements of ad valorem taxes, and payments in lieu thereof, allowed by amendments to this section by Act 2008-275 shall become effective for projects for which statements of intent are filed after December 31, 2011. No ad valorem taxes, or payments in lieu thereof, shall be abated for periods prior to January 1, 2012. The other abatements allowed by amendments made to this section by Act 2008-275 shall become effective after December 31, 2011.
For a qualifying industrial or research enterprise described in paragraph (a)(10)j., the approval of the abatement of a specified ad valorem tax or construction related tax levied or imposed by a county or municipality, or payments required to be made in lieu thereof, shall take effect only upon adoption of a resolution by the governing body of that county or municipality approving such abatement or abatements.
(Acts 1992, No. 92-599, p. 1239, §3; Acts 1995, No. 95-321, p. 683, §1; Acts 1996, No. 96-647, p. 1030, §1; Act 2001-503, p. 886, §12; Act 2006-633, p. 1728, §1; Act 2008-275, p. 402, §4; Act 2009-722, p. 2143, §2; Act 2012-54, p. 76, §1; Act 2012-210, p. 351, §2; Act 2012-436, p. 1215, §2; Act 2015-24, §3; Act 2026-550, §1; Act 2026-573, §1.)
(a) Noneducational ad valorem taxes, construction related transaction taxes, except those local construction related transaction taxes levied for educational purposes or for capital improvements for education, and mortgage and recording taxes, or payments required to be made in lieu thereof, and in the case of a qualifying industrial or research enterprise described in Section 40-9B-3(a)(10)e. which is owned by an entity organized under Chapter 6 of Title 37, or by an authority both organized and existing pursuant to Chapter 50A of Title 11 and subject to the payments required to be made in lieu of ad valorem, sales, use, license, and severance taxes imposed by Section 11-50A-7, in addition to the foregoing, all other ad valorem taxes, or payments required to be made in lieu thereof, imposed by the state, counties, municipalities, and other taxing jurisdictions of Alabama, may be abated with respect to private use industrial property and security documents and other recordable documents associated therewith as provided in this chapter.
(b)(1) No abatement of noneducational ad valorem taxes, other ad valorem taxes, or payments required to be made in lieu of the foregoing, may exceed the maximum exemption period. No further abatement with respect to the same private use industrial property may be granted unless there is a major addition to the property, in which event abatement may be granted only with respect to the noneducational ad valorem taxes, and in the case of a qualifying industrial or research enterprise described in Section 40-9B-3(a)(10)e. which is owned by an entity organized under Chapter 6 of Title 37, or by an authority both organized and existing pursuant to Chapter 50A of Title 11 and subject to the payments required to be made in lieu of ad valorem, sales, use, license, and severance taxes imposed by Section 11-50A-7, in addition to the noneducational ad valorem taxes, with respect to all other ad valorem taxes, or payments required to be made in lieu thereof, imposed by the state, counties, municipalities, and other taxing jurisdictions of Alabama, on the major addition by complying with the procedures set forth in this chapter. Notwithstanding the immediately preceding sentence, with respect to a data processing center, an abatement of noneducational ad valorem taxes, other ad valorem taxes, or payments required to be made in lieu thereof, shall apply to all real and personal property comprising a data processing center, the costs of which may be capitalized for federal income tax purposes, acquired at any time during the applicable maximum exemption period, including, but not limited to, computers, software licensed for use at the qualifying data processing center, equipment supporting computing, networking, or data storage; cooling systems, cooling towers, and other temperature infrastructure; power infrastructure for transformation, distribution, or management of electricity used for the maintenance and operation of a data processing center, including, but not limited to, exterior dedicated business-owned substations, backup power generation systems, battery systems, and related infrastructure; and any other equipment necessary for the maintenance and operation of a data processing center.
(2) Effective for an abatement granted: (i) on or after January 1, 2027; and (ii) to a data processing center with a total peak demand of 100 megawatts or greater, no abatement of state noneducational ad valorem taxes shall extend beyond the date the private use industrial property is placed in service.
(c)(1) An abatement of construction related transaction taxes, or payments required to be made in lieu thereof, shall apply only to tangible personal property and taxable services incorporated into a private use industrial property, the cost of which may be added to capital account with respect to the property, determined without regard to any rule that permits expenditures properly chargeable to capital account to be treated as current expenses. No abatement of construction related transaction taxes, or payments required to be made in lieu thereof, shall extend beyond the date the private use industrial property is placed in service; provided, however, that an abatement of construction related transaction taxes, or payments required to be made in lieu thereof, for a data processing center shall apply to all taxable services and acquisitions of real and personal property comprising the data processing center, the costs of which may be capitalized for federal income tax purposes, occurring at any time during the applicable maximum exemption period, including, but not limited to, computers, software licensed for use at the qualifying data processing center, equipment supporting computing, networking, or data storage; cooling systems, cooling towers, and other temperature infrastructure; power infrastructure for transformation, distribution, or management of electricity used for the maintenance and operation of a data processing center, including, but not limited to, exterior dedicated business-owned substations, backup power generation systems, battery systems, and related infrastructure; and any other equipment necessary for the maintenance and operation of a data processing center. No further abatement may be granted for construction related transaction taxes, or payments required to be made in lieu thereof, with respect to the private use industrial property unless incurred in connection with a major addition, in which event only construction related transaction taxes, or payments required to be made in lieu thereof, that may be added to capital account with respect to the major addition, determined without regard to any rule that permits expenditures properly chargeable to capital account to be treated as current expenses, may be abated by complying with the procedures set forth in Act 92-599 as amended, and as amended by Act 2008-275. Except in the case of a qualifying industrial or research enterprise described in Section 40-9B-3(a)(10)e. which is owned by an entity organized under Chapter 6 of Title 37, or by an authority both organized and existing pursuant to Chapter 50A of Title 11 and subject to the payments required to be made in lieu of ad valorem, sales, use, license, and severance taxes imposed by Section 11-50A-7, no local construction related transaction taxes levied for educational purposes or capital improvements for education, or payments required to be made in lieu thereof, may be abated.
(2)a. Effective for an abatement granted: (i) on or after January 1, 2027; and (ii) to a data processing center with a total peak demand of 100 megawatts or greater, construction related transaction taxes levied pursuant to Chapter 23, or payments required to be made in lieu thereof, on computers, servers, software licensed for use at the data processing center, equipment supporting computing, networking, or data storage; cooling systems, cooling towers, and other temperature infrastructure; and any other equipment necessary for the maintenance and operation of a data processing center, shall be eligible for abatement throughout the applicable maximum exemption period as provided in subdivision (1).
b. Except for those abatements provided in paragraph a., effective for an abatement granted: (i) on or after January 1, 2027; and (ii) to a data processing center with a total peak demand of 100 megawatts or greater, no abatement of state construction related transaction taxes levied pursuant to Chapter 23, or payments required to be made in lieu thereof, shall extend beyond the date the private use industrial property is placed in service.
(3) Notwithstanding subdivision (2), the Governor may abate the state construction related transaction taxes for the maximum exemption period for a data processing center with a total peak demand of 100 megawatts or greater if the data processing center is located in a “targeted county” as defined in Section 40-18-376.1.
(d) Mortgage and recording taxes with respect to mortgages, deeds, and documents relating to issuing or securing obligations and conveying title into or out of the public authority or county or municipal government with respect to a private use industrial property may be abated by complying with the procedures set forth in this chapter.
(e) An abatement under this section may be granted only with respect to private use industrial property that has not previously been placed in service by the private user who is applying for the abatement or by a person who is a related party, as defined in 26 U.S.C. § 267, with respect to such private user.
(f)(1) For a qualifying industrial or research enterprise described in Section 40-9B-3(a)(10)e. which is owned by a utility described in Section 37-4-1(7)a., and which is a coal gasification or liquefaction project or an advanced fossil-based generation project, as such terms are defined in Section 40-18-1, or which utilizes hydropower production, an abatement under this section shall be in an amount equal to 100 percent of the state noneducational ad valorem taxes owed for plant, property, and facilities for the maximum exemption period, and in an amount equal to 50 percent of the state construction related transaction taxes. The abatement shall not be subject to the procedures in Section 40-9B-5 or 40-9B-6.
(2) For a qualifying industrial or research enterprise described in Section 40-9B-3(a)(10)e. which is owned by a utility described in Section 37-4-1(7)a., and which is a project using an alternative energy resource the abatements for which are not provided in subdivision (1), an abatement under this section shall be in an amount equal to 100 percent of the state noneducational ad valorem taxes owed for plant, property, and facilities for the maximum exemption period, and in an amount equal to 50 percent of the state construction related transaction taxes. The abatement shall not be subject to the procedures in Section 40-9B-5 or 40-9B-6.
(3) For a qualifying industrial or research enterprise described in Section 40-9B-3(a)(10)e. which is owned by an entity organized under Chapter 6 of Title 37, an abatement under this section shall be in an amount equal to 100 percent of the ad valorem taxes owed for plant, property, and facilities for the maximum exemption period, and in an amount equal to 100 percent of the construction related transaction taxes. An abatement of ad valorem taxes levied or imposed by counties or municipalities may be granted as provided in subsection (h). An abatement of the construction related transaction taxes imposed by the governing body of a county pursuant to authority conferred under Article 1 of Chapter 12 of Title 40, or any general, special, or local act of the Legislature, and such transaction taxes imposed by the governing body of a municipality pursuant to authority conferred under Article 3 of Chapter 51 of Title 11, or any general, special, or local act of the Legislature, and all transaction taxes imposed by any other local taxing jurisdiction of Alabama may be granted as provided in subsection (h). The abatement shall not be subject to the procedures in Section 40-9B-5 or 40-9B-6.
(4) For a qualifying industrial or research enterprise described in Section 40-9B-3(a)(10)e., which is owned by an authority both organized and existing pursuant to Chapter 50A of Title 11 and subject to the payments required to be made in lieu of ad valorem, sales, use, license, and severance taxes imposed by Section 11-50A-7, an abatement under this section against the payments required to be made in lieu of taxes imposed by Section 11-50A-7 shall be allowed in an amount equal to 100 percent of the payments required to be made in lieu of ad valorem taxes owed for plant, property, and facilities for the maximum exemption period, and in an amount equal to 100 percent of the payments required to be made in lieu of the construction related transaction taxes, including, without limitation, payments required to be made in lieu of all transaction taxes imposed by the governing body of a county pursuant to authority conferred under Article 1 of Chapter 12 of this title, or any general, special, or local act of the Legislature, all transaction taxes imposed by the governing body of a municipality pursuant to authority conferred under Article 3 of Chapter 51 of Title 11, or any general, special, or local act of the Legislature, and payments required to be made in lieu of all transaction taxes imposed by any other taxing jurisdiction of Alabama. The abatement of such payments required to be made in lieu of local taxes may be granted as provided in subsection (h). The abatement shall not be subject to the procedures in Section 40-9B-5 or 40-9B-6.
(5) For a qualifying industrial or research enterprise described in Section 40-9B-3(a)(10)e., which is owned by a utility described in Section 37-4-1(7)a., the abatement for state noneducational ad valorem taxes provided in subdivision (1) or (2) of this subsection shall be equal to 100 percent of the state noneducational ad valorem taxes owed for plant, property, and facilities for the maximum exemption period if the industrial or research enterprise is located in either of the following:
a. Any area designated or created as an enterprise zone by law or that is governed by the Alabama Enterprise Zone Act.
b.1. Any Alabama county that is considered to be less developed. A county is considered to be less developed if it has been found to be less developed by the Alabama Department of Workforce using the most current data available from the United States Departments of Labor or Commerce, the United States Bureau of the Census, or any other federal or state agency, and which finding shall be made not later than January 1 of each year thereafter.
(i) Percent change in population over the most recent five-year period.
(ii) Personal per capita income in the last calendar year for which data are available.
(iii) The average percent employed over the last 12 months for which data are available.
(i) Percent change in population (25 percent).
(ii) Personal per capita income (25 percent).
(iii) Average percent employed (50 percent).
(6)a. To the extent that a plant, property, or facility described in Section 40-9B-3(a)(10)e. is owned in whole or in part by one or more private users listed in paragraph c., including, but not limited to, ownership as tenants in common, joint tenants, or owners of an undivided interest, then each private user shall be entitled to the abatement allowed under this section with a percentage limitation equal to the ownership interest percentage of the private user multiplied by the percentage limitation found in this subsection applicable to the private user for the tax, or payment in lieu of tax, in question.
b. To the extent that a plant, property, or facility described in Section 40-9B-3(a)(10)e. is owned by a private user that is itself owned in whole or in part by one or more of the entities listed in paragraph c., then the private user shall be entitled to the abatement allowed under this section with a percentage limitation equal to the sum, for all owners, of the ownership interest percentage of each owner multiplied by the percentage limitation found in this subsection applicable to the owner for the tax, or payment in lieu of tax, in question.
c. The entities listed in this paragraph c. are:
A utility described in Section 37-4-1(7)a.;
An entity organized under Chapter 6 of Title 37; and
An authority both organized and existing pursuant to Chapter 50A of Title 11 and subject to the payments required to be made in lieu of ad valorem, sales, use, license, and severance taxes imposed by Section 11-50A-7.
(7) No abatement for mortgage and recording taxes, local noneducational ad valorem taxes, or local noneducational construction related transaction taxes shall be granted to a qualifying industrial or research enterprise described in Section 40-9B-3(a)(10)e., which is owned by a utility described in Section 37-4-1(7)a., except upon the approval of the abatement by the governing body of the county or municipality as provided in Section 40-9B-5(b).
(g) The abatements of ad valorem taxes and payments in lieu thereof allowed by amendments to this section by Act 2008-275 shall become effective for projects for which statements of intent are filed after December 31, 2011. No ad valorem taxes, or payments in lieu thereof, shall be abated for periods prior to January 1, 2012. The other abatements allowed by amendments made to this section by Act 2008-275 shall become effective after December 31, 2011.
(h) For a qualifying industrial or research enterprise described in Section 40-9B-3(a)(10)e., the approval of the abatement of a specific ad valorem tax or construction related tax levied or imposed by a county or municipality, or payments required to be made in lieu thereof, shall take effect only upon adoption of a resolution by the governing body of that county or municipality approving such abatement or abatements.
(Acts 1992, No. 92-599, p. 1239, §4; Act 2008-275, p. 402, §4; Act 2012-210, p. 351, §2; Act 2026-573, §1.)
In no event shall any incentive provided in Act 2012-210 be available to any company filing an application on or after July 31, 2032. Any project granted an incentive prior to July 31, 2032, shall be entitled to the incentive pursuant to the project agreement regardless of whether Act 2012-210 is reauthorized.
(Act 2012-210, p. 351, §3; Act 2018-475, §1; Act 2023-34, §2; Act 2026-573, §1.)
(a) Subject to the geographical or jurisdictional or other limitations specified in subsections (b), (c), and (d), the governing body of a municipality, a county, or a public industrial authority may grant abatements of all of the taxes allowed to be abated under Section 40-9B-4 with respect to private use industrial property.
(b)(1) The abatements authorized to be granted pursuant to subsection (a) for construction related transaction taxes and for ad valorem taxes for a period not to exceed 10 years may be granted:
a. By the governing body of a municipality, except as otherwise provided herein, with respect to private use industrial property located within the limits of the municipality or within the police jurisdiction of the municipality; provided, however, if a municipality has a corresponding municipal tax, the municipal governing body may only grant an abatement of a county tax if the municipality has also abated the corresponding municipal tax, or, if the municipality does not have a corresponding municipal tax, the municipal governing body may abate a county tax only if the governing body of the county, by resolution adopted by a majority of its members, has authorized the municipality to abate the eligible county tax described in the resolution.
b. By the governing body of a county, with respect to private use industrial property located in the county and not within a municipality or the police jurisdiction of a municipality, unless consented to by resolution of the governing body of the municipality.
c. By the governing body of a public industrial authority, except as otherwise provided herein, with respect to private use industrial property located within the jurisdiction of the public industrial authority; provided, however, if the municipality has a corresponding municipal tax, a municipal public industrial authority may grant an abatement of a county tax only if the municipal authority has also abated the corresponding municipal tax or, if the municipality does not have a corresponding municipal tax, the municipal authority may abate a county tax only if the governing body of a county, by resolution adopted by a majority of its members, has authorized the public industrial authority of the municipality to abate any eligible county tax described in the resolution.
(2) The abatements authorized to be granted pursuant to subsection (a) for ad valorem taxes for a period longer than 10 years may be granted:
a. By the governing body of a municipality, with respect to private use industrial property located within the limits of the municipality or within the police jurisdiction of the municipality, but only as to municipal noneducational taxes.
b. By the governing body of a county, with respect to private use industrial property located in the county, but only as to county noneducational taxes.
c. By the Governor, with respect to private use industrial property located in the state, but only as to state taxes.
The governing body of a county and a municipality may separately authorize one or more public industrial authorities to provide by resolution for such consent on its behalf.
(3) Notwithstanding the provisions of this subsection, abatements authorized to be granted pursuant to subsection (a) for data processing centers may be granted in accordance with subdivision (1) without regard to the time limitation stated in subdivision (1).
(c) If a tax is abated pursuant to this chapter, any payment, contribution, or other financial or in-kind award received from a private user or related party shall be divided between the county and municipality whose taxes were abated based upon the tax proceeds which would have been paid if the taxes had not been abated, unless the party receiving such award can prove that the award was not related to the granting of any abatement. In addition, any county or municipality whose taxes are subject to abatement as provided in this chapter, by resolution adopted by affirmative vote of a majority of its members, may elect to waive the requirements of this subsection.
(d) Any abatement of county taxes granted by a municipality or municipal industrial authority shall not be valid until the expiration of (1) 10 days following the date of physical delivery to the county commission or (2) 13 days following the date of mailing by certified mail to the county commission of a copy of the resolution granting such abatement. Proof of delivery by affidavit of service, in the case of physical delivery, or by certified mail receipt, in the case of mailing by certified mail, shall be furnished to the Department of Revenue at the same time as the filing of the abatement agreement under Section 40-9B-6. If the procedures herein prescribed are followed, any such abatement shall be effective as of the date granted.
(Acts 1992, No. 92-599, p. 1239, §5; Act 2002-265, p. 548, §1; Act 2006-578, p. 1520, §1; Act 2015-24, §3; Act 2016-403, §1; Act 2016-405, §1.)
(a) Any person who proposes to become a private user of industrial development property or of a major addition may apply to the governing body of any municipality, county, or public industrial authority, at or about the time that the private user is requesting inducement, for an abatement of all of the taxes allowed to be abated under Section 40-9B-4 with respect to such property. The application shall contain information that will permit the governing body to which it is submitted to make a reasonable cost/benefit analysis as to the proposed industrial development property and to determine the maximum exemption period for the abatement of noneducational ad valorem taxes.
(b) The abatements granted by the governing body shall be embodied in an agreement, which may be the same as the inducement, between the governing body and the private user, setting forth:
(1) The estimated amount of each abatement and the maximum exemption period.
(2) Good faith projections by the private user of: The amount to be invested; the number of individuals to be employed, initially and in the succeeding three years; and the payroll.
(c) The private user shall file with the Department of Revenue within 90 days after the granting of the abatements a copy of the agreement required by subsection (b), the contents of which the department shall use solely for its statistical and recordkeeping activities but shall otherwise keep confidential unless consented to in writing by the private user.
(Acts 1992, No. 92-599, p. 1239, §6; Act 2001-503, p. 886, §123.)
(a) Notwithstanding any other provision of law, if a public authority or county or municipal government has title to or a possessory right in private use property, then:
(1) The property shall be subject to ad valorem taxes as if the private user held title to the property.
(2) The private user of the property shall be liable for construction related transaction taxes as if the private user held title to such property.
(3) The private user of the property shall be subject to the recording taxes for mortgages, deeds, and documents relating to the issuance or securing of obligations and the conveyance of title to property into and out of a public authority.
(b) A private user of property described in subsection (a) may apply for, and if the property constitutes industrial development property, be granted abatements of ad valorem, construction related transaction taxes, and mortgage and recording taxes as described in Sections 40-9B-1 through 40-9B-6.
(c) The rule of subsection (a)(1) shall not apply to ad valorem taxes if a private user was entitled to use the property pursuant to a lease or other agreement entered into before May 21, 1992, or would be entitled to use the property at some future time pursuant to inducement entered into or adopted before May 21, 1992, provided, however, that this subdivision shall apply only to the property and the amount of capital expenditures set out in such inducement, subject to de minimis deviations.
(d) The rule of subsection (a)(2) shall not apply to construction related transaction taxes if a private user was entitled to use the property pursuant to a lease or other agreement entered into before May 21, 1992, or would be entitled to use the property at some future time pursuant to inducement entered into or adopted before May 21, 1992, provided, however, that this subdivision shall apply only to the property and the amount of capital expenditures set out in such agreement, subject to de minimis deviations.
(e) The rule of subsection (a)(3) shall not apply to mortgage and recording taxes with respect to property if a private user was entitled to use the property pursuant to a lease or other agreement entered into before May 21, 1992, or would be entitled to use the property at some future time pursuant to inducement entered into or adopted before May 21, 1992, provided, however, that this subdivision shall apply only to the property specified in such agreement, subject to de minimis deviations.
(Acts 1992, No. 92-599, p. 1239, §7.)
Notwithstanding any other laws and subject to the limitations set out in Section 40-9B-5, the gross proceeds of the sale to, or the storage, use, or consumption by, any contractor of any tangible personal property to be incorporated into a private use industrial development property or major addition for which a private user is granted a valid abatement of construction related transaction taxes pursuant to this chapter shall be exempt from all state and local sales and use taxes, except those county and municipal sales and use taxes levied for educational purposes or for capital improvements for education. This exemption shall not apply to any purchases of tangible personal property by a contractor which would not also be exempt if purchased by a private user who has been granted a valid abatement of construction related transactions taxes pursuant to this chapter. The definitions contained in Section 40-9B-3 are incorporated by reference herein.
(Act 98-600, p. 1313, §1; Act 2002-265, p. 548, §1.)
With respect to industrial development property for the establishment or expansion of an industrial or research enterprise as defined in paragraph b. of subdivision (10) of Section 40-9B-3, the governing body of a municipality, county, or public industrial authority shall not grant the abatements provided for in this chapter without first receiving the written approval of the Governor, Finance Director, and Director of the Alabama State Port Authority.
(Act 2001-503, p. 886, §14.)
Beginning April 1, 2003, a trade or business in counties with populations under 30,000 engaged in the postharvest processing of peanuts described in the 1987 Standard Industrial Classification Manual, or its successor, shall constitute an industrial or research enterprise for only purposes of this chapter related to state and local taxes that do not fund public education and such trade or business, and the property thereof, shall be eligible for the abatement of taxes in accordance with this chapter but in no event shall such trade or business, and the property thereof, be eligible for the abatement of any state or local taxes that support public education.
(Act 2003-503, p. 1523, §1.)
(a) Effective October 1, 2011, the maximum exemption period for a qualifying industrial or research enterprise described in paragraph e. of subdivision (10) of subsection (a) of Section 40-9B-3, which is owned by a utility described in Section 37-4-1(7)a., shall be 10 years applied as follows:
(1) With respect to land, the abatement shall begin with the first October 1 lien date following commencement of the project, and the abatement shall be for a total of 10 years.
(2) With respect to each portion of real property construction work in progress which was not taxable on the prior October 1 lien date, the abatement for the portion shall begin with the first October 1 lien date on which the construction work in progress becomes taxable, and the abatement shall be for a total of 10 years.
(3) With respect to each item of tangible personal property, the abatement shall begin with the first October 1 lien date on which the item of tangible personal property becomes taxable, and the abatement shall be for a total of 10 years.
(b) Effective October 1, 2011, the maximum exemption period for a qualifying industrial or research enterprise described in paragraph e. of subdivision (10) of subsection (a) of Section 40-9B-3 which is owned by an entity organized under Chapter 6 of Title 37, or by an authority both organized and existing pursuant to Chapter 50A of Title 11, and subject to the payments required to be made in lieu of ad valorem, sales, use, license, and severance taxes imposed by Section 11-50A-7, shall be 20 years applied as follows:
(1) With respect to land, the abatement shall begin with the first October 1 lien date following commencement of the project, and the abatement shall be for a total of 20 years.
(2) With respect to each portion of real property construction work in progress which was not taxable on the prior October 1 lien date, the abatement for that portion shall begin with the first October 1 lien date on which the construction work in progress becomes taxable or subject to payments required to be made in lieu of taxes, and the abatement shall be for a total of 20 years.
(3) With respect to each item of tangible personal property, the abatement shall begin with the first October 1 lien date on which the item of tangible personal property becomes taxable or subject to payments required to be made in lieu of taxes, and the abatement shall be for a total of 20 years.
(c) The abatements of ad valorem taxes and payments in lieu thereof allowed by Act 2008-275 shall become effective for projects for which statements of intent are filed after December 31, 2011, and any such abatements shall be granted for 10 years. No ad valorem taxes or payments in lieu thereof shall be abated for periods prior to January 1, 2012. The other abatements allowed by Act 2008-275 shall become effective after December 31, 2011.
(Act 2008-275, p. 402, §5.)
The tax abatements and abatements of payments in lieu of taxes authorized by the amendments to Sections 40-9B-3, 40-9B-4, and 40-9B-11 by Act 2008-275 shall not be available for new industrial or research enterprises described in Section 40-9B-3(a)(10)e. after December 31, 2018, unless the Legislature votes to continue or reinstate the abatements of state taxes for new industrial or research enterprises described in Section 40-9B-3(a)(10)e. after that date. No action or inaction on the part of the Legislature shall reduce, suspend, or disqualify any abatement in any past or future year with respect to any qualifying industrial or research enterprises described in Section 40-9B-3(a)(10)e. which files with the Department of Revenue, on or before December 31, 2018, a statement of intent as defined in Section 40-9B-3(a)(23). The failure of the Legislature to vote to continue or reinstate the capital credit for new projects after December 31, 2018, shall affect only the availability of the abatements to new qualifying industrial or research enterprises described in Section 40-9B-3(a)(10)e. after that date and shall not affect either the qualifying industrial or research enterprises described in Section 40-9B-3(a)(10)e. which have established their eligibility to receive abatements by filing the statement of intent, on or before December 31, 2018, or any future qualifying major additions to such qualifying industrial or research enterprises described in Section 40-9B-3(a)(10)e.
(Act 2008-275, p. 402, §12.)
(a) This section shall be known as the Disaster Recovery Tax Incentive Protection Act of 2011.
(b) For the purposes of this section, the following terms shall have the following meanings:
(1) DISASTER REPLACEMENT PROPERTY. Private use industrial property obtained by a private user to repair or replace private use industrial property on which tax abatements were in existence at the time of a natural disaster, that was damaged or destroyed by the natural disaster.
(2) GOVERNING BODY. The governing body of a municipality, a county, or a public industrial authority which may grant tax abatements with respect to private use industrial property under Section 40-9B-4, subject to the geographical or jurisdictional or other limitations of Section 40-9B-5.
(3) NATURAL DISASTER. A catastrophe caused by nature, or regardless of cause, a fire, flood, or explosion, which is declared by the President of the United States or the Governor of the State of Alabama to be a major disaster.
(4) REPLACED PROPERTY. Private use industrial property that was damaged or destroyed by a natural disaster, and on which tax abatements were in existence at the time of the disaster.
(c) Tax abatements that may otherwise be granted pursuant to this chapter shall not be subject to disqualification solely because the underlying transactions or property relate to the repair or replacement of property damaged by a natural disaster and not to new construction. This expansion of Alabama’s abatement law applies to transactions entered into or property acquired after the tornado outbreaks of April 2011. Ad valorem tax abatements in existence prior to the onset of a natural disaster, shall not be disallowed due to an interruption of a qualifying business activity at the site directly attributable to the natural disaster.
(d) Any tax abatements granted on replaced property shall continue to apply to disaster replacement property obtained by a private user if any of the following conditions are met:
(1) Where such disaster replacement property is located at a different site than the replaced property, but not within the jurisdiction of a different governing body, then no new approval of the governing body shall be required to transfer the previously granted tax abatements on the replaced property to the disaster replacement property so long as the cost of the disaster replacement property does not exceed the cost of the replaced property by more than 25 percent. However, the private user shall provide written notice to the abatement granting authority, to the assessing official of the county where the property is located, and to the Department of Revenue of the change in location of the private use industrial property or the disaster replacement property not later than October 1, 2012, or the first October 1 following the change in location of such property, whichever is later. The user shall also file the appropriate tax returns on October 1 of that year and each year thereafter, as required by law.
(2) Where disaster replacement property is located within the jurisdiction of a governing body different from the replaced property, then the private user shall obtain the approval from the appropriate governing body for the continuation of the ad valorem tax abatement, with such approval to be requested in accordance with Sections 40-9B-5 and 40-9B-6.
(3) If the cost of the disaster replacement property exceeds the cost of the replaced property by more than 25 percent, then the private user shall obtain governing body approval under the procedures outlined in Sections 40-9B-5 and 40-9B-6 for the abatement of any taxes on the amount of the investment that is greater than 25 percent more than the cost of the replaced property. No new approval is required on the amount of the new investment not greater than 25 percent more than the cost of the replaced property, provided that no new governing body is affected by such continuation of the tax abatements.
(Act 2011-709, p. 2191, §§1, 2(a); Act 2012-524, p. 1552, §1.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
This chapter shall be known and may be cited as the Brownfield Development Tax Abatement Act.
(Act 2004-245, p. 334, §1.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
The Legislature recognizes the importance of recovering and reusing previously utilized property to the well-being of the people of the state. The Legislature also recognizes that in some cases additional incentives are required to succeed in recovering brownfield sites and therefore intends to allow county and municipal governments to provide substantial tax incentives as an inducement to recovering land pursuant to Chapter 30E, beginning with Section 22-30E-1, of Title 22, the Alabama Land Recycling and Economic Redevelopment Act.
(Act 2004-245, p. 334, §2.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
For purposes of this chapter, the following words and phrases shall have the following meanings:
(1) ABATE, ABATEMENT. A reduction or elimination of a taxpayer’s liability for tax. An abatement of local and noneducation transaction taxes imposed under Chapter 23 of this title shall relieve the seller from the obligation to collect and pay over the local portion of the noneducation transaction tax as if the sale were to a person exempt, to the extent of the abatement, from the local portion of the noneducation transaction tax.
(2) BROWNFIELD DEVELOPMENT PROPERTY. Real property which qualifies under Section 22-30E-6 for participation in the voluntary cleanup program established pursuant to Chapter 30E of Title 22, and any personal property acquired in connection with the cleanup and redevelopment of such real property.
(3) CONSTRUCTION RELATED NONEDUCATION TRANSACTION TAXES. The local portion of the transaction taxes imposed pursuant to Chapter 23 of this title, not levied for education purposes or for capital improvements for education, on tangible personal property and taxable services incorporated into a brownfield property development pursuant to Chapter 30E of Title 22, the cost of which may be added to capital account with respect to the property, determined without regard to any rule which permits expenditures properly chargeable to capital account to be treated as current expenses.
(4) EDUCATION TAXES. Ad valorem taxes that must, pursuant to the Constitution of Alabama of 1901, as amended, or legislative act, or the resolution or other action of the governing board authorizing the tax, be used for educational purposes or for capital improvements for education, the state portion of transactional taxes, and local construction related transaction taxes levied for educational purposes or for capital improvements for education.
(5) MAJOR ADDITION. Any addition to an existing brownfield development property that equals the lesser of: 30 percent of the original cost of the developed property as cleaned up, or two million dollars ($2,000,000). For purposes of this definition, the original cost of existing brownfield development property shall be the amount of the property with respect to which an abatement is granted under this chapter when the property is constructed, or if the existing property was constructed before January 1, 2003, the maximum amount that would have been allowed if this chapter had applied at the time it was constructed. Only property that constitutes brownfield development property shall be eligible for the abatement allowance provided in this definition.
(6) MAXIMUM EXEMPTION PERIOD. A period of up to 20 years following the date on which the voluntary cleanup plan is approved by the Alabama Department of Environmental Management pursuant to rules and regulations adopted by the department.
(7) MORTGAGE AND RECORDING TAXES. The taxes imposed by Chapter 22 of this title.
(8) NONEDUCATIONAL AD VALOREM TAXES. Ad valorem taxes imposed by the state, counties, municipalities, and other taxing jurisdictions of Alabama that are not required to be used for educational purposes or for capital improvements for education.
(9) PERSON. Includes any individual, partnership, trust, estate, or corporation.
(10) PRIVATE USER. Any individual, partnership, corporation, or business entity organized for profit that is or will be treated as the owner of a brownfield development property for federal income tax purposes, even though title may be held by a municipal or county governmental entity.
(Act 2004-245, p. 334, §3.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
(a) Noneducational ad valorem taxes, construction related noneducation transaction taxes, except those construction related transaction taxes levied for educational purposes or for capital improvements for education, and mortgage and recording taxes may be abated with respect to brownfield development property and security documents and other recordable documents associated therewith as provided in this chapter.
(b) No abatement of noneducational ad valorem taxes may exceed the maximum exemption period of 20 years. No further abatement with respect to the same brownfield development property may be granted unless there is a major addition to the property, in which event abatement may be granted only with respect to the noneducational ad valorem taxes on the major addition by complying with the procedures set forth in this chapter.
(c) An abatement of construction related noneducation transaction taxes shall apply only to tangible personal property and taxable services incorporated into a brownfield development property, the cost of which may be added to capital account with respect to the property, determined without regard to any rule which permits expenditures properly chargeable to capital account to be treated as current expenses. No abatement of construction related noneducation transaction taxes shall extend beyond the date the property is placed in service for federal income tax purposes. No further abatement may be granted for construction related noneducation transaction taxes with respect to the property unless incurred in connection with a major addition, in which event only construction related noneducation transaction taxes that may be added to capital account with respect to the major addition, determined without regard to any rule which permits expenditures properly chargeable to capital account to be treated as current expenses, may be abated by complying with the procedures set forth in this chapter. No construction related state transaction taxes or local construction related transaction taxes levied for educational purposes or capital improvements for education may be abated.
(d) Mortgage and recording taxes with respect to mortgages, deeds, and documents relating to issuing or securing obligations and conveying title into or out of a public authority or county or municipal government with respect to a brownfield development property may be abated by complying with the procedures set forth in this chapter.
(Act 2004-245, p. 334, §4.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
(a) Subject to the geographical or jurisdictional limitations specified in subsection (b), the governing body of a municipality or a county may grant abatements of all of the taxes allowed to be abated under Section 40-9C-4 with respect to private use brownfield development property.
(b) The abatements authorized to be granted pursuant to subsection (a) may be granted:
(1) By the governing body of a municipality, with respect to private use brownfield development property located within the limits of the municipality or within the police jurisdiction of the municipality; provided, however, that the governing body shall not grant an abatement of any county taxes unless consented to by resolution of the governing body of the county.
(2) By the governing body of a county, with respect to private use brownfield development property located in the county and not within a municipality or the police jurisdiction of a municipality; provided, however, that the governing body shall not grant an abatement of any municipal taxes unless consented to by resolution of the governing body of the municipality.
(Act 2004-245, p. 334, §5.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
(a) Subject to the limitations set out in Section 40-9C-5, any person who proposes to become a private user of brownfield development property or of a major addition thereto may apply to the governing body of any municipality or county at or about the time a voluntary cleanup plan is approved by the Alabama Department of Environmental Management, for an abatement of all of the taxes allowed to be abated under this chapter with respect to such property. The application shall contain information that will permit the governing body to which it is submitted to make a reasonable cost/benefit analysis as to the proposed brownfield development property and to determine the maximum exemption period for the abatement of noneducational ad valorem taxes. The application must be accompanied by an approval of the voluntary cleanup plan.
(b) The abatements granted by the governing body shall be embodied in an agreement between the governing body and the private user, setting forth the following:
(1) The estimated amount of each abatement and the maximum exemption period not exceeding 20 years.
(2) Good faith projections by the private user of: the amount to be invested; the number of individuals to be employed, initially and in the succeeding three years; and the payroll.
(c) The private user shall file with the Department of Revenue within 90 days after the granting of the abatements a copy of the agreement required by subsection (b), the contents of which the department shall use solely for its statistical and recordkeeping activities but shall otherwise keep confidential unless consented to in writing by the private user.
(d) The abatements granted by the governing body shall be subject to termination by the governing body in the event the private user fails to implement the voluntary cleanup plan approved by the Alabama Department of Environmental Management.
(Act 2004-245, p. 334, §6.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
Notwithstanding any other laws, and subject to the limitations set out in Section 40-9C-5, the gross proceeds of the sale to, or the storage, use, or consumption by, any contractor of any tangible personal property to be incorporated into a brownfield development property or major addition for which a private user is granted a valid abatement of construction related noneducation transaction taxes pursuant to this chapter shall be exempt from local sales and use taxes, except those county and municipal sales and use taxes levied for educational purposes or for capital improvements for education. This exemption shall not apply to any purchase of tangible personal property by a contractor which would not also be exempt if purchased by a private user who has been granted a valid abatement of construction related transaction taxes pursuant to this chapter.
(Act 2004-245, p. 334, §7.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
The Department of Revenue shall adopt all necessary rules, regulations, and orders needed to implement and administer this chapter.
(Act 2004-245, p. 334, §8.)
(a) The Brownfield Development Tax Abatement Act, Chapter 9C, of Title 40, commencing with Section 40-9C-1, is repealed effective December 31, 2028, unless extended by an act of the Legislature prior to that date for no more than five additional years.
(b) The repealing of the incentives in subsection (a) shall only affect the availability of the tax credits after December 31, 2028, and shall not cause a reduction or suspension of any credits awarded on or prior to December 31, 2028.
(Act 2023-546, §§ 2, 11.)
This chapter shall be known and may be cited as the “Alabama Economic Incentive Enhancement Act of 2007.”
(Act 2007-199, p. 234, §1.)
(a)(1) The legislative intent of this chapter is to provide incentives necessary to attract very large projects which shall generate a substantial number of jobs and economic growth for the citizens of Alabama.
(2) This chapter is intended as minimum code and the Department of Revenue may adopt rules under the Administrative Procedure Act to provide additional clarification, not inconsistent with this chapter.
(3) In the event of any conflict between this chapter and those of any other specific statutory provisions contained in other chapters of this title, or of any other title, it is declared to be the legislative intent that, to the extent such other specific provisions are inconsistent with or different from the provisions of this chapter, this chapter shall prevail.
(b) The provisions contained in this chapter shall govern the tax incentives for very large projects, as defined below, that locate in Alabama subsequent to December 31, 2006.
(Act 2007-199, p. 234, §2.)
(1) CAPITAL COSTS. Costs as defined in subdivision (2) of Section 40-18-190.
(2) CAPITAL CREDIT. An amount defined in subdivision (3) of Section 40-18-190.
(3) CONSTRUCTION RELATED TRANSACTION TAXES. The sales and use taxes defined in subdivision (3) of Section 40-9B-3.
(4) QUALIFYING ENTITIES. Those entities that invest in large projects in Alabama that employ, prior to December 31, 2015, at least 2,000 full time on site employees with benefits at a single site in Alabama and prior to December 31, 2011, invest at least $2.5 billion in capital costs at a single site in Alabama. For periods following December 31, 2015, the 2,000 employment level required to qualify as a qualifying entity shall be maintained for all years thereafter.
(Act 2007-199, p. 234, §3.)
(a) For the entities that qualify under this chapter, an abatement shall be allowed for ad valorem taxes. Such abatement shall follow the provisions and definitions of Chapter 9B of this title with the following exceptions:
(1) The maximum exemption period as provided in subdivision (10) of Section 40-9B-3 shall be 20 years.
(2) This abatement shall apply to real property located at other Alabama project sites built, owned, and operated by the qualifying entity as a component of the qualifying project. Such abatement shall be made pursuant to the provisions of the granting authority where the ancillary property is located.
(3) This abatement shall apply to the qualifying entity’s tangible personal property located at other Alabama project sites if the property is a component of the qualifying project. Such abatement shall be made pursuant to the provisions of the granting authority where the ancillary property is located.
(b) For the entities that qualify under this chapter, an abatement shall be allowed for construction related transaction taxes. Such abatement shall follow the provisions of Chapter 9B of this title.
(c) For the entities that qualify under this chapter, an abatement shall be allowed for taxes related to mortgages and recording taxes with respect to mortgages, deeds and other documents as allowed in the provisions of Chapter 9B of this title.
(d) For the entities that qualify under this chapter, in addition to the allowances found in Section 40-21-83, an exclusion shall be allowed for a 10-year period from the utility taxes contained in subsection (a) of Section 40-21-82 of this title. The beginning date of the aforementioned 10-year period shall commence using the provisos of subdivision (10) of Section 40-9B-3.
(e) For the entities that qualify under this chapter, an enhanced capital credit shall be allowed. This capital credit shall follow the provisions of Article 7, commencing with Section 40-18-190, of Chapter 18, of this title, and shall be allowed as a credit to the tax provided in Chapter 18, with the following exceptions:
(1) The maximum period shall be extended to 30 years;
(2) The maximum amount allowed in any one tax year, within the above extended period, shall not exceed five percent of the capital cost of the qualifying project, such amount to be credited or allowed against the state income tax liability generated by or arising out of the qualifying project in each of the 30 years commencing with the year during which the qualifying project is placed in service and continuing for 29 consecutive years thereafter; and
(3) The total amount utilized over the extended period shall not exceed 100 percent of the capital cost of the project.
(Act 2007-199, p. 234, §4.)
For purposes of this chapter only, the following terms shall have the following meanings:
(1) BASE YEAR. The taxable year immediately before the taxable year in which property first becomes qualified property under this chapter.
(2) BASE YEAR VALUE. The value of the property used to determine the assessment on which the property tax on property is imposed for the base year. Base year value does not include any new property that is first assessed in the base year.
(3) ELIGIBLE ASSESSMENT. The difference between the base year value and the actual value as determined by the county tax assessor for the applicable taxable year.
(4) ENHANCED USE LEASE AREA. Any area of a military installation which contains underutilized real or personal property, or both, that is leased by a secretary of a military department to a lessee pursuant to the authority provided in 10 U.S.C. §2667.
(5) LOCAL GOVERNING BODY. The governing body of a county or municipality which proposes to create or has created a tax increment district.
(6) PROJECT COSTS. Any expenditures made or estimated to be made or monetary obligations incurred or estimated to be incurred by a public entity which are listed in a project plan as costs of public works or improvements within a tax increment district, plus any costs incidental thereto, diminished by any special assessments received or reasonably expected to be received by the public entity in connection with the implementation of the project plan. Project costs include, but are not limited to the following:
a. Capital costs, including the costs of the construction of public works or improvements, new buildings, structures, and fixtures, the demolition, alteration, remodeling, repair, or reconstruction of existing buildings, structures, and fixtures, the acquisition of equipment, the acquisition, clearing, and grading of land, and the acquisition of interests in land.
b. Financing costs, including all interest paid to holders of tax increment obligations during the period of implementation of the project plan, the costs of any form of credit enhancement, printing and trustee costs, and any premium paid in excess of the principal amount thereof because of the redemption of such obligations prior to maturity.
c. Real property assembly costs, meaning any deficit resulting from the sale or lease as lessor by the public entity of real or personal property within a tax increment district for consideration which is less than its cost to the public entity.
d. Professional service costs, including those costs incurred for architectural, planning, engineering, fiscal, underwriting, and legal advice and services.
e. Imputed administrative costs, including reasonable charges for the time spent by officers and employees of the public entity in connection with the implementation of a project plan.
f. Relocation costs, including those relocation payments made following condemnation under Chapter 1A of Title 18.
g. Organizational costs, including the costs of conducting environmental impact and other studies and the costs of informing the public with respect to the creation of tax increment districts and the implementation of project plans.
h. The amount of any contributions made in connection with the implementation of the project plan that are within limits prescribed by law.
i. Payments made, at the discretion of the local governing body, which are to be necessary or convenient to the creation of tax increment districts or the implementation of project plans.
j. For purposes of any tax increment district in which not less than 50 percent, by area, of the real property within the tax increment district is an enhanced use lease area, project costs shall also include all costs described in this subdivision which are expended within three years immediately preceding the date of the creation of such tax increment district.
(7) PROJECT PLAN. The properly approved plan for the development or redevelopment of a tax increment district, including all properly approved amendments thereto.
(8) PUBLIC ENTITY. Any municipality or county in the state.
(9) QUALIFIED PROPERTY. Real property that is located in a tax increment district in which not less than 50 percent, by area, of the real property within the tax increment district is an enhanced use lease area.
(10) STATE PROPERTY TAX INCREMENT. The state property taxes attributable to the eligible assessment of qualified property.
(11) TAX INCREMENT DISTRICT. A contiguous geographic area within the boundaries of a public entity defined and created by resolution of the local governing body.
(12) TAX INCREMENT OBLIGATIONS. Bonds, warrants, notes, or other evidences of indebtedness issued by a public entity to fund all or any project costs.
(Act 2010-184, p. 262, §4.)
(a) Notwithstanding any other law of this state, qualified property shall be entitled to an abatement of state property taxes provided the conditions of this section are satisfied.
(b) In lieu of paying the state property tax increment on qualified property, any owner of qualified property not exempt from ad valorem taxation must pay the state property tax increment on such qualified property to the public entity that created the tax increment district in which the qualified property is located for each year commencing on the October 1 following the date when property first becomes qualified property under this chapter, and each October 1 thereafter, until the tax increment district in which such qualified property is located is terminated in accordance with Section 11-99-7.
(c) State property tax increments received by the public entity which created the tax increment district in which the qualified property is located shall be used for both of the following:
(1) To pay for project costs.
(2) To repay tax increment obligations issued to fund project costs.
(Act 2010-184, p. 262, §4.)
This chapter shall apply to qualified structures throughout the State of Alabama.
(Act 2013-241, p. 579, §1.)
As used in this chapter, the following terms shall have the following meanings:
(1) CERTIFIED HISTORIC STRUCTURE. A property located in Alabama which is certified by the Alabama Historical Commission as being individually listed in the National Register of Historic Places, eligible for listing in the National Register of Historic Places, or certified by the commission as contributing to the historic significance of a Registered Historic District.
(2) CERTIFIED REHABILITATION. Repairs or alterations to a certified historic structure that is certified by the commission as meeting the U.S. Secretary of the Interior’s Standards for Rehabilitation, or to non-historic structures built before 1936 which are certified by the commission as meeting the requirements contained in Section 47(c)(1)(a) and (b) of the Internal Revenue Code, as amended, or to a certified historic residential structure as defined in subdivision (4).
(3) CERTIFIED HISTORIC RESIDENTIAL STRUCTURE. A certified historic structure as defined in subdivision (1).
(4) COMMISSION. The Alabama Historical Commission and or its successor.
(5) DEPARTMENT. The Alabama Department of Revenue or its successor.
(6) OWNER. Any taxpayer filing a State of Alabama tax return or any entity that is exempt from federal income taxation pursuant to Section 501(c) of the Internal Revenue Code, as amended, that: a. owns title to a qualified structure, or b. owns a leasehold interest in a qualified structure for a term of not less than 39 years.
(7) QUALIFIED REHABILITATION EXPENDITURES. Any expenditure as defined under Section 47(c)(2)(A) of the Internal Revenue Code, as amended, and the related regulations thereunder, and other reasonable expenses and costs expended in the rehabilitation of a qualified structure. For certified historic residential structures, this term shall mean expenses incurred by the taxpayer in the certified rehabilitation of a certified historic residential structure, including preservation and rehabilitation work done to the exterior of a certified historic residential structure, repair and stabilization of historic structural systems, restoration of historic plaster, energy efficiency measures except insulation in frame walls, repairs or rehabilitation of heating, air conditioning, or ventilation systems, repairs or rehabilitation of electrical or plumbing systems exclusive of new electrical appliances and electrical or plumbing fixtures, and architectural, engineering, and land surveying fees. Qualified rehabilitation expenditures do not include the cost of acquisition of the qualified structure, the personal labor by the owner, or any cost associated with the rehabilitation of an outbuilding of the qualified structure, unless the outbuilding is certified by the commission to contribute to the historical significance of the qualified structure.
(8) QUALIFIED STRUCTURE. Certified historic structures and non-historic structures built before 1936 which are certified by the commission as meeting the requirements contained in Section 47(c)(1)(a) and (b) of the Internal Revenue Code, as amended, and to certified historic residential structures as defined herein.
(9) REGISTERED HISTORIC DISTRICT. Any district listed in the National Register of Historic Places and any district which is either of the following:
a. Designated under Alabama or local law certified by the U.S. Secretary of the Interior as containing criteria which substantially achieves the purpose of preserving and rehabilitating buildings of historic significance to the district.
b. Certified by the U.S. Secretary of the Interior as meeting substantially all of the requirements for the listing of districts in the National Register of Historic Places.
(10) REHABILITATION PLAN. Construction plans and specifications for the proposed rehabilitation of a qualified structure in sufficient detail to enable the commission to evaluate compliance with the standards developed under this chapter.
(11) SUBSTANTIAL REHABILITATION. Rehabilitation of a qualified structure for which the qualified rehabilitation expenditures exceed 50 percent of the owner’s original purchase price of the qualified structure or twenty-five thousand dollars ($25,000), whichever is greater.
(Act 2013-241, p. 579, §2.)
(a) The commission shall develop standards for the approval of the substantial rehabilitation of qualified structures for which a tax credit is sought. The standards shall take into account whether the substantial rehabilitation of a qualified structure is consistent with the historic character of the structure or of the Registered Historic District in which the property is located.
(b) Prior to beginning any substantial rehabilitation work on a qualified structure, the owner shall submit an application and rehabilitation plan to the commission and an estimate of the qualified rehabilitation expenditures under the rehabilitation plan; provided, however, that the owner, at its own risk, may incur qualified rehabilitation expenditures no earlier than six months prior to the submission of the application and rehabilitation plan that are limited to architectural, engineering, and land surveying fees and related soft costs and any costs related to the protection of the qualified structure from deterioration.
(c) The commission shall review the application and rehabilitation plan to determine that the information contained therein is complete. If the commission determines that the application and rehabilitation plan are complete, the commission shall reserve for the benefit of the owner an allocation for a tax credit as provided in Section 40-9F-4 and the commission shall notify the owner in writing of the amount of the reservation. The reservation of tax credits does not entitle the owner to an issuance of tax credits until the owner complies with all other requirements of this chapter for the issuance of the tax credits. The reservation of tax credits shall be made by the commission in the order in which completed applications and rehabilitation plans are received by the commission, and the reservation of tax credits shall be issued by the commission within a reasonable time, not to exceed 90 days from the filing of a completed application and rehabilitation plan. Applications received by the commission on the same day shall go through a lottery process to determine the order in which the applications will be reviewed by the commission. Only the property for which a property address, legal description or other specific location is provided in the application shall be reviewed. Ownership of an entity that is the owner of property contained in the application shall not be a factor in the commission’s review of the application and no subsequent change in the ownership structure of such entity shall result in the loss or rescission of a reservation of tax credits. The owner shall not be permitted to request the review of another property for approval in the place of the property contained in the application. Any application disapproved by the commission shall be removed from the review process, and the commission shall notify the owner in writing of the decision to remove the application. Disapproved applications shall lose their priority in the review process. A disapproved application may be resubmitted, but shall be deemed to be a new submission for purposes of the priority procedures described in this section and may be charged a new application fee. In the event that the commission grants reservations for tax credits equal to the total amount available for reservations during the tax year, all owners with applications then awaiting approval or thereafter submitted for approval shall be notified by the commission that no additional approvals shall be granted during that tax year and shall be notified of the priority number given to the owner’s application then awaiting approval. The applications shall remain in priority status for two years from the date of the original application and shall be considered for reservations of tax credits in the priority order established in this section in the event that additional credits become available due to the rescission of approvals or when a new tax year’s allocation of tax credits becomes available.
Owners receiving a reservation of tax credits shall commence rehabilitation, if rehabilitation has not previously begun, within 18 months of the date of issuance of the written notice from the commission to the owner granting the reservation of tax credits. “Commencement of rehabilitation” shall mean that, as of the date in which actual physical work contemplated by the rehabilitation plan submitted with the application has begun, the owner has incurred no less than 20 percent of the estimated costs of rehabilitation provided in the application. Owners receiving a reservation of tax credits shall submit evidence of compliance with the provisions of this subsection. If the commission determines that an owner has failed to comply with the requirements provided under this section, the reservation of tax credits for the owner may be rescinded and, if so, the amount of tax credits shall then be included in the total amount of available tax credits provided for in subsection (c) of Section 40-9F-4, from which reservations may be granted. Any owner whose reservation of tax credits shall be rescinded shall be notified of the rescission from the commission and, upon receipt of the notice, may submit a new application but may be charged a new application fee.
(d) Following the completion of a substantial rehabilitation of a qualified structure, the owner shall notify the commission that the substantial rehabilitation has been completed and shall certify the qualified rehabilitation expenditures incurred with respect to the rehabilitation plan. In addition, the owner shall provide the commission with: (i) a cost and expense certification, prepared by a licensed certified public accountant that is not an affiliate of the owner, certifying the total qualified rehabilitation expenditures and the total amount of tax credits against any state tax due that is specified in this chapter for which the owner is eligible under Section 40-9F-4 and, if the qualified rehabilitation expenditures exceed two hundred thousand dollars ($200,000), the cost and expense certification must be audited by the licensed certified public accountant; and (ii) an appraisal of the qualified structure prepared by an independent MAI designated and licensed real estate appraiser. The commission shall review the documentation of the rehabilitation and verify its compliance with the rehabilitation plan. Within 90 days after receipt of the foregoing documentation from the owner, the commission shall issue a tax credit certificate in an amount equivalent to the lesser of: (i) the amount of the tax credit reservation issued for the project under the provisions of subsection (c), or (ii) 25 percent of the actual qualified rehabilitation expenditures for certified historic structures and 10 percent of the actual qualified rehabilitation expenditures for qualified pre-1936 non-historic structures. In the event the amount of qualified rehabilitation expenditures incurred by the owner would result in the issuance of an amount of tax credits in excess of the amount of tax credits reserved for the owner under subsection (c), the owner may apply to the commission for issuance of tax credits in an amount equal to the excess. Applications for issuance of tax credits in excess of the amount of tax credits reserved for the owner shall be made on a form prescribed by the commission and shall represent a separate certificate that shall be issued, subject to all provisions regarding priority provided in this section.
(e) In order to obtain a credit against any state tax due that is specified in this chapter, a taxpayer shall file the tax credit certificate with the taxpayer’s Alabama state tax return.
(f) The department shall grant a tax credit against any state tax due that is specified in this chapter to a taxpayer holding the tax credit certificate issued under subsection (d) or, in the case of a transferee, issued by the department pursuant to Section 40-9F-4(e) against any tax due under Chapters 16 and 18 in the amount stated on the tax credit certificate. The department shall have the right to audit and to reassess any credit improperly obtained by the owner, in accordance with the Taxpayers’ Bill of Rights and the Uniform Revenue Procedures contained in Chapter 2A; provided, however that only the owner initially awarded the tax credit certificate, and not any subsequent transferee of the tax credit certificate or person to whom tax credits have been passed through pursuant to Section 40-9F-4(d), shall be liable for any credit improperly obtained by the owner.
(g) For processing the taxpayer’s application for a tax credit, the commission may impose reasonable application fees of up to one percent of the qualified rehabilitation expenses but not to exceed ten thousand dollars ($10,000).
(h) The commission shall, in consultation with the department, report to the Legislature in the third year following passage of this chapter, and annually thereafter, on the overall economic activity, usage, and impact to the state from the substantial rehabilitation of qualified structures for which tax credits have been allowed.
(Act 2013-241, p. 579, §3; Act 2014-452, p. 1679, §1.)
(a) The state portion of any tax credit against the tax imposed by Chapters 16 and 18, for the taxable year in which the certified rehabilitation is placed in service, shall be equal to 25 percent of the qualified rehabilitation expenditures for certified historic structures, and shall be 10 percent of the qualified rehabilitation expenditures for qualified pre-1936 non-historic structures. No tax credit claimed for any certified rehabilitation may exceed five million dollars ($5,000,000) for all allowable property types except a certified historic residential structure, and fifty thousand dollars ($50,000) for a certified historic residential structure.
(b) The entire tax credit may be claimed by the taxpayer in the taxable year in which the certified rehabilitation is placed in service. Where the taxes owed by the taxpayer are less than the tax credit, the taxpayer shall not be entitled to claim a refund for the difference, but any unused portion of the credit may be carried forward for up to 10 additional tax years.
(c) For the calendar years 2013, 2014, and 2015, the aggregate amount of all tax credits that may be reserved in any one of such years by the commission upon certification of rehabilitation plans under subsection (c) of Section 40-9F-3 shall not exceed twenty million dollars ($20,000,000) plus any amount of previous reservations of tax credits that were rescinded under subsection (c) of Section 40-9F-3 during the tax year. However, if all of the allowable tax credit amount for any tax year is not requested and reserved, any unreserved tax credits may be utilized by the commission in awarding tax credits in subsequent years; provided, however, that in no event shall a total of more than sixty million dollars ($60,000,000) be reserved by the commission during the period of May 15, 2013, through May 16, 2016. For purposes of this chapter, “tax year” shall mean the calendar year.
(d) Tax credits granted to a partnership, a limited liability company or multiple owners of a property shall be passed through to the partners, members, or owners (including any not-for-profit entity that is a partner, member, or owner) respectively pro rata or pursuant to an executed agreement among the partners, members, or owners documenting an alternate distribution method without regard to their sharing of other tax or economic attributes of the entity. The tax credit certificate shall contain a section to be completed by the owner that provides the percentage or amount of credit that will be allocated to each partner, member, or owner, and such completed certificate may be provided to the department to transfer all or any portion of the tax credits passed through to the partner, member, or owner in accordance with subsection (e).
(e) All or any portion of the tax credits under this section and Sections 40-9F-3 and 40-9F-5 shall be transferable and assignable, subject to any notice and verification requirements to be determined by the department, without the requirement of transferring any ownership interest in the qualified structure or any interest in the entity which owns the qualified structure. However, once a credit is transferred, only the transferee may utilize such credit and the credit cannot be transferred again. A transferee of the tax credits may use the amount of tax credits transferred to offset any state tax due under Chapters 16 and 18 of Title 40. The department shall promulgate a form transfer statement to be filed by the transferor with the department prior to the purported transfer of any credit issued under this chapter. The transfer statement form shall include the name and federal taxpayer identification number of the transferor and each transferee listed therein along with the amount of the tax credit to be transferred to each transferee listed on the form. The transfer statement form shall also contain such other information as the department may from time to time reasonably require. For each transfer, the transferor shall file (1) a completed transfer statement form; (2) a copy of the tax credit certificate issued by the commission documenting the amount of tax credits which the transferor intends to transfer; (3) a copy of the proposed written transfer agreement; and (4) a transfer fee payable to the department in the amount of one thousand dollars ($1,000) per transferee listed on the transfer statement form. The transferor shall file with the department a fully executed copy of the written transfer agreement with each transferee within 30 days after the completed transfer. Filing of the written transfer agreement with the department shall perfect such transfer with respect to such transferee. Within 30 days after the department’s receipt of the fully executed written transfer agreement, the department shall issue a tax credit certificate to each transferee listed in such agreement in the amount of the tax credit so transferred. Such certificate shall be used by the transferee in claiming the tax credit pursuant to Section 40-9F-3(e) and (f). The department may promulgate such additional rules as are necessary to permit verification of the ownership of the tax credits but shall not promulgate any rules which unduly restrict or hinder the transfer of the tax credits.
(Act 2013-241, p. 579, §4; Act 2014-452, p. 1679, §1.)
(a) Recapture of any of the credit shall apply against the taxpayer who utilizes the credit, and any required adjustments to basis due to recapture, shall be governed by Section 50 of the Internal Revenue Code.
(b) In the taxable year the certified rehabilitation is placed in service for any structure for which a tax credit has been issued, the commission shall provide notice of the certified rehabilitation and a copy of the appraisal provided by the owner to the taxing authority responsible for the assessment of ad valorem taxes. Upon notification, the taxing authority responsible for the assessment of ad valorem taxes shall complete a new assessment for the structure to be used in the assessment of ad valorem taxes for the tax year in which the certified rehabilitation was placed in service.
(Act 2013-241, p. 579, §5; Act 2014-452, p. 1679, §1.)
Owners or their duly authorized representatives may appeal any state official decision, including all preliminary or final reservations, approvals, and denials, made by the commission or the department with regard to an application and rehabilitation plan submitted under Section 40-9F-3, in accordance with the Alabama Administrative Procedure Act contained in Chapter 22 of Title 41. Appeals shall constitute an administrative review of the decision appealed from and shall not be conducted as an adjudicative proceeding. Appeals shall be submitted within 30 days of receipt by the owner or the owner’s duly authorized representative of the decision that is the subject of the appeal.
(Act 2013-241, p. 579, §6.)
The tax credits authorized by this chapter for the substantial rehabilitation of qualified structures shall not be available to owners of qualified structures that submit an application and rehabilitation plan after May 15, 2016. No action or inaction on the part of the Legislature shall reduce or suspend the tax credits authorized by this chapter in any past or future calendar year with respect to a qualified structure if the owner thereof submits an application and rehabilitation plan with the commission and the commission reserves an allocation for a tax credit on or prior to May 15, 2016, even if the qualified structure is placed into service after May 15, 2016, and shall not affect the owner of a qualified structure if the commission has reserved an allocation for a tax credit on or prior to May 15, 2016.
(Act 2013-241, p. 579, §7.)
The commission shall promulgate by September 1, 2013, any and all rules and regulations necessary to implement the provisions of this chapter. Applications for the reservation of tax credits shall be accepted beginning October 1, 2013, but no tax credit may be credited prior to the taxpayer’s return for the taxable year 2014.
(Act 2013-241, p. 579, §8.)
This article shall apply to qualified structures throughout the State of Alabama.
(Act 2017-380, §1.)
As used in this article, the following terms have the following meanings:
(1) CERTIFIED HISTORIC STRUCTURE. A property located in this state which is at least 60 years of age, unless the structure is a historic structure located within the boundaries of a National Monument or Park as declared by the United States Congress or the President of the United States, in which case the federal age provisions shall apply, and is certified by the Alabama Historical Commission as being individually listed in the National Register of Historic Places, eligible for listing in the National Register of Historic Places, or certified by the commission as contributing to the historic significance of a Registered Historic District. For applications submitted after June 1, 2023, a property must be 75 years of age.
(2) CERTIFIED REHABILITATION. Repairs or alterations to a certified historic structure that is certified by the commission as meeting the U.S. Secretary of the Interior’s Standards for Rehabilitation which meet the requirements of 26 U.S.C. § 47.
(3) COMMISSION. The Alabama Historical Commission or its successor.
(4) COMMITTEE. The Historic Tax Credit Evaluating Committee established by this article.
(5) DEPARTMENT. The Alabama Department of Revenue or its successor.
(6) DISQUALIFYING USE. Any use of a certified historic structure that is occupied by an owner and used exclusively as a primary or secondary residence.
(7) OWNER. Any taxpayer filing a State of Alabama income tax return or any entity that is exempt from federal income taxation pursuant to 26 U.S.C. § 501, that owns title to a qualified structure or owns a leasehold interest in a qualified structure for a term of not less than 39 years. An owner as defined herein shall not be considered a private user as defined in Section 40-9A-1.
(8) QUALIFIED REHABILITATION EXPENDITURES. Any expenditure as defined under 26 U.S.C. § 47, as amended, and the related regulations thereunder, and other reasonable expenses and costs expended in the rehabilitation of a qualified structure. Qualified rehabilitation expenditures do not include the cost of acquisition of the qualified structure, the personal labor by the owner, or any cost associated with the rehabilitation of an outbuilding of the qualified structure, unless the outbuilding is certified by the commission to contribute to the historical significance of the qualified structure.
(9) QUALIFIED STRUCTURE. Certified historic structures that are certified by the commission as meeting the requirements contained in 26 U.S.C. § 47.
(10) REGISTERED HISTORIC DISTRICT. Any district listed in the National Register of Historic Places and any district that is either of the following:
a. Designated under Alabama or local law as containing criteria that substantially achieves the purpose of preserving and rehabilitating buildings of historic significance to the district.
b. Certified by the U.S. Secretary of the Interior as meeting substantially all of the requirements for the listing of districts in the National Register of Historic Places.
(11) REHABILITATION PLAN. Construction plans and specifications for the proposed rehabilitation of a qualified structure in sufficient detail to enable the commission to evaluate compliance with the standards developed under this article.
(12) SUBSTANTIAL REHABILITATION. Rehabilitation of a qualified structure for which the qualified rehabilitation expenditures exceed 50 percent of the owner’s original purchase price of the qualified structure or twenty-five thousand dollars ($25,000), whichever is greater.
(Act 2017-380, §2; Act 2021-431, §1; Act 2023-522, §1.)
(a) The commission shall develop standards for the approval of the substantial rehabilitation of qualified structures for which a tax credit is sought. The standards shall: (i) take into account whether the substantial rehabilitation of a qualified structure is consistent with the historic character of the structure or of the Registered Historic District in which the property is located; and (ii) for tax years 2023 through 2027, establish a mechanism to require owners to confirm that the proposed use for the qualified structure is not a disqualifying use in the application, and prior to the commission’s issuance of the tax credit certificate for the qualified structure under Section 40-9F-32(d).
(b) Prior to beginning any substantial rehabilitation work on a qualified structure, the owner shall submit an application and rehabilitation plan to the commission and an estimate of the qualified rehabilitation expenditures under the rehabilitation plan; provided, however, that the owner, at its own risk, may incur qualified rehabilitation expenditures no earlier than six months prior to the submission of the application and rehabilitation plan that are limited to architectural, engineering, and land surveying fees and related soft costs and any costs related to the protection of the qualified structure from deterioration.
(c)(1) The commission shall review the application and rehabilitation plan to determine that the information contained therein is complete. If the commission determines that the application and rehabilitation plan are complete, the commission shall recommend the project to the committee for the reservation of a tax credit. If the project is approved for a tax credit by the committee, the commission shall reserve, for the benefit of the owner, an allocation for a tax credit as provided in Section 40-9F-33, and the commission shall notify the owner in writing of the amount of the reservation. The reservation of tax credits does not entitle the owner to an issuance of tax credits until the owner complies with all other requirements of this article for the issuance of the tax credits. The reservation of tax credits shall be made by the commission in the order in which the committee has ranked completed applications and rehabilitation plans. Reservations of tax credits shall be issued by the commission within a reasonable time from the filing of a completed application and rehabilitation plan. Only the property for which a property address, legal description, or other specific location is provided in the application shall be reviewed. Ownership of an entity that is the owner of property contained in the application shall not be a factor in the commission’s review of the application and no subsequent change in the ownership structure of such entity shall result in the loss or rescission of a reservation of tax credits. The owner shall not be permitted to request the review of another property for approval in the place of the property contained in the application. Any application disapproved by the commission or the committee shall be removed from the review process, and the commission shall notify the owner in writing of the decision to remove the application. A disapproved application may be resubmitted, but shall be deemed to be a new submission and may be charged a new application fee. In the event the reservations of tax credits equal the total amount available for reservations during the tax year, all owners with applications then awaiting approval or thereafter submitted shall be notified by the commission that no additional tax credits shall be granted during that tax year. The applications shall remain in active status from the date of the original application and shall be considered for recommendations of tax credits in the event that additional credits become available due to rescission by the commission or when a new tax year’s allocation of tax credits becomes available.
(2) Owners receiving a reservation of tax credits shall commence rehabilitation, if rehabilitation has not previously begun, within 18 months of the date of issuance of the written notice from the commission to the owner granting the tax credits. Commencement of rehabilitation shall mean that, as of the date in which actual physical work contemplated by the rehabilitation plan submitted with the application has begun, the owner has incurred no less than 20 percent of the estimated costs of rehabilitation provided in the application. Within 36 months of the date of issuance of the written notice from the commission to the owner granting the tax credit reservation, the owner must have incurred an additional 50 percent of the estimated costs of rehabilitation provided in the application. Within 60 months of the date of issuance of the written notice from the commission to the owner granting the tax credit reservation, the project must be completed. Owners receiving a reservation of tax credits shall submit evidence of compliance with this subsection. If the commission determines that an owner has failed to comply with the requirements provided under this section, the reservation of tax credits for the owner may be rescinded and, if so, the amount of tax credits shall then be included in the total amount of available tax credits provided for in subsection (c) of Section 40-9F-33, from which reservations may be granted. Any owner whose reservation of tax credits are rescinded shall be notified of the rescission from the commission and, upon receipt of the notice, may submit a new application but may be charged a new application fee.
(d) Following the completion of a substantial rehabilitation of a qualified structure, the owner shall notify the commission that the substantial rehabilitation has been completed and shall certify the qualified rehabilitation expenditures incurred with respect to the rehabilitation plan. In addition, the owner shall provide the commission with: (i) a cost and expense certification, prepared by a licensed certified public accountant that is not an affiliate of the owner, certifying the total qualified rehabilitation expenditures and the total amount of tax credits against any state tax due that is specified in this article for which the owner is eligible under Section 40-9F-33; and (ii) an appraisal of the qualified structure prepared by an independent MAI designated and licensed real estate appraiser. The commission shall review the documentation of the rehabilitation and verify its compliance with the rehabilitation plan. Within 90 days after receipt and approval of the foregoing documentation from the owner, the commission shall issue a tax credit certificate in an amount equivalent to the lesser of: (i) the amount of the tax credit reservation issued for the project under the provisions of subsection (c); or (ii) 25 percent of the actual qualified rehabilitation expenditures for certified historic structures. In the event the amount of qualified rehabilitation expenditures incurred by the owner would result in the issuance of an amount of tax credits in excess of the amount of tax credits reserved for the owner under subsection (c), the owner may apply to the commission for issuance of tax credits in an amount equal to the excess. Applications for issuance of tax credits in excess of the amount of tax credits reserved for the owner shall be made on a form prescribed by the commission and shall represent a separate certificate that shall be issued, subject to all provisions regarding priority provided in Section 40-9F-38.
(e) In order to obtain a credit against any state tax due that is specified in this article, a taxpayer shall file the tax credit certificate with the taxpayer’s Alabama state tax return.
(f) The department shall grant a tax credit against any state tax due that is specified in this article to a taxpayer holding the tax credit certificate issued under subsection (d) or, in the case of a transferee, issued by the department pursuant to Section 40-9F-33 against any tax due under Chapter 18 in the amount stated on the tax credit certificate. The department shall have the right to audit and to reassess any credit improperly obtained by the owner, in accordance with the Taxpayers’ Bill of Rights and the Uniform Revenue Procedures contained in Chapter 2A; provided, however that only the owner initially awarded the tax credit certificate, and not any subsequent transferee of the tax credit certificate or person to whom tax credits have been passed through pursuant to Section 40-9F-33, shall be liable for any credit improperly obtained by the owner.
(g) For processing the taxpayer’s application for a tax credit, the commission may impose the following application fees:
(1) For qualified rehabilitation expenses of one million dollars ($1,000,000) or less, a fee equal to 1 percent of the qualified rehabilitation expenditures.
(2) For qualified rehabilitation expenses from one million and one dollars ($1,000,001) to ten million dollars ($10,000,000), a fee equal to fifteen thousand dollars ($15,000).
(3) For qualified rehabilitation expenses over ten million dollars ($10,000,000), a fee equal to twenty thousand dollars ($20,000).
(h) Any fees collected by the commission under this section shall be deposited in the State Treasury to the credit of the commission and all such funds are to be appropriated to the commission to defray the expenses incurred in carrying out this article.
(i) The commission shall report to the Legislature in the third year following passage of this article, and annually thereafter, on the overall economic activity, usage, and impact to the state from the substantial rehabilitation of qualified structures for which tax credits have been allowed. The information in the reports shall be consistent with the information required by the Legislature pursuant to, and shall be provided by the commission to the Legislature in accordance with, Section 40-1-50, and rules adopted thereunder. Information provided pursuant to this section is exempt from the confidentiality provisions of Section 40-2A-10.
(Act 2017-380, §3; Act 2021-431, §1.)
(a) The state portion of any tax credit against the tax imposed by Chapter 18 for the taxable year in which the reservation is allocated to a project or the certified rehabilitation is placed in service shall be equal to 25 percent of the qualified rehabilitation expenditures for certified historic structures. No tax credit claimed for any certified rehabilitation may exceed five million dollars ($5,000,000) for all allowable property types.
(b) There is created within the Education Trust Fund a separate account named the Historic Preservation Income Tax Credit Account. The Commissioner of Revenue shall certify to the Comptroller the amount of income tax credits under this section and the Comptroller shall transfer into the Historic Preservation Income Tax Credit Account only the amount from sales tax revenues within the Education Trust Fund that is sufficient for the Department of Revenue to use to cover the income tax credits for the applicable tax year. The Commissioner of Revenue shall distribute the funds in the Historic Preservation Income Tax Credit Account pursuant to this section.
(c) The entire tax credit must be claimed by the taxpayer for the taxable year in which the reservation is allocated to a project or the certified rehabilitation is placed in service. Tax credits shall not be claimed prior to the taxable year in which the certified rehabilitation is placed in service. Where the taxes owed by the taxpayer are less than the tax credit, the taxpayer shall be entitled to claim a refund for the difference. In the event that any additional credit is allocated to the taxpayer for a given project, the additional credit must be claimed in the taxable year the additional credit is allocated to the taxpayer.
(d)(1) For the tax years 2018 through 2022, the aggregate amount of all tax credits that may be reserved in any one of such years by the commission and certification of rehabilitation plans under Section 40-9F-32(c) shall not exceed twenty million dollars ($20,000,000), plus any amount of previous reservations of tax credits that were rescinded under Section 40-9F-32(c) during the tax year. However, if all of the allowable tax credit amount for any tax year is not requested and reserved, any unreserved tax credits may be utilized by the commission in awarding tax credits in subsequent years; provided, however, that in no event shall a total of more than two hundred million dollars ($200,000,000) be reserved by the commission during the period from May 25, 2017, through December 31, 2022, pursuant to this article. Applications shall not be received by the commission after the Historic Tax Credit Evaluating Committee has ranked projects with a total amount exceeding two hundred million dollars ($200,000,000).
(2) For the tax years 2023 through 2027, the aggregate amount of all tax credits that may be reserved in any one of such years by the commission and certification of rehabilitation plans under Section 40-9F-32(c) shall not exceed twenty million dollars ($20,000,000), plus any amount of previous reservations of tax credits that were rescinded under Section 40-9F-32(c) during the tax year. However, if all of the allowable tax credit amount for any tax year is not requested and reserved, any unreserved tax credits may be utilized by the commission in awarding tax credits in subsequent years; provided, however, that in no event shall a total of more than two hundred million dollars ($200,000,000) be reserved by the commission during the period from May 25, 2017, through December 31, 2027, pursuant to this article.
(3) For tax years 2023 through 2027, no tax credits shall be reserved for qualified structures the end use of which is proposed to be a disqualifying use.
(4) For purposes of this article, “tax year” shall mean calendar year.
(5) In addition to the limits in subdivision (2), for tax years 2024 through 2027, the commission may utilize an additional amount up to a total of five million dollars ($5,000,000) to reduce the backlog of qualified applications.
(e) Of the annual amount of the tax credits provided for in subsection (d), 40 percent shall be reserved to taxpayers with a certified rehabilitation project located in a county in which the population does not exceed 175,000 according to the most recent federal decennial census. In the event applications are not received and credits are not allocated for projects in these areas by the close of the third quarter of the program year, the funds may revert for allocations of other project applications.
(f) Tax credits granted to a partnership, a limited liability company, S corporations, trusts, or estates, shall be claimed at the entity level and shall not pass through to the partners, members, or owners.
(g) All or any portion of the income tax credits under this section and Section 40-9F-32 shall be transferable and assignable, subject to any notice and verification requirements to be determined by the department, without the requirement of transferring any ownership interest in the qualified structure or any interest in the entity which owns the qualified structure. Any tax credits transferred shall be at a value of at least 85 percent of the present value of the credits. However, once a credit is transferred, only the transferee may utilize the credit and the credit may not be transferred again. A transferee of the tax credits may use the amount of tax credits transferred to offset any income tax under Chapter 18. The entire tax credit must be claimed by the transferee for the taxable year in which the reservation is allocated to a project or the certified rehabilitation is placed in service. When the taxes owed by the transferee are less than the tax credit, the transferee shall be entitled to claim a refund for the difference. The department shall adopt a form transfer statement to be filed by the transferor with the department prior to the purported transfer of any credit issued under this article. The transfer statement form shall include the name and federal taxpayer identification number of the transferor and each transferee listed therein along with the amount of the tax credit to be transferred to each transferee listed on the form. The transfer statement form shall also contain any other information as the department may from time to time reasonably require. For each transfer, the transferor shall file: (1) a completed transfer statement form; (2) a copy of the tax credit certificate issued by the commission documenting the amount of tax credits which the transferor intends to transfer; (3) a copy of the proposed written transfer agreement; and (4) a transfer fee payable to the department in the amount of one thousand dollars ($1,000) per transferee listed on the transfer statement form. The transferor shall file with the department a fully executed copy of the written transfer agreement with each transferee within 30 days after the completed transfer. Filing of the written transfer agreement with the department shall perfect the transfer with respect to the transferee. Within 30 days after the department’s receipt of the fully executed written transfer agreement, the department shall issue a tax credit certificate to each transferee listed in the agreement in the amount of the tax credit so transferred. The certificate shall be used by the transferee in claiming the tax credit pursuant to subsections (e) and (f) of Section 40-9F-32. The department may adopt additional rules as are necessary to permit verification of the ownership of the tax credits, but shall not adopt any rules which unduly restrict or hinder the transfer of the tax credits.
(Act 2017-380, §4; Act 2021-431, §1; Act 2023-522, §1.)
(a) Recapture of any of the credit shall apply against the taxpayer who utilizes the credit, and any required adjustments to basis due to recapture, shall be governed by Section 50 of the Internal Revenue Code.
(b) In the taxable year the certified rehabilitation is placed in service for any structure for which a tax credit has been issued, the commission shall provide notice of the certified rehabilitation and a copy of the appraisal provided by the owner to the taxing authority responsible for the assessment of ad valorem taxes. Upon notification, the taxing authority responsible for the assessment of ad valorem taxes shall complete a new assessment for the structure to be used in the assessment of ad valorem taxes for the tax year in which the certified rehabilitation was placed in service.
(Act 2017-380, §5.)
Owners or their duly authorized representatives may appeal any state official decision, including all preliminary or final reservations, approvals, and denials, made by the commission, committee or the department with regard to an application and rehabilitation plan submitted under Section 40-9F-32, in accordance with the Alabama Administrative Procedure Act contained in Chapter 22 of Title 41. Appeals shall constitute an administrative review of the decision appealed from and shall not be conducted as an adjudicative proceeding. Appeals shall be submitted within 30 days of receipt by the owner or the owner’s duly authorized representative of the decision that is the subject of the appeal.
(Act 2017-380, §6.)
The tax credits authorized by this article for the substantial rehabilitation of qualified structures shall not be available to owners of qualified structures that submit an application and rehabilitation plan after December 31, 2027. No action or inaction on the part of the Legislature shall reduce or suspend the tax credits authorized by this article in any past or future calendar year with respect to a qualified structure if the owner thereof submits an application and rehabilitation plan with the commission and the commission reserves an allocation for a tax credit on or prior to December 31, 2027, even if the qualified structure is placed into service after December 31, 2027, and shall not affect the owner of a qualified structure if the commission has reserved an allocation for a tax credit on or prior to December 31, 2027. Notwithstanding any other provision of this chapter, any application received by the commission, other than an application for a qualified structure the end use of which is proposed to be a disqualifying use, in active status on the ranking list of the Historic Tax Credit Evaluating Committee or granted a tax allocation reservation prior to May 14, 2021, shall remain on the ranking list or in reservation status and shall receive a tax credit allocation reservation or a tax credit allocation, as the case may be, when additional credits become available, including in any tax year commencing after 2022.
(Act 2017-380, §7; Act 2021-431, §1.)
The commission shall promulgate by October 1, 2017, any and all rules and regulations necessary to implement this article. Applications for the reservation of tax credits shall be accepted beginning November 1, 2017.
(Act 2017-380, §8.)
AMENDED BY ACT 2026-209, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
(a) There is established the Historic Tax Credit Evaluating Committee, which shall review qualifying projects, approve credits for projects, and rank projects in the order in which the projects should receive tax credit reservations based on criteria established by the commission. The commission shall establish a review cycle for the committee beginning on January 1, 2018, provided that the committee shall meet at least quarterly unless no credits remain to be allocated. The Commissioner of Revenue shall be a nonvoting member of the committee and provide advisory and technical support. The committee shall consist of the following:
(1) The Director of the Alabama Office of Minority Affairs.
(2) The Executive Director of the Alabama Historical Commission.
(3) The Finance Director.
(4) The Director of the Alabama Department of Economic and Community Affairs.
(5) The Secretary of Commerce.
(6) Two members of the Alabama House of Representatives, at least one of whom shall be a member of the minority party, to be appointed by the Speaker of the House of Representatives.
(7) Two members of the Alabama Senate, at least one of whom shall be a member of the minority party, to be appointed by the President Pro Tempore of the Senate.
(8) The Chair of the Senate Finance Taxation Education Committee or his or her designee.
(9) The Chair of the House Ways and Means Education Committee or his or her designee.
(b)(1) The Alabama Historical Commission shall adopt rules that shall set forth guidelines to be used by the committee in determining the allocation of credits. The guidelines shall set forth factors to be considered by the committee including all of the following:
a. The relative value of the proposed project to the particular community, including the maintenance of the historic fabric of the community.
b. The possible return on investment for the community in which the proposed project is located.
c. The geographic distribution of projects.
d. The likelihood of the project proceeding without the historic tax credit authorized in this article.
e. The strength of local support for the proposed project.
f. The leveraged investment ratio of the project, as determined by the total project investment divided by the amount of tax credits requested.
g. The number of net new jobs the project will create in the state.
h. The amount of overall project financing for which the applicant has firm, secured commitments prior to submitting its application.
(2) Included in the information to be required for the evaluation submitted in the application of any project shall be any additional tax credits or state, federal, or local government grants that the applicant expects to utilize for the construction of the project.
(3) The committee shall establish a minimum threshold that a project must exceed before the project may be funded by the committee.
(c) The committee may meet in person, remotely, or by using a hybrid model where some members attend in person and others attend remotely, pursuant to Section 36-25A-5.1.
(Act 2017-380, §9; Act 2021-431, §1; Act 2022-402, §1; Act 2023-522, §1.)
For purposes of this chapter, the following words and phrases have the following meanings:
(1) APPROVED ACTIVITY. The conduct of an activity that is predominantly any one or more of the following:
a. Described by NAICS Code 1133, 115111, 2121, 22111, 221330, 31 (other than 311811), 32, 33, 423, 424, 482, 4862, 48691, 48699, 48819, 4882, 4883 (other than 48833), 493, 5121 (other than 51213), 5122, 513, 517, 518 (without regard to the premise that data processing and related services be performed in conjunction with a third party), 51929, 52232, 54133 (if predominantly in furtherance of another activity described in this chapter), 54134 (if predominantly in furtherance of another activity described in this chapter), 54138, 5415, 541614, 5417, 55 (if not for the production of electricity), 561422 (other than establishments that originate telephone calls), 562213, 56291, 56292, 611512, 927, or 92811.
b. The production of biofuel as such term is defined in Section 2-2-90(c)(2).
c. The conduct of original investigations undertaken on a systematic basis to gain new knowledge or the application of research findings or other scientific knowledge to create new or significantly improved products or processes.
d. The national or regional headquarters for a company that conducts significant business operations outside the state and that will serve as the principal office of the company’s principal operating officer with chief responsibility for the daily business operations of the company.
e. A target of the state’s economic development efforts pursuant to either of the following:
(i) The comprehensive economic development plan, CatALyst, or any amended version or successor document thereto; or
(ii) A type listed in a rule adopted by the Department of Commerce, other than a rule submitted as an emergency rule.
Notwithstanding the foregoing, an approved activity shall not predominantly concern farming activities involving trees, animals, or crops, nor the retail sale of tangible personal property or services. This provision shall not be deemed to exclude customer service centers, call centers, or headquarters otherwise allowed by this subdivision.
(2) COMPANY. Anyone or anything that has the power to own a project and have employees.
(3) NAICS CODE. Any sector, subsector, industry group, industry, or national industry of the 2022 North American Industry Classification System, or any similar classification system developed in conjunction with the United States Department of Commerce or Office of Management and Budget.
(4) QUALIFYING PROJECT. Any project: (i) that proposes to invest in capital expenditures that equal or exceed two million dollars ($2,000,000) as part of any addition, expansion, improvement, renovation, re-opening, or rehabilitation of a facility, or replacement of any existing equipment or tangible personal property; (ii) that predominantly involves an approved activity; and (iii) for which no project agreement has been entered into with the Governor for the provision of other incentives.
(5) UTILITY TAXES. The taxes imposed by Sections 40-21-82 and 40-21-102.
(Act 2015-24, §2; Act 2026-550, §1.)
(a) For any qualifying project, an abatement may be allowed for ad valorem taxes and construction related transaction taxes.
(1) The abatement of construction related transaction taxes shall be subject to and shall follow the procedures, provisions, limitations, and definitions of Chapter 9B, except that capitalized repairs, rebuilds, maintenance and replacement equipment shall qualify for abatements.
(2) The abatement of ad valorem taxes shall be subject to and shall follow the procedures, provisions, limitations, and definitions of Chapter 9B, except as follows:
a. The amount of the ad valorem tax abatement shall be equal to the ad valorem taxes owed, minus the ad valorem taxes owed from the tax year immediately before the qualifying project was placed in service;
b. As to any ad valorem tax abatement, capitalized repairs, rebuilds, maintenance and replacement equipment shall qualify for abatements; and
c. Regardless of the length of the abatement, county noneducational taxes may be abated only with the consent by resolution of the governing body of the county, municipal noneducational taxes may be abated only with the consent by resolution of the governing body of the municipality, and state ad valorem taxes may be abated only with the consent of the Governor. The governing body of a county and a municipality may separately authorize one or more public industrial authorities to provide by resolution for such consent on its behalf.
(b) For any qualifying project, a refund of utility taxes may be allowed for up to a ten-year period. The refund shall be calculated and paid annually, as follows:
(1) The amount of the refund shall be equal to the utility taxes paid, minus the utility taxes paid on average during the three tax years immediately before the qualifying project was placed in service.
(2) For each year of the incentive period for the utility tax refund, the incentivized company shall submit to the Department of Commerce a certification as to the utility taxes paid during the prior year. Following such examination as it deems necessary, the Department of Commerce may certify the information and deliver same to the Department of Revenue. Thereafter, the Department of Revenue shall calculate the correct refund and issue it directly to the company.
The Department of Finance shall promulgate regulations to ensure that the refund in no case would reduce the distribution for the Alabama Special Mental Health Trust Fund.
An incentivized company may assign and convey a utility tax refund to another entity if substantially all of the assets of the incentivized company are assigned and conveyed in the same transaction. Proof of such transfer shall be submitted to the Departments of Commerce and Revenue.
(c) For any qualifying project, AIDT training for new or current employees to operate new and replacement equipment may be provided.
(d) In order to receive the incentives described in subsections (b) or (c), the following shall occur:
(1) For any company that proposes a qualifying project, the Secretary of Commerce shall make the following findings:
a. That the project is in fact a qualifying project;
b. That the company or any related company has not defaulted on a project agreement or similar agreement, or any economic incentive agreement at any time during the last 10 years; and
c. That the qualifying project will promote the continued and sustained operation of the company’s business operations in Alabama.
(2) Upon making affirmative findings on the criteria set forth in subdivision (1), the Secretary of Commerce shall recommend to the Governor that the company and qualifying project be approved for one or more of the incentives described in subsections (b) and (c). The name of the company and information collected about it and the qualifying project by the Secretary shall be forwarded to the Governor.
(3) After reviewing the information provided by the Secretary of Commerce, the Governor shall also determine whether the company and the qualifying project meet the criteria set forth in subdivision (1). If the Governor makes such a finding, the company and qualifying project may claim the incentives provided in subsections (b) and (c).
(e) All filings made by a private party with any department of the state government shall be made using forms promulgated by such department. Any such filing shall be treated as a tax return, subject to penalties imposed by the Department of Revenue.
(f) Nothing in this chapter shall be construed to limit the powers otherwise existing for the Department of Revenue to audit and assess a company. Nothing in this chapter shall be construed to limit the applicability of Chapter 9B to a private user, as such term is used in Chapter 9B.
(g) Nothing in this chapter shall be construed to make available to any company any right to the benefits conferred by this chapter absent strict compliance with this chapter. No cause of action shall exist for the denial of any benefit under this chapter.
(h) The Departments of Commerce and Revenue shall promulgate regulations to implement and administer the provisions of this chapter.
(Act 2015-24, §2.)
This chapter shall be known and may be cited as the Alabama Rural, Agribusiness, and Opportunity Zone Jobs Act.
(Act 2021-492, §1.)
As used in this chapter, the following words shall have the following meanings:
(1) AFFILIATE. An entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with another entity. For the purposes of this subdivision, an entity is controlled by another entity if the controlling person holds, directly or indirectly, the majority voting or ownership interest in the controlled person or has control over the day-to-day operations of the controlled person by contract or by law.
(2) AGRIBUSINESS. A business that earns a majority of its revenues from either farming, forestry, biotechnology, fisheries, or biofuels and the processing, manufacturing, packaging, storage, distribution, marketing, and sales of those products or commodities, or the design, creation, manufacture, marketing, or sales of technology, equipment, or supplies related to those businesses.
(3) CLOSING DATE. The date the department and the growth fund execute the SSBCI loan agreement.
(4) DEPARTMENT. The state body, department, subdivision, or agency authorized by the state to direct federal funds available under Subtitle C of Title III of the American Rescue Plan Act of 2021.
(5) FOLLOW-ON CAPITAL. The sum of 50 percent of each initial growth investment, subsequent growth investments made to satisfy subdivision (a)(2) of Section 40-9H-5 and any additional financing received by a growth business on or after the date of the initial growth investment, including senior debt, subordinate debt, mortgage debt, equipment financing, mezzanine debt, convertible notes, revolving lines of credit, letters of credit, capital leases, preferred equity, participating preferred equity, convertible preferred equity, common equity, warrants and simple agreements for future equity, and any other financing approved by the department.
(6) FOLLOW-ON CAPITAL PERCENTAGE. Fifty percent multiplied by a fraction, the numerator of which is the aggregate follow-on capital reported to the department in reports submitted pursuant to subsection (b) of Section 40-9H-6 and the denominator of which is 10 times the amount of the SSBCI loan. The percentage may exceed 50 percent.
(7) GROWTH BUSINESS. A business to which all of the following apply at the time of the initial investment in the company by a growth fund:
a. Has fewer than 200 employees.
b. Has its principal business operations in one or more growth zones in the state.
c. Is made in any of the following:
Any business in North American Industry Classification System codes 11, 21, 22, 23, 31 through 33, 48 through 49, 54, or 62 or, if not engaged in those industries, the department determines that the investment will be beneficial to the growth zone.
An agribusiness.
A minority owned business.
(8) GROWTH FUND. An entity certified by the department under subsection (g) of Section 40-9H-3.
(9) GROWTH INVESTMENT. Any capital or equity investment in a growth business or any loan to a growth business with a stated maturity at least one year after the date of issuance, provided that with respect to any loan to a growth business secured by accounts receivable, inventory, real estate, or other tangible property, the chief executive officer or similar official of the growth business executes an affidavit that the business sought and was denied similar financing from a banking institution doing business in this state. Fifty percent of a growth investment shall be comprised of a draw on the SSBCI loan with the remaining 50 percent funded with the growth fund’s matching capital.
(10) GROWTH ZONE. A rural county of the state with less than 50,000 in population pursuant to the 2020 Federal Decennial Census, or a qualified opportunity zone as designated pursuant to 26 U.S.C. § 1400Z-1 with a poverty rate of at least 20 percent, or otherwise meeting the definition of low-income community in 26 U.S.C. § 45D.
(11) HIGH WAGE EMPLOYMENT POSITION. An employment position that is filled, pays a wage of at least 110 percent of the county average as noted in the most recent quarterly County Employment and Wages report by the Bureau of Labor Statistics of the United States Department of Labor, and requires at least 35 hours of work per week or any other period of time generally accepted by custom, industry, or practice as full-time employment.
(12) INVESTMENT AUTHORITY. The amount stated on the notice issued under subsection (g) of Section 40-9H-3 certifying the growth fund.
(13) JOBS RETAINED. The number of high wage employment positions that existed before the initial growth investment and for which the growth business’s chief executive officer or similar officer certifies that the high wage employment position would have been eliminated but for the initial growth investment. The retained jobs of a growth business shall be calculated each year based on the monthly average of high wage employment positions. The reported number of retained jobs may not exceed the number reported on the initial report required under subsection (a) of Section 40-9H-6.
(14) MANAGEMENT FEE. An amount equal to three percent per annum of the growth fund’s investment authority that accrues annually, but shall not be paid until the growth fund exits the program in accordance with subsection (e) of Section 40-9H-5.
(15) MATCHING CAPITAL. An amount of capital raised by the growth fund as debt or equity and invested in growth businesses. Matching capital shall only be considered debt of the growth fund and eligible for repayment pursuant to paragraph (e)(2)a. of Section 40-9H-5 if the growth fund provides evidence of such direct or indirect debt to the department.
(16) MINORITY OWNED BUSINESS. A business that is more than 50 percent owned by one or more individuals of African-American, Asian, or Hispanic origin.
(17) NEW ANNUAL JOBS. Except as provided in paragraph c., the term means the difference between paragraphs a. and b. as follows:
a.1. The monthly average of high wage employment positions for the preceding calendar year.
b. The number of high wage employment positions at the growth business on the date of the initial growth investment.
c. If the amount calculated in subparagraph a.1. is less than zero, the new annual jobs amount is equal to zero.
(18) NEW ANNUAL JOBS AND JOBS RETAINED PERCENTAGE. Fifty percent multiplied by a fraction, the numerator of which is the number of new annual jobs and jobs retained reported in annual reports submitted to the department pursuant to subsection (b) of Section 40-9H-6 and the denominator of which is the number of new annual jobs and jobs retained set forth in the growth fund’s certification provided pursuant to subsection (g) of Section 40-9H-3. The percentage may exceed 50 percent.
(19) PRINCIPAL BUSINESS OPERATIONS. The place or places where at least 60 percent of the business’s employees work or where employees that are paid at least 60 percent of the business’s payroll work. A business that has agreed to relocate or hire new employees using the proceeds of a growth investment to establish its principal business operations in a growth zone in the state shall be deemed to have its principal business operations in this new location, provided the business satisfies this requirement within 180 days after receiving the growth investment, unless the department agrees to a later date.
(20) PROGRAM EXIT. The process described in subsection (e) of Section 40-9H-5.
(21) SSBCI. The federal State Small Business Credit Initiative pursuant to Subtitle C of Title III of the American Rescue Plan of 2021.
(22) SSBCI FUND. The SSBCI Alabama Rural, Agribusiness, and Opportunity Zone Jobs Act Account which is hereby established.
(23) SSBCI FUNDING. An amount equal to twenty-five million dollars ($25,000,000) of the State of Alabama’s allocation of funds pursuant to Subtitle C of Title III of the American Rescue Plan Act of 2021 which shall be deposited in the SSBCI fund.
(24) SSBCI LOAN. A loan made to a growth fund using SSBCI funding. The department and the growth fund shall execute a loan agreement which shall provide for:
a. An interest rate of one percent interest compounding annually which shall be due upon program exit or acceleration pursuant to Section 40-9H-5.
b. Forgiveness at exit of a percentage of principal and interest due on the SSBCI loan equal to the sum of the follow-capital percentage and the new annual and jobs retained percentage, provided forgiveness shall not be available with respect to SSBCI loans accelerated pursuant to Section 40-9H-5.
c. Subordination to matching capital funded directly or indirectly as debt, which subordination may be revoked pursuant to Section 40-9H-5.
d. Draws in connection with growth investments in accordance with subsection (c) of Section 40-9H-4.
(Act 2021-492, §2; Act 2024-403, §1.)
(a) Upon receipt of an allocation of funds pursuant to Subtitle C of Title III of the American Rescue Plan Act of 2021, the department shall cause the SSBCI funding to be deposited in the SSBCI fund.
(b) Within 30 days of the approval of the state’s application for federal funds pursuant to Subtitle C of Title III of the American Rescue Plan Act of 2021, the department shall accept applications for certification as a growth fund on a form prescribed by the department. The application shall include all of the following:
(1) The total investment authority and SSBCI loan sought by the applicant not to exceed fifteen million dollars ($15,000,000) and seven million five hundred thousand dollars ($7,500,000), respectively.
(2) Evidence that the applicant, or an affiliate of the applicant, is licensed as a rural business investment company under 7 U.S.C. § 2009cc or as a small business investment company under 15 U.S.C. § 681, including a certificate executed by an executive officer of the applicant attesting that the license remains in effect and has not been revoked, and that at least one principal in a rural business investment company or a small business investment company is, and has been for at least five years, an officer or employee of the applicant or an affiliate of the applicant on the date the application is submitted.
(3) Evidence that as of the date the application is submitted, the applicant or affiliates of the applicant have invested at least fifty million dollars ($50,000,000) in, or lent at least fifty million dollars ($50,000,000) to, nonpublic companies located in nonmetropolitan counties, as defined by the Office of Management and Budget within the Office of the President of the United States, on the basis of county or county-equivalent units and invested at least twenty-five million dollars ($25,000,000) in, or lent at least twenty-five million dollars ($25,000,000) to, minority owned businesses.
(4) An estimate of the number of aggregate new annual jobs that will be created and jobs retained in this state because of the applicant’s growth investments.
(5) A business plan that includes a revenue impact assessment projecting state and local tax revenue, as well as reduced state expenditures, to be generated by the applicant’s proposed growth investments prepared by a nationally recognized third-party independent economic forecasting firm using a dynamic economic forecasting model that analyzes the applicant’s business plan over the 10 years following the date the application is submitted to the department.
(6) A letter of credit issued to the applicant from a depository institution equal to at least 50 percent of the amount of investment authority requested or similar evidence that the applicant has secured matching capital equal to such amount.
(7) A nonrefundable application fee of twenty thousand dollars ($20,000) payable to the department.
(8) An education and marketing plan to educate growth businesses regarding the availability of funds and requirements for participation pursuant to this chapter.
(c) Within 30 days after receipt of a completed application containing the information set forth in subsection (b), the department shall grant or deny the application. The department shall deem applications received on the same day to have been received simultaneously. The department shall approve investment authority up to an amount that would allow not more than fifty million dollars ($50,000,000) of investment authority and twenty-five million dollars ($25,000,000) of SSBCI loans. If requests for investment authority and SSBCI loans exceed this limitation, the department shall proportionally reduce the investment authority and SSBCI loan for each approved application as necessary to avoid exceeding the limit.
(d) The department shall deny an application if any of the following are true:
(1) The application is incomplete.
(2) The applicant does not satisfy all the criteria described in subdivisions (2), (3), (6), and (7) of subsection (b).
(3) The revenue impact assessment submitted under subdivision (b)(5) does not demonstrate that the applicant’s business plan will result in an economic impact on this state over a 10-year period that exceeds the growth fund’s SSBCI loan.
(4) The department has already approved the maximum amount of investment authority and SSBCI loans allowed under subsection (c).
(e) If the department denies an application, the applicant may provide additional information to the department to complete, clarify, or cure defects in the application identified by the department, except for failure to comply with subdivision (b)(6), within 15 days of the notice of denial for reconsideration and determination. The department shall review and reconsider the applications for which additional information is provided within the 15-day period within 30 days and, if approved, the application shall be considered complete as of its original submission date.
(f) The department may not reduce the requested investment authority or deny a growth fund application for reasons other than those described in subsections (c) and (d).
(g) Upon approval of an application, the department shall certify the applicant as a growth fund, specifying the amount of the applicant’s investment authority, SSBCI loan, aggregate required matching capital, and the number of new annual jobs and jobs retained that will be required of the growth fund, which shall match those projected in the growth fund’s application, prorated on the basis of the investment authority awarded to the growth fund.
(h) An approved growth fund may apply for additional investment authority and SSBCI loans once it has invested 100 percent of its outstanding investment authority.
(Act 2021-492, §3; Act 2024-403, §1.)
(a) Within 30 days of certification of a growth fund, the department shall enter into the SSBCI loan agreement with the growth fund and segregate for draws by the growth fund in the SSBCI fund an amount of SSBCI funding equal to the SSBCI loan awarded to such growth fund.
(b) A growth fund, before making a growth investment, shall request from the department a written opinion as to whether the business in which it proposes to invest satisfies the definition of a growth business. The department, not later than 15 business days after the date of receipt of the request, shall notify the growth fund of its determination. If the department fails to notify the growth fund of its determination within 15 business days, the business in which the growth fund proposes to invest shall be considered a growth business. Each request for a written opinion shall be accompanied by a five hundred dollar ($500) opinion fee payable to the department.
(c) At least five business days prior to a growth investment, a growth fund shall make a draw request on the SSBCI loan to the department. The draw on the SSBCI loan shall not exceed 50 percent of the proposed growth investment. At least two business days prior to a growth investment, a growth fund shall notify the department of the date of the closing of the growth investment and the department shall transfer the amount of draw requested from the SSBCI fund to an account designated by the growth fund on the following day. The growth fund shall return the proceeds of the draw if the growth investment is not made within the three business days of receipt of the draw unless the return is waived by the department.
(Act 2021-492, §4; Act 2024-403, §1.)
(a) A growth fund shall forfeit its management fee, the SSBCI loan shall be immediately due and its subordination immediately revoked, and remaining draws on the SSBCI loan shall be forfeited if:
(1) Within 12 months of the closing date:
a. The growth fund does not invest 100 percent of its investment authority in growth investments in this state, of which at least 25 percent shall be invested in agribusiness and at least 25 percent shall be invested in minority owned businesses, and of which at least 50 percent shall be invested in growth businesses located in rural areas and at least 25 percent shall be invested in growth businesses located in qualified opportunity zones.
b. With respect to awards of investment authority less than seven million five hundred thousand dollars ($7,500,000), the growth fund does not invest 100 percent of its investment authority in this state, of which at least 50 percent of growth investments shall be made in agribusiness or minority owned businesses and at least 75 percent of growth investments shall be made in rural areas or opportunity zones.
(2) The growth fund, after satisfying subdivision (1), fails to maintain growth investments equal to 100 percent of its investment authority until the sixth anniversary of the closing date in accordance with the levels set forth in subdivision (1). For the purposes of this subdivision, a growth investment is maintained even if it is sold or repaid so long as the growth fund reinvests an amount equal to the capital returned or recovered from the original investment, exclusive of any profits realized, in other growth investments in this state within 12 months of the receipt of the capital. Amounts received periodically by a growth fund shall be treated as continuously invested in growth investments if the amounts are reinvested in one or more growth investments by the end of the following calendar year.
(3) The growth fund, before program exit, makes a distribution or payment that results in the growth fund having less than 100 percent of its investment authority invested in growth investments in this state or available for investment in growth investments and held in cash and other marketable securities, or makes a distribution or payment to an equity holder, other than to fund payments with respect to matching capital funded indirectly as debt, without consent of the department.
(4) The growth fund makes a growth investment in a growth business that directly or indirectly through an affiliate owns, has the right to acquire an ownership interest in, makes a loan to, or makes an investment in the growth fund, an affiliate of the growth fund, or an investor in the growth fund. This subdivision does not apply to investments in publicly traded securities by a growth business or an owner or affiliate of the growth business. For purposes of this subdivision, a growth fund shall not be considered an affiliate of a growth business solely because of its growth investment.
(b) The maximum amount of growth investments in a growth business, including amounts invested in affiliates of the growth business, that may be counted towards its satisfaction of the requirements of subdivisions (a)(1) and (2) is the greater of three million dollars ($3,000,000) or 20 percent of its total investment authority, exclusive of repaid or redeemed growth investments.
(c) Upon violation of this section, the department shall notify the growth fund. The growth fund shall have 90 days from the date the notice was received to correct any violation outlined in the notice to the satisfaction of the department and to avoid the penalties set forth in subsection (a).
(d) If an SSBCI loan is accelerated, the remaining draws on the SSBCI loan and associated investment authority shall not count toward the limit on the SSBCI loans and total investment authority described by subsection (c) of Section 40-9H-3. The department shall first award reverted investment authority and SSBCI loans on a pro rata basis to each growth fund that was awarded less than the amount requested in an application. The department may award any remaining investment authority and SSBCI loans to new applicants.
(e)(1) On or after the seventh anniversary of the closing date, a growth fund may apply to the department to exit the program and no longer be subject to regulation except as set forth in subdivision (2). The application shall include a calculation of the follow-on percentage and the new jobs and retained jobs percentage. The department shall respond to the application within 30 days of receipt. In evaluating the application, the fact that the SSBCI loan has not been violated and that the growth fund has not received a notice of revocation that has not been cured under subsection (c) shall be sufficient evidence to prove that the growth fund is eligible for exit. The department may not unreasonably deny an application submitted under this subsection. If the application is denied, the notice shall include the reasons for the determination.
(2) On or after an exit under this subsection, the growth fund may make distributions and payments as follows:
a. First, to pay principal and interest on matching capital funded directly or indirectly as debt.
b. Second, to pay management fees unless prohibited under this section.
c. Third, to pay any principal and interest on the SSBCI loan not deemed to be forgiven pursuant to paragraph (24)b. of Section 40-9H-2.
d. Fourth, to make distributions to its equity holders.
(Act 2021-492, §5; Act 2024-403, §1.)
(a) Each growth fund shall submit a report to the department on or before the fifth business day after the first anniversary of the closing date prior to program exit and include all of the following:
(1) A bank statement evidencing each growth investment.
(2) The name, location, and industry of each growth business receiving a growth investment, including the written opinion if provided by the department pursuant to subsection (b) of Section 40-9H-4.
(3) The number of high wage employment positions at each growth business on the date of the growth fund’s initial growth investment as evidenced on a payroll report certified by the growth business.
(b) Thereafter, if not previously provided pursuant to subsection (a), each growth fund shall submit a report to the department on or before April 15 of each year prior to program exit and include all of the following unless previously provided:
(1) A bank statement evidencing each growth investment.
(2) The name, location, and industry of each growth business receiving a growth investment, including the written opinion if provided by the department pursuant to subsection (b) of Section 40-9H-4.
(3) The number of high wage employment positions at each growth business on the date of the growth fund’s initial growth investment as evidenced on a payroll report certified by the growth business.
(4) The number of new annual jobs and jobs retained at each growth business as of December 31 of the prior calendar year as evidenced on a payroll report certified by the growth business.
(5) The average annual salary of the positions described in subdivisions (3) and (4).
(6) The cumulative amount of growth investments made in growth businesses.
(7) Financial statements for the preceding calendar year audited by an independent certified public accounting firm, which shall include an opinion of, or an agreed upon procedures letter issued by, the independent certified public accounting firm as to the growth fund’s compliance with the requirements of this chapter.
(8) The amount of follow-on capital attracted by the growth business as certified by the growth business.
(9) Any other information required by the department.
(10) A five thousand dollar ($5,000) annual fee.
(c) The growth fund shall use best efforts to obtain and provide information with respect to growth investments that have been redeemed or repaid as part of the annual report set forth in subsection (b) and shall provide the information if available.
(Act 2021-492, §6.)
The department shall report to the Legislature beginning in 2023, pursuant to Section 40-1-50 and rules adopted by the Department of Revenue, providing an assessment of the incentives allowed in this chapter.
(Act 2021-492, §7; Act 2024-403, §1.)
(a) The department may adopt rules to implement and administer this chapter.
(b) The department shall issue all forms and notices required by this chapter in accordance with the requirements of this chapter.
(Act 2021-492, §8.)
Under Subtitle C of Title III of the American Rescue Plan Act of 2021, the United States Treasury has been appropriated certain funds to use for the support of private businesses in each of the states. Each state is given the opportunity to apply for a certain amount of these funds, provided the funds are directly invested or used to support private enterprises pursuant to financing structures that are approved by the Treasury after application by the state. It is expected that the State of Alabama will be entitled to request more than twenty-five million dollars ($25,000,000) under this federal program. It is the intent of the Legislature that the program set forth in this chapter be included as part of the State of Alabama’s application to the United States Treasury as a Venture Capital Program, and if the application is approved, that the funds provided by the Treasury be used as set forth in this chapter. The Legislature notes that the program requires a dollar for dollar private capital match to the dollars invested by the Treasury, no reduction for administrative costs, and incentives to help ensure that the federal dollars are eventually leveraged on a ten-to-one basis. The provisions of this chapter shall not become operative until guidance is released by the United States Treasury regarding the State Small Business Credit Initiative pursuant to Subtitle C of Title III of the American Rescue Plan Act of 2021.
(Act 2021-492, §9; Act 2024-403, §1.)
Upon the granting of an abatement pursuant to Section 40-9B-4 or 40-9G-2 during the applicable exemption period:
(1) One mill of the state’s abated noneducational ad valorem taxes shall be unabated. The local tax collecting official shall collect 1.0 mill of the state noneducational ad valorem taxes that otherwise could have been abated and remit the amount collected to the State Comptroller for deposit into the Alabama Development Fund.
(2) Three-quarters of one percent of the state construction related transaction taxes on private use industrial property shall be unabated. The Department of Revenue shall collect the unabated rate on sales of private use industrial property which was previously subject to abatement and shall deposit such funds directly to the Alabama Development Fund.
(Act 2025-84, §1.)
Nothing in this chapter shall impair, restrict, or alter any abatement agreement granted prior to June 1, 2026. The provisions of this chapter shall apply prospectively to new abatements granted on or after June 1, 2026.
(Act 2025-84, §2.)
(a) The Department of Revenue shall provide the Department of Commerce with a copy of each application, resolution, and abatement agreement, including any amendment, granted under Section 40-9B-4 or 40-9G-2.
(b) The Department of Commerce shall use the information received under subsection (a) solely for the purposes of economic development planning and program evaluation.
(c) To ensure taxpayer confidentiality, all information shared under this section shall remain subject to the confidentiality provisions of Section 40-2A-10. The Department of Commerce shall implement safeguards to ensure that taxpayer information is not disclosed to unauthorized persons or entities.
(d) The Department of Commerce and the Department of Revenue may adopt rules for the administration of this chapter.
(Act 2025-84, §3.)
Section 40-9I-2 shall apply uniformly to all eligible taxpayers and shall be implemented in a manner that complies with all applicable provisions of the Constitution of Alabama of 2022, as amended.
(Act 2025-84, §4.)
The probate court of each county may order the sale of lands therein for the payment of taxes assessed on the lands, or against the owners of the lands, when the tax collector shall report to the court that he or she or the holder of a tax lien issued pursuant to Acts 1995, No. 95-408 was unable to collect the taxes assessed against the land, or any mineral, timber or water right or special right, or easement therein, or the owner thereof, without a sale of the land.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §249; Acts 1995, No. 95-408, p. 864, §2.)
The tax collector shall, at the expense of the county, procure a substantially bound book in which he or she shall enter, in the manner usual in docketing causes for trial in the circuit court, each parcel of real estate, or right or interest, or easement therein, assessed to any person against whom taxes have been assessed which are not paid or, if the tax collector has received written notice from the holder of a tax certificate, issued pursuant to Acts 1995, No. 95-408, requesting that the tax collector list the property described in such tax certificate in the book of lands prepared pursuant to this section, have been paid by the holder of such holder of a tax lien certificate, when a portion of the taxes are on the real estate or right or interest or easement therein, describing the same in the same manner as it is described in the assessment list or the record of tax lien sales kept pursuant to Acts 1995, No. 95-408, if applicable, and stating the amount of the unpaid taxes, or taxes paid by the holder of a tax lien certificate, penalties, fees, and charges due by the person, specifying the amount due the state and due the county and to special tax districts, and to the holder of a tax lien certificate issued pursuant to Acts 1995, No. 95-408 and the amount for fees and charges; and he or she shall in like manner enter in the book each parcel of real estate, or right or interest or easement therein, which has been assessed to an “owner unknown,” the amount of taxes, fees, and charges due thereon or paid by the holder of a tax lien certificate, stating in each case the fact that it was so assessed. The description of the real estate, or right or interest or easement therein, shall be entered in alphabetical order, if known and they reside in the county, but if they are unknown and do not reside in the county, then by the precincts in which the real estate is situated.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §250; Acts 1995, No. 95-408, p. 864, §2.)
Such book shall be prepared in a neat and orderly manner either in a fair and legible handwriting or typewritten, with sufficient space in each case to make the necessary entries, and in other particulars in a manner suitable for the purpose for which it is to be used; and, if it is not thus prepared, the judge of probate shall cause it to be so prepared at the expense of the collector, and the cost thereof shall be deducted from his compensation. Such books shall be delivered to the judge of probate on or before March 1, but if from any cause there has been a failure to deliver the same by that time, it may be delivered thereafter.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §251.)
(a) On receiving such book, as speedily as practicable the judge of probate shall issue a notice addressed to each person against whom any unpaid taxes are assessed as shown by such book, substantially in the following form: “State of Alabama, (give name of county) county, to (give name of taxpayer): The tax collector has filed in my office a list of delinquent taxpayers, and of real estate upon which taxes are due. You are reported as delinquent, and your tax amounts to (here give amount of taxes) with costs added. This is to notify you to appear before the probate court of said county at the next term thereof, commencing on Monday, the _____ day of ___, 2, then and there to show cause, if any you have, why a decree for the sale of property assessed for taxation as belonging to you should not be made for the payment of the taxes thereon and fees and costs. (Here probate judge’s signature). Judge of probate.” Such notice must be served by the tax collector, or his deputy, on the person to whom it is addressed, and service of such notice may be made by handing a copy thereof to the party to whom it is addressed, or his agent, or by leaving a copy thereof at the residence or place of business of such party, or his agent, or by sending a copy of said notice to the party to whom it is addressed, by certified or registered mail, postage prepaid, marked “for delivery only to the person to whom addressed,” and return receipt demanded addressed to the tax collector of the county; and with his endorsement thereon, showing how and when served or showing his reason for not serving the same, and it must be by the collector or his deputy returned into court on or before the first day of the next term thereof.
(b) If the party against whom such assessment was made has since died, and letters testamentary or of administration have been granted upon his estate, such notice must in like manner be served on his personal representatives, if a resident of the county. If the property or other subjects embraced in any assessment were returned or listed by a guardian or other person for a minor or person of unsound mind or by a trustee for his cestui que trust, except husband or wife, or by personal representative for the estate of any deceased person, or by a public officer, receiver, or appointee of any court, such notice must in like manner be served on the party making the return, or his successor, and also by publication or posting, as provided in subsection (c).
(c) If the person against whom such assessment is made is a nonresident of the county and has no agent therein known to the tax collector, or if he has died since making the return and there is no executor or administrator of his estate residing in the county, such notice may be given by publishing the same in a newspaper published in the county or, if no newspaper is published therein, by posting the same at the courthouse of the county for three weeks.
(d) The book to be prepared and delivered to the judge of probate by the tax collector must show in each case by whom such returns were made and the address of such person as shown on the assessment list.
(e) If the notice required to be given by the tax collector to resident taxpayers, as provided for in this section, remains unserved after two notices to the same person are returned not served, notice by publication or posting may be given as in the case of a nonresident.
(Acts 1935, No. 194, p. 256; Acts 1936, Ex. Sess., No. 180, p. 216; Code 1940, T. 51, §252.)
When any assessment is made to an “owner unknown,” notice must be given by publication once a week for three successive weeks in a newspaper published in the county, or if no newspaper is published therein, by posting the same at the courthouse of the county for three weeks, substantially in the following form: “The State of Alabama. (Here give name of county) County. To whom it may concern: Take notice that the tax collector has filed in my office a list of delinquent taxpayers and of real estate upon which taxes are due, and therein is reported as assessed to ‘owner unknown’ the following real estate, to-wit: (here insert descriptions). This is to notify you to appear before the probate court of this county, at the next term thereof, commencing on Monday, the_____ day of ___, 2, then and there to show cause, if any you have, why a decree for sale of said real estate should not be made for the payment of the taxes assessed upon the same, plus fees and costs. (Here probate judge’s signature) Judge of probate.” In answer to such notice, any person having an interest in or claim to such real estate may appear and defend against the proceedings seeking to condemn the same to sale for the payment of taxes assessed thereon. When practicable, all real estate so assessed for any one year must be incorporated in one notice, a separate paragraph only, in addition to the caption and conclusion being given to the description of the real estate embraced in each assessment.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §253.)
The publication of notices under Sections 40-10-4 and 40-10-5 is governed by the provisions of this title relating to the publication of notices of sale of land, so far as they may be applicable, and the tax collector may select the newspaper or newspapers in which any notice under this chapter shall be given. The tax collector may give notice in the same or in a different newspaper for each week for three consecutive weeks so long as the newspaper in which the notice is placed is a legally qualified newspaper published in the county.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §254; Acts 1995, No. 95-722, p. 1546, §1.)
The tax collectors of the several counties of the state are authorized and required to accept any moneys tendered to them in partial payment of ad valorem taxes collectible by them at any time before the decree of sale of the properties liable therefor; provided, that said payment shall be an amount not less than one fourth of the total amount of taxes due, unless payment is made as provided in Section 40-5-13; provided, that no such payment shall be made, nor shall same be accepted by the tax collectors, unless such payment shall amount to at least one fourth of the total amount of taxes due on October 1 of each year. They shall credit the amount so paid first upon accrued interest and then upon the principal of the taxes owing. They shall give to the person paying the same a receipt for the amount so paid. Nothing herein shall be construed to postpone the payment of such taxes nor to waive any lien or right of enforcement of collection. The Department of Revenue shall prescribe the form of the receipt to be given hereunder.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §254.)
Such cause shall be triable at the term named in said notice; and, unless the cause is contested at the trial term, the judge of probate shall forthwith issue his decree for the sale of lands, but if the cause is contested, the court with the written consent of the taxpayer and the tax collector, filed in the case and noted on the docket, may for good and sufficient reason continue any cause, but such continuance shall not be beyond the next succeeding term. The fact of such agreement shall be noted on the docket, and such continuance shall not necessitate a republication of the notice.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §255.)
The tax collector shall attend the several terms of the probate court at which any of the causes are triable and to have with him or her his or her tax book and his or her record of tax lien sales kept pursuant to Acts 1995, No. 95-408, and the tax book and record of tax lien sales shall, in all cases, be accepted as prima facie evidence of the amount of taxes and fees due and that the same have been properly assessed and charged and are unpaid or have been paid by the holder of a tax lien certificate.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §256; Acts 1995, No. 95-408, p. 864, §2.)
If on account of illness or other good and sufficient cause the tax collector is unable to attend any term of court at which any of the causes are triable, his or her deputy may attend in his or her stead and produce the tax book and the record of tax lien sales kept pursuant to Acts 1995, No. 95-408 as required of the tax collector.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §257; Acts 1995, No. 95-408, p. 864, §2.)
If service of such notice is perfected 10 days before the commencement of the term to which the same is returnable, the cause shall stand for trial at such term; and if no defense is interposed or if interposed and on trial thereof the same is adjudged insufficient in law or is not sustained by the evidence adduced, the probate court shall make and enter on such book or docket, a decree of sale substantially in the following form: “It appearing to the court that the taxes have been assessed against the person mentioned in this cause (or if the assessment is to owner unknown that the taxes have been assessed on real estate mentioned in this cause) to the amount of (state amount here) dollars for the year _________, and that the same are still due and unpaid or have been paid by the holder of a tax lien certificate, and it further appearing that notice of this proceeding has been given as required by law, and no valid defense has been interposed against the sale of such real estate for the payment of the taxes or the tax lien certificates, if applicable, it is therefore ordered, decreed and adjudged by the court that the State of Alabama and with respect to each tax lien certificate, the holder of such tax lien certificate, respectively, have a lien for the payment of said amount and for the additional sum of (state amount here) dollars, for fees, charges and costs in this behalf lawfully incurred, on the following described real estate: (Here insert description of real estate). It is further ordered, adjudged and decreed by the court that said real estate or so much thereof as may be necessary be sold for the payment of said delinquent taxes or tax lien certificates and of said fees, charges and costs, and of the expenses of such sale.” Such decree when entered shall be signed by the judge of probate and shall have, when the jurisdiction of the court is shown, the effect of judgments in other cases in courts of record.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §258; Acts 1995, No. 95-408, p. 864, §2.)
Immediately at the end of any term of court at which any decree for sales of real estate for the payment of taxes is rendered, or as soon thereafter as practicable, the tax collector shall proceed to enforce such decree by sales of real estate ordered to be sold, and to this end shall give notice for 30 days before the day of sale, by publication for three successive weeks in some newspaper published in the county, or at least three weeks before the day of sale shall post a notice at the courthouse of his county and at some public place in the precinct in which the real estate is situated that at the time specified therein he will proceed to sell such real estate separately, describing such portions as are embraced in each decree and stating the amount for which each decree was rendered (without stating the items of which said decree is composed) and the person against whom the taxes embraced in such decree were assessed or, if assessed to “owner unknown,” stating that fact.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §259.)
Within 10 days after such sale the tax collector shall make report of each sale to the probate court and praying confirmation thereof. Such report shall lie over for a period of five days for exceptions or objections thereto. If upon the expiration of five days no objections have been filed, or if in the opinion of the court they are insufficient, and it appearing to the court that the tax collector sold such real estate in accordance with the law, and the decree of court ordering such sale, the court shall make and enter an order confirming said sale, which shall be entered on the same book or docket as the original decree of sale, and ordering the tax collector to issue proper certificates of purchase to the various purchasers, including the state.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §260.)
In all advertisements, any notices of the proceedings in the probate court for the sale of land for taxes and of such sales and all entries required to be made by the probate judge, tax collector or other officer, initial letters, abbreviations and figures may be used to indicate townships, ranges, sections, parts of sections, blocks and lots and dates and amounts; and, in estimating the cost of publication, each amount, date or number and each initial letter or abbreviation shall be counted as a word. In all advertisements for the sale of real estate, the notice shall state the precinct in which the property is situated, except in those counties where the tax assessor is not required to list the property by precincts; provided, that nothing herein contained shall in anywise affect the collection of any taxes now due the state or any county therein or operate to abate or discontinue any suit or action of any character instituted or begun for the collection thereof.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §261; Acts 1953, No. 235, p. 301.)
(a) Sales conducted pursuant to this article shall be made on the premises of or within the courthouse or courthouse annex of the county at public auction, to the highest bidder for cash between the hours of 10:00 a.m. and 4:00 p.m., and shall continue from day to day until all the real estate embraced in the decree has been sold.
(b) The judge of probate, or his or her designee, shall attend the sales and make a record of the sales. The judge of probate, or his or her designee, shall include all of the following in the record:
(1) Descriptions of each parcel of real estate sold and state to whom sold.
(2) The price paid by the purchaser.
(3) The date of sale and, if no sale was effected, stating that fact and the reason thereof.
(4) The amounts, in separate columns, as taken from the book or docket in which the decrees are entered of each kind of tax penalties and of the fees and costs in each case.
(c) The judge of probate shall enter in the docket, in each case, the land sold under the decree in that case, the purchaser, and the amount for which it was sold.
(d) This section is remedial and curative and shall be retroactive to validate any prior sale of land for taxes conducted in accordance with this section.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §262; Act 2021-175, §§1, 2; Act 2021-521, §§1, 2.)
It shall be the duty of the tax collector, in making such sales, if practicable, to so offer such real estate for sale that only such portion thereof may be sold as is necessary to satisfy the decree under which it is sold and the expenses of the sale, but no sale shall be made for a sum less than the amount of such decree and expenses.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §263.)
The person to whom any real estate at such sale is knocked off shall forthwith pay to the collector the amount of his bid, and on his failure to do so the collector must proceed at once to again offer it for sale.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §264.)
If no person shall bid for any real estate offered at such sale an amount sufficient to pay the sum specified in the decree of sale, and the costs and expenses subsequently accruing, the judge of probate shall bid in such real estate for the state at a price not exceeding the sum specified in such decree and such subsequently accruing cost and expenses. In no event shall the judge of probate bid in for the state less than the entire amount of real estate included in any assessment.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §265.)
(a) As soon after the confirmation of sale is made as may be practicable, the tax collector must make out and deliver to each purchaser, other than the state, a certificate of purchase, which shall contain a description of the real estate sold and show that the sum was assessed by the assessor, to whom assessed, the date of assessment, for what year or years the taxes were due, the amount of taxes thereon, the amount of and the name of the holder of each tax lien certificate related thereto, distinguishing the amount due the state and county and for school purposes and to each holder of a tax lien certificate and the fees and costs, that it was advertised and how long, that it was offered for sale and at what time, who became the purchaser, at what price and the fact and date of the confirmation of such sale.
(b) In the event of the tax sale of owner-occupied property that is taxed as Class III, the certificate shall provide notice that (1) the Class III tax status shall remain in effect for the property throughout the period allowed for redemption as long as the property is used as an owner-occupied residence, and (2) for any period or periods following the tax sale that the property is not used as Class III property, as defined in Section 40-8-1, the property will be classified, assessed, and taxed as Class II property.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §266; Acts 1995, No. 95-408, p. 864, §2; Act 2009-508, p. 937, §1.)
For the real estate bid off for the state in each case the judge of probate shall make out a certificate of purchase to the state of like import to the one provided for in Section 40-10-19 and deliver the same to the tax collector who shall, on final settlement, deliver all certificates received by him from the judge of probate to the Comptroller, who shall examine carefully all certificates of purchase of real estate where the same were bid in for the state at tax sale. When the same are received by him and if, in his opinion, such sale was erroneous for want of regularity, proper or sufficient description, error in advertising or for any other cause that may appear from such certificates, he shall so declare it and return the certificate to the judge of probate and charge the account of the officer making the error with all taxes, interests, fees, and costs involved in said sale. The Comptroller shall notify the judge of probate who issued the certificate of such cancellation, and shall also notify the tax assessor of the county in which the property is situated and direct him to assess the property as an escape for the years in which it was subject under existing laws. The Comptroller, when he has settled the accounts of the tax collector, shall deliver to the Land Commissioner all certificates of land bid in for the state which have been accepted by him, and said Land Commissioner shall cause the same to be recorded in a book kept in his office for that purpose and properly indexed for convenient reference. Lands bid in for the state shall not thereafter be assessed except as herein provided until the same have been redeemed or sold by the state.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §267.)
The certificate of purchase delivered by the tax collector to the purchaser at such sale or to the state in case the state is the purchaser is assignable in writing or by endorsement, and if the state is the purchaser such assignment shall be made by the Land Commissioner upon the payment of the amount bid by the state, with interest thereon at the rate of 12 percent per annum from the date of sale to the date of assignment, plus all taxes due on said lands since the date of sale, with interest thereon at 12 percent from date of maturity. Such assignment shall vest in the assignee and his legal representatives all the right and title of the original purchaser or of the state in case the state is a purchaser.
Upon such assignment it shall be the duty of the assignee or his legal representatives to assess such property as from the date of such assignment.
Should such assignment be made after the third Monday in January, the assignee shall be allowed 30 days within which to assess such property before any penalties for such failure shall accrue.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §270; Acts 1988, 1st Ex. Sess., No. 88-824, p. 265, §9.)
The cost of advertising the caption and conclusion of notices for the sale of real estate for the payment of taxes, and so much thereof as pertain to those portions of such real estate as are bid off for the state, must be paid by the state, and the Comptroller shall after every such sale and after the collector has filed with the Comptroller the certificates of sale and purchases by the state, audit the account of the owner or proprietor of the newspaper in which such notices were published and shall draw his warrant on the Treasurer in favor of such owner or proprietor for the amount he may find to be lawfully due him, and payable by the state, and the Treasurer shall pay the same; but the state shall pay no other costs attending any tax sale.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §268.)
The cost of advertising the part of such notices pertaining to lands purchased by others than the state shall be covered by the bids of the purchaser and collected by the collector as part of the purchase money, but for the use of the owner or proprietor of the newspaper in which such notices were published, and shall be by the collector paid over to him on demand; and for such portions of such costs, as well as for the cost of advertising lands inserted in the notice by the mistake of the collector, such collector and the sureties on his official bond shall be liable to the owner or proprietor of such newspaper.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §269.)
If the assessor, collector, judge of probate or any county tax assessor shall directly or indirectly be concerned or interested in the purchase of any real estate sold for taxes, the sale shall be void, and he and his sureties on his official bond shall be liable to a penalty of not exceeding $500 to be fixed by the jury, which may be recovered in an action in the circuit court, or court of like jurisdiction, brought on the relation of any taxpayer of the county, in the name of the state, one half of the amount recovered to be paid to the relator and the other half to the state.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §271.)
From any decree rendered by the probate court for the sale of real estate for the payment of taxes, the defendant in the cause or the state, in behalf of itself and the county, may appeal to the circuit court of the county within 30 days after the rendition of the decree. If the defendant appeals, he must execute a bond in double the amount of the decree, payable to the State of Alabama, with sufficient surety to be approved by the judge of probate, and conditioned that he will prosecute the appeal to effect and pay such judgment as the appellate court may render thereon; but the state shall not be required to execute any bond. The district attorney shall represent the state on such appeal, and of the pendency thereof the judge of probate must give him notice in writing; and on appeal by the state, notice thereof shall be given the defendant, as in other cases of appeal from the court to the circuit court, such appeal must be tried de novo, upon an issue made up under the direction of the court. If the defendant appeals and the issue is decided adversely to him, the court must render judgment against him and his sureties in favor of the state for the amount of the taxes, fees and costs, besides the costs of the appeal, and such judgment shall be a lien upon the lands described in the decree from which the appeal was taken, which lien with a description of the lands must be declared in the judgment.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §272.)
Any money collected on such judgment, except for costs of court, must be paid to the tax collector, who shall account for and pay the same over to the officers and persons entitled to receive the same.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §273.)
For each notice to a delinquent property owner to show cause why a decree of sale should not be rendered, the judge of probate is entitled to a fee of $5 and for each decree of sale, $5; the tax collector shall have $5 for serving each notice which may be given by certified or registered mail with return receipt demanded, but for his attendance at court, he shall receive no pay; but in case of appeal, the sheriff and the clerk of the appellate court shall be entitled to the same fees as for services in like cases.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §274; Acts 1980, No. 80-630, p. 1087, §7; Acts 1990, No. 90-535, p. 837, §1.)
(a)(1) The excess arising from the sale of any real estate remaining after paying the amount of the decree of sale, including costs and expenses subsequently accruing, shall be paid over to a person or entity who has redeemed the property as authorized in Section 40-10-120 or any other provisions of Alabama law authorizing redemption from a tax sale, provided proof that the person or entity requesting payment of the excess has properly redeemed the property is presented to the county commission within three years after the tax sale has occurred. The county commission may retain any interest earned on those funds. Until and unless the property is redeemed, the excess funds from the tax sale shall be held in a separate account in the county treasury during the three-year period. If at the end of the three-year period there has been no proper request for the excess funds, those funds and any interest earned on those funds shall be deposited to the credit of the general fund of the county and shall thereafter be treated as part of the general fund of the county.
(2) The Department of Revenue shall adopt rules authorizing the county commission to issue a voucher in the amount of the excess bid to a person or entity that has paid all other costs of redemption as required in this subsection. The person or entity redeeming property may present the voucher to the judge of probate in lieu of the amount equal to the excess bid to complete the redemption process. The rules adopted by the department shall include forms to be utilized for issuing such vouchers.
(b) At any time after three years but no later than 10 years after a tax sale that occurred in calendar year 2016 or later, or at any time after three years but no later than 11 years after a tax sale that occurred in calendar year 2015, or at any time after three years but no later than 12 years after a tax sale that occurred in calendar year 2014, the excess funds arising from the sale shall be paid to any of the following:
(1) To any person or entity entitled to redeem under Section 40-10-83, or any other provisions of law authorizing redemption from the tax sale, upon proof of a circuit court order granting redemption to the person or entity.
(2) To the owner of the land at the time of the tax sale or a subsequent owner, upon proof provided to the tax collector or other official performing those duties that the land has been redeemed by negotiated agreement from the purchaser at the tax sale or the purchaser’s successor in interest. Proof of negotiated redemption agreement shall include the following:
a. A copy of a properly recorded deed or conveyance to the redeeming party executed by the party from whom redemption was made.
b. If the redeeming party was not the owner of the land at the time of the tax sale, a copy of a properly recorded deed or conveyance from the owner at the time of the tax sale to the subsequent owner.
c. If the party from whom redemption was made is a successor in interest of the tax sale purchaser, a copy of a properly recorded deed or conveyance from the tax sale purchaser to the successor in interest.
(3) To the owner of the land at the time of the tax sale or a subsequent owner with a properly recorded deed or conveyance without a redemption if the owner or subsequent owner executes a release and waiver releasing any right to redeem the property and waiving any and all interest in the property, which shall be recorded with the judge of probate.
(c) Upon receipt of proof of redemption or proof of release and waiver as required in subsection (b), the county commission shall order the payment of the excess funds as provided therein and retain any interest earned on those funds. If proof of redemption or proof of release and waiver is not received within 10 years after the tax sale that occurred in calendar year 2016 or later, within 11 years after a tax sale that occurred in calendar year 2015, or within 12 years after a tax sale that occurred in calendar year 2014, the excess funds and any interest earned on the funds shall become the property of the county.
(d) Notwithstanding any other provision of law, the process for calculation, distribution, and retention of any excess funds resulting from the sale of real estate for taxes, including any interest earned on the funds, shall be governed by this section and shall apply regardless of when the tax sale occurred. Any prior actions taken regarding excess funds and any interest earned on the funds which were made in good faith reliance pursuant to this section prior to July 2, 2017, are ratified, validated, and affirmed.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §275; Act 2013-370, p. 1328, §§1, 2; Act 2014-442, p. 1653, §1; Act 2017-130, §1; Act 2024-261, §1.)
After the expiration of three years from the date of the sale of any real estate for taxes, the judge of probate then in office must execute and deliver to the purchaser, other than the state, or person to whom the certificate of purchase has been assigned, upon the return of the certificate, proof that all ad valorem taxes have been paid, and payment of a fee of five dollars ($5) to the judge of probate, a deed to each lot or parcel of real estate sold to the purchaser and remaining unredeemed, including therein, if desired by the purchaser, any number of parcels, or lots purchased by him at such sale; and such deed shall convey to and vest in the grantee all the right, title, interest and estate of the person whose duty it was to pay the taxes on such real estate and the lien and claim of the state and county thereto, but it shall not convey the right, title or interest of any reversioner or remainderman therein.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §276; Acts 1990, No. 90-535, p. 837, §1; Act 2009-508, p. 937, §1.)
Such deed shall be signed by the judge of probate in his official capacity, and by him acknowledged before some officer authorized to take acknowledgment of deeds, and it shall be, in all the courts of the state, prima facie evidence of the regularity of all proceedings recited therein both prior and subsequent to the decree of sale in any controversy, proceeding or suit involving or concerning the rights of the purchaser, his heirs or assigns to the real estate thereby conveyed.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §277.)
Where real estate is erroneously sold for taxes and the state became the purchaser thereof, it shall be the duty of the tax collector of the county in which the real estate is situated to prepare and issue a certificate setting forth the following facts:
(1) A correct description of the real estate sold and purchased by the state,
(2) That the sale was erroneous and the reason therefor, and
(3) The present owner of the property, if known.
This certificate shall be forthwith forwarded to the Land Commissioner of the state; and, if it is determined by him that the facts therein set out are true and correct, he shall approve the same and forward the same to the judge of probate of the county in which the property is situated, who shall note on the margin of the record of such sale the fact that the Land Commissioner has approved the cancellation of the same, and he shall mark the sale void and sign his name as judge of probate to his certificate voiding the same.
(Acts 1943, No. 469, p. 433.)
The Commissioner of Revenue shall be ex officio Land Commissioner. The Land Commissioner, subject to the provisions of the Merit System, shall appoint such agents or assistants as deemed necessary to carry out the provisions of this title with respect to the duties of the Land Commissioner herein provided for. He shall not receive any compensation as Land Commissioner. The duties of Land Commissioner as herein designated shall be in addition to the duties required by law of the Department of Revenue.
(Acts 1935, No. 194, p. 256; Acts 1939, No. 6, p. 3; Code 1940, T. 51, §278.)
The Land Commissioner shall have supervision and control of all real estate bought in by the state at tax sales, shall rent, lease or operate the same and make conveyances thereof when authorized by law and shall perform any and all duties with reference to such real estate as may be required by law or directed by the Governor.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §279.)
The Director of the Department of Revenue shall appoint subject to the provisions of the Merit System such agents as may be necessary to look after, protect against trespassers and rent any real estate bid in by the state at tax sales. Such agents under the direction of the Department of Revenue shall investigate sales of real estate for taxes bid in by the state, notify the parties at interest in such real estate or sales, secure redemption, sales or property, prevent waste and perform any and all duties relating to lands bid in by the state at tax sales as the Department of Revenue may direct.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §280.)
The Attorney General must furnish the Land Commissioner with suitable forms of certificates of purchase and deeds to purchasers at sales of real estate for taxes, from which the Land Commissioner shall cause to be printed a sufficient number of blank certificates and deeds and distribute the same among the several judges of probate to be used by them and tax collectors on the sales of lands for taxes.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §281.)
It shall be the duty of the Land Commissioner to transmit to the tax assessor of each county by August 1 of each year a descriptive list of all the lands in the county reported to him as bid in for the state during the year and not redeemed, and it shall be the duty of said county tax assessor to compare such list carefully with the record of sales of land for taxes in the county, and of the redemption thereof, and to ascertain if any of such lands have been redeemed or were not liable for the taxes for which they were sold; if any of such lands are ascertained to have been redeemed or to have been sold for taxes for which they were not liable, the said county tax assessor shall promptly certify the facts to the Land Commissioner, and the probate judge shall correct the record of land sales in his office accordingly. The assessor shall furnish to the judge of probate a copy of the list returned to the Land Commissioner, and it shall be the duty of the judge of probate to enter the taxes therein calculated on the record of sale thereof kept in his office.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §282.)
When the sale of any land sold for the payment of taxes is, for any cause, ineffectual to pass the title to the purchaser, whether individual or the state, except in the case in which such sales are in this article expressly declared to be invalid, such sale shall operate as an assignment to the purchaser of the rights and liens of the state and county in and to the lands sold, both as to the taxes paid at said sale and as to the taxes subsequently paid by the purchaser, and such liens may be foreclosed in the same manner as other liens as provided in this title.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §283.)
When lands are sold for taxes which are not liable therefor, the purchaser may recover from the officer by whose fault or neglect the assessment or sale was made, and the sureties on his official bond, the amount of the purchase money paid him therefor, with interest thereon from the day of the sale, together with all costs which are adjudged against him in any action concerning said land involving such tax title.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §284.)
In case of the sale of any real estate, either for the collection of the taxes thereon or for the collection of other taxes due by the owner thereof, said real estate shall be described in all the proceedings incident to the condemnation and sale thereof, and in the certificate and deed issued to the purchaser at said sale in the manner described in the assessment thereof, and in case of failure of the tax collector to so describe said property in any part of said proceedings, certificate or deed, by reason of which said deed may be held insufficient to convey the property intended to be referred to, the said tax collector and the sureties on his official bond shall be liable to the purchaser at said tax sale for all amounts paid by him for such land, together with cost of suit for same. Should, however, the property be insufficiently described in the assessment thereof, the said tax assessor and the sureties on his official bond shall likewise be responsible to the purchaser, or in case the said liability has been enforced against said tax collector, then the said assessor and the sureties on his official bond shall be liable to the tax collector, or his sureties, for whatever sum he shall have been compelled to pay to said purchaser on account of said defect together with cost adjudged against him in an action for such lands.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §285.)
When the lands are bid in for the state at tax sales, the state shall be entitled to possession of said lands immediately upon execution of the certificate of sale by the judge of probate. If possession is not surrendered within six months from the date of sale after demand therefor is made by the Land Commissioner in behalf of the state, or if the certificate has been assigned by the assignee, then the Land Commissioner in the name of the state or the assignee of the state, if the certificate has been assigned, may maintain an action in ejectment or a statutory real action in the nature of ejectment or other proper remedy for the recovery of the possession of the lands purchased at such sales and shall be entitled to hold the possession thereof on recovery, subject, however, to all rights of redemption provided for in this title. If the mortgage or other instrument creating a lien under which a party seeks to redeem is duly recorded at the time of said tax sale, the said party shall, in addition to the time in this title specified, have the right to redeem said real estate sold, or any portion thereof covered by his mortgage or lien, at any time within one year from the date of written notice from the purchaser of his purchase of said lands at tax sale, served upon such party, and notice served upon either the original mortgagees or lienholders or their transferee of record, or their heirs, personal representatives, or assigns shall be sufficient notice. Such notice shall be given by certified or registered mail, return receipt demanded, addressed to the last known address of the mortgagee or lienholder. Nothing in this title shall affect the rights of minors or insane persons to redeem as provided for in this title, or operate to convey or affect the rights, title or interest of any reversioner or remainderman.
(Acts 1935, No. 194, p. 256; Acts 1935, No. 525, p. 1112; Code 1940, T. 51, §286.)
Any purchaser of lands at a tax sale other than the state or anyone claiming under him shall be entitled to possession of said lands immediately upon receipt of certificate of sale from the tax collector; and, if possession is not surrendered within six months after demand therefor is made by said purchaser or his assignee, the said purchaser or his assignee may maintain an action in ejectment or a statutory real action in the nature of ejectment, or other proper remedy for the recovery of the possession of the lands purchased at such sales and shall be entitled to hold the possession thereof on recovery, subject, however, to all rights of redemption provided for in this title. If the mortgage or other instrument creating a lien under which a party seeks to redeem is duly recorded at the time of said tax sale, the said party shall, in addition to the time in this title specified, have the right to redeem said real estate sold, or any portion thereof covered by his mortgage or lien, at any time within one year from the date of written notice from the purchaser of his purchase of said lands at tax sale, served upon such party, and notice served upon either the original mortgagees or lienholders or their transferee of record, or their heirs, personal representatives or assigns shall be sufficient notice. Such notice shall be given by certified or registered mail, return receipt demanded, addressed to the last known address of the mortgagee or lienholder. Nothing in this title shall affect the rights of minors or insane persons to redeem as provided for in this title, or operate to convey or affect the rights, title or interest of any reversioner or remainderman.
(Acts 1935, No. 194, p. 256; Acts 1935, No. 528, p. 1114; Code 1940, T. 51, §287.)
In any action brought related to taxes delinquent on or after January 1, 2020, the interest rate on any amounts awarded pursuant to this section shall be eight percent. In any other action brought for the possession of land sold for taxes delinquent before January 1, 2020, the title of the purchaser at the tax sale shall be defeated on account of any defect in the proceedings under which the sale is had, or on account of any defect in or insufficiency of the process by which the owner of the land was brought before the probate court, as is provided, or in the service of the process, or by reason of the failure of the judge of probate on account of any negligence or refusal on his or her part to produce when called upon, sufficient evidence of the proper issuance and service of the notice or process, or by reason of any other defect or insufficiency in any of the proceedings for the condemnation and sale of the property, or of the certificate or deed to the purchaser or any two or more of the causes, the officer or officers on account of whose omission or error the defect or insufficiency or defects or insufficiencies shall have arisen, together with the sureties on the official bond, shall be liable to the purchaser whose title shall be thus defeated and to his or her assignees for the full sum of the purchase money paid by him or her at the tax sale for the property, the cost of the action in which the title failed, which the purchaser shall have incurred in attempting to maintain title under the tax sale, together with the interest upon each of these amounts, at the rate of eight percent per annum, subject to the limitations set forth in Section 40-10-122(a); provided that except as to the state, actions under this section shall be commenced within five years from the sale.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §288; Acts 1988, 1st Ex. Sess., No. 88-824, p. 265, §10; Act 2009-508, p. 937, §1; Act 2018-494, §1.)
Use the other codified version with the 2018 date in the history line.
THIS SECTION WAS AMENDED BY ACT 2018-494 IN THE 2018 REGULAR SESSION, EFFECTIVE JANUARY 1, 2020. TO SEE THE AMENDED VERSION, SEE THE VERSION LABELED PENDING.
If, in any action brought by the purchaser, or other person claiming under the purchaser, to recover the possession of lands sold for taxes, a recovery is defeated on the ground that such sale was invalid for any reason other than that the taxes were not due, the court shall forthwith, on the motion of the plaintiff, ascertain the amount of taxes for which the lands were liable at the time of the sale and for the payment of which they were sold, with interest thereon from the date of sale, and the amount of such taxes on the lands, if any, as the plaintiff, or the person under whom he claims, has, since such sale, lawfully paid or assumed by the state after its purchase, with interest thereon from the date of such payment, the interest on both amounts to be computed at the rate of 12 percent per annum, subject to the limitations set forth in Section 40-10-122(a); and the court shall thereupon render judgment against the defendant in favor of the plaintiff for the amount ascertained and the costs of the action, which judgment shall constitute a lien on the lands sued for, and payment thereof may be enforced as in other cases.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §289; Acts 1988, 1st Ex. Sess., No. 88-824, p. 265, §11; Act 2009-508, p. 937, §1.)
In any action brought related to taxes delinquent on or after January 1, 2020, the interest rate on any amounts awarded pursuant to this section shall be eight percent. In any other action brought against such purchaser or other person claiming under the purchaser to recover possession of lands sold for taxes delinquent before January 1, 2020, the defendant claims and defends under the tax title and the defense fails on the ground that such sale was invalid for any reason other than that the taxes were not due, and the plaintiff recovers, the court shall forthwith, on the motion of the defendant, ascertain the amount of taxes for which the lands were liable at the time of the sale and for the payment of which they were sold, with interest thereon from the day of sale, and the amount of such taxes on the lands, if any, as the defendant or the person under whom he or she claims has, since such sale, lawfully paid or assumed, in case of the state, with interest thereon from the date of such payment, the interest on both amounts to be computed at the rate of eight percent per annum, subject to the limitations set forth in Section 40-10-122(a); and the court shall thereupon render judgment against the plaintiff in favor of the defendant for the amount ascertained and the cost of the action, which judgment shall constitute a lien on the land sued for, the payment of which may be enforced as in other cases, and no writ of possession shall issue until such judgment has been satisfied, and the court may order the land sold or condemn it to the satisfaction of the debt.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §290; Acts 1988, 1st Ex. Sess., No. 88-824, p. 265, §12; Act 2009-508, p. 937, §1; Act 2018-494, §1.)
(a) In any action under the provisions of either Section 40-10-76 or 40-10-77, the party claiming adversely to the tax title may, at any time, tender the amounts required in such sections to be ascertained by the court, with interest as therein prescribed; and no costs accruing after such tender shall be recovered of him, if, upon a refusal of the tender, he shall pay such amounts into court.
(b) If the party is entitled to recover an excess pursuant to Section 40-10-28, the court shall ascertain the amount of the tender after allowing a credit for any such amount and shall direct the county treasurer, or other holder of the excess, to pay the amount of the excess to the court. The county need not be named as a party to the proceedings.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §291; Act 2009-508, p. 937, §1.)
When an action is brought to recover possession of lands by either the state, its assignee or by purchaser other than the state, or his assignee as provided by Sections 40-10-73 and 40-10-74, the complainant shall recite the fact of the tax sale and purchase, and the certificate of purchase, and the same shall prima facie be sufficient to entitle the complainant to judgment, and the burden shall be on the respondent to show that the complainant is not entitled to recover.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §292.)
If, in any action brought to recover the possession of lands sold for taxes by or against the purchaser or other person claiming under him, it is shown that the party claiming adversely to the tax title, being entitled to redeem, made within the time allowed for redemption the payment required by law for the redemption of such lands, or made tender thereof, and the amount of such tender has been paid into court for the opposite party, judgment must be rendered in his favor for the costs accruing after such payment or tender, except as against the state.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §293.)
Unless otherwise provided, on the trial of any issue involving the sale of real estate for taxes, or the redemption thereof, the books and records belonging to the office of the judge of probate, tax collector or tax assessor and required by law to be kept or certified copies therefrom shall be prima facie evidence of the facts stated therein.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §294.)
No action for the recovery of real estate sold for the payment of taxes shall lie unless the same is brought within three years from the date when the purchaser became entitled to demand a deed therefor; but if the owner of such real estate was, at the time of such sale, under the age of 19 years or insane, he or she, his or her heirs, or legal representatives shall be allowed one year after such disability is removed to bring an action for the recovery thereof; but this section shall not apply to any action brought by the state, to cases in which the owner of the real estate sold had paid the taxes, for the payment of which such real estate was sold prior to such sale, or to cases in which the real estate sold was not, at the time of the assessment or of the sale, subject to taxation. There shall be no time limit for recovery of real estate by an owner of land who has retained possession. If the owner of land seeking to redeem has retained possession, character of possession need not be actual and peaceful, but may be constructive and scrambling and, where there is no real occupancy of land, constructive possession follows title of the original owner and may only be cut off by adverse possession of the tax purchaser for three years after the purchaser is entitled to possession.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §295; Act 2009-508, p. 937, §1.)
In any action brought related to taxes delinquent on or after January 1, 2020, the interest rate on any amounts awarded pursuant to this section shall be eight percent. In any other action, when the action is against the person for whom the taxes were assessed or the owner of the land at the time of the sale for taxes delinquent before January 1, 2020, his or her heir, devisee, vendee or mortgagee, the court shall, on motion of the defendant made at any time before the trial of the action, ascertain (i) the amount paid by the purchaser at the sale and of the taxes subsequently paid by the purchaser, together with eight percent per annum thereon, subject to the limitations set forth in Section 40-10-122(a); (ii) with respect to property located within an urban renewal or urban redevelopment project area designated pursuant to Chapters 2 or 3 of Title 24, all insurance premiums paid or owed by the purchaser for casualty loss coverage on insurable structures and the value of all permanent improvements made by the purchaser determined in accordance with Section 40-10-122, together with eight percent per annum thereon; (iii) with respect to any property which contains a residential structure at the time of the sale regardless of its location, all insurance premiums paid or owed by the purchaser for casualty loss coverage on the residential structure and the value of all preservation improvements made by the purchaser determined in accordance with Section 40-10-122, together with eight percent per annum thereon, subject to the limitations set forth in Section 40-10-122(a); and (iv) a reasonable attorney’s fee for the plaintiff’s attorney for bringing the action. The court shall also determine the right, if any, of the defendant to recover any excess pursuant to Section 40-10-28 and shall apply a credit and direct the payment of the same as set forth in subsection (b) of Section 40-10-78. Upon such determination the court shall enter judgment for the amount so ascertained in favor of the plaintiff against the defendant, and the judgment shall be a lien on the land sued for. Upon the payment into court of the amount of the judgment and costs, the court shall enter judgment for the defendant for the land, and all title and interest in the land shall by such judgment be divested out of the owner of the tax deed.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §296; Acts 1988, 1st Ex. Sess., No. 88-824, p. 265, §13; Act 2002-426, p. 1094, §1; Act 2009-508, p. 937, §1; Act 2018-494, §1.)
When land which has been sold for taxes and purchased by the state has been sold by the state at private sale, and the purchase money has been paid into the state and county treasuries, and it shall be made to appear to the satisfaction of the Comptroller that such sale was invalid by reason of the fact that the taxes for which the land was sold were not due, the purchaser of said land from the state, his heirs, or assigns shall upon the surrender of the deed from the state and the cancellation of the same be entitled to have the purchase money paid for the said lands refunded, if application shall be made therefor, as hereinafter provided, within two years from the date of the deed made by the state.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §297.)
When land has been sold for taxes and purchased by anyone other than the state, and the purchase money has been paid into the state and county treasuries, and it shall be made to appear to the satisfaction of the Comptroller that such sale was invalid by reason of the fact that the taxes for which the land was sold were not due, the purchaser of said land, his heirs or assigns, upon the surrender of the certificate of purchase, shall be entitled to have the amount paid for the purchase of said land refunded to him, if application shall be made therefor as hereinafter provided, within two years from the date of sale and before the execution of a deed to such purchaser.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §298.)
In order to procure the refunding under the provisions of Sections 40-10-100 and 40-10-101 of the amounts erroneously paid for the purchase of property, the purchaser, his heirs or assigns shall file in triplicate a petition directed to the chairman of the county commission of the county wherein the land is situated, setting up the facts relied on to procure the refunding of the money so erroneously paid.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §299.)
The chairman of the county commission shall examine said petition and also the tax books of his county, and if the facts set forth in the petition are such as to entitle petitioner to the refunding of the money as prayed for, he shall so certify to the Comptroller, stating the amount to be refunded by the state, and forward to the Comptroller a copy of the petition with his certificate endorsed thereon; and, if the Comptroller shall be satisfied that the petitioner is entitled to have the money refunded to him, he shall draw his warrant on the Treasurer in favor of the petitioner for such an amount as the certificate of the chairman of the county commission shows should be refunded.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §300.)
The chairman of the county commission shall likewise certify his findings on the triplicate petition stating the amount of money which the petitioner is entitled to receive from the county and from the county school and district school fund, and such petition with his certificate endorsed thereon he shall deliver to the petitioner, who may present a copy to the county commission; and, if said commission is satisfied with the proof of the claim made by the petition, the commission must allow said claims to the amount of taxes paid to the county and draw a warrant on the treasurer of the county for the amount allowed in favor of the petitioner, and the petitioner may likewise present a copy of such petition with the certificate of the chairman of the county commission endorsed thereon to the county board of education, and the fact of the allowance by the Comptroller and the county commission, and thereupon such county school board shall allow said claim to the amount of taxes paid to the county school fund and the district school fund and draw a warrant on the county treasurer of school funds for the amounts due from the county school fund and from the district school fund.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §301.)
The Comptroller must also ascertain the amount of such purchase money which has been paid to the county in which the land is situated as fees, costs, taxes, penalty, and interest, or on other account, if any such payment has been made on account of such purchase, which amount he shall certify to the judge of probate of such county or presiding officer of the county commission where the judge of probate has no connection with such commission who shall present such claim at the next meeting of the county commission of such county, whereupon such commission shall order a warrant in favor of the state for such amount, which warrant shall be a preferred claim against the county and payable by the county treasurer to the judge of probate or presiding officer of any county commission where the judge of probate has no connection with such commission who shall forthwith forward such amount, less cost of remitting, to the State Treasury and report it to the Comptroller.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §302.)
(a) Real estate which hereafter may be sold for taxes and purchased by the state may be redeemed at any time before the title passes out of the state or, if purchased by any other purchaser, may be redeemed at any time within three years from the date of the sale by the owner, his or her heirs, or personal representatives, or by any mortgagee or purchaser of such lands, or any part thereof, or by any person having an interest therein, or in any part thereof, legal or equitable, in severalty or as tenant in common, including a judgment creditor or other creditor having a lien thereon, or on any part thereof; and an infant or insane person entitled to redeem at any time before the expiration of three years from the sale may redeem at any time within one year after the removal of the disability; and such redemption may be of any part of the lands so sold, which includes the whole of the interest of the redemptioner. If the mortgage or other instrument creating a lien under which a party seeks to redeem is duly recorded at the time of the tax sale, the party shall, in addition to the time herein specified, have the right to redeem the real estate sold, or any portion thereof covered by his or her mortgage or lien, at any time within one year from the date of written notice from the purchaser of his or her purchase of the lands at tax sale served upon such party, and notice served upon either the original mortgagees or lienholders or their transferee of record, or their heirs, personal representatives, or assigns shall be sufficient notice.
(b) If any real property has been sold for taxes and is subject to redemption from the sale as set forth in subsection (a) and has also been sold in one or more subsequent sales for taxes, then any party entitled to redeem such sale for taxes may redeem such sale if the redemptioner simultaneously redeems his or her sale and all subsequent sales. In the event of a redemption of successive sales, the redemption amount shall be ascertained by applying the provisions of Sections 40-10-121 and 40-10-122. Redemption amounts computed pursuant to Section 40-10-121 shall be paid as stated therein. Redemption amounts computed pursuant to Section 40-10-122 shall be paid as stated therein if the purchaser had the right to redeem pursuant to subsection (a) or was the owner of the then current tax certificate or tax title. Otherwise, those funds shall be disposed of as set forth in Section 40-10-28 and paid to such purchaser or his or her assignee only as set forth in Section 40-10-28, with the time limits for such application computed utilizing the sale date when the purchaser’s interest was sold for taxes.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §303; Act 2009-508, p. 937, §1.)
(a) In order to obtain the redemption of land from tax sales where the same has been heretofore or hereafter sold to the state, the party desiring to make such redemption shall apply therefor as hereinafter provided and shall deposit with the judge of probate of the county in which the land is situated the amount of money for which the lands were sold, with interest thereon at the rate of eight percent, together with the amount of all taxes found to be due on such land since the date of sale, as provided herein, with interest at the rate of eight percent and all costs and fees due to officers.
(b) Upon application to the probate judge to redeem land where the same has been sold to the state for taxes, which application shall be made on blank forms to be furnished by the Land Commissioner, the probate judge shall submit such application to the tax assessor of the county in which the land sought to be redeemed is located, and the assessor shall without delay enter on such application an assessment value for each of the years for which taxes are due, subsequent to the year for which such land was sold to the state for taxes, and such assessment value shall be such percentage as established by law of the fair and reasonable market value of such lands as of October 1 of the year or years subsequent to the year for which the land was sold for taxes.
(c) Any party having a right to redeem the property, his or her agents, or attorney, shall have the right to file a written protest with the board of equalization, objecting to the valuation of the land as placed on the property by the tax assessor, setting forth his or her ground of objection to the assessed value of the property as fixed by the tax assessor, and the board of equalization shall, thereafter, fix a day for hearing the protest by giving to the tax assessor and party desiring to redeem, his or her agents, or attorney, at least 10 days’ written notice of the day and place of hearing the petition, and upon the hearing of the cause, the board of equalization shall have the right to review the assessed value of the property as fixed by the tax assessor and shall fix and determine the assessed value for each of the years subsequent to the year for which such land was sold to the state for taxes, and the board of equalization shall certify to the probate judge the assessed value of the land so fixed.
(d) The redemptioner shall deposit with the probate judge the amount of money for which lands were sold for taxes, plus the amount due for subsequent years based on the assessment value as required to be fixed herein, and interest costs, and fees as provided in this section.
(e) If any balance remains due to the state upon any lien arising by reason of any installment redemption the payment of which is secured under the provisions of Section 40-10-141, the redemptioner shall also deposit with the probate judge the amount of the balance due upon such lien, with interest to the date of redemption.
(f) If the lands sought to be redeemed, or any portion thereof, are situated in any municipality, the redemptioner shall also deposit with the probate judge the amount of any unpaid taxes assessed against the same by such municipality, and an amount equal to any municipal taxes thereon which, subsequent to the tax sale, were not assessed by reason of the fact that such land had been purchased by the State of Alabama, plus interest which would have accrued upon such municipal taxes from the time the same would have otherwise become delinquent, which amounts, with interest, shall be treated and distributed in the same manner as taxes and interest thereon.
(Acts 1935, No. 194, p. 256; Acts 1935, No. 526, p. 1113; Acts 1936, Ex. Sess., No. 54, p. 30; Code 1940, T. 51, §304; Acts 1943, No. 578, p. 580; Acts 1988, 1st Ex. Sess., No. 88-824, p. 265, §14; Act 2018-494, §1.)
(a)(1) In order to obtain the redemption of land from tax sales where the same has been sold to one other than the state, the party desiring to make such redemption shall deposit with the judge of probate of the county in which the land is situated the amount of money for which the lands were sold, with interest payable at the rate of eight percent per annum from date of sale, and, on the portion of any excess bid that is less than or equal to 15 percent of the market value as established by the assessing official, together with the amount of all taxes which have been paid by the purchaser, which fact shall be ascertained by consulting the records in the office of the tax collector, or other tax collecting official, with interest on the payment at eight percent per annum. If any taxes on the land have been assessed to the purchaser and have not been paid, and if the taxes are due which may be ascertained by consulting the tax collector or other tax collecting official of the county, the probate judge shall also require the party desiring to redeem the land to pay the tax collector or other tax collecting official the taxes due on the lands which have not been paid by the purchaser before he or she is entitled to redeem the same. In all redemptions of land from tax sales, the party securing the redemption shall pay all costs and fees as herein provided for due to officers and a fee of $.50 to the judge of probate for his or her services in the matter of redemption. This application and payment may be executed by an on-line transaction via the Internet or other on-line provision.
(2) The reimbursement to the purchaser from the proposed redemptioner for allowable improvements and insurance premiums as provided in subsections (b) through (e) is not required for the proposed redemptioner to take possession of the property; provided however, that the proposed redemptioner shall reimburse the purchaser for such costs prior to January 1 of the subsequent tax year in order to complete the redemption process as provided in this subsection. Failure of the proposed redemptioner to reimburse the purchaser for such costs prior to January 1 of the subsequent tax year shall forfeit the right of the proposed redemptioner in the property.
(b) With respect to property located within an urban renewal or urban redevelopment project area designated pursuant to Chapters 2 or 3 of Title 24, the proposed redemptioner must pay to the purchaser or his or her transferee, in addition to any other requirements set forth in this section, the amounts set forth below:
(1) All insurance premiums paid or owed by the purchaser for casualty loss coverage on insurable structures with interest on the payments at eight percent per annum.
(2) The value of all permanent improvements made on the property determined in accordance with this section with interest on the value at eight percent per annum.
(c) With respect to property which contains a residential structure at the time of the sale regardless of its location, the proposed redemptioner must pay to the purchaser or his or her transferee, in addition to any other requirements set forth in this section, the amounts set forth below:
(1) All insurance premiums paid or owed by the purchaser for casualty loss coverage on the residential structure with interest on the payments at eight percent per annum.
(2) The value of all preservation improvements made on the property determined in accordance with this section with interest on the value at eight percent per annum.
(d) As used herein, “permanent improvements” shall include, but not be limited to, all repairs, improvements, and equipment attached to the property as fixtures. As used herein, “preservation improvements” shall mean improvements made to preserve the property by properly keeping it in repair for its proper and reasonable use, having due regard for the kind and character of the property at the time of sale. The proposed redemptioner shall make written demand upon the purchaser of a statement of the value of all permanent or preservation improvements as applicable made on the property since the tax sale. In response to written demand made pursuant to this subsection, within 10 days from the receipt of such demand, the purchaser shall furnish the proposed redemptioner with the amount claimed as the value of such permanent or preservation improvements as applicable; and within 10 days after receipt of such response, the proposed redemptioner either shall accept the value so stated by the purchaser or, disagreeing therewith, shall appoint a referee to ascertain the value of such permanent or preservation improvements as applicable. The proposed redemptioner shall in writing (i) notify the purchaser of his or her disagreement as to the value; and (ii) inform the purchaser of the name of the referee appointed by him or her. Within 10 days after the receipt of such notice, the purchaser shall appoint a referee to ascertain the value of the permanent or preservation improvements as applicable and advise the proposed redemptioner of the name of the appointee. Within 10 days after the purchaser has appointed his or her referee, the two referees shall meet and confer upon the award to be made by them. If they cannot agree, the referees shall at once appoint an umpire, and the award by a majority of such body shall be made within 10 days after the appointment of the umpire and shall be final between the parties.
(e) If the proposed redemptioner fails or refuses to nominate a referee as provided in subsection (d), he or she must pay the value put upon the improvements by the purchaser. If the purchaser refuses or fails to appoint a referee, as provided in subsection (d), the purchaser shall forfeit his or her claim to compensation for such improvements. The failure of the referees or either of them to act or to appoint an umpire shall not operate to impair or forfeit the right of either the proposed redemptioner or the purchaser in the premises and in the event of failure without fault of the parties to affect an award, the appropriate court shall proceed to ascertain the true value of such permanent or preservation improvements as applicable and enforce the redemption accordingly.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §305; Acts 1988, 1st Ex. Sess., No. 88-824, p. 265, §15; Act 2002-426, p. 1094, §1; Act 2009-508, p. 937, §1; Act 2018-494, §1.)
When distinct lots or parcels of land have been included in one assessment and sold for taxes under one decree, any person, including the owner, whose interest in one or more of such lots or parcels is such as to entitle him to redeem may redeem the lots or parcels in which he has such interest without redeeming all of said property; provided, that any owners desiring to redeem any one or more parcels of land must also pay all tax on personal property assessed against him in said assessment, together with all costs of court and advertising fees.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §306.)
When any tracts, lots, or parcels of land have been included in one assessment and sold for taxes under one decree, the owner or any one entitled to redeem may redeem any lot or part of said property where the part to be redeemed can be ascertained by legal and usual subdivision. It shall be the duty of the tax assessor to ascertain the amount of taxes on such portion desired to be redeemed as provided for under Section 40-10-121.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §307.)
A person desiring to redeem any separate lot or parcel of land as authorized by Section 40-10-124 must file with the judge of probate an application in writing, under oath, setting forth the date of the decree, the name of the defaulting taxpayer against whom the same was rendered, the description and character of each lot or parcel of land included in the decree and the assessed value thereof, if separately valued in the assessment or, if not separately valued, stating that fact and stating the assessed value of the whole of the lands, a description of the lot or parcel which the applicant seeks to redeem and, if not separately valued in the assessment, stating the value thereof at the time of the assessment and the nature of his interest in such lot or parcel; and such applicant must deposit with the judge of probate a sum of money which bears the same proportion to the amount of taxes, interest, and costs which would be required to redeem all the lands included in the decree, that the value of such lot or parcel, as separately assessed or, if not separately assessed, as ascertained by the judge of probate, bears to the value of the whole of the lands included in the decree; and, in addition thereto, such applicant must deposit the amount of proportionate costs and officers’ fees which may have accrued upon such assessment and sale.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §308.)
The judge of probate must, before allowing the redemption of a separate lot or parcel of land under Sections 40-10-124 and 40-10-125, submit the application, together with a copy of the statement of calculation ascertaining the amount to be paid on such redemption, to the Land Commissioner for his approval, and the Land Commissioner may call upon the judge of probate, the assessor, or the collector for any information he may desire touching the application. If the Land Commissioner is satisfied that the applicant is entitled to redeem such lot or parcel of land and that the proper amount of money has been deposited with the judge of probate, the Land Commissioner shall endorse his approval upon the application and return the same to the judge of probate, who must allow the redemption; but without the approval of the Land Commissioner, the judge of probate must not allow the redemption and must return to the applicant the money deposited by him for that purpose, when such application is made within the time allowed by law for redemption the same may be perfected as herein provided, notwithstanding the expiration of such limitations; where the land sought to be redeemed has been purchased by an individual and not by the state, it shall not be necessary to submit the matter to the Land Commissioner.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §309.)
Upon the payment of the amount required by law for the redemption of the lands sold for taxes by a person entitled to redeem, the judge of probate, or official who performs the same function, shall issue that person a certificate of redemption describing the lands, setting forth the facts of the sale substantially as contained in the certificate of purchase, the date of redemption, the amount paid, by whom the lands were redeemed, and make the proper entries in the book of sales in his or her office and immediately give notice of the redemption to the county treasurer or custodian of the county funds. The judge of probate, or official who performs the same functions, shall sign the certificate. Unless signed, no certificate shall be held as evidence of redemption, and it shall be the duty of the judge of probate, or official who performs the same functions, to keep a book of certificates of redemption, and every blank shall have a stub attached thereto, on which shall be printed the matter as the Land Commissioner may prescribe, with appropriate blank spaces to be filled by the judge of probate, or official who performs the same functions, upon the issuance of any certificates of redemption. The Land Commissioner shall take and file in his or her office a proper receipt from the judge of probate, or official who performs the same functions, for the certificates of redemption furnished him or her. If the lands were bid in by the state, the person redeeming shall present to the Land Commissioner the certificates of redemption, and the Land Commissioner shall give to the person a certificate releasing all claims to the land acquired by the state at the tax sale.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §310; Acts 1993, No. 93-717, p. 1402, §1.)
If the lands redeemed were bid in by any person other than the state, the redemption money must be deposited by the judge of probate in the county treasury and there kept separate and apart from the general funds of the county, and the judge of probate shall notify the purchaser of such deposit by mailing notice to the residence or place of business of such purchaser, or to such address as the purchaser may furnish the judge of probate at the time he secures his certificate of purchase; and, upon the demand of the purchaser, his legal representative or assignee and the surrender of the certificate of purchase, the judge of probate must give him an order on the treasury for the same.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §311.)
When lands which have been bid in by the state are redeemed, the judge of probate must immediately pay over to the tax collector of the county the entire amount of money received by such judge of probate on such redemption. The tax collector shall pay over to the proper authorities the fees of such officers that accrued in the sale and shall determine the proportionate amounts of the redemption money belonging to the state, including advertising fees, and the amounts of such redemption money belonging to the county and to the school fund and to any municipality and to each holder of a tax lien certificate. The tax collector shall monthly, by the tenth day of the month next after the month in which the redemption was made, pay over such proportions to the proper authorities, respectively, after deducting therefrom the commissions allowed by law to tax collectors for collecting taxes; and he shall certify to the Land Commissioner and to the county treasurer, upon blanks to be furnished by the state Comptroller, a full descriptive statement of all real estate bid in by the state and redeemed, showing separately the amount of state, county, municipal and school taxes and tax lien certificates and penalties and costs embraced in and covered by the redemption so reported. At the end of any month during which no land has been redeemed, the judge of probate shall report that fact to the Land Commissioner and to the tax collector.
(Acts 1935, No. 194, p. 256; Acts 1936, Ex. Sess., No. 125, p. 83; Code 1940, T. 51, §312; Acts 1943, No. 579, p. 582; Acts 1995, No. 95-408, p. 864, §2.)
Within five days from the redemption of any real estate bid in by the state, the judge of probate shall notify the tax assessor and tax collector of his county thereof and shall, on demand, pay to them the costs and fees to which they are respectively entitled, and the assessor shall enter such real estate and the name of the person redeeming the same on an appropriate list to be kept by him for assessment.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §313.)
Neither the purchaser, nor anyone claiming under him, who may have lawfully obtained possession of any real estate purchased at tax sales shall be liable upon the redemption of such real estate to account to the owner for any rents, issues, or profits during such possession, but as to such rents, issues, and profits he shall be held and considered the rightful owner of such real estate unless such owner at the time of the sale was a minor or a person of unsound mind and had no guardian, or his guardian was not lawfully served with notice of the proceedings had in the court of probate for the sale of such real estate, in which event such purchaser or other person in possession shall be liable for rents, issues, and profits, as in other cases; but neither such purchaser nor anyone claiming under him shall have the right to cut standing timber from land so purchased at tax sales, nor shall have the right to remove or destroy any improvements on said property or commit waste until he shall have received a deed for the land from the probate judge, and anyone in possession shall have the right to growing crops planted by him.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §314.)
(a) The Land Commissioner shall maintain a listing of all the lands that have been bid in for the state, which shall include the following:
(1) A legal description of the property, as it appears on the certificate of purchase provided to the state as required by Section 40-10-20.
(2) The amount of state and county taxes due.
(3) The date when the property was bid in for the state.
(b) After three years from the date of the sale, any portions of property that have not been redeemed shall be subject to sale by the state. The Land Commissioner may sell the property in any of the following ways:
(1) Sell the property at private sale to any purchaser, who may pay in cash to the Treasurer such sum of money as the Land Commissioner ascertains to be sufficient to cover and satisfy all claims of the state and county, which sum shall not be less than the amount of money for which the lands were bid in by the state, with interest thereon at the rate of 12 percent per annum from the date of sale, together with the amount of all taxes due on the lands since date of sale, with interest thereon at the rate of 12 percent per annum from the maturity of such taxes.
(2) If the lands are within a municipal boundary, sell the property to the municipality or other nonprofit or governmental entity as the municipality may designate, at the best price offered, irrespective of the amount of taxes and interest due.
(3) If the property is not within a municipal boundary, sell the property to the county in which the lands are situated or other entity as the county may designate, at the best price offered, irrespective of the amount of taxes and interest due.
(4) Sell the property to such other entity created jointly by the municipality and the county in which the lands are situated as much as may be authorized by state law, at the best price offered, irrespective of the amount of taxes and interest due.
(5) Sell the property to a land bank authority created as authorized by Chapter 9, Title 24, for no consideration, irrespective of the amount of taxes and interest due.
(c) If the property has not been redeemed or sold by the state within five years from the date of the sale, the property may be sold by the Land Commissioner by online public auction as provided in Section 40-10-134, irrespective of the amount of taxes and interest due.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §315; Acts 1988, 1st Ex. Sess., No. 88-824, p. 265, §16; Act 2002-426, p. 1094, §1; Act 2013-249, p. 610, §1; Act 2024-83, §1.)
When application is made to the Land Commissioner by any person to purchase lands in which such person had no interest, the Land Commissioner shall mail a notice in writing to the owner, or some person having an interest in such land, if his place of residence is known, or, if not known, then to the judge of probate of the county in which such lands are situated, informing him that such application has been made and fixing a reasonable time within which such owner or such other person having an interest in the lands may redeem the same. The judge of probate shall cause the notice to be posted at the courthouse, and he shall mail a copy of said notice to the owner, if known to him; and if such lands are not redeemed within the time so fixed, the same shall be sold to the applicant or any other person desiring to purchase the same without other or further notice to such owner or persons having an interest in the lands. If such lands are redeemed within the time so fixed, the judge of probate must, without delay, report the same to the Land Commissioner and pay over the redemption money as required by law.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §316.)
(a) Commencing January 1, 2025, and subject to subsections (b) through (f), the Land Commissioner may sell lands by online public auction when those lands have been sold for taxes and bought in for the State of Alabama; have not been redeemed or sold by the state; and a period of five years has elapsed from the date of sale to the state. The sale of the property by online public auction shall be subject to the provisions of subsections (b) through (e) and shall be for the best price obtainable, irrespective of the amount of taxes and interest due.
(b) When selling lands by public auction, the Land Commissioner shall contract with a nationally recognized auction company to sell at public auction the state’s tax interest on any lands sold for nonpayment of taxes and bought in for the State of Alabama which meet the following requirements:
(1) The property has been bid in for the state for at least five years.
(2) The land has not been redeemed.
(3) The state has not sold or assigned its tax interest in the land.
(4) There is no active price quote on the land. The term “active price quote” means a statement that has been issued to an applicant which provides the amount necessary to purchase the state’s tax interest in the land, and the applicant is still within the period of time stated in the price quote to accept and submit payment.
(c) The contract with the auction company shall provide that the fee to the auction company shall be a contingency fee with all expenses borne by the company. The expenses shall include, but are not limited to, the costs of advertising as provided in subsection (e). The contingency fee shall not exceed 15 percent of the total amount of each successful bid at auction and shall be added as a premium to the total amount of each successful bid at auction.
(d) When the Land Commissioner contracts with an auction company pursuant to subsection (b), he or she shall notify the owners of record, or persons having interest in the lands, that the state’s tax lien interest on the property will be sold at auction and the date upon which this is scheduled to occur. Notification shall be achieved by means of publication on the Department of Revenue’s website for a period of not less than 30 days prior to the auction. The publication shall include the date and time of the auction and a listing of the properties that are scheduled to be auctioned. Due to certain factors including, but not limited to, sales, redemptions, cancellations, or open price quotes occurring between the time of initial publication and the time of auction, the list may be amended as necessary throughout the publication period. Amending the list for these reasons shall not restart the 30-day publication period, nor shall it invalidate the actions of the Land Commissioner in complying with this subsection.
(e) The auction company, as part of its contracted responsibilities, shall advertise the auction. In its advertisement, the auction company shall make a prominent statement that purchasers will not receive clear title to any land sold at auction, and further, that they are bidding on the tax lien interest on lands held by the state for nonpayment of taxes which may have additional liens. The auction company and its agents shall not be liable for damages resulting from conducting the auction.
(f) Any provision of law to the contrary notwithstanding, the Department of Revenue shall distribute the funds derived from this section as follows:
(1) For properties in which the current assessment includes state, county, and municipal taxes, the total amount received shall be divided into three equal shares. One share shall be disbursed to the State General Fund, one share disbursed to the county general fund, and one share disbursed to the municipality.
(2) For properties in which the current assessment includes only state and county taxes, the total amount received shall be divided into two equal shares. One share shall be disbursed to the State General Fund, and one share disbursed to the county general fund.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §317; Acts 1995, No. 95-408, p. 864, §2; Act 2024-83, §1.)
When lands have been sold by the state, as provided in Sections 40-10-132 and 40-10-134, and the purchase money has been paid, the Land Commissioner, in behalf of the state, shall execute to the purchaser a deed, duly acknowledged, without warranty or covenant of any kind on the part of the state, express or implied, conveying to him all the right, title, and interest of the state in and to the lands purchased by him; and such purchaser shall thereafter have all the right, title, and interest of the state in and to such lands and shall be held and treated as the assignee of all the taxes due upon such lands, or for which they were sold, and the penalties and all of the taxes that should have been under the law assessed upon the same, if they had been the property of a private citizen of the state, and he shall be clothed with all the rights, liens, powers, and remedies, whether as a plaintiff or defendant, respecting said lands as an individual purchaser at the tax collector’s sale would have in similar circumstances; and all such liens and charges as the state had before such sale by the Land Commissioner shall be enforced in favor of such purchaser from him, as under the provisions of law relating to individual purchasers at sales by the tax collector, such purchaser, on failure of his title, shall have his lien and charges assessed by the court or by a jury and may foreclose the same by proceeding at law in such suit.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §318.)
Upon the consummation of such sale, the Land Commissioner must certify the same to the judge of probate, who shall make entry thereof in the book of land sales in his office; and the commissioner shall furnish a description of such lands to the assessor of the county in which they are situated, who shall enter the same upon his list for assessment; but the time allowed infants and lunatics in which to redeem lands sold for taxes shall in no wise be affected by any such sale and conveyance.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §319.)
Any lands which have been bid in by the state at tax sale shall, after three years have elapsed from the date of sale to the state and no person having any interest therein having redeemed same from tax sale, be subject to conveyance to the Department of Conservation and Natural Resources in the manner hereinafter provided:
(1) Whenever the Department of Conservation and Natural Resources shall determine any lands which have been bid in by the state at tax sale and the title to which has not passed out of the state, to be suitable or desirable for the use of the said Department of Conservation and Natural Resources, either for the purpose of being used as a state park, state forest, or for the purpose of exchange for other lands of equal value, which are determined to be suitable for said purposes, or for any other use or disposition which the Department of Conservation and Natural Resources may hereafter be authorized by law to make of such lands, the Department of Conservation and Natural Resources shall file with the Land Commissioner a written application, signed by the Commissioner of the Department of Conservation and Natural Resources on a form to be prescribed by the Land Commissioner, giving such information as may be required by the Land Commissioner.
(2) When application is made to the Land Commissioner for the conveyance of any lands to the Department of Conservation and Natural Resources, the Land Commissioner shall mail a notice in writing to the owner, or some person having an interest in such land, if his place of residence is known to the Land Commissioner, and also to the judge of probate of the county in which such lands are situated, informing the owner or other persons having an interest in such land that such application has been made and informing him that he shall have 30 days from the date of said notice within which to redeem said lands, and the judge of probate shall cause the notice to be posted at the courthouse, and he shall mail a copy of said notice to the owner, if known to him; and if such lands are not redeemed within the time so fixed, the same shall, upon approval of the Governor, be conveyed to the Department of Conservation and Natural Resources, without other or further notice to such owner or persons having an interest in the lands. If such lands are redeemed within the time so fixed, the judge of probate must, without delay, report the same to the Land Commissioner and pay over the redemption money as required by law.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §320.)
When lands are required to be conveyed to the Department of Conservation and Natural Resources, as hereinabove provided, the Land Commissioner, in behalf of the state, with the approval of the Governor, shall execute to the Department of Conservation and Natural Resources, a deed, duly acknowledged, without warranty or covenant of any kind on the part of the state, express or implied, conveying to the said Department of Conservation and Natural Resources all the right, title, and interest of the state in and to the lands so conveyed. The Department of Conservation and Natural Resources shall thereafter have all the right, title, and interest of the state in and to such lands and shall be held and treated as the assignee of all the taxes due upon such lands or for which they were sold and the penalties and all of the taxes that should have been under the law assessed upon the same, if they had been the property of a private citizen of the state, and it shall be clothed with all the rights, liens, powers, and remedies, whether as a plaintiff or defendant, respecting said lands as an individual purchaser at the tax collector’s sale would have in similar circumstances, and all such liens and charges as the state had before such conveyance by the Land Commissioner shall be enforced in favor of the Department of Conservation and Natural Resources as under the provisions of law relating to individual purchasers at sales by the tax collector. The Department of Conservation and Natural Resources, on failure of its title, shall have its lien and charges assessed by the courts or by a jury and may foreclose the same by proceeding at law in such action.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §321.)
Whenever it is determined by the Land Commissioner that it is to the best interest of the state to convey to the Department of Conservation and Natural Resources the title of any lands which have been bid in at tax sale and which remain unredeemed, he may, on his own motion and without application being filed by the Department of Conservation and Natural Resources, issue notice to the former owner or some person having an interest in such land, in the same manner as heretofore provided for in cases where application for conveyance has been filed by the Department of Conservation and Natural Resources; and, if such lands are not redeemed within the time so fixed, the same shall, upon approval of the Governor, be conveyed to the Department of Conservation and Natural Resources in the same manner as if application for such conveyance had been filed by the Department of Conservation and Natural Resources.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §322.)
When lands bid in by the state have been sold by the state under any of the provisions of this chapter, the Land Commissioner shall certify to the Comptroller the amount, and the Comptroller shall draw his warrant on the Treasurer in favor of the judge of probate of the county in which the lands lie for the county and school taxes and the fees and costs due to the different officers of the county, specifying each separately; and, if the same cannot be ascertained from the records and papers in his office, the judge of probate, on notice by the Land Commissioner of such redemption or sale, must certify the same to him, and the judge of probate, upon the collection of such warrant, shall pay the same over to the officers entitled thereto or authorized by law to receive the same.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §323.)
The State of Alabama shall have a lien for all unpaid partial payments as well as for taxes for any subsequent year, and in case of the failure to pay any one of said installments together with the taxes for any subsequent year, either or both, the Land Commissioner for and in the name of the State of Alabama shall at his option declare all said installments due and payable at once. In case of default in payment of any installment or of any subsequent taxes, the Land Commissioner in the name of the state shall have a right to file a complaint to foreclose the lien of the state, and in such suit all parties at interest shall be made parties defendant. Such suit shall be filed in the county where the land or the major portion thereof is situated. The court shall determine what amount, if any, of such taxes or installments are illegal, and in its final judgment shall determine the total amount due on such installment payments and any unpaid subsequent taxes and shall render judgment therefor which shall include costs and shall order the property sold to satisfy the judgment in the same manner as in the foreclosure of mortgages on real estate. If at such sale no one bids a sufficient sum to pay the full amount of the judgment, the officer conducting the sale shall announce that the real estate is sold to the State of Alabama for the amount of the judgment, interest, and costs, and the sale shall be reported to the court and be confirmed and a deed made to the State of Alabama, and the state shall be entitled to a writ of possession. The purchaser at such sale, including the state, shall be entitled to a deed and the same processes and remedies to obtain possession of the premises as in other suits where land is sold under order of a court, and the title to the land conveyed by such deed shall be indefeasible as to all parties defendant in the action.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §325.)
All moneys arising from such sale shall be applied first to the reimbursement to the state of any amount paid for costs, fees, and expenses incurred in such suit, and the remainder shall be divided between the state and the various taxing subdivisions in the manner provided by law.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §326.)
Any mortgagee, lienholder, or other creditor, or any person having an interest but not the legal title shall have a lien on the lands for the amount expended by him in effecting a redemption; and, if such redemption is by a tenant in common, he shall have a lien on the interest of his cotenant.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §327.)
Any taxpayer who through any mistake, or by reason of any double assessment, or by any error in the assessment or collection of taxes, or other error, has paid taxes that were not due upon the property of such taxpayer shall be entitled, upon making proof of such payment to the satisfaction of the Comptroller, to have such taxes refunded to him if application shall be made therefor, as hereinafter provided, within two years from the date of such payment.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §328.)
In order to procure the refunding under the provisions of Section 40-10-160 of the amounts erroneously paid for taxes on property, the taxpayer, his heirs, or assigns shall file in duplicate a petition directed to the judge of probate of the county wherein the land is situated, setting up the facts relied on to procure the refunding of the money so erroneously paid.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §329.)
The judge of probate shall examine said petition and also the tax books of his county; and, if the facts set forth in the petition are such as to entitle the petitioner to the refunding of the money as prayed for, he shall so certify to the Comptroller, stating the amount to be refunded by the state, and forward to the Comptroller a copy of the petition with his certificate endorsed thereon; and, if the Comptroller shall be satisfied that the petitioner is entitled to have the money refunded to him, he shall draw his warrant on the Treasurer in favor of the petitioner for such an amount as the certificate of the probate judge shows should be refunded.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §330.)
The judge of probate shall likewise certify his findings on the duplicate petition, stating the amount of money which the petitioner is entitled to receive from the county, and such petition, with his certificate endorsed thereon, he shall deliver to the petitioner, who may present the same to the county commission; and, if said commission is satisfied with the proof of the claim made by the petition, the commission must allow said claim to the amount of tax paid to the county and draw a warrant on the treasurer of the county for the amount allowed in favor of the petitioner.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §331.)
In case of the payment of money under mistake of law or fact upon any illegal tax assessment made under color of any law, special or general, of the state, or by any of its political subdivisions, authorizing the assessment or collection of taxes for any purpose whatever, whether for any municipality, for the payment of the creditors of any municipality, for schools, or otherwise, except the laws relating to taxes to be paid to the state or to the general funds of the counties, respectively, the same shall be recoverable by appropriate proceedings against the proper parties or their successors, with the usual rights of appeal, and that such payment was not made under compulsion or protest shall be immaterial.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §332.)
In case of any petition or application for the refund of any money paid as aforesaid, filed with any mayor and alderman or any other municipal or other board, circuit court, or other authority having the control or the administration or the supervision of the receipts or disbursement of any taxes collected under, or under color of, any law mentioned in Section 40-10-164, it shall, upon proper proof, pay or order paid all such money so erroneously paid, and the tax collector, custodian, disbursing officer, or agency under it must obey such order and also pay such costs as may in such petition or application or suit be awarded, adjudged, or decreed in favor of such person making such erroneous payment; but this section shall not apply to assessments where owners of property received special benefits or where taxes were due but irregularly assessed thereon.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §333.)
The provisions of Sections 40-10-164 and 40-10-165 shall apply to all persons and corporations who are justly and equitably entitled to have money erroneously paid for taxes refunded, such payment having been made within two years preceding the commencement of any action, suit, or proceedings for its recovery, and no action, suit, or other procedure can be maintained unless brought or commenced within two years after such payment is made.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §334.)
(a) The Legislature declares that the purpose of this article is to provide counties with an alternative remedy for collecting delinquent property taxes by the sale of a tax lien.
(b) The tax collecting official for each county shall have the sole authority to decide whether his or her county shall utilize the sale of a tax lien or the sale of property to collect delinquent property taxes and the method decided by the tax collecting official shall apply to all real property in that county for the year so decided.
(c) The tax collecting official’s decision to change the current remedy used for collecting delinquent property taxes shall be published on the tax collecting official’s website or by advertising once a week for three consecutive weeks in a newspaper with general circulation in that particular county, all of which shall occur not later than October 1 when the property taxes become due and payable.
(Acts 1995, No. 95-408, p. 864, §1; Act 2018-577, §1; Act 2022-208, §1.)
For purposes of this article, the following terms shall have the following meanings:
(1) TAX COLLECTING OFFICIAL. The elected or appointed person responsible for collecting ad valorem taxes in a county.
(2) TAX LIEN. The perpetual first priority lien provided by Section 40-1-3 against any parcel of real property representing taxes assessed and levied against the property, together with interest, penalties, fees, and costs applicable by law to the taxes.
(3) TAX LIEN AUCTION. The public sale of all tax liens advertised under Section 40-10-182 and held no earlier than March 1 or later than June 15 of the current ad valorem tax year where the awarding of the tax lien certificate is based on the lowest interest rate bid on a tax lien.
(4) TAX LIEN SALE. The sale of an unsold tax lien by private sale between a tax collecting official and the purchaser of a tax lien under Section 40-10-199.
(5) UNIFORM PARCEL NUMBER. The unique parcel identification number assigned to the parcel of property for ad valorem tax purposes based on the tax lien date of the current tax year.
(Acts 1995, No. 95-408, p. 864, §3; Act 2018-577, §1.)
(a) All tax liens representing unpaid and delinquent taxes on real property shall be subject to a tax lien auction or a tax lien sale.
(b)(1) If the sale of a tax lien is chosen as the method to collect delinquent property taxes, the tax collecting official of any county shall conduct a public auction for the sale and transfer of delinquent tax liens between the hours of 8:30 a.m. and 4:00 p.m. on the auction date. The tax collecting official shall notify the delinquent taxpayer of the auction and all charges pursuant to Section 40-10-183 at least 30 days prior to the tax lien auction by first class mail and by any one of the following:
a. Advertising once a week for three consecutive weeks in a newspaper with general circulation in the county where the property is located.
b. Advertising on an online website controlled by the tax collecting official and accessible from the tax collecting official’s website.
c. Posting at the courthouse of the county and if possible in a public place in the precinct where the property is located.
(2) The notices shall declare the time, the method, whether online or in person, and the location of the auction.
(c) The tax collecting official may auction or sell tax liens representing delinquent taxes for any year taxes are delinquent and unpaid.
(Acts 1995, No. 95-408, p. 864, §4; Act 2018-577, §1; Act 2022-208, §1; Act 2024-324, §1.)
At least 30 days prior to any tax lien auction, the tax collecting official shall prepare and maintain a list of all unsold tax liens. The list shall be known as the tax lien auction list and shall contain all of the following:
(1) The names of the several persons appearing in the latest tax roll as the respective owners of tax-delinquent properties.
(2) A description of each property as it appears in the latest tax roll.
(3) The year or years for which taxes are delinquent on each property.
(4) The principal amount of the delinquent taxes and the amount of accrued and accruing interest thereon and penalties, fees, and administration costs pursuant to Section 40-10-184(b) relating to each year of assessment.
(Acts 1995, No. 95-408, p. 864, §5; Act 2018-577, §1; Act 2022-208, §1; Act 2024-324, §1.)
(a) On the day and time designated for a tax lien auction, the tax collecting official shall proceed to auction all tax liens described in the tax lien auction list compiled as provided in Section 40-10-183, except those for which the taxes, penalties, interest, fees, and costs have been paid. Any tax lien unsold after a tax lien auction shall continue pursuant to Section 40-1-3 for future auction or sale as provided in this article. Interest shall continue to accrue on unsold tax liens at the rate imposed on delinquent real property taxes.
(b)(1) A tax lien shall be sold at auction pursuant to this article to the person who: (i) pays all taxes due, including unpaid taxes for previous years, interest, penalties, fees, and costs due on the property; (ii) pays an administrative fee of forty-five dollars ($45), effective upon the preparation of the tax lien auction list, plus the amount to be paid to the holder of a tax lien certificate who has not exercised his or her first right to purchase as provided in Section 40-10-191; and (iii) bids the lowest interest rate on the amount required to be paid to redeem the property from the sale.
(2) The beginning interest rate bid shall not exceed a rate of 12 percent and additional bids may be made at a rate less than the immediately preceding bid.
(3) If an in-person auction ends in a tie and the winner cannot be determined, the tax collecting official shall draw lots to determine the winning bidder. If an online auction ends in a tie and the winner cannot be determined, the tie shall be resolved by a random number generator.
(c) The sale of a tax lien does not extinguish any deed restriction, deed covenant, or easement on or appurtenant to the parcel. A tax lien offered for auction or sale shall be identified by a uniform parcel number and a legal description.
(Acts 1995, No. 95-408, p. 864, §6; Act 2018-577, §1; Act 2024-324, §1.)
When a tax lien is offered for auction or sale, it shall not be necessary to list it as being against the property of any specific person. The auction or sale is not invalid by reason of the fact that the property was assessed in the name of a person other than the rightful owner or to a person unknown, if the description and the uniform parcel number of the real estate in the tax lien auction list is sufficient to identify it and the amount of taxes, interest, penalties, fees, and costs for which its tax lien is to be auctioned or sold.
(Acts 1995, No. 95-408, p. 864, §7; Act 2018-577, §1; Act 2022-208, §1.)
(a) The purchase price for a tax lien shall be the amount as required in Section 40-10-184.
(b) The purchase price for a tax lien shall be paid in a form acceptable to the tax collecting official not later than one hour before close of business on the date of the auction or sale or, if the auction is online, not later than the close of business two days following the date of the auction.
(c) The purchase price for a tax lien received by the tax collecting official shall be credited to the tax collecting official for purposes of calculating commissions, if any, on taxes collected by the tax collecting official pursuant to Section 40-5-4.
(Acts 1995, No. 95-408, p. 864, §8; Act 2018-577, §1; Act 2022-208, §1; Act 2024-324, §1.)
(a) The tax collecting official, upon receipt of the purchase price, shall make, execute, and deliver a tax lien certificate to each purchaser. The tax lien certificate shall be in a form provided by the Department of Revenue and shall also include a certificate of redemption form as provided in Section 40-10-194.
(b) A tax lien certificate shall evidence the auction or sale or assignment to the holder of the tax lien certificate of the delinquent and unpaid taxes, penalties, interest, fees, and costs set forth therein and represented by the tax lien.
(c) A tax lien certificate shall bear the interest rate per annum as bid on by the purchaser at the tax lien auction or as agreed upon by the purchaser at the tax lien sale, until the tax lien certificate is redeemed as provided pursuant to Section 40-10-193 or Section 40-10-197.
(d) The tax lien certificate shall do all of the following:
(1) Describe the real property on which a tax lien is auctioned or sold as it is described in the tax lien auction list.
(2) Specify the date on which the tax lien was auctioned or sold to the original purchaser.
(3) Specify the year of assessment to which the tax lien relates and the amount for which the tax lien was auctioned or sold to the original purchaser.
(4) Recite the amount of all taxes, penalties, interest, fees, and costs due on the property, which relate to the year of assessment described in subdivision (3), as of the date specified in subdivision (2).
(5) Recite the rate per annum bid on by the purchaser at the tax lien auction or agreed upon at the tax lien sale on the amount described in subdivision (4) from the date specified in subdivision (2).
(e) The purchaser of a tax lien certificate may transfer and assign the certificate to any person, and the transferee of a tax lien certificate may subsequently transfer the certificate to any other person. The transferor of a tax lien certificate shall endorse the certificate and shall swear to the endorsement before a notary public or other officer empowered to administer oaths. The transferee shall present the endorsed tax lien certificate to the tax collecting official who prepared and executed the certificate, or his or her successor, who, for a fee of five dollars ($5), shall acknowledge the transfer on the certificate and shall make note of the transfer on the record of tax lien auctions and sales kept as provided in Section 40-10-188. An assignment and transfer as provided in this subsection shall vest in the assignee all the right and title of the original purchaser.
(f) A security interest in a tax lien certificate may be created and perfected in the manner provided for general intangibles under Title 7. Notice of the security interest shall be given to the tax collecting official pursuant to Section 7-9A-406 and as otherwise required by law.
(g) Within 30 days of a completed tax lien auction or sale, the tax collecting official shall send notice to the property owner for whom the property was assessed informing the property owner that the tax lien has been auctioned or sold. The notice shall include the date of auction or sale and the name of the purchaser and shall be made by first class mail to the address listed in the assessment.
(Acts 1995, No. 95-408, p. 864, §9; Act 2018-577, §1; Act 2022-208, §1; Act 2024-324, §1.)
The tax collecting official shall make a correct record of all auctions and sales of tax liens in a durable book or an electronic file, which shall be known as the record of tax lien auctions and sales, containing all of the following:
(1) The date of auction or sale.
(2) A description of each parcel and uniform parcel number on which a tax lien was auctioned or sold.
(3) The year of assessment to which the tax lien relates.
(4) The name and address of the property owner for whom the property was assessed, if known.
(5) The name and address of the original purchaser of the tax lien.
(6) The total amount of taxes, interest, penalties, fees, and costs due on the tax lien, which relate to the year of assessment, as described in Section 40-10-187, as of the date of the auction or sale of the tax lien to the original purchaser.
(7) The interest rate bid on by the purchaser at the tax lien auction or as agreed by the purchaser at the tax lien sale.
(8) The amount of any subsequent taxes, penalties, interest, fees, and costs paid by the original purchaser, or assignee, of the tax lien certificate as provided in Section 40-10-191 and the year of assessment to which the payment relates.
(9) The name and address of the assignee, if any, and the date of assignment of the tax lien certificate.
(10) Any security interest of which the tax collecting official has been notified pursuant to Section 40-10-187(f).
(11) The name and address of the person redeeming and the date of redemption.
(12) The total amount paid for redemption.
(Acts 1995, No. 95-408, p. 864, §10; Act 2018-577, §1; Act 2022-208, §1.)
The “holder of the tax lien certificate” means the original purchaser of a tax lien or any assignee thereof as described in the record of tax lien auctions and sales kept by the tax collecting official pursuant to Section 40-10-188.
(Acts 1995, No. 95-408, p. 864, §11; Act 2018-577, §1.)
When a tax lien certificate is lost or destroyed, the holder of the tax lien certificate may file a notarized affidavit with the tax collecting official attesting to the loss of the certificate. Upon presentation of the notarized affidavit, the tax collecting official, on payment of a fee of fifty dollars ($50), shall issue to the holder thereof an exact duplicate of the tax lien certificate.
(Acts 1995, No. 95-408, p. 864, §12; Act 2018-577, §1.)
(a) The holder of a tax lien certificate shall have the first right to purchase the tax lien relating to a subsequent delinquency on the property described in the tax lien certificate of the holder. A holder of the certificate shall exercise this right between five and 30 days prior to the tax lien auction date, and the purchase by the holder shall be effective as of the date of the tax lien auction as if the holder has been the winning bidder. A holder of the certificate who exercises this right, upon payment of the purchase price, shall be issued a certificate of purchase in accordance with Section 40-10-187 and is entitled to the same interest rate as shown on the previous tax lien certificate. The owner of the property shall be notified within 30 days of the completion of the first right of purchase, in accordance with Section 40-10-187(g).
(b)(1) If the holder of a tax lien certificate fails to exercise the first right to purchase a subsequent tax lien, an amount equal to the redemption price of the tax lien shall be added to the purchase price at the subsequent tax lien sale or auction, and the tax lien certificate shall be transferred to the purchaser of the subsequent tax lien.
(2) A transfer of the tax lien certificate as provided in this subsection shall vest in the transferee all the rights and title of the previous holder of the tax lien certificate; the previous tax lien certificate shall be canceled, and a new tax lien certificate shall be issued to the purchaser.
(3) The amount paid from the transfer shall be distributed to the previous holder of the tax lien certificate along with a notice of cancellation of the previous tax lien certificate, within 30 days of the receipt of the purchase price.
(c) In the event that a mortgagee is or becomes the holder of a tax lien certificate, the mortgagee may add all costs, fees, interest, penalties, and taxes regarding the tax sale to the principal of the loan.
(d) A holder of a tax lien certificate may abandon the certificate at any time upon notification given to the tax collecting official and the surrender of the tax lien certificate. Abandonment of a tax lien certificate relinquishes all rights of recovery of any monies or expenses.
(Acts 1995, No. 95-408, p. 864, §13; Act 2018-577, §1; Act 2022-208, §1; Act 2024-324, §1.)
All monies collected or received by the tax collecting official as proceeds of a tax lien auction or sale shall be distributed in the same manner and proportions as the tax collecting official is required by law to distribute other monies collected by him or her in satisfaction of ad valorem taxes. All penalties, costs, and fees collected by the tax collecting official shall be paid to the general fund of the county.
(Acts 1995, No. 95-408, p. 864, §14; Act 2018-577, §1.)
(a)(1) Tax liens auctioned or sold may be redeemed by any of the following:
a. The owner, including a partial owner under Section 40-10-195, or his or her heirs or personal representatives.
b. Any mortgagee or purchaser of the property or any portion of the property.
c. Any person having an interest in the property or any portion of the property, legal or equitable, in severalty or as tenant in common, including a judgment creditor or other creditor having a lien on the property or any portion of the property.
(2) Property may be redeemed under subdivision (1) by payment to the tax collecting official of the amount specified on the tax lien certificate as the total amount of delinquent tax, interest, penalties, fees excluding lost certificate fees provided in Section 40-10-190, and costs paid to purchase the tax lien and to obtain a title report for use in a foreclosure and quiet title action under Section 40-10-197, plus interest at the rate specified in the tax lien certificate, plus any due and owing taxes, interest, penalties, fees, and costs due. The tax collecting official shall provide a separate receipt for any current taxes, interest, penalties, fees, or costs paid.
(b) Statutory fees paid by the holder of the tax lien certificate in connection with the tax lien certificate shall be added to the amount payable on redemption and shall also bear interest at the rate of interest specified in the tax lien certificate.
(Acts 1995, No. 95-408, p. 864, §15; Act 2018-577, §1; Act 2022-208, §1;Act 2024-324, §1.)
(a) The tax collecting official, upon application to redeem a tax lien, and upon being satisfied that the person applying has the right to redeem the tax lien, and upon payment of the amount due, shall issue to the person a certificate of redemption appended to a copy of the certificate of tax lien, giving the date of redemption, the amount paid, and by whom redeemed, and shall make the proper entries in the record of tax lien auctions or sales in his or her office. Upon issuance of the certificate of redemption, the redemption is complete and perfected, the tax lien is satisfied, and the certificate of tax lien is void and of no effect other than to support a request for payment of redemption money pursuant to Section 40-10-196.
(b) For each certificate of redemption, the tax collecting official shall collect from the person to whom the certificate of redemption is issued a fee of ten dollars ($10).
(c) The holder of a certificate of redemption may record the certificate with the recording officer of the county.
(Acts 1995, No. 95-408, p. 864, §16; Act 2018-577, §1; Act 2022-208, §1.)
A person owning an interest less than the whole in real property may redeem a tax lien pursuant to Section 40-10-193.
(Acts 1995, No. 95-408, p. 864, §17; Act 2018-577, §1.)
Within 10 days of issuance of any certificate of redemption, the tax collecting official shall mail a copy of the certificate of redemption to the holder of the tax lien certificate related thereto at the address specified in the record of tax lien auctions and sales kept as provided in Section 40-10-188. On demand of the holder of the tax lien certificate, the tax collecting official shall pay the redemption money to the holder upon surrender of the original tax lien certificate.
(Acts 1995, No. 95-408, p. 864, §18; Act 2018-577, §1.)
(a)(1) At any time not less than four years after the tax lien auction or the tax official’s sale of a tax lien but not more than 10 years after the auction or sale, if the tax lien has not been redeemed, a holder of all of the sold, unexpired, outstanding tax lien certificates for a parcel of property may bring in the circuit court of the county in which the property is located an action to foreclose the right to redeem and to quiet title to the property in the name of the holder of the tax lien certificate. If any applicable law or court order prohibits bringing an action to foreclose the right to redeem and to quiet title to the property, the limitation provided in this section shall be extended 12 months following the termination of the prohibition.
(2) For purposes of this section, a tax lien certificate shall be considered outstanding if the certificate is owned by the original holder of the tax lien certificate or his or her successor in interest.
(b) If there are any unsold tax liens, the holder shall pay all due and owing taxes, interest, penalties, fees, and costs prior to filing an action under this section.
(c)(1) At least 30 days before filing a tax lien foreclosure action under this article, but not more than 180 days before the action is commenced, the holder of the tax lien certificates shall send notice of intent to file the foreclosure action by certified mail or by United States mail, first class, postage pre-paid, to all of the following:
a. The property owner or owners of record, according to the property tax records of the county in which the property is located, at the address shown in the records and at the street address of the property if different.
b. All holders of outstanding mortgages, judgment liens, or other liens on the property as recorded in the probate office of the county in which the property is located.
c. The tax collecting official of the county in which the property is located.
d. Any other person who may reasonably be believed to have an interest in the property, including, but not limited to, any of the following:
A person whose name appears on the face of a recorded deed, mortgage, or other relevant instrument.
A person who paid taxes on the property during the period that it has been owned by the property owner of record.
A person who appears to be the heir of the property owner of record, as shown by probate court records.
The registered agent and all persons appearing to have an ownership interest in the entity as recorded on the records of the probate court or the Secretary of State, or both, if the property is owned by a business entity.
(2) The holder of the tax lien certificates shall make an affidavit setting forth the names of the persons, entities, and organizations that were sent notice pursuant to subdivision (1) and how these persons were identified, including, but not limited to, the records searched. This affidavit must be filed in the subsequent action.
(3) The notice shall include the property owner’s name, the date of mailing, the uniform parcel number, the legal description and street address, if any, of the property, and the name and address of the holder of the tax lien certificate. If the holder fails to send the notice required by this subsection, the court shall dismiss any tax lien foreclosure action filed under this article. The notice shall also include a statement or words substantially to the same effect, as follows:
“Notice is hereby given that the holder of these tax liens proposes to file a tax lien foreclosure action as soon as 30, but not later than 180, days following the date this notice is mailed. Once this action is served, anyone who is named as a defendant has 30 days to file an answer, or a default judgment may be entered against that person. Any person with a right to redeem the property may do so at any time prior to the entry of final judgment in the proposed action, either by payment to the tax collecting official as provided by law before an action is commenced, or by filing a timely answer or motion in the court after an action has been commenced. A judgment quieting title may cause a person with an interest in or claim on the property to lose their interest or claim. Any person claiming an interest in the property may appear in the action. Any person who is entitled to redeem may request that the property be sold at public auction. IN SUMMARY, IF YOU DO NOT WANT TO LOSE ANY INTEREST OR EQUITY, OR BOTH, YOU MAY HAVE IN THE PROPERTY, ONCE THE TAX LIEN FORECLOSURE ACTION BEGINS, YOU MUST TAKE ALL REQUIRED MEASURES TO APPEAR IN AND RESPOND TO THE FORECLOSURE ACTION.”
(d)(1) An action shall be commenced by filing a complaint in compliance with Section 6-6-561. Additionally, the complaint shall be accompanied by the following statement or words substantially to the same effect:
“A person with a right to redeem the property may do so at any time prior to the entry of final judgment in this action by filing a timely answer or motion in the court. A judgment quieting title may cause a person with an interest in or claim on the property to lose their interest or claim. Any person claiming an interest in the property may appear in this action. Any person who is entitled to redeem may request that the property be sold at public auction. IN SUMMARY, IF YOU DO NOT WANT TO LOSE ANY INTEREST OR EQUITY, OR BOTH, YOU MAY HAVE IN THE PROPERTY, YOU MUST TAKE ALL REQUIRED MEASURES TO APPEAR IN AND RESPOND TO THIS TAX LIEN FORECLOSURE ACTION.”
The holder shall not be required to plead or prove possession of the property. The holder shall name as parties defendant to the tax lien foreclosure action all persons entitled to redeem under this article. Upon filing the tax lien foreclosure action, the holder shall record a notice as provided by Section 35-4-131. Service of the complaint shall be made in accordance with Section 6-6-563. Notice shall also be published as provided by Section 6-6-564. An answer must be filed within 30 days following the date of service, as provided by Section 6-6-565.
(2) On the filing of a complaint, should it appear that any of the defendants is a minor or incapacitated, or should the identity of some, or all, of the defendants be unknown, the court shall promptly appoint a guardian ad litem to represent and defend the interest of the minor or incapacitated defendant, or unknown party in the proceeding.
(3) If the taxes have been paid by a person authorized to pay the taxes for any year in the intervening period between the first unredeemed lien and the filing of the action, the holder must also pay into court the amount of taxes that were paid, plus the interest on those taxes at the rate of interest specified in the oldest unredeemed tax lien certificate. If the property is foreclosed or sold through auction, this amount shall be distributed to the person who paid the taxes.
(e)(1) In a tax lien foreclosure action, if the court finds that: (i) the tax lien auction or sale is valid; (ii) proper notice has been sent; (iii) the holder is the holder of all of the sold, unexpired, outstanding tax certificates on the property; (iv) the tax liens have not been redeemed; and (v) no person has demanded that the property be sold by public auction under this section, the court shall enter judgment foreclosing the right of the defendant or defendants to redeem, shall vest good and marketable fee simple title in the holder, free of encumbrances, claims, and liens except as otherwise provided in subsection (f), and shall direct the circuit clerk to execute and deliver to the party in whose favor judgment is entered a deed conveying the property described in the tax lien certificates.
(2)a. In no event may judgment be granted in a tax lien foreclosure action prior to the expiration of 90 days after it is filed, unless all persons possessing an ownership interest in the property have filed an answer explicitly waiving any defense to the action, and all persons who are entitled to demand a sale of the parcel of property at public auction have filed an answer explicitly waiving their right to demand a sale at public auction.
b. Notwithstanding any other provision of law or the Alabama Rules of Civil Procedure to the contrary, an application for default judgment must be filed with the court and served on all parties who have appeared in the action as provided in the Alabama Rules of Civil Procedure and on any party who has not appeared in the action in accordance with Section 6-6-563. The holder of the tax lien certificates must submit an affidavit of service to the court.
c. Judgment may not be granted prior to 30 days after the service of the application for default judgment or 90 days after the filing of the action, whichever is later. The application for default judgment must specifically and prominently state the expected date on which judgment on the application may be entered and that any person seeking to protect an ownership or equity interest in the property must take all required measures to appear in and respond to the tax lien foreclosure action.
(3) After entry of judgment, a party whose rights to redeem the tax liens have been foreclosed has no further legal or equitable right, title, or interest in the property, subject to the right of appeal and stay of execution as in other civil actions.
(f) The foreclosure of the right to redeem does not extinguish any easement or right-of-way on or appurtenant to the property or rights of any public utility or governmental entity in the property, deed restrictions or covenants, or plat restrictions or conditions. Any other liens shall be extinguished according to their priority as provided by law.
(g)(1) The clerk’s deed executed in accordance with subsection (e) shall include all of the following information:
a. The date of the judgment.
b. The number and style of the case.
c. The name of the plaintiff, who shall be stated as the grantee.
d. The legal description of the property.
e. The uniform parcel number of the property.
f. The date of the conveyance.
(2) The original deed shall be delivered to the plaintiff for recording in the probate records in the county in which the property is located.
(h) Any person who is entitled to redeem under this article may redeem at any time before judgment is entered, notwithstanding that an action under this section has been commenced, by paying into the circuit court the redemption amount that would have been paid to the tax collecting official under Section 40-10-193, for all sold, unexpired, outstanding tax lien certificates held by the holder, plus the amount of any other taxes that were paid pursuant to this section. If the person who redeems has been served in the action, or if the person became an owner after the action was commenced and redeems after a notice is recorded pursuant to subsection (d), the court shall also enter an order requiring the repayment of reasonable costs and reasonable attorney fees actually incurred in the action as established by the law and evidence, including, but not limited to, the filing fee. An award of costs and fees under this section shall be entered as a judgment against the redeemer, which may be enforced in the same manner as other judgments.
(i)(1)a. Any person entitled to redeem, without redeeming, may respond to the action by demanding that the parcel of property be sold at public auction. By demanding that the parcel of property be sold at public auction, the person concedes that the court may enter judgment foreclosing the right to redeem and vest good and marketable fee simple title in favor of the highest bidder.
b. A demand for auction may be made at any time before judgment is entered and may be made in the alternative, however no auction shall occur before any other defense raised by any other party defendant has been waived or adjudicated. The demand for auction must be served on all parties as provided in the Alabama Rules of Civil Procedure for pleadings subsequent to the original complaint. Any other party to the action, except for the holder of the tax lien certificates, may object to the demand within 30 days following service. A holder of the tax lien certificates receiving the demand shall file an accounting of the reasonable costs and attorney fees incurred in the action within 30 days.
(2) If the court determines that the request for auction of the parcel of property is made by a proper person and is due to be granted, the court shall also determine the reasonable costs and attorney fees actually incurred by the holder of the tax lien certificates in the action in accordance with this section, plus the cost of the auction. It shall order a suitable commissioner to conduct the auction no later than 180 days from the date of the order.
(3) The auction of the parcel of property shall be conducted either on the premises of or within the courthouse or courthouse annex of the county, and awarded to the highest bidder for cash between the hours of 10:00 a.m. and 4:00 p.m.
(4) Notice of the auction shall be given for at least three successive weeks as provided by Section 6-8-60 and by posting a notice in the courthouse. The notice shall specify the property and shall state the location, time, and manner of the sale.
(5) The minimum bid at the sale shall be set by the court as the amount required to redeem all outstanding tax lien certificates under Section 40-10-193, plus any back taxes paid prior to bringing the action and the costs and fees ordered by the court. The holder of the tax lien certificates shall automatically be deemed to bid the minimum amount. If the holder is the highest bidder, he or she shall receive a credit toward the purchase price equal to the minimum bid.
(6) The suitable commissioner shall report the results of the auction to the court for confirmation and shall deposit the proceeds of the auction, if any, with the clerk of court. The court shall enter judgment foreclosing the right of the defendant or defendants to redeem and shall vest good and marketable fee simple title to the highest bidder. The court shall direct the circuit clerk to execute and deliver a deed as described in this section to the highest bidder, except that if no bid other than the minimum bid is received, the holder shall pay the cost of the auction prior to receiving the deed.
(7) The proceeds of the auction shall be applied first to the cost of the auction, and then distributed to the holder of the tax lien certificates in an amount equal to the amount required to redeem, plus any due and owing taxes, interest, penalties, fees, and costs that were paid by him or her prior to filing the action, plus the reasonable costs and fees actually incurred in the action as previously determined by the court. Any surplus shall then be distributed to the owner or owners of the property or their heirs or other successors in interest, or to another proper person, as determined by the court. The provisions of Alabama law applicable to unclaimed property held by the state shall apply.
(j) If a tax lien that was purchased pursuant to this article is not redeemed and the holder of the tax lien certificate fails to commence a tax lien foreclosure action on or before 10 years after the tax lien auction or the tax official’s sale of the tax lien, the tax lien certificate shall expire and the lien shall become void.
(k) If a judicial proceeding prohibits bringing a tax lien foreclosure action, the time of expiration under this section shall be extended by 12 months following the completion of the judicial proceeding.
(Acts 1995, No. 95-408, p. 864, §19; Act 2018-577, §1; Act 2022-208, §1; Act 2024-261, §1.)
(a) Each holder of a tax lien certificate shall be entitled to the same rights and remedies with respect to the collection of the amounts due on the tax lien certificate as are available to the tax collecting official with respect to the collection of delinquent taxes, including, but not limited to, the right to institute garnishment proceedings against the taxpayer for the payment of taxes.
(b) The holder of a tax lien certificate shall not be entitled to charge the taxpayer for the release or satisfaction of the tax lien any amount more than what would otherwise have been available to the tax collecting official with respect to the collection of the delinquent tax.
(c) The holder of a tax lien certificate shall not have the right to enter upon or otherwise possess any property upon which he or she holds a tax lien until he or she receives a deed from the circuit clerk pursuant to a court action under this article. Prior to receiving a clerk’s deed, the holder of a tax lien certificate shall not make any repairs or alterations to the property or require the property owner to pay mesne profits or rents as part of any redemption amount. The holder of a tax lien certificate shall not be held criminally or civilly liable for any code violation on the property occurring prior to obtaining a clerk’s deed unless the holder of the tax lien certificate has otherwise violated this subsection.
(d) A Class 2 municipality that holds a tax lien certificate may enter and make repairs or alterations to any property within the Class 2 municipality for which the municipality holds a tax lien certificate if the governing body determines that the repairs or alterations serve a public purpose. The cost of the repairs or alterations shall not be included in the price of redemption. If a demand for public auction is made and granted under Section 40-10-197, the reasonable cost of the repairs or alterations shall be determined by the court as part of the costs actually incurred by the holder of the tax lien certificates for the purpose of setting the minimum bid and the distribution of the proceeds.
(Acts 1995, No. 95-408, p. 864, §20; Act 2018-577, §1; Act 2024-324, §1; Act 2025-348, §2.)
(a)(1) Tax liens that are not sold at the tax lien auction conducted by the tax collecting official shall be separated in the tax lien auction list as prescribed by Section 40-10-183, and the lien shall continue pursuant to Section 40-1-3. The tax collecting official, at any time after the tax lien auction date, may sell at private sale an unsold tax lien for no less than all taxes, interest, penalties, costs, and fees, plus the amount to be paid to the holder of a tax lien certificate who has not exercised his or her first right to purchase as provided in Section 40-10-191. The purchaser at private sale shall be entitled to interest on the amount paid at a rate agreed to by the tax collecting official, not to exceed 12 percent. All private tax lien sales shall be entered in the record of tax lien auctions and sales, as provided in Section 40-10-188.
(2) a. Tax liens located within a Class 2 municipality which remain unsold in three successive auctions may be acquired by the municipality after the third tax lien auction for the best price offered without regard to the amount of taxes, penalties, and interest due. All such sales shall be entered in the record of tax lien auctions and sales, as provided in Section 40-10-188. If the property is thereafter redeemed or sold to a third party, or the municipality’s tax lien certificate is sold, the municipality shall not be entitled to interest on the amount paid in a best price sale under this paragraph. Unless the property is lawfully occupied as a residence at the time of the sale of the tax lien certificate to the municipality, the municipality purchasing the tax lien under this section may file an action to foreclose the right to redeem and quiet title as set forth in Section 40-10-197 at any time after it becomes the holder of all of the sold, unexpired, outstanding tax lien certificates.
b. Notwithstanding the provisions of Section 40-10-197(b), the municipality purchasing tax liens under this subdivision shall not be required to pay all due and owing taxes, interest, penalties, fees, and costs for any unsold tax liens prior to filing an action to foreclose the right to redeem and quiet title. A sale to the municipality for the best price offered in accordance with this subdivision is a valid tax lien certificate sale for purposes of Section 40-10-197(e)(1)(i).
c. Prior to filing an action to foreclose the right to redeem and quiet title, the municipality must comply with the prefiling notice requirements of Section 40-10-197(c) in all respects, except as modified in this paragraph. The municipality shall provide two prefiling notices. The first notice must be sent at least 60 days and not more than 180 days before filing a tax lien foreclosure action. The second notice must be sent at least 30 days after sending the first notice and not more than 30 days before filing the tax lien foreclosure action. The first sentence of the statement set forth in Section 40-10-197(c)(3) to be included in each notice shall be modified to reflect the applicable time frame required by this paragraph.
(b) All tax liens that remain unsold by the tax lien auction or sale shall be included in all future tax lien auctions or sales until sold.
(c) Any tax lien that does not sell at auction shall be reported to the county commission when seeking approval of errors in assessments, litigation, or insolvents as the tax collecting official shall be allowed credit for taxes due to this state upon final settlement with the Comptroller.
(Act 2018-577, §2; Act 2024-324, §1; Act 2025-348, §2.)
(a)(1) Except as provided in subdivision (2), a tax assessing or tax collecting official, commissioner of revenue, judge or clerk of the court with jurisdiction over actions filed under this article, or any employee of any of those offices shall not knowingly have a direct or indirect financial interest in the purchase of any tax lien sold for delinquent taxes within his or her jurisdiction. A sale made in violation of this subsection is void.
(2) This section does not apply to an attorney representing a party in the purchase of a tax lien sold for delinquent taxes or an employee of the attorney.
(b) A violation of this section is a Class C misdemeanor and the sureties on his or her official bond shall be liable for a penalty not to exceed five hundred dollars ($500) to be fixed by the circuit judge with jurisdiction in the county. The penalty shall be remitted to the general fund of the county.
(Act 2018-577, §2; Act 2024-324, §1.)
A tax collecting official may conduct a tax lien auction and sale online or in person in accordance with procedures established by the tax collecting official.
(Act 2022-208, §2.)
Unless otherwise provided, in the trial of any issue involving the auction, sale, or redemption of a tax lien certificate, an action for public auction, or a foreclosure and quiet title action filed under this article, the originals or certified copies of the books and records belonging to the office of the tax assessing official, tax collecting official, or board of equalization required to be kept by law shall be prima facie evidence of the facts included in the books or records.
(Act 2024-324, §2.)
(a) As used in this section the following terms shall have the meanings ascribed herein:
(1) CONSTRUCTION PURPOSES. The normal and ordinary meaning of the words, except that mining activities or the transportation of materials used in or produced by mining or forestry activities shall not be construed to be included;
(2) HEAVY DUTY EQUIPMENT. Any motor vehicle used primarily off the open road for construction purposes, including all road construction equipment whose gross weight exceeds 16,000 pounds, but not including inventory on hand for sale by duly licensed equipment dealers.
(b) The subjects of ad valorem taxation, except as exempted by law, shall be as follows:
(1) Every piece, parcel, tract, or lot of land in this state, including therein all things pertaining to such land, and all structures and other things so annexed or attached thereto as to pass to a vendee by conveyance of such land; and every separate or special interest in any land, such as minerals, the right to mine minerals, the right to turpentine, oil or petroleum, natural gas, and the right to remove same from the soil, or any other interests when such interests are owned by persons other than the owner of the surface or soil, except growing crops, standing timber, or any tree, bush, vine, or other growing thing from which a crop is harvested;
(2) All docks, wharves, wharf boats, landings, warehouses, toll bridges, ferries, canals, passes, channels, turnpikes, all street railroads, printing presses, and materials;
(3) All steamboats, barges, vessels, and watercraft of every name and kind however propelled, plying waters of this state, and the owner thereof shall return same for taxation to the assessors in the county wherein he resides; and, if such steamboat, barge, vessel, or watercraft is owned by a corporation, then in that county where its principal office is located; in the case of the owner’s being an individual not residing in this state or being a corporation with no principal office in this state, then in the county or counties where used; all such steamboats, barges, vessels, or watercraft whether owned by a resident or nonresident of this state, which have acquired a permanent situs in this state. All transfer boats, steamboats, or barges used by any railroad in transferring cars and passengers must be assessed and taxed in the county or counties where used, or where the owner resides, regardless of where such vessel may be registered;
(4) All stocks of goods, wares, and merchandise, the assessment to be on the average amount on hand during the preceding year, except in cases where business is commenced on or after October 1 of a current year, and in such cases the assessment to be on the capital actually employed in the business and apportioned as hereinafter provided, but the amount so assessed for any whole year shall in no case be less than the capital actually employed in the business, and this shall include all goods, wares, and merchandise kept on plantations or elsewhere, or by railroad companies or persons, for sale or to be dealt out to laborers or employees for profit, or on account of their wages, and shall include all goods, wares, and merchandise offered for sale by any person commencing business subsequent to October 1 of a current year, but in such case the tax shall be apportioned according to the date at which the business was commenced, so that if commenced after January 1, the tax shall be three fourths of the tax for the whole year; if commenced after April 1, the tax shall be one half of the tax for the whole year; provided, that the assessment herein provided for shall not include products raised on the farms in the hands of the original producers. If the person, association or corporation, receiver, or trustee carrying on such business shall fail to make return of the amount of stock of goods, wares, and merchandise as provided by law, or if the county tax assessor is not satisfied with the return made, in order to make proper assessment, he shall have the right to demand a copy of the last inventory made of such stock of goods, wares, or merchandise, and may also by inquiry of persons believed to have knowledge of the subject obtain information as to the probable average amount of such stock, and from such information may assess the same upon his best judgment;
(5) All household and kitchen furniture, mechanical and electrical refrigerators, libraries, jewelry, precious stones, plate and silverware, ornaments and articles of taste, pianos and other musical instruments, paintings, clocks, gold, silver and other watches and gold and other safety chains, all wagons and other vehicles; all motor cars, automobiles, trucks, buses, tractors, motorcycles, and other motor vehicles and bicycles; travel trailers, utility trailers, semitrailers, and all other trailers of any kind; all outboard motors; airplanes, airships, and other aircraft and aircraft landing fields and equipment; all typewriters; all cash registers; all calculating machines; all bookkeeping machines, teletypes, dictaphones, and other recording or sending apparatus or machines; all phonographs and all machines of like character; all radio sending and receiving sets and appliances; all iron safes and cabinets, all store fixtures, all office furniture and fixtures; all mechanical tools and farming implements; all tanks, all storage reservoirs or basins; all golf bags, golf sticks, and all other sporting goods; all pistols and guns; all cattle and horses, mules, studs, jacks and jennets; all hogs, sheep and goats, except as specifically exempted; all x-ray machines; all lens grinding machines, all eye-testing machines, all surgical instruments and all other instruments or appliances used in surgical, dental, medical, optometrical, or other professional work;
(6) All money hoarded, whether in the custody of the owner in this state, or in another state, or in any safety deposit box, safe, or vault, or elsewhere, except money on deposit in banks which is specifically exempted from taxation;
(7) All investments in bonds, except bonds of the United States, the State of Alabama, and of counties and municipalities of this state, warrants or other obligations of county and city school boards in this state, and such other bonds as are not by law taxable; and all capital invested in bonds or currency which are exempt from taxation shall be liable to be taxed under this section should such capital at any time during the year be reconverted into money, bonds, or property which is taxable, unless it is made to appear that the money, bonds, or property into which such reconversion may be made has been assessed for taxes for such year;
(8) All roadbed, track, engines, cars, derricks, cranes, signals, crossties, and other property, real and personal, of railroads, of mining and manufacturing plants, and all tramroads, pole-roads, canals, ditches, and channels used for transporting or moving mineral ore, lumber, timber, logs, minerals, coal, ore, sand, gravel, or other commodities, whether raw or manufactured, which are not taxed as improvements on the land or plant or main property, of the owner of such tramroads, pole-roads, canals, ditches, or channels;
(9) Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date, see the Code Commissioner’s Notes.
(10) On the gross amount of sales of goods, wares, and merchandise owned by nonresidents made at auction in or during the tax year preceding the assessment of goods, wares, and merchandise kept in stores for sale in the ordinary course of business, each auctioneer shall be assessed and shall pay a tax of one fourth of one percent, and each auctioneer shall pay a like tax on the gross amount of sales made by him of goods, wares, and merchandise owned by citizens of this state which have been imported into this state and sold at auction before same have been assessed for taxes as other property; but on sales of goods, wares, and merchandise and fruit by cargo at action, the rate of taxation shall be one eighth of one percent;
(11) On the gross amount of commissions or sums charged and received during each year by any auctioneer; provided, that nothing herein contained shall be construed as levying a tax on commissions received for the sale or rental of real estate, or brokerage on loans or real estate or the underwriting of insurance;
(12) All the real and personal property of water companies, including pumping stations, reservoirs, standpipes, towers, pipelines, gates, valves, tunnels, canals, and dams used in the business of supplying water to consumers for pay; all real and personal property of hydroelectric power, steam, or other power and light companies; natural and manufactured gas companies and gas light companies, including all machinery, engines, dynamos, wires, poles, pipelines, tubes, and appliances of every nature and description used in connection therewith; all real and personal property of every furnace, rolling mill, mine, quarry, or manufacturing establishment, including all machinery, all engines, hoisting engines, derricks, and appliances of every nature used in the business; all dams across rivers and creeks; all real and personal property of cotton gins, cotton mills, cotton compresses, cottonseed oil mills, grain elevators, flour and grist mills, molasses and syrup mills, paper mills, chemical plants or manufactories, fertilizer factories or mixing plants; all peanut oil mills and peanut mills, creosoting plants, concrete mixing plants, crosstie plants, and stave mills and heading mills;
(13) All property, real and personal, of all cement plants, lime plants, plaster plants, or quarries or other manufacturing, mining, or quarrying plants not herein specifically exempted;
(14) All property, including heavy duty equipment, used for construction purposes.
(15) All manufactured homes located on land owned by the manufactured home owners, except those manufactured homes rented or leased for business purposes, other than those manufactured homes in the inventory of a manufactured home dealer or manufacturer.
(16) All other property, real, personal, or mixed, not hereinbefore specified, of whatever class, whether ejusdem generis or not, except as herein specifically exempted, which said property shall be assessed and specifically described.
(c)(1) All property described in subdivision (b)(14) brought into the state after October 1 of any tax year and before the assessor has completed his assessment, shall be subject to taxation the same as if it had been held or owned in the state on October 1. In addition, heavy duty equipment brought into the state after October 1 and after the assessor has completed his assessment shall be subject to taxation the same as if it had been held or owned in the state on October 1; except that such tax shall be prorated with respect to the number of months remaining in the year.
(2) Property described in subdivision (b)(15) shall be taxed as realty.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §21; Acts 1967, No. 240, p. 619; Acts 1973, No. 1007, p. 1542, §1; Acts 1977, No. 698, p. 1233; Acts 1988, 1st Ex. Sess., No. 88-824, p. 265, §4; Acts 1991, No. 91-694, p. 1340, §4; Act 99-665, 2nd Sp. Sess., p. 131, §9.)
Property and activities of the United States and its agencies shall be taxable as other property and activities, except where the State of Alabama is without constitutional authority to impose such taxes.
(Acts 1939, No. 65, p. 95; Code 1940, T. 51, §22.)
The property of the United States, its agencies, instrumentalities, or corporations organized under the laws of Congress, including any buildings which have or may hereafter be erected on the land of another and for which reason may be considered by the laws of the state to be personal property for taxation purposes, the immunity from taxation of which said property has been or may hereafter be waived by the laws of Congress and which said property has been or may hereafter be made subject to state, county, municipal, or local taxation by the laws of Congress, shall be assessed for taxation by the state, county, municipality, or local taxing unit and the taxes collected thereon to the same extent according to its value as other like or similar property is assessed for taxation by the state, county, municipality, or local taxing unit.
(Acts 1945, No. 485, p. 722.)
All taxes, unless otherwise provided by law, shall become due and payable on October 1 in each year, and shall become delinquent if not paid before January 1 succeeding, except in cases when parties have moved or are about to move from the county, and except in cases when parties are closing out or going out of business, and except in cases where insolvency is impending, and except in cases where goods, wares, and merchandise are advertised for sale at auction, bankrupt, insolvent, assignment, or fire sales, or where said goods, wares, and merchandise are advertised for sale for the satisfaction of creditors, or as closing out or going out of business sales, or in any way where a person is disposing of substantially all of his taxable property in the county, in which cases such taxes shall become due and payable at once. Advertisements in the newspapers or otherwise of a sale of any personal property as a closing out sale, fire sale, bankrupt sale, or any sale of like character shall be prima facie evidence that the collection of taxes due on such property or any other property so advertised is endangered within the meaning of this section. Notice to any tax collector by the Department of Revenue, a tax assessor, deputy tax assessor, tax agent, license inspector, or any other official of this state or any county thereof that any person is about to move a whole or any part of his personal property from this state shall be prima facie evidence that the collection of the taxes due or to become due by said person on such property or other property is endangered; and, upon failure of the tax collector to act as provided in Section 40-5-31, he shall be liable on his bond for any neglect to immediately collect the taxes due, by levy and sale or otherwise.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §23.)
(a) Effective September 25, 1986, in addition to all other taxes heretofore or hereafter levied by local or general law, all licensees or operators of dog race tracks within this state are hereby required to pay, (1) income taxes levied by the state, (2) occupational taxes levied on wages by a municipality or county, (3) ad valorem taxes levied on any racing facility by the state, county, or other local subdivision at the same rates as are applicable to other commercial property having comparable market value, (4) state and local sales taxes on merchandise, food, or beverage, sold by operators or their concessionaires at racing events, and (5) all taxes and license fees imposed or related to the sale of alcoholic beverages.
(b) This section shall not apply retroactively nor shall any provision of this section be construed as affecting the local distribution of taxes of any existing dog race track.
(c) The Legislature affirms and declares the exemptions heretofore granted by local act and expressly declares that the intention of this legislation is that such exemptions were heretofore valid and remain valid until September 25, 1986.
(d) There is no intent by this legislation to impose a general sales tax on admission to the track or to the handle and an exemption is hereby granted for such taxes.
(Acts 1986, Ex. Sess., No. 86-647, p. 29.)
(a) Effective October 1, 2022, all airplanes, airships, and other aircrafts listed in Section 40-11-1 shall be valued and assessed by the Department of Revenue.
(b) The Department of Revenue may adopt rules for the implementation and administration of this section.
(Act 2021-429, §2.)
When a person has obtained a license to engage in or carry on any business, employment, or profession at any definite place in a county or city in Alabama and desires to remove to any other place within the same county or city where the license was granted and wishes his license altered accordingly, the probate judge who originally issued such license shall make such alteration, which alteration shall be shown on the license records of the probate judge’s office; provided, that no license shall be altered to change a place of business to a location requiring a higher license than originally paid.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §830.)
(a) Before any person, firm, or corporation shall engage in or carry on any business or do any act for which a license by law is required, he, they, or it, except as otherwise provided, shall pay to the judge of probate of the county in which it is proposed to engage in or carry on such business or do such act, or to the commissioner of licenses or the state Department of Revenue, as specified, the amount required for such license and shall comply with all the other requirements of this title.
(b) Upon the payment of the amount required for said license and a fee of $1 herein provided for the issuance of such license and all costs and fees and penalties which shall have accrued, or for which such person, firm, or corporation shall have become liable in any proceedings commenced for the collection of such license, or to enforce payment thereof, such probate judge, commissioner of licenses or Department of Revenue shall issue the license properly countersigned, in the form and on the blank to be furnished by the Comptroller, which shall set forth and specify the name of the person, firm, or corporation applying therefor, whether the business, profession, or occupation for which the license is procured is owned by an individual, partnership, corporation, or other association, stating the name of the individual, the name of each of the partners if a partnership, the exact name of the corporation or association, if a corporation or association, and the name of each of the principal officers thereof, the business or act which it is proposed to carry on or do thereunder, the name of the street or location where it is proposed to carry on the same, if such location shall be in a city or town and have a street number and, if not, then the location and amount paid for such license, and the time for which it is issued; and if the license is for a peddler it shall state whether he proposes to travel on foot or on horseback or on wagon or motor vehicle; provided, that the governing body of any county may furnish application blanks in such form that the applicant for a license may supply the above information in writing; and such license shall not be transferable except as otherwise provided herein, nor shall it entitle the holder thereof to carry on any other business or do any other act than that named therein.
(c) Whenever a license is levied in this title, there shall be collected both a state and county license for each place of business, except as specifically otherwise provided.
(d) In case it should become necessary to remove any business for which a license is required by this section from one location to another location in the same county, and such business is continued as the same kind and character and by the same person or firm as that carried on at the former location, another license shall not be required for such business for the same license year.
(e) There is hereby levied for the use and benefit of and to be paid to the county in which the license is issued, in addition to all license taxes levied under the provisions of Article 2 of this chapter, for state purposes and which are payable to the judge of probate or commissioner of licenses, a sum equal to 50 percent of the amount levied for state purposes, except as otherwise specifically provided.
(f) Any action to recover the amount due for any license, whether levied solely for state purposes or for state and county purposes, shall be instituted by the State of Alabama and may include all penalties and fees due by any person, in addition to the amount due for such license and interest thereon. The amount recovered in any such actions shall be paid to the state Department of Revenue, and if any portion of said license was levied for county purposes, such portion shall be remitted to the county in which such license was payable, and the department may from the amount of any penalties or fee thus recovered remit the amount, if any, due to the judge of probate, commissioner of licenses, or license inspector.
(Acts 1935, No. 194, p. 256; Acts 1939, No. 18, p. 16; Code 1940, T. 51, §831; Acts 1943, No. 546, p. 535; Acts 1951, No. 700, p. 1208; Acts 1984, No. 84-446, p. 1040, §7.)
Whenever, by virtue of the provisions of subsection (d) of Section 40-12-2, or the provisions of Article 2 of this chapter, both a state and county license tax are levied, the authority charged with the duty of collecting such license tax shall continue to collect the same, and of the total amount collected for such state and county license tax he shall distribute one half thereof to the state and one half thereof to the county, any other provision of law to the contrary notwithstanding.
(Acts 1955, No. 572, p. 1248.)
(a) In order to provide funds for public school purposes, the governing body of each of the several counties in this state is hereby authorized by ordinance to levy and provide for the assessment and collection of franchise, excise and privilege license taxes with respect to privileges or receipts from privileges exercised in such county, which shall be in addition to any and all other county taxes heretofore or hereafter authorized by law in such county. Such governing body may, in its discretion, submit the question of levying any such tax to a vote of the qualified electors of the county. If such governing body submits the question to the voters, then the governing body shall also provide for holding and canvassing the returns of the election and for giving notice thereof. All the proceeds from any tax levied pursuant to this section less the cost of collection and administration thereof shall be used exclusively for public school purposes, including specifically and without limitation capital improvements and the payment of debt service on obligations issued therefor.
(b) Notwithstanding anything to the contrary herein, the governing body shall not levy any tax hereunder measured by gross receipts, except a sales or use tax which parallels, except for the rate of tax, that imposed by the state under this title. Any such sales or use tax on any automotive vehicle, truck trailer, trailer, semitrailer, or travel trailer required to be registered or licensed with the probate judge, where not collected by a licensed Alabama dealer at time of sale, shall be collected and fees paid in accordance with the provisions of Sections 40-23-104 and 40-23-107, respectively. No such governing body shall levy any tax upon the privilege of engaging in any business or profession unless such tax is levied uniformly and at the same rate against every person engaged in the pursuit of any business or profession within the county; except, that any tax levied hereunder upon the privilege of engaging in any business or profession may be measured by the number of employees of such business or the number of persons engaged in the pursuit of such profession. In all counties having more than one local board of education, revenues collected under the provisions of this section shall be distributed within such county on the same basis of the total calculated costs for the Foundation Program for those local boards of education within the county.
(c) For the purpose of this section, the terms collection and administration shall have the same meaning as in Section 11-3-11.3(i).
(Acts 1969, Ex. Sess., No. 34, p. 85; Acts 1969, No. 688, p. 1226; Acts 1988, No. 88-336, p. 512, §1; Acts 1989, No. 89-691, p. 1358, §3; Acts 1995, No. 95-314, p. 634, §51; Act 2018-150, §1.)
It is the intent of the Legislature by the passage of Acts 1988, No. 88-336, to clarify existing provisions of law respecting the use of the proceeds from the taxes authorized to be levied in the aforesaid Section 40-12-4. To that end, the amendment of said Section 40-12-4 effected by Section 1 of Acts 1988, No. 88-336, shall be deemed declarative of existing law and shall therefore have both a prospective and a retroactive or retrospective operation. Without limiting the generality of the foregoing, the proceeds from any taxes heretofore levied pursuant to the provisions of said Section 40-12-4 may be used for any purpose specified in said section, as amended hereby.
(Acts 1988, No. 88-336, p. 512, §2.)
The state Department of Revenue shall, on request by resolution of the governing body of each of the several counties, administer and collect all taxes levied and assessed by the governing body of each of the several counties pursuant to and under the authority of Section 40-12-4.
(Acts 1971, No. 346, p. 634, §1.)
In all cases where the governing body of any of the several counties requests by resolution for the administration and collection of such taxes by the state Department of Revenue, the administration and collection thereof shall be made in the manner and in accordance with the provisions of Sections 11-51-180 through 11-51-185, in like manner as the same pertains to cities or towns as therein provided.
(Acts 1971, No. 346, p. 634, §2.)
(a) All such taxes collected and administered by the Department of Revenue shall be collected and remitted to the governing bodies of the various counties in the manner as provided for the collection and administration of taxes for cities or towns as provided in Sections 11-51-180 through 11-51-185, and the Department of Revenue is authorized to charge the counties for collecting and administering the taxes its actual cost, not to exceed two percent of the amount collected, and to do any and all things pertaining to the collection and administration of the taxes for the various counties as the department is authorized to do in collecting and administering taxes for cities and towns as provided in Sections 11-51-180 through 11-51-185.
(b) For the purpose of this section, the terms collection and administration shall have the same meaning as in Section 11-3-11.3(i).
(Acts 1971, No. 346, p. 634, §3; Act 2018-150, §1.)
Any person who shall knowingly make any false affidavit or certificate in connection with the ordering or procuring of a license to carry on any business or do anything in this state for which a license is required shall be guilty of a misdemeanor and, upon conviction, when the offense is not otherwise specifically provided for, shall be fined not less than $100 nor more than $1,000 and, at the discretion of the court, may be sentenced to hard labor for the county not to exceed six months as additional punishment.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §833.)
(a) It shall be unlawful for any person, firm, or corporation to engage in or carry on any business, or do any act for which a license is required now or may hereafter be by law, without having first paid for and taken out a license therefor in the manner in this title provided. Any person who is convicted of failing to take out and pay for the license required shall be fined not less than the amounts of all licenses required of him and, if convicted for refusing to take out the license shall, on conviction, be fined not less than the amount of the state and county license due by him and not more than $100 in addition thereto, and may be sentenced to hard labor for the county for not more than six months, all fines to be paid in money; and, when collected, two thirds shall be paid to the state and one third to the county.
(b) No person shall be allowed the privilege of selling throughout the state under one license except by special provisions of law.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §834.)
(a) The county commission of each county is hereby authorized and empowered to appoint a license inspector.
(b) It shall be the duty of the license inspector to scrutinize the records and stubs kept in the office of the probate judge and also to examine the license records of each city or town located in the county or counties of which he has been appointed license inspector; and, if it shall be reported to any license inspector or come to his knowledge that any person, persons, firms, or corporations have failed or refused to take out a license for a business or occupation for which a license is required by the state or have failed or refused to take out a license for operating any motor vehicle or trailer for which a license is required by law, the license inspector shall thereupon cite such delinquent to appear before the license inspector at the courthouse of the county in which such citation is issued and to show cause why the license or privilege tax required by law has not been paid and, at the same time, shall file with the probate judge of the county a copy of such citation showing service on the delinquent.
(c) If the license inspector shall discover any motor vehicle being operated without a proper or legal license, he shall cite the operator of the motor vehicle; and, in filing copy of such citation with the probate judge, he shall show on such citation the particular motor vehicle operated without legal license, as well as the operator thereof.
(d) The probate judge must in all cases, in addition to the other penalties required to be collected by him, collect the citation fee, if any, before issuing any license; and, in case of a motor vehicle where a license is taken out in the name of person not cited, the citation fee shall be collected if the citation filed shows the motor number of such vehicle. When any license is due the license inspector shall cause the delinquent to appear before the probate judge of the county and take out the same, but such probate judge shall not have the authority to determine the liability of such delinquent for such license and shall in each case issue a license to the applicant upon the payment by him of the amount or amounts prescribed by this title. If such delinquent shall fail or refuse to take out a license, the license inspector shall institute or cause to be instituted criminal proceedings against such delinquent before any court having jurisdiction of such offense. In case of emergency the license inspector must commence the criminal proceedings in the first place.
(e) All license taxes levied by this title, except as otherwise provided, shall be due and payable as of October 1 of each year and shall be delinquent November 1 thereafter. Where any license issuable by the probate judge or commissioner of licenses shall be delinquent, the same shall be subject to a penalty of 15 percent of the amount of the license, which penalty must be collected by the probate judge or commissioner of licenses when the license is taken out together with interest at six percent from the date of delinquency; provided, that the penalty for delinquency in payment of motor vehicle licenses shall in no case be less than $1.50.
(f) It shall be unlawful for any probate judge or other officer to fail to collect such penalties when issuing such license.
(g) The probate judge, in remitting such penalties, shall file report with the county commission, Comptroller, and with the Department of Revenue showing the amount of such penalties collected, from whom, and for what collected, and he shall remit to the county general fund all penalties collected. The probate judge shall remit to the county general fund all citation fees collected where the citation was served by the license inspector or his deputy.
(h) If a criminal prosecution shall be commenced either by affidavit and warrant, or information or indictment, 44 percent of the fine or penalty thereafter imposed in the case shall be paid to the county general fund. The remainder shall be paid to the Treasury of the state.
(i) The county commission may appoint deputy license inspectors, and the acts of such deputies shall be recognized as the acts of the license inspector.
(j) All citations to delinquents shall be served by any lawful officer or by the license inspector or his deputy for which a fee of $1.50 for each citation served shall be taxed against the delinquent.
(k) License inspectors shall have the same power to arrest persons violating the revenue laws of the state as is now vested in the sheriffs of the state and shall receive the same fees for such service.
(l) The Department of Revenue shall keep a record by counties in which, each month, shall be entered the number of licenses issued by the probate judge for each and every business or occupation for which a state license tax is required, and such record may be compared each month with the number of licenses issued by cities and towns for the same business or occupation.
(m) The license inspector shall be required to report to the Department of Revenue the reason for the failure to collect any licenses due the state which may be evidenced by the comparison of the report of the probate judge and the report made of licenses issued by cities or towns.
(n) It shall be the duty of the county commissions of the several counties to supply the license inspector with necessary citation blanks and other necessary forms to be paid for by the county.
(o) The county commission shall fix and pay the salary of the license inspector and his deputies and the expenses of his office.
(p) The provisions of this section shall not repeal, modify, or prohibit any presently existing or future local act or general act of local application affecting the office of license inspector or which establishes any office or position which encompasses the duties of license inspector in any county.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §835; Acts 1951, No. 610, p. 1053; Acts 1990, No. 90-558, p. 948.)
Before entering upon the duties of their office, all license inspectors shall execute to the State of Alabama a bond, to be approved by the Governor, in amounts to be fixed by the Department of Revenue, for the faithful performance of their duties.
(Acts 1943, No. 122, p. 123; Acts 1961, Ex. Sess., No. 208, p. 2190.)
Every license granting authority to engage in or exercise any business, employment, or profession, unless expressly authorized elsewhere or otherwise, shall designate the place of such business, employment, or profession at some specified house or other definite place within the county of the probate judge granting it. Engaging in or exercising any such license, business, employment, or profession elsewhere than at such house or definite place, unless expressly authorized elsewhere or otherwise by law, shall be held to be without license. A license which does not specify such house or definite place where business, employment, or profession is limited thereto by law shall be void.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §836.)
Where any person, firm, or corporation is engaged in more than one business which is made by the provisions of law subject to taxation, such incorporated company or person shall pay the tax provided by law on each branch of the business.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §838.)
Wherever in this title two or more licenses on the same business or occupation are required, it is hereby declared to be the intention of the Legislature that all such licenses as are herein levied shall be collected without credit or offset, except where specific provision is made therefor.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §839.)
(a) Every license shall be held to confer a personal privilege to transact the business, employment, or profession which may be the subject of the license and shall not be exercised except by the person, firm, or corporation licensed, unless specifically authorized by law to do so.
(b) When a business or privilege for which such license is issued is, under actual sale, transferred to a new ownership, a transfer of license may be effected by application to the probate judge originally issuing such license and the payment of a fee of $1.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §840; Acts 1984, No. 84-446, p. 1040, §7.)
In all cases where the amount to be paid for a license depends upon the amount of capital invested, the value of the goods or stock, the amount of sales or receipts, or any other fact or condition hereinbefore recited, it shall be the duty of the person applying for such license to render to the probate judge a sworn statement of the amount of the capital invested, of the value of the goods or stock or amount of sales or receipts, and to make under oath such further proof or affidavit as may be required by the probate judge to determine the character of the license and the amount to be paid for the same.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §841.)
Whenever this title fixes a license for a business or occupation which is located without the corporate limits of an incorporated municipality but within a fixed distance of such municipality and fixes the amount of the license by the population of such municipality, in the event there is more than one municipality within such distance of the location of such business, then the amount of the license shall be that which is provided for by the nearest municipality.
(Acts 1935, No. 194, p. 256; Acts 1936, Ex. Sess., No. 124, p. 82; Code 1940, T. 51, §842.)
Any person who acts as agent for any person, firm, or corporation liable for the payment of a license or privilege tax, without said license or privilege tax having been paid, shall on conviction be fined in a sum equal to the state and county license, and not more than $100 in addition thereto, and may also be sentenced to hard labor for the county for not more than six months.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §843.)
It shall be the duty of the Department of Finance to prepare and have printed suitable forms of licenses and as often as need be to furnish to the several probate judges blank licenses signed by the director sufficient for the probable wants of their respective counties, taking their receipts for the same. Each such blank shall have a stub attached thereto, on which shall be printed such matter as the Department of Finance may prescribe, with appropriate blank spaces to be filled in by the probate judge upon the issuance of any license. The Department of Finance shall take and file in the director’s office a proper receipt from the probate judge for the blank licenses furnished him.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §844.)
Upon the issuance of any license the probate judge must, before detaching the license from the stub, fill up the blank spaces in the stub to correspond in all respects with the license as issued and sign his name thereto.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §845.)
The probate judge shall keep in a book prepared for that purpose an accurate account of all licenses received by him from the Department of Finance, and of the disposition made of them, and of all money received from the licenses issued by him, and make report thereof to the Department of Finance within 10 days after the expiration of the fiscal year, at which time he shall return to the Department of Finance all unused licenses and stubs, or account to the Department of Finance for all unused licenses, and shall also return to the Department of Finance the stubs of all licenses issued by him, and the probate judge shall on demand of the Department of Finance, at any time, exhibit to him or to any agent appointed by the Department of Finance for that purpose such license record and the original of all licenses then remaining in his hands and all stubs of licenses issued.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §846.)
Within 20 days after the end of each month, the probate judge must remit to the State Treasurer at the expense of the state all money received by him for licenses belonging to the state and pay to the county treasurer all the money received by him for licenses belonging to the county, and within the same time the probate judge shall forward to the Comptroller and to the Department of Revenue each certified list of all licenses issued by him, stating thereon for what business issued, amount collected for each license, from whom collected, and the date of such collection; and, if no licenses have been issued, he shall report that fact; provided, that for the months of October, November, and December of each calendar year, the probate judge shall be granted an additional period of 10 days in which to make the remittances and certification of lists above specified and for such months shall be required to make such remittances and certification of lists within 30 days after the end of each of such months. The probate judge shall be entitled to receive five percent of the amount of money collected for licenses due the state, which he may deduct from his remittance to the State Treasurer, and he shall be entitled to the same amount as compensation for collecting licenses due the county, which amount he may deduct from the payment made by him to the county treasurer, but he shall not be allowed any commission on any money not remitted by him within 20 days from the end of the month, except as otherwise provided herein with reference to the months of October, November, and December of each calendar year, for which months the probate judge shall be entitled to the commissions herein provided if such remittances be made within 30 days after the end of each such months. If the probate judge fails to comply with the provisions of this section within five days after the date on which he is required to make such report and to remit the money collected by him, the Comptroller shall forthwith report the fact to the Governor, who shall cite such probate judge to show why he has not made report of the lists of licenses and paid over the amount collected by him as required by law, and if such probate judge fails to show sufficient cause for such failure, the Governor shall direct the Attorney General to institute impeachment proceedings against him before the Supreme Court.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §847; Acts 1951, No. 854, p. 1483; Acts 1977, No. 165, p. 224; Acts 1984, No. 84-446, p. 1040, §7.)
(a) Any person who by a mistake of fact or law has paid to the probate judge or the commissioner of licenses money that was not due from him for a license or an amount in excess of that required by law for the business or occupation to be carried on by such person under the license shall be entitled to have refunded the money incorrectly paid, less the issuance fee and commission retained by the judge of probate or the commissioner of licenses.
(b) Any petition for refund pursuant to subsection (a) shall be filed directly with the department within the time allowed for refunds in Chapter 2A of this title, and thereafter shall be administered as provided for other refunds in Chapter 2A of this title.
(c) In case of the issuance of a license for less than the amount due therefor, upon the payment of the additional amount due for such license an additional license may be issued, in such manner as to allow credit for the amount previously paid by the licensee, and there shall be endorsed on the face of such additional license the words “Additional To License No. _____.”
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §848; Acts 1943, No. 544, p. 533; Acts 1992, No. 92-186, p. 349, §23.)
If the petition for refund allowed by Section 40-12-23 is approved, in whole or in part, the department shall certify the amount which it approves to be refunded by the state and county. The state Comptroller shall draw a warrant payable to the applicant for the amount of the refund to be made by the state, and the county commission of the county in which such payment was made shall draw a warrant upon the county treasurer or county treasury payable to the applicant for the amount to be refunded by such county. Claims for refund hereunder shall not be subject to assignment, except assignments resulting by operation of law.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §849; Acts 1943, No. 544, p. 533; Acts 1992, No. 92-186, p. 349, §24.)
Unless otherwise provided, if any business licensed by this title shall commence after April 1 in any year, the amount of the license or privilege tax shall be one half of the year’s license or privilege tax. In all other cases the license shall be taken out for the full term of one year, unless a shorter term is fixed by the provisions of this title. In all cases where the amount of license is rated according to the population of the town, city, or county, the population of such town, city, or county as fixed by the last preceding United States census shall govern.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §850.)
Except as otherwise provided, all licenses or privilege licenses payable hereunder shall be due on October 1 of each year and shall be for one year, ending September 30 following, and shall be delinquent on November 1 of each year.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §851.)
If the law annexes a penalty for each or every violation of its provisions, or for each separate offense, it shall be lawful to hold that each day’s continuance in the exercise of any business, employment, or profession, for which a license is required, constitutes a separate offense.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §837.)
All occupation license or privilege taxes imposed by the state for engaging in any business dealing with timber or timber products shall be paid into the Conservation Fund of the Department of Conservation and Natural Resources.
(Acts 1935, No. 500, p. 1078; Code 1940, T. 51, §911.)
In addition to the criminal penalty provided by Sections 40-12-400 and 40-12-424, any person who willfully fails to comply with the provisions of Article 8 and Article 9 of this chapter shall for each such failure be subject to a penalty of not less than $500 nor more than $1,000.
(Acts 1991, No. 91-321, p. 595, §2.)
(a) The Department of Revenue is hereby authorized to promulgate reasonable rules and regulations relating to the administration and enforcement of the provisions of this act and those other provisions of this chapter relating to the licensing of automobile and other motor vehicle dealers not in conflict with the specific provisions hereof.
(b) Every applicant for a new license and renewal issued pursuant to Articles 2, 6, 8, and 9 of this chapter shall provide to the issuing agent the applicant’s federal employer identification number or, if the applicant is a sole proprietorship and does not possess same, the applicant’s Social Security number. The federal employer identification number or Social Security number shall be included with the license information reported to the department by each county.
(c) All business privilege license application information for new licenses and renewals shall be transmitted electronically to the department by the probate judge or other county licensing official in a manner as prescribed by the department.
(Acts 1991, No. 91-321, p. 595, §3; Act 2014-430, p. 1581, §1.)
No provision or provisions in this chapter shall prevent the Alabama Legislature from enacting, imposing, and establishing occupational taxes, which are to be paid to the county or otherwise, and are imposed on an individual’s engaging in any occupation, business, or profession without any regard to whether he or she has a license to, or pays a license tax or fee in order to, carry on that occupation, business, or profession.
(Act 2001-383, p. 488, §1.)
Every person, firm, company, corporation or association, receiver or trustee, but not a governmental subdivision, engaged in any business, vocation, occupation, calling, or profession herein enumerated or who shall exercise any privilege hereinafter described for which a license or privilege tax is required shall first procure a state license, and a county license when so required, and shall pay for the same or shall pay for the exercise of such privilege the amounts hereinafter provided, and comply with all other provisions of this title.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §450.)
Abstract companies and persons engaged in the business of furnishing abstracts of title shall pay the following license taxes: In towns or cities of 100,000 inhabitants or more, $75; in towns or cities of 50,000 inhabitants and less than 100,000 inhabitants, $50; in towns or cities of 20,000 inhabitants and less than 50,000 inhabitants, $40; in towns or cities of 10,000 inhabitants and less than 20,000 inhabitants, $25; in towns and cities of 5,000 inhabitants and less than 10,000 inhabitants, $20; and in all other places, whether incorporated or not, $10. The payment of the license tax required by this section shall authorize the doing of business only in the town, city, or county where paid; provided, that this section shall not apply to regular licensed practicing attorneys who furnish abstracts as a part of their general practice.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §451.)
Each person manufacturing acetylene gas and carbide shall pay the following license tax: In towns of over 25,000 inhabitants or within five miles thereof, $50; all other places, whether incorporated or not, $25.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §452.)
Each professional actuary, auditor, or public accountant shall pay a license tax of $25 to the state, but no license tax shall be paid to the county. If such business is conducted as a firm or as a corporation in which more than one person above named is engaged, each person so engaged shall pay a license tax of $25.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §453.)
Every private examining or collecting firm shall pay a separate annual state license fee of twenty-five dollars ($25), no later than October 1 of each year or within 30 days of entering into a contract with a county or municipality, with proceeds to be paid by the state Comptroller to the Alabama Local Tax Institute of Standards and Training established under Section 40-2A-15, for the administration of the institute’s examiner certification program. If the firm has engaged more than one examiner, each such person so engaged shall pay the separate license fee of twenty-five dollars ($25) within 30 days of being hired by the private examining or collecting firm. No private examining or collecting firm shall be issued a license unless it is in compliance with the provisions of Chapter 2A and this section.
(Act 98-191, p. 297, §6.)
Each person engaged in the business of selling adding machines, calculating machines, comptometers, billing machines, bookkeeping machines, cash registers, typewriters, or similar machines shall pay the following annual privilege tax: In counties of over 100,000 inhabitants, $100; in counties of over 60,000 inhabitants and not over 100,000 inhabitants, $60; in counties of over 40,000 inhabitants and not over 60,000 inhabitants, $40; in counties of 40,000 inhabitants or less, $25.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §454.)
All bill posting and advertising companies displaying advertisements in public places, including streetcars, and each person engaged in the business of advertising or bill posting shall pay the following license taxes: In counties having 200,000 inhabitants or over, $150; in counties of less than 200,000 inhabitants and as many as 100,000 inhabitants, $125; in counties of less than 100,000 inhabitants and as many as 75,000 inhabitants, $100; in counties of less than 75,000 inhabitants and as many as 50,000 inhabitants, $50; in counties of less than 50,000 inhabitants and as many as 30,000 inhabitants, $25; in counties of less than 30,000 inhabitants, $15.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §456.)
Each person engaged in the business of selling or installing air-conditioning plants or equipment which use or require the use of water connections shall pay, in the county in which is located his principal office, an annual state privilege tax of $100 and a county privilege tax of $50; provided, that in each other county in which such person engages in the business of selling or installing such air-conditioning plants or equipment, he shall pay a state license tax of $10 and a county license tax of $5; provided further, that no person subject to the provisions of this section shall be required to pay the license tax levied hereunder in any county other than where he maintains a regular and established place of business for the purpose of selling or installing such air-conditioning plants or equipment.
Any person other than those persons licensed under paragraph one hereof engaged in the business of selling or installing air-conditioning plants or equipment which do not use or require the use of water connections shall pay an annual state privilege license tax for each place of business as follows: In cities of 100,000 inhabitants or more, $30; in cities of 50,000 and less than 100,000 inhabitants, $20; in cities of 10,000 and less than 50,000 inhabitants, $10; in places of less than 10,000 inhabitants, whether incorporated or not, $5.
As used in this section the term “air-conditioning” means the artificial lowering or raising of temperature or the supplying of fresh air by artificial methods.
Upon the payment of the license prescribed by Section 40-12-84, a contractor who installs air-conditioning plants or equipment shall not be required to pay the license prescribed by this section, nor shall any person who has paid the license prescribed by this section, who accepts contracts only for the installation of air-conditioning plants and equipment and no other type of construction work be required to pay the license prescribed by Section 40-12-84.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §457; Acts 1951, No. 582, p. 1017; Acts 1955, 2nd Ex. Sess., No. 71, p. 184.)
Owners and operators of permanent amusement parks which shall be open for the public for not more than five months of each year may be exempted from payment of the license or privilege taxes on amusements or entertainments licensed by this title; provided, that they take out and pay for a license to operate a permanent amusement park at the following rates: In cities or towns of less than 5,000 inhabitants, or within five miles thereof, $25; in cities or towns of 5,000 inhabitants and less than 15,000 inhabitants, or within five miles thereof, $50; in cities of 15,000 and less than 25,000 inhabitants, or within five miles thereof, $100; in cities of 25,000 or more inhabitants, or within five miles thereof, $200. The provision of this title permitting the payment of a half-year license after April 1 shall not apply to this section. No license shall be paid under this section by any town or city which itself owns and operates an amusement park.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §458.)
Each architect practicing his profession for the public shall pay to the state a license tax of $25, but no license shall be paid to the county. If such business is conducted as a firm or as a corporation in which more than one person above named is engaged, each person so engaged shall pay the amount provided above.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §459.)
(a) Each attorney engaged in the practice of law shall pay an annual license tax to the state, but none to the county. On October 1, 2006, and each year thereafter, the annual license tax shall be three hundred dollars ($300). On and after May 15, 2012, the Board of Bar Commissioners shall by rule determine the amount of the annual license tax. If business is conducted as a firm or as a corporation in which more than one lawyer is engaged, each lawyer shall pay such license tax, but no lawyer shall be required to pay a license tax until the first day of October following admission to the bar. The license tax shall be paid to the Secretary of the Board of Bar Commissioners of the Alabama State Bar. The funds collected for the issuance of the license tax levied shall constitute a separate fund to be disbursed on the order of the Board of Commissioners of the Alabama State Bar. As soon after the first day of each November as practicable, the Secretary of the Alabama State Bar shall certify to the presiding judge of the circuit court having jurisdiction in the county the names of attorneys who have paid the license fee.
(b) The license taxes shall be due and payable on October 1 of each year and shall be delinquent on the following November 1. If a license is delinquent, the Secretary of the Board of Bar Commissioners of the Alabama State Bar shall assess and collect a penalty of 15 percent of the amount of the license. The penalty shall be paid when the license is issued.
(c) Section 40-12-10, relating to the collection and distribution of business license taxes shall not be applicable to license taxes provided in subsection (a).
(Acts 1935, No. 194, p. 256; Acts 1939, No. 551, p. 871; Code 1940, T. 51, §460; Acts 1951, No. 186, p. 437; Acts 1959, No. 156, p. 682; Acts 1966, Ex. Sess., No. 287, p. 430; Acts 1971, No. 958, p. 1716; Acts 1979, Ex. Sess., No. 79-27, p. 37; Acts 1985, 1st Ex. Sess., No. 85-119; Acts 1992, No. 92-600, p. 1246, §1; Act 2006-525, p. 1221, §1; Act 2012-475, p. 1318, §1.)
Auctioneers and apprentice auctioneers shall pay annual license taxes in accordance with Chapter 4 of Title 34.
Each person dealing in, selling, or purchasing for resale automobiles, trucks, or other self-propelled vehicles shall pay an annual state license as provided in this section and shall pay a county license tax of one half the amount of his state license tax for the use of the counties. The following license taxes shall be paid by each dealer, each agent, or other person, except agents of a dealer who have procured the licenses required in the following section: In cities and towns of 50,000 or more inhabitants, $140; in cities and towns of over 25,000 and not exceeding 50,000 inhabitants, $100; in cities and towns of over 10,000 and not exceeding 25,000 inhabitants, $80; in cities and towns of over 5,000 and not exceeding 10,000 inhabitants, $65; in cities and towns of over 2,500 and not exceeding 5,000 inhabitants, $50; in cities and towns of 2,500 and less inhabitants, $30; in all other places, whether incorporated or not, $30; provided, that a person maintaining more than one place of business in the same city or town for the sale of automobiles, trucks, or other self-propelled vehicles shall pay an additional license tax of one half of the license tax levied on his principal place of business for each additional place of business; provided, that the licensed dealer may maintain a used car lot for the sale or use of secondhand cars without the payment of an additional license tax. Upon the payment of the license tax prescribed in this section, such dealer shall not be required to pay the license tax as provided in Sections 40-12-53 through 40-12-55, 40-12-60, 40-12-62 and 40-12-169.
(Acts 1939, No. 370, p. 497; Code 1940, T. 51, §462.)
Each person selling motor vehicle accessories, including automobile radios, air-conditioning units, motor vehicle parts, motor vehicle batteries and tires, shall pay the following annual license tax in cities of:
| | Over 100,000 population | | --- | | 25,000 to 100,000 population | | 5,000 to 25,000 population | | 2,000 to 5,000 population | | All other places, whether incorporated or not | | | $40.00 | | --- | | 30.00 | | 20.00 | | 10.00 | | 5.00 | | | --- | --- |
Regularly licensed filling stations or garages are not required to pay the above accessories license tax if their stock of accessories at any time does not exceed the wholesale value of $75.
(Acts 1935, No. 194, p. 256; Acts 1939, No. 596, p. 966; Code 1940, T. 51, §465; Acts 1959, No. 476, p. 1195.)
Garages or shops where automobiles or other motor vehicles are repaired, painted, trimmed, or welded for the public shall pay the following license taxes: Each shop where the work is done by one man, $5; each shop where the work is done by two men, $10; each shop where the work is done by more than two men shall pay a license of $10, and an additional license of $5 for each workman in excess of two so employed. Where garage or shop owners do work in shops they shall be counted as workmen. The maximum number of men employed at any time during the license year shall be the basis of computing the license due.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §466.)
For each garage where a charge is made for the storage of motor vehicles there shall be a license tax of $2 for each 1,000 square feet or fraction thereof up to 50,000 square feet. On each 1,000 square feet or fraction thereof in excess of 50,000 square feet, the license tax shall be $1 on each additional square footage of space.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §467.)
Each lot or place other than a storage garage where a charge is made for storage of motor vehicles shall pay the following annual license tax: For each 1,000 square feet or major fraction thereof up to 50,000 square feet, $1; on each 1,000 square feet or major fraction thereof in excess of 50,000 square feet the license tax shall be $.50.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §468.)
Retreading or tire rebuilding shops where motor vehicle tires are retreaded shall pay a license tax of $20.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §469.)
Each person engaged in the business of operating a barbershop shall pay a license fee of $2.50 for each chair.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §470.)
Each owner or lessee of a baseball park where admission fees are charged shall pay the following license taxes: In cities or towns of less than 10,000 inhabitants, or within five miles thereof, $10; in cities or towns of 10,000 and less than 25,000 inhabitants, or within five miles thereof, $25; in cities and towns of 25,000 inhabitants and less than 50,000 inhabitants, or within five miles thereof, $50; in cities and towns of 50,000 inhabitants or more, or within five miles of any such city or town, $100; provided, that when baseball is allowed by law to be played in any city or town on Sunday, the license tax therefor in such city or town shall be double the amount hereinbefore named.
This section shall not apply to baseball parks owned or maintained in good faith by educational institutions located in this state. The provisions of this title permitting the payment of a half-year license after April 1 shall not apply to this section.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §471.)
Each battery shop for the repairing and recharging and selling of batteries shall pay the following license taxes: In cities and towns of over 60,000 inhabitants, $20; in cities and towns of 16,000 inhabitants and not over 60,000 inhabitants, $15; in cities and towns of 5,000 and not over 16,000 inhabitants, $10; in all other places, whether incorporated or not, $5. The above license tax shall not apply unless a complete battery service is rendered. Each manufacturer of batteries shall pay a license tax of $100; provided, that such manufacturer paying the license hereunder shall not be required to pay the license under Section 40-12-172.
(Acts 1935, No. 194, p. 256; Acts 1939, No. 597, p. 967; Code 1940, T. 51, §472; Acts 1943, No. 567, p. 569.)
Each person operating what is generally known as a beauty parlor or other place where hairdressing, facial treatments, manicuring, or hair waving is done shall pay a license tax of $10 and for each operator so employed, as follows: In cities of more than 60,000 inhabitants, $6; in cities of less than 60,000 inhabitants and all other places whether incorporated or not, $4. This schedule of fees shall apply to beauty parlor colleges where said colleges engage in beauty parlor work for which a charge is made or material used is charged therefor.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §473.)
Each person other than a licensee under Section 40-12-51 engaging in the business of dealing in, renting, or hiring bicycles or motorcycles shall pay the following license tax: In cities or towns over 20,000 inhabitants, $15; in cities or towns of 10,000 to 20,000 inhabitants, $10; in all other places, whether incorporated or not, $5.
(Acts 1935, No. 194, p. 256; Acts 1936-37, Ex. Sess., No. 156, p. 178; Code 1940, T. 51, §474; Act 2002-256, p. 537, §1.)
Each person engaging in the business of making blueprints or developing the same from tracings or drawings for pay shall pay a license tax of $15 for engaging in such business.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §475.)
Each person engaged in the business of making bonds and charging for the same, except guaranty companies or corporations otherwise specifically licensed, shall pay a license tax of $100 per annum. The payment of the license tax required by this section shall authorize the doing of business only in the town, city, or county where paid. No person engaged in the business of making bonds and charging for the same shall be exempt from paying said license tax.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §477.)
Each person engaged in manufacturing, producing, or bottling in bottles or other containers, soda water, carbonated drinks, fruit juices or imitations thereof, flavored milk, and any preparations known as soft drinks shall not use any machine, machines, or apparatus for the filling or bottling of the same until such person shall have first applied, paid for, and obtained from the probate judge a license. The amount of the license tax for each machine shall be graded or proportioned as follows: On each machine bottling, per minute, less than 16 bottles, $40 state license tax and $40 county license tax; 16 and less than 30 bottles, $90 state license tax and $90 county license tax; 30 and less than 40 bottles, $140 state license tax and $140 county license tax; 40 and less than 60 bottles, $200 state license tax and $200 county license tax; and 60 and less than 75 bottles, $300 state license tax and $300 county license tax; 75 and less than 100 bottles, $325 state license tax and $325 county license tax; 100 and less than 150 bottles, $450 state license tax and $450 county license tax; 150 bottles and over, $500 state license tax and $500 county license tax. Where any person has within his bottling plant or place of manufacture more than one bottling machine, then such person shall pay the license herein specified upon every such bottling machine or apparatus whether in actual operation or not; provided, that such bottling machine or apparatus is in an operating condition.
The person applying for such license shall file an application, under oath, stating the name, make, model of his machine, name and address of manufacturer, whether it is low-pressure equipment or high-pressure equipment, or otherwise, contents, capacity of bottles used, and giving its bottling capacity.
“Capacity” shall be based on the number of six and one-half ounce bottles that may be bottled per minute as rated by the manufacturer, or the number of such bottles that are bottled per minute as determined by inspection and actual count, whichever may be greater. Where the machine or apparatus used in the filling and bottling of products covered by this section is also used in the filling and bottling of dairy products, the “capacity” of such machine or apparatus shall be based upon the percentage of time such machine or apparatus is used in the daily operation for the bottling of the products covered by this section. The percentage of time which the machine or apparatus is used for the bottling of products covered by this section shall be determined by inspection and actual count, and where the percentage of time used in the bottling of products covered in this section shall be 20 percent or less of the total operational time, the person so engaged in the bottling of products covered by this section shall pay 20 percent of the amount of the license as proportioned above based upon the number of six and one-half ounce bottles that may be bottled per minute as rated by the manufacturer. Any person using his bottling machinery for the bottling of dairy products and products covered by this section shall be taxed only upon that machine or machines which are used in the bottling of products covered by this section regardless of the number of machines which may be located within his bottling plant or place of manufacture. Bottlers paying the license tax hereunder where such business is engaged in bottling drinks exclusively shall be exempt from payment of transient dealer’s license levied under Section 40-12-172 and wholesale bottler’s license levied under Section 40-12-70.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §476; Acts 1945, No. 504, p. 729; Acts 1953, No. 704, p. 960.)
Bowling alleys or tenpin alleys for the use of which money or other compensation is charged shall pay a license tax of $10 for each alley.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §478.)
Each person, other than a merchant paying an ad valorem tax on his stock of goods, who shall as agent or broker sell iron, railway supplies, furnace supplies, or mining supplies, shall pay a privilege tax of $25.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §479.)
Each person operating a manufactory plant for the making of brooms, brushes, mops, or similar articles shall pay a license tax of $10; provided, that this shall not apply to blind persons. Such license tax shall not apply where not more than three persons are employed for the making of said brooms.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §480.)
(a) Each person engaged in the business of selling at retail cereal beverages, carbonated or other soft drinks in bottles, cans, or other sealed containers shall pay an annual license tax of $2.50.
(b) Each person engaged in the retail business of selling soft drinks in whatever form, by means of taps or other dispensing devices, shall pay annually the following license taxes: In unincorporated places, and towns and cities of not over 5,000 inhabitants, $10; in cities and towns of over 5,000 and not over 15,000 inhabitants, $15; in cities of over 15,000 and not over 25,000 inhabitants, $20; in cities of more than 25,000 inhabitants, $25. A person licensed under this subsection shall be thereby also licensed to sell at retail cereal beverages, carbonated or other soft drinks in bottles, cans, or other sealed containers without the payment of the license imposed in subsection (a) of this section.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §482.)
Each person engaged in the business of selling at wholesale nonalcoholic, carbonated, or other soft drinks shall pay an annual license tax of $50; provided, that bottlers who have taken out the bottle license for operating plants in this state shall not be liable under this section, nor shall such bottlers be liable for any county or state license under Section 40-12-174, nor as transient vendors or dealers or peddlers.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §483.)
(a) In lieu of any other privilege license fees levied under the revenue laws of the State of Alabama, each person who holds a certificate as a certified public accountant and who is a resident of the State of Alabama and who is engaged in the practice of public accounting in the State of Alabama shall pay an annual license fee of $25, but no license fee shall be paid to the county. Such license shall be obtained from the probate judge or licensing agency in the county where the business of a certified public accountant is located and shall be due and delinquent as provided by Section 40-12-26. All money paid into the treasury for license under this section shall be deposited in the State Treasury to the credit of the Alabama State Board of Public Accountancy and shall constitute a separate fund to be disbursed as provided in subsection (b) of this section.
(b) The fund provided by subsection (a) of this section shall be used by the Alabama State Board of Public Accountancy to defray the expenses for administering and enforcing the laws of the State of Alabama pertaining to the practice of public accounting and the other necessary purposes and expenses of said board not otherwise available and provided pursuant to Section 34-1-3; and the said Alabama State Board of Public Accountancy shall have the power to direct the disbursement of said fund, which shall be paid on the warranty of the state Comptroller upon certificate or voucher of the secretary of said board, approved by the chairman or vice-chairman of said board. No funds shall be withdrawn or expended except as budgeted and allotted according to the provisions of Article 4 of Chapter 4 of Title 41, and only in amounts as stipulated in the general appropriations bill.
(c) No license fee as herein provided shall be due or payable by any certified public accountant employed by any state or federal government agency, educational institution, or industry, who does not perform public accounting service for which he is paid.
(Acts 1969, No. 269, p. 599, §§1-3.)
Each retail dealer in cigars, cheroots, stogies, cigarettes, smoking tobacco, chewing tobacco, or snuff, or any substitute therefor, either or all, shall pay to the state the following privilege license tax: In cities of 25,000 inhabitants and over, $15; in cities or towns of 10,000 inhabitants and less than 25,000 inhabitants, $10; in cities or towns of 5,000 inhabitants and less than 10,000 inhabitants, $5; in cities or towns of 2,000 inhabitants and less than 5,000 inhabitants, $3; in all other places, whether incorporated or not, $2. This privilege license tax is levied on each place of business owned or operated by retail dealers, whether under the same roof or not. The phrase “retail dealer” as used in this section shall include every person, firm, corporation, club, or association, other than a wholesale dealer as defined in Section 40-12-73, who shall sell or store or offer for sale any one or more of the articles enumerated herein, irrespective of quantity or amount, or the number of sales. The privilege license tax herein defined shall be in addition to the sales tax as provided in Section 40-25-2.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §484.)
Each wholesale dealer in cigars, cheroots, stogies, cigarettes, smoking tobacco, chewing tobacco, snuff, or any substitute therefor, either or all, shall pay one privilege license tax to the state of $100 and $5 to each county in which such wholesale dealer does business. The phrase “wholesale dealer” as used in this section shall include persons, firms, corporations, clubs, or associations who shall sell or store or offer to sell any one or more of the articles enumerated herein to retail dealers for the purpose of resale only. The privilege license tax herein levied shall be in addition to the sales tax as provided in Section 40-25-2.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §485.)
Each person operating a circus shall pay the following license tax: Where the seating capacity of the circus is less than 2,000, $50; where the seating capacity is 2,000 and less than 4,000, $100; where the seating capacity is 4,000 or more, $200; and the license tax hereinabove provided shall include the license tax for a menagerie accompanying the circus. The payment of the proper license tax, as is herein provided, will entitle the circus to operate for one week in the same place and at the same time on the same license.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §486; Acts 1953, No. 745, p. 1008; Acts 1967, No. 411, p. 1067.)
Each person conducting what is commonly known as a cleaning or pressing business, where wearing apparel is cleaned or pressed, shall pay a license tax of $5 in all places of less than 10,000 inhabitants, whether incorporated or not; in cities or towns of 10,000 inhabitants and less than 50,000 inhabitants, $10; in cities of 50,000 inhabitants or more, $15; provided, that where dyeing is done singularly or in conjunction with the cleaning and pressing business, $10 additional. Each place maintained or operated for the reception or collection of such articles and not at the location of such pressing, cleaning, or dyeing plant paying a license as such shall pay a license tax of $5. A person not having a place of business within the State of Alabama where such work is actually performed shall pay a license tax of $15 for the reception and collection of such articles.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §487.)
[Repealed]
Repealed by Act 2015-70 effective April 21, 2015.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §488.)
[Repealed]
Repealed by Act 2015-70 effective April 21, 2015.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §489.)
Each manufacturer of coffins or caskets shall pay a license tax of $100. This license tax shall not apply to any person who manufactures coffins or caskets without the assistance of any other person or without the assistance of hired labor and which coffins or caskets retail for not exceeding $10. This section shall not apply to local wood-working plants or carpenter shops whose principal business is not the manufacturing of coffins or caskets and who make coffins for paupers for local governing bodies or for charity.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §490.)
Each dealer in coffins or caskets and each agent or person taking or soliciting orders for retail deliveries of coffins or caskets shall pay the following license tax: In unincorporated places or towns of 1,000 inhabitants or less, $10; in towns and cities of over 1,000 inhabitants and not exceeding 7,000 inhabitants, $20; in cities of over 7,000 and not exceeding 35,000 inhabitants, $50; in cities of over 35,000 inhabitants, $100.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §491.)
Each collection agency shall pay the following license tax: In towns and cities of 20,000 or more inhabitants, $100; in towns and cities of less than 20,000 inhabitants, $25. Each person who shall employ agents to solicit claims for collection from persons, firms, or corporations in the state shall be deemed a collection agency within the meaning of this section. This section shall not apply to any person who is excluded from the definition of the term “debt collector” under the federal Fair Debt Collection Practices Act, 15 U.S.C. § 1692a(6).
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §492; Act 2001-454, p. 595, §1.)
Each commission merchant or merchandise broker shall pay one state license tax of $25 and one county license tax of $12.50. Such payment shall be made in the county in which such commission merchant or merchandise broker maintains his principal place of business. Such license shall authorize such commission merchant or merchandise broker to do business in any county of the state without the payment of any further state or county license tax. The payment of the license tax in one county of the state as evidenced by the license certificate of the probate judge shall be sufficient.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §493; Acts 1943, No. 418, p. 384.)
For each concert, musical entertainment, public lecture, or other public entertainment where charges are made for admission, or for the use of any instrument or device or the participation in any exercises or entertainment not given wholly for charitable, school, or religious purposes and not otherwise provided for, the license tax shall be $10; but this provision shall not apply to exhibitions or entertainments given in theaters when the owners or managers thereof have taken out licenses as owners or managers; and provided further, that this license tax shall not be charged for any lecture course given as part of the course of instruction in any educational institution; provided further, that the provisions of this section shall not apply to chautauquas, lecture lyceums, or exhibits held under the auspices of religious or charitable associations. In all cases where such exhibitions shall be in the nature of a continuous show or performance, the license tax shall be $5 per day, $15 per week or $30 per month.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §494.)
(a) Each person engaged in discounting or buying conditional sales contracts, drafts, acceptances, notes, or mortgages on personal property shall pay an annual license tax as follows: Employing capital of $50,000 or less, $5; $50,000 to $100,000, $10; $100,000 to $150,000, $15; $150,000 to $300,000, $25; $300,000 to $500,000, $100; $500,000 and up, $300, the payment of which shall be sufficient to engage in business in any county of the state except the county in which the principal office is located, in which case the county license tax shall be one half of the above schedule.
(b) Each person engaging in business of lending money on salaries or making industrial or personal loans shall pay an annual license tax of $100 for each county in which he engages in business.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §495; Acts 1953, No. 680, p. 934.)
Any person, firm, or corporation accepting orders or contracts for doing any work on or in any building or structure requiring the use of paint, stone, brick, mortar, wood, cement, structural iron or steel, sheet iron, galvanized iron, metallic piping, tin, lead, electric wiring, or other steel, or any other building material, or accepting contracts to do any paving or curbing on sidewalks or streets, public or private property, using asphalt, brick, stone, cement, wood, or other composition, or accepting orders for or contracts to excavate earth, rock, or other material for foundations or any other purpose, or accepting orders or contracts to construct any sewer of stone, brick, terra cotta, or other material, or accepting contracts to construct highways, bridges, dams, or railroads, shall be deemed a contractor. Every contractor shall procure from the probate judge of the county in which he has his principal office a license to carry on the business of a contractor; provided, that if such contractor has no such office in this state, then he shall procure such license from the probate judge of the county where the contract is to be performed. Every such contractor shall pay a license tax to be ascertained on the basis of the gross amount of all orders or contracts accepted, exclusive of orders or contracts pertaining to state or county road and bridge projects, as follows: If the gross amount of all orders or contracts accepted aggregates $5,000 and not exceeding $10,000, he shall pay the sum of $10; if the amount of such orders or contracts is more than $10,000 and does not exceed $20,000, $15; if the amount of such orders or contracts exceeds $20,000 and does not exceed $50,000, $25; if the amount of such orders or contracts exceeds $50,000 and does not exceed $100,000, $50; if the amount of such orders or contracts exceeds $100,000 and does not exceed $150,000, $150; if the amount of such orders or contracts exceeds $150,000 and does not exceed $200,000, $200; if the amount of such orders or contracts exceeds $200,000, $250; and, when such contractor shall have obtained a license for any year for which he has paid a license tax of less than the maximum above prescribed, he shall not accept any contract or contracts during such year, the aggregate amount of which exceeds the maximum amount for which his license was obtained, unless and until he shall have paid such additional sum as will make the total license tax paid by him for that year sufficient to cover the aggregate amount of such contract or contracts as prescribed above; and unless he pays such additional sum he shall be deemed to be acting without a license. The payment of the license tax in one county in the state, as evidenced by the license or official certificate of the probate judge, shall be sufficient.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §496; Acts 1953, No. 749, p. 1012.)
[Repealed]
Repealed by Act 2015-70 effective April 21, 2015.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §497.)
[Repealed]
Repealed by Act 2015-70 effective April 21, 2015.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §498.)
Every person operating a cottonseed oil mill; cotton mill; cloth mill; towel factory; garment factory; yarn mill; hosiery mill; peanut mill; peanut oil mill; peanut shelling plant; paper mill; pulp mill; mill manufacturing sheeting, rugs, bags, hats, cement, carpets, lime, plaster, soap, chemical, acid (other than fertilizer) explosive; and all mills manufacturing any finished or semifinished products of tobacco, thread, yarn, cloth, fur, felt, nylon, paper, jute, rubber, iron, iron ore, copper, brass, tin, coal, coke, sand, cement, glass, clay, slag, aluminum, bauxite, ore, grain, other than what is commonly called a grist mill, oats, corn, rye, synthetic rubber, stone, oil, crude oil, tar, resin, asphalt, paraffin, plastics, fibers, straw, cellulose, or other factory where materials are woven, made, or assembled shall pay the following license tax: $10 where the investment for plant, equipment, supplies, and fixtures is less than $15,000; $20 where the investment for plant, equipment, supplies, and fixtures is $15,000 and less than $25,000; $30 where the investment for plant, equipment, supplies, and fixtures is $25,000 and less than $50,000; $50 where the investment for plant, equipment, supplies, and fixtures is $50,000 and less than $100,000; $100 where the investment for plant, equipment, supplies, and fixtures is $100,000 and less than $500,000; $150 where the investment for plant, equipment, supplies, and fixtures is $500,000 and less than $1,000,000; $200 where the investment for plant, equipment, supplies, and fixtures is $1,000,000 and over. Such investment shall be the total capital employed in such plant, and the person applying for such license shall furnish a sworn statement showing the amount of the investment and shall accompany the same with a statement taken from the books of the company, showing the amount of such investment, and such books shall at all times be subject to the inspection of the Department of Revenue or its agents. The license taxes levied under this section shall not apply where the factory, mill, or plant which would be licensed by this section is covered by a specific license under this article.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §499; Acts 1947, No. 136, p. 44.)
Each person operating a warehouse or yard for the storage of cotton for compensation shall pay a license tax to the state as follows: Every such warehouse storing not more than 5,000 bales in the preceding calendar year, $20; more than 5,000 and not more than 10,000 bales, $40; more than 10,000 and not more than 15,000 bales, $60; more than 15,000 and not more than 20,000 bales, $100; more than 20,000 and not more than 30,000 bales, $150; more than 30,000 bales, $200.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §500.)
(a) Each person, firm, or corporation inquiring into and reporting on the credit and standing of persons, firms, or corporations in this state shall pay the following license tax:
(1) In each county where the population exceeds 300,000, a state license tax of $200 for each place of business and a county license tax of $50;
(2) In each county where the population exceeds 200,000, but is not more than 300,000, a state license tax of $150 for each place of business and a county license tax of $50;
(3) In each county where the population exceeds 100,000, but is not more than 200,000, a state license tax of $100 for each place of business and a county license tax of $25;
(4) In each county where the population exceeds 50,000, but is not more than 100,000, a state license tax of $50 for each place of business and a county license tax of $25; and
(5) In all other counties, $25 to the state for each place of business and $12.50 to the county.
(b) This section shall not apply to mutual trade organizations where credit information is exchanged among members at actual cost of service.
(c) Where any person shall pay to the state the license tax of $200 for an office which supervises the operations of suboffices under its jurisdiction, no additional state license tax shall be due for such suboffice, but a county license tax of $50 shall be paid in each county in which a suboffice is located.
(d) The population shall be according to the last or any subsequent federal decennial census.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §501; Acts 1953, No. 468, p. 584; Acts 1963, No. 566, p. 1189.)
Each person operating a creosoting or other preservative treatment plant, where crossties, crossarms, poles, posts, or other lumber or timbers are creosoted or treated shall pay a license tax based on the capital invested in such plant for equipment, raw materials, finished materials, supplies, realty, and all personalty, as follows: Where the capital invested is less than $5,000, $20 for the state and $10 for the county; where the capital invested is $5,000 and less than $25,000, $50 for the state and $25 for the county; where the capital invested is $25,000 and less than $50,000, $75 for the state and $37.50 for the county; where the capital invested is $50,000 or over, $100 for the state and $50 for the county.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §502; Acts 1943, No. 419, p. 385.)
Each delicatessen where cooked foods are sold for consumption other than on the premises shall pay a license tax of $10.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §503.)
Each person practicing the profession of dentistry in cities or towns of over 25,000 inhabitants shall pay an annual license tax of $25; in cities or towns of more than 5,000 and not exceeding 25,000 inhabitants, $15; in cities or towns of more than 1,000 and not exceeding 5,000 inhabitants, $10; in all other places whether incorporated or not, $5; but no license shall be paid the county. If such business is conducted as a firm or as a corporation in which more than one dentist is engaged, each dentist so engaged shall pay the license tax as above stated; provided, that the license tax imposed by the section shall not apply until such dentist shall have practiced his profession as long as two years. Seventy-five percent of all moneys paid into the Treasury for licenses under this section shall be paid to the secretary-treasurer of the Board of Dental Examiners each year. Such amounts shall be paid annually upon the warrant of the Comptroller drawn on the Treasury; said funds shall be used by the Board of Dental Examiners to defray the expenses of enforcing the laws of the State of Alabama relating to the practice of dentistry, for other necessary purposes and expenses of such board and in the promotion of the arts and science of dentistry in the State of Alabama. As soon after the first day of each year as practicable, the State Treasurer shall certify to the secretary-treasurer of the Board of Dental Examiners the names of dentists who have paid such license fee.
(Acts 1935, No. 194, p. 256; Acts 1935, No. 435, p. 914; Code 1940, T. 51, §504; Acts 1953, No. 814, p. 1096; Acts 1961, Ex. Sess., No. 59, p. 1927.)
Each person engaged in the business of operating a detective agency, or each company or corporation doing business as such in this state, shall pay a license tax of $100. Each person so engaged who also solicits or receives notes or accounts for collection shall pay an additional license tax of $100.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §505.)
Each person engaged in the business of developing and printing Kodak plates or films, or camera plates or films, or other photographic films or plates shall pay a license tax of $5; provided, that this license tax shall not be applicable to any person paying the photographer’s license tax levied by this title.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §506.)
[Repealed]
Repealed by Act 2015-70 effective April 21, 2015.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §507.)
Each person compiling, selling, or offering for sale directories shall pay to the state license taxes as follows: For each city or town of 100,000 inhabitants or over, $150; in cities or towns of 50,000 and less than 100,000 inhabitants, $75; in cities or towns of 20,000 and less than 50,000 inhabitants, $50; in cities and towns of less than 20,000 inhabitants, $15; provided, that this section shall not apply to directories issued by any person in connection with or as a part of a business for which a general license tax is provided.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §509.)
For each dealer in electric, gas, or other mechanical refrigerators, electric or gas heaters, electric or gas water heaters, electric or gas stoves, or for each electrical or gas repair shop, or electrical or gas supply shop there shall be paid a license tax as follows: In cities of 100,000 inhabitants or over, $30; in cities of 50,000 and less than 100,000 inhabitants, $20; in cities of 10,000 and less than 50,000 inhabitants, $10; and in places of less than 10,000 inhabitants, whether incorporated or not, $5.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §511.)
Each embalmer shall pay an annual license tax of $10.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §512.)
Each person practicing for the public the profession of civil, electrical, mining, mechanical, or radio engineering shall pay an annual license tax of $20 to the state, but no license shall be paid to the county. If such business is conducted as a firm or corporation in which more than one engineer is engaged, each engineer so engaged shall pay a license tax of $20. No such engineer shall be required to pay this license tax until after he has practiced his profession for two years in this state or elsewhere. An engineer who is an employee of the state or of any county or municipality at a fixed salary and who engages in no other engineering work for compensation is not subject to this license tax when so employed.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §522.)
Each person owning or operating any fertilizer factory shall pay a license tax as follows: In which the capital invested does not exceed $25,000, $50; in which the capital invested exceeds $25,000 and does not exceed $50,000, $100; in which the capital invested exceeds $50,000 and does not exceed $100,000, $200; in which the capital invested exceeds $100,000, $250 for each factory. Each fertilizer mixing plant shall pay a license tax of $15.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §524.)
Each person, other than the original bona fide owners, selling goods, wares, or merchandise as an insurance, bankruptcy, mortgage, insolvent, assignee’s, executor’s, administrator’s, receiver’s, trustee’s, removal, or closing out sale, or a sale of goods, wares, and merchandise damaged by fire, smoke, water, or otherwise, shall pay a license tax of $100. The provisions of this section shall not apply to sheriffs, constables, or other public or court officers or to any other persons acting under the license, discretion, or authority of any court, state or federal, selling goods, wares, or merchandise in the course of their official duties.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §525.)
Each dealer in fireworks such as roman candles, sky rockets, torpedoes, firecrackers, cannon crackers, cap guns, devil wheels, and such other articles commonly known as fireworks shall pay the following license tax: In cities, or within two miles of said cities, of 25,000 population or more, $50; in cities, or within two miles of said cities, of 10,000 population and not more than 25,000, $30; in cities, or within two miles of said cities, of 5,000 to 10,000 population, $20; and in all other places, whether incorporated or not, $10.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §526.)
For each flying jenny, called also hobbyhorses, and merry-go-rounds, roller coasters, or other devices of like character, there shall be paid a license tax of $50 per year, $20 for each month or $5 for each week in each place in which such device is operated, whether incorporated or not.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §527.)
Each fortuneteller, palmist, clairvoyant, astrologer, phrenologist, or crystal gazer, where any fee is charged directly or indirectly or any gratuity is accepted, shall pay a license tax of $40.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §528.)
Each person selling fruit from a fruit stand, store, or other established place of business shall pay a license tax as follows: In cities or towns of over 10,000 inhabitants, $10; and in all other places, whether incorporated or not, $5. This section shall not apply to regular merchants carrying fruit as a part of their stock of merchandise who do not display same in front of their place of business and whose ad valorem assessment on the stock of merchandise at the place where such fruit is sold is in excess of $100.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §529.)
Each person operating for profit a gasoline filling station or pump in cities or towns, or within three miles thereof, shall, on October 1, of each year, pay the following annual privilege tax: In cities of 100,000 inhabitants and over, where only one pump or filler is used, $28 and, for each additional pump, $21; in cities or towns of 40,000 inhabitants and less than 100,000 inhabitants, where only one pump or filler is used, $21 and, for each additional pump, $14; in cities or towns of 12,000 inhabitants and less than 40,000, where only one pump or filler is used, $18 and, for each additional pump, $10; in cities or towns of 5,000 inhabitants and less than 12,000, where only one pump or filler is used, $14 and, for each additional pump, $7; in incorporated towns of 1,000 inhabitants and less than 5,000, where only one pump or filler is used, $7 and, for each additional pump, $5; in incorporated towns of less than 1,000 inhabitants, $3.50 and, for each additional pump, $2.50; and in all other places, whether incorporated or not, $2.50 and, for each additional pump, $2.50.
(Acts 1935, No. 194, p. 256; Acts 1935, No. 402, p. 876; Acts 1939, No. 604, p. 968; Code 1940, T. 51, §531.)
Each person whose principal business is the selling of plate glass or other glass shall pay the following license tax: In cities of 100,000 inhabitants or more, $50; in cities or towns of more than 30,000 and under 100,000 inhabitants, $35; in cities or towns of more than 7,000 and under 30,000 inhabitants, $20; in all other places, $10.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §532.)
Each person operating a golf course or courses where the game of golf, miniature golf, or a similar game is played, either indoors or out, where a charge is made, shall pay the following license tax: Iin towns and cities of 500 and not exceeding 10,000 inhabitants, or within 10 miles of the city limits thereof, $10 for each golf course and $5 for each table or course where miniature golf or a similar game is played; in towns or cities of over 10,000 and not exceeding 35,000 inhabitants, or within 10 miles of the city limits thereof, $20 for each golf course and $10 for each table or course where miniature golf or a similar game is played; in cities having more than 35,000 inhabitants, or within 10 miles of the city limits thereof, $40 for each golf course and $15 for each table or course where miniature golf or a similar game is played; and in all other places, whether incorporated or not, for each golf course $5 and for each table or course where miniature golf or a similar game is played, $2.50. This section shall not apply to municipally owned and operated golf courses or tables, nor to regularly organized clubs or other private organizations maintaining and operating a golf course or tables for the use of its members only.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §533.)
[Repealed]
Repealed by Act 2015-70 effective April 21, 2015.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §534.)
Each person dealing in hides or furs, whether principal business or not, shall pay the following license tax: In counties of 100,000 inhabitants or over, $25; in counties of 40,000 inhabitants and less than 100,000 inhabitants, $20; and in counties of less than 40,000 inhabitants, $15. The license herein fixed shall not apply to persons dealing in cattle, sheep, goat, or horse hides.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §535.)
Every horse show, rodeo, dog and pony show, or like exhibition or show, where any charge is made therefor, shall pay a license tax of $25 for each day of performance.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §510; Acts 1967, No. 412, p. 1068.)
Each person engaged in the business of buying, selling, or exchanging horses, mules, jacks, or jennets shall pay a license tax of $20 in each county where such person engages in said business.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §536.)
Each manufacturer of ice cream who sells any part of his output at wholesale shall pay the following license tax: In cities of 35,000 inhabitants and more, $50; in cities of less than 35,000 and not less than 7,000 inhabitants, $10; and in all other places $5. Nothing in this section shall apply to soda fountains and places of like character where the owner or proprietor manufactures ice cream exclusively for service at his established place of business.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §538.)
Each ice factory shall pay an annual license tax of $1 for each ton capacity per day.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §539.)
Each person keeping a public inn or lodginghouse of five or more bedrooms where transient guests are lodged for pay shall be deemed for the purposes of this title to be engaged in the business of keeping a hotel. A transient guest is one who puts up for less than one week at such hotel, but such a house is no less a hotel because some of the guests put up for longer periods than one week. Every person keeping a hotel, as defined in this section, shall pay an annual license tax as follows: Hotels with five rooms and not over 15 rooms, $.50 for each room; hotels with over 15 and less than 50 rooms, $1 for each room; hotels with 50 rooms and less than 100 rooms, $1.50 for each room; and hotels with 100 rooms and over, $2 for each room. If meals, food or refreshments are served to the general public and charged for, then the additional license required to be paid by restaurants, cafes, lunch counters, and public eating houses shall be paid. Where cottages or annex are operated in connection with or rented by such hotel, this section shall apply to the total of the rooms in the hotel and the cottages and annex.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §540.)
(a) Each junk dealer shall pay the following license tax: in all places of less than 1,000 inhabitants, whether incorporated or not, $10; in towns of 1,000 inhabitants and less than 3,000 inhabitants, or within 10 miles thereof, $20; in cities and towns of 3,000 and less than 10,000 inhabitants, or within 10 miles of the city limits thereof, $30; in cities and towns of 10,000 and less than 20,000 inhabitants, or within 10 miles of the city limits thereof, $50; in cities and towns of 20,000 inhabitants and less than 50,000 inhabitants, or within 10 miles of the city limits thereof, $75; and in cities and towns of 50,000 inhabitants and over or within 10 miles of the city limits thereof, $150. Each junk dealer, his clerk, agent or employee shall keep a book open to inspection in which he shall make entries of all articles of railroad iron or brass, pieces of machinery and plumbing material, automobiles, automobile tires, parts, and accessories, or other articles purchased by him, together with the name of the party from whom purchased; and, upon failure to keep such book or record and produce it on demand, the dealer shall forfeit his license. Each junk dealer, his clerk, agent or employee to whom any new and unused articles or railroad brass and iron, pieces of machinery, automobiles, automobile tires, parts and accessories, or other articles shall be presented for sale shall notify the police authorities that such articles are offered for sale within a reasonable time thereafter, otherwise, his license shall be forfeited. Any junk dealer whose place of business is within 10 miles of more than one city shall pay the license as provided herein for the larger of the cities within 10 miles.
(b) Any person or company operating car crushing equipment, other than licensed junk dealers, automotive dismantlers, and parts recyclers and secondary metals recyclers as defined in Section 13A-8-30, shall pay a license fee, on an annual basis, of two hundred dollars ($200) per piece of car crushing equipment. The provisions of this title permitting the payment of a half-year license after April 1 shall not apply to this section. Furthermore, any additional car crushing equipment acquired during the license year shall require an additional license in accordance with this section. Anyone operating car crushing equipment without a license shall be guilty of a Class C felony and such equipment shall be subject to forfeiture to law enforcement. Upon proper process and hearing as required by the State of Alabama in forfeiture proceedings, including notifying any lienholders, the car crushing equipment may be seized and held for forfeiture, as described in Section 32-8-87. In addition to any punishment rendered, each person convicted shall be subject to the laws regarding restitution of the state. For purposes of this section, car crushing equipment means a machine that compacts or flattens a motor vehicle into a crushed motor vehicle and is designed to be transported on a highway; and a crushed motor vehicle means a motor vehicle, the frame or unibody of which is compacted or flattened so that it no longer resembles any particular year, model, or make of motor vehicle and is less than half of the motor vehicle’s original volume as measured in cubic feet.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §541; Act 2011-633, p. 1507, §2.)
(a) Each person renting or supplying laundered towels, aprons, coats, linens or supplying other similar service, except those persons engaged in the business of renting diapers who do not rent or supply laundered towels, aprons, coats or linens shall pay the following license tax: In cities of 100,000 inhabitants or over, $50; in cites or towns of 60,000 and less than 100,000 inhabitants, $35; in cities or towns of 25,000 and less than 60,000 inhabitants, $25; in cities and towns of 10,000 and less than 25,000 inhabitants, $15; and all other places, whether incorporated or not, $10. This section shall not apply to regular laundries which have paid the license taxes on laundries levied by this title.
(b) Each person furnishing diaper service or laundered diapers shall pay a license tax of $50 in the county in which he maintains his principal place of business and shall pay a license tax of $7 in each county wherein he engages in the business of furnishing diaper service or laundered diapers other than the county of his principal place of business.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §542; Acts 1953, No. 760, p. 1022.)
Each person, firm or corporation who operates what is commonly known as a power or steam laundry shall pay the following license tax: In cities and towns of 35,000 inhabitants and over, $60; in cities and towns of less than 35,000 and not less than 15,000 inhabitants, $30; in cities and towns of less than 15,000 and not less than 5,000 inhabitants, $15; and in all other places, whether incorporated or not, $10. Self-service laundries or concerns commonly known as launderettes shall pay a license tax of 25 percent of the power or steam laundry license. Each laundry operated by hand power shall pay a license tax of $10; provided, that no license shall be required of a person commonly known as a “washwoman.” Hotels which operate laundries exclusively for their own guests shall pay a license tax of 25 percent of the foregoing enumerated amounts for power or steam laundries. A person not having a place of business within the State of Alabama where such work is actually performed shall pay a license tax of $25 for the reception or collection of laundry.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §543; Acts 1950, 5th Ex. Sess., No. 41, p. 85.)
[Repealed]
Repealed by Act 2015-70 effective April 21, 2015.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §544.)
[Repealed]
Repealed by Act 2015-70 effective April 21, 2015.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §545; Acts 1971, 1st Ex. Sess., No. 132, p. 213.)
Each wholesale dealer or jobber of lumber and timber and each wholesale dealer in lumber and timber on commission whether maintaining an established place of business or not shall pay a license tax of $100. A sawmill operator, regularly licensed under Section 40-12-154, shall not become liable for the license tax imposed by this section by reason of his purchasing partially manufactured lumber from other sawmills, if the processing of said partially manufactured lumber is completed at the plant of the sawmill operator so purchasing the same and the lumber is thereafter shipped or sold in the same manner as lumber manufactured at the plant of such operator; provided, that such purchases do not exceed in volume the lumber manufactured by such operator at his own plant or plants.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §546; Acts 1945, No. 460, p. 693.)
Each person operating a lumberyard shall pay the following license tax: In cities of 100,000 inhabitants and over, $75; in cities of less than 100,000 and not less than 35,000 inhabitants, $40; in cities of less than 35,000 and not less than 7,000 inhabitants, $25; in cities of less than 7,000 inhabitants and not less than 1,000 inhabitants, $10; and in all other places, whether incorporated or not, $5. This section shall not apply to a regularly licensed sawmill selling lumber at retail at its plant.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §547.)
Each person operating a shop for the repair or rebuilding of machinery or making parts therefor for the public and charging for same shall pay the following license tax: In cities or towns of 100,000 or more inhabitants, $40; in cities or towns of 50,000 and less than 100,000 inhabitants, $25; in cities or towns of 15,000 and less than 50,000 inhabitants, $15; and in all other places, whether incorporated or not, $5. This license shall not apply to what is commonly known as a blacksmith shop or to shops repairing automobiles where a garage license or an automobile repair license has been taken out.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §548.)
Each person engaging in the business of manicuring, hairdressing or administering facial treatments shall pay a license tax of $5; provided, that this section shall not apply to such persons employed in beauty shops and beauty shop colleges, paying the license tax as provided under Section 40-12-61.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §549.)
Each person engaging in the business of manufacturing or upholstering cushions, mattresses, pillows, or rugs, or the renovating, cleaning or reworking of same, shall pay for the privilege of engaging in such business, $15; provided, that the license tax shall be $5 in towns of 3,000 or less population.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §551.)
Each person engaged in the practice of medicine, chemistry, bacteriology, roentgenology, or other similar profession, except chemists, bacteriologists, and roentgenologists employed full time by physicians, nonprofit scientific institutions, and hospitals, and except doctors employed exclusively by a medical college, shall pay the following annual license tax: In cities or towns of over 5,000 inhabitants, $25; 1,000 to 5,000 inhabitants, $10; all other places, whether incorporated or not, $5, but no license tax shall be paid to the county. If such business is conducted as a firm or as a corporation in which more than one person is engaged, each person so engaged shall pay the license tax as above stated. The license tax imposed by this section shall not apply until such person shall have practiced his or her profession as long as two years. Two fifths of the annual license tax herein levied shall remain in the Treasury and shall constitute a separate fund to be disbursed by the Treasurer as follows: All of such fund arising from licenses paid in each of the separate counties of the state shall be set aside in a separate fund for such county and shall be disbursed by the Treasurer, on the order of the board of censors of the medical society of such county, if there is such organization in such county.
(Acts 1935, No. 194, p. 256; Acts 1936-37, Ex. Sess., No. 181, p. 210; Code 1940, T. 51, §552; Acts 1957, No. 379, p. 508.)
Every person engaged in the business of selling or soliciting orders for the sale or purchase of mimeographs, duplicating machines, dictaphones, teletypes, or other similar machines, and except any person regularly employed by a said agent of or dealer in which said agent of or dealer in has paid the privilege tax or license tax herein provided for, the following annual privilege tax shall be levied and collected: In counties of over 100,000 inhabitants, $30; in counties of over 60,000 inhabitants and not exceeding 100,000 inhabitants, $20; in counties of over 40,000 inhabitants and not exceeding 60,000 inhabitants, $15; and in counties of 40,000 inhabitants and less, $10. Such license shall not authorize such agent or dealer to do business in any other county than that in which the license is issued, but if such agent or dealer shall do business in any other county than that in which he has secured the license above provided, he shall pay an additional license in each such county where he solicits business of one fourth of the above enumerated amounts.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §554.)
Every person engaged in the business of mining iron ore or operating an iron ore mine in the State of Alabama shall pay to the State of Alabama a license or privilege tax by the twentieth of each month for the privilege of operating said iron ore mine during the current month in which such payment is due an amount equal to $.03 per ton, of 2,240 pounds, on all iron ore mined during the last preceding month in which said mine was operated according to the run of the mine, whether such mine is an open mine or an underground mine, but no such tax shall be paid to any county in this state. Railroad weights shall govern where said iron ore is loaded on railroad cars in determining the amount of iron ore mined. In order that the industrial development of the state may be best preserved and promoted and in order that any deleterious effect of the tax levied in this section may be minimized, the Department of Revenue is authorized and empowered to lower, with the approval of the Governor, as in its knowledge of prevailing conditions may, from time to time prove expedient and advisable for the best welfare of the state, but not to raise, the rate on which the tax is computed. Any action by the state for the recovery of the tax levied under this section shall be commenced, or the assessment therefor made, within 12 months from the shipment by any means of such iron ore from the mine. Unless commenced within such period, the same shall be forever barred.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §556; Acts 1943, No. 525, p. 491.)
Every person, partnership, joint stock company, or association engaged in the business of mining iron ore or coal in this state shall, by the twentieth day of each month, make a report, duly sworn to before some officer authorized to administer oaths, to the Department of Revenue of the number of tons of iron ore or coal mined during the preceding month according to the run of the mine and where mined by such person in this state. Every person engaged in operating or assisting to operate in any capacity whatsoever any coal or iron ore mine in this state, upon the output of which a report has not been made as provided herein upon which the license or privilege tax has not been paid and is past due, shall be guilty of a misdemeanor and, upon conviction therefor, shall be fined not less than $10 nor more than $500, and may also be sentenced to hard labor for the county for not more than six months.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §557.)
Every person or corporation receiving coal or iron ore from any mine in this state for transportation or use shall render to the Department of Revenue by the twentieth day of each month a statement in writing, duly sworn to by some person having knowledge of the facts before some officer authorized by law to administer oaths, of the number of tons so received during the preceding month. Every person receiving coal or iron ore from any mine in this state and transporting the same in motor trucks shall, in addition to the above requirements, show to whom and where each ton of coal or iron ore was delivered. Every person or corporation receiving coal or iron ore from any mine in this state for transportation or use, who shall fail by the twentieth day of the succeeding month to render the statement required herein, shall be guilty of a misdemeanor and, upon conviction therefor, shall be fined not less than $10 nor more than $500.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §558.)
Each person who sells or erects monuments or tombstones in the state shall pay an annual license tax of $5 for each county in which he sells or erects such monument or tombstone; provided, that this shall not apply to benevolent and fraternal societies that place monuments at the graves of their members.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §559.)
[Repealed]
Repealed by Act 2015-70 effective April 21, 2015.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §560.)
Every person engaging or continuing in the business of operating a moving picture show, or show of like character, to which admission is charged shall pay the following license tax: In cities of 35,000 inhabitants and over, $200; in cities and towns of less than 35,000 and not less than 7,000 inhabitants, $50; in all other places, $15; provided that, in cities of 35,000 inhabitants or over in which the theater is one mile or more from the city hall, the license shall be $60 per annum. Moving picture shows under this section shall be held to mean a show, the principal featuring of which is moving pictures and for which is required an annual privilege license in Alabama and shall be conducted within a building arranged or constructed for such purpose, and no additional license shall be required if other features of entertainment, including vaudeville acts, are given during any period for which an admission is charged. Any motion picture theater charging children under 12 years of age more than one half of the admission charged adults shall pay double the amount herein levied under this section; provided, that this shall not apply where admission charged such children does not exceed $.10.
(Acts 1935, No. 429, p. 901; Code 1940, T. 51, §561.)
Each person operating a newsstand for the sale of magazines or periodicals shall pay an annual license tax of $5.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §563.)
Each oculist, optometrist, or optician practicing his profession shall pay the following license tax: In cities or towns of over 5,000 inhabitants, $25; in cities and towns of 1,000 to 5,000 inhabitants, $10; and all other places, whether incorporated or not, $5, but no license shall be paid to the county. If such business is conducted as a firm or as a corporation in which more than one person is engaged, each oculist, optometrist, or optician so engaged shall pay the license as above stated; provided, that the license imposed by this section shall not apply until such oculist, optometrist, or optician shall have practiced his profession as long as two years. A licensee having procured a license in the city or town where he has his principal office may practice his profession in any other place without the payment of an additional license.
(Acts 1935, No. 194, p. 256; Acts 1936-37, Ex. Sess., No. 218, p. 259; Code 1940, T. 51, §564.)
Each osteopath or chiropractor practicing his profession shall pay an annual license tax of $20 to the state, but no license shall be paid to the county. If such business is conducted as a firm or corporation in which more than one person is engaged, each osteopath or chiropractor so engaged shall pay a license tax of $20. No osteopath or chiropractor shall be required to pay a license until after he has practiced his profession for two years.
Of the license fee prescribed herein for chiropractors, but not for osteopaths, one fourth of the amount collected shall be paid into the State General Fund and three fourths of the amount collected shall be paid into the State Treasury to the credit of the State Board of Chiropractic Examiners. That portion paid into the credit of the State Board of Chiropractic Examiners shall be used by the board for the purposes stipulated in Section 34-24-143.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §565; Acts 1965, 3rd Ex. Sess., No. 39, p. 255.)
Each cold storage plant, packinghouse, or refrigerated warehouse used for storage for hire of any food product shall pay a license fee according to the following schedule based on cubic feet of refrigerated space: Less than 25,000 cubic feet, $15; 25,000 and not over 50,000 cubic feet, $20; 50,000 and not over 100,000 cubic feet, $25; 100,000 and not over 200,000 cubic feet, $50; 200,000 cubic feet and over, $100. Operators of refrigerating pipeline for the purpose of refrigerating rooms, premises, goods, wares, or merchandise of others for profit shall pay a license tax of $75.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §566; Acts 1955, No. 81, p. 317.)
Each pawnbroker shall pay a license tax of $250 for each place of business; but, if such pawnbroker sells pistols or sawed-off shotguns, or revolvers, however acquired, he shall pay the additional license tax required for dealers in pistols or sawed-off guns or revolvers by this title.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §567.)
(a) Every itinerant vendor or peddler who shall sell or offer for sale any drugs, ointments or medical preparations intended for treatment of any disease or injury, who shall by speech, writing or printing or any other method profess to treat or cure diseases, injury or deformity by any drug, nostrum or medical preparation shall pay an annual license tax of $250 to the state and $125 in each county where he does business, but the license taken out under this section will not be so construed as to authorize the licensee to practice medicine or treat persons for diseases; provided, that the foregoing shall not be construed to apply to the sale of patent or proprietary medicines or household remedies in original or unbroken packages upon which are written or printed directions for use.
(b) Each itinerant vendor or peddler of spices, flavoring, extracts, toilet articles, soaps, insecticides, stock and poultry supplies, proprietary medicines and household remedies in original packages and other packaged articles of like kind commonly used on the farm and in the home, who uses a motor vehicle solely for the purpose of transporting merchandise from house to house or place to place, who does not use such vehicle for the display of merchandise or as a rolling store and who does not permit purchasers or prospective purchasers to enter said vehicle for the purpose of inspecting or purchasing merchandise shall pay an annual license tax of $7.50 to the state and $7.50 to each county in which he does business; provided, that those who use a vehicle as herein provided, other than a motor vehicle, shall pay an annual license tax of $20 to the state and $10 to each county in which they do business, and those who operate without a vehicle of any kind shall pay an annual license tax of $10 to the state and $10 to each county in which they do business.
(c) Upon the payment of the license fees provided in subsection (b) of this section, the licensee shall be required to pay no other state or county license tax for the privilege of carrying on the business described in said subsection.
(Acts 1935, No. 194, p. 256; Acts 1936, Ex. Sess., No. 43, p. 26; Code 1940, T. 51, §568; Acts 1961, No. 721, p. 1030.)
Every photograph gallery or person engaged in photography, when the business is conducted at a fixed location, shall pay the following license tax: in cities and towns of 75,000 inhabitants and over, $25 for each fixed location; In cities and towns of less than 75,000 and not less than 40,000 inhabitants, $15 for each fixed location; in cities and towns of less than 40,000 and not less than 7,000 inhabitants, $10 for each fixed location; in cities and towns of less than 7,000 and in all other places whether incorporated or not, $5 for each fixed location. The payment of such license tax shall authorize the doing of business only in and throughout the county where paid. If the licensee does business in any other county or counties, he shall pay an annual license tax of $5 for each photographer in each additional county in which he does business. Each transient or each traveling photographer having no fixed place of business in the state shall pay a license tax of $10 per annum in each county where he does business.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §569; Acts 1967, No. 213, p. 577.)
Each person engaged in the business of selling, renting or delivering pianos, organs, small musical instruments or all such articles in this state, either in person or by agent, consignee or broker, shall pay $50 as a license tax to the state for each county in which he has an established place of business, and such license shall permit him to solicit business anywhere in the state; provided, that where such dealer does not have an established place of business in the state but merely sells or solicits the sale of such articles, he shall pay as a state license tax $25 in each county. The provisions of this section shall not apply to general merchants selling as a part of their stock in trade small musical instruments, the selling price of which does not exceed $10; provided, that the license tax on general merchants selling small musical instruments, the selling price of which exceeds $10, but who do not sell pianos or organs, shall be as follows: In counties having a population of 35,000 inhabitants or less, $5; in counties having a population of over 35,000 inhabitants and not exceeding 50,000 inhabitants, $10; in counties having a population of over 50,000 inhabitants and not exceeding 100,000 inhabitants, $15; and in counties having a population of over 100,000 inhabitants, $20. This shall not be construed to entitle a licensee to maintain branch establishments or stores without payment of the regular license tax of each branch or store, both state and county, required under this section.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §570.)
[Repealed]
Repealed by Act 2015-70 effective April 21, 2015.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §571.)
Persons dealing in pistols, revolvers, maxim silencers, bowie knives, dirk knives, brass knucks or knucks of like kind, whether principal stock in trade or not shall pay the following license tax: In cities and towns of 35,000 inhabitants and over, $150; and in all other places, $100. The required license amounts shall be paid for each place of business from which sales of such items are made. In addition to any other required licenses, a person may organize and conduct a gun and knife show of no more than seven days, by paying the maximum license tax prescribed in this section, as well as the maximum license taxes provided in Sections 40-12-158 and 40-12-174(d), for each such show. Participants shall not be required to pay the license taxes provided in this section, nor in Section 40-12-158 or 40-12-174 for participating in such shows, provided the organizer has paid the license taxes prescribed in this section prior to the commencement of the event. It shall be the duty of the organizer of such show to determine if each participant is licensed under the sales tax laws of this state as well as the particular county and municipality in which the show is conducted. The organizer shall be responsible for providing a list of participants to the county and municipality in which the gun show is held and for collecting and remitting all state and local sales taxes for any participant not licensed under state or local sales tax laws. In the event the organizer does not provide the information required herein or pay the license taxes prescribed in this section, prior to the commencement of the event, each participant shall be responsible for his or her applicable licenses. The organizer and all participants shall abide by applicable federal, state, and local laws and regulations.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §572; Act 2013-283, p. 938, §3; Act 2015-341, §1.)
In addition to all other taxes of every kind now imposed by law and which are not specifically repealed by this section, every person, firm, corporation, club or association within the State of Alabama which sells or stores or uses or otherwise consumes packages of playing cards containing not more than 54 cards to the deck or package shall pay to the State of Alabama for state purposes only a license or privilege tax of $.10 per package or deck, such tax to be evidenced by revenue stamps, and the stamps in all cases to be affixed to the individual package. The stamps shall be affixed in such manner that their removal will require continued application of water or steam. All taxable playing cards found in the possession of any person, firm, corporation, club or association without having stamps affixed in the manner set out in this section shall be subject to confiscation in the manner provided for contraband goods as set out in Chapter 25 of this title. The administration, collection and enforcement of this law shall be subject to the provisions of Chapter 25 of this title. In addition to the above tax, each retail dealer shall pay for the privilege of selling playing cards an annual license tax of $2.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §573; Acts 1951, No. 978, p. 1653.)
Each person doing business as a plumber, steam fitter or operator of a tin shop or roofing shop shall pay the following license tax: In towns or cities of 50,000 inhabitants or over, $25; in cities and towns of 10,000 inhabitants and less than 50,000 inhabitants, $15; in cities and towns of less than 10,000 inhabitants, $10; and in all other places, whether incorporated or not, $5.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §574.)
For each pool table upon which the game of pin pool, bottle pool or starboard pool, or other like device is played, there shall be paid a license tax of $100. For each table upon which the game of pool or billiards is played with 15 balls or more or less, and not pin pool, there shall be paid a license tax of $25. The provisions of this section shall not apply to pool or billiard tables operated or owned by private individuals and used in their homes or pool or billiard tables operated or owned by private clubs, social clubs, or Y.M.C.A.’s when no charge is made for playing thereon.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §575.)
Each owner or lessee of an athletic field, racetrack or place where races of any kind are held, or where admission fees charged are in excess of $.50, shall pay the following license taxes: In cities or towns of less than 10,000 inhabitants, or within five miles thereof, $10; in cities or towns of 10,000 and less than 25,000 inhabitants, or within five miles thereof, $25; in cities of 25,000 inhabitants and less than 50,000 inhabitants, or within five miles thereof, $50; and in cities of 50,000 inhabitants or more, or within five miles thereof, $100. This section shall not apply to racetracks used exclusively by any county or state fair or athletic fields owned or maintained in good faith by educational institutions located in this state. The provisions of this title permitting the payment of a half-year license tax after April 1 shall not apply to this section.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §577.)
Every person engaged in the business of selling radios or other receiving or transmitting machines shall pay the following annual privilege tax: In cities of over 50,000 inhabitants, $25; in cities of over 15,000 inhabitants and not exceeding 50,000 inhabitants, $15; in cities and towns of over 5,000 inhabitants and not exceeding 15,000 inhabitants, $10; in cities or towns of over 1,000 inhabitants and not exceeding 5,000 inhabitants, $5; and in all other places, whether incorporated or not, $3.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §578.)
Each person engaged in buying, selling or renting real estate on commission, when such real estate is situated in this state, shall pay to the state the following license tax: In cities and towns of 10,000 inhabitants and over, $15; in cities and towns of less than 10,000 and more than 5,000 inhabitants, $10; and in all other places, $5.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §580.)
Every person who shall sell or who shall offer to sell in this state any lots or land situated in another state, or who offers to sell at auction or advertises any auction sale of town lots, or the sale by auction or otherwise, or lots in any subdivision of lands situated in another state shall pay an annual license tax to the state of $500. Before any license shall be issued under this section, the party desiring to obtain such license shall cause to be recorded at his own expense on the deed records in the office of the probate judge of the county in which the license is applied for a full description of the lands or lots so offered for sale, together with the location of same and, if the lands have been divided into lots shall, at his own expense, file a map of said subdivision, which shall be recorded upon the plat book of the county in the office of the judge of probate, and reference to said plat book shall be made on the deed records and noted in the general direct and reverse index of said county. The applicant shall also file and cause to be recorded at his own expense, in the office of the probate judge, evidence of the ownership of the vendor of said lands or lots, the character and extent of such ownership, together with a statement of any and all mortgages or other liens which may exist thereon.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §581.)
Each restaurant, cafe, cafeteria, lunch counter or public eating house where meals, food or refreshments are furnished or served and charged for shall pay the following license taxes:
(1) In cities of over 40,000 inhabitants: Where the seating capacity does not exceed 10 people, $10; where the seating capacity is over 10 people and does not exceed 20 people, $15; where the seating capacity is over 20 people and not exceeding 35, $30; where the seating capacity is over 35 people, $50.
(2) In cities of 15,000 and not over 40,000 inhabitants: Where the seating capacity does not exceed 10 people, $7.50; where the seating capacity is over 10 people and does not exceed 20 people, $12.50; where the seating capacity is over 20 people and not exceeding 35, $25; where the seating capacity is over 35 people, $35.
(3) In cities or towns of over 5,000 and less than 15,000 inhabitants: Where the seating capacity does not exceed 10 people, $5; where the seating capacity is over 10 people and does not exceed 20 people, $10; where the seating capacity is over 20 people and not exceeding 35, $15; where the seating capacity is over 35 people, $25.
(4) In all other places of 5,000 inhabitants and under, whether incorporated or not: Where the seating capacity does not exceed 10 people, $5; where the seating capacity is over 10 people and does not exceed 20 people, $7.50; where the seating capacity is over 20 people and not exceeding 35, $10; where the seating capacity is over 35 people, $15.
Seating capacity shall be computed as of October 1; provided, that if a restaurant, cafe, cafeteria, lunch counter or other public eating house should increase its seating capacity after paying the license tax as above provided before January 1, next, it shall be liable for additional tax based on the above schedule; should the seating capacity be increased after January 1 and before April 1, it shall be liable for an additional tax based on the acquired number of seats, but shall be taxed only for three fourths of the additional tax; should the seating capacity be increased after April 1, it shall be liable for one half of the additional tax based on the then acquired seating capacity.
The foregoing schedule shall not apply to regular druggists or operators of ice cream parlors paying a soda fountain license and who serve sandwiches, but do not serve meals or lunches, nor to employers operating on their own premises nonprofit restaurants or lunchrooms for the service of meals and lunches to their employees.
Hotels operating two restaurants or dining rooms, in connection with the hotel and under the same ownership or management, shall compute their seating capacity on the combined seats of both restaurants or dining rooms and shall be required to secure only one license.
The provisions hereof shall not apply to restaurants, cafes, cafeterias or lunch counters operated in connection with, by or as a part of any school, college or university.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §582.)
Every place commonly known as a roadhouse, nightclub, public dance hall or place by any other name where the general public is permitted to dance, whether or not a charge is made therefor, within incorporated cities or towns or within the police jurisdiction thereof, shall pay a license tax of $25; and in all other places $50.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §583.)
Each sandwich shop, barbecue stand or pit, hamburger or hot dog stand shall pay an annual license tax of $5.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §584.)
Each person, firm or corporation engaged in operating a sawmill, heading mill or stave mill shall pay a privilege tax according to capacity as follows: Those having a capacity of 5,000 feet or less per day, $10; those having a capacity of more than 5,000 and not exceeding 10,000 feet per day, $25; those having a capacity of more than 10,000 and not exceeding 25,000 feet per day, $50; those having a capacity of more than 25,000 feet and not exceeding 50,000 feet per day, $100; those having a capacity of more than 50,000 feet per day and not over 100,000, $200; those having a capacity of 100,000 and not over 150,000, $300; those having a capacity of more than 150,000 and not more than 200,000, $400; and those having a capacity of more than 200,000 feet, $500. Only one state license shall be paid by the operator or owner of any sawmill.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §585; Acts 1945, No. 311, p. 503.)
Each scientist, naturopath, or chiropodist practicing his profession shall pay an annual license tax of $10 to the state, but no license tax shall be paid to the county. If such business is conducted as a firm or corporation in which more than one person is engaged, each scientist, naturopath, or chiropodist so engaged shall pay a license tax of $10; provided further, that no scientist, naturopath or chiropodist shall be required to pay a license tax until after he has practiced his profession for two years.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §586.)
Each person selling or delivering sewing machines, either in person or through agents, shall pay $25 annually to the state for each county in which he may sell or deliver sewing machines. For each motor vehicle used in delivering or displaying the same, an additional license shall be paid to the state of $10; provided, that a merchant carrying sewing machines as a part of his stock in trade and whose principal business is not selling sewing machines shall not be required to pay this license.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §587.)
Each person operating a shooting gallery shall pay an annual license tax of $20, but such license may be taken out for one month, in which case the license tax shall be $5 per month.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §588.)
(a) Each person dealing in shotguns, rifles of .22 caliber or over, metallic ammunition or shotgun shells shall pay a license tax of $25 in cities of 100,000 inhabitants or over; $10 in cities or towns of 7,000 and less than 100,000 inhabitants; and $3 in all other places, whether incorporated or not.
(b) Regularly licensed rolling stores selling any or all of the articles enumerated in this section shall, in addition to the license provided in Section 40-12-174, pay a license tax of $5 to the state and $5 to the county in each county in which they sell or offer such articles for sale.
(Acts 1935, No. 194, p. 256; Acts 1936-37, Ex. Sess., No. 214, p. 248; Code 1940, T. 51, §589; Acts 1943, No. 474, p. 438.)
Each skating rink operator shall pay an annual state license tax of $25 and a county license tax of $5 for every county in which same is operated or conducted.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §590.)
Any person engaged in the management of business matters occurring between the owners of vessels, railroads, airplanes, motor vehicles, and express companies and the shippers or consignors of the freight and the passengers which they carry shall be deemed a “soliciting broker” for the purpose of this section. Every such person shall pay, for the privilege of transacting such business, $50.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §593.)
Each person selling spectacles or eyeglasses, other than nonprescription sunglasses, shall pay the following license tax: In cities or towns of 50,000 inhabitants and over, $25; in cities or towns of 15,000 inhabitants and less than 50,000 inhabitants, $15; in cities and towns of over 5,000 inhabitants and less than 15,000 inhabitants, $10; and in all other places, whether incorporated or not, $5.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §594.)
Each person dealing in stocks and bonds shall pay a license tax of $50. The payment of the license tax required by this section shall authorize the doing of business in the town, city or county where paid.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §596.)
Each person operating or conducting an exhibition termed a “street fair” or “carnival” shall pay to the state a license tax as follows: For an exhibition operating or composed of or controlling or embracing not more than 10 exhibits, devices or concessions, $50; but where more than 10 and not exceeding 20 exhibits, devices or concessions, $75; and where more than 20 and not exceeding 35, $100; and where more than 35 exhibits, devices or concessions, $150. This license shall entitle the street fair or carnival to be operated for a period of not exceeding two weeks in any one place at any one time. For the purpose of this section, a “street fair” or “carnival” shall mean a combination of exhibitions, also called sideshows, rides, games of chance, tests of skill or strength, concessions and any other devices generally associated with a “street fair” or “carnival,” regardless of ownership, when operated as a combination or a group, and regardless of whether or not an admission is charged to the midway or grounds. A licensee under this section shall not be required to purchase licenses under the provisions of Sections 40-12-69, 40-12-95, 40-12-103, 40-12-140, 40-12-153 and 40-12-157.
(Acts 1935, No. 194, p. 256; Acts 1939, No. 391, p. 515; Code 1940, T. 51, §597; Acts 1967, No. 422, p. 1088.)
[Repealed]
Repealed by Act 2015-70 effective April 21, 2015.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §598.)
Each person operating or conducting a factory, plant or refinery where syrup or sugar is made, manufactured or refined shall pay a license tax based on the capital invested in plant, equipment, finished materials and raw materials, as follows: Where the capital so invested is over $100,000, $100; where the capital so invested is over $75,000 and not exceeding $100,000, $75; where the capital so invested is over $50,000 and not exceeding $75,000, $50; where the capital so invested is over $25,000 and not exceeding $50,000, $40; where the capital so invested is over $10,000 and not exceeding $25,000, $25; where the capital so invested is over $5,000 and not exceeding $10,000, $15; where the capital so invested is over $2,000 and not exceeding $5,000, $10; and where the capital so invested is over $1,000 and not exceeding $2,000, $5.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §599.)
Each person engaged in conducting a theater, vaudeville or variety show and each person conducting any other exhibition, show, entertainment or performance to which an admission is charged and not in this chapter otherwise licensed shall pay an annual license tax for each place of business as follows: In towns and cities of 3,000 inhabitants or less and in unincorporated places, $5; in cities of more than 3,000 and less than 7,000 inhabitants, $10; in cities of 7,000 and less than 20,000 inhabitants, $20; in cities of 20,000 and less than 30,000 inhabitants, $25; and in cities of 30,000 inhabitants or more, $35.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §601.)
Any person offering for sale or selling tickets at a price greater than the original price and who is commonly known as a ticket scalper shall pay a license tax of $100.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §602.)
Each person operating a public tourist camp where transient guests are lodged for pay shall be deemed for the purpose of this section engaged in the business of keeping or operating a tourist camp and shall pay the following license or privilege tax: Each camp containing not over five beds, $15; each camp containing over five and not exceeding 15 beds, $25; each camp containing over 15 beds, $35 and $1 for each additional bed over 15.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §604.)
Each person, other than a licensee under Section 40-12-51, for engaging in the business of dealing in tractors, road machinery or trailers, shall pay the following license tax: In cities and towns of 50,000 inhabitants or over, state license of $50, county license of $40; in cities and towns of 25,000 and less than 50,000 inhabitants, state license of $35, county license of $35; in cities and towns of 5,000 and less than 25,000 inhabitants, state license of $20, county license of $20; and in all other places of less than 5,000 inhabitants, whether incorporated or not, state license of $10, county license of $10.
(Acts 1935, No. 194, p. 256; Acts 1936-37, Ex. Sess., No. 156, p. 178; Code 1940, T. 51, §605; Acts 1947, No. 133, p. 42.)
[Repealed]
Repealed by Act 2015-70 effective April 21, 2015.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §606; Acts 1955, No. 399, p. 938; Acts 1969, No. 1157, p. 2162.)
Each person transferring freight, not including household goods, using more than one vehicle for hire in cities or towns or in the police jurisdiction thereof shall pay a license tax of $10 for each vehicle in excess of one. This section shall not apply to vehicles owned by motor carriers coming within the provisions of Sections 37-3-1 through 37-3-34 and 40-19-1 through 40-19-17 nor shall it apply to vehicles owned by any railroad company or express company.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §607; Acts 1949, No. 606, p. 938.)
Each person doing business as a transient dealer as defined in this section and who does not pay the privilege license under Section 40-12-73 or the license permit under Section 40-25-19 shall pay an annual license tax to the state of $30. The payment of one state license shall authorize such transient dealer to engage in such business in any county in the state upon the payment of a county license of $5 in each such county.
When used in this section, the words “transient dealer” shall be held to include any person or persons who shall be embraced in any of the following classifications: All persons acting for themselves or as an agent, employee, salesman or in any capacity for another, whether as owner, bailee or other custodian of goods, wares, and merchandise and going from person to person, dealer to dealer, house to house or place to place and selling or offering to sell, exchanging or offering to exchange, for resale by a retailer, any goods, wares, and merchandise, or all persons who do not keep a regular place of business open at all times in regular business hours and at the same place, who shall sell or offer for sale goods, wares, and merchandise, or all persons who keep a regular place of business open during regular business hours and at the same place, who shall elsewhere than at such regular place of business sell or offer for sale or at the time of such sale deliver goods, wares, or merchandise, or all persons who go from person to person, house to house, place to place, or dealer to dealer and sell or offer for sale or exchange the goods, wares, and merchandise which they carry with them, and who deliver the same at the time of, or immediately after the sale, or without returning to the place of business operations (a permanent place of business) between the taking of the order and the delivery of the goods, wares, and merchandise, or all persons who go from person to person, house to house, place to place, or dealer to dealer soliciting orders by exhibiting samples, or taking orders, and thereafter making delivery of the goods or filling the order without carrying or sending the order to the permanent place of business and thereafter making delivery of the goods pursuant to the terms of the order, or all persons who go from person to person, place to place, house to house or dealer to dealer carrying samples and selling goods from samples and afterwards making delivery without taking or sending an order therefor to a permanent place of business for the filling of the order and delivery of the goods, or the exchange of the goods, or the exchange of merchandise having become damaged or unsalable, or the purchase by merchants of advertising space, or all persons who have in their possession or under their control any tangible property offered or to be offered for sale, or to be delivered, unless the sale or delivery thereof is to be made in pursuance of a bona fide order for the goods to be sold or delivered, said order to be evidenced by an invoice or memorandum.
An order is defined as being an agreement in writing between the seller to deliver and the buyer to accept the merchandise to be sold, bought and delivered at the prices and in the quantities agreed upon; and said order shall be evidenced by a memorandum or invoice accompanying the goods on the day on which the same are to be delivered, specifically designating and specifying the name and address of the seller and the buyer, the items purchased, sold and to be delivered and the price on each and the aggregate thereof. The agreement to buy or accept for delivery must be entered into before the goods are placed in transit or delivered and must be transmitted from the place at which taken to the regular and fixed place of business before being filled and the goods delivered. A commonly termed “blanket order” shall not satisfy the conditions of this definition when such “blanket order” is merely an agreement between the buyer and seller, whereby the buyer shall take such quantity of goods as the seller may deliver to his place of business, or to any other place, within a certain period of time. A “blanket order” to satisfy the conditions of this definition must be an agreement in writing and must recite that the buyer agrees to accept from the seller definite quantities of goods at agreed prices or at prevailing market prices at the time of the delivery of the same; and such agreement shall not be subject to change or cancellation before its termination, without damages to either of the parties entering into it, and it shall not be a condition of such agreement that goods, delivered in accordance therewith must be paid for on delivery. This section shall not apply to transient dealers of bakery products in the county where such bakery is located; nor shall this section apply to transient dealers of bottled soft drinks when sold or distributed from a bottling plant which has paid the privilege tax imposed by Section 40-12-65; nor shall it apply to transient dealers in the sale or delivery of gasoline, kerosene, lubricating oil, or other petroleum products when drawn, conveyed, and distributed from a stock maintained at a warehouse, oil depot, distributing station, or established place of business in this state upon which has been paid all the privilege taxes required of such business; provided that transient dealers of bakery products engaging in the business of transient dealer in any other county shall pay the state an annual state license tax of $20 and, in addition thereto, $5 to each county in which such transient dealer does business as such.
This section shall not apply to a person or to any member of his immediate household selling dairy, poultry, or farm products raised, produced, or grown by him nor to such products preserved, bottled, or canned by him. Nor shall this section apply to those selling fish, shrimp, crabs, or other seafoods, candy, and peanuts.
No part of this section shall be construed so as to impose any tax or require any duty of traveling salesmen representing jobbers or wholesalers and who do not carry with them goods for sale, but only take orders for goods and deliver said orders to their employer at a store or permanent place of business, to be filled in the manner used by the jobbing and wholesale trade.
The payment of the privilege license tax required by this section shall not authorize any transient dealer to sell any goods, wares, or merchandise for which a higher license is required without the payment of the higher license.
Any person paying the license tax herein levied shall not sell any goods, wares, or merchandise for use or consumption by going from person to person, dealer to dealer, house to house, or place to place without the payment of a peddler’s license as required by Section 40-12-174.
The taxes herein levied are not subject to any specific exemption.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §609.)
[Repealed]
Repealed by Act 2015-70 effective April 21, 2015.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §610.)
(a) Each person travelling on an animal or using a vehicle other than a motor vehicle, doing business as a transient vendor or peddler as defined in this section, displaying, selling or offering to sell any goods, wares, or merchandise, other than to a merchant for resale, shall pay a privilege license tax to the State of Alabama of $15 and $5 for the county in each county in which such transient vendor or peddler does business for each vehicle.
(b) Each itinerant vendor or peddler of merchandise, other than tobacco products, medicines or household remedies or liquified petroleum products, but including persons, firms, corporations, partnerships, or cooperatives whose principal business is selling and distributing milk and dairy products, who operates on foot or uses a vehicle solely for the purpose of transporting merchandise from house to house or place to place but who does not use such vehicle for the display of merchandise or as a rolling store and who does not permit purchasers to enter said vehicle for the purpose of purchasing merchandise shall pay an annual license tax of $20 to the state and $10 to the county in each county in which he does business; and the payment of one state license shall authorize such persons, firms, corporations, partnerships, or cooperatives to engage in such business in any county in the state upon the payment of a county license of $10 to each county in which said persons, firms, corporations, partnerships, or cooperatives do business.
(c) Each person using a motor vehicle, doing business as a transient vendor or peddler as defined in this section displaying, selling, or offering to sell any goods, wares, or merchandise of whatever nature at retail shall pay to the state in order to engage in such business the following license taxes: Upon one motor vehicle, the annual license for each such motor vehicle, not in excess of one so used, shall be $100; upon two motor vehicles or more, but not to exceed three, the annual license fee for each such additional motor vehicle shall be $130; upon more than three motor vehicles, but not to exceed six, the annual license fee for each such additional motor vehicle shall be $150; upon each motor vehicle in excess of six, for each such additional motor vehicle, $200. In addition to the above, there is levied a license tax of $50 for the state and a county license tax of $50 in each additional county in which said business is conducted. Rolling stores which are controlled or held with others by stock ownership of 25 percent or ultimately controlled or directed by one management or association of ultimate management shall be deemed for the purpose of this section as being owned by the same person.
(d) Each person going from person to person, place to place, town to town, selling, or giving away medicine, salves, ointments, lotions, or other goods, wares, or, merchandise by exhibitions, shows, performances, or other entertainment, whether sold for himself or another, in each county where such sales or gifts are made shall pay a license tax of $100.
(e) When used in this section, the words “transient vendor or peddler” shall be held to include any person embraced in any of the following classifications:
(1) All persons commonly and generally termed “peddlers” and falling within the usual and commonly understood definition of “peddler”; or
(2) All persons acting for themselves or as an agent, employee, or salesman, or in any capacity for another whether as owner, bailee, or other custodian of goods, wares, and merchandise, going from person to person, house to house, or place to place and selling or offering to sell, or consigning or offering to consign, other than to a retail merchant for resale, goods, wares, and merchandise; or
(3) All persons who do not keep a regular place of business open at all times in regular business hours at the same place, going from person to person, house to house, place to place or town to town, and selling or offering for sale, other than to a retail merchant, goods, wares, and merchandise which they carry with them and who deliver the same at the time of or immediately after the sale; or
(4) All persons who go from person to person, house to house, place to place, soliciting orders, other than from a retail merchant for resale, by exhibiting samples or taking orders and thereafter making delivery of the goods or filling the order, without carrying or sending the order to the permanent place of business.
(f) This section shall not apply to a person or to any member of his immediate household selling or offering to sell dairy, poultry or farm products raised, produced or grown by himself, or the immediate members of his household, or such products preserved, bottled or canned by himself, or the immediate members of his household, or to persons peddling wood, charcoal, fruit, or vegetables; or to blind persons or persons physically disabled to the extent of 30 percent, such disability to be certified to by a reputable physician and the local license inspector, operating other than a rolling store, or to peddlers of poultry and eggs, or to persons selling fish, shrimp, crabs or other seafoods. These and none other shall be exempt from the payment of the license tax levied by this section.
(g) The payment of the privilege license tax required by this section shall not authorize any transient vendor or peddler to sell any goods, wares, or merchandise for which a higher or specific license is required without the payment of such license in addition to the license herein levied or to sell any goods, wares, or merchandise that are by law required to be sold at a fixed location, except upon the payment of the maximum license tax levied under the section or sections of this chapter for the sale of merchandise at a fixed location. This section shall not apply to transient dealers of bottled soft drinks when sold or distributed from a bottling plant which has paid the privilege license tax imposed by Section 40-12-65.
(Acts 1935, No. 194, p. 256; Acts 1936-37, Ex. Sess., No. 230, p. 277; Code 1940, T. 51, §611; Acts 1953, No. 208, p. 276; Acts 1961, Ex. Sess., No. 241, p. 2254; Acts 1969, No. 543, p. 1021.)
[Repealed]
Repealed by Act 2015-70 effective April 21, 2015.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §612.)
(a) Every person, firm, corporation, association, or copartnership operating a vending machine business whereby tangible personal property is sold through or by the use of coin-operated machines shall pay an annual privilege license tax based on the total sales of each such vending company during the preceding year as follows:
Total SalesAmount of Tax$12,000.00 or less$10.0012,000.01 - 24,000.0020.0024,000.01 - 36,000.0030.0036,000.01 - 48,000.0040.0048,000.01 - 60,000.0060.0060,000.01 - 80,000.0075.0080,000.01 - 100,000.0090.00100,000.01 - 150,000.00125.00150,000.01 - 200,000.00150.00200,000.01 - 250,000.00175.00250,000.01 - 350,000.00200.00350,000.01 - 450,000.00300.00450,000.01 - 750,000.00400.00750,000.01 - 1,000,000.00500.001,000,000.01 - 2,500,000.00600.002,500,000.01 - 5,000,000.00700.005,000,000.01 - 7,500,000.00800.007,500,000.01 - 10,000,000.00900.0010,000,000.01 or more1000.00
(b) The revenue produced by the license taxes levied in this section shall be divided equally between the state and the several counties in which it is collected. No separate county license shall be required. The several probate judges and license commissioners shall report and remit monthly to the State Treasurer all moneys collected for the use of the state, and to the counties all moneys collected for the counties. The payment of such occupational license tax as herein provided for in one county in the state shall be sufficient, and the vending machine company shall conspicuously post, on each machine operated by him under such license, his name and address.
(c) Hotels, motels, tourist camps, or other places of business having less than five coin-operated radios shall pay $8 for each location, establishment, or place of business receiving transmitted music by wire or cable; except, that such locations, establishments, or places of business having less than five transmitters or speakers, $8 for each such transmitter or speaker in excess of four, $2 each; provided, that where the music transmitted by wire or cable from any central point or studio, whether such point or studio is situated within or without such location, establishment, or place of business, is not coin-operated or where no deposit of a coin or other thing of value into any machine is necessary in order that music may be heard, then each person, firm, or corporation engaged in the business of transmitting music by wire or cable may pay in lieu of the speaker or transmitter tax specified above a privilege tax as follows: In counties of 60,000 inhabitants or less, $30; in counties of 60,001 and not exceeding 125,000 inhabitants, $60; in counties of 125, 001 inhabitants and over, $80; provided, that one license may be issued to include all coin-operated radios and/or transmitters or speakers located within such hotel, motel, tourist camp location, establishment, or other place of business, which license shall be prominently displayed. The licenses herein provided for shall be levied upon the operator of the machine, the coin-operated radio or the central point or studio from which point or studio the music is transmitted; provided, that in the event any unlicensed machine, coin-operated radio, transmitter, or speaker is found in any establishment or place of business, the operator of such establishment or place of business shall be the operator of such machine, coin-operated radio, transmitter, or speaker and shall be liable for the license therefor.
(d) Nothing in this section shall apply to machines installed by any person, firm, or corporation, nor to coin-operated gas meters, nor to coin-operated telephones, nor to a machine vending postage stamps in its place of business or vending necessary articles on a nonprofit basis for emergency use only by the employees of such person, firm, or corporation.
(e) No license shall be required under this section where a privilege or dealer’s license is required by this chapter for the sale of such article, and such privilege license shall have been obtained by the person, firm, or corporation operating the place of business where such machine is located, or the owner of such vending machine shall have secured such privilege license as required herein.
(f) Any person operating or permitting the operation of a vending machine dispensing packages or in quantities less than a package of cigarettes, or any article on which there is an excise tax, the payment of which is evidenced by stamps, without first having paid the tax thereon by affixing the required stamps to the original package as required under Section 40-25-2, shall be guilty of a misdemeanor and punished as provided in such section for failure to pay said tax. Each vending machine vending tobacco products of any kind whatsoever shall have securely affixed thereto in full view the name and address of the legal owner of said machine. When tobacco products are found in such vending machines to be improperly stamped or unstamped, in violation of Section 40-25-2, such vending machine and contents shall be confiscated by any duly authorized agent of the Department of Revenue as provided in Section 40-25-2 for the confiscation of improperly stamped or unstamped tobacco products. Each vending machine vending tobacco products of any kind whatsoever shall have a transparent front window, or windows, through which the Alabama revenue stamps required by Section 40-25-2 may be seen without the necessity of opening or unlocking the vending machine.
(g) For the purpose of any excise or consumption taxes, the payment of which is not evidenced by stamps, levied on any of the articles dispensed through such machine, the person in whose place of business each machine is located shall be considered the consumer of such article and shall be liable for such taxes measured by the regular retail price thereof.
(h) No license shall be required under this section for home-type merchandise vending machines placed in private homes for home use only and not for public use.
(i) Nothing herein contained shall be construed as legalizing or licensing any machine or device which is now illegal or which may hereafter be declared illegal.
(j) All the licenses levied by this section shall bear the business address of the owner or operator thereof.
(k) It is the legislative intent that only the license required under this section shall be required for the operation of a vending machine company under this section within this state for any one license year.
(l) The license shall be purchased in the county in which the home office or principal place of business of the company is located or in operation on October 1, or at the time the license is purchased for the licensing year.
(m) Any person failing to perform any of the duties required of him by the provisions of this section shall be guilty of a misdemeanor and, upon conviction, shall be fined not less than $10 and not exceeding $100 for each offense.
(n) In the event that a new business is formed which has not heretofore been in the vending machine business, it shall pay only the minimum license until such time as a new license is required.
(o) Each applicant for any license required herein shall by sworn statement supply the gross sales as required herein, and its books and records shall be available to any taxing authority within this state for inspection to insure compliance with this section.
(p) On all other vending machines whereby tangible personal property is not sold but services or amusements are vended, with the exception that coin-operated pool tables and coin-operated or self-service laundries are specifically excluded herefrom and licensed under other sections, operators shall pay a license as follows: On all machines whereby one cent is used, a fee of $1; on all machines where over one cent is used, a fee of $8. The license is to be paid, collected and distributed as heretofore provided in this section.
It is further provided that any fees, penalties, fines or other collections made by the Revenue Department upon owners of coin-operated or self-service laundries prior to the date of this amendatory act shall be returned in full to such owners.
(Acts 1935, No. 194, p. 256; Acts 1936-37, Ex. Sess., No. 36, p. 32; Acts 1939, No. 398, p. 519; Code 1940, T. 51, §613; Acts 1943, No. 207, p. 185; Acts 1947, No. 688, p. 522; Acts 1957, No. 566, p. 785; Acts 1961, No. 867, p. 1358; Acts 1961, Ex. Sess., No. 38, p. 1890; Acts 1963, No. 483, p. 1035; Acts 1965, 2nd Ex. Sess., No. 46, p. 65; Acts 1975, No. 1085, p. 2149; Acts 1983, 3rd Ex. Sess., No. 83-835, p. 55.)
Each person, firm, or corporation engaged in the operation of a veneer mill, planing mill, box factory, handle factory or any other factory where lumber or timber is sawed or made into a finished or semifinished product, other than a sawmill licensed under Section 40-12-154, shall pay a privilege tax based on the number of men employed or engaged in the manufacture of the products produced by such mills, as follows: Where there are five or less men employed or so engaged, $5; where there are more than five men and less than 10 so employed or engaged, $10; where there are 10 men and less than 20 so employed or engaged, $30; where there are 20 men and less than 40 so employed or engaged, $80; and where there are 40 men and over, $120. It is the intention hereof that where a person, firm, or corporation shall pay a privilege tax under Section 40-12-154 or under Section 40-12-121, then no privilege license tax shall be charged or collected hereunder.
(Acts 1936-37, Ex. Sess., No. 231, p. 279; Code 1940, T. 51, §614.)
Each person practicing veterinary surgery shall pay an annual license tax of $5 to the state, but no license tax shall be paid to the county. No veterinary surgeon shall be required to pay a license tax until he has practiced his profession for two years.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §615.)
Each person operating a warehouse or yard for the storage of goods, wares, or merchandise for hire shall pay an annual license tax to the state of $25; where such warehouseman also acts as a distributing agent and forwards and distributes the goods stored in such warehouse and charges for such service, he shall pay an additional license tax of $100.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §616.)
Redesignated by Act 99-526, p. 1152, §1, effective June 18, 1999.
(Acts 1991, No. 91-598, p. 1101, §1.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1932, Ex. Sess., No. 55, p. 57, §1; Code 1940, T. 51, §666; Acts 1992, No. 92-222, p. 547, §2; Acts 1995, No. 95-410, p. 881, §1.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1932, Ex. Sess., No. 55, p. 57, §2; Code 1940, T. 51, §667.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1932, Ex. Sess., No. 55, p. 57, §3; Code 1940, T. 51, §668; Acts 1992, No. 92-186, §25; Acts 1992, No. 92-222, p. 547, §3; Acts 1993, No. 93-614, p. 547, §2(3).)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1932, Ex. Sess., No. 55, p. 57, §4; Code 1940, T. 51, §669.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1932, Ex. Sess., No. 55, p. 57, §5; Acts 1939, No. 608, p. 974, §1; Code 1940, T. 51, §670; Acts 1992, No. 92-186, p. 349, §26.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1932, Ex. Sess., No. 55, p. 57, §6; Code 1940, T. 51, §671; Acts 1992, No. 92-186, p. 349, §27.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1932, Ex. Sess., No. 55, p. 57, §7; Code 1940, T. 51, §672; Acts 1992, No. 92-222, p. 547, §4.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1932, Ex. Sess., No. 55, p. 57, §8; Code 1940, T. 51, §673.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1932, Ex. Sess., No. 55, p. 57, §9; Acts 1936-37, Ex. Sess., No. 115, p. 120; Code 1940, T. 51, §674; Acts 1986, No. 86-532, p. 1032; Acts 1992, No. 92-222, p. 547, §5; Acts 1995, No. 95-410, p. 881, §1.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1932, Ex. Sess., No. 55, p. 57, §10; Code 1940, T. 51, §675; Acts 1995, No. 95-410, p. 881, §1.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1932, Ex. Sess., No. 55, p. 57, §12; Code 1940, T. 51, §677; Acts 1992, No. 92-222, p. 547, §6.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1932, Ex. Sess., No. 55, p. 57, §13; Code 1940, T. 51, §678.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1932, Ex. Sess., No. 55, p. 57, §14; Code 1940, T. 51, §679.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1932, Ex. Sess., No. 55, p. 57, §16; Code 1940, T. 51, §681.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1932, Ex. Sess., No. 55, p. 57, §17; Code 1940, T. 51, §682.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1932, Ex. Sess., No. 55, p. 57, §18; Code 1940, T. 51, §683.)
For purposes of this article, the following terms shall have the respective meanings ascribed by this section:
(1) BUSINESS. All activities engaged in, or caused to be engaged in, by any person with the object of gain, profit, benefit, or advantage, either direct or indirect to such person.
(2) COMMISSIONER. The Commissioner of Revenue of the state.
(3) DEPARTMENT. The Department of Revenue of the state.
(4) GROSS PROCEEDS. The value proceeding or accruing from the leasing or rental of tangible personal property, including any license or privilege taxes passed on to a lessee by a lessor, without any deduction on account of the cost of the property so leased or rented, the cost of materials used, labor or service cost, interest paid, or any other expense whatsoever, and without any deductions on account of loss, and shall also include on the part of any person claiming exemption under subdivision (4) of Section 40-12-223 an amount equal to the amount of rental paid on any tangible personal property acquired under such exemption and thereafter diverted to the use of such person.
(5) LEASING or RENTAL. A transaction whereunder the person who owns or controls the possession of tangible personal property permits another person to have the possession or use thereof for a consideration and for the duration of a definite or indefinite period of time without transfer of the title to such property. The detention by the user thereof of freight cars, oxygen and acetylene tanks, and similar property, in respect of which detention a demurrage or per diem charge is made against the user of such property, shall not be deemed to constitute a transaction whereunder property is leased or rented to another within the meaning of this article.
(6) PERSON. Any natural person, firm, partnership, association, corporation, receiver, trust, estate, or other entity, or any other group or combination of any thereof acting as a unit.
(7) STATE. The State of Alabama.
(8) TANGIBLE PERSONAL PROPERTY. Personal property which may be seen, weighed, measured, felt, or touched, or is in any other manner perceptible to the senses. The term “tangible personal property” shall not include stocks, bonds, notes, insurance or other contracts, or securities.
(Acts 1971, 1st Ex. Sess., No. 96, p. 166, § 1; Act 2001-636, p. 1242, § 3.)
It was the intent of the Legislature in enacting Sections 40-12-220 to 40-12-227, inclusive, to impose a license tax or privilege tax on lessors based on the gross proceeds derived from the leasing or rental of tangible personal property. It is also the intent of the Legislature to permit lessors of tangible personal property to pass on to lessees such license or privilege taxes by adding such taxes to the leasing price or otherwise, with all such amounts constituting the gross proceeds subject to the privilege or license tax provided in this article. The purpose of Act 2001-636 is to clarify and insure the implementation of the actual purpose and original intent of the Legislature when it enacted this article.
(Act 2001-636, p. 1242, §2.)
If any person shall engage in or continue in any business for which a privilege tax is imposed by Section 40-12-222 as a condition precedent to engaging or continuing in such business, he shall apply for and obtain from the department a license to engage in and to conduct such business for the current tax year upon the condition that he shall pay the taxes accruing to the state under the provisions of this article; provided, that no license shall be issued under the provisions of this article to any person who has not complied with the provisions of this article, and no provision of this article shall be construed as relieving any person from the payment of any license or privilege tax now or hereafter imposed by law.
(Acts 1971, 1st Ex. Sess., No. 96, p. 166, §4.)
AMENDED BY ACT 2026-111, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
(a)(1) In addition to all other taxes now imposed by law, there is hereby levied and shall be collected a privilege or license tax on each person engaging or continuing within this state in the business of leasing or renting tangible personal property at the rate of four percent of the gross proceeds derived by the lessor from the lease or rental of tangible personal property.
(2) The privilege or license tax on each person engaging or continuing within this state in the business of leasing or renting any automotive vehicle or truck trailer, semitrailer, or house trailer shall be at the rate of one and one-half percent of the gross proceeds derived by the lessor from the lease or rental of such automotive vehicle or truck trailer, semitrailer, or house trailer.
(3) The tax levied in this article shall not apply to any leasing or rental, as lessor, by the state or any municipality or county in the state, or any public corporation organized under the laws of the state, including, without limiting the generality of the foregoing, any corporation organized under the provisions of Division 1 of Article 4 of Chapter 54, Title 11.
(4) The privilege or license tax on each person or firm engaging or continuing within this state in the business of the leasing and rental of linens and garments shall be at the rate of two percent of the gross proceeds derived by the lessor from the lease or rental of the linens and garments.
(b) Notwithstanding subsection (a), nothing shall prohibit a lessor subject to a state or local privilege or license tax from passing the amounts on to a lessee by adding the taxes to the leasing price or otherwise; provided, however, that all amounts passed on to the lessee shall be includable in the gross proceeds derived from the lease of tangible personal property which shall be subject to the privilege or license tax owed by the lessor.
(c) The state and applicable local privilege or license taxes applicable to a lease or rental transaction to which a lessor is subject shall be determined as follows:
(1) Except for automotive vehicles as provided in subdivision (2) and commercial aircraft as provided in subdivision (3), the following shall apply:
a. When tangible personal property is delivered to the lessee by the lessor or his or her agent, the privilege or license tax levy shall be determined based on where the property is delivered.
b. When tangible personal property is picked up at the lessor’s rental location by the lessee or his or her agent, the privilege or license tax levy shall be determined based on the rental location.
(2) For automotive vehicles required to be registered pursuant to Section 32-6-61, each lease payment is considered a separate lease transaction and occurs in the location as provided below and the following rules shall apply:
a. The privilege or license tax levy on any nonrecurring gross proceeds due at the inception of the lease to a new motor vehicle dealer or a used motor vehicle dealer licensed pursuant to Section 40-12-391, including any capitalized cost reduction or other fee that is retained by the dealer in connection with its initiation of the lease, shall be determined based on the location of the dealer where the lease was initiated.
b. The privilege or license tax levy on gross proceeds other than those described in paragraph a., including the initial lease or rental payment and all subsequent lease or rental payments, shall be determined based on the garage address of the lessee as provided to the county licensing official. The lessor is considered to be engaging or continuing within this state in the business of leasing or renting tangible personal property when its lessee has a garage address within this state.
(3) For commercial aircraft, which are aircraft used by certificated or licensed air carriers, the privilege or license tax levy on gross proceeds, including the initial lease or rental payment and all subsequent lease or rental payments, shall be determined based on the location of the aircraft when the aircraft is first entered into revenue service.
(Acts 1971, 1st Ex. Sess., No. 96, p. 166, §2; Act 2001-636, p. 1242, §3; Act 2019-89, §1; Act 2021-221, §1; Act 2025-240, §3.)
There are exempted from the computation of the amount of the tax levied, assessed, or payable under this article all of the following:
(1) The gross proceeds accruing from the leasing or rental of a film or films to a lessee who charges, or proposes to charge, admission for viewing the film or films.
(2) The gross proceeds accruing from any charge in respect to the use of docks or docking facilities furnished for boats or other craft operated on waterways.
(3) The gross proceeds accruing from any charge made by a landlord to a tenant in respect of 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 mobile homes.
(4) The gross proceeds accruing from 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 article.
(5) The gross proceeds accruing from any charge made by a landlord to a tenant in 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 gross proceeds accruing from the leasing or rental of tangible personal property which the state is prohibited from taxing under the Constitution or laws of the United States or under the Constitution of Alabama of 2022.
(7) The gross proceeds accruing from 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 in which the lessor leases a truck or tractor-trailer or semitrailer for operation over the public roads and highways and such lessor furnishes a driver or drivers for each vehicle, and the transaction shall be deemed to constitute the rendition of service and not a “leasing or rental” within the meaning of this article.
(9) The gross proceeds accruing from the leasing or rental of vehicles in interchange between regulated motor carriers on a per diem basis.
(10) The gross proceeds accruing from 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 gross proceeds accruing from 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 gross proceeds derived by the lessor, which term includes a sublessor, from the leasing or rental of tangible personal property when the lessor and lessee, which term includes 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 the item of personal property; and provided further, that in the event of any subsequent subleasing of the tangible personal property to any person other than any sister, parent, or subsidiary corporation, any privilege or license tax due and payable with respect to that subsequent subleasing under the provisions of this article shall be paid.
(12) The gross proceeds accruing from a transaction that involves the leasing or rental of vessels or railroad equipment which are engaged in interstate or foreign commerce, or both.
(13) The gross proceeds accruing from 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 words “hub operation within this state” shall be construed to have both 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, property, or both are regularly exchanged at the location between flights of the same or a different certificated or licensed air carrier.
(14) The gross proceeds derived by the lessor, which term includes a sublessor, from the leasing of tangible personal property under all of the following conditions:
a. Prior to being leased under the lease subject to this exemption, the leased tangible personal property shall have been owned, or considered to be owned, for either Alabama or federal income tax purposes or both, or subject to acquisition pursuant to a binding contract, by the lessee or by a corporation, partnership, or other entity controlled by, or under common control with, the lessee.
b. The leased tangible personal property, or the right to ownership thereof, shall have been acquired by the lessor from the lessee or a corporation, partnership, or other entity controlled by, or under common control with, that lessee and leased back to the lessee under a lease that is considered a lease and not a sale for either Alabama or federal income tax purposes, or both, and that has a term of not less than 15 years, except that the lessor and the lessee may agree in the lease or any subsequent amendment thereof for the termination of the lease on any date through purchase of the leased tangible personal property by the lessee, which right to purchase the property shall be exercisable solely at the option of the lessee.
c. The appropriate sales or use tax levied by the state shall have been paid with respect to the acquisition or use of the leased tangible personal property, or, alternatively, the acquisition or use of that property shall be exempt by law from such sales or use tax.
d. The leased tangible personal property shall be installed in or about an industrial plant or other real property that was specially constructed or modified for the location and use of the tangible personal property and that is owned, or considered to be owned, for either Alabama or federal income tax purposes, or both, by a corporation, partnership, or other entity controlled by, or under common control with, the lessee of such tangible personal property.
e. The leased tangible property shall be used only by a lessee engaged in the iron and steel industry, and the exemption from the tax levied by this article shall apply only to the gross proceeds derived from leases that become binding contracts of the parties thereto within 180 calendar days following the date on which the act adding the exemption contained in this subdivision shall become effective.
(15) The gross proceeds accruing from a motor vehicle lease transaction for a duration of at least 180 days with the federal government, or any state, county, or municipal entity within the state, including a public school board or an individual public school, or any entity eligible for a sales tax exemption under federal law or Section 40-23-5.
(16)a. The gross receipts from the leasing or rental of aircraft replacement parts, components, systems, sundries, and supplies affixed to, used on, or that became part of, aircraft brought into the state and used, or to be used, by a certified or licensed air carrier to undergo conversion, reconfiguration, or general maintenance while temporarily within this state.
(i) The hanger, airstrip, or other housing unit in which the aircraft is primarily based, departs from, and returns to in its normal operation is located outside of Alabama; or
(ii) The purchaser’s headquarters is not in Alabama on the date of purchase, and the aircraft will be operated by either: (1) a certificated air carrier holding certificate of public convenience under 49 U.S.C. § 40102; or (2) a foreign air carrier or intrastate air carrier, as defined by 49 U.S.C. § 40102.
b. The exemption provided in this subdivision shall not apply to county or municipal rental or lease taxes unless approved by resolution or ordinance adopted by the local governing body.
c. The exemption provided in this subdivision shall be effective from September 1, 2025, to August 31, 2030.
(Acts 1971, 1st Ex. Sess., No. 96, p. 166, §3; Acts 1973, No. 1130, p. 1906; Acts 1979, No. 79-336, p. 544; Acts 1986, No. 86-214, p. 282, §4; Acts 1988, 2nd Ex. Sess., No. 88-982, p. 705; Act 2021-221, §1; Act 2025-240, §4.)
The provisions of this article shall be administered and the tax herein levied shall be collected in accordance with the procedures set forth in Article 1 of Chapter 23 of this title for administering and collecting the tax therein levied, and for such purposes there are hereby incorporated into this article by reference the provisions of Sections 40-23-7 through 40-23-12, Section 40-23-25, Section 40-23-27 and Sections 40-23-30 and 40-23-31, together with the definitions applicable to said sections contained in Section 40-23-1; provided, that wherever in the said provisions the term “gross proceeds of sales” or “gross receipts” shall appear, the same for the purposes of this article shall be construed to mean “gross proceeds” as defined in this article; provided further, that a sale of tangible personal property to any person engaging in the business of leasing or renting such tangible personal property to others, if such tangible personal property is purchased for the purpose of leasing or renting it to others under a transaction subject to the tax levied in this article, shall be deemed to be a “wholesale sale” or a “sale at wholesale” for the purpose of administering Article 1 of Chapter 23 of this title and Section 40-23-60; provided further, that a sale of tangible personal property previously purchased at wholesale for the purpose of leasing or renting under a transaction subject to the privilege or license tax levied in this article shall be deemed to be a “retail sale” or a “sale at retail” for the purpose of administering Article 1 of Chapter 23 of this title and Section 40-23-60, regardless of whether such sale is to the person who theretofore leased or rented the said tangible property or to some other person; provided further, in the event of the repeal of Article 1 of Chapter 23 of this title, such repeal shall not operate to eliminate the tax collection procedures contained therein to the extent they are incorporated in this article by reference, unless the legislation providing for such repeal shall clearly indicate such a result.
(Acts 1971, 1st Ex. Sess., No. 96, p. 166, §5.)
All taxes or other funds received or collected by the department under the provisions of this article shall be deposited in the State Treasury without delay.
(Acts 1971, 1st Ex. Sess., No. 96, p. 166, §7.)
The total proceeds of the taxes or other funds deposited in the State Treasury pursuant to Section 40-12-226 remaining after payment of the expenses of administration and enforcement of this article shall be distributed to the State General Fund.
(Acts 1971, 1st Ex. Sess., No. 96, p. 166, §8; Acts 1988, 2nd Ex. Sess., No. 88-955, p. 680, §1; Act 99-650, 2nd Sp. Sess., p. 96, §1.)
(a) For the purpose of this article, the following terms shall have the respective meanings ascribed by this section:
(1) DEPARTMENT. The Alabama Department of Revenue.
(2) ESTABLISHED PLACE OF BUSINESS. A place actually occupied either continuously or at regular periods at or from which a business or a part thereof is transacted.
(3) FARM TRACTOR. Every motor vehicle designed and used primarily as a farm implement for drawing plows, mowing machines, and other implements designed and used for agricultural purposes and only incidentally moved upon public highways.
(4) FARMER. An individual, partnership, cooperative corporation, or other entity actively engaged in agriculture or agricultural activities as the same are circumscribed and defined in paragraphs a. and b. of Section 41-14-51(1).
(5) FLEET. A group of similarly classified fleet vehicles comprised of 50 or more units or other amount as prescribed by the department.
(6) FLEET OPERATOR. A person, owner, lessor, or an authorized designee that maintains or operates a fleet.
(7) FLEET VEHICLE. Any of the following:
a. A motor vehicle with a gross vehicle weight of not more than 12,000 pounds that is either Class I or Class II property, as defined in Section 40-8-1, that is owned or leased by a fleet operator.
b. A utility trailer that is either Class I or Class II property, as defined in Section 40-8-1, that is owned or leased by a fleet operator.
c. A motor vehicle which the department, by rule, has deemed to be a fleet vehicle.
(8) FULL-TIME SALESPERSON. A person whose principal income is derived from selling motor vehicles for a licensed dealer and the income is reflected on the dealership payroll for the withholding of income taxes on income derived from motor vehicle sales.
(9) GROSS VEHICLE WEIGHT. Whenever used in Section 40-12-248, or elsewhere in this section, the empty weight of the truck or truck tractor, plus the heaviest load to be carried and, in the case of combinations, the empty weight of the heaviest trailer with which the power unit shall be placed in combination, plus the heaviest load to be carried. The intent being that all licenses which are levied on the basis of the “gross vehicle weight” of the vehicle plus the heaviest load to be carried, as “gross vehicle weight” is hereinabove defined, shall be collected and enforced uniformly.
(10) MINI-TRUCK. A four-wheeled reduced dimension truck that is not less than 48 inches wide, with an unladen weight, including fuels and fluids, of not less than 1,500 pounds, equipped with a fully enclosed metal cab, an installed speed governor to prevent the truck from attaining a speed of more than 25 miles per hour, headlamps, stop lamps, front and rear turn signal lamps, tail lamps, reflex reflectors, a parking brake, rearview mirrors, windshield, seat belts, and a nonconforming vehicle identification number.
(11) MOTORCYCLE. Every motor vehicle designed to travel on not more than three wheels in contact with the ground, including motor scooters and motor bicycles, but not including farm tractors.
(12) MOTOR VEHICLE. Every vehicle that is self-propelled, every vehicle that is propelled by electric power, and every vehicle that is drawn by a self-propelled vehicle, including every trailer and semitrailer.
(13) MOTOR VEHICLE DEALER. A new motor vehicle dealer or used motor vehicle dealer, as those terms are defined in Section 40-12-390, or a person who is licensed under Section 40-12-169 and engaged in the business of buying, selling, or exchanging of trailers, semitrailers, or manufactured homes.
(14) MOTOR VEHICLE MANUFACTURER. Every person engaged in the business of constructing or assembling vehicles or manufactured homes with manufacturing facilities located within this state.
(15) MOTOR VEHICLE REBUILDER. As defined in Section 40-12-390.
(16) MOTOR VEHICLE WHOLESALER. As defined in Section 40-12-390.
(17) MUNICIPALITY. Any incorporated city or town in this state.
(18) NEW MOTOR VEHICLE DEALER. As defined in Section 40-12-390.
(19) NONRESIDENT. Every person who is not a resident of this state.
(20) OWNER. Any of the following:
a. A person or persons holding the legal title to a motor vehicle.
b. The mortgagor or conditional vendee of a vehicle that is the subject of a chattel mortgage or an agreement for the conditional sale thereof or other like agreement with the right of purchase upon performance of the conditions stated in the agreement and with the immediate right of possession vested in the mortgagor or conditional vendee.
c. The lessee of a vehicle owned by the United States of America or any of its agencies or instrumentalities.
(21) PERSON. Every individual, firm, partnership, association, estate, trust, or corporation, and the receiver, assignee, agent, administrator, or other representative of any of them.
(22) PICKUP TRUCK. As defined in Section 32-8-2.
(23) PRIVATE PASSENGER AUTOMOBILE. Every motor vehicle designed primarily for the transportation of nine persons or less except the following:
a. Motorcycles.
b. Motor vehicles used in the transportation of persons for hire.
c. Trailers or semitrailers.
d. Self-propelled campers or house cars including every motor vehicle of the type usually referred to as a bus which is owned and operated by an individual for personal or private use and not for hire, rent, or compensation. Motor trucks of the type commonly known as “pickups” or “pickup trucks,” regardless of the use made of any such motor trucks and regardless of whether the owner thereof owns or has access to any other mode of transportation, shall not be deemed to constitute a private passenger automobile.
(24) PUBLIC HIGHWAY. Every highway, road, street, alley, lane, court, place, trail, drive, bridge, viaduct, or trestle, located either within a municipality or in unincorporated territory, and laid out or erected by the public or dedicated or abandoned to the public or intended for use by or for the public. The term “public highway” shall apply to and include driveways upon the grounds of universities, colleges, schools, and institutions, but shall not include private driveways, private roads, or private places not intended for use by the public.
(25) SELF-PROPELLED CAMPERS or HOUSE CARS. A self-propelled motor vehicle designed and used primarily for mobile living quarters. The living quarters on self-propelled campers or house cars are constructed as an integral part of the motor vehicle and are not detachable. Self-propelled campers or house cars are commonly known as motor homes.
(26) SEMITRAILER. Every vehicle without motive power designed for carrying persons or property and for being drawn by a motor vehicle and so constructed that some part of its weight and some part of its load rest upon or are carried by another motor vehicle.
(27) STATE. A state, territory, or possession of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or a province of the Dominion of Canada.
(28) TAX YEAR. The tax year of this state, being the 12-month period commencing on each October 1.
(29) TRAILER. Every vehicle without motive power designed to carry persons or property wholly on its own structure and to be drawn by another motor vehicle.
(30) TRAVEL TRAILER. A vehicle without motive power, designed and constructed as a camping vehicle or a temporary dwelling, living, or sleeping place drawn by a private passenger automobile or a pickup truck, but not including folding or collapsible camping trailers included within the definition of utility trailer, nor manufactured homes as defined in Section 40-12-255(n).
(31) TRUCK. Every self-propelled motor vehicle designed and used primarily for the transportation of property in or upon its own structure, every self-propelled motor vehicle of the types known as “campers” and “house cars,” and every vehicle of the type commonly called a wrecker, which is used to move disabled motor vehicles for repair, storage, and other purposes.
(32) TRUCK TRACTOR. Every motor vehicle designed and used primarily for drawing other vehicles and not so constructed as to carry a load other than a part of the weight of the vehicles and load so drawn.
(33) USED MOTOR VEHICLE DEALER. As defined in Section 40-12-390.
(34) UTILITY TRAILER. A trailer primarily designed to be drawn by a passenger car or pickup truck, including luggage trailers, folding or collapsible camping trailers, and other small trailers of similar size and function, but shall not include boat trailers.
(35) VEHICLE. Every device in, upon, or by which any person or property is or may be transported or drawn upon a highway, excepting devices moved by muscular power or used exclusively upon rails or tracks or electric personal assistive mobility devices.
(b) All references in this article to the judge of probate or licensing official shall be deemed to include the revenue commissioner, license commissioner, or other county official designated by law to register motor vehicles, issue license plates, and perform other duties in connection with motor vehicle licenses.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §692; Acts 1967, Ex. Sess., No. 223, p. 282, §1; Acts 1967, No. 302, p. 842; Acts 1967, No. 580, p. 1343, §1; Acts 1988, 1st Ex. Sess., No. 88-824, p. 265, §5; Acts 1989, No. 89-946, p. 1859, §1; Acts 1994, No. 94-584, p. 1071, §1; Acts 1997, No. 97-177, p. 267, §1; Act 2003-342, p. 851, §1; Act 2011-205, p. 384, §2; Act 2015-499, p. 1801, §1; Act 2019-129, §1.)
Station wagons, jeeps, and similar motor vehicles which are kept for private use and are designed primarily for the transportation of passengers shall be taxed, rated, and classified on the same basis as other passenger automobiles kept for private use of the same size or weight; and, where used in any statute, rule, regulation, or order, the term “passenger automobile” or “passenger motor vehicle” shall include station wagons, jeeps, and similar vehicles which are kept for private use as passenger cars, unless a contrary meaning is obvious.
(Acts 1951, No. 976, p. 1650.)
(a) The following annual license taxes and registration fees are hereby imposed and shall be charged on each private passenger automobile operated on the public highways of this state and on each motorcycle operated on the public highways:
(1) For each private passenger automobile................$13.00
(2) For each motorcycle.......................................................$7.00
No private passenger automobile and no motorcycle shall be used on any public highway in the state unless the proper license tag therefor has been procured and is securely attached to the rear end thereof, the tag to be attached right side up with the number thereof in an upright position and plainly visible.
(b)(1) In addition to the annual license taxes and registration fees imposed in subsection (a) and in this article, there is hereby imposed and shall be charged:
a. An annual license tax and registration fee of $200.00 on each battery electric vehicle operated on the public highways of this state; and
b. An annual license tax and registration fee of $100.00 on each plug-in hybrid electric vehicle operated on the public highways of this state.
(2)a. A battery electric vehicle is defined as any motor vehicle which draws propulsion energy solely or primarily from onboard sources of stored electric energy from a plug-in rechargeable electric energy storage system and which does not include an internal combustion or heat engine using combustible fuel.
b. A plug-in hybrid electric vehicle is defined as any motor vehicle which draws propulsion energy from onboard sources of stored electric energy that can be plugged into an outlet or charging station, and which includes an internal combustion or heat engine using combustible fuel.
(c) Beginning on July 1, 2023 and every fourth year thereafter, the additional license tax and registration fee specified in subsection (b) shall increase by three dollars ($3).
(d) The annual battery electric vehicle fee imposed in subdivision (b)(1) shall be reduced by the amount of any future additional annual federal surcharge or registration fee placed on a battery electric vehicle, and the annual plug-in hybrid electric vehicle fee imposed in subdivision (b)(1) shall be reduced by the amount of any future annual federal surcharge or registration fee placed on a plug-in hybrid electric vehicle, if the federal surcharge or registration fee is used solely for highway transportation purposes in the State of Alabama, but in no case shall the battery electric vehicle fee be reduced to less than $150 and the plug-in hybrid electric vehicle fee be reduced to less than $75.
(e) The Electric Transportation Infrastructure Grant Program is created within the State Department of Transportation. The program shall be administered, conducted, and managed, and its funds shall be disbursed by, the State Department of Transportation, which shall have all the powers, authorities, rights, privileges, and titles necessary to enable it to accomplish the purpose of the Electric Transportation Infrastructure Grant Program. The State Department of Transportation is authorized and directed to adopt rules for the Electric Transportation Infrastructure Grant Program including the solicitation, application, evaluation, and selection of grant applicants, the distribution of grants for electric vehicle charging infrastructure, and the use of grant funds through the Alabama Administrative Procedure Act.
(f) Notwithstanding any other law to the contrary, all proceeds of the annual license taxes and registration fees imposed and charged in subsection (b), after deduction pursuant to Section 40-12-269 (a)(1), shall be distributed as follows:
(1) The first one hundred fifty dollars ($150) collected from the annual license tax and registration fee on each battery electric vehicle and the first seventy-five dollars ($75) collected from the annual license tax and registration fee on each plug-in hybrid electric vehicle shall be distributed sixty-six and sixty-seven one hundreths percent (66.67%) to the state, twenty-five percent (25%) to counties, and eight and thirty-three one hundreths percent (8.33%) to municipalities.
(2) The remainder shall be deposited in the Rebuild Alabama Fund established in Section 23-8-4, and shall be used by the State Department of Transportation to fund electric vehicle transportation charging infrastructure through the Electric Transportation Infrastructure Grant Program established in subsection (e) until such time as the total annual registrations of battery electric vehicles plus plug-in hybrid electric vehicle exceed four percent (4%) of the total annual registrations of all motor vehicles within the State of Alabama, except trailers and semitrailers, for which an annual license tax and registration fee is paid. Thereafter, the annual license taxes and registration fees imposed by subdivision (b)(1) shall be reduced to one hundred fifty dollars ($150) and seventy-five dollars ($75), respectively, and after such reduction the receipts shall be deposited into the Rebuild Alabama Fund and distributed sixty-six and sixty-seven one hundreths percent (66.67%) to the state, twenty-five percent (25%) to the counties, and eight and thirty-three one hundreths percent (8.33%) to the municipalities to be used in the construction, reconstruction, maintenance, and repair of public roads, highways, and bridges in the state, and for any other purpose for which moneys in the Rebuild Alabama Fund may be lawfully used. All previously collected but unspent funds dedicated to the Electric Transportation Infrastructure Grant Program shall continue to be used to fund the Electric Transportation Infrastructure Grant Program.
(g) The annual license taxes and registration fees pursuant to the Rebuild Alabama Act shall be effective January 1, 2020.
(Acts 1935, No. 194, p. 256; Acts 1936-37, Ex. Sess., No. 67, p. 86; Code 1940, T. 51, §693; Acts 1951, No. 206, p. 468; Acts 1967, Ex. Sess., No. 223, p. 282, §2; Act 2004-529, p. 1106, §1; Act 2019-2, 1st Sp. Sess., §3.)
The Legislature finds and declares the following regarding the distribution and use of the proceeds from certain annual license taxes and registration fees on vehicles: All proceeds of the annual license taxes and registration fees to be distributed to counties and municipalities pursuant to subsection (f) of Section 40-12-242 shall be allocated in the same manner and used for the same purposes as provided in subdivisions (2) and (3) of subsection (c) of Section 40-17-371 and, effective October 1, 2021, shall be distributed by the entity responsible for the distribution of funds under these subdivisions, which shall be the Alabama Department of Revenue.
(Act 2019-305, §3; Act 2021-146, §2.)
(a) Notwithstanding Section 40-12-242(b)(1), effective January 1, 2022, the additional annual license tax and registration fee shall be fifty dollars ($50) for each electric low-speed vehicle registered and operated on the public highways of this state. The term electric low-speed vehicle as used in this section shall be defined in the same manner as in 49 C.F.R. § 571.3.
(b) The additional annual license tax and registration fee provided in this section shall be distributed pursuant to Section 40-12-242.1.
(c) The Department of Revenue may adopt rules for the implementation and administration of this section.
(Act 2021-146, §4.)
(a) Duly constituted and appointed consuls and honorary consuls of foreign countries who are officially stationed in Alabama may, upon application to the state Department of Revenue supported by proper proof of their said office, and subject otherwise to the provisions hereof, be issued annually a set of distinctive motor vehicle license plates or tags identifying such consuls, to be used on private passenger vehicles in lieu of the standard license plates required on such vehicles. The license plates in this connection shall be substantially in the following form:
“Consular Corps, No. _____ Alabama 2___”
(b) Each such set of plates shall contain a serial number designated by the state Department of Revenue, and the state Department of Revenue shall keep a record of each such set of plates issued by it, together with the serial number and such other information as may be necessary.
(c) Such consuls, where duly appointed and stationed in Alabama and where their applications have been approved by the state Department of Revenue, shall each be entitled to a set of such license plates without the payment of a license tax and upon the payment of an issuance fee of $.50 to the state Department of Revenue.
(d) The distinctive license plates issued hereunder shall not be transferable, shall be valid only as to the passenger vehicle of the consul to whom same may be issued, and shall be good only so long as such consul shall be qualified therefor during the specific fiscal year for which issued.
(e) The provisions of this section are supplementary to the laws of this state pertaining to the licensing of motor vehicles, and nothing herein shall be construed as repealing any of such laws.
(Acts 1959, 2nd Ex. Sess., No. 68, p. 237.)
There shall be exempt from the operation of the privilege or license tax and registration fee now or hereinafter to be levied on automobiles and motor vehicles by the State of Alabama one passenger vehicle owned by any of the following:
(1)a. An active member of the Alabama National Guard or the Alabama State Guard, when organized in lieu of the National Guard or for any service-connected disabled veteran. The exemption for any service-connected disabled veteran extends only to the service-connected disabled veterans’ license plate. The exemption for active members of the Alabama National Guard or Alabama State Guard, when organized in lieu of the National Guard, shall be claimed upon presentation of proper identification on forms prescribed by the Adjutant General. Active members of the National Guard may obtain additional license plates for other passenger vehicles which they own by paying the regular privilege or license tax provided by law.
b. A retired member of the Alabama National Guard with 20 years or more service. The exemption shall be claimed upon presentation of proper identification on forms prescribed by the Adjutant General. Retired members of the Alabama National Guard may obtain additional license plates for passenger vehicles which they own upon presentation and proper identification on forms prescribed by the Adjutant General and by paying the regular privilege or license tax and registration fee as provided by law.
c. In lieu of applying the registration fee exemption to the disabled veteran license plate category provided in this subdivision, the exemption may be applied to any license plate category in which the disabled veteran qualifies to obtain a license plate. Any additional fee required for a plate from a distinctive or personalized license plate category shall still be required in order to obtain the plate.
(2)a. An officer, warrant officer, or enlisted person serving as an active member of any United States armed forces reserve organization or any service-connected disabled veterans who were residents of Alabama at the time of entering the service and who are still residents of Alabama at the time the exemption is claimed. The exemption shall be claimed by presentation of proper identification and proof of residence requirements on forms prescribed by the state Department of Revenue.
b. In lieu of applying the registration fee exemption to the disabled veteran license plate category provided for in this subdivision, the exemption may be applied to any license plate category in which the disabled veteran qualifies to obtain a license plate. Any additional fee imposed for a plate from a distinctive or personalized license plate category shall still be required in order to obtain the plate.
(3) A member of a volunteer rescue squad.
(4) The Civil Air Patrol; including those vehicles owned by the national headquarters and those owned by the Alabama wing of the Civil Air Patrol.
(5) A volunteer firefighter who is a resident of Alabama and who is entitled to the distinctive firefighter plate issued pursuant to Section 32-6-272. The exemption for one vehicle extends only to the firefighter distinctive license plate.
(6) A recipient of the “Alabama Gold Star Family” distinctive plate, with respect to the registration fee, ad valorem tax, and any additional fees.
(Acts 1975, No. 1237, p. 2603, §1; Acts 1975, 4th Ex. Sess., No. 80, p. 2725, §1; Acts 1977, No. 777, p. 1336, §6; Acts 1980, No. 80-695, p. 1398; Act 2000-754, p. 1709, §2; Act 2009-618, p. 1790, §1; Act 2015-362, §1; Act 2015-506, 1st Sp. Sess., §1; Act 2016-339, §1.)
(a) Notwithstanding any provision of law to the contrary, the amount of the annual license tax and registration fee for a vehicle designed and especially constructed to transport only raw cotton from harvest to a cotton gin shall be two hundred fifty dollars ($250), which shall be distributed as provided in Section 40-12-270. The vehicle may not be made to conform to the axle and gross weight requirements, but shall qualify for the exemption provided in paragraph j. of subdivision (4) of Section 32-9-20.
(b) The Revenue Commissioner shall be responsible for the design of the license plate for vehicles licensed pursuant to this section.
(Act 2006-550, §1.)
(a) The following annual license taxes and registration fees are hereby imposed and shall be charged on each automobile, motor bus or other motor vehicle, other than motor vehicles subject to the license provided for in subsection (c) of this section, used on public highways in this state for transporting passengers paying fare or for hire:
With a seating capacity of five persons or less, $47.50;
With a seating capacity of more than five persons and not exceeding 10 persons, $60;
With a seating capacity of more than 10 persons and not exceeding 15 persons, $85;
With a seating capacity of more than 15 persons and not exceeding 20 persons, $110;
With a seating capacity of more than 20 persons and not exceeding 40 persons, $160;
With a seating capacity exceeding 40 persons, $210; provided, that the Commissioner of Revenue of Alabama is hereby authorized and directed to apportion the amount of the license tax payable under this subsection by any common carrier of passengers operating on the public highways of this state a fleet of two or more motor vehicles under the authority of the Interstate Commerce Commission so that the amount of the license tax payable under this subsection for any tax year by such a carrier in respect to all motor vehicles operated on the public highways of this state as a part of the said fleet shall bear the same relation to, and constitute the same proportion of, the total of the amounts specified in the foregoing schedule set forth in this section, and applicable to the said motor vehicles, that the total number of miles operated by the said fleet in Alabama during the then preceding tax year bears to the total number of miles operated by the said fleet in all states during the said preceding tax year; and provided further, that the Commissioner of Revenue of Alabama is hereby authorized to promulgate such reasonable rules and regulations as may be necessary to effectuate such apportionment.
(b) Each person desiring to take out a license to operate a motor vehicle for the transportation of passengers for hire, except taxicabs and touring cars hired by the hour or for special trips on terms agreed upon between the passenger and the carrier at the time of entering upon such service, shall at the time he applies for such license make out in writing a statement describing the route over which such motor vehicle shall be operated and naming the terminal points thereof, and such route shall be plainly indicated on the motor vehicle in letters of sufficient size to be read at a distance of 50 feet.
(c) For each motor vehicle operated on public highways in this state as a part of a taxicab system or similar system, the following annual license taxes or registration fees are hereby imposed and shall be charged:
For each vehicle weighing not exceeding 2,500 pounds, $21;
For each vehicle weighing more than 2,500 pounds, but not exceeding 3,000 pounds, $27;
For each vehicle weighing more than 3,000 pounds, but not exceeding 3,500 pounds, $30;
For each vehicle weighing over 3,500 pounds, but not exceeding 4,000 pounds, $36; and
For each vehicle weighing in excess of 4,000 pounds, $40.
(d) For each motor bus operated on public highways in this state which is owned by a church, private school, hospital, or other eleemosynary institution and used only for the purposes of such institution, regardless of whether any compensation may be charged to any passenger, a license tax or registration fee of $13 is hereby imposed and shall be charged.
(Acts 1935, No. 194, p. 256; Acts 1935, No. 530, p. 1118; Code 1940, T. 51, §695; Acts 1959, No. 649, p. 1565; Acts 1967, Ex. Sess., No. 223, p. 282, §3; Acts 1997, No. 97-177, p. 267, §1.)
(a) Any motor bus passenger carrier vehicle owned or otherwise operated by a common carrier of passengers authorized to operate in this state by the Public Service Commission pursuant to Chapter 3 of Title 37, is expressly exempt from the payment of any state, county, municipal, or other local ad valorem tax provided such vehicle is in compliance with subsection (b). Such exemption shall only apply to those common carriers of passengers that are both based in and have principal operating facilities located within Alabama.
(b) In lieu of the payment of any state, county, municipal, or other local ad valorem tax and in addition to any other business or occupational licenses required for operation by the laws of this state, any business, person, or persons operating as a common carrier of passengers that is authorized to operate in this state by the Public Service Commission pursuant to Chapter 3 of Title 37, shall be required to annually obtain a special common carrier of passengers business operating license. Such license shall be obtained prior to the registration of any motor bus passenger carrier vehicle owned or otherwise operated by a common carrier of passengers and registered pursuant to Section 40-12-246. Furthermore, such business operating license must be presented by the common carrier of passengers to the license issuing official upon the registration of such vehicle and no registration shall be completed without sufficient evidence that the special common carrier of passengers business operating license has been obtained. The licensing provisions of this section shall only apply to those common carriers of passengers that are both based in and have principal operating facilities located within Alabama.
(c) The amount of each license shall be determined by multiplying by six hundred twenty dollars ($620) the number of motor bus passenger carrier vehicles that are less than 10 years old and are registered in the name of the common carrier of passengers that is authorized to operate in this state by the Public Service Commission pursuant to Chapter 3 of Title 37, and by multiplying by one hundred dollars ($100) the number of motor bus passenger carrier vehicles that are 10 years old or older and are registered in the name of the common carrier of passengers that is authorized to operate in this state by the Public Service Commission pursuant to Chapter 3 of Title 37.
(d) Such fee shall be paid annually to the county officials responsible for the collection of ad valorem taxes on motor vehicles in the county where the motor bus passenger carrier vehicle is based. The Department of Revenue may adopt any rules and regulations regarding the implementation of such provisions, including such rules and regulations regarding the license renewal process and the payment of such fee.
(e) Of the revenue generated from the issuance of the special common carrier of passengers business operating license, the county licensing official shall retain as commission two and one-half percent of the business operating license fee, which shall be deposited into the general fund of the collecting county. The balance of the revenue remaining after the payment of the commission shall be distributed as follows:
(1) Seven and one-half percent shall be distributed to the State General Fund.
(2) Fifty-six and one-half percent shall be distributed to the Education Trust Fund.
(3) Thirty-six percent shall be distributed to the general fund of the collecting county.
(f) Any common carrier of passengers authorized to operate in this state by the Public Service Commission pursuant to Chapter 3 of Title 37, found in violation of this section shall be subject to the penalty provisions prescribed in Section 40-12-9.
(Act 2006-632, §§1-3.)
For each ambulance and automobile hearse operated on the public highways in this state, the following annual license taxes and registration fees are hereby imposed and shall be charged: In each municipality of less than 10,000 inhabitants and in all unincorporated territory, $15; in each municipality of 10,000 to 40,000 inhabitants, $25; in each municipality of 40,001 inhabitants to 100,000 inhabitants, $35; and in each municipality of more than 100,000 inhabitants, $55. Automobile hearses and ambulances shall carry symbol tags.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §696; Acts 1967, Ex. Sess., No. 223, p. 282, §4.)
(a) For each truck or truck tractor using the public highways of this state, annual license taxes and registration fees based on the gross vehicle weight in pounds are imposed and shall be charged. For the purposes of this section, the term “gross vehicle weight” shall mean the empty weight of the truck or truck tractor plus the heaviest load to be carried and, in the case of combinations, shall be deemed to include also the empty weight of the heaviest trailer with which the power unit shall be placed in combination, plus the heaviest load to be carried. No tolerance or margin of error shall be allowable under this section, except as provided in subsection (b).
(b) For each truck or truck tractor using the public highways of this state, the annual license taxes and registration fees herein imposed shall consist of: (i) the base amount applicable to the truck or truck tractor under the schedule of base amounts set forth in this subsection; plus (ii) the additional amount, if any, applicable to the truck or truck tractor under the schedule of additional amounts set forth in this subsection:
| SCHEDULE OF BASE AMOUNTS | | --- |
| Gross Vehicle | | | --- | --- | | Weight in Pounds | Base Amount | | 0 to 8,000 | $10.70 | | 8,001 to 10,000 | 17.50 | | 10,001 to 12,000 | 52.50 | | 12,001 to 18,000 | 85.00 | | 18,001 to 26,000 | 117.50 | | 26,001 to 33,000 | 150.00 | | 33,001 to 42,000 | 260.00 | | 42,001 to 55,000 | 292.50 | | 55,001 to 64,000 | 325.00 | | 64,001 to 73,280 | 357.50 | | 73,281 to 80,000 | 407.50 | | 80,001 or over | 445.00 |
| SCHEDULE OF ADDITIONAL AMOUNTS | | --- |
| Gross Vehicle | | | --- | --- | | Weight in Pounds | Additional Amount | | 0 to 8,000 | $2.30 | | 8,001 to 10,000 | 17.50 | | 10,001 to 12,000 | 52.50 | | 12,001 to 18,000 | 85.00 | | 18,001 to 26,000 | 117.50 | | 26,001 to 33,000 | 150.00 | | 33,001 to 42,000 | 260.00 | | 42,001 to 55,000 | 292.50 | | 55,001 to 64,000 | 325.00 | | 64,001 to 73,280 | 357.50 | | 73,281 to 80,000 | 407.50 | | 80,001 or over | 445.00 |
The total amount of the annual license tax and registration fee shall be limited with respect to trucks or truck tractors owned and used by a farmer for transporting farm products or the personal property of the farmer for use on his or her farm to a maximum of thirty dollars ($30) where the gross vehicle weight of the truck does not exceed 30,000 pounds; to a maximum of eighty-five dollars ($85) where the gross vehicle weight of the truck exceeds 30,000 pounds, but does not exceed 42,000 pounds; and to a maximum of two hundred fifty dollars ($250) where the gross vehicle weight of the truck or truck tractor is up to and including the class currently designated 80,001 pounds or over. The annual license tax and registration fee shall be limited with respect to trucks owned and used by any person for activities reasonably related to the harvesting and processing of forest products to a maximum of forty dollars ($40) where the gross vehicle weight of the truck does not exceed 30,000 pounds and to a maximum of sixty-five dollars ($65) where the gross vehicle weight exceeds 30,000 pounds, but does not exceed 42,000 pounds. Where the gross vehicle weight of a truck or truck tractor owned and used by any person for activities reasonably related to the harvesting and processing of forest products exceeds 42,000 pounds, the annual license tax and registration fee for the restricted tags shall consist of the base amount applicable to the truck tractor under the schedule base amounts set forth in this subsection, plus the additional amount applicable to the truck or truck tractor under the schedule of additional amounts set forth in this subsection.
For purposes of enforcement of farm truck license tags or of forest products truck license tags, all scaled weight shall be allowed a tolerance or a margin of error of 10 percent of the true gross or axle weights to allow for any climatic conditions.
For each truck tractor that is operated by a certificated motor carrier and that is operated exclusively within 15 miles of the corporate limits of the incorporated municipality in which it is customarily domiciled, but not including vehicles operating beyond the borders of Alabama, and which is registered in the county in which it is customarily domiciled, a total annual license tax and registration fee of three hundred dollars ($300) is imposed and shall be charged.
The total amount of the annual license tax and registration fee shall be limited to the following schedule for all self-propelled campers or house cars, but a self-propelled camper or a house car whose weight does not exceed 8,000 pounds, shall be subject to Section 40-12-273(b):
| SCHEDULE OF BASE AMOUNTS | | | --- | --- |
| Gross Vehicle | | | --- | --- | | Weight in Pounds | Base Amount | | 0 to 8,000 | $10.70 | | 8,001 to 12,000 | 25.00 | | 12,001 to 18,000 | 50.00 | | 18,001 to 26,000 | 87.50 | | 26,001 to 33,000 | 137.50 | | 33,001 to 42,000 | 250.00 |
| SCHEDULE OF ADDITIONAL AMOUNTS | | --- |
| Gross Vehicle | | | --- | --- | | Weight in Pounds | Additional Amount | | 0 to 8,000 | $2.30 | | 8,001 to 12,000 | 25.00 | | 12,001 to 18,000 | 50.00 | | 18,001 to 26,000 | 87.50 | | 26,001 to 33,000 | 137.50 | | 33,001 to 42,000 | 250.00 |
(1) Notwithstanding the other provisions of this section, a pickup truck as defined in Section 32-8-2, which is used for personal or agricultural use and which is not operated for commercial purposes, shall be licensed and registered based on the gross weight of the vehicle only without regard to the heaviest load to be carried including the heaviest load to be carried on any trailer used in combination with the truck, and, for purposes of this subdivision, the term “gross vehicle weight in pounds” as used in this subsection means the gross weight of the vehicle only without regard to the heaviest load to be carried including the heaviest load to be carried on any trailer used in combination with the truck.
(2) Notwithstanding the other provisions of this section, a motor vehicle wrecker, commonly known as a tow truck, which is used primarily to move, tow, or recover disabled motor vehicles or used for impoundment purposes, shall be licensed and registered based on the gross vehicle weight of the wrecker only without regard to the gross vehicle weight of any motor vehicle to be towed by the wrecker.
(c) Every person making application for license under this section to use a truck or truck tractor on the public highways of this state shall be required to file a statement declaring the gross vehicle weight of the truck or truck tractor with the judge of probate, or other county licensing officer, in the county in which the application is made. Upon payment of the applicable motor vehicle license tax or registration fee, the license to use the truck or truck tractor on the public highways of this state shall be limited to the gross vehicle weight so declared by the owner, which shall be deemed to constitute the allowable gross vehicle weight for which the vehicle is licensed.
After having obtained a license under this section with respect to any truck or truck tractor, the owner thereof may during the then current tax year voluntarily increase the allowable gross vehicle weight for which the vehicle is licensed by filing a new statement declaring the vehicle’s gross weight, applying for a new license applicable to the appropriate gross vehicle weight classification, surrendering the license plates or tags previously obtained, and paying the difference between the fees applicable to a license for the higher weight classification desired and the fee in respect of the license so surrendered. The license classification of a truck or truck tractor may not be decreased, however, except once a year at the time new license tags or plates are purchased for the truck or truck tractor.
(Acts 1935, No. 194, p. 256; Acts 1936-37, Ex. Sess., No. 93, p. 108; Code 1940, T. 51, §697; Acts 1967, Ex. Sess., No. 223, p. 282, §5; Acts 1967, No. 580, p. 1343, §2; Acts 1971, No. 1206, p. 2092, §1; Acts 1981, No. 81-865, p. 1655; Acts 1984, No. 84-186, p. 286, §1; Acts 1986, Ex. Sess., No. 86-687, p. 83, §1; Acts 1989, No. 89-946, p. 1859, §2; Act 97-916, §1; Act 2004-520, p. 1051, §1; Act 2006-276, p. 482, §1; Act 2006-356, p. 946, §1; Act 2011-540, p. 984, §1; Act 2015-499, p. 1801, §1; Act 2021-337, §1; Act 2022-206, §1.)
(a) If, after having obtained a license under Section 40-12-248 for any truck or truck tractor, the owner thereof voluntarily applies for a license of greater cost than that previously obtained, the cost of the new license shall be computed on the quarterly declining basis as of the date such license was lawfully due, and credit for the old license shall be allowed on the basis of the value of the surrendered license for the corresponding quarter, it being the intent and purpose of this section that the remaining value of the surrendered license be allowed as a credit on the purchase of the higher license and that the cost for increased weight allowance or for use as a for-hire or leased vehicle date from the time of the first use of the vehicle at the greater weight or from the commencement of the lease or the for-hire operation.
(b) If, by virtue of citation or assessment by any agent of the state charged with the enforcement of this section, an owner is required to purchase a license of higher cost for exceeding the allowed gross vehicle weight for which licensed or for use of the vehicle in a manner for which proper license has not been voluntarily obtained prior to such citation or assessment, the quarterly declining basis shall not be allowed, and the full license must be obtained, although credit for the license previously obtained shall be allowed. A penalty of 25 percent of the net amount of the license due shall be collected, plus interest as now provided by law. The penalty hereby imposed may not be waived.
(Acts 1969, No. 632, p. 1158.)
(a) Motor vehicles owned and used by the state, a county, or a municipality of this state shall not be subject to the payment of license taxes levied, but shall display permanent license plates. Any agency that obtains or possesses a vehicle through a lease-purchase or an installment-sales agreement with an option to buy shall be considered as owning the vehicle for purposes of this section. The purchasing agent or other officer of the state, county, or municipality shall apply to the Department of Revenue giving the make, type, model, and vehicle identification number of the vehicle or vehicles owned and used by the state, county, or municipality, together with any other information the department may require, which shall be furnished under oath by the applying officer. If upon examination the application appears correct to the department, it shall issue, to be placed on the motor vehicles, the number of license plates, to be used on no other vehicle than that for which issued. State license plates shall have the letter “S” and the registration number printed thereon, county license plates shall have the word “county” and the registration numbers, and municipal license plates shall have the word “municipal” and the registration number printed thereon. License plates on any vehicle owned by a municipal corporation or a municipal board shall have “PUD”, public utility department, and the registration number printed thereon. All replacement license plates issued for the vehicles shall be similarly printed or marked. The motor vehicle shall be used exclusively in the governmental or corporate functions of the state, county, or municipality to which issued.
(b) Any person who operates a motor vehicle owned or used by the state or any county or municipality thereof with an improper license plate or without a license plate thereon shall be guilty of a misdemeanor and, upon conviction, shall be punished as prescribed by law.
(c) The department may issue permanent license plates for vehicles owned by the United States or any agency thereof which have been loaned to the state or a county or municipality of this state, or to a public agency, including, but not limited to, a volunteer fire department or volunteer rescue squad, if the state, county, municipality, or public agency desires to obtain license plates to operate the vehicle on the streets and highways of this state. The license plates shall have words indicating that the vehicle is on loan from the federal government and a registration number. Vehicles displaying these license plates shall be used in accordance with the stipulations wherein the vehicle was loaned to the receiving agency. The license plates may be issued by the department upon application by the state, county, municipality, public corporation, or agency receiving and using the vehicles. Upon return of the vehicle to the United States agency, the license plate shall be removed, and may be transferred by the department to another vehicle loaned by the United States and used by the governmental entity or agency. The department shall adopt rules as necessary to implement this subsection.
(d) The department may issue permanent license plates for vehicles owned by volunteer fire departments or volunteer rescue squads. The license plates shall have words indicating that the vehicle is owned by a volunteer fire department or a volunteer rescue squad and a registration number. Vehicles displaying these license plates shall be used in accordance with the stipulations provided by law for such vehicles. The license plates may be issued by the department upon application by a volunteer fire department or a volunteer rescue squad. The vehicle shall be used exclusively for volunteer fire department or volunteer rescue squad purposes. The department shall adopt rules as necessary to implement this subsection.
(e) Registration fees for all license plates provided for in this section shall be determined by the department and may not exceed the fees for standard passenger plates as provided for in Sections 40-12-242 and 40-12-273. The department shall collect an issuance fee at the time of registration for all license plates provided for in this section in the amount as provided for in Section 40-12-271.
(f) In the event a license plate provided for in this section becomes so mutilated as to make it illegible, the governmental entity, volunteer rescue squad, or volunteer fire department shall file an application with the Department of Revenue setting forth the fact that the plate has been lost, mutilated, or destroyed. The department shall issue a replacement license plate upon payment of the replacement fee provided for in Section 40-12-265 and the surrender of the tag.
(g) When a governmental entity, volunteer rescue squad, or volunteer fire department sells, trades, or otherwise disposes of a motor vehicle, the license plate shall be removed from the vehicle and retained. The plate may be transferred to another vehicle purchased or otherwise acquired by the governmental entity, volunteer rescue squad, or volunteer fire department pursuant to Section 40-12-260 and upon payment of the fee provided for therein.
(h) All fees associated with governmental, volunteer rescue squad, and volunteer fire department license plates shall be retained by the Department of Revenue to cover the costs to administer this section.
(Acts 1951, No. 780, p. 1375; Acts 1980, No. 80-436, p. 661; Acts 1985, 2nd Ex. Sess., No. 85-996, p. 364, §1; Acts 1987, No. 87-805, p. 1579, §1; Act 99-699, 2nd Sp. Sess., p. 208, §1; Act 2000-699, p. 1421, §1; Act 2010-689, p. 1674, §1; Act 2024-291, §2.)
For each motor tractor used on the highways of this state there shall be paid a license or privilege tax of $100; provided, however, that this license shall not be collected for a tractor when run on a highway to be transferred from one point to another for use on a farm with or without a “small trailer” or with or without a “semitrailer,” or when used on the highway for transferring what is commonly known as a “portable sawmill” or a “well-boring outfit,” or when used on the highway by a farmer for the purpose of transporting to and from his farm farm products or products to be used on his farm.
(Acts 1935, No. 194, p. 256; Acts 1939, No. 403, p. 528; Code 1940, T. 51, §702; Acts 1943, No. 571, p. 575.)
(a) The following annual license taxes and registration fees are hereby imposed and shall be charged for each trailer, other than manufactured homes, operated on the public highways of this state:
(1) For each privately owned utility trailer or travel trailer, which is not operated for hire, lease, or rental, twelve dollars ($12).
(2) For each utility trailer, rented or leased for compensation of any kind or nature, fifteen dollars ($15).
(3) For each truck or tractor trailer or semitrailer, twenty dollars ($20); and provided, that any trailer or semitrailer used by a farmer exclusively for transporting farm products to and from market or for transporting the personal property of a farmer for his or her own use on the farm shall not be subject to the license taxes and registration fees provided for in this section. Trailers of any kind or description for hauling passengers for hire are prohibited by law and shall not be licensed under this article.
(b) At the option of the owner, a fleet of 50 or more rental utility trailers required to be licensed in this section may be registered for a period of five years, or any number of years to be designated by the commissioner, provided the following requirements are met:
(1) The application shall be made on forms prescribed by the commissioner and shall contain such information as the commissioner may require.
(2) Upon receipt of proper application and fees, there shall be issued for each trailer in the fleet a registration plate which shall be valid for the number of years specified. All plates issued to a fleet shall expire on the last day of the final month of the period for which issued. Should the fleet owner add trailers during the registration period, the registration of the additional trailers shall expire on the same day as the original fleet of trailers are to expire.
(3) The fleet owner shall be required to pay all registration renewal fees due each year for all trailers registered in his or her fleet prior to the expiration date. If the renewal fees are not paid, all license plates and registrations in the fleet shall be cancelled.
(c)(1) The owner of any truck trailer, tractor trailer, or semitrailer, except for manufactured homes, who has compiled with Section 32-8-32, in lieu of paying the annual registration fee provided in paragraph (3) of subsection (a), may purchase a permanent license plate which shall not be subject to annual renewal. Notwithstanding the foregoing, the owner of any truck trailer, tractor trailer, or semitrailer who chooses to purchase a permanent license plate shall annually assess the property between October 1 and prior to January 1 on a Business Personal Property Return (ADV-40) in the county where the truck trailer, tractor trailer, or semitrailer is based. Application for the permanent license plate shall be as prescribed by the Department of Revenue and shall be accompanied by a one-time registration fee of sixty dollars ($60) per permanent plate issued. The permanent license plate shall be displayed on the trailer for which it is issued, shall be valid only as long as the truck trailer, tractor trailer, or semitrailer is titled in this state to the owner who registered the trailer or trailers under this subsection, and may not be transferred to another trailer or to another owner. In the event of the transfer of ownership of the trailer, the owner shall surrender the permanent license plate to his or her county license plate issuing official and no credit or refund of registration fees shall be allowed upon surrender.
(2) It shall be unlawful for anyone to display or operate a trailer displaying a permanent trailer plate on a vehicle other than the trailer originally registered with the trailer plate or to display or operate a trailer with a permanent trailer license plate issued to the previous vehicle owner. Anyone convicted of violating this subdivision shall be guilty of a Class C misdemeanor.
(d) The Department of Revenue shall have the authority to develop and promulgate reasonable rules and regulations as needed to administer the provisions of this section.
(Acts 1935, No. 194, p. 256; Acts 1939, No. 406, p. 533; Code 1940, T. 51, §703; Acts 1967, Ex. Sess., No. 223, p. 282, §6; Acts 1967, No. 580, p. 1343, §3; Acts 1979, No. 79-813, p. 1512; Acts 1988, 2nd Ex. Sess., No. 88-980, p. 701; Acts 1991, No. 91-694, p. 1340, §3; Act 2006-276, p. 482, §1.)
(a) Effective January 1, 2000, ad valorem taxes on motor vehicles shall be assessed and the tax collected forward on a current basis to coincide with the collection of motor vehicle license taxes and registration fees.
(1) Ad valorem taxes on motor vehicles shall become due and payable on the first day of the registration renewal month of the owner, the date the motor vehicle enters the State of Alabama, the date the motor vehicle is removed from the inventory of a dealer, or the date on which the motor vehicle is otherwise determined to be taxable, whichever comes first. Ad valorem taxes on motor vehicles shall become delinquent on the first day of the month following the registration renewal month for the owner or as otherwise provided by law.
(2) Ad valorem tax on motor vehicles shall be collected through the last day of the month which precedes the assigned registration renewal month for the owner as provided in Section 32-6-61. The definition of owner shall be as defined in subdivision (16) of Section 40-12-240.
(3) No license shall be issued to operate a motor vehicle on the public highways of this state, nor shall any transfer be made by the license issuing official under this article, until the ad valorem tax on the motor vehicle is paid in the county, as evidenced either by a receipt of the tax collecting official where the owner of the motor vehicle resides, if the motor vehicle is owned by an individual, or by the receipt of the tax collecting official in the county where the motor vehicle is based, if the motor vehicle is owned by a firm, corporation, or association. The receipt, as referenced in this subsection, may be evidenced in either a tangible format or in an electronic format as prescribed by the department. The definition of the base of a vehicle shall be the place where a vehicle is most frequently dispatched, garaged, serviced, maintained, operated, or otherwise controlled, and from which it ordinarily departs and to which it ordinarily returns.
(4) Every person, firm, or corporation that plans to operate a motor vehicle shall first return the motor vehicle for ad valorem taxation to the tax assessing official of the county where the individual resides or, if a firm or corporation, where the vehicle is based, and the tax assessing official shall deliver to the person making the return a certificate of assessment on a form prescribed by the Department of Revenue, and the certificate shall be the warrant of the tax collecting official to collect the tax as shown on the assessment form.
(5) Valuation for ad valorem tax assessment purposes shall be based, as specified by law, on the value of the motor vehicle on October 1, as provided by the Department of Revenue. The October 1 valuation shall be used for calculating ad valorem taxes for the next succeeding year beginning January 1 and continuing through December 31.
(6) Before any motor vehicle can be assessed, the tax assessing official shall determine the amount of ad valorem taxes due on the motor vehicle from information provided by the owner. If the number of months for which taxes are delinquent cannot be determined, the motor vehicle shall be presumed to have been in the state for one preceding year in addition to the current tax year for ad valorem tax assessing and collecting purposes. Motor vehicles with delinquent registrations shall be subject to payment of escaped ad valorem taxes for up to two prior years plus the current year.
(b) The license issuing official shall require the applicant to surrender the receipt of the tax collecting official which shall be kept on file in the license issuing official’s office. The license plate shall be evidence of the payment of the license and the ad valorem tax due as provided under this article. The license issuing official may issue a motor vehicle license plate upon receiving certification from the tax assessing official that there is no ad valorem tax due on the motor vehicle.
(c) Ad valorem taxes on a motor vehicle shall be collected on an annual current basis in the registration renewal month of the owner thereof, in conjunction with registration of the motor vehicle; provided, however, that ad valorem taxes due at the time of registration shall be prorated on a monthly basis from the date the motor vehicle enters the State of Alabama, from the date the motor vehicle is removed from the inventory of a dealer, from the date of transfer of ownership of the motor vehicle, or upon the date the motor vehicle otherwise becomes subject to taxation.
(d) Upon the sale, trade, total destruction, permanent removal from Alabama, theft without recovery, or other transfer of a motor vehicle, hereafter referred to as a “demitted motor vehicle” constituting Class I, Class II, or Class IV Property under Section 40-8-1, the owner of the demitted motor vehicle shall be entitled to a pro rata credit for the ad valorem taxes paid with respect thereto for the remainder of the then current period for which the taxes have been paid. In determining the credit available, the total ad valorem taxes previously paid for the then current registration period shall be determined by a ratio, the numerator of which shall be the number of full calendar months from the date the motor vehicle is demitted to the last day of the month which precedes the assigned registration renewal month for the owner as provided in Section 32-6-61, and the denominator of which shall be the number of months for which ad valorem taxes shall have been paid with respect to the motor vehicle. The ad valorem tax credit shall be evidenced by a credit voucher, in a form of which shall be specified by the department, bearing the name of the person entitled to the credit. The ad valorem tax credit so determined shall either (i) be allowed at the election of the owner on a pro rata basis against all ad valorem taxes payable on another motor vehicle or vehicles acquired by the owner in conjunction with the sale or trade of the motor vehicle in respect of which the credit is allowable under this subsection, or (ii) be allowed by the tax collecting official on a pro rata basis against all ad valorem taxes payable on another motor vehicle or vehicles owned by the owner or a member of the owner’s immediate family. No interest shall be allowable on the amount of any credit allowable hereunder. A credit issued shall be creditable only against ad valorem taxes levied by those taxing authorities whose ad valorem taxes had been paid by the owner with respect to the motor vehicle for which a credit is allowed. No credit shall be allowable against any ad valorem taxes levied by the state unless the credit shall be eligible for application and applied against ad valorem taxes levied by taxing authorities other than the state. A credit voucher must be used at the time of issuance. In the event a voucher is presented for credit against ad valorem taxes due and the amount of the voucher is in excess of the taxes due, a new voucher for the excess amount shall be issued referencing the date of issuance of the voucher so presented. The new voucher shall be designated a receipt for credit for reporting purposes with a copy given to the owner. Immediately upon issuance of a receipt for credit and no later than the twentieth day of the month following the month in which the new voucher was issued, the tax collecting official shall remit to the owner a refund credit payment in the amount of the receipt for credit. When a credit voucher is issued and no ad valorem taxes payable on a vehicle are available for credit to the owner, the voucher shall be designated a receipt for credit for reporting purposes with a copy given to the owner. Immediately upon issuance of a receipt for credit and no later than the twentieth day of the month following the month in which the new voucher was issued, the tax collecting official shall remit to the owner a refund credit payment in the amount of the receipt for credit.
(e) The credit provided under subsection (d) may be claimed by the owner of a motor vehicle pursuant to the procedure and upon presentation of the evidence of payment of tax and eligibility for credit pursuant to subsection (d) as specified by regulations issued by the Department of Revenue, including a sworn affidavit of the buyer in the case of a sale or trade of the motor vehicle. The tax collecting official shall charge and collect as a condition to the redemption of a credit voucher or the remittance of a refund credit payment a commission in order to defray the costs thereof at a flat rate of two dollars ($2) for each credit voucher redeemed or refund remitted, which shall be collected by the tax collecting official at the time of the transaction. One-half of the commissions and fees so collected shall be deposited into the general fund of the county in which the fees are collected and the balance shall be remitted to the State General Fund. There is hereby appropriated for the use of the department in carrying out its responsibilities hereunder in each fiscal year a sum as the Legislature shall appropriate to the department for this purpose.
(f) In no event may a credit be claimed under subsection (d), whether in conjunction with the sale or trade of a motor vehicle or pursuant to the issuance of a credit voucher as provided for in subsection (d), later than 12 months after the date a motor vehicle is demitted.
(g) The tax assessing officials and tax collecting officials of the counties in this state, in addition to assessing and collecting the ad valorem taxes due the state and counties on motor vehicles, shall collect the ad valorem taxes on motor vehicles due all cities in this state.
(1) The tax collecting official shall report and pay the money collected for cities at the same time and in the same manner as state and county taxes are reported and paid by the official. The tax assessing and tax collecting officials shall each receive a commission of two and one-half percent of the amount of city taxes collected. The tax collecting officials shall deduct this commission from the amount collected before paying the city treasury and, at the same time, pay to the tax assessing official any commissions due him or her under this article.
(2) The license issuing official shall not issue a license to operate a motor vehicle on the highways of this state until all ad valorem taxes due the state, counties, and cities are paid as evidenced by a receipt of the tax collecting official.
(h) Motor vehicles assessed under this section shall not be included in any assessment made by any person, firm, or corporation under Section 40-11-1, and the motor vehicles shall not be considered an escape property by reason of the failure to include the property value of the motor vehicle in any tax return as of October 1. All motor vehicles shall be assessed and the taxes shall be collected on the motor vehicles as herein provided. The foregoing notwithstanding, any machinery or equipment including, but not limited to, cement mixers, wrecker rigs, and box-type bodies which may be added to a motor vehicle after it leaves the original manufacturer and may be moved from one motor vehicle to another shall be separately valued and assessed with the tax assessing official as personal property.
(i) In addition to the refunds provided for in subsection (d), refunds shall be granted for ad valorem taxes on motor vehicles for monies collected in error, as provided in Section 40-7-9.1, or upon evidence of valuation change or adjustment by the county board of equalization.
(j) All millage rate levies and changes affecting ad valorem taxes on motor vehicles shall become effective on the January 1 following the levy or rate change.
(k) The Department of Revenue may promulgate and implement rules and regulations for the administration of this section.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §704; Acts 1945, No. 314, p. 504; Acts 1959, No. 654, p. 1583; Acts 1961, No. 660, p. 822; Act 99-363, p. 581, §2; Act 2000-565, p. 1041, §1; Act 2004-520, p. 1051, §2; Act 2015-556, 2nd Sp. Sess., p. 2085, §3; Act 2017-242, §1.)
(a) Any disabled veteran of World War II or of any other hostilities in which the United States was, is, or shall be engaged against any foreign state, whether as a result of a declared war or not, who owns an automobile which has been, is or shall hereafter be all or partly paid for with funds furnished for such purpose by the Administrator of Veterans’ Affairs under authority of any act of the Congress of the United States, is exempt from all license fees and ad valorem taxes required by or prescribed in this article; provided, that the veteran keeps such motor vehicle only for private use. Application for an exemption may be made to the probate judge of the county in which such veteran resides. The state Department of Revenue shall prescribe and furnish application forms to be used and may require the applicant to supply such information as may be necessary to enable the probate judge to determine the veteran’s eligibility for the exemption. The application shall be sworn to or affirmed by the veteran and shall be accompanied by the document or instrument, or a certified copy thereof, which evidences the veteran’s ownership of the vehicle. Upon determination of eligibility and grant of the exemption, the probate judge shall issue a license plate or stamp, to be provided by the state Department of Revenue, permitting the operation of the motor vehicle.
(b) In lieu of applying the registration fee exemption to the disabled veteran license plate category provided for in this section, the exemption may be applied to any license plate category in which the disabled veteran qualifies to obtain a license plate. Any additional fee imposed for a plate from a distinctive or personalized license plate category shall still be required in order to obtain the plate.
(Acts 1947, No. 19, p. 5; Acts 1953, No. 234, p. 300; Act 2016-339, §1.)
(a) Every person, firm, or corporation who owns, maintains or keeps in this state a manufactured home as defined according to subsection (n) of this section, except a manufactured home that constitutes a part of the inventory of a manufacturer or dealer, shall pay an annual registration fee of $24 for an owner occupied single wide (one transportable module) manufactured home, $48 for an owner occupied double wide or larger (two or more transportable modules) manufactured home, $48 for a commercial single wide (one transportable module) manufactured home, or $96 for a commercial double wide or larger (two or more transportable modules) manufactured home, provided, however, that any manufactured home 10 years of age or greater but less than 20 years of age shall pay 75 percent of the above stated fees, and any manufactured home 20 years of age or greater shall pay 50 percent of the above stated fees; and upon payment thereof such owner shall be furnished an identification decal, designed by the Department of Revenue and color coded to denote the size and year issued, which shall be immediately attached to and at all times thereafter displayed at eye level on the outside finish of the manufactured home for which the registration fee was paid, and one foot from the corner on the right side facing the street, so as to be clearly visible from the street. The registration fee hereby provided for shall be paid in the county in which such manufactured home is customarily kept to the same county official who normally collected ad valorem tax on manufactured homes prior to October 1, 1991; provided, however, that the responsibilities for administering the provisions of this law may be transferred to another county official with the mutual consent of the elected county officials involved. The fee shall be due and payable on October 1 of each year and delinquent if not paid before December 1 of each year. For the year beginning October 1, 1991, the registration fee shall be in lieu of the ad valorem taxes that would have been due and payable on October 1, 1991, and any taxpayer who pays the registration fee on his manufactured home between October 1, 1991, and November 30, 1991, shall not be subject to any delinquent ad valorem taxes or fees. The owner of the manufactured home shall furnish to the registration official the make, model, year, length, width, number of transportable modules, and serial number of the manufactured home and the registration official shall furnish a receipt to the manufactured home owner containing the above referenced information. The registration fee shall be disbursed by the collecting official by the twentieth of the month following the month of collection and shall be disbursed as follows, 25 percent to the State General Fund, 25 percent to the county general fund, 25 percent to the county school board except that if the manufactured home is located within a city school district then the 25 percent shall go to the city school board, and 25 percent to the city or municipality in which the manufactured home is located, except that if the manufactured home is not located within a municipal corporate limits then the county general fund will receive the 25 percent share that would have gone to the municipality. The official collecting such registration fees and issuing such identification decals in evidence of payment thereof shall also collect a $5 issuance fee to be distributed as follows: $4 to the county general fund if the issuing official is on salary and if the issuing official is on the fee system, then the $4 issuance fee shall go to the issuing official, and the remaining $1 shall accrue to an account in the office of the county treasurer for use by the issuing official or designated representative, and such accumulated moneys shall be used only for performance of his or her official duties.
(b) The owner of any manufactured home who fails to pay the registration fee hereby provided for shall be subject to a delinquent fee of $10 if payment is made on or after December 1, or if the manufactured home owner fails to pay the registration fee or if the owner fails to display the identification decal on such manufactured home, as hereinabove required. Furthermore, the owner shall be subject to a citation fee of $15 and if the registration fee and citation fee are not paid within 15 calendar days of date cited a penalty of $24 will be assessed against the owner of the manufactured home. The county license inspector or deputy license inspector shall have authority to issue citations and assess penalties. The county official charged with the responsibility of administering this law shall have the authority to designate employees of his office or by mutual consent of the tax assessor, employees of the tax assessor’s or appraisal office as deputy license inspectors. The delinquent fee and penalty shall be distributed in the same manner as the registration fee. The citation fee shall accrue to the county general fund if the citation is issued by the county license inspector’s office. The citation fee shall accrue to an account in the office of the county treasurer for use by the assessor, collector, license commissioner, or revenue commissioner if an employee of that office issues the citation, and the citation fee shall be used only for performance of the issuing official’s official duties. The official responsible for administering the provisions of this section must collect all fees and penalties due before a decal may be issued to the manufactured home owner. The penalties set out under Section 32-6-65(b) are not applicable to manufactured homes.
(c) The owner or lessor of the real estate on which any manufactured home is situated shall report the name and address of the owner of such manufactured home at such times as the Commissioner of Revenue may require on forms furnished by the Department of Revenue. The commissioner and the state Department of Revenue are hereby empowered to promulgate and enforce any rules or regulations reasonably necessary to administer the provisions of this chapter, including but not limited to, notice, hearings, and appeals processes.
(d) Any public or private entity that provides or sells any gas or electric services and connects such services to any manufactured home shall, not less often than monthly, report to the county tax assessing official a list containing each such manufactured home connected to such service during the period preceding the report, together with the name of the occupant and the location of the connection.
(e) The manufactured home owner shall furnish to the county official charged with the responsibility of administering this law a copy of the prior year’s registration receipt, unless such manufactured home is new and a registration decal has never been issued, in which case the county official charged with the responsibility of administering this law shall be furnished a bona fide bill of sale from the dealer showing when the manufactured home was bought and a certificate of title issued by the Alabama Department of Revenue or application for a certificate of title for a 1990 or subsequent year model manufactured home or, in the case of a used manufactured home brought into the state from any other state the county official charged with the responsibility of administering this law shall be furnished a bona fide certificate of title, manufacturer’s certificate of origin or bill of sale, properly assigned, showing when the manufactured home was sold to an individual, firm, corporation or association now living or operating in this state. If such bill of sale or certificate of title is not furnished, the manufactured home will be presumed to have been in the state for the two previous years and the registration fee shall be immediately due and payable for the two previous years plus the current year, but in no case will the registration fee be due and payable for any period prior to October 1, 1991.
(f) Manufactured homes brought into the state during any tax year, new manufactured homes for which registration decals have never been issued, or manufactured homes sold from the stock of a dealer or otherwise acquired during any tax year, shall be subject to registration the same as if they had been held or owned in the state on October 1; except, that registration fees thereon shall be assessed on a quarterly basis as follows:
(1) Manufactured homes brought into the state or sold from stock after October 1, but before January 1 following, shall be subject to registration the same as if held or owned in the state on October 1.
(2) Manufactured homes brought into the state or sold from stock after the last day of December, but before April 1 following, shall be subject to registration for three quarters of the tax year.
(3) Manufactured homes brought into the state or sold from stock after the last day of March, but before the first day of July following, shall be subject to registration for one half of the tax year.
(4) Manufactured homes brought into the state or sold from stock after the last day of June, but before October 1, following, shall be subject to registration for one fourth of the tax year.
(g) Any person, firm, or corporation acquiring a new manufactured home or bringing a manufactured home into the state for the first time, except a manufactured home which constitutes a part of the inventory of a dealer or manufacturer, shall have 30 calendar days from the date of the bill-of-sale or from the date the manufactured home entered the state for the first time to register said manufactured home without a delinquent fee.
(h) Manufactured homes shall not be included in any assessment for ad valorem tax purposes made by any person, firm or corporation unless said manufactured home meets the requirements of subdivision (b)(15) of Section 40-11-1. Any manufactured home that is assessed for ad valorem tax purposes under subdivision (b)(15) of Section 40-11-1 shall not be subject to registration.
(i) Any owner occupied manufactured home owned by any person over the age of 65 or any owner who is totally disabled shall be exempt from paying the annual registration fee. The exemption must be claimed annually by the manufactured home owner between October 1 and November 30. Proof of age shall only be required once and a copy of proof may be kept on file. Proof of disability may be, but shall not be limited to, the written certification of such total disability by any two physicians licensed to practice in this state. The payment of the $5 issuance fee will be required in order to receive the exemption and decal.
(j) No manufactured home may be moved on the roads or highways of Alabama unless one of the following provisions are met:
(1) Every person, firm, or corporation who owns, maintains, or keeps in this state a manufactured home, must obtain a permit to move said manufactured home on the highways of Alabama. The permit shall be obtained from the county official who administers the manufactured home registration laws. Proof of payment of the current registration fee, issuance fee, and any applicable penalties shall be required before the moving permit shall be issued. Manufactured home dealers shall not be required to obtain a moving permit when moving a manufactured home that is part of dealer’s inventory or moving a manufactured home for the first time after a sale of such manufactured home from dealer’s inventory as evidenced by a bill of sale or bill of lading.
(2) If the manufactured home is owned by a dealer, manufacturer, lien holder, or an out-of-state person, firm, or corporation and is being transported within or through the State of Alabama, or entering the State of Alabama for the first time, then proof of ownership of said manufactured home by said person, firm, or corporation as evidenced by a tag, decal, bill-of-sale, bill of lading, or title shall be sufficient and a permit will not be required; provided, however, that a lien holder will be required to notify, in writing, within 10 days of moving any manufactured home, the county official charged with the responsibility of administering this law, and such official shall send a notice of any delinquent taxes, if applicable within 10 days, and the lien holder shall pay delinquent tax within 30 days of being notified.
(3) The above referenced moving permit shall be in addition to any other moving permits required by law.
(4) The provisions of this section shall be enforced by any law enforcement officials in the State of Alabama. Any person, firm, or corporation moving a manufactured home on the roads or highways of Alabama without a moving permit shall be issued a traffic citation for failure to have in possession the required moving permit and shall be guilty of a Class C misdemeanor; and upon conviction thereof shall be subject to a fine of not less than $50.
(5) The issuing official shall charge a $10 fee for the above referenced moving permit. One-half of said fee shall accrue to the county general fund to cover the costs of obtaining and issuing said permits, and the remaining one-half shall accrue to the State Road and Bridge Fund.
(6) The Department of Revenue shall design the above referenced moving permit and shall promulgate rules and regulations for their use.
(k) Any person, firm, or corporation required to register a manufactured home under the provisions of this article must show proof of payment of sales/use tax before the decal may be issued.
(l) Any person violating any provision of this article shall be guilty of a Class C misdemeanor and, upon conviction thereof, shall be subject to a fine of not less than $50.
(m) All manufactured homes owned by the United States government, the State of Alabama, and county or municipal corporations are exempt from the registration fees provided for under this section.
(n) For purposes of administering the provisions of this section the definition of “manufactured home” shall be the following: A structure, transportable in one or more sections, and which is built on a permanent chassis, and not designed normally to be drawn or pulled on the highway except to change permanent locations but is designed to be used as a dwelling, with or without a permanent foundation, when connected to the required utilities, including the plumbing, heating, air conditioning, and electrical systems, if any, contained therein. It may be used as a place of residence, business, profession, trade, or for any other purpose, by the owner, lessee, or assigns and may consist of one or more units that can be attached or joined together.
(o) For the purposes of administering the provisions of this section, the definition of a manufactured home used for commercial purposes shall be any manufactured home except an owner-occupied manufactured home used as a single family residence.
(Acts 1961, Ex. Sess., No. 44, p. 1897, §1; Acts 1962, Ex. Sess., No. 159, p. 203; Acts 1988, 1st Ex. Sess., No. 88-824, p. 265, §6; Acts 1991, No. 91-694, p. 1340, §2; Act 2001-1098, 4th Sp. Sess., p. 1152, §1.)
No identification tag for a travel trailer shall be issued until all ad valorem taxes due thereon have been paid. Travel trailers shall be assessed for ad valorem taxation and taxes thereon paid in the same manner that motor vehicles are assessed and ad valorem taxes thereon paid; and the identification tags shall be evidence of such assessment and payment to the same extent that motor vehicle license tags evidence assessment and payment of taxes on motor vehicles. For assessing travel trailers for ad valorem taxation and collecting such taxes the officers performing these duties, respectively, shall be entitled to the same fees and allowances as they are entitled for performing like duties relative to motor vehicles.
Travel trailers shall not be included in any assessment by any person, firm or corporation under the provisions of subdivision (b)(4) of Section 40-11-1, and ad valorem taxation of travel trailers shall be assessed and taxes collected solely as herein provided.
(Acts 1961, Ex. Sess., No. 44, p. 1897, §§2, 4; Acts 1962, Ex. Sess., No. 159, p. 203; Acts 1988, 1st Ex. Sess., No. 88-824, p. 265, §7.)
Any state, county or municipal law-enforcement officer, or license inspector is authorized to issue citations to persons failing to comply with Sections 40-12-255 and 40-12-256.
(Acts 1961, Ex. Sess., No. 44, p. 1897, §3.)
(a) Except for vehicles provided for in subsections (b) and (c), an individual reregistering a motor vehicle that has been stored in this state and not used or operated on the public highways of this state shall pay the annual license taxes and registration fees on the vehicle. The license taxes and registration fees associated with the reregistering of motor vehicles shall not be prorated.
(b) The owners of motor vehicles commonly known as self-propelled campers or house cars, when stored in this state and not used or operated on the public highways of this state, upon reregistering, shall pay license taxes and registration fees on a monthly prorated basis.
(c) The owners of farm trucks and farm truck tractors and vintage vehicles, without regard to subdivision (2) of subsection (c) of Section 40-12-290, when stored in this state and not used or operated on the public highways of this state, upon reregistering, shall pay license taxes and registration fees on a monthly prorated basis.
(d) The payment of the registration fee or license tax on motor vehicles shall be evidenced by the delivery of a license plate, which shall be placed in such position as to be lighted by the license plate lamp in accordance with subdivision (3) of subsection (g) Section 32-5-242 in an upright position, right side up, on the rear of the automobile; when a semitrailer truck is operated, the plate shall be placed on the rear of the semitrailer. It shall be a misdemeanor, punishable by a fine of not less than ten dollars ($10) and not exceeding twenty-five dollars ($25) for each offense, to display the plate in any other place or in any other manner than as herein provided. The Department of Revenue shall provide plates for all motor vehicles and shall also provide receipts, one of which shall be retained by the judge of probate, one shall be delivered to the person paying the license fee, and one legible copy shall be mailed by the judge of probate to the Department of Revenue on the day the license was issued. Each receipt shall bear the same number as the plate delivered to the licensee. These receipts shall be prepared in the form to be determined by the Department of Revenue and delivered to the judges of probate of the several counties of the state under such rules and regulations as may be prescribed by the Department of Revenue; and the Department of Revenue shall have power to prescribe rules and regulations concerning the application for and delivery to the licensee of the plate and receipt required by this article.
(e) The automobile licensee shall be required to state in his or her application the proposed use of the automobile, whether for private use or for commercial purposes.
(f) The plates furnished for commercial vehicles, except those used or rented by a U-Drive-It or similar system, shall be of a different design from those used for private or pleasure cars. In applying for license for buses, taxicabs, or U-Drive-Its or like motor vehicles, the application shall give the seating capacity and the weight of the vehicle.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §705; Acts 1949, No. 44, p. 66; Acts 1951, No. 207, p. 469; Acts 1961, Ex. Sess., No. 143, p. 2085, §§2, 3; Acts 1997, No. 97-177, p. 267, §1; Act 2004-292, p. 414, §1; Act 2017-242, §1.)
Notwithstanding any other provision of law, the license tax and registration fee to be paid for any motor vehicle, either new or used, that may be acquired or first brought into and operated on the public streets or highways of this state shall be computed by the multiplication of one twelfth of the annual license tax and registration fee by the number of calendar months remaining in the license year.
(Acts 1967, No. 311, p. 860; Act 2004-292, p. 414, §1.)
(a) Effective January 1, 1998, license plates, except for license plates issued under the provisions of Section 40-12-290, et seq., or any subsequent enactment which authorizes special license plates based on vehicle age, shall not be transferable between motor vehicle owners and the following registration procedures shall apply:
(1) When a current and valid Alabama motor vehicle license plate has been obtained for the current tax year for use on a motor vehicle and the vehicle has been sold or otherwise transferred to a new owner, the license plate shall be removed from the vehicle and retained by the original plate owner.
(2) In the event an owner purchases, trades, exchanges, or otherwise acquires another vehicle of the same license registration classification, the licensing official shall authorize the transfer of the current and valid Alabama license plate previously obtained by the owner to the replacement vehicle for the remainder of the current license year. In the further event the owner acquires a vehicle requiring a higher license classification, the owner shall first request a transfer of the valid Alabama license plate to the newly acquired vehicle, and, immediately, shall surrender the license plate to the issuing official, and upon payment of the difference in registration fees on a monthly prorated basis, shall be issued the higher license plate classification. Provided, that the owner shall not be entitled to a refund when the registration fee for the vehicle to which the plate(s) is to be assigned is less than the registration fee for that vehicle to which the license plate(s) was last assigned. Furthermore, if the owner does not have or does not acquire another vehicle to which the license plate(s) may be transferred, the owner shall not be entitled to a refund and the license plate shall be revoked.
(3) In the event the owner of a license plate purchases, trades, exchanges, or otherwise acquires a vehicle for which a license plate has been issued during the current license year, and the license plate has not been removed by the previous owner in accordance with this section, the new owner of the vehicle shall remove and return the license plate to the county license plate issuing official of the county where the owner resides, if the owner is an individual, or of the county in which said motor vehicle is used or operated if the owner is a firm, corporation, or association, who shall receive, account for, and dispose of the license plate. However, if the license plate has expired, the new owner shall not be required to surrender the license plate.
(4)a. The new owner of a motor vehicle shall, within 20 calendar days from the date of vehicle purchase or acquisition, make application to record the registration of the vehicle by the transfer to or the purchase of a license plate for the newly acquired vehicle with the license issuing official of the county in which the owner resides if the owner is an individual, or with the license issuing official of the county in which the motor vehicle is used or operated if the owner is a firm, corporation, or association and shall pay the fee provided under Section 40-12-271.
b. The county license issuing official shall provide the registration record to the Department of Revenue. One copy shall be retained in the files of the county license issuing official, and one copy shall be furnished to the registered owner. The Department of Revenue shall have the authority to prescribe rules and regulations for the administration of this paragraph.
c. Licensed motor vehicle dealers shall not be required to register vehicles in the name of the dealership for vehicles held for resale. The dealership shall register any motor vehicle and purchase an Alabama license plate of the proper classification for any motor vehicle purchased, leased, or otherwise withdrawn from dealer inventory for private, personal, or business use by any person, including any of the dealership employees.
(5) Any person failing to register a motor vehicle by timely transferring the license plate as provided by subsections (a)(2) and (a)(4) above and (a)(7) below shall pay a penalty of fifteen dollars ($15). The penalty shall be paid into the treasury of the county, with the county treasurer maintaining these moneys as a special training fund. Only one special training fund shall be established in each county. These moneys shall be used for all reasonable and necessary official educational expenses directly related to the assessment and collection of taxes on motor vehicles or registration and titling of motor vehicles. The special training fund shall be for the use of the officials in the county charged with the motor vehicle responsibilities mentioned above, and shall be in addition to the amount budgeted for these offices. Moneys shall be disbursed by the county treasurer for the payment of the motor vehicle related educational expenses of those officials and their employees by the county officials requisitioning expenditures from the fund. Not more than three thousand dollars ($3,000) shall be paid into the special training fund during any fiscal year (October 1 through September 30). Any excess moneys shall accrue to the general fund of the county.
(6) Any person, firm, or corporation engaged in the business of selling or otherwise disposing of motor vehicles which are required to be registered in this state shall furnish each purchaser of a motor vehicle with a legal bill of sale on which there shall be printed, stamped, or otherwise inscribed in a bold and conspicuous manner the words: “Penalty of fifteen dollars ($15) due if vehicle is not registered in the name of the new owner within 20 calendar days.”
(7)a. In the event a motor vehicle is registered pursuant to Section 32-6-150 or Section 32-6-300, or any other section designated by the Commissioner of Revenue by rule or regulation, and is transferred to the transferor’s spouse or child, at the option of the transferor, the license plate may remain on the vehicle in the hands of the transferee upon payment of the fee for recording the transfer of the license plate.
b.1. A surviving spouse, desiring to operate a vehicle devolving from a deceased spouse, shall present an application for certificate of title to the licensing official in his or her name within 20 days of obtaining ownership. The licensing official shall then transfer the license plate to the surviving spouse. If the motor vehicle is not subject to the provisions of the Alabama Uniform Certificate of Title and Antitheft Act (Section 32-8-1, et seq.), the surviving spouse shall provide the licensing official evidence that ownership has been conveyed to the surviving spouse.
(8) In the event the owner of a motor vehicle junks the vehicle or the vehicle is deemed a total loss, as defined in Section 32-8-87, the license plate may be transferred to a motor vehicle of the same class during the same tax year. The owner of the license plate, after authorization by the licensing official, and after compliance with the provisions of the Alabama Uniform Certificate of Title and Antitheft Act, if applicable, may transfer the plate to a vehicle currently owned but not operated by that owner for the period remaining before expiration of the registration, or the license plate may be transferred to a newly acquired vehicle.
(9) All references in this article to the words tag or plate shall have identical meaning and may be used interchangeably. The words tag, plate, and owner shall mean singular or plural.
(b)(1) Any person operating a self-propelled vehicle required to be registered in this state on the public roads and highways of this state shall retain within the vehicle a current and valid Alabama motor vehicle registration receipt issued to the vehicle being operated. This subsection shall apply to all vehicles registered on or after January 1, 1998.
(2) Within the first 20 calendar days of purchase or acquisition of a self-propelled motor vehicle, prior to receiving a copy of a registration receipt, there shall be retained within the vehicle being operated a legible copy of the legal bill of sale if the motor vehicle is not subject to the provisions of the Alabama Uniform Certificate of Title and Antitheft Act (Section 32-8-1, et seq.), or the owner’s permit copy of the application for certificate of title, or an official copy of a current and valid Alabama temporary registration receipt as authorized under Section 32-6-210 to Section 32-6-219, inclusive, assigned to the vehicle being operated.
(3) a. The retained documents specified by subsections (b)(1) and (b)(2) above shall be presented, on demand, by the vehicle operator, for inspection by law enforcement officers. The registration receipt may be presented in either a tangible format or in an electronic format. It shall be unlawful for the operator to fail or refuse to present, when requested by a law enforcement officer, the official registration receipt, or other document herein described, or legible copy thereof, for the vehicle being used or operated.
b. The use of a cellular phone or other electronic device to display evidence of a registration receipt does not constitute consent for law enforcement or other governmental employees to access any other content on the electronic device. Any law enforcement officer or other governmental employee presented with an electronic device pursuant to this section shall be subject to the provisions of Section 36-1-12 for damages to the electronic device resulting from acts taken when viewing the device pursuant to this section.
(4) A motor vehicle dealer licensed under the provisions of Section 40-12-390 to Section 40-12-400, inclusive, or a motorcycle dealer licensed under the provisions of Section 40-12-62, or any motor vehicle manufacturer utilizing manufacturer license plates as authorized under the provisions of subsection (g) of Section 40-12-264 shall not be required to comply with this subsection for self-propelled motor vehicles within the dealer inventory of the motor vehicle dealer, or, in the case of the motor vehicle manufacturer, shall not be required to comply for new vehicles utilizing the manufacturer license plates and being operated within the provisions of subsection (g) of Section 40-12-264.
(c) Any person failing to perform the duties required by the provisions of this section shall be guilty of a Class C misdemeanor.
(Acts 1935, No. 194, p. 256; Acts 1939, No. 611, p. 978; Code 1940, T. 51, §706; Acts 1945, No. 361, p. 578; Acts 1953, No. 480, p. 598; Acts 1961, Ex. Sess., No. 162, p. 2109; Acts 1963, No. 296, p. 766; Acts 1965, 1st Ex. Sess., No. 201, p. 269; Acts 1969, No. 1032, p. 1914; Acts 1978, No. 540, p. 601, §1; Acts 1996, No. 96-746, p. 1307, §1; Act 2004-529, p. 1106, §1; Act 2017-242, §1.)
(a) The provisions of the foregoing sections relative to registration and display of registration numbers shall not apply to a motor vehicle owned by a nonresident of this state and not used for hire or used for commercial purposes in this state for a period of 30 days from date of entering the state; provided, that the owner thereof shall have complied with the provisions of the law of the foreign country, state, territory, or federal district of his residence relative to the registration of motor vehicles and the display of registration numbers thereon and shall conspicuously display his registration number as required thereby; provided further, that nothing herein shall be construed to permit the use of motor vehicles for hire, or for commercial purposes, by nonresidents without complying with the provisions of this article. The state Department of Revenue is hereby authorized to make reciprocal agreements with other states for an exchange of rights for the operation of motor vehicles that will be considered as a fair exchange of rights and privileges, the said rights and privileges to be in effect as long as both contracting parties recognize the rights of the other. The above reciprocal agreement can be annulled on a notice issued to either party by the other party thereto within 30 days thereafter.
(b) Each vehicle registered pursuant to the provisions of Section 32-6-56 (International Registration Plan) must have a current and valid Alabama license plate of the correct classification and a current and valid cab card reflecting the proper vehicle identification if based in Alabama. If the vehicle is from another member jurisdiction, it must have a current and valid apportioned registration plate and cab card reflecting the proper vehicle identification, proper weight classification as provided in Section 40-12-248, and listing the State of Alabama as a participating member, or be registered as provided in subsection (c) or (d) below.
(c) Persons who drive or operate vehicles of a weight or type as defined in the International Registration Plan and which are based outside Alabama and elect not to secure a full or apportioned registration or registration pursuant to a reciprocal agreement between Alabama and the vehicle’s base state, must secure, prior to entry into this state, a temporary trip permit in lieu of full registration or apportioned registration. This temporary trip permit shall be valid for seven days and may be obtained from the state Department of Revenue or an agent designated by the department, in the form and under the rules and regulations prescribed by the Commissioner of Revenue. The fee for each such permit shall be $20, which upon receipt by the Commissioner of Revenue must be promptly deposited into the State Treasury to the credit of the State Road and Bridge Fund.
(d) An owner-operator of a vehicle of the weight or type as defined in the International Registration Plan not operating as a lessor for a registered motor carrier may operate an unladen vehicle or combination of vehicles without the temporary trip permit, providing the owner-operator possesses and presents upon request, a current and valid temporary registration plate or permit from a member jurisdiction.
(e) The cab card or temporary trip permit provided for herein must be present at all times in the vehicle for which it is issued; and must be presented, on demand, for inspection by revenue enforcement officers or other agents or officers of the state Department of Revenue, or other law enforcement officers.
(f) It shall be unlawful for any person to operate on the public roads and highways of this state, an apportionable vehicle or combination of apportionable vehicles based in a jurisdiction that is a party to the International Registration Plan, that is not validly registered as provided in this section. It shall be unlawful for any person to alter a cab card or temporary trip permit; or to possess or offer an altered cab card or temporary trip permit. Anyone violating any of the provisions of this section shall be guilty of a Class C misdemeanor, and upon conviction thereof, shall be punished as provided by law, except that the minimum fine upon conviction shall be $200 or the maximum fine provided for a Class C misdemeanor, whichever is less.
(g) It shall be unlawful for any person to operate on the public roads and highways of this state, a vehicle or combination of vehicles of a weight or type as defined in the International Registration Plan not based in a jurisdiction that is a party to the International Registration Plan, that is not validly registered in Alabama or registered in accordance with a reciprocal agreement between Alabama and its state of registration. Anyone violating any of the provisions of this paragraph shall be guilty of a Class C misdemeanor, and upon conviction thereof, shall be punished as provided by law, except that the minimum fine upon conviction shall be $200 or the maximum fine provided for a Class C misdemeanor, whichever is less.
(Acts 1935, No. 194, p. 256; Acts 1936, Ex. Sess., No. 177, p. 208; Acts 1939, No. 402, p. 527; Code 1940, T. 51, §707; Acts 1987, No. 87-763, p. 1484.)
No truck, semitrailer truck, road tractor, or other like motor vehicle used for hire or for commercial purposes which is owned by a nonresident of this state shall be registered in this state except as may be otherwise provided in or authorized or required by Section 40-12-262. Every person, firm, or corporation who applies for the registration of a truck, semitrailer truck, road tractor, or other like motor vehicle used for hire or for commercial purposes shall be required by the judge of probate or commissioner of licenses to state in writing under oath his name and address and whether the vehicle is owned by a resident or by a nonresident of this state. Any person who knowingly makes a false statement in applying for the registration of a motor vehicle pursuant to this section is guilty of a misdemeanor and upon conviction shall be punished as prescribed by law.
(Acts 1955, No. 361, p. 879.)
(a) Any person, including a motor vehicle dealer, acquiring a new or used motor vehicle may be granted a grace period of 20 calendar days from date of acquisition to procure a license tag or plate.
(b) Notwithstanding Section 32-6-65, a new or used motor vehicle dealer who has a current regulatory license required under this article and a dealer license as required by Section 40-12-51 or Section 40-12-169 may purchase dealer license plates from the department upon presentation of the current licenses and payment of the fee for a private passenger automobile as provided in subdivision (1) of subsection (a) of Section 40-12-242 and subsection (a) of Section 40-12-273 per dealer plate. An additional two dollar ($2) issuance fee shall also be collected by the department. A new or used motor vehicle dealer that has a current regulatory license required under this article and a dealer license as required by Section 40-12-62 may purchase motorcycle dealers’ license plates from the department upon presentation of current licenses and payment of the motorcycle registration fee as provided by subdivision (2) of subsection (a) of Section 40-12-242 and subsection (c) of Section 40-12-273 per license plate. An additional two dollar ($2) issuance fee shall also be collected by the department. Dealer license plates and motorcycle dealer license plates may only be used on motor vehicles owned by the dealership and being held in the inventory of the dealer. The number of dealer license plates is limited as follows:
(1) A licensed new motor vehicle dealer may purchase a maximum combined total of 35 dealer and motorcycle dealer license plates unless the dealer qualifies for additional dealer license plates as provided for in subdivision (3).
(2) A licensed used motor vehicle dealer may purchase a maximum combined total of 10 dealer and motorcycle dealer license plates unless the dealer qualifies for additional dealer license plates as provided for in subdivision (3).
(3) Any licensed new or used motor vehicle dealer who completes applications for certificates of title involving title transfers for 300 or more motor vehicles in this state during the previous dealer regulatory license year may purchase a combined total of not more than 25 additional dealer and motorcycle dealer license plates.
(c) Dealer license plates may be used by prospective purchasers, owners, partners, corporate officers, and employees of the dealership and only on vehicles owned by the dealership and being held in the inventory of the dealer. Dealer license plates shall not be used on vehicles that are utilized by the dealership as rental or lease vehicles, tow trucks, service trucks or vans, or for other commercial purposes. A prospective purchaser shall be limited to 72 hours of use of dealer license plates. All vehicles on temporary loan from a motor vehicle dealer to a customer whose vehicle is being serviced or repaired by the dealer or to a high school for the purpose of student driver education shall be considered dealer demonstrator vehicles and dealer license plates may be used on these vehicles provided a fee is not charged by the dealer for the use.
(d) Licensed new and used motor vehicle dealers selling trucks or truck tractors with more than two axles on the power unit or a gross weight exceeding 26,000 pounds shall allow prospective purchasers to use dealer license plates for one payload trip only, and that use shall not exceed 72 hours. The dealer shall provide the prospective purchaser a permit fully describing the vehicle by make, model, year, and vehicle identification number. The permit shall contain the complete name and address of the dealership and of the prospective customer and shall clearly indicate the date and time the permit was issued. The permit and dealer license plate shall be issued only for demonstration purposes, and shall not be issued by the dealer when a vehicle is loaned or rented to an operator for any other purpose.
(e) A licensed new or used motor vehicle dealer, upon proper application, may be issued a temporary seven-day dealer transit license plate to be used on motor vehicles being offered for sale to licensed motor vehicle dealers. The temporary dealer transit license plate shall be issued in a manner as prescribed by the department. Temporary seven-day dealer transit license plates may be used by the new or used motor vehicle dealer to transport vehicles within the inventory of the dealer. The temporary seven-day dealer transit license plates shall not be used on service vehicles, which include tow trucks and rental and lease vehicles, or used for other commercial purposes. The fees for the seven-day dealer transit license plates shall be five dollars ($5).
(f) A motor vehicle wholesale auction, licensed under Section 40-12-446, upon proper application, may be issued a seven-day auction transit license plate to be used to transport vehicles to and from the auction. The seven-day auction transit license plate shall be issued in a manner as prescribed by the department. The seven-day auction transit license plate may not be used on service vehicles, which include tow trucks and rental and lease vehicles, or used for other commercial purposes. The fee for a seven-day auction transit license plate shall be five dollars ($5).
(g) A licensed motor vehicle dealer may purchase a temporary seven-day dealer transit license plate to be used in accordance with subsection (a) of Section 32-8-87.
(h) Notwithstanding Section 32-6-65, any manufacturer of private passenger automobiles, motorcycles, trucks, truck tractors, or trailers who has manufacturing facilities located in this state and has a current manufacturer’s license as required by Section 40-12-87, may procure manufacturer license plates from the department upon payment of the private passenger automobile or motorcycle fees per plate, as provided in subdivision (1) or (2) of subsection (a) of Section 40-12-242 and subsection (a) or (c) of Section 40-12-273. An additional two dollar ($2) issuance fee shall also be collected by the department. The word “manufacturer” shall appear on the license plates. The license plates may be used for transporting and testing new motor vehicles owned by the manufacturer.
(i) The proceeds of the fees levied in this section shall not be subject to proration. The registration fees collected pursuant to this section for dealer license plates and manufacturer license plates shall be distributed by the department in the same manner as fees for private passenger automobiles and motorcycles pursuant to Sections 40-12-269, 40-12-270, and 40-12-274. The five dollar ($5) fee for the issuance of the seven-day dealer transit plates and the seven-day auction transit plates and the additional two dollar ($2) issuance fee for dealer license plates and manufacturer license plates shall be retained by the department to offset the cost of administering this article. The five dollar ($5) fee and the two dollar ($2) issuance fee, in addition to all other appropriations, shall be continuously appropriated to the department. No fees provided in this section may be refunded.
(j) No motor vehicle ad valorem taxes, registration fees imposed by local law, or issuance fees imposed by local law shall be collected by the department when issuing license plates pursuant to this section. In addition, motor vehicle delinquency penalties and interest fees shall not be applicable when issuing license plates pursuant to this section.
(k) No motor vehicle ad valorem taxes or sales tax shall be collected by the local issuing official when a standard plate is issued for a motor vehicle held in inventory by a licensed new or used motor vehicle dealer.
(l) Any person to whom license plates are issued under this section, upon forfeiture or revocation of his or her license under Section 40-12-390, et seq., or upon discontinuing business, shall surrender to the department all license plates issued within 10 calendar days from the date of forfeiture or revocation of license or discontinuing business.
(m) Motor vehicle dealer, motorcycle dealer, manufacturer, auction transit, or dealer transit license plates may not be used in lieu of regular issued license plates as a means of avoiding the registration and ad valorem tax requirements of this chapter. Any person who willfully misuses or unlawfully acquires a license plate issued under this section in a manner not authorized by this section and rules adopted pursuant to this section shall be subject to a penalty assessed by the department in the amount of two hundred dollars ($200) for the first violation and five hundred dollars ($500) for each subsequent violation.
(n) A licensed new or used motor vehicle dealer shall register any motor vehicle and purchase an Alabama license plate of the proper classification for any motor vehicle withdrawn from the inventory of the dealer.
(o) A motor vehicle dealer, motorcycle dealer, or manufacturer license plate may be replaced in accordance with Section 40-12-265.
(p) Any person who makes willful misstatements or files documents with erroneous information in order to obtain motor vehicle dealer, motorcycle dealer, dealer transit, auction transit, or manufacturer license plates shall be guilty of a Class A misdemeanor subject to criminal penalties as provided by law, and may be assessed a civil penalty of one thousand dollars ($1,000) by the department.
(q) A new or used motor vehicle dealer, motor vehicle rebuilder, or motor vehicle wholesaler, licensed pursuant to Section 40-12-51, 40-12-62, or 40-12-169 and Section 40-12-391, or a manufacturer of private passenger automobiles, motorcycles, trucks, truck tractors, or trailers that is licensed pursuant to Section 40-12-87, is prohibited from renewing his or her licenses if the new or used motor vehicle dealer, motor vehicle rebuilder, motor vehicle wholesaler, or manufacturer fails to pay any outstanding liabilities resulting from the assessment of penalties provided in this section.
(Acts 1939, No. 370, p. 497; Code 1940, T. 51, §464; Acts 1953, No. 117, p. 167; Acts 1994, No. 94-584, p. 1071, §1; Acts 1995, No. 95-761, p. 1785, §1; Acts 1996, No. 96-746, p. 1307, §3; Act 2002-256, p. 537, §1; Act 2004-529, p. 1106, §1; Act 2011-554, p. 1032, §1; Act 2014-158, p. 445, §1; Act 2019-244, §1; Act 2021-490, §1.)
(a) It shall be unlawful for any person to mutilate or alter, for the purpose of deception, any motor vehicle tag, plate, or validation stamp or to use upon any motor vehicle any tags, plates, or validation stamps in imitation of or substitution for authorized issued tags, plates, or validation stamps. It shall be the duty of all sheriffs, police officers, state troopers, license inspectors, deputy license inspectors, and field agents of the Department of Revenue to arrest any person violating the provisions of this section, and upon conviction of any such person a fine of not less than $25 nor exceeding $100 shall be imposed for each offense. The license inspector shall receive a fee of $1.50 for making such arrest, which arrest fee shall be collected as a part of the costs in any such action before a court of competent jurisdiction.
(b) In case the tag, plate, or validation stamp becomes so mutilated as to make it illegible, the owner of the vehicle must file with the county probate judge an application setting forth the facts that the tag, plate, or validation stamp or one of them has been lost, mutilated, or destroyed; and, upon payment of $2 and the surrender of the tag, if mutilated, the probate judge or the appropriate licensing authority established by local act shall forward $1 to the state Department of Revenue, and shall issue without additional charge a replacement tag or validation stamp to the applicant. The probate judge or the appropriate licensing authority established by local act shall retain $1 for his service. Should the lost tag or plate be recovered or come into the possession of such applicant, he must immediately deliver same to the probate judge or the appropriate licensing authority established by local act. Should any person use upon any motor vehicle the old tag or validation stamp, he shall be guilty of a misdemeanor and upon conviction be fined as provided in subsection (a) of this section, and shall in addition, be required to procure a proper license at the annual rate levied for such license.
(c) Any person using a motor vehicle with improper license plate or validation stamp, or failing to have tag, plate, or validation stamp properly displayed, shall be notified in writing by the license inspector or field agent. If after five days from the date of such notice said person fails or refuses to comply with said notice, the license inspector shall thereupon issue citation to such person to appear instanter and procure such proper license or, in the case of mutilated or lost license plate or validation stamp, to make the application and pay the amount as herein provided; where such person is cited for improperly displaying the license plate or validation stamp and fails or refuses to comply with the citation of the license inspector, such person shall be arrested and, upon conviction, fined as herein provided. In each case where the citation has been served in accordance herewith, the license inspector shall be entitled to a citation fee of $1.50.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §708; Acts 1943, No. 577, p. 579; Acts 1973, No. 1285, p. 2197; Acts 1979, No. 79-797, p. 1455, §7.)
[Repealed]
Repealed by Act 2013-398, §4, effective May 23, 2013.
(Acts 1935, No. 194, p. 256; Acts 1939, No. 212, p. 363; Code 1940, T. 51, §710; Acts 1943, No. 576, p. 578.)
The registration fee or license tax herein required to be paid on motor vehicles shall be in lieu of all other privilege or license taxes which the state or any county or municipality thereof might impose, where the motor vehicle is used by the owner; provided, that only one such license tax can be levied and collected on one and the same motor vehicle for one and the same period of time; provided further, that incorporated cities and towns are hereby authorized to collect a reasonable license or privilege tax on motor vehicles used for carrying passengers or freight for hire.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §711.)
(a) On or before the twentieth day of each month, the probate judge must disburse all money received by him during the then preceding month in respect of motor vehicle licenses and registration fees as follows:
(1) The probate judge shall retain, as compensation for collecting all such money, two and one-half percent of all moneys so collected, except that portion of the said moneys that constitutes additional amounts paid under the schedule of additional amounts set forth in subsection (b) of Section 40-12-248; but no such compensation shall be allowed with respect to any money not remitted pursuant to subdivisions (2) and (3) of this subsection at the time when such remittances are provided in this section to be made;
(2) There shall be remitted to the State Treasurer five percent of all moneys so collected except that portion of the said moneys that constitutes additional amounts paid under the schedule of additional amounts set forth in subsection (b) of Section 40-12-248; and
(3) The residue of the money so collected shall be remitted as provided in Section 40-12-270; provided, that the probate judge shall have an additional period of 10 days within which to make remittances of amounts collected by him during the months of October, November and December and remittances with respect to collections during any of those months shall be made on or prior to the thirtieth day of the then next succeeding month.
(b) At the time that each monthly remittance is made as herein provided, the probate judge shall forward to the Comptroller and to the Department of Revenue each a certified list of all motor vehicle licenses issued by the probate judge during the then preceding month, stating therein the amount collected for each license tag, the number of the tag, the motor number of the vehicle, or vehicle identification number, in lieu of the motor number, the serial number of the vehicle, the name and address of its owner, and the date of the issuance of said tag; provided, that the Governor may, by executive order, direct that such list be forwarded to the state Department of Public Safety instead of the state Department of Revenue, thus placing the responsibility for the maintenance of the records of motor vehicle registration on the state Department of Public Safety whenever such action is necessary to enable the state to receive federal funds or federal grants under the National Highway Safety Act or any other federal program; provided further, that in all counties having over 600,000 population according to the last or any subsequent federal census the date of the issuance of the tag shall not be included in the certified list of all motor vehicle licenses issued. If no such licenses shall have been issued during any month by the probate judge, he shall report that fact to the said Comptroller and to the said department on or prior to the tenth day of the then next succeeding month.
(c) If any probate judge fails to comply with the provisions of this section within five days after the date on which he is required to make any report or remittance hereunder, the Comptroller shall forthwith report such failure to the Governor, who shall cite such probate judge to show cause why he has not made report of the list of motor vehicle licenses and paid over the amount collected by him as required by law, and if such probate judge fails to show sufficient cause for such failure, the Governor shall direct the Attorney General to institute impeachment proceedings against him before the Supreme Court.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §712; Acts 1945, No. 68, p. 64; Acts 1951, No. 973, p. 1646; Acts 1963, No. 140, p. 516; Acts 1967, Ex. Sess., No. 223, p. 282, §7; Acts 1969, No. 1075, p. 2005; Acts 1971, No. 1206, p. 2092, §2; Acts 1977, No. 176, p. 236; Acts 1984, No. 84-186, p. 286, §2.)
(a) The moneys collected each month by the judge of probate from motor vehicle license taxes and registration fees, after deducting therefrom the amounts referred to in subdivisions (1) and (2) of subsection (a) of Section 40-12-269, the moneys remaining after making the deductions being referred to in this section as “the net proceeds,” shall be disbursed by the judge of probate as follows:
(1) That portion of the net proceeds that consists of additional amounts paid under the schedule of additional amounts set forth in subsection (b) of Section 40-12-248 shall be remitted by the judge of probate to the State Treasurer who shall distribute the amounts as follows:
a. 64.75 percent of the amounts shall be distributed by the State Treasurer to the State of Alabama;
b. 35.25 percent of the amounts shall be apportioned and distributed by the State Treasurer among the 67 counties as follows:
A portion of the counties’ share of the net tax proceeds that is equal to 42.16 percent of the total net tax proceeds distributed to counties under paragraph (a)(1)b. of this section, shall be allocated equally among the 67 counties of the state.
The entire residue of the counties’ share of the net tax proceeds, being an amount equal to 57.84 percent of the total net tax proceeds distributed to counties under paragraph (a)(1)b., shall be allocated among the 67 counties of the state on the basis of the ratio of the population of each county to the total population of the state according to the then next preceding federal decennial census, or any special federal census heretofore held in any county subsequent to the effective date of the 1980 federal decennial census.
(2) The entire residue of the net proceeds remaining after compliance with subdivision (1) shall be distributed as follows:
a. Seventy-two percent of the residue, referred to in this subdivision, shall be distributed to the State of Alabama and shall be remitted by the judge of probate to the State Treasurer;
b. Twenty-one percent of the residue, referred to in this subdivision, shall be remitted by the judge of probate to the municipality in which the owner of the motor vehicle resides or with respect to which it is registered as required by law, or, if the owner does not reside in, or the motor vehicle is not required by law to be registered with respect to, an incorporated municipality, then to the county in which the license tax or registration fee with respect to the motor vehicle is paid; and
c. Seven percent of the residue, referred to in this subdivision, shall be remitted by the judge of probate to the State Treasurer and shall be apportioned by the State Treasurer among the several counties of the state in an amount for each county that bears the same relation to, and constitutes the same proportion of, the total of the seven percent that the total number of motor vehicles registered in such county bears to the total number of motor vehicles registered in the entire state. The amounts so apportioned to each county shall be distributed by the State Treasurer as follows:
Ten percent of the amount so apportioned to each county shall be distributed among the municipalities in the county with respect to which the apportionment is made, each such distribution to be on the basis of the ratio of the population of each such municipality to the total population of all municipalities in the applicable county according to the then next preceding federal decennial census; and
The remaining portion of the amount so apportioned to each county shall be distributed to the county to which the apportionment is made.
(b) Payment of the amounts herein provided to be distributed by the State Treasurer to counties and municipalities shall be made monthly by state warrant and shall be mailed, in the case of distribution to a county, to the county treasurer (or other officer or entity having the functions of a county treasurer) of that county and, in the case of a distribution to a municipality, to the treasurer of that municipality.
(c) Any municipality incorporated after September 30, 1967, shall not participate in the distribution provided for in this section until the fiscal year next succeeding the fiscal year during which it is incorporated. The population of any municipality incorporated subsequent to the taking of the then next preceding federal decennial census shall, until the effective date of the then next succeeding federal decennial census, be deemed to be the population shown by the census for that municipality taken pursuant to the requirements of Section 11-41-4. For the purposes of this section, each federal decennial census shall be deemed to be effective on October 1 next following the publication of the results of the decennial census.
(d) The amounts remitted to the State Treasurer pursuant to subdivision (2) of subsection (a) of Section 40-12-269 and all moneys provided in this section to be distributed to the State of Alabama shall be covered into the Treasury to the credit of the Public Road and Bridge Fund and disbursed as follows:
(1) Paid out of the portion of the motor vehicle license taxes and registration fees that is remitted to the State Treasurer pursuant to Section 40-12-269(a)(2):
a. One million two hundred thousand dollars ($1,200,000) shall be distributed to the Alabama State Law Enforcement Agency (ALEA) each fiscal year to the credit of the Public Safety Fund to be used for the enforcement of state traffic and motor vehicle laws; and
b. The remaining amounts appropriated by the Legislature out of the motor vehicle license taxes and registration fees for the payment of expenses of the state Department of Revenue in the collection of the said taxes and fees, including salaries, cost of tags and other costs of collection;
(2) So much of the net proceeds distributed to the State of Alabama pursuant to the provisions of this section as shall be necessary for such purpose shall be used for the following purposes in the following order:
a. Payment at their respective maturities of the principal of and interest on bonds, other than refunding bonds, issued by the Alabama Highway Authority under the provisions of Acts 1967, Ex. Sess., No. 225, p. 302;
b. Payment at their respective maturities of the principal of and interest on bonds, other than refunding bonds, issued by the Alabama Highway Authority under the provisions of Acts 1969, No. 781, p. 1398;
c. Payment at their respective maturities of the principal of and interest on bonds, other than refunding bonds, issued by the Alabama Highway Authority under the provisions of Acts 1971, No. 1416, p. 2414; and
d. Payment at their respective maturities of the principal of and interest on any bonds or other obligations, including refunding obligations, issued after December 1, 1977, by a public corporation existing at the time of issuance under the laws of Alabama pursuant to then existing statutory or constitutional authorization, or by the State of Alabama pursuant to authorization, effective at the time of issuance, under the Constitution and laws of the state, and for which the net proceeds referred to in this subdivision shall have been appropriated and pledged in a then effective statute or constitutional provision (including any enabling act under a constitutional provision), all in the manner and to the extent and subject to such priorities in rank as may be provided in such statute or constitutional provision or in an authorizing resolution thereunder; and
(3) The balance of the moneys referred to in subdivisions (1) and (2) remaining after compliance with the subdivisions shall be used by the state Department of Transportation for construction and maintenance of public roads and bridges in the state and for any other purpose for which moneys in the Public Road and Bridge Fund may be lawfully used.
(e)(1) All moneys received by a municipality or county under this section, except that portion of the moneys that constitute collections from additional amounts paid under the schedule of additional amounts set forth in subsection (b) of Section 40-12-248 and distributed under subdivision (a)(1), shall be used by such municipality or county exclusively for the construction, improvement, and maintenance of public highways or public streets, including administrative expenses in connection therewith and retirement of securities evidencing obligations incurred for payment of costs of the construction, improvement, and maintenance.
(2) All moneys received by a county under this section which constitute collections from additional amounts paid under the schedule of additional amounts set forth in subsection (b) of Section 40-12-248 and distributed under subdivision (a)(1) shall be used by the county for the construction, including draining, grading, basing, paving, signing, and erosion items, of certain high density unpaved roads as herein provided and for the construction or reconstruction of bridges on such high density roads. The use may also be for the reconstruction, resurfacing, restoration, and rehabilitation of the paved county roads and bridges or bridge replacement on the county road system. The use may also be for the construction, including draining, grading, basing, and paving of certain unpaved roads, and reconstruction of certain paved roads accessing certain public and private recreational facilities and areas.
There is hereby created a committee to be referred to as the Secondary Road Committee comprised of the Chief of the Bureau of Secondary Roads of the state Department of Transportation, two county engineers appointed by the state Director of Transportation and two county commission members appointed by the Governor. The committee members shall serve at the pleasure of the appointing authority. The committee shall elect one of its members to serve as chair. A quorum of the committee shall consist of no less than three members. Committee members shall serve without compensation.
The Secondary Road Committee shall develop and publish criteria for the designation of high density roads and bridges and for the designation of eligible recreational access roads. The committee may in its discretion provide different criteria for counties according to population, topography, and road mileage. The committee shall also develop and publish minimum design standards, including allowable cost items, for the construction, reconstruction, surfacing, resurfacing, restoration, and rehabilitation of such high density roads and bridges and recreational access roads. Criteria and standards developed by the committee shall be published by distributing printed copies thereof to the chairman of each county commission in Alabama no later than 90 days after June 1, 1984. The committee may from time to time amend the criteria and standards developed provided that at least 60 days’ notice is provided in writing to the chair of each county commission before the effective date of the amendment. The state Department of Transportation shall provide all supplies and clerical help necessary for the committee to execute its responsibilities.
County commissions are hereby required to submit all plans for the use of such proceeds to the Director of Transportation or his or her designee for approval. The Director of Transportation or his or her designee shall review all plans and approve them or disapprove them, based on the criteria and standards developed by the committee.
The funds distributed to the counties under this subsection shall not be commingled with other funds of the county except the counties’ portion of the inspection fee distributed under Section 8-17-91, and shall be kept and disbursed by such county from a special fund only for the purposes hereinabove provided.
The provisions of this section notwithstanding, any county may at any time deposit all or any portion of the proceeds into the county’s special RRR fund as provided for in Section 40-17-224 and may use the proceeds so deposited for any purpose authorized under that section.
(Acts 1935, No. 194, p. 256; Acts 1939, No. 397, p. 518; Code 1940, T. 51, §713; Acts 1949, No. 471, p. 688; Acts 1951, No. 314, p. 609; Acts 1961, No. 682, p. 974; Acts 1967, Ex. Sess., No. 223, p. 282, §8; Acts 1969, No. 780, p. 1395; Acts 1971, No. 1206, p. 2092, §3; Acts 1978, No. 579, p. 648; Acts 1984, No. 84-186, p. 286, §3; Act 2021-365, §1.)
The probate judge or license commissioner of the county, for issuing the licenses required by this article or by any other law prescribing licenses for operating motor vehicles, shall be allowed a fee of $1.25 for issuing each license for operating motor vehicles. Such fees shall be paid to the probate judge or license commissioner of the county by the owner at the time of the issuance of the license tag.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §714; Acts 1951, No. 681, p. 1172; Acts 1978, No. 598, p. 849; Acts 1979, No. 79-797, p. 1455, §9.)
A disabled veteran who qualifies for a partial or full exemption from privilege license taxes, registrations fees, or ad valorem taxes under Section 32-6-130, 40-12-244, or 40-12-254, shall also be exempt from the license plate issuance fee provided in 40-12-271.
(Act 2021-410, §1.)
The Commissioner of Revenue shall issue such rules and regulations as he deems necessary to carry out the provisions of Sections 40-12-260, 40-12-261, and 40-12-266.
(Acts 1978, No. 540, p. 601, §6.)
(a) Effective October 1, 1984, in addition to the regular license tax or registration fee for each passenger automobile as established in Section 40-12-242, there shall be an additional fee of $10.
(b) Effective October 1, 1984, in addition to the regular license tax or registration fee for each truck with a gross weight of 8,000 pounds or less as established in Section 40-12-248, there shall be an additional annual fee of $10.
(c) Effective October 1, 1984, in addition to the regular license tax or registration fee for each motorcycle as established in Section 40-12-242, there shall be an additional annual fee of $8.
(Acts 1984, No. 84-240, p. 363, §2.)
The additional fees collected each month by the probate judge, license commissioner or other license issuing official under the provisions of subsections (a), (b), and (c) of Section 40-12-273 shall not be disbursed as provided by Sections 40-12-269 and 40-12-270, but shall be deposited to the General Fund to be used by the Department of Public Safety for the cost of traffic regulation, and the expense of enforcing state traffic and motor vehicle laws.
(Acts 1984, No. 84-240, p. 363, §3.)
(a) The Department of Revenue shall review all personalized license plates issued pursuant to Chapter 6 of Title 32 and Chapter 12 of this title and shall determine whether a requested license plate is issued or renewed in accordance with rules adopted pursuant to Chapter 22 of Title 41.
(b) An appeal concerning the denial of the issuance or renewal of a license plate shall be made with the circuit court of the county where the motor vehicle is registered.
(Act 2019-305, §2.)
(a) Subject to the requirements of subsections (b), (c), (d) and (e), the owner of a motor vehicle which is herein defined as a “vintage vehicle”, upon application to the judge of probate or commissioner of licenses on special application forms prescribed by the Commissioner of Revenue and the payment of a registration fee of ten dollars ($10), may register the vehicle as a “vintage vehicle” and procure therefor permanent license plates to be issued and displayed on the vehicle.
(b) Beginning October 1, 1996, the owner of a “vintage vehicle” which is owned and operated primarily as a collector’s item may, upon satisfying the requirements of this subsection, register the vehicle as a “vintage vehicle.” The owner shall apply to the judge of probate or county official authorized and required by law to issue license plates. The owner shall pay a registration fee of ten dollars ($10). Upon satisfying these requirements, permanent “vintage vehicle” license plates shall be issued and displayed on the vehicle.
(c)(1) The Commissioner of Revenue may make such reasonable rules and regulations as may be necessary to administer the provisions of this division.
(2) A vehicle using or displaying a “vintage vehicle” plate issued pursuant to this section shall not be used as a commercial vehicle, for transporting passengers or property, or for use as a service vehicle.
(3) “Vintage vehicle” license plates shall remain with the vehicle when sold or otherwise disposed of, and the new owner shall transfer the registration into his or her name in accordance with the provisions of Sections 40-12-260 and 40-12-261, if the vehicle will be operated in accordance with this section, and, if not, standard license plates shall be obtained.
(4) The owner of a vehicle displaying an antique license plate issued prior to October 1, 1996, if the vehicle is to be operated in accordance with the provisions of this section, shall surrender the license plate and obtain the vintage vehicle license plate above authorized without payment.
(d) For the purpose of this section, a “vintage vehicle” is: (i) a private passenger automobile, truck or truck tractor which weighs not more than 26,000 pounds gross weight, motorcycle, or fire truck, (ii) over 30 years old, (iii) operated as a collector’s item, including participation in club activities, exhibitions, tours, parades, and not used for general transportation purposes, (iv) a vehicle having the original or substantially similar vehicle body, chassis, engine, and transmission as designated for that make, model, year, and age vehicle.
(e)(1) Effective October 1, 1997, it shall be unlawful for any person to operate, on the public highways of this state, a vehicle based in this state and displaying a vintage vehicle license plate not in compliance with subsections (b), (c), and (d). Any antique license plate or tag issued prior to October 1, 1996, shall become invalid on October 1, 1997.
(2) Any person violating this section shall, upon conviction, pay a fine of not less than one hundred dollars ($100), shall forfeit the vintage vehicle registration and plates issued to the owner for the respective vehicle, shall be liable for the regular registration fee and taxes for the vehicle, and shall be barred from applying for or holding a vintage vehicle registration for the respective vehicle for three years from the date of the violation. This penalty shall be in lieu of any other penalty specified in this chapter for this offense.
(Acts 1965, 2nd Ex. Sess., No. 116, p. 157, §1; Acts 1996, No. 96-818, p. 1520, §1.)
“Vintage vehicle” license plates shall be of such size and design as the Commissioner of Revenue may prescribe, shall bear no date, shall have inscribed thereon the words “vintage vehicle” and shall be of a color different from regular motor vehicle license plates and shall be valid without renewal.
(Acts 1965, 2nd Ex. Sess., No. 116, p. 157, §2; Acts 1996, No. 96-818, p. 1520, §1.)
Should any license plates or tags issued pursuant to this division be defaced, lost or destroyed, the owner may apply for a replacement in the same manner as prescribed by law for the replacement of regular motor vehicle license plates and tags.
(Acts 1965, 2nd Ex. Sess., No. 116, p. 157, §3.)
Except for the provisions of Sections 40-12-260 and 40-12-261, a vehicle which has been registered and licensed as a “vintage vehicle” pursuant to this division shall not be subject to the motor vehicle licensing requirements of Division 1 of this article, nor any other law prescribing or requiring the payment of a license or privilege tax for the privilege of operating the vehicle upon the public roads or highways of this state. Vehicles registered under this division shall be exempt from ad valorem taxation.
(Acts 1965, 2nd Ex. Sess., No. 116, p. 157, §4; Acts 1996, No. 96-818, p. 1520, §1.)
The state Department of Revenue shall make such rules and regulations as necessary to provide for the application for and issuance of such special tags.
(Acts 1965, 2nd Ex. Sess., No. 116, p. 157, §5.)
All moneys derived from the registration and licensing of vintage motor vehicles shall be paid into the same fund in the State Treasury that moneys derived from regular motor vehicle license taxes are paid. Such moneys may be used for the same purposes and disbursed in the same manner prescribed for moneys derived from regular motor vehicle license taxes.
(Acts 1965, 2nd Ex. Sess., No. 116, p. 157, §7; Acts 1996, No. 96-818, p. 1520, §1.)
(a) The owner of any vehicle designated as a 1976 year model vehicle or earlier qualified to receive a vintage vehicle license plate, upon application to the county license plate issuing official, in lieu of receiving the vintage vehicle license plate, may request to register an original Alabama license plate, 1976 or previous, including a restored or refurbished Alabama license plate, issued in the model year as designated by the manufacturer of the vehicle, of a type license plate that would have been issued to that category vehicle. Subject to the restrictions herein provided, the license plate issuing official shall issue a permanent vintage vehicle validation decal and attach the decal to an appropriate location on the lower portion of the original Alabama license plate. The issuing official shall also issue a registration receipt to be maintained within the vehicle and presented to law enforcement upon request. The issuing official shall collect the fee authorized under subsection (b) of Section 40-12-290 when issuing a vintage vehicle validation decal and the funds shall be distributed in the same manner as other fees collected for the issuance of vintage vehicle license plates. The issuing official shall be entitled to the issuance fee provided under Section 40-12-271.
(b) The owner requesting the registration of an original Alabama license plate shall present the license plate to the issuing official for examination, and, upon approval, issuance. In examining the license plate, the issuing official shall check the legibility and condition of the license plate and shall ascertain if the original Alabama license plate would have been properly issued to the category of vehicle for which registration is being currently requested.
(c) In the event the owner of a vehicle has applied for and is currently displaying a vintage vehicle license plate and elects to obtain a registration for an original Alabama license plate as herein provided, the owner shall surrender the vintage vehicle license plate at the time of registration and shall not receive a credit for fees previously paid.
(d) This division shall otherwise be applicable to registrants electing to register as herein provided, including the ad valorem tax exemption authorized in Section 40-12-293.
(e) In the event the original Alabama license plate with a vintage vehicle validation decal is lost or stolen, the owner may elect to register another original Alabama license plate to the vehicle through the county license plate issuing official and pay the replacement fee as provided under subsection (b) of Section 40-12-265. If the validation decal only is lost or stolen, a replacement vintage vehicle validation decal may be issued.
(f) In the event front and rear original Alabama license plates were issued, only one original Alabama license plate shall be authorized for display on the rear of the vehicle.
(g) In the event that a vehicle owner requests the registration of a license plate number that is identical to a previously issued registration issued under this section, the license plate issuing official shall not approve the requested registration, and, if in the event duplicate registrations are issued, the department shall notify the vehicle owner with the most recent date registration that his or her registration is invalid and void, and the owner shall promptly surrender the vintage vehicle validation decal to the issuing official, and may request a subsequent registration of another original Alabama license plate upon payment of the transfer fee.
(Act 2006-612, §1.)
AMENDED BY ACT 2026-498, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
(a)(1) The distinctive license plates provided for herein shall be prepared by the Commissioner of Revenue and shall be issued through the county license issuing officials of the state in the same manner as are other motor vehicle license plates. An applicant for a distinctive plate shall present to the issuing official documentation that he or she is either of the following:
a. A parent, stepparent, or legal guardian of a minor or an adult who is an individual with a disability as defined in Section 32-6-230.
b. An individual with a disability as defined in Section 32-6-230.
(2) Upon presentation of the required documentation, the applicant shall be issued the requested number of special access or disability access distinctive license plates upon the payment of the regular license fee, as provided by law.
(b) Any private agency, nursing home, church, or charitable institution that submits to the licensing authority proof satisfactory to the commissioner that it operates a motor vehicle for the primary purpose of transporting one or more individuals with disabilities may apply for the distinctive plates. Applicants shall pay the regular fees for license plates, as provided by law.
(c) Any government agency that applies for a license plate for a vehicle that it owns for the primary purpose of transporting individuals with disabilities shall be issued the requested number of license plates according to Section 40-12-250, with the plate displaying the Dynamic Accessibility Symbol embossed on the plate.
(d) The distinctive license plates shall be used only upon and for personally-owned, private, or government owned and operated passenger vehicles, including, but not limited to, vans, station wagons, buses, motorcycles, and pickup trucks, registered in the name of the individual or public or private agency, nursing home, church, or charitable institution making application therefor, and when issued to the applicant shall be used upon the vehicle for which issued in lieu of the standard license plates normally issued for the vehicle. This division shall not be construed to require an individual with a disability to display a distinctive special access or disability access license plate. It is specifically provided that this division shall be construed in pari materia with Section 32-6-231. The commissioner may adopt any rules necessary to carry out this division.
(e) The commissioner may require all individuals with long-term disabilities to be recertified by a licensed physician before special access parking or disability access parking license plates may be reissued.
(f) Notwithstanding any provision of this section, a motor vehicle may not be parked in an area reserved for individuals with disabilities to park unless the individual with a disability is in the vehicle.
(Acts 1988, No. 88-547, p. 847, §1; Acts 1989, No. 89-856, p. 1706, §1; Act 2000-811, p. 1935, §1; Act 2018-261, §1; Act 2024-346, §1.)
The distinctive license plates issued pursuant to this division shall not be transferable between motor vehicle owners, and in the event the owner of a vehicle bearing such distinctive plates shall sell, trade, exchange, or otherwise dispose of same, such plates shall be retained by the owner to whom issued and by him returned to the probate judge or license commissioner of the county, who shall receive and account for same in the manner stated below. In the event such owner shall acquire by purchase, trade, exchange, or otherwise a vehicle for which no standard plates have been issued during the current license period, the probate judge or license commissioner of the county shall upon being furnished by the owner thereof proper certification of the acquisition of such vehicle and the payment of the motor vehicle license tax due upon such vehicle, authorize the transfer to said vehicle of the distinctive license plates previously purchased by such owner, which plates shall authorize the operation of said vehicle for the remainder of the then current license period. In the further event the owner of such distinctive plates shall acquire by purchase, trade, exchange, or otherwise a vehicle for which standard plates have been issued during the current license year, the probate judge or license commissioner shall, upon proper certification of such owner and upon delivery to such official of the standard plates previously issued for such vehicle, authorize the owner of such newly-acquired vehicle to place the distinctive plates previously purchased by him upon such vehicle and use same thereon for the remainder of the then current license period. Such notice of transfer of ownership shall be made of record by the probate judge or the license commissioner.
Any person acquiring by purchase, trade, exchange, or otherwise any vehicle formerly bearing such distinctive plates shall be authorized, upon certification of such fact to the probate judge or license commissioner of the county and the payment of the fee now required by law, to purchase standard replacement plates for such vehicle which shall authorize the operation of such vehicle by the new owner for the remainder of the license period.
(Acts 1988, No. 88-547, p. 847, §2.)
The design of motor vehicle license plates for individuals with disabilities shall be as prescribed by the Commissioner of the Department of Revenue.
(Acts 1988, No. 88-547, p. 847, §3; Acts 1989, No. 89-856, p. 1706, §1; Act 2000-811, p. 1935, §1.)
(a)(1) Notwithstanding the provisions of subsection (a) of Section 32-6-65, no later than January 1, 2022, the department shall develop, maintain, and make available a fleet online registration and tax system, known as the FORT system, which shall allow a fleet operator to do all of the following:
a. Remit for each fleet vehicle the ad valorem taxes as required by Section 40-12-253, levied under Chapter 8.
b. Remit license taxes and registration fees levied under this chapter in a manner as prescribed by the department by rule.
c. Facilitate the issuance of a license plate as required by Chapter 6 of Title 32 and this chapter, in conformance with Section 32-6-710 and rules adopted thereunder.
(2) The FORT system shall be available for motor vehicle registration periods beginning on and after January 1, 2022, provided the fleet operator complies with this article and any rules adopted under this article.
(b) No fleet operator shall be required to use the FORT system for the payment and remittance of ad valorem tax, vehicle license tax, or registration fees.
(c)(1) The initial registration of a fleet vehicle through the FORT system shall be limited to business entities that hold a valid Alabama-issued sales and use tax certificate of exemption, a valid Alabama-issued sales tax direct pay permit, or a valid Alabama rental tax license which subjects motor vehicles purchased using the rental tax license to the Alabama rental tax.
(2) The FORT system shall accommodate registration renewals for fleet vehicles qualified for initial registration under subdivision (1) and other fleet vehicles as prescribed by the department.
(d) Except as otherwise prescribed by the department, no transactions other than those authorized by subdivision (c)(1) or (c)(2) shall be processed through the FORT system, including credit vouchers as provided for in Section 40-12-253.
(e) Subject to Section 41-1-60, credit cards or ACH credit may be used for any payment made using the FORT system.
(Act 2019-129, §2.)
(a)(1) To ensure that local taxing jurisdictions and taxpayers have meaningful input into the development and operation of the FORT system, an advisory committee is established to review the design and operation of the system and to make recommendations regarding system requirements and functionality to the Commissioner of Revenue.
(2) The committee shall consist of the following individuals:
a. Two local officials, appointed by the Association of Alabama Tax Administrators. One of the local officials shall be a revenue commissioner who has responsibility for the issuance of tags, and one of the local officials shall be a license commissioner.
b. One county commissioner, appointed by the Association of County Commissions of Alabama.
c. One judge of probate who has responsibility for the issuance of tags, appointed by the Alabama Probate Judges Association.
d. Two representatives of rental car organizations who operate in the state, appointed by the American Car Rental Association.
e. Two representatives of the fleet operator community, other than rental car organizations. One representative shall be appointed by the Speaker of the House of Representatives, and one representative shall be appointed by the President Pro Tempore of the Senate.
f. One representative of the Alabama Department of Revenue, appointed by the Commissioner of Revenue, who shall serve as chair of the committee.
(b) Members of the advisory committee shall receive no compensation or reimbursement of expenses from the state for their service on the committee.
(c) The advisory committee shall hold its first meeting no later than the first day of December 2019. The Commissioner of Revenue shall set the date, time, and location of the first meeting.
(d) The advisory committee shall present a report of its findings to the Commissioner of Revenue no later than the first day of December 2020. The advisory committee shall continue in its advisory role until December 31, 2023, at which time the advisory committee shall stand dissolved and discharged of any further duties or responsibilities.
(Act 2019-129, §2.)
(a) On or before December 1, 2021, and December 1 of each year thereafter, each county, municipality, or other local taxing authority that levies an ad valorem tax shall provide the department with the ad valorem tax rate needed to calculate the applicable county, municipal, or local taxing authority’s millage rate. The ad valorem taxes collected for each fleet vehicle registered through the FORT system shall be calculated in accordance with the millage rates reported under this subsection for each county, municipality, and local taxing jurisdiction in which the fleet vehicle is based.
(b) The ad valorem taxes remitted to and collected by the department for a fleet vehicle registered through the FORT system shall be distributed to the local official responsible for distributing ad valorem tax in the county in which the vehicle is based. The local official shall then distribute the ad valorem taxes as required by law to the respective recipients.
(Act 2019-129, §2.)
(a) A motor vehicle registered through the FORT system shall only be subject to the annual license taxes and registration fees imposed by and levied under Chapter 6 of Title 32 and Chapter 12 of this title and shall be issued a license plate pursuant to Section 32-6-710.
(b)(1) The transfer of a motor vehicle registration and license plate shall be subject to the provisions of Section 40-12-260 and rules adopted under that section.
(2) The replacement of a motor vehicle license plate shall be subject to Section 40-12-265 and rules adopted under that section.
(c) This division shall not be construed to invalidate subsection (b) of Section 40-12-252.
(Act 2019-129, §2.)
The department may adopt rules for the implementation of this division, including the development, maintenance, and administration of the fleet online registration and tax system, FORT system.
(Act 2019-129, §2.)
The term “store” as used in this article shall be construed to mean and include any store or stores or any mercantile establishment or establishments which are owned, operated, maintained, controlled or for which the buying is done by the same person, firm, corporation, copartnership, or association, either domestic or foreign, in which goods, wares or merchandise of any kind are sold, either at retail or wholesale. The term “store” as used in this article shall not be construed to mean or include any place of business at which the principal business conducted is that of selling or distributing petroleum products or ice, where the amount kept in any store is less than 4,000 pounds at any one time.
Two or more stores or mercantile establishments shall, for the purpose of this article, be treated as being under a single or common ownership, supervision or management if directly or indirectly owned or controlled by a single person or any group of persons having a common interest in such stores or mercantile establishments, or if any part of the gross revenues, net revenues or profits from any such stores or mercantile establishments shall directly or indirectly be required to be immediately or ultimately made available for the beneficial uses or shall directly or indirectly inure to the immediate or ultimate benefit of any single person or group of persons having a common interest therein; provided, that a person owning or operating a store and owning an interest in not more than one other store which handles merchandise of an entirely different character, or a person operating a candy counter or popcorn stand in the lobby of a motion picture theater owned or operated by him shall not be termed a chain of stores, but shall be required to pay only the annual license on each store; each store being considered a separate unit.
(Acts 1935, No. 194, p. 256; Acts 1936-37, Ex. Sess., No. 99, p. 111, Code 1940, T. 51, §627; Acts 1945, No. 430, p. 675.)
It shall be unlawful for any person, firm, corporation, association, or copartnership, either foreign or domestic, to operate, maintain, open, or establish any store in this state without first having obtained a license to do so from the probate judge or license commissioner of the county in which the store is located, as hereinafter provided. In instances where stores are located in more than one county, the licensee must procure licenses in the county where his principal or main store is located for all stores wheresoever located.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §620; Acts 1945, No. 430, p. 675.)
Any person, firm, corporation, association, or copartnership desiring to operate, maintain, open, or establish one or more stores in this state shall apply to the probate judge or license commissioner for a license to do so. The application for a license shall be made on a form which shall be prescribed and furnished by the Department of Revenue and shall set forth the name of the owner, manager, lessee, receiver, or other person desiring such license, the name of the store, the location, including the street number of each store, and such other facts as the Department of Revenue may require. The applicant desiring to operate, maintain, open, or establish such stores shall make a separate application for a license to operate, maintain, open, or establish each store, but the respective stores for which the applicant desires to secure licenses may all be listed on one application blank. Each such application shall be accompanied by an issuance fee of $.50 for each store, to be retained by the probate judge or license commissioner for the issuance of such license, and by the license fee as prescribed in Section 40-12-315.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §621; Acts 1945, No. 430, p. 675.)
As soon as practical after the receipt of any such application, the probate judge or license commissioner shall carefully examine such application to ascertain whether it is in the proper form and contains the necessary and requisite information. If upon examination the probate judge or license commissioner shall find that any such application is not in the proper form and does not contain the necessary and requisite information, he shall return such application for correction. If an application is found to be satisfactory and if the issuance and license fees, as herein prescribed, shall have been paid, the probate judge or license commissioner shall issue to the applicant a license for each store for which an application for a license shall have been made. Each licensee shall display the license so issued in a conspicuous place in the store for which such license is issued. It shall be the duty of the license inspector to examine such licenses to ascertain if there is an attempted evasion on the part of the applicant; and, if it is brought to the attention of the license inspector, he shall cite any and all delinquents for failure to procure the proper license. The license inspector shall be entitled to the citation fee of $1 for each citation served, to be taxed against the delinquent and collected by the probate judge or license commissioner at the time of issuing the license. The probate judge or license commissioner shall remit such fees to the license inspector in a like manner as other fees are remitted. It shall be the duty of the probate judge or license commissioner to furnish the state Department of Revenue a list of all licenses issued, on a form prescribed by the state Department of Revenue, by the tenth of the month following the month of issuance.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §622; Acts 1945, No. 430, p. 675.)
All licenses shall be so issued as to expire on September 30 of each calendar year. On or before October 31 of each year, every person, firm, corporation, association, or copartnership due a license shall apply to the probate judge or license commissioner for a renewal license for the fiscal year next ensuing. All such licenses shall become delinquent on the first day of the month immediately following the due date thereof.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §623; Acts 1945, No. 430, p. 675.)
Every person, firm, corporation, association, or copartnership opening, establishing, operating, or maintaining one or more stores or mercantile establishments within this state under the same general management, supervision, or ownership shall pay the license fees hereinafter prescribed for the privilege of opening, establishing, operating, or maintaining such stores or mercantile establishments. The license fee herein prescribed shall be paid annually, shall be in addition to the filing fee prescribed in Sections 40-12-312 and 40-12-314 and shall be in addition to all other license or privilege taxes levied by this section or hereafter levied. The license fees as herein prescribed shall be as follows:
(1) Upon one store, the annual license fee shall be $1 for each store.
(2) Upon two stores or more, but not to exceed five stores, the annual license fee shall be $15 for each such additional store.
(3) Upon each store in excess of five but not to exceed 10, the annual license fee shall be $22.50 for each additional store.
(4) Upon each store in excess of 10 but not to exceed 20, the annual license fee shall be $37.50 for each such additional store.
(5) Upon each store in excess of 20, the annual license fee shall be $112.50 for each such additional store.
No license fee or license shall be due or payable for the use of any county.
(Acts 1935, No. 194, p. 256; Acts 1935, No. 403, p. 877; Code 1940, T. 51, §624; Acts 1945, No. 430, p. 675.)
Any person beginning a new business on or after April 1 shall be entitled to, and be charged for one half of the full rate in Section 40-12-315 for the then current year.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §625; Acts 1945, No. 430, p. 675.)
The provisions of this article shall be construed to apply to every person, firm, corporation, copartnership, or association, either domestic or foreign, which is controlled or held with others by stock ownership of 25 percent or ultimately controlled or directed by one management or association of ultimate management or the buying for said store or stores is centralized or done by one person or management.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §626; Acts 1945, No. 430, p. 675.)
It shall be the duty of the probate judge or license commissioner to issue the licenses herein prescribed on a form to be furnished and prescribed by the state Department of Revenue and to remit such money to the Department of Revenue on or before the tenth of the month following the month of issuance. Such amount of money as shall be appropriated for each fiscal year by the Legislature to the Department of Revenue with which to pay the salaries, the cost of operation and the management of the said department shall be deducted, as a first charge thereon, from the taxes collected under and pursuant to Section 40-12-315; provided, that the expenditure of said sum so appropriated shall be budgeted and allotted pursuant to Article 4 of Chapter 4 of Title 41 and limited to the the amount appropriated to defray the expenses of operating said department for each fiscal year. All money collected under the provisions of this article, less expenses appropriated herein, shall be paid into the Treasury monthly by the Department of Revenue and shall be added to and constitute a part of the Education Trust Fund. All fees collected by probate judges, license commissioners, and license inspectors, who are compensated on a salary basis, shall be paid by them into the treasury of the county, as other fees are likewise paid.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §629; Acts 1945, No. 430, p. 675; Acts 1951, No. 845, p. 1476.)
Any person, firm, corporation, copartnership, or association who shall violate any of the provisions of this article shall be deemed guilty of a misdemeanor and upon conviction thereof shall be fined in any sum not less than $25, nor more than $100. Each and every day such violation shall continue shall constitute a separate and distinct offense.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §628; Acts 1945, No. 430, p. 675; Acts 1992, No. 92-186, p. 349, §28.)
All blind persons, as defined in Section 40-1-1, shall be entitled to exemption from the payment of all state, county, city, or municipal privilege licenses on filing with the probate judge or license commissioner of the county in which said license is due the certificate provided for in this section. Such exemptions shall not exceed the sum of $75 for state privilege license and $75 for county, city, or municipal privilege licenses during any year.
No person shall come within the provisions of this section who has not been a continuous bona fide resident of the State of Alabama for a period of two years next preceding the filing of the application for the benefits hereunder.
Any person claiming exemptions under the provisions of this section shall be required to furnish a vision certificate from a regularly licensed physician in the county in which such person makes said application.
Any person who secures a license under the provisions of this section and who permits any other person, firm, or corporation to engage in any occupation or conduct any business under such license shall be guilty of a misdemeanor and shall be punished as provided by law, and any person, firm, or corporation not entitled to exemption from payment of license under this chapter who engages in any occupation or conducts any business under a license issued to a blind person under the provisions of this section shall be guilty of a misdemeanor and shall be punished as provided by law.
(Acts 1932, Ex. Sess., No. 68, p. 88; Acts 1935, No. 194, p. 256; Acts 1936-37, Ex. Sess., No. 84, p. 95; Code 1940, T. 51, §832; Acts 1963, No. 520, p. 1111, §1.)
Every bona fide permanent resident of the State of Alabama who served in the United States Army, Navy, or Marine Corps during World War I between April 6, 1917, and November 11, 1918, in the Spanish-American War between April 21, 1896, and July 4, 1902, or any soldier, sailor, or other person serving in the Armed Forces of the United States between December 7, 1941, and the termination of World War II by the signing of a definitive treaty of peace, or at any other time past, present or future when the United States was, is or shall be engaged in hostilities with any foreign state, whether as a result of a declared war or not, and who, at the time of his application for license as hereinafter provided for, shall be physically disabled to the extent of 25 percent, or more, shall, upon sufficient identification and upon sufficient proof of such disability and upon sufficient proof of being a permanent resident of this state, and upon the production of an honorable discharge or other proof of termination of honorable service from the United States Army, Navy, or Marine Corps during World War I, the Spanish-American War or from the Armed Services of the United States within the respective limits hereinabove prescribed, be exempt from business or occupational license taxes to the extent and subject to the conditions hereinafter specified; provided, that no exemption, deduction, or commutation shall be allowed any person from the license or tax on what is commonly known as rolling stores; nor shall said exemption, deduction, or commutation be construed as relieving any person from the payment of any license tax for the registration or operation of any motor vehicle upon the public highways of this state, unless otherwise provided by law.
(Acts 1935, No. 494, p. 1057; Code 1940, T. 51, §852; Acts 1943, No. 564, p. 562; Acts 1953, No. 233, p. 299.)
Each such veteran who shall engage in or carry on any businesses or occupations as a means of livelihood through the personal efforts of such person or through the personal efforts of such person and not more than one employee, helper, or apprentice, for which businesses or occupations license taxes are prescribed by the State of Alabama, shall be entitled to licenses from the state to so engage in or carry on such businesses or occupations upon payment of the license taxes so prescribed, less all or such portion of such license taxes as shall not exceed $25.
(Acts 1935, No. 494, p. 1057; Code 1940, T. 51, §853; Acts 1945, No. 366, p. 589, §1.)
Each such person who shall engage in or carry on any businesses or occupations as a means of livelihood through the personal efforts of such person or through the personal efforts of such person and not more than one employee, helper, or apprentice, for which businesses or occupations license taxes are prescribed by or for any county of Alabama, shall be entitled to licenses from such county to so engage in or carry on such businesses or occupations upon payment of the license taxes so prescribed, less all or such portion of such license taxes as shall not exceed $25.
(Acts 1935, No. 494, p. 1057; Code 1940, T. 51, §854; Acts 1945, No. 366, p. 589, §2.)
Each such person who shall engage in or carry on in his own name any businesses or occupations as a means of livelihood through the personal efforts of such person or through the personal efforts of such person and not more than one employee, helper, or apprentice, for which businesses or occupations license taxes are prescribed by any municipality of Alabama, shall be entitled to licenses from such municipality to so engage in or carry on such businesses or occupations upon payment of the license taxes so prescribed, less all or such portion of such license taxes as shall not exceed $25.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §855; Acts 1945, No. 366, p. 589, §3.)
Any person who assists or serves such veteran in the conduct or carrying on of such veteran’s business or occupation shall be deemed an employee, helper or apprentice, whether such assisting person is paid any compensation for his assistance or service or not. The term “license tax,” as used in this title, shall be deemed to include any tax prescribed by a license tax schedule, but shall not exclude any license tax otherwise prescribed.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §856.)
It shall be the duty of each and every official empowered or charged by law with the duty of issuing licenses in this state to issue a license to every such person as may come within the provisions of this division, and such license, when issued, shall be marked across the face thereof “War Veteran’s License — Not Transferable.” Any person who transfers or assigns or attempts to transfer or assign the war veteran’s license issued under the provisions of this division shall forfeit all rights to any exemptions, deductions or commutation allowed by the terms of this division.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §857.)
All licenses issued under this division shall be in the same general form as other licenses and shall expire at the same time as other licenses are fixed by law to expire.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §858.)
Proof of disability shall be made by exhibiting a federal government rated disability certificate to an extent of 25 percent or more, or an affidavit from an examining physician of the United States Veteran’s Administration showing that the applicant for license is physically disabled to the extent of at least 25 percent or by the production of a pension certificate issued by the United States Government or by the State of Alabama or by a certificate of the county health officer of the county in which the veteran resides or, if there is no county health officer, a certificate by a reputable physician in the county in which the veteran resides, said physician’s certificate to be attested before some officer authorized to administer oaths.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §859.)
No exemption or commutation herein provided for shall be allowed any corporation, association, or partnership, except as to partnerships the prescribed exemption or commutation shall be allowed a partnership when each partner thereof would be individually entitled to an exemption hereunder; provided, that an individual entitled to such exemption shall not be denied it by reason of being a member of a partnership in those cases when license is required of the individual members of a partnership and not of the partnership as such.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §860.)
Any license issued under the provisions of this division shall be or become null and void and shall afford no protection against a prosecution for doing business without license if the same is fraudulently obtained, or if the business conducted thereunder is not bona fide the business of the veteran licensee, or if the veteran shall at any time conduct his business in such a manner so that he would not be entitled to exemption under the terms of this division.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §861.)
No license herein provided for shall be issued in any county other than the county wherein the disabled veteran is a bona fide resident; provided, that should a disabled veteran holding a veteran’s license desire to engage in a business or occupation in a county in this state other than the county in which he has secured such veteran’s license, he shall produce the license issued to him in the county of his residence to the probate judge of the county where he desires to do business; and, if the license in such other county together with the license issued in the county of his residence does not exceed the $25 exemption herein granted, he shall be exempt to such extent, and such probate judge shall countersign the license obtained in his county without charge or fee, and it shall thereafter be as valid as though issued by the probate judge of the county of his residence.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §862.)
Any probate judge, city clerk, or city comptroller who willfully fails or refuses to issue any licenses applied for by a veteran entitled to the benefits of this division shall be guilty of a misdemeanor and shall be prosecuted as provided by law.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §863.)
Any veteran whose property, both real and personal, is valued at $5,000 or more shall be precluded from the exemptions granted herein, nor shall a veteran whose net annual income is $2,500 or more be entitled to the exemptions herein granted.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §864; Acts 1945, No. 366, p. 589, §4.)
Every bona fide permanent resident of the State of Alabama who has served 90 days or more in the Armed Forces of the United States between September 16, 1940, and the termination of World War II by the signing of a definitive treaty of peace or at any subsequent time when the United States was, is or shall be engaged in hostilities with any foreign state, whether as a result of a declared war or not, or who shall have been discharged or released from such service in less than 90 days by reason of a service-connected disability shall, upon sufficient identification, upon sufficient proof of being a permanent resident of this state and upon the production of an honorable discharge from or other proof of the honorable termination of such service, be exempt from business or occupational license taxes for a period of six years after July 6, 1945 or for a period of six years after his or her discharge from or termination of service, whichever is later, to the extent and subject to the conditions herein specified. No exemption, however, shall be allowed any such person from the license tax on what commonly are known as rolling stores, nor shall the exemption herein granted be construed as relieving any person from the payment of any license tax for the registration or operation of any motor vehicle, unless otherwise provided by law.
(Acts 1945, No. 353, p. 570, §1; Acts 1947, No. 698, p. 535, §1; Acts 1953, No. 229, p. 296.)
Such veterans who shall engage in or carry on any businesses or occupations for which license taxes are prescribed by the State of Alabama shall be entitled to licenses from the state to engage in or carry on those businesses or occupations upon the payment of the license taxes prescribed, less, as regards each veteran, such portion of the license taxes as shall not exceed $35.
(Acts 1945, No. 353, p. 570, §2.)
Such veterans who shall engage in or carry on any businesses or occupations for which license taxes are prescribed by any county of Alabama shall be entitled to licenses from the county to engage in or carry on those businesses or occupations upon the payment of the license taxes prescribed, less, as regards each veteran, such portion of the license taxes as shall not exceed $35. However, no such veteran may claim the exemption in more than one county.
(Acts 1945, No. 353, p. 570, §3.)
Each such veteran who shall engage in or carry on any businesses or occupations for which license taxes are prescribed by any municipality in Alabama shall be entitled to licenses from the municipality to engage in or carry on those businesses or occupations upon the payment of the license taxes prescribed, less, as regards each veteran, such portion of the license taxes as shall not exceed $35. However, no such veteran may claim the exemption in more than one municipality.
(Acts 1945, No. 353, p. 570, §4.)
It shall be the duty of every official charged with the duty of issuing licenses in this state to issue licenses at the cost herein specified to each veteran coming within the provisions of this division; and such licenses, when issued, shall be marked across the face thereof “War Veteran’s License — Not Transferable.” Any veteran who transfers, assigns or attempts to transfer a war veteran’s license issued under the provisions of this division shall forfeit his rights to all exemptions allowed hereunder.
(Acts 1945, No. 353, p. 570, §5.)
No exemption under the provisions of this division shall be allowed any corporation or association. As to partnerships, the exemption shall be allowed a partnership only when each partner thereof individually would be entitled to an exemption hereunder. However, an individual entitled to an exemption shall not be denied it by reason of being a member of a partnership in those cases when the licenses are required of the individual members of a partnership and not of the partnership as such.
Any veteran whose property, both real and personal, is valued at $7,000 or more or whose net annual income is $3,000 or more shall not be granted the exemption provided herein, but shall be granted an exemption of $15 on his licenses from each city, county and state.
(Acts 1945, No. 353, p. 570, §6; Acts 1947, No. 698, p. 535, §2.)
Any license issued under the provisions of this division shall become null and void and shall afford no protection against prosecution for doing business without a license if the license is fraudulently obtained or if the business conducted under the license is not bona fide the business of the licensee.
(Acts 1945, No. 353, p. 570, §7.)
Any person charged with the duty of issuing licenses in this state who willfully fails or refuses to issue any license applied for by a veteran entitled to the benefits of this division shall be guilty of a misdemeanor and shall be prosecuted as provided by law.
(Acts 1945, No. 353, p. 570, §8.)
The following words and phrases, when used in this article, shall have the following meanings:
(1) COMMISSIONER. The state Commissioner of Revenue.
(2) DEPARTMENT. The Department of Revenue.
(3) DISTRIBUTOR. Any person engaged in the business of selling or distributing new motor vehicles to new motor vehicle dealers.
(4) FACILITATOR. Any person or his or her designee who facilitates an off-site sale licensed under Section 40-12-395. The term may include the owner of the property where the off-site sale is being conducted.
(5) MANUFACTURER. Any person engaged in the business of manufacturing or assembling new and unused motor vehicles.
(6) MASTER DEALER LICENSE. The license issued by the department pursuant to this article.
(7) MOTOR VEHICLE. Any motor vehicle as defined in Section 40-12-240, but the term shall not include any trailer not required to have a certificate of title.
(8) MOTOR VEHICLE REBUILDER. Any person engaged in the business of making or causing to be made extensive repairs, replacements, or combination of different motor vehicles to the extent of extinguishing the identity of the original vehicle to the extent that the finished motor vehicle may be assigned a new identification to be issued by the department under Chapter 8 of Title 32. The term also includes any person engaged in the business of refurbishing, repairing, or replacing damaged parts of motor vehicles for the purpose of preparing the vehicle for resale under the same identification and identity as the vehicle had before the refurbishing.
(9) MOTOR VEHICLE WHOLESALER. Any person engaged in the business of buying, selling, or exchanging motor vehicles at wholesale to motor vehicle dealers, as defined in this article, and not to the public.
(10) NEW MOTOR VEHICLE. A motor vehicle, other than a used motor vehicle, the legal title of which has never been transferred by a manufacturer, distributor, or new motor vehicle dealer to an ultimate purchaser.
(11) NEW MOTOR VEHICLE DEALER. Any person that holds a bona fide contract or franchise in this state in effect with a manufacturer or distributor of new motor vehicles and is engaged in the business of selling, advertising, or negotiating the sale of new motor vehicles or new and used motor vehicles, and the duly licensed new motor vehicle dealers shall be the sole and only persons entitled, other than in connection with the rental or leasing of new motor vehicles by persons engaged in the business of motor vehicle rental and leasing, to sell and publicly or otherwise solicit and advertise for sale new motor vehicles. The term also includes a motor vehicle rebuilder and motor vehicle wholesaler as defined in this article.
(12) PERMANENT LOCATION. A building or structure from which sales of motor vehicles are conducted. The building or structure must be owned, rented, or leased and must be used as an office and a place to receive mail, keep records, and conduct routine business, to include utilities under the name of the licensed business or the business owner.
(13) PERSON. As defined in Section 40-12-240.
(14) USED MOTOR VEHICLE. A motor vehicle, the legal title of which has been transferred by a manufacturer, distributor, or new motor vehicle dealer to an ultimate purchaser.
(15) USED MOTOR VEHICLE DEALER. Any person engaged in the business of buying, selling, exchanging, advertising, or negotiating the sale of five or more motor vehicles, not previously titled or registered in the person’s name, at retail during a calendar year or in offering or displaying motor vehicles for sale at retail to the public. The term “selling” or “sale” shall include lease-purchase transactions. The term “used motor vehicle dealer” does not include banks, credit unions, licensees of the State Banking Department, and finance companies which acquire motor vehicles as an incident to their regular business and does not include motor vehicle rental and leasing companies. The term also includes a motor vehicle rebuilder and motor vehicle wholesaler as defined in this article.
(16) ULTIMATE PURCHASER. With respect to a new motor vehicle, the first person, other than a new motor vehicle dealer purchasing in his or her capacity as a new motor vehicle dealer, who in good faith purchases the new motor vehicle for purposes other than resale. The term does not include a person who purchases a vehicle for purposes of altering or remanufacturing the motor vehicle for future resale.
(Acts 1978, No. 539, p. 597, §1; Acts 1991, No. 91-321, p. 595, §1; Acts 1995, No. 95-727, p. 1553, §1; Act 2004-534, p. 1126, §1; Act 2012-561, p. 1660, §1; Act 2014-158, p. 445, §2; Act 2019-244, §1.)
(a) No person shall be licensed as a motor vehicle dealer under Section 40-12-51, 40-12-62, or 40-12-169, nor shall any person engage in business as, serve in the capacity of, or act as a new motor vehicle dealer, used motor vehicle dealer, motor vehicle rebuilder, or motor vehicle wholesaler in this state, without first obtaining a master dealer license as provided in this article and, if a new motor vehicle dealer or a used motor vehicle dealer, a state sales tax number.
(b) No person shall engage in the business of buying, selling, exchanging, advertising, or negotiating the sale of new motor vehicles unless he or she holds a valid master dealer license as a new motor vehicle dealer in this state for the make or makes of new motor vehicles being bought, sold, exchanged, advertised, or negotiated or unless a bona fide employee or agent of the licensee.
(c) No person, other than a motor vehicle dealer licensed under this article or a recorded lienholder, may sell a motor vehicle without being currently recorded as the owner or lienholder on the certificate of title or designated as the attorney-in-fact acting on behalf of the titled owner or lienholder. If a person is not in compliance with this subsection, any state or local licensing official or law enforcement officer may impound the motor vehicle until the person provides proper proof of ownership as the currently recorded owner on the certificate of title or as the attorney-in-fact acting on behalf of the titled owner, or as otherwise prescribed by law. This subsection does not apply to abandoned motor vehicles sold under Chapter 13 of Title 32.
(d) Notwithstanding any law of this state providing otherwise, neither a new motor vehicle dealer nor a used motor vehicle dealer nor any person engaged in the business of motor vehicle rental and leasing:
(1) With respect to a credit sale transaction, is required to be licensed under Chapter 19 of Title 5 in order to pay any amount necessary to satisfy a lease on, security interest in, or lien on any motor vehicle either returned to that dealer or to the lessor or traded in by the purchaser in connection with the credit sale transaction, and to include that amount as part of the amount to be paid by the purchaser under the credit sale transaction; or
(2) With respect to a lease transaction, is subject to Chapter 19 of Title 5 or otherwise deemed to have made a loan or credit sale by virtue of paying any amount necessary to satisfy a lease on, security interest in, or lien on any motor vehicle either returned to that dealer or to the original lessor or traded in by the lessee in connection with the lease transaction, and including that amount as part of the amount to be paid by the lessee under the lease transaction.
(Acts 1978, No. 539, p. 597, §2; Acts 1991, No. 91-321, p. 595, §1; Acts 1995, No. 95-727, p. 1553, §1; Act 99-398, p. 661, §1; Act 2014-158, p. 445, §2; Act 2019-244, §1.)
(a) The application for a master dealer license shall be in such form and shall be subject to such rules as may be prescribed by the commissioner. An application shall be verified by the oath or affirmation of the applicant. If the applicant is a sole proprietorship, the application shall contain the name and residence of the applicant. If the applicant is a partnership, the application shall contain the names and residences of each partner. If the applicant is a corporation, the application shall contain the names and residences of the officers and directors. If the applicant is a new motor vehicle dealer, or used motor vehicle dealer in this state, the application shall contain the state sales tax number assigned to the applicant. The application shall enumerate the number of new and used vehicles sold during the previous calendar year; describe the exact location of the place of business, and shall state: That the location is a permanent one; that the location affords sufficient space upon and within which to adequately display one or more motor vehicles offered for sale and that an appropriate sign designates the location as being the place of business of a motor vehicle dealer; and that it is a suitable place from which the applicant can in good faith carry on such business and keep and maintain books and records necessary to conduct business, which shall be available at all reasonable hours for inspection by the commissioner. The application shall state that the applicant is either (i) franchised by a manufacturer of motor vehicles, and, if so, the name of the manufacturer and line make that the applicant is authorized to represent, or (ii) a used motor vehicle dealer, rebuilder, or wholesaler. Upon making application, the person applying shall pay an application fee of twenty-five dollars ($25) through September 30, 2020. Effective October 1, 2020, the application fee shall be calculated pursuant to Section 40-12-392.1 and shall be in addition to other fees required by law. The commissioner may cause an investigation to be made and upon being satisfied that the facts set forth in the application are true, shall issue a master dealer license certificate to the applicant, which shall entitle the licensee to operate as a motor vehicle dealer, rebuilder, and wholesaler for one year from the first day of October of each year. If the commissioner, upon investigation, determines that a master dealer license should not be issued, the commissioner may deny the license and the applicant may appeal the denial to the Alabama Tax Tribunal as allowed in Chapter 2A of this title.
(b) Every master dealer license issued under this article shall be valid for one year from the first day of October of each year and shall be renewed on October 1 each year. Thirty days of grace for obtaining the license shall be allowed without penalty. Thereafter, penalties prescribed under this article for delinquent licenses shall be imposed.
(c) New and used motor vehicle dealers, motor vehicle rebuilders, and motor vehicle wholesalers shall be required to maintain blanket motor vehicle liability insurance coverage on vehicles operated on the public streets and highways of this state, including vehicles in dealership inventory. Evidence of liability insurance for business and inventory vehicles shall be filed with the application for license, and the application for license shall be denied if proof of liability insurance satisfactory to the commissioner is not provided. A licensee who fails to maintain a blanket motor vehicle liability insurance policy during the licensing period may be assessed a civil penalty of up to five thousand dollars ($5,000). The penalty may be assessed against the bond as provided for in Section 40-12-398.
(d) A person who is subject to the licensing requirements of this article, but willfully fails to acquire the license, shall be subject to a penalty of five hundred dollars ($500) for the first violation and one thousand dollars ($1,000) for the second or subsequent violation.
(Acts 1978, No. 539, p. 597, §3; Acts 1991, No. 91-321, p. 595, §1; Acts 1992, No. 92-186, p. 349, §29; Acts 1995, No. 95-727, p. 1553, §1; Act 2000-554, p. 1005, §2; Act 2014-158, p. 445, §2; Act 2019-244, §1.)
(a) Beginning October 1, 2020, the application fee prescribed in Section 40-12-392 shall be equal to the average of the annual dealer license fees, as of January 1, 2020, of the contiguous states to Alabama and shall be rounded to the nearest twenty-five dollars ($25). The Department of Revenue may adjust these fees once every five years thereafter using the same calculation; provided, the adjusted fee may not exceed the application fee provided under Section 40-12-413.
(b) On or after October 1, 2022, the Department of Revenue, by rule, may establish a biennial license in lieu of the annual license provided under Section 40-12-391. The application fee for the biennial license may not exceed double the amount charged for the application fee or for the annual license.
(Act 2019-244, §2.)
The commissioner shall deposit the application fees collected under this article into the State Treasury, which shall be appropriated as follows:
(1) A minimum of twenty-five dollars ($25) or 10 percent, whichever is greater, of the application fee shall be appropriated to the General Fund of the state.
(2) The remaining amount shall be continuously appropriated to the department for the inspection, issuance, and enforcement of the licensing requirements under this article.
(Acts 1978, No. 539, p. 597, §11; Act 2019-244, §1.)
(a) A person licensed under this article shall obtain a supplemental license for each additional place of business, in a manner as prescribed by the commissioner and upon payment of an additional application fee of five dollars ($5) for each additional location. The signage and other requirements of Section 40-12-392 shall apply to each additional place of business. Only one licensed dealer shall operate at the same place of business.
(b) Notwithstanding the requirement that sales of new and used motor vehicles shall be made only from the permanent location of the new or used motor vehicle dealer, such dealers may conduct sales of new and used motor vehicles from locations off-site of their permanent locations on the following conditions:
(1) The off-site sales events shall not exceed three per dealer per license year with each sale not to exceed 10 consecutive calendar days in duration. Off-site sales of new motor vehicles by new motor vehicle dealers shall be conducted only at a location within the new motor vehicle dealer’s area of responsibility as defined in the contract or franchise agreement between the new motor vehicle dealer and its manufacturer or distributor. Off-site sales of used motor vehicles shall be conducted only at a location in the county or city where the new or used motor vehicle dealer maintains a permanent location.
(2) The off-site sale need not be conducted in a building or permanent structure, but the facilitator shall display a temporary sign at the location where the off-site sale is conducted identifying the name of the facilitator who is conducting the sale as stated on the license required by subdivision (3) and the name of the motor vehicle dealers who are participating in the sale as stated on the license required by subdivision (4). All advertisements and other notices of the sale must be conducted in the name of the facilitator.
(3)a. At least 10 calendar days before conducting each off-site sale, the facilitator of the off-site sale shall obtain a master off-site sale license by making a license application to the commissioner and paying an application fee of twenty-five dollars ($25) for each off-site sale. On the application, the facilitator shall list each participating motor vehicle dealer and the participating motor vehicle dealer’s off-site sale license number, as required in subdivision (4). The off-site sale license required in subdivision (4) is not required if the facilitator and motor vehicle dealer are the same entity. Each motor vehicle dealer participating in the off-site sale shall obtain an off-site license required by subdivision (4) and provide the license to the facilitator prior to the facilitator making the application.
b. The failure of a facilitator to disclose participating motor vehicle dealers shall subject the facilitator to the following penalties:
A facilitator that is a bonded agent of the state and in violation of this section shall be subject to a statutory notice of non-compliance. Subsequent violations may result in the suspension or revocation of designated agent status pursuant to Section 32-8-3 and rules adopted under that section.
A facilitator that is not a bonded agent of the state that is in violation of this section shall be subject to the penalty provisions as provided in subsection (d) of Section 40-12-392.
(4) At least 10 calendar days before conducting each off-site sale, the motor vehicle dealer shall obtain an off-site sale license by making license application to the commissioner and paying an application fee of twenty-five dollars ($25) for each off-site sale to be conducted. If more than one motor vehicle dealer participates in the same off-site sale, each motor vehicle dealer participating in the sale shall obtain an off-site sale license from the commissioner.
(5) This subsection shall not be construed to prohibit a new or used motor vehicle dealer from delivering a motor vehicle off-site or from selling a motor vehicle to a customer at the customer’s home or place of business.
(c) In addition to the foregoing, the motor vehicle dealer shall obtain from the judge of probate or other county licensing official a county license for the off-site location by paying the county license tax imposed pursuant to Sections 40-12-51, 40-12-62, and 40-12-169, and shall provide to the commissioner proof of payment of the license upon application for each off-site sale. If more than one motor vehicle dealer participates in the same off-site sale, each motor vehicle dealer participating in the sale shall obtain from the judge of probate or other county licensing official a county license for the off-site location by paying the county license tax imposed pursuant to Sections 40-12-51, 40-12-62, and 40-12-169.
(d) For purposes of this section, a new motor vehicle dealer temporarily displaying new vehicles at a shopping mall, auto show, or other location solely for advertising or display purposes and from which location sales are not conducted, shall not be deemed to be conducting an off-site sale and no off-site sales license shall be required.
(e) For purposes of this section, an off-site sales license shall not be required for wholesale sales between licensed motor vehicle dealers or for retail sales by new or used motor vehicle dealers conducted at the permanent location of an auction company which is licensed as a used motor vehicle dealer or motor vehicle wholesale auction.
(Acts 1978, No. 539, p. 597, §5; Act 2004-534, p. 1126, §1; Act 2014-158, p. 445, §2; Act 2019-244, §1; Act 2022-344, §1.)
(a) The commissioner may, subject to the appeal provisions allowed in Chapter 2A of this Title 40, suspend or revoke any license issued for the willful and intentional failure of the licensee to comply with the provisions of this article or for the willful failure to maintain the business premises, location, and sign as described in the application.
(b) A license may be revoked or a license application may be denied by the Department of Revenue for any of the following reasons:
(1) Fraud practiced or any material misstatement in license application.
(2) Change of condition after a license is granted or the failure to maintain qualification for the license.
(3) Skipping title assignment; accepting open assignment of title and/or bill of sale for a motor vehicle which is not completed by identifying the licensee as the purchaser or assignee of the motor vehicle.
(4) Having no established place of business.
(5) Failing to keep and maintain records.
(6) Knowingly dealing in stolen motor vehicles, parts, or accessories.
(7) Willful failure to comply with provisions of this chapter, or any rule or regulation promulgated thereunder.
(8) Disconnecting, turning back, or resetting the odometer of any motor vehicle in violation of state or federal law.
(9) Filing a materially erroneous or fraudulent tax return as certified by the Department of Revenue.
(10) Revocation as a designated agent, as provided for in Section 32-8-34, for failing to faithfully perform his or her duties as a designated agent.
(Acts 1978, No. 539, p. 597, §8; Acts 1991, No. 91-321, p. 595, §1; Acts 1992, No. 92-186, p. 349, §30; Act 2014-158, p. 445, §2.)
Before any master dealer license may be issued to a new motor vehicle dealer, used motor vehicle dealer, motor vehicle rebuilder, or motor vehicle wholesaler, the applicant shall deliver to the commissioner a good and sufficient surety bond, executed by the applicant as principal and by a corporate surety company qualified to do business in the state as surety, in the sum of not less than fifty thousand dollars ($50,000) or an amount as prescribed by the department. Such bond shall be in a form to be approved by the commissioner, and shall be conditioned that the motor vehicle dealer, motor vehicle rebuilder, or motor vehicle wholesaler shall comply with the conditions of any contract made by such dealer in connection with the sale or exchange of any motor vehicle and shall not violate any of the provisions of law relating to the conduct of the business for which he or she is licensed. Such bond shall be payable to the commissioner and to his or her successors in office, and shall be in favor of any person who shall recover any judgment for any loss as a result of any violation of the conditions hereinabove contained. The bond shall serve in lieu of the bond provided for in subsection (b) of Section 32-8-34 and, in addition to all other conditions, shall also be conditioned upon their performance of their duties as a designated agent under Chapter 8 of Title 32. The penalty provisions provided under this article, in addition to the tax liability incurred under Chapter 23 on the sale of a motor vehicle, may be assessed against the bond.
(Acts 1978, No. 539, p. 597, §10; Acts 1991, No. 91-321, p. 595, §1; Act 2014-158, p. 445, §2; Act 2019-244, §1.)
Every licensee under this article shall keep books and records in such form as may be approved by the commissioner, in which he shall record the purchase, sale or exchange, or receipt for the purpose of sale of every motor vehicle purchased or sold or held for sale by him, which shall include a description of each vehicle, together with the name and address of the seller, purchaser or owner of vehicles held by him for sale. Such description shall include the identification number of each such vehicle and shall also include a statement that the identification number has been obliterated, defaced or changed if such is the fact.
(Acts 1978, No. 539, p. 597, §6.)
Any person violating any of the provisions of this article shall be guilty of a Class A misdemeanor.
(Acts 1978, No. 539, p. 597, §7; Act 2004-534, §1; Act 2014-158, p. 445, §2.)
(a) Beginning October 1, 2025, every off-road vehicle dealer, as defined in Section 32-8-2, shall be subject to the licensing provisions of this article.
(b) The department may adopt rules to implement and administer this section.
(Act 2024-190, §2.)
For the purposes of this article, the following terms shall have the meanings respectively ascribed to them by this section:
(1) AUTOMOTIVE DISMANTLER AND PARTS RECYCLER. A person, firm, or corporation engaged in the business of purchasing and dismantling, disassembling or repairing, wrecked, abandoned, or repairable motor vehicles, and selling the usable parts thereof, or selling such wrecked, abandoned, or repairable motor vehicles as a unit at wholesale, or selling the hulk of the vehicle after the salvageable parts have been removed. For the purposes of this article, a person, firm, or corporation shall be presumed to be engaging in the business of an automotive dismantler and parts recycler if such person, firm, or corporation shall possess 10 or more inoperable motor vehicles for more than 30 days, except where such inoperable motor vehicles are being held by a licensed junk dealer or scrap processor for the purpose of recycling scrap metal or are being held by a licensed repair business awaiting repairs, nor shall this term include any person, firm, or corporation which repairs, reconstructs, or reconditions its own motor vehicles for its own use, nor shall it include any person, firm, or corporation disposing of a motor vehicle acquired for its own use.
(2) MOTOR VEHICLE. Every automobile, motorcycle, mobile trailer, semitrailer, truck, truck tractor, trailer, and other device which is self-propelled or drawn, in, upon, or by which any person or property is or may be transported or drawn upon a public highway, except such as is moved by animal power or used exclusively upon stationary rails or tracks.
(3) PLACE OF BUSINESS. The place owned or leased and regularly occupied by a person, firm, or corporation licensed under the provisions of this article for the principal purpose of engaging in the business of an automotive dismantler and parts recycler, where the products for sale are displayed and offered for sale and where the books and records required for the conduct of the business are maintained and kept.
(4) SALVAGE POOL or SALVAGE DISPOSAL SALE. A scheduled sale at auction or by private bid of wrecked or repairable motor vehicles by insurance underwriters or dealers, either at retail or wholesale.
(Acts 1979, No. 79-756, p. 1342, §1.)
No person, firm, or corporation in this state, unless licensed under this article by the Department of Revenue, shall engage in the business of an automotive dismantler and parts recycler as defined in Section 40-12-410.
(Acts 1979, No. 79-756, p. 1342, §2.)
Every person, firm, or corporation desiring to engage in the business of an automotive dismantler and parts recycler shall apply in writing to the Department of Revenue on a form prescribed by the department, which form shall contain:
(1) The name of the applicant.
(2) The street address of the applicant’s principal place of business.
(3) A statement that the applicant’s place of business meets federal, state, and local laws concerning screening and beautification, which is a requirement to be licensed under this article.
(4) The type of business organization of the applicant.
(5) The applicant’s sales tax number.
(6) The applicant’s unique registration number provided by the Administrator of the National Motor Vehicle Title Information System known as the NMVTIS ID Number.
(7) Such additional information as may be required by the Department of Revenue.
(Acts 1979, No. 79-756, p. 1342, §3; Act 2011-633, p. 1507, §2.)
Every application for a license as an automotive dismantler and parts recycler shall be accompanied by a state privilege license fee of $225 and any fee for issuing licenses as may be otherwise prescribed by law.
(Acts 1979, No. 79-756, p. 1342, §4.)
(a) Except as provided in subsection (b), every person, firm, or corporation, before being licensed under this article, must show proof of responsibility by depositing with the Commissioner of Revenue a continuing bond in the amount prescribed in Section 40-12-398 with surety thereon of a company authorized to do business in the State of Alabama, which bond shall be approved by the Commissioner of Revenue, payable to the State of Alabama, and shall be conditioned upon the faithful observance of all the provisions of this article and shall also indemnify any person who suffers any loss by reason of a failure to observe the provisions of this article.
(b) The department, by rule, may permit a surety bond obtained pursuant to Section 40-12-398, to serve in lieu of the surety bond prescribed in subsection (a).
(Acts 1979, No. 79-756, p. 1342, §5; Acts 1981, No. 81-811, p. 1449, §1; Acts 1991, No. 91-321, p. 595, §1; Act 2015-362, §2.)
Every privilege license issued to an automotive dismantler and parts recycler under this article shall be valid for one fiscal year of the State of Alabama, and shall be renewed on October 1 of each year. Thirty days of grace for obtaining such license shall be allowed without penalty. Thereafter, penalties prescribed by law for delinquent licenses shall be imposed.
(Acts 1979, No. 79-756, p. 1342, §6.)
The Commissioner of Revenue, subject to the notice and appeal provisions set out in Chapter 2A of this Title 40, is authorized to refuse a license to any person, firm, or corporation who does not meet the requirements of this article; to cancel the license of any licensee for willful failure to continue to meet the requirements of this article; and to refuse, cancel, or revoke a license for the felony conviction of a state or federal law involving theft or for violation of Chapter 8 of Title 32 or similar laws of other states by an applicant, a licensee, a partner of an applicant, or licensee or a director or manager in the case of a corporate applicant or licensee.
(Acts 1979, No. 79-756, p. 1342, §10; Acts 1992, No. 92-186, p. 349, §31.)
An automotive dismantler and parts recycler may, as an end result of the conduct of his principal business, accumulate hulks and parts and may scrap such hulks and parts without first obtaining a separate license as a scrap processor or as a junk dealer. A licensed automotive dismantler and parts recycler shall not be required to obtain a separate license as an automobile dealer, an automobile accessory dealer, an automobile garage, or shop or a storage garage or yard to engage in the business of an automotive dismantler and parts recycler as set forth in this article.
(Acts 1979, No. 79-756, p. 1342, §8.)
Every automotive dismantler and parts recycler shall keep a register of all purchases and sales of motor vehicles for five years from the date of purchase or sale, showing the make, model, year, body style, vehicle identification number, and the name and address of the purchaser or seller. A salvage pool shall furnish the purchaser with the make, model, year, body style, vehicle identification number of the vehicles it sells and, if the owner is an insurance company, the salvage pool shall furnish the purchaser with the claim number. Such registers shall be made available for inspection by identified law enforcement officers of the state, county and municipality of the automotive dismantler and parts recycler’s business location at reasonable business hours on business days.
(Acts 1979, No. 79-756, p. 1342, §7.)
An automotive dismantler and parts recycler, duly licensed under this article, shall have the authority to transfer the certificate of title to a motor vehicle as a dealer under subsection (a) of Section 32-8-45.
(Acts 1979, No. 79-756, p. 1342, §9.)
(a) Sales at a salvage pool or a salvage disposal sale shall be open only to persons holding a current automotive dismantler and parts recycler license or their agents or employees as hereinafter defined. Such persons must have a separate buyer’s identification card to buy at a salvage pool or salvage disposal sale.
(b) Any person, firm, or corporation desiring to purchase a buyer’s identification card must do so by making application to the Department of Revenue upon a form prescribed by the department, which form shall contain:
(1) The name of the applicant.
(2) The street address of the applicant’s principal place of business.
(3) If an agent or employee, the name of the licensee for whom the applicant will be making purchases at salvage pools or salvage disposal sales.
(4) The license number under which the applicant will be making purchases.
(5) Such other information as may be required by the Department of Revenue.
(c) In order to obtain a buyer’s identification card, a person, firm or corporation must:
(1) Be a licensed automotive dismantler and parts recycler or an agent or employee of a licensed automotive dismantler and parts recycler.
(2) Pay a fee of $10 to the Department of Revenue for processing said buyer’s identification card. The card shall be valid as long as the holder is a licensed automotive dismantler and parts recycler or an agent or employee of the same licensed automotive dismantler and parts recycler at the time the card is issued. Buyer’s identification cards are not transferable, and should the holder no longer be a licensed automotive dismantler and parts recycler or an agent or employee of a licensed automotive dismantler and parts recycler, then the card becomes invalid and it is the duty of the holder to return the same to the Department of Revenue.
(d) A licensee shall not have more than three agents or employees who are holders of a buyer’s identification card.
(e) It shall be unlawful for the owner, manager, or person in charge of any salvage pool or salvage disposal sale to permit the bidding by a person who does not possess a valid buyer’s identification card at a sale.
(f) All buyer identification cards heretofore issued by the Department of Revenue are hereby revoked and each person, firm, or corporation who qualify and desire to obtain a new buyer’s identification card must resubmit their application and pay the fee prescribed.
(Acts 1979, No. 79-756, p. 1342, §12; Acts 1981, No. 81-811, p. 1449, §2.)
Nothing in this article shall prohibit salvage dealers licensed in other states from buying at a salvage pool or salvage disposal sale, provided they qualify under the provisions of this article as a holder of a buyer’s identification card.
(Acts 1979, No. 79-756, p. 1342, §13.)
[Repealed]
Repealed by Act 2015-70 effective April 21, 2015.
(Acts 1979, No. 79-756, p. 1342, §13A.)
Any person violating any provision of this article shall be guilty of a misdemeanor and, upon conviction thereof, may be punished by a fine of not less than $25 nor more than $1,000, or by imprisonment in the county jail for not more than six months, or by both such fine and imprisonment.
(Acts 1979, No. 79-756, p. 1342, §14.)
The district attorney of any judicial circuit may seek injunctive relief in the circuit court to prohibit continued violations of this article by any person, firm, or corporation.
(Acts 1979, No. 79-756, p. 1342, §15.)
As used in this article, the following words shall have the following meanings:
(1) AUTOMOTIVE DISMANTLER AND PARTS RECYCLER. As defined in Section 40-12-410.
(2) COMMISSIONER. The Commissioner of Revenue.
(3) DEPARTMENT. The Department of Revenue.
(4) MOTOR VEHICLE. As defined in Section 40-12-390.
(5) MOTOR VEHICLE REBUILDER. As defined in Section 40-12-390.
(6) NEW MOTOR VEHICLE DEALER. As defined in Section 40-12-390.
(7) PERSON. As defined in Section 40-12-240.
(8) PLACE OF BUSINESS. The place owned or leased and regularly occupied by a person for the principal purpose of engaging in the business of a wholesale motor vehicle auction from which the wholesale of motor vehicles is conducted and where the books and records required for the conduct of business are maintained and kept.
(9) USED MOTOR VEHICLE DEALER. As defined in Section 40-12-390.
(10) MOTOR VEHICLE WHOLESALE AUCTION. Any person engaged in the business of buying, selling, exchanging, or facilitating the sale of motor vehicles at wholesale to new or used motor vehicle dealers, automotive dismantler and parts recyclers, and secondary metals recyclers, as defined in Section 13A-8-30, and not to the public.
(Act 2019-244, §3.)
(a) A person may not engage in the business of a motor vehicle wholesale auction unless the person is licensed under this article by the department.
(b) A person desiring to engage in the business of a motor vehicle wholesale auction shall apply to the department on a form prescribed by the department. The form shall contain all of the following:
(1) The legal name of the applicant.
(2) The street address of the applicant’s principal place of business.
(3) The street address of the applicant’s headquarters, if different from the applicant’s principal place of business.
(4) Any additional information as may be required by the department.
(c) A motor vehicle wholesale auction shall be required to maintain books, records, and files that shall be accessible and available for inspection by the department during normal business hours on usual business days. The department, by rule, shall establish electronic reporting requirements regarding the sale of motor vehicles at the motor vehicle wholesale auction.
(d) Every licensee under this article shall keep books and records in a form prescribed by the department. The books and records shall include purchases, sales or exchanges, and receipts of every motor vehicle purchased or sold or held for sale at the location of the licensee. In addition, the books and records shall include a description of each motor vehicle, which shall include the vehicle identification number of each motor vehicle, together with the name and address of any seller or purchaser of the motor vehicle.
(e) A motor vehicle wholesale auction may not sell a motor vehicle or component parts to anyone other than a licensed new or used motor vehicle dealer, automotive dismantler and parts recycler, secondary metals recycler as defined in Section 13A-8-30, or a person with an equivalent license from another jurisdiction.
(Act 2019-244, §3.)
(a) An application for a license as a motor vehicle wholesale auction shall be accompanied by a state privilege license fee equal to the fee levied under Section 40-12-392 and any additional fee for issuing licenses as may be otherwise prescribed by law.
(b) A privilege license issued to a motor vehicle wholesale auction under this article shall be valid for one year from the first day of October and shall be renewed on October 1 of each year. Thirty days of grace for obtaining the license shall be allowed without penalty. Thereafter, penalties prescribed under this article for delinquent licenses shall be imposed.
(Act 2019-244, §3.)
(a) Except as provided in subsection (b), before being licensed under this article, a person shall demonstrate proof of responsibility by depositing with the commissioner a continuing surety bond in the amount prescribed under Section 40-12-398 from a company authorized to do business in the state. The bond must be approved by the commissioner, payable to the state, and conditioned upon the faithful observance of all the provisions of this article. The bond must also indemnify any person who suffers a loss by reason of failure to observe the provisions of this article.
(b) The department, by rule, may permit a surety bond obtained under Section 40-12-398 to serve in lieu of the surety bond prescribed in subsection (a).
(Act 2019-244, §3.)
(a) Subject to the appeal provisions allowed under Chapter 2A, the commissioner may suspend or revoke a license issued for the willful and intentional failure of the licensee to comply with this article.
(b) A license may be revoked or a license application may be denied by the department for any of the following reasons:
(1) Fraud practiced or any material misstatement in the license application.
(2) Change of condition after a license is granted or the failure to maintain qualification for the license.
(3) Skipping title assignment; accepting an open assignment of title whereby the seller has signed the title to transfer ownership without listing the purchaser in the title assignment.
(4) Having no established place of business.
(5) Failing to properly keep and maintain records.
(6) Knowingly dealing in stolen motor vehicles, parts, or accessories.
(7) Willful failure to comply with this article or any rule adopted under this article.
(8) Disconnecting, turning back, or resetting the odometer of a motor vehicle in violation of state or federal law.
(9) Filing a materially erroneous or fraudulent tax return with the department.
(10) Revocation as a designated agent, as provided in Section 32-8-34, for failing to faithfully perform his or her duties as a designated agent.
(c) Subject to the notice and appeal provisions under Chapter 2A, the commissioner may do any of the following:
(1) Refuse to license a person who does not meet the requirements of this article.
(2) Cancel the license of a licensee for willful failure to continue to meet the requirements of this article.
(3) Refuse, cancel, or revoke a license for a state or federal felony conviction involving theft or for a violation of Chapter 8 of Title 32, relating to the Uniform Certificate of Title and Antitheft Act, or a similar law of another state by an applicant; a licensee; a partner of an applicant; or, in the case of a corporate applicant or licensee, a director or manager of the licensee.
(Act 2019-244, §3.)
A person who violates this article is guilty of a Class A misdemeanor. In addition, the department may assess against the person a civil penalty of up to five thousand dollars ($5,000). The penalty may be assessed against the bond as provided for in Section 40-12-398.
(Act 2019-244, §3.)
For the purposes of this article, the following terms shall have the respective meanings ascribed to them by this section:
(1) BONDS. Any revenue bonds or notes that may at any time be issued by the Alabama State Docks Department pursuant to authorization in Act No. 64, p. 115, of the Alabama Legislature of 1971 (First Special Session), as same may be amended from time to time, for the purpose of constructing any seaport facility.
(2) COMMISSIONER. The Commissioner of Revenue of the Department of Revenue of the State of Alabama.
(3) PERSON. Any individual, firm, partnership, corporation, association, or any combination thereof.
(4) PRODUCER. Any person engaging in the business of severing coal from the soil within this state.
(5) PURCHASER. Any person acquiring title, outright or conditionally, to any interest in severed coal.
(6) SEVER. Cutting, mining, stripping, or otherwise taking or removing from the soil within Alabama.
(7) SEAPORT FACILITY. Any improvements, including any real or personal property, structure or equipment useful for any one or more of the loading, unloading, storage, or other handling of coal, coke, or any other materials or products of any kind that are useful in promoting, developing, and operating seaports within this state and that are constructed with the proceeds from the bonds as defined herein.
(8) TON. A short ton of 2,000 pounds.
(9) TRANSPORTER. Any person transporting coal from the place where it is severed or from any other place to any other place within or without the State of Alabama.
(Acts 1971, No. 2305, p. 3719, §1.)
Effective October 1, 2011, there is hereby levied, in addition to all other taxes imposed by law, an excise and privilege tax on every person severing coal within Alabama. This tax shall be paid to the commissioner by every producer who severs coal within Alabama at the rate of $.135 per ton of coal severed.
(Acts 1971, No. 2305, p. 3719, §2; Acts 1980, No. 80-645, p. 1217; Act 2012-386, p. 1030, §1.)
Every producer shall, within 20 days after the end of each calendar month, whether or not he shall have actually severed any coal during the preceding month, file with the commissioner a report. The report shall set forth, in a form to be prescribed by the commissioner, the amount of coal in tons, if any, severed by such producer during the next preceding calendar month, the point of severance thereof, the amount of tax due and such other information as the commissioner may reasonably require for the proper enforcement of the provisions of this article. The producer shall accompany such report with payment of the full amount of the tax shown to be due. The said report shall be signed by the producer himself in the instance of any individual producer, and by a member or officer or the manager of the producer in all other instances.
(Acts 1971, No. 2305, p. 3719, §3.)
Purchasers and transporters of coal shall file a report with the commissioner, upon forms prescribed by the commissioner, within 20 days after the end of each calendar month. The report shall state the names and addresses of all producers from whom such purchaser or transporter has received coal during the respective said calendar month, the total quantity of coal so acquired and, in the case of a transporter, to whom and where each ton of coal was delivered, and such further information as the commissioner reasonably may require for the proper enforcement of the provisions of this article. The said report shall be signed by the purchaser or transporter himself, in the instance of an individual purchaser or transporter, and by a member or officer or the manager of the purchaser or transporter in all other instances.
(Acts 1971, No. 2305, p. 3719, §4.)
(a) The entire proceeds from the privilege or license tax levied by Section 40-13-2 shall be deposited in the State Treasury to the credit of the Alabama State Docks Bulk Handling Facility Trust Fund. The proceeds from the special handling charge provided for by Act No. 2306 of the 1971 Regular Session of the Legislature shall be deposited in the State Treasury to the credit of a fund to be created and known as the Special Handling Charge Fund.
(b) The amounts deposited into such funds shall be disbursed and are hereby appropriated to the extent necessary for such purpose, to pay at their respective maturities, or to redeem under the terms thereof, principal of and interest on any revenue bonds that may at any time be issued pursuant to authorization and any statute adopted at the 1971 Regular Session of the Alabama Legislature or at any other legislative session prior thereto for the purpose of constructing any seaport facility; provided, that amounts deposited into the Special Handling Charge Fund shall be first expended to the extent necessary for such purposes before any amounts are drawn from the Alabama State Docks Bulk Handling Facility Trust Fund.
(c) From the balance remaining in the Special Handling Charge Fund during each fiscal year there is hereby appropriated and there shall be paid by the State Treasurer into a reserve fund or funds established for the bonds until there is on deposit an amount equal to the maximum principal and interest becoming due on the bonds in any one year; to the extent that the balance remaining in the Special Handling Charge Fund is inadequate to fully fund the reserve fund, the reserve fund shall be funded from the Alabama State Docks Bulk Handling Facility Trust Fund.
(d) The balance thereafter remaining in the Alabama State Docks Bulk Handling Facility Trust Fund during each fiscal year shall be transferred as provided by Section 40-13-6.
(e) The balance, if any, in the Special Handling Charge Fund is hereby appropriated and shall be used by the State Treasurer to pay, at his discretion, principal and interest on the bonds in future years or to redeem portions of the bonds.
(Acts 1971, No. 2305, p. 3719, §5; Acts 1980, No. 80-645, p. 1217; Acts 1985, No. 85-648, §1.)
(a) In each fiscal year when the funds then on deposit in the special fund or funds created for retirement of the bonds equal the amount needed to pay all the principal and interest becoming payable on the bonds within the succeeding 12 months and the funds then on deposit in the reserve fund or funds created for the bonds equal the maximum principal and interest becoming due on the bonds in any one year, the severance tax proceeds remaining in the Alabama State Docks Bulk Handling Facility Trust Fund shall be distributed as provided herein; provided however, that if at the end of any fiscal year of the state, beginning with the fiscal year ending September 30, 1987, the Director of the Alabama State Docks Department shall have notified the Director of Finance in writing, at least five days prior to the close of the fiscal year, that the revenues to be derived by the Alabama State Docks Department from the operations of its coal handling facilities for the then current fiscal year are anticipated to be insufficient to pay the aggregate of (1) the expenses (exclusive of depreciation) incurred in operating and maintaining the facilities during such fiscal year and (2) principal and interest that came due during such fiscal year on those bonds of the Alabama State Docks Department for payment of which the revenues have been pledged (which notification shall specify the amount of the expected deficiency), then the remaining severance tax proceeds shall remain in the Alabama State Docks Bulk Handling Facility Trust Fund. Following the filing of such notification, a report shall be filed by the Director of the Alabama State Docks Department with the Director of Finance within 30 days after the close of such fiscal year, supported by such documentation as may be deemed appropriate by the Director of Finance and attesting to the amount of the actual deficiency, computed as described above, incurred in the operation of the facilities during the immediately preceding fiscal year. Upon receipt of the report and such other documentation from the department as the Director of Finance may specify, the Director of Finance, if satisfied as to the accuracy of the amount of the actual deficiency as reflected in the report and accompanying documentation, shall authorize to be transferred, and to the extent herein provided there is hereby in such event appropriated, to the Alabama State Docks Department an amount equal to the lesser of (i) the actual amount of any deficiency computed as described herein or (ii) the balance contained in the Alabama State Docks Bulk Handling Facility Trust Fund as of the immediately preceding September 30.
(b) Beginning with the 1992-93 fiscal year, the first three hundred thousand dollars ($300,000) of any moneys remaining in the Alabama State Docks Bulk Handling Facility Trust Fund after such transfer to the Alabama State Docks Department shall be transferred directly to the Alabama Mining Academy.
(c) For the fiscal year 2011-2012, any moneys remaining in the Alabama State Docks Bulk Handling Facility Trust Fund after such transfers to the Alabama State Docks Department and the Alabama Mining Academy shall be distributed as follows:
(1) Five hundred thousand dollars ($500,000) shall be transferred to the Tuscaloosa County General Fund; five hundred thousand dollars ($500,000) to the Jefferson County General Fund; and two hundred thousand dollars ($200,000) to the Walker County Economic and Industrial Development Authority. The Tuscaloosa County General Fund allocation shall be distributed as follows: One hundred thousand dollars ($100,000) to the Town of Vance; one hundred thousand dollars ($100,000) to the Town of Brookwood; one hundred twenty-five thousand dollars ($125,000) to the Tuscaloosa County Public Library; and one hundred seventy-five thousand dollars ($175,000) to the Tuscaloosa County Board of Education. If the total amount available for distribution to the Tuscaloosa County General Fund, the Jefferson County General Fund, and the Walker County Economic and Industrial Development Authority is insufficient to provide the total allocations for the three, the amount that is available shall be prorated among the three in the same proportion as the designated allocations. In the event the Tuscaloosa County General Fund receives less than five hundred thousand dollars ($500,000), the distributions to the Tuscaloosa County Board of Education and Tuscaloosa County Public Library shall collectively have priority. In the event the allocation to the Tuscaloosa County General Fund is less than three hundred twenty-five thousand dollars ($325,000), the total amount available shall be prorated among the Tuscaloosa County Board of Education and the Tuscaloosa County Public Library in the same proportion as the designated allocations.
(2) From any moneys remaining after the allocations in subdivision (1), one hundred thousand dollars ($100,000) shall be transferred to the Community Development Foundation, Inc., fifty thousand dollars ($50,000) shall be transferred to the Marion County Community Development Association, Inc., fifty thousand dollars ($50,000) shall be transferred to the West Alabama Development Association of Fayette County, one hundred thousand dollars ($100,000) shall be transferred to the Jackson County Economic Development Association, and one hundred thousand dollars ($100,000) shall be transferred to the West Alabama Economic Development Association. If the total moneys available for distribution to the Community Development Foundation, Inc., the Marion County Development Association, Inc., the West Alabama Development Association of Fayette County, the Jackson County Economic Development Association, and the West Alabama Economic Development Association are insufficient to provide the total allocations for the five, the amount that is available shall be allocated proportionately.
Any foundation or association receiving funds pursuant to this section shall be annually audited by the Department of Examiners of Public Accounts and such audit shall be submitted to the Legislature each legislative session.
(3) Any county producing coal that has not previously received an allocation shall receive an allocation based upon tonnage produced in their county using 60 percent of severance tax.
(4) Any moneys remaining after the distributions in subdivisions (1), (2), and (3) shall be transferred to the State General Fund.
(d) For the fiscal year 2012-2013, any moneys remaining in the Alabama State Docks Bulk Handling Facility Trust Fund after any transfers to the Alabama State Docks Department and the Alabama Mining Academy shall be distributed as follows:
(1)a. The Tuscaloosa County General Fund, Jefferson County General Fund, and Walker County Economic and Industrial Development Authority shall receive 50 percent of the designated allocations provided in subsection (c)(1), unless insufficient moneys are available for the distributions; in which case, a pro rata amount shall be received.
b. However, if 60 percent of the remaining moneys available for distribution to the Tuscaloosa County General Fund, Jefferson County General Fund, and Walker County Economic and Industrial Development Authority exceed 50 percent of the designated allocations to the three, as provided in subsection (c)(1), then the three shall receive the same proportion of 60 percent of the remaining moneys available for distribution as provided by the designated allocations.
c. Notwithstanding any other provision, through the fiscal year ending September 30, 2031, the Tuscaloosa County General Fund allocation shall be distributed as follows: Two hundred twenty-five thousand dollars ($225,000) to the Tuscaloosa County Board of Education; one hundred fifty thousand dollars ($150,000) to the Tuscaloosa County Public Library; one hundred thousand dollars ($100,000) to the Town of Brookwood; fifty thousand dollars ($50,000) to the Town of Vance; thirteen thousand dollars ($13,000) to the Town of Coaling; thirteen thousand dollars ($13,000) to the Town of Coker; thirteen thousand dollars ($13,000) to the Town of Lakeview; and eleven thousand dollars ($11,000) to the Tuscaloosa County Judicial Library Fund.
If the total amount available to the Tuscaloosa County General Fund is less than five hundred seventy-five thousand dollars ($575,000), the amount that is available shall be prorated among the entities named in this paragraph in the same proportion as the designated allocations.
In the event the Tuscaloosa County General Fund receives less than two hundred twenty-five thousand dollars ($225,000), the Tuscaloosa County schools shall receive the entire distribution.
In the event the allocation to the Tuscaloosa County General Fund is greater than five hundred seventy-five thousand dollars ($575,000), the total amount of the excess available shall be prorated as follows: 80 percent of the excess to the Tuscaloosa County Board of Education; 12 percent of the excess to the Tuscaloosa County Public Library; and eight percent of the excess to the Tuscaloosa County General Fund for the purpose of supporting the volunteer fire departments in Tuscaloosa County.
(2) From any moneys remaining after the allocations in subsection (c)(1), one hundred thousand dollars ($100,000) shall be transferred to the Community Development Foundation, Inc., fifty thousand dollars ($50,000) shall be transferred to the Marion County Community Development Association, Inc., fifty thousand dollars ($50,000) shall be transferred to the West Alabama Development Association of Fayette County, fifty thousand dollars ($50,000) shall be transferred to the Jackson County Economic Development Association, and one hundred thousand dollars ($100,000) shall be transferred to the West Alabama Economic Development Association. If the total moneys available for distribution to the Community Development Foundation, Inc., the Marion County Development Association, Inc., the West Alabama Development Association of Fayette County, the Jackson County Economic Development Association, and the West Alabama Economic Development Association are insufficient to provide the total allocations for the five, the amount that is available shall be allocated proportionately.
(3) One hundred thousand dollars ($100,000) shall be allocated to the Winston County General Fund.
(4) Any moneys remaining after the distributions in subdivisions (1), (2), and (3) shall be transferred to the State General Fund.
(e) Beginning with the fiscal year 2013-2014, and for all fiscal years thereafter, any moneys remaining in the Alabama State Docks Bulk Handling Facility Trust Fund after any transfers to the Alabama State Docks Department and the Alabama Mining Academy shall be distributed as follows:
(1) a. Sixty percent shall be transferred by the Department of Revenue to the general fund of the county of severance based on the ratio of the $0.135 per ton coal severance tax collections from within the county to the total coal severance tax collections, except those sent to the Walker County Economic and Industrial Development Authority, which shall not be less than one hundred thousand dollars ($100,000). Provided, however, the distribution to the Jefferson County General Fund shall be five hundred thousand dollars ($500,000). This distribution to Jefferson County shall not reduce the amounts available for distribution to other counties pursuant to this subdivision. Any difference in the amount calculated for Jefferson County pursuant to this subdivision and five hundred thousand dollars ($500,000) shall be provided from funds that would otherwise be transferred pursuant to subdivision (4).
b. For the purposes of this paragraph, the term “additional severance tax distribution” means any severance tax distribution that is attributed to the amount of coal severed in a county that is at least 10 percent greater than the average of coal severed in a county for the fiscal years 2017-2018, 2018-2019, and 2019-2020. Notwithstanding any other provision of this section, for the fiscal year 2021-2022 and each fiscal year thereafter, any additional severance tax distribution shall be distributed to the county where the coal was severed, except if any coal severed in the county was loaded for shipping in another county, any additional severance tax distribution attributed to any coal severed in a county and loaded for shipping in another county shall be distributed as follows: 75 percent of that portion of any additional severance tax distribution shall be distributed to the county where severed, and 25 percent of that portion of any additional severance tax distribution shall be distributed to the county where the coal was loaded for shipping.
(2) From any moneys remaining after the allocations in subdivision (1), one hundred thousand dollars ($100,000) shall be transferred to the Community Development Foundation, Inc., fifty thousand dollars ($50,000) shall be transferred to the Marion County Community Development Association, Inc., fifty thousand dollars ($50,000) shall be transferred to the West Alabama Development Association of Fayette County, and one hundred thousand dollars ($100,000) shall be transferred to the West Alabama Economic Development Association. If the total moneys available for distribution to the Community Development Foundation, Inc., the Marion County Development Association, Inc., the West Alabama Development Association of Fayette County, and the West Alabama Economic Development Association are insufficient to provide the total allocations for the four, the amount that is available shall be allocated proportionately.
(3) One hundred thousand dollars ($100,000) shall be allocated to the Winston County General Fund.
(4) The remainder after the distribution in subdivisions (1), (2), and (3) shall be transferred to a fund in the State Treasury designated solely for the operation of the Surface Mining Commission, which fund is continuously appropriated for the operation of the commission.
(Acts 1971, No. 2305, p. 3719, §6; Acts 1980, No. 80-645, p. 1217; Acts 1985, No. 85-648, §2; Acts 1993, No. 93-680, p. 1301, §1; Acts 1997, No. 97-615, p. 1078, §1; Act 2006-386, p. 984, §1; Act 2012-386, p. 1030, §1; Act 2014-346, p. 1289, §1(b)(8); Act 2021-120, §1.)
The excise and privilege tax imposed by this article shall terminate on October 1, 2031, unless extended by an act of the Legislature of the State of Alabama.
(Acts 1971, No. 2305, p. 3719, §9; Acts 1985, No. 85-648, p. 1005, §3; Acts 1990, No. 90-562, p. 956; Act 2006-386, p. 984, §1; Act 2012-386, p. 1030, §1; Act 2021-120, §1.)
No political subdivision of the State of Alabama, including counties, cities, special taxing districts or other taxing instrumentalities, shall levy a tax upon the excise or privilege of severing coal in Alabama. It is the intent hereof that all taxing authority upon the excise or privilege of severing coal as is granted in Section 40-13-2 shall inure to the State of Alabama exclusively.
(Acts 1971, No. 2305, p. 3719, §9A.)
Any producer, purchaser or transporter who shall fail to comply with the provisions of this article shall be guilty of a misdemeanor and upon conviction thereof shall be fined not less than $100 nor more than $500 for each such offense, and the willful filing of any false report shall constitute perjury and shall be punished as such.
(Acts 1971, No. 2305, p. 3719, §8.)
When used in this article, unless the context plainly indicates otherwise, the following words and phrases shall have the meanings respectively ascribed to them by this section:
(1) PERSON. Any individual, firm, partnership, corporation, association, or any other legal entity;
(2) SEVER. Cutting, mining, stripping, deep mining, or otherwise taking or removing coal or lignite from the soil within the county;
(3) TON. A short ton of 2,000 lbs.;
(4) FISCAL YEAR. A 12 month period from January 1 through December 31;
(5) POLICE JURISDICTION and MUNICIPAL LIMITS. Such terms shall refer to police jurisdictions and municipal limits as such police jurisdictions and municipal limits existed on January 1, 1977.
(Acts 1977, No. 598, p. 799, §1.)
Any laws to the contrary notwithstanding, the Department of Revenue is authorized and empowered to and shall levy and collect an excise and privilege tax on every person severing coal or lignite within the State of Alabama in an amount equal to $0.20 per ton of coal or lignite severed.
(Acts 1977, No. 598, p. 799, §2.)
The proceeds collected pursuant to the provisions of this article shall be deposited with the state Department of Revenue and shall be distributed by it at intervals of not more than 60 days as follows:
(1) There shall be distributed to the governing body of each municipality within the police jurisdiction or municipal limits of which coal or lignite was severed an amount equal to 50 percent of the tax collected under this article from the severance of coal or lignite occurring within such police jurisdiction or municipal limits; and
(2) There shall be distributed to the governing body of each county within which coal or lignite was severed other than within the police jurisdiction or municipal limits of a municipality an amount equal to 100 percent of the tax collected under this article from the severance of coal or lignite not severed within the police jurisdiction or municipal limits of a municipality, and, in addition, there shall be distributed to each such county 50 percent of the tax collected under this article from the severance of coal or lignite within the police jurisdiction or municipal limits of each municipality in such county within which there occurred the severance of coal or lignite.
(Acts 1977, No. 598, p. 799, §3.)
In any case in which more than one municipality has, pursuant to the laws of the State of Alabama, police jurisdiction over an area, computations of tonnage severed and the distribution of taxes collected under this article shall be prorated equally among such municipalities with such overlapping police jurisdictions as to such area of overlapping jurisdictions only.
(Acts 1977, No. 598, p. 799, §4.)
(a) The relevant books of every person engaged in the severing of coal or lignite in the State of Alabama shall be open to inspection by duly authorized agents of the Department of Revenue selected or appointed for the purpose of aiding in the collection and enforcement of the tax imposed by this article.
(b) The Department of Revenue is authorized and empowered to issue such forms and to make reasonable rules, regulations and promulgations as may be necessary to enforce and collect the tax imposed by this article, including the imposition of a delinquent penalty not to exceed 10 percent of the amount of such tax; provided, however, that such penalty may be waived by the Department of Revenue if a good and sufficient reason therefor is shown.
(Acts 1977, No. 598, p. 799, §5; Acts 1992, No. 92-186, p. 349, §32.)
Any person who shall fail to comply with the provisions of this article shall be guilty of a misdemeanor and, upon conviction thereof, shall be fined not less than $500 nor more than $5,000 for each such offense.
(Acts 1977, No. 598, p. 799, §6.)
The provisions of this article are supplemental and shall be construed in pari materia with Article 1 of this chapter and Act No. 906, H. 1867, 1975 Regular Session (Acts 1975, p. 1803) as amended by Act No. 368, S. 262, Regular Session of 1976, and any other laws regulating excise and privilege taxes on the severance of coal or lignite; provided, however, that those laws or parts of laws, including specifically any laws imposing or authorizing local, county, municipal, or other severance taxes, except as set out in this section, on coal or lignite, are hereby repealed and all counties, municipalities, and taxing authorities now or hereafter existing in the State of Alabama are prohibited from enacting and implementing any excise or privilege tax on any person severing coal or lignite within the State of Alabama.
(Acts 1977, No. 598, p. 799, §7.)
This article may be cited as the Alabama Uniform Severance Tax Act.
(Act 2004-629, p. 1433, §1.)
As used in this article, the following terms shall have the following meanings:
(1) BORROW PIT. An area from which soil or other unconsolidated materials are removed to be used, without further processing, for highway or road construction and maintenance.
(2) COMMISSIONER. The Commissioner of Revenue of the Alabama Department of Revenue.
(3) DEPARTMENT. The Alabama Department of Revenue.
(4) OPERATOR. Any person engaged in mining or quarrying operations in the state, whether individually, jointly, or through a parent, subsidiary, or affiliated company, or by agent, employee, or contractor.
(5) PERSON. Any individual or individuals, partnership, limited partnership, corporation, limited liability company, limited liability partnership, business trust, or any other association of persons.
(6) POLLUTION CONTROL OR ABATEMENT. As defined in Section 40-23-4(a)(16) and shall include, but shall not be limited to, severed materials used in the treating, modifying, or disposing of water or air pollutants with lime or limestone in water treatment or scrubbing systems in order to comply with a federal, state, or local pollution control law or regulation.
(7) PRODUCER. An operator engaged in the sale of severed materials.
(8) PURCHASER. A person acquiring severed materials from a producer and liable for the tax imposed hereunder.
(9) SEVERED MATERIAL. All natural minerals, including, but not limited to, sand, gravel, sandstone, granite, shale, clay, except clay that produces lightweight aggregate, dolomite, and limestone.
(10) STATE. The State of Alabama and its departments and agencies.
(11) TON. A short ton of 2,000 pounds.
(Act 2004-629, p. 1433, §2; Act 2012-318, p. 717, §1.)
There is hereby levied, in addition to all other taxes imposed by law, a severance tax on the purchaser of all severed material severed from the ground and sold as tangible personal property. The tax shall be levied primarily to compensate the county for the use of its roads and infrastructure and also for the benefit, health, safety, and economic development of the county in which the severed material is severed and the proceeds thereof shall be distributed and allocated as provided in Section 40-13-58.
(Act 2004-629, p. 1433, §3.)
(a) The term severed material, as defined in subdivision (9) of Section 40-13-51 shall not include lime or limestone used for agricultural purposes or for pollution control or abatement purposes, nor rock dust used for settling coal dust in underground mines or similar uses, nor any natural minerals used for the purpose of producing portland cement, nor processed sand used in the foundry cores, mold, and linings, nor clay that produces lightweight aggregate, severed materials that are further processed into a finished aggregate or limestone product without being transported on a public road, marble and marble by-products, iron ore, quartzite, coal, oil, and natural gas and the severance of marble and marble by-products, iron ore, quartzite, coal, oil, and natural gas shall not be subject to the provisions of this article.
(b) The tax levied by this article shall apply to all severed material severed from the ground within this state and sold as tangible personal property, regardless of the place of sale or the fact that delivery may be made outside the county, except that no tax shall be due on any such minerals that are sold to a purchaser for use outside the state provided such minerals are not transported on public roads in Alabama. Records relating to minerals purchased for use outside the state, including method of delivery, shall be available for verification and audit purposes to the department and the department shall make the records available to the county commission of the county from which the materials were severed upon request of the county commission.
(c) Notwithstanding the provisions of subsection (b), or any other provisions in this article to the contrary:
(1) Any severed material severed from the earth by an operator or producer and moved from one place to another on the same site, or transported to another site owned by the same operator or producer shall not be considered a severance thereof for purposes of taxation.
(2) Any severed materials or any other kind of material when severed and used for fill by an operator, producer, or any other person, whether from the same construction site, job site, borrow pit, or any site other than a commercial quarry shall be exempt from the severance tax levied by this article.
(3) Chert shall be exempt from the severance tax levied by this article, including any county or municipality owned and operated chert facility.
(4) Severed materials which are sold, delivered, or transferred between separate legal entities are subject to the tax regardless of any common ownership or other affiliation between the producer and the purchaser.
(5) A producer who severs material from the earth and sells the severed material to the first purchaser without the materials being transported on a public road shall be exempt from the payment of the tax on the sale, provided that the materials will later be processed into a finished aggregate or limestone product for resale. In such instance, the tax shall be levied on the finished aggregate or limestone product made from such exempt material and shall be remitted by the first purchaser who shall be subject to the provisions of this chapter. The severance tax shall not apply to severed material that is wasted by any manufacturing process provided the material is not transported on a public road in this state and is not sold to another entity.
(6) The federal government and the State of Alabama, along with their agencies and political subdivisions, including municipalities, counties, and city and county school boards, are sovereign governmental entities. Direct purchases by sovereign governmental entities are not subject to the tax hereunder.
(d) Any severed material which has been severed and on which any county severance tax has accrued prior to October 1, 2004, in the county in which the severance has occurred shall be exempt if such tax has been paid.
(Act 2004-629, p. 1433, §4; Act 2012-318, p. 717, §1.)
(a) The rate of the tax shall be ten cents ($0.10) per ton on severed material sold as tangible personal property. Provided, however, that naturally occurring unprocessed sand may be taxed at a higher rate by a local act and all such tax collected at such higher rate shall be remitted directly to the jurisdiction in which the operator severing such naturally occurring unprocessed sand is located.
(b) Except as provided in Section 40-13-55(c), the tax levied by this article shall be collected by the producer and become due and payable by the purchaser thereof at the time of sale or delivery, whichever first occurs, provided that the tax shall be identified as a severance tax on a bill of sale, invoice, or similar sales document to the purchaser thereof, otherwise the tax shall instead be the obligation of the producer. The tax levied under this article shall not be included in the measure of tax for any other tax imposed by the state.
(c) A producer shall be allowed a credit against the tax levied hereunder for any severed material severance tax remitted to any county in connection with severed materials severed in one county and transported into another county for further processing by the producer or an affiliate of the producer.
(d) A purchaser claiming an exemption shall provide the producer with the proper documentation which includes the full name and address of the purchaser, the date of sale, the type of product purchased, the product usage, and shall state that the severed materials will be used by an exempt entity or used for an exempt purpose. If the proper documentation of exemption is presented to the producer, the producer shall not be liable for the tax imposed should the purchaser use the severed material for another purpose that is subsequently determined not to be exempt. In that case, the purchaser using the materials for other than an exempt purpose shall be liable for the tax. The exemption documentation form submitted by the purchaser shall be kept on file by the producer and submitted to the department upon request.
(Act 2004-629, p. 1433, §5; Act 2012-318, p. 717, §1.)
(a) The department shall administer and collect this tax and shall promulgate rules and regulations necessary and reasonable for the administration of this article. It shall be the duty of the department to include in such regulations an appropriate method to allocate funds collected to the county where the severed material was severed or processed. Any records related to the collection, distribution, and enforcement of this tax in a particular county, including serverance tax returns, shall be made available to the county commission of the county upon request from the county commission.
(b) The department and producers shall use the inventory accounting principle known as “first in-first out” in determining the tax payable on stockpiles or inventories of severed material sold, and to which county the tax revenue should be allocated, regardless of where the severed material is stored or sold. Any records detailing the allocation of funds under this subsection shall be forwarded to the county commission in a county receiving an allocation at the time the monies are distributed to the county.
(c) For severed materials governed by the provisions of Section 40-13-53(b)(5), the severance tax shall be collected at the time the product is first transported on a public road in this state. The first purchaser as defined in Section 40-13-53(b)(5) shall collect and remit the severance tax, and shall provide reports concerning this taxable event to the department as set out for producers in Section 40-13-56.
(Act 2004-629, p. 1433, §6; Act 2012-318, p. 717, §1.)
For the purpose of ascertaining the amount of tax due and payable under this article, it shall be the duty of all producers to transmit to the department, on or before the twentieth day of the month next succeeding the month in which the tax accrues, a return upon the forms provided by the department. The return shall show the month or period covered, the total number of tons of each type of severed material sold from each production unit operated, owned, or controlled by the producer in each county during the period covered, the amount of the tax due, and such other information as the department may reasonably require to allocate the tax between raw materials severed and finished products sold, as the case may be in particular counties. The return shall be signed by the producer and shall be accompanied by the full amount of the tax shown to be due in good and immediate funds. A copy of the severance tax return shall be made available to any county commission receiving a portion of the tax paid upon request by the county commission.
(Act 2004-629, p. 1433, §7; Act 2012-318, p. 717, §1.)
(a) The tax levied by this article shall become delinquent on the twenty-first day of the month next succeeding the month in which the tax is due. Provided, however, that the department, for good cause shown, may extend the time for making a return required under this article pursuant to rules adopted by the department.
(b) The department shall impose interest and penalties on unpaid taxes which become delinquent. One-half of all interest and penalties collected with respect to the tax imposed by this article shall be retained by the department to help defray the expenses of administration and collection of the tax.
(c) No penalties shall be imposed by the department against a producer or purchaser for any severance tax due under Act 2012-318 based upon an interpretation of the provisions of that act until and unless such time as the department has adopted rules related to such provision of that act and the rules have been effective for 60 days thereafter. Thereafter, any penalties assessed under this tax may be abated by a showing of reasonable cause.
(Act 2004-629, p. 1433, §8; Act 2012-318, p. 717, §1.)
(a) All revenues collected from the tax levied pursuant to this article, less an amount to cover the expenses of administration and collection and one-half of all interest and penalties collected, as provided in subsection (b) of Section 40-13-57, shall be remitted quarterly to the governing body of the county from which the severed material was severed within 60 days following the end of a calendar quarter along with a report prepared by the department detailing how the amount remitted was determined. Notwithstanding the above, the aggregate amount retained by the department to defray the expenses described herein shall not exceed 1.5 percent of the total revenues collected during such calendar quarter and shall be credited to its current service revenue.
(b) The revenues remitted to a county as provided in subsection (a) shall be deposited into a fund held and dispensed by the county commission and designated as the severed material severance tax fund. At least 75 percent of such funds shall be allocated and utilized by the county for the construction, maintenance, and repair of the county’s road system or, if provided by local legislation, for a local economic development authority, public transit, construction and maintenance of county roads and bridges, or the reclamation of lands where natural materials have been severed. Notwithstanding the foregoing, revenues distributed to Franklin County as provided in subsection (a) shall be allocated and utilized exclusively for economic development. Twenty-five percent of the funds distributed to a county as a result of the severance of materials from within the corporate limits of a municipality in the county shall be expended by the county on county roads or other projects authorized by this article within the corporate limits of that municipality.
(c) Revenues collected by the tax imposed by this article shall be remitted back to the county from which the severed material was originally produced based on total tons severed in such county subject to the severance tax multiplied by the rate of tax, less sums due the department, as provided in subsection (a), based on forms submitted to the department from the operator or producer.
(d) Any adjustment of taxes, interest, or penalties which is necessary to adjust any error in the calculation, collection, or disbursement may be made at a subsequent collection or disbursement.
(Act 2004-629, p. 1433, §9; Act 2012-318, p. 717, §1.)
All acts or parts of laws in conflict herewith are hereby repealed, including, but not limited to, Act 99-255, 1999 Regular Session, Act 94-478, 1994 Regular Session, as amended by Act 98-242, 1998 Regular Session and Act 91-609, 1991 Regular Session. Notwithstanding the foregoing, the tax levied pursuant to this article shall not be operative in any county in which, on October 1, 2004, there is a local law which levies a severance tax on natural material in an amount of twenty-five cents ($.25) or more per ton of severed material. This article provides the only method and manner to tax the severance of severed materials subject to the tax levied herein. This article shall preempt all local acts, now or in the future, except as provided herein, regarding the taxation of the severance of the severed material subject to the tax levied herein. Provided, however, that notwithstanding any other provision of this article, the Legislature shall be allowed and shall have the power to tax, by local act or local law applicable to a single county, the severance of materials and/or any use thereof which is not subject to the tax levied by this article or which is otherwise excepted or exempted from the tax levied herein.
(Act 2004-629, p. 1433, §10.)
Within 90 days after October 1, 2004, any county may elect to have the provisions of this article inapplicable to their county. Such election must be made by an affirmative, majority vote of the membership of the county commission so electing to exempt the county from the provisions of this article. Any county making such election shall not receive the proceeds or benefits of any tax collected under this article. Should any county, after electing to be exempted from this article, determine to have the provisions of this article apply to the county, then such county must repeal such previous election by a majority vote of the membership of the county commission and this article shall then apply to such county and the terms and provisions of this article, as amended, shall supersede and take precedence over any act or resolution of the county taxing the severance of materials within such county. Any election under this section shall be filed with the department.
(Act 2004-629, p. 1433, §11.)
(a) Any person required by this article to make a return, pay a tax, keep records, or furnish information deemed necessary by the commissioner or the computation, assessment, or collection of the tax imposed by this article, who fails to make the return, pay the tax, keep the records, or furnish the information at the time required by law or regulation, in addition to other penalties provided by law, shall be guilty of a Class C misdemeanor and, upon conviction, shall be punished as provided by law. Each required procedure and each required record shall constitute a separate offense.
(b) Any person who willfully or fraudulently makes and signs a return, not believing the return to be true and correct as to every material fact, shall be guilty of a Class C felony, and upon conviction, shall be punished as provided by law. Each return shall constitute a separate offense. Additionally, any person who willfully or fraudulently makes and signs a return shall be subject to the penalties prescribed for perjury under the laws of the state.
(c) If noncompliance with any provision of this article is due to any intent to evade payment, the person liable for the payment may be restrained and enjoined from severing severed material from any production unit from which severed material may be severed and sold and upon which the tax is due.
(d) Proceedings to enforce this article shall be instituted in the name of the state by the Attorney General upon the request of the commissioner.
(e) The assessment and collection of any tax imposed hereunder shall be governed by the Alabama Taxpayers’ Bill of Rights and Uniform Revenue Procedures Act, as amended.
(f) For purposes of this section, in addition to its ordinary legal meaning and its defined meaning under this article, “person” includes an officer or employee of a corporation or a partner, member or employee of a partnership or limited liability entity that is under a duty to perform the act in respect to which the violation occurs.
(Act 2004-629, p. 1433, §12.)
The Legislature makes the following findings:
(1) The Legislature understands the need to properly fund state agencies in order to match federal funds for enforcement programs.
(2) The Surface Mining Commission is the delegated agency in this state authorized to enforce the federal Office of Surface Mining (OSM) programs, with a 50 percent match required in order to access federal funds.
(3) Due to very limited General Fund monies available, along with numerous mining companies going out of business over the last eight years which has reduced permit fees and other monies paid to the Surface Mining Commission, there is a need for increased funding from other sources in addition to permit fee increases.
(Act 2017-369, §1.)
For the purposes of this article, the following words have the following meanings:
(1) AFFILIATE. Any person directly or indirectly controlling greater than a 50 percent interest in any other person.
(2) PERSON. Any individual, firm, partnership, corporation, association, or any other legal entity.
(3) SEVER. Cutting, mining, stripping, deep mining, or otherwise taking or removing coal or lignite from the soil within the county.
(4) TON. A short ton of 2,000 pounds.
(Act 2017-369, §2.)
(a) There is levied an additional excise and privilege tax on every person severing coal or lignite in this state in the amount of two and one-half cents ($0.025) per ton of coal or lignite severed by underground mining, and five cents ($0.05) per ton of coal or lignite severed by surface mining, except the maximum tonnage on which the severance tax is levied against a person and a person’s affiliates shall not in the aggregate exceed two million tons per year.
(b) The tax levied by this section shall be collected by the State Department of Revenue and shall be deposited in a special fund in the State Treasury to be used exclusively for the operation of the Surface Mining Commission. Monies in the fund are continuously appropriated to the commission and no money in the fund shall revert to the State Treasury at the end of a fiscal year.
(c) Any person who fails to comply with this section shall be subject to a civil penalty to be assessed by the State Department of Revenue not to exceed one thousand dollars ($1,000) for each offense.
(Act 2017-369, §3.)
This article is repealed August 1, 2019.
(Act 2017-369, §4.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date, see the Code Commissioner’s Notes in the supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §339; Acts 1967, Ex. Sess., No. 169, p. 215, §2.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date, see the Code Commissioner’s Notes in the supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §340; Acts 1992, No. 92-186, §33.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date, see the Code Commissioner’s Notes in the supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §341.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date, see the Code Commissioner’s Notes in the supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §342; Acts 1970, Ex. Sess., No. 34, p. 2657; Acts 1994, No. 94-245, p. 343, §4.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date, see the Code Commissioner’s Notes in the supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §345; Acts 1961, Ex. Sess., No. 49, p. 1905; Acts 1981, 2nd Ex. Sess., No. 81-1073, p. 320, §3; Acts 1994, No. 94-245, p. 343, §4.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date, see the Code Commissioner’s Notes in the supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §346; Acts 1961, Ex. Sess., No. 50, p. 1907; Acts 1981, 2nd Ex. Sess., No. 81-1073, p. 320, §4; Acts 1990, No. 90-242, p. 299, §1.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date, see the Code Commissioner’s Notes in the supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §343; Acts 1992, No. 92-186, p. 349, §34.)
Every corporation organized under the laws of this state, except strictly benevolent, educational, or religious corporations, shall pay annually to the state an annual franchise tax based on its capital stock as follows:
For the tax year beginningRate on each $1,000 of capital stockJanuary 1, 1984$10And all tax years thereafter$10
provided that in no event shall the amount paid by any corporation for annual franchise tax be less than the sum of $50.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §347; Acts 1955, 2nd Ex. Sess., No. 74, p. 191, §1; Acts 1971, 1st Ex. Sess., No. 103, p. 184, §1; Acts 1983, No. 83-745, p. 1233, §1.)
(a) Amount of levy. Every corporation organized under the laws of any other state, nation, or territory and doing business in this state, except strictly benevolent, educational, or religious corporations, shall pay annually to the state an annual franchise tax of three dollars ($3) on each one thousand dollars ($1,000) of the actual amount of its capital employed in this state. Corporations which have qualified to do business in this state shall for the purpose of this title prima facie be held to be doing business in Alabama. However, in no event shall the amount paid by any corporation for annual franchise tax be less than the sum of twenty-five dollars ($25).
(b) Definition of capital. The total capital of such foreign corporation, herein referred to as the “taxpayer,” shall equal the aggregate net amount of the following items determined in accordance with generally accepted accounting principles appropriate in the particular case, as promulgated by the Financial Accounting Standards Board or a similar or successor agency or board, unless otherwise defined in this article:
(1) The outstanding capital stock and any additional paid-in capital, whether positive or negative, but excluding the taxpayer’s cost of its treasury stock.
(2) Retained earnings, whether positive or negative, which shall include any amounts designated for the payment of dividends until the amounts are definitely and irrevocably placed to the credit of stockholders subject to withdrawal on demand.
(3) The amount of bonds, notes, debentures, or other evidences of indebtedness maturing and payable more than one year after the first day of the franchise tax year, but not including deposit liabilities of banks and other financial institutions as defined by state or federal law.
(4) The amount of bonds, notes, debentures, or other evidences of indebtedness, but not including deposit liabilities of banks and other financial institutions as defined by state or federal law, maturing and payable at the time to: (i) any individual stockholder owning directly or indirectly 10 percent or more of the outstanding capital stock of the taxpayer, or (ii) another corporation owning more than 50 percent of the outstanding capital stock of the taxpayer, or (iii) another corporation more than 50 percent of the outstanding capital stock of which is owned by the taxpayer, unless the other corporation referred to in clause (ii) or (iii) is also required to pay a franchise tax to the State of Alabama.
(5) The amount reasonably required to adjust the depreciable or amortizable property accounts for any rapid, excessive, or unreasonable depreciation or amortization charges, so as to restore the depreciable or amortizable property accounts, for franchise tax purposes, to original cost less depreciation or amortization computed on the basis of the useful life of the property to the taxpayer.
(c) Determination of capital employed in state. The actual amount of capital employed by the taxpayer in this state shall then be determined by apportioning the total capital of the taxpayer, as defined above, to Alabama in accordance with regulations promulgated by the Department of Revenue appropriate in the particular case, except that if the apportionment formula prescribed by the regulations and otherwise applicable to the taxpayer would not fairly represent the actual amount of the capital of the taxpayer employed in this state, then the taxpayer may petition for or the department may require, if reasonable, any one of the following:
(1) The exclusion of any one or more of the three standard factors plus the cost-of-manufacturing component;
(2) The inclusion of one or more additional factors which fairly represents the taxpayer’s actual amount of capital employed in this state; or
(3) The employment of any other method, including, without limitation, the method commonly referred to as the summation method, which effectuates an equitable determination of the actual amount of the taxpayer’s capital employed in this state.
However, in the case of organizations whose accounts and records are kept according to rules prescribed by a regulatory agency or instrumentality of the United States or by the Alabama Public Service Commission, or by a state insurance department, the actual amount of capital employed in this state as so determined shall in no event exceed the value of the sum of its tangible property located in this state and its intangible property employed in the conduct of its business in this state.
(d) Exclusions and deductions. (1) There shall be excluded from the amount of capital as determined in subsection (b) of this section the investment by the taxpayer in the capital of other corporations organized under the laws of Alabama, or under the laws of any other state if such other corporations also pay a franchise tax to the State of Alabama, unless the taxpayer is a dealer in stocks or securities.
(2) Except as provided in subdivision (3), in addition to any other applicable exclusions, in the case of any taxpayer, there shall be excluded from the amount of capital as determined in subsection (b), the investment by the taxpayer in the capital of any other corporation that does not pay a franchise tax to the State of Alabama if the taxpayer owns more than 50 percent of the outstanding capital stock of the other corporation, unless the other corporation is dormant and not regularly engaged in one or more business activities.
(3) In addition to any other applicable exclusions, in the case of any bank or bank holding company, there shall be excluded from the amount of capital as determined in subsection (b) as subsection (b) provided prior to the enactment of Act 95-564, the investment by the bank or bank holding company in the capital of any other corporation that does not pay a franchise tax to the State of Alabama if the bank or bank holding company owns more than 50 percent of the outstanding capital stock of the other corporation, unless the other corporation is dormant and not regularly engaged in one or more business activities. A corporation shall not be deemed dormant and shall be considered regularly engaged in one or more business activities, if the corporation owns, directly or indirectly, more than 50 percent of the outstanding capital stock of another corporation regularly engaged in one or more business activities. A corporation shall be deemed to directly or indirectly own more than 50 percent of another corporation if both corporations would be part of a controlled group of corporations as defined in 26 U.S.C. Section 1563 if a 50 percent ownership requirement is applied in lieu of the 80 percent ownership requirement in 26 U.S.C. Section 1563.
(4) There shall be deducted from the amount of capital employed in this state as determined in accordance with subsections (b) and (c) of this section, the following amounts:
a. The aggregate amount of loans of money made by the taxpayer in this state and which shall be secured by existing mortgage or mortgages to it on real estate in this state and upon which mortgage or mortgages there shall have been paid the recording privilege tax provided by law.
b. The amount invested by the taxpayer in bonds or other securities issued by the State of Alabama, or any county, municipality, or other political subdivision of the State of Alabama, or any public corporation organized under the laws of the State of Alabama, unless the corporation is a dealer in securities.
c. The amount invested by the taxpayer in all devices, facilities, or structures, and all identifiable components or materials for use therein, acquired or constructed primarily for the control, reduction, or elimination of air or water pollution.
d. The amount invested by the taxpayer in all real and tangible personal property, equipment, facilities, structures, and components including, but not limited to, all aircraft replacement parts, components, systems, supplies, and sundries affixed or used on an aircraft, and ground support equipment and vehicles used by or for the aircraft, when used by certified 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 paragraph, the words “hub operation within this state” shall be construed to have all of the following criteria:
There originate 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.
Passengers or property, or both, are regularly exchanged at the location between flights of the same or a different certificated or licensed air carrier.
e. During the period beginning December 1, 1997, and ending on the date 20years thereafter, the amount invested in all new and existing manufacturing facilities in this state by the taxpayer, which amount shall be limited to the investment in all real and tangible personal property, equipment, facilities, structures, components, and inventory in this state, provided that the taxpayer has met the criteria in subparagraph 1. below, and, in addition, has met the criteria in subparagraph 2. below:
The taxpayer must, not later than December 31, 2000, file with the Alabama Department of Revenue a statement of intent to claim the deduction provided under this section. This statement of intent shall contain any information required by the Department of Revenue.
During the period commencing with December 1, 1997, and ending on the date six years thereafter, the amount of new investment in all new and existing manufacturing facilities in this state by the taxpayer and, in addition, the number of new employees at all new and existing manufacturing facilities in this state shall meet or exceed the limits described in one of the following brackets:
Amount InvestedNumber of New Employees1. Not less than $1,000,000,000Not less than 5002. Not less than $900,000,000Not less than 6003. Not less than $800,000,000Not less than 7004. Not less than $700,000,000Not less than 8005. Not less than $600,000,000Not less than 9006. Not less than $500,000,000Not less than 1,0007. Not less than $400,000,000Not less than 1,1008. Not less than $300,000,000Not less than 1,2009. Not less than $200,000,000Not less than 1,30010. Not less than $100,000,000Not less than 1,400
No deduction shall be available under this paragraph e. until the criteria defined in subparagraph 1. above, and, in addition, subparagraph 2. above have been met. The deduction available under this paragraph e. shall only be available during those years within the 20 years after December 1, 1997, in which the taxpayer maintains the criteria defined in subparagraph 2. above.
f. The amount invested by the taxpayer in the purchase of an existing manufacturing facility in this state, which amount shall be limited to the investment in all real and tangible personal property, equipment, facilities, structures, components, and inventory on or after January 1, 1998, and during the period for 20 years thereafter, provided that the taxpayer has met the criteria in subparagraphs 1., 2., and 3.
The taxpayer must, within six months of February 19, 1998, file with the Alabama Department of Revenue a statement of intent to claim the deduction provided pursuant to this paragraph. The statement of intent shall contain any information required by the department.
At the time of purchase, the existing manufacturing facility must have at least 1,000 employees, which employment level must be maintained during the period 20 years after the date of acquisition by the taxpayer.
At the time of purchase, the existing manufacturing facility must produce aluminum alloy can stock.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §348; Acts 1955, 2nd Ex. Sess., No. 74, p. 191, §2; Acts 1961, No. 912, p. 1462, §1; Acts 1963, No. 255, p. 666, §1; Acts 1965, No. 764, p. 1375; Acts 1969, No. 1138, p. 2126; Acts 1971, 1st Ex. Sess., No. 103, p. 184, §2; Acts 1971, No. 499, p. 1210; Acts 1973, No. 469, p. 678; Acts 1973, No. 1173, p. 1981; Acts 1985, No. 85-412, p. 374; Acts 1986, No. 86-214, p. 282, §5; Acts 1995, No. 95-403, p. 839, §1; Acts 1995, No. 95-564, §2; Acts 1996, No. 96-261, p. 307, §4; Acts 1996, No. 96-475, p. 589, §1; Act 97-914, p. 299, §1; Act 98-106, p. 129, §1; Act 98-501, p. 1078, §1.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date see the Code Commissioner’s Notes in the supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §349.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date see the Code Commissioner’s Notes in the code supplement..
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §350; Acts 1955, 2nd Ex. Sess., No. 74, p. 191, §3; Acts 1971, 1st Ex. Sess., No. 103, p. 184, §3; Acts 1973, No. 820, p. 1286; Acts 1983, No. 83-745, p. 1233, §1.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., §9. As to effective date see the Code Commissioner’s Notes in the code supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §351; Acts 1992, No. 92-186, p. 349, §35.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date see the Code Commissioner’s Notes in the code supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §353.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date see the Code Commissioner’s Notes in the code supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §354; Acts 1961, Ex. Sess., No. 51, p. 1908; Acts 1990, No. 90-242, p. 299, §3; Acts 1992, No. 92-186, p. 349, §36.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date see the Code Commissioner’s Notes in the code supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §355; Acts 1992, No. 92-186, p. 349, §37.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date see the Code Commissioner’s Notes in the code supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §356.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date see the Code Commissioner’s Notes in the code supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §359.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., §9. As to effective date see the Code Commissioner’s Notes in the code supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §360; Acts 1992, No. 92-186, p. 349, §38.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., §9. As to effective date see the Code Commissioner’s Notes in the code supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §361; Acts 1992, No. 92-186, p. 349, §39.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date see the Code Commissioner’s Notes in the code supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §362; Acts 1990, No. 90-242, p. 299, §5.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date see the Code Commissioner’s Notes in the code supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §363; Acts 1990, No. 90-242, p. 299, §6.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date see the Code Commissioner’s Notes in the code supplement.
(Acts 1990, No. 90-242, p. 299, §7.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date see the Code Commissioner’s Notes in the code supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §25; Acts 1965, No. 391, p. 566; Acts 1965, 2nd Ex. Sess., No. 27, p. 42; Acts 1969, No. 1140, p. 2131; Acts 1973, No. 1172, p. 1978; Acts 1979, No. 79-666, p. 1170; Acts 1981, 1st Ex. Sess., No. 81-975, p. 154; Acts 1985, No. 85-413; Acts 1992, No. 92-186, p. 349, §40; Acts 1996, No. 96-551, p. 808, §1; Acts 1996, 2nd Ex. Sess., No. 96-861, p. 1671, §1.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date see the Code Commissioner’s Notes in the code supplement.
(Acts 1996, No. 96-551, p. 808, §2.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date see the Code Commissioner’s Notes in the code supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §27; Acts 1992, No. 92-186, p. 349, §41.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date see the Code Commissioner’s Notes in the code supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §28.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date see the Code Commissioner’s Notes in the code supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §29.)
For purposes of this chapter, the following terms shall mean:
(a) ALABAMA S CORPORATION. An S corporation defined under Section 40-18-160.
(b) C CORPORATION. A corporation other than an Alabama S corporation.
(c) CODE. The Internal Revenue Code of 1986, as amended from time to time.
(d) CORPORATION. An entity, including a limited liability company electing to be taxed as a corporation for federal income tax purposes, through which business can be conducted while offering limited liability to the owners of the entity with respect to some or all of the obligations of the entity, other than a limited liability entity or a disregarded entity. The term “corporation” shall include but not be limited to the following: Corporations, professional corporations, joint stock companies, unincorporated professional associations, real estate investment trusts, limited liability companies electing to be taxed as corporations for federal income tax purposes, and all associations classified as corporations for federal income tax purposes. The term “corporation” shall not include any county, municipal corporation, political subdivision of the state, governmental corporation, instrumentality or agency thereof.
(e) DEPARTMENT. The Department of Revenue created by Chapter 2.
(f) DETERMINATION PERIOD. The taxpayer’s taxable year next preceding or, if different, the fiscal year next preceding the taxpayer’s current taxable year. If the constitutional amendment proposed by Act 99-600 is ratified by the qualified electors of the state and proclaimed by the Governor as provided in Sections 284 and 285 of the Constitution of Alabama 1901, then for all tax years beginning after December 31, 2000, the term “determination period” means the taxpayer’s taxable year next preceding the taxpayer’s current taxable year.
(g) DISREGARDED ENTITY. A limited liability company that is disregarded for purposes of federal income tax, or a qualified subchapter S subsidiary, as defined in 26 U.S.C. §1361.
(h) ELECTING FAMILY LIMITED LIABILITY ENTITY. A limited liability entity that meets the following requirements:
(1) Eighty percent or more of the profits and capital interests are directly or constructively owned by an individual and the members of the individual’s family, as defined in subdivision (4);
(2) Elects annually (on or before the due date, including extensions, of the return for the tax levied by this chapter) in a manner prescribed by the department to be taxed for the taxable year as a family limited liability entity; and
(3) Either: The Gross Receipts Test in a. or the Assets Test in b.
a. Gross Receipts Test. Ninety percent or more of the gross receipts of the entity for the taxable year consist of any combination of the following:
(i) Interest; (ii) dividends or other distributions or payments made with respect to stock or securities; (iii) rents, license fees, or other fees for the use of property where the entity does not render direct substantial services in connection with such use; (iv) receipts described in 26 U.S.C. §631(b) from the sale or leasing of timber or timberlands; (v) royalties; (vi) annuity payments; (vii) proceeds from the sale of an asset other than in the ordinary course of the entity’s trade or business; or
b. Assets Test. The aggregate adjusted basis of the following categories of assets constitutes at least 90 percent of the aggregate adjusted basis of all of the entity’s assets: (i) Cash or cash equivalents; (ii) stocks, bonds, debentures, notes, or other securities; (iii) timber or timberlands; (iv) annuities; (v) assets held principally for appreciation rather than production of income; (vi) mutual funds; (vii) assets not used directly in the active conduct of the entity’s trade or business of the entity; or (viii) royalty interests.
The Assets Test in b. shall be computed: Without regard to any increase or decrease in adjusted basis on account of an election under 26 U.S.C. §754; as of the first day of the taxable year; without including assets held primarily for sale to customers in the ordinary course of the entity’s trade or business in the numerator; and using the adjusted basis as determined for federal income tax purposes.
(4) For purposes of this subsection, “members of the individual’s family” shall include the individual’s spouse, grandparents, and the lineal descendents of the grandparents and their spouses. Whether interests are constructively owned shall be determined using the attribution rules set forth in 26 U.S.C. §318 as if the profits and capital interests of the family limited liability entity were stock and without regard to the fifty percent limitations contained in 26 U.S.C. §318(a)(2)(C) and 26 U.S.C. §318(a)(3)(C)).
(i) FEDERAL INCOME TAX. The income tax imposed by the Code, as amended from time to time.
(j) FISCAL YEAR. The annual period used by a taxpayer to determine its federal income tax, financial institution excise tax, or report its financial results.
(k) LIMITED LIABILITY ENTITY. Any entity, other than a corporation, organized under the laws of this or any other jurisdiction through which business may be conducted while offering limited liability to the owners of the entity with respect to some or all of the obligations of the entity and which is taxable under subchapter K of the Code, including, without limitation, limited liability companies, registered limited liability partnerships, and limited partnerships.
(l) RELATED PARTY. Any member of a controlled group of corporations as defined in 26 U.S.C. §1563, or a limited liability entity that would be a member of a controlled group if rules similar to those of 26 U.S.C. §1563 were applied to limited liability entities.
(m) TAXABLE INCOME. In the case of a C corporation, the amount of its federal taxable income. In the case of an Alabama S corporation, other than a qualified subchapter S subsidiary, the amount taken into account by its owners pursuant to 26 U.S.C. §1366. In the case of a limited liability entity, the amounts taken into account by its owners pursuant to 26 U.S.C. §702. In the case of a real estate investment trust, the real estate investment trust taxable income determined pursuant to 26 U.S.C. §857. In the case of a disregarded entity, the amount taken into account by its owner pursuant to 26 U.S.C. §1361 or §61. In each case, taxable income of the entity subject to tax shall mean its taxable income for the determination period. In each case, taxable income shall be apportioned and allocated to Alabama in accordance with Chapter 18 or in the case of a financial institution, Chapter 16, or in accordance with Title 27 relating to insurance companies.
(n) TAXABLE YEAR. The calendar year for which a tax levied by this chapter is being determined. For all tax years beginning after December 31, 2000, the term “taxable year” means the fiscal year used by the taxpayer to file returns required under the income tax levied by Chapter 18 or the financial institution excise tax levied by Chapter 16, or, in the case of an insurance company subject to the premium tax levied by Chapter 4A of Title 27, the calendar year.
(o) TAXPAYER. A corporation, limited liability entity, or disregarded entity, subject to a tax levied by this chapter.
(p) U.S.C. The United States Code, as amended from time to time.
(Act 99-665, 2nd Sp. Sess., p. 131, §2; Act 2000-705, p. 1442, §2.)
(a) The taxpayer’s net worth shall be determined for purposes of the taxes levied by this chapter in accordance with the accounting principles used in preparing the taxpayer’s financial statements reported to its owners. If the taxpayer’s financial statements are not prepared in accordance with generally accepted accounting principles, then net worth for such purposes shall be determined either on the same basis as it prepares its federal income tax return or as required by the appropriate regulatory agencies having jurisdiction. However, in the case of a taxpayer that is an insurer holding a certificate of authority to conduct an insurance business within the State of Alabama, net worth for such purposes shall be computed on the same basis as its financial statements are prepared in accordance with the requirements of the State of Alabama Insurance Department.
(b) Net worth may be determined from the taxpayer’s financial statements for its determination period if those financial statements reasonably reflect the financial condition of the taxpayer as of the January 1 following the determination period.
(Act 99-665, 2nd Sp. Sess., p. 131, §2.)
This article shall be known and may be cited as the “Alabama Business Privilege Tax Act of 1999.”
(Act 99-665, 2nd Sp. Sess., §2; Act 2000-705, p. 1442, §2.)
(a) Levy of tax. There is hereby levied an annual privilege tax on every corporation, limited liability entity, and disregarded entity doing business in Alabama, or organized, incorporated, qualified, or registered under the laws of Alabama. The tax shall accrue as of January 1 of every taxable year, or in the case of a taxpayer organized, incorporated, qualified, or registered during the year, or doing business in Alabama for the first time, as of the date the taxpayer is organized, incorporated, registered, or qualifies to do business, or begins to do business in Alabama, as the case may be. The taxpayer shall be liable for the tax levied by this article for each year beginning before the taxpayer has been dissolved or otherwise ceased to exist or has withdrawn or forfeited its qualification to do business in Alabama. The amount of the tax due shall be determined by multiplying the taxpayer’s net worth in Alabama by the rate determined in subsection (b).
(b) Rate of tax. For all taxable years of taxpayers that begin after December 31, 1999, the rate of tax shall be as set forth below.
| If taxable income of the taxpayer is: | | | | --- | --- | --- | | at least | but less than | The tax rate shall be | | | $1 | $0.25 per $1,000 | | $1 | $200,000 | $1.00 per $1,000 | | $200,000 | $500,000 | $1.25 per $1,000 | | $500,000 | $2,500,000 | $1.50 per $1,000 | | $2,500,000 | | $1.75 per $1,000 |
(c) Minimum tax.
(1) Except as provided in subsection (f), and subdivisions (2) and (3), the privilege tax levied by this article on certain corporations, business trusts, limited liability entities, and disregarded entities shall not be less than $100.
(2) For the taxable year beginning after December 31, 2022, taxpayers who would otherwise be subject to the minimum tax due of $100 provided for in subdivision (c)(1) shall pay $50 in lieu thereof. This subdivision shall not apply to those subject to the tax levy provided under Section 20-2A-80.
(3) For taxable years beginning after December 31, 2023, taxpayers who would otherwise be subject to the minimum tax due provided for in subdivisions (c)(1) or (c)(2) shall be exempt from the privilege tax levied by this article and the associated filing requirement. This subdivision shall not apply to those subject to the tax levy provided under Section 20-2A-80.
(d) Maximum tax.
(1) Except as provided in subdivision (2), the privilege tax levied by this article shall not exceed $15,250 for any taxpayer for the taxable year beginning January 1, 2000. For each taxable year thereafter, the maximum tax shall not exceed $15,000 for any taxpayer, except as provided in subdivision (2).
(2) With respect to any (i) financial institution groups as defined in subsection (f)(1); (ii) insurance company that is subject to the premium taxes levied by Chapter 4A of Title 27; and (iii) corporation, company, limited liability entity, or association whose property is assessed for taxation pursuant to the provisions of Chapter 21 and is obligated to serve the general public, but is not subject to the Alabama Corporate Income tax, the privilege tax levied by this article shall not exceed $3,000,000, for any taxpayer or, for a financial institution group, for the financial institution group as a whole each year except as provided in subsection (e). The privilege tax levied by this article on any electing family limited liability entity shall not exceed $500.
The privilege tax levied by this article on any corporation organized as a not-for-profit corporation that does not engage in any business other than holding title to property and paying the expenses thereof, including, without limitation, a property owners’ association or a corporation organized solely to hold title to property on a temporary basis, shall not exceed $100.
(e) Short taxable years. If any taxpayer’s taxable year is less than 12 months because the taxpayer is incorporated or organized within the taxable year, or if any foreign corporation or foreign limited liability entity qualifies, registers, or begins to do business in this state within the taxable year or converts to a taxable year other than the calendar year, the amount of the tax levied by this article shall be determined in the manner specified in this article but apportioned to the short taxable year in same proportion as the number of days in the short taxable year bears to 365, but in no event less than the amounts as specified in subsection (c) as applicable nor more than the applicable amount specified in subsection (d).
(f) Minimum taxes for financial institution groups.
(1) For purposes of this subsection, the following terms shall mean:
a. Affiliated Group. (i) One or more chains of corporations or limited liability entities connected through the ownership of stock or ownership interests with a common parent which is a corporation or limited liability entity, but only if the common parent owns directly stock or ownership interests meeting the requirements of item (ii) in at least one of the other corporations or limited liability entities, and only if stock or ownership interests meeting the requirements of item (ii) in each of the corporations or limited liability entities (except the common parent) is owned directly by one or more of the other corporations or limited liability entities. (ii) The ownership of stock or ownership interests of any corporation or limited liability entity meets the requirements of this paragraph if it possesses at least 80 percent of the total voting power or capital and profits interest of the corporation or limited liability entity.
b. Financial Institution. The meaning given in Section 40-16-1.
c. Financial Institution Group. All taxpayers in an affiliated group where at least one member of the group is a financial institution that is subject to the provisions of Chapter 16. In the event a financial institution taxpayer is not a member of an affiliated group, that financial institution shall be treated as a financial institution group.
(2) To the extent that the members of a financial institution group have different taxable years, the group shall be deemed, for purposes of the business privilege tax levied by Article 2, to have a calendar taxable year.
(3) Taxpayers who are members of a financial institution group shall complete their business privilege tax returns without regard to this subsection. Those taxpayers shall submit their returns together, and the minimum tax amount provided in subdivision (5) shall apply to the aggregate business privilege tax liability of the group. To the extent that the minimum amount provided in subdivision (5) applies to determine the liability of the group, each taxpayer that is a member of the group shall be liable for that portion of the group liability which is equal to the amount multiplied by the ratio of the taxpayer’s liability without regard to this subsection over the liability of the group without regard to this subsection. Upon the annual election of the common parent, a financial institution group may file a single return, executed by the common parent of that financial institution group. The return shall be completed as if the financial institution group were a single taxpayer. Each member of the financial institution group shall be jointly and severally liable for the group’s business privilege tax and corporate shares tax liabilities.
(4) The tax returns for all members of a financial institution group shall be due no later than the corresponding Alabama financial institution excise tax return due date. Extensions for filing these returns shall not be granted for more than six months.
(5) For taxable years beginning on or after January 1, 2000, the minimum aggregate business privilege tax levied by Article 2 on all members of a financial institution group shall be:
a. For financial institutions with total deposits inside Alabama of less than one billion dollars ($1,000,000,000) within that financial institution group, as reported to the FDIC, OTS, or the NCUSIF as of June 30 of the immediately preceding taxable year, the tax rate shall be $.125 per one thousand dollars ($1,000) of such deposits. For deposit rate purposes for all future periods, the deposits shall in no event be less than the deposits listed as of June 30, 1999.
b. For financial institutions with total deposits inside Alabama of one billion dollars ($1,000,000,000) or greater up to and including six billion dollars ($6,000,000,000) within that financial institution group, as reported to the FDIC, OTS, or the NCUSIF as of June 30 of the immediately preceding taxable year, the tax rate shall be $.17 per one thousand dollars ($1,000) of such deposits. For deposit rate purposes for all future periods, the deposits shall in no event be less than the deposits listed as of June 30, 1999.
c. For financial institutions with total deposits inside Alabama greater than six billion dollars ($6,000,000,000) within that financial institution group, as reported to the FDIC, OTS, or the NCUSIF as of June 30 of the immediately preceding taxable year, the tax rate shall be $.225 per one thousand dollars ($1,000) of such deposits. For deposit rate purposes for all future periods, the deposits shall in no event be less than the deposits listed as of June 30, 1999.
d. Provided, however, that in the case of a financial institution group that, as of June 30, 1999, (i) had total deposits of less than one billion dollars ($1,000,000,000) and (ii) derived at least a majority of its deposits, as reported to FDIC, OTS, or NCUSIF, that were booked to one or more branches or offices located within Alabama from account holders whose addresses of record on the books of the financial institution group were outside the State of Alabama, the phrase “total deposits in Alabama,” for purposes of calculating the minimum aggregate business privilege tax levied by Article 2 for all taxable years beginning on and after January 1, 2000, shall only include deposits of account holders whose addresses of record on the books of the financial institution group are inside the State of Alabama.
e. In the event a financial institution group sells Alabama deposits to another financial institution group that reports those deposits in Alabama for purposes of Act 2000-705, those deposits shall not be taxed more than once pursuant to the provisions of Act 2000-705 in the same taxable year. The liability for such taxes shall be the responsibility of the purchaser, and the tax base for the selling group shall be adjusted accordingly.
f. In the event an existing financial institution group reports deposits in any year less than 96.5 percent of the deposits reported as of June 30, 1999, the alternative minimum tax shall be based on the deposits reported as of June 30, 1999. In the event an existing financial institution group reports deposits in any year more than 96.5 percent of the deposits reported as of June 30, 1999, the alternative minimum tax shall be based on the deposits reported for that taxable year. For financial institutions coming into existence after June 30, 1999, the deposits upon which the alternative minimum tax is based shall not be less than the deposits reported the first full year that financial institution reported deposits to the FDIC, OTS, or NCUSIF.
(g) The Department of Revenue may adopt rules for the implementation and administration of this section.
(Act 99-665, 2nd Sp. Sess., p. 131, §2; Act 2000-705, p. 1442, §2; Act 2017-363, §7; Act 2022-252, §§1, 2.)
(a) Net worth of corporation. The net worth of a corporation shall equal the aggregate net amount of the following items determined as of the first day of the corporation’s taxable year and adjusted as required in this article:
(1) In the case of a corporation, the sum of the following:
a. The issued capital stock and any additional paid-in capital, without reduction for treasury stock; and
b. Retained earnings, but not less than zero, which shall include any amounts designated for the payment of dividends until the amounts are definitely and irrevocably placed to the credit of stockholders subject to withdrawal on demand, and
(2) In the case of an entity taxed as a corporation under this article that does not issue stock, the difference between the book value of the entity’s assets and liabilities, but not less than zero.
(b) Net worth of limited liability entities. The net worth of a limited liability entity shall be an amount equal to the sum, but not less than zero, of the capital accounts of the owners of the limited liability entity determined as of the first day of the taxable year of the entity and as further adjusted pursuant to this article.
(c) All the items that would enter into determining a disregarded entity’s net worth shall be instead taken into account in determining the net worth of its owner, and the net worth of the disregarded entity shall be zero. Provided, however, that if the owner of the disregarded entity is an individual, general partnership, or other entity not subject to this tax, the net worth of the disregarded entity shall be equal to the assets minus the liabilities of the disregarded entity.
(d) Net worth of business trusts classified as corporations. The net worth of a business trust classified as an association taxable as a corporation for federal income tax purposes shall be equal to the book value of the assets minus the liabilities of the business trust but not less than zero.
(e) Additions to net worth.
(1) Additions to net worth may be positive amounts only.
(2) Net worth shall include related-party debt in certain situations as follows:
a. If a taxpayer is indebted to related parties in an amount that exceeds the net worth of the taxpayer determined under subsections (a), (b), or (c), then the amount of the excess shall be included in the net worth of the taxpayer.
b. For purposes of this subsection, the terms “debt,” “indebted,” and “indebtedness” shall not include trade debt, accounts payable, or deposit liabilities to related parties that are doing business in Alabama.
(f) There shall be added to net worth, as determined above, compensation and distributions paid or accrued in certain situations.
(1) CORPORATIONS OTHER THAN ALABAMA S CORPORATIONS.
a. For a C corporation, net worth shall include compensation or similar amounts paid or accrued to a direct or indirect shareholder if such shareholder owns at least a 5% capital, profits, or voting interest in such corporation, to the extent such amount exceeds $500,000 with respect to each shareholder in the determination period. The rules of 26 U.S.C. §267(c) shall apply in determining whether an individual is a direct or indirect shareholder who owns at least a 5% capital, profits, or voting interest in such corporation.
b. All compensation or similar amounts paid or accrued to shareholders described in paragraph a. shall be aggregated if such shareholders are members of the same family as described in 26 U.S.C. §267(b)(1), unless the shareholders are 21 years of age or older and materially participate in the business.
c. Compensation or similar amounts paid or accrued to a person not described in paragraphs a. and b. shall be included in such aggregate amount if such person is related to any of the shareholders described in paragraphs a. and b., in accordance with the rules of 26 U.S.C. §267(b)(1), unless the person is 21 years of age or older and materially participates in the business.
(2) ALABAMA S CORPORATIONS.
a. For an Alabama S corporation, add to the above net worth the sum of compensation, distributions or similar amounts paid or accrued to a direct or indirect shareholder if that shareholder owns at least a 5% capital, profits, or voting interest in the corporation, to the extent such amounts exceed $500,000 with respect to each shareholder in the determination period. The rules of 26 U.S.C. §267(c) shall apply in determining whether an individual is a direct or indirect shareholder who owns at least a 5% capital, profits, or voting interest in the corporation.
b. All compensation, distributions, or similar amounts paid or accrued to shareholders described in paragraph a. shall be aggregated if such shareholders are members of the same family as described in 26 U.S.C. §267(b)(1), unless the shareholders are 21 years of age or older and materially participate in the business.
c. Compensation or other similar amounts and distributions paid or accrued to a person not described in paragraphs a. and b. shall be included in such aggregate amount if such person is related to any of the shareholders described in paragraphs a. and b., in accordance with the rules of 26 U. S. C. §267(b)(1), unless the person is 21 years of age or older and materially participates in the business.
(3) LIMITED LIABILITY ENTITIES.
a. For a limited liability entity, net worth shall include compensation, distributions or similar amounts paid or accrued to each direct or indirect partner or member to the extent the amounts exceed $500,000 with respect to each partner or member in the determination period. In determining whether an individual is an indirect partner or member, the principles of 26 U.S.C. §267(c) shall apply.
b. All compensation, distributions, or similar amounts paid or accrued to partners or members described in paragraph a. shall be aggregated if such partners or members are members of the same family as described in 26 U.S.C. §267(b)(1), unless the partners or members are 21 years of age or older and materially participate in the business.
c. Compensation, distributions, or other similar amounts paid or accrued to a person not described in paragraphs a. and b. shall be included in such aggregate amount if such person is related to any of the partners or members described in the paragraphs a. and b., in accordance with the rules of 26 U.S.C. §267(b)(1), unless the person is 21 years of age or older and materially participates in the business.
(4) DISREGARDED ENTITIES.
a. For a disregarded entity, net worth shall include compensation, distributions, or similar amounts paid or accrued to a direct or indirect owner to the extent the amount exceeds $500,000 in the determination period. In determining whether an individual is an indirect owner, the principles of 26 U.S.C. §267(c) shall apply.
b. All compensation, distributions, or similar amounts paid or accrued to an owner or indirect owners described in paragraph a. shall be aggregated if the owner or indirect owners are members of the same family as described in 26 U.S.C. §267(b)(1), unless the owner or indirect owners are 21 years of age or older and materially participate in the business.
c. Compensation, distributions, or similar amounts paid or accrued to persons not described in paragraphs a. and b. shall be included in the aggregate amount if the person is related to any of the owners described in paragraphs a. and b., in accordance with the rules of 26 U.S.C. §267(b)(1), unless the person is 21 years of age or older and materially participates in the business.
(g) From the sum of the items and additions to net worth determined in subsections (a) through (f), the following items shall be subtracted:
(1) The book value of the investment by the taxpayer in the equity of any other taxpayer (including any excess related-party debt described in paragraph (e)(2)a. that is included in the net worth of the taxpayer) that is doing business in Alabama. The subtraction shall not include the book value of any security held by a dealer primarily for sale to customers in the ordinary course of its trade or business pursuant to 26 U.S.C. §1236.
(2) In the case of financial institutions, the investment by the taxpayer in the equity (including any excess related-party debt added to net worth pursuant to paragraph (e)(2)a.) of any other corporation or limited liability entity that is not doing business in Alabama if the taxpayer owns more than 50 percent of the outstanding capital stock of the other corporation or more than 50 percent of the capital and profits interest of the limited liability entity, unless the other corporation or limited liability entity is dormant and not regularly engaged in one or more business activities. A corporation shall not be deemed dormant and shall be considered regularly engaged in one or more business activities if the corporation owns, directly or indirectly, more than 50 percent of the outstanding capital stock of another corporation regularly engaged in one or more business activities. A corporation shall be deemed to directly or indirectly own more than 50 percent of another corporation if both corporations would be part of a controlled group of corporations as defined in 26 U.S.C. §1563 if a 50 percent ownership requirement were applied in lieu of the 80 percent ownership requirement in 26 U.S.C. §1563.
(3) The unamortized portion of goodwill and core deposit intangibles appearing on the taxpayer’s balance sheet by reason of a direct purchase of another corporation or limited liability entity.
(4) The unamortized balance of any amount that the taxpayer properly elected, pursuant to Pronouncement 106 of the Financial Accounting Standards Board or any equivalent successor authority, to amortize over a period of years rather than immediately charging that amount to earnings.
(5) In the case of a financial institution, the amount of net worth as adjusted pursuant to this section that exceeds six percent of its assets.
(Act 99-665, 2nd Sp. Sess., p. 131, §2; Act 2000-705, p. 1442, §2.)
(a) A taxpayer’s net worth in Alabama shall be determined by apportioning the taxpayer’s net worth computed under Section 40-14A-23 in the same manner as prescribed for apportioning income during the determination period for purposes of the income tax levied by Chapter 18, or the manner in which the income would be apportioned if the taxpayer were subject to the income tax, or for the purposes of the financial institution excise tax levied by Chapter 16; provided, however, that the net worth of insurers subject to the insurance premium tax levied by Chapter 4A of Title 27 shall be apportioned on the basis of the ratio of the insurer’s Alabama premium income to its nationwide total direct premiums as reflected on schedule T of the insurer’s annual statement filed with the Commissioner of Insurance for the then immediately preceding calendar year.
(b) There shall be deducted from the amount of net worth in Alabama as determined in accordance with subsection (a):
(1) The net amount invested by the taxpayer in any bond or other security issued before January 1, 2000 by the State of Alabama, or any county, municipality or other political subdivision of the State of Alabama, or any public corporation, agency or instrumentality of the foregoing, but only until the year in which occurs the earlier of the final stated maturity thereof or the date on which the principal of the bond or other security shall be called for optional redemption prior to the final maturity thereof. For purposes of this subdivision, “net amount invested” means the amount of cash, including any premium and net of any discount, paid as the purchase price for the bond or other security, less the amount of any premium amortized and plus the amount of any discount accreted to the date of calculation, reduced by the proportionate amount of principal on the bond or other security that is amortized or otherwise paid or retired. This subdivision shall not apply if the taxpayer is a dealer in securities subject to the rules of 26 U.S.C. §1236.
(2) The net amount invested by the taxpayer in all devices, facilities, or structures, and all identifiable components or materials for use therein, that are located in Alabama and are acquired or constructed primarily for the control, reduction, or elimination of air, ground, or water pollution or radiological hazards where such pollution or radiological hazards result from or would be caused by the taxpayer’s activities in Alabama.
(3) The net amount invested by the taxpayer in all real and tangible personal property, equipment, facilities, structures, and components including, but not limited to, all aircraft replacement parts, components, systems, supplies, and sundries affixed or used on an aircraft, and ground support equipment and vehicles used by or for the aircraft, when used by certified 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 (3), the words “hub operation within this state” shall be construed to have all of the following criteria:
a. There originate 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; and
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.
(4) During the period beginning December 1, 1997, and ending on the date 20 years thereafter, the amount invested in all new and existing manufacturing facilities in this state by the taxpayer, which amount shall be limited to the investment in all real and tangible personal property, equipment, facilities, structures, components, and inventory in this state, provided that the taxpayer has met the criteria in paragraph a. below, and, in addition, has met the criteria in paragraph b. below:
a. The taxpayer must, not later than December 31, 2000, file with the department a statement of intent to claim the deduction provided under this section. This statement of intent shall contain any information required by the department.
b. During the period commencing with December 1, 1997, and ending on the date six years thereafter, the amount of new investment in all new and existing manufacturing facilities in this state by the taxpayer and, in addition, the number of new employees at all new and existing manufacturing facilities in this state shall meet or exceed the limits described in one of the following brackets:
Amount InvestedNumber of New Employees Not less than $1,000,000,000Not less than 500Not less than $900,000,000Not less than 600Not less than $800,000,000Not less than 700Not less than $700,000,000Not less than 800Not less than $600,000,000Not less than 900Not less than $100,000,000Not less than 1,000
No deduction shall be available under this subdivision (4) until the criteria defined in paragraph a. above, and, in addition, paragraph b. above have been met. The deduction available under this subdivision (4) shall only be available during those years within the 20 years after December 1, 1997, in which the taxpayer maintains the criteria defined in paragraph b. above.
(5) The amount invested by the taxpayer in the purchase of an existing manufacturing facility in this state, which amount shall be limited to the investment in all real and tangible personal property, equipment, facilities, structures, components, and inventory on or after January 1, 1998, and during the period for 20 years thereafter, provided that the taxpayer has met the criteria in paragraphs a., b., and c.
a. The taxpayer must, within six months of February 19, 1998, file with the department a statement of intent to claim the deduction provided pursuant to this subdivision (5). The statement of intent shall contain any information required by the department.
b. At the time of purchase, the existing manufacturing facility must have at least 1,000 employees, which employment level must be maintained during the period 20 years after the date of acquisition by the taxpayer.
c. At the time of purchase, the existing manufacturing facility must produce aluminum alloy can stock.
(6) The balance of any reserve, account, or trust reasonably determined to satisfy any liability that is imposed by federal, state, or local government laws or regulations for reclamation, storage, disposal, decontamination, retirement, or other related costs associated with a plant, facility, mine, or site in Alabama.
(7) The book value of any residential real estate project in Alabama that qualifies for federal or state income tax credits, loans, or grants on the grounds that it provides housing for low-income individuals.
(8) In the case of an Alabama S corporation, an amount equal to 30 percent of the corporation’s taxable income.
(9) In the case of a limited liability entity or a disregarded entity, an amount equal to 30 percent of its taxable income, provided that the deduction provided in this subdivision shall not apply if the shares tax levied by Article 3 is in effect.
(c) Nothing in this section shall be construed to allow any item to be deducted more than once or to allow a deduction for any item that is excluded from net worth.
(Act 99-665, 2nd Sp. Sess., p. 131, §2; Act 2000-705, p. 1442, §2.)
(a) Every taxpayer shall file a privilege tax return, which shall include the public record disclosures required by Section 10-2B-16.22, with the department for every taxable year for which it is subject to the tax levied by this article. A disregarded entity that is owned by an individual, general partnership, or other entity not subject to the tax levied by this article shall file a return and pay the tax levied on it by this article. Except as provided in Section 40-14A-22(f) (4), the return required by this section is due no later than the corresponding federal income tax return as required to be filed as provided under federal law. In the case of a taxpayer’s initial return, two and one half months after the taxpayer comes into existence, qualifies or registers to do business, or commences doing business in Alabama as the case may be. A disregarded entity that is required to file a return by this section shall file the return not later than the time its owner is required to file its return. If a taxpayer is required to change its taxable year pursuant to the previous sentence, then it shall file a return for the short taxable year beginning January 1, 2001, and ending on the day before the beginning of its new taxable year, and the return shall be filed no later than the corresponding federal income tax return as required to be filed as provided under federal law. In cases where receivers, trustees in bankruptcy, or assignees are operating the property or business of taxpayers, those receivers, trustees, or assignees shall file returns for the taxpayers in the same manner and form as the taxpayers are required to file returns. Any tax due on the basis of returns filed by receivers, trustees, or assignees shall be collected in the same manner as if collected from the taxpayers for whose business or property they have custody and control. The department may grant a reasonable extension of time for filing returns under rules and regulations prescribed by the department. No extension shall be for more than six months.
(b) The tax provided in this article shall be reported on forms and in the manner as prescribed by the department. The failure to receive a form from the department shall not relieve a taxpayer from liability for any tax, penalty, or interest otherwise due. The tax due, as reported, shall constitute an admitted liability for that amount. The department may compute and assess additional tax, penalty, and interest against a taxpayer as provided in Chapter 2A. Interest on overpayments of business privilege tax will be computed and paid in the manner provided in Section 40-1-44(b)(1)b.
(c) A corporation that is a member of an Alabama affiliated group that has elected to file a consolidated return pursuant to Section 40-18-39 or Section 40-16-3(b), if it is subject to the tax imposed by this article, shall file a separate return reporting and paying tax on its net worth without regard to other members of the affiliated group.
(Act 99-665, 2nd Sp. Sess., p. 131, §2; Act 2000-705, p. 1442, §2; Act 2017-363, §8.)
The tax levied by this article shall be due at the same time the return is due. Remittance of the tax levied by this article shall be made to the department at Montgomery, Alabama, for deposit to the State Treasurer of Alabama. In addition to all other appropriations heretofore or hereinafter made, there is hereby appropriated to the department for the fiscal year ending September 30, 2000, such amount as is reasonably required to offset its conversion costs as a first charge against the revenues from the tax levied by this article. The department and the Secretary of State shall each promulgate a regulation listing those persons who are authorized to execute the privilege tax return and the extension request, and the annual report, respectively, which shall permit the taxpayer’s return preparer to execute any of those forms on behalf of the taxpayer. For all subsequent years, there shall be appropriated to the department as a first charge against the revenues from the tax levied by this article an amount that will offset its actual costs in the administration and regulation of this tax. The balance of the tax collected shall be distributed as follows:
(a) For the fiscal year beginning October 1, 1999, and each fiscal year thereafter, each county shall receive an amount that would have been distributed to each county prior to the repayments required by settlement of litigation regarding audits conducted by the Alabama Department of Revenue from the franchise tax distributed under former Section 40-14-43 during the fiscal year ending September 30, 1999. Beginning with the fiscal year ending September 30, 2000, and for each fiscal year thereafter, each county’s distribution shall be increased by three-quarters of one percent of the amount received by each county in the preceding year.
(b) For the fiscal year beginning October 1, 1999, and each fiscal year thereafter, each county and each tax recipient agency or fund within the county shall receive an amount equal to the amount it received from the shares tax assessed under the procedures of former Article 4 of Chapter 14 with respect to the fiscal year ending September 30, 1999. Beginning with the fiscal year ending September 30, 2000, and for each fiscal year thereafter, each county’s and recipient agency’s or fund’s distribution shall be increased by three-quarters of one percent of the amount received by each entity in the preceding year.
(c) The balance remaining after the distributions in (a) and (b) above shall be deposited into the State General Fund.
(Act 99-665, 2nd Sp. Sess., p. 131, §2; Act 2000-705, p. 1442, §2.)
Whenever a corporation or a limited liability entity organized under the laws of this state is dissolved, terminated, liquidated, or otherwise wound-up, by an agreement or notice of the stockholders or owners of the limited liability entity filed in the office of the judge of probate of the county wherein the corporation or limited liability entity was organized, the judge of probate shall at once give notice to the department and Secretary of State of the dissolution event, with the name of the taxpayer and the date of dissolution, termination, liquidation, or other winding-up. When a dissolution of a corporation or limited liability entity organized under the laws of this state takes place by judgment of a court, upon the filing of a complaint under the laws of this state by the creditors, stockholders, the owners of the limited liability entity, or others, the clerk of the court shall at once notify the department and Secretary of State of such dissolution, termination, liquidation, or other winding-up. In any case where petitions are filed in any court by the creditors, stockholders, owners of the limited liability entity, or others for the dissolution, termination, liquidation, or other winding-up of the entity in case of insolvency of the taxpayer, the clerk of the court shall give notice of the civil action to the department so that the department may file a petition in the case in the court for the purpose of collecting any unpaid privilege tax owing by the taxpayer.
(Act 99-665, 2nd Sp. Sess., p. 131, §2; Act 2000-705, p. 1442, §2.)
The payment of the tax levied by this article shall not exempt any taxpayer from the payment of any regular license or privilege tax required by law for engaging in or carrying on any business for which a license or privilege tax is required of individuals, firms or corporations.
(Act 99-665, 2nd Sp. Sess., p. 131, §2.)
(a) By domestic entities. Each corporation, limited liability entity, and disregarded entity organized under the laws of Alabama shall, within two and one-half months after its organization, file with the department an initial report setting out its name, address, and the name and address of its agent for service of process in Alabama and a return including payment of the tax levied by this article for the year of its organization. The report and return required by this section shall be made on forms prescribed by the department.
(b) By foreign entities. Every corporation, limited liability entity, and disregarded entity organized under the laws of a jurisdiction other than Alabama shall, within two and one-half months after qualifying to do business in Alabama, file with the department an initial report setting forth its name and address, its principal place of business where organized, its principal place of business in Alabama, and the name and address of its agent for service of process in Alabama and a return including payment of the tax levied by this article for the first year of the taxpayer’s qualification to do business in Alabama. The report and return required by this section shall be made on forms prescribed by the department.
(Act 99-665, 2nd Sp. Sess., p. 131, §2; Act 2000-705, p. 1442, §2.)
(a) There is hereby levied an annual shares tax on all corporations incorporated or organized under the laws of Alabama, qualifying or registering to do business, or doing business in Alabama, unless otherwise exempted in this article; provided that all assets and other items of a disregarded entity shall be taken into account in determining the shares tax base of its owner and the disregarded entity shall not be subject to the tax levied by this article. The tax shall accrue as of January 1, 2000, and on January 1 of every taxable year thereafter, or in the case of a taxpayer incorporated or organized during the year, qualifying to do business during the year, or beginning to do business in Alabama for the first time during the year, as of the date the taxpayer incorporated, organized, qualifies, or begins to do business in Alabama, as the case may be. Except as provided in the following sentence, the tax levied by this article for taxable years beginning on or after January 1, 2000, shall be levied at the rate of $5.30 per $1,000 of the taxable shares base and shall not be less than $0 nor exceed $500,000 for any taxpayer. The amount of tax levied by this section for the taxable year beginning January 1, 2001, shall be levied at the rate of $1.33 per $1,000 of the taxable shares base and shall not exceed $125,000 for any taxpayer.
(b) If any taxpayer’s first taxable year is less than 12 months because the taxpayer is organized or incorporated during the taxable year, or if any foreign corporation qualifies or registers or if the taxpayer begins to do business in this state during the taxable year, the amount of the tax levied by this article shall be determined in the manner specified in this article but apportioned to the short taxable year in the same proportion as the number of days in the short taxable year bears to 365, but in no event more than $500,000.
(Act 99-665, 2nd Sp. Sess., p. 131, §2; Act 2000-705, p. 1442, §2; repealed by Act 2000-705, §12.)
The tax levied by this article shall not apply to:
(1) Financial institutions, as defined in Section 40-16-1, that are subject to the provisions of Chapter 16 as to the excise taxes levied on financial institutions;
(2) Insurance companies that are subject to the premium taxes levied by Chapter 4A of Title 27;
(3) Corporations, limited liability entities, companies, or associations whose property is assessed for taxation pursuant to the provisions of Chapter 21 and are also obligated to serve the general public;
(4) Real estate investment trusts as defined in Chapter 13 of Title 10; and
(5) Any corporation organized as a not-for-profit corporation that does not engage in any business other than holding title to property and paying the expenses thereof, including, without limitation, a property owner’s association or a corporation organized solely to hold title to property on a temporary basis.
(Act 99-665, 2nd Sp. Sess., p. 131, §2; Act 2000-705, p. 1442, §2; repealed by Act 2000-705, §12.)
(a) Determine the sum of the following as of the first day of the corporation’s taxable year:
(1) The outstanding capital stock and any additional paid-in capital, but without reduction for treasury stock; and
(2) Retained earnings, but not less than zero, which shall include any amounts designated for the payment of dividends until the amounts are definitely and irrevocably placed to the credit of stockholders subject to withdrawal on demand.
(b) From the amount determined under subsection (a), deduct:
(1) The book value of goods, wares, and merchandise held for sale;
(2) The book value of the investment by the taxpayer in the equity of other corporations doing business in Alabama. This subdivision shall not apply if the taxpayer is a dealer in securities subject to 26 U.S.C. §1236.
(3) Federal obligations.
a. For a taxpayer who does not hold federal obligations for a tax avoidance purpose, the book value of federal obligations owned by the taxpayer multiplied by a fraction, the numerator of which is the amount determined in subsection (a) and the denominator of which is the sum of the amount determined in subsection (a) and the amount of the taxpayer’s debts maturing in more than one year.
b. For a taxpayer that does hold federal obligations for a tax avoidance purpose, an amount determined in accordance with paragraph a. multiplied by a fraction, the numerator of which is the average amount of federal obligations owned during the taxable year and the denominator of which is the average amount of the taxpayer’s total assets during the taxable year, both determined on a monthly basis.
c. A taxpayer shall be deemed to hold federal obligations for a tax avoidance purpose if more than 50 percent by value of the taxpayer’s federal obligations are purchased within a period beginning 45 days before the end of the determination period and are sold within a period ending 45 days after the end of the determination period.
d. A taxpayer may be found to hold federal obligations for a tax avoidance purpose even if such tax avoidance purpose is not deemed to exist by virtue of paragraph c.
(4) The unamortized balance of any amount that the taxpayer properly elected, pursuant to Pronouncement 106 of the Financial Accounting Standards Board or any successor authority, to amortize over a period of years rather than immediately charging that amount to earnings.
(5) For all industrial development board assets that the corporation was entitled to use pursuant to a lease or other agreement entered into before May 21, 1992, or would be entitled to use at some future time pursuant to an inducement entered into with the industrial development board before May 21, 1992, as provided in Section 40-9B-7(c) (if and to the extent that the corporation includes such industrial development board assets on its balance sheet), the corporation shall file with its shares tax return a separate schedule itemizing the book value of its industrial development board assets and the book value of its industrial development board liabilities. The net balance sheet value of such separately scheduled industrial development board assets and industrial development board liabilities shall be excluded from the calculation of the shares tax if such assets are included in the calculation of net worth under Article 2; provided however, this exclusion shall not exceed $200,000 per determination period.
(c) Nothing in this section shall be construed to allow any item to be deducted more than once or to allow a deduction for any item that is excluded from the initial taxable shares base.
(Act 99-665, 2nd Sp. Sess., p. 131, §2; Act 2000-705, p. 1442, §2; repealed by Act 2000-705, §12.)
The taxable shares base shall be determined as follows:
(a) Multiply the corporation’s initial taxable shares base by the apportionment factor used to apportion the corporation’s income to Alabama for purposes of the Alabama income tax in accordance with Chapter 18 or that would be used if the corporation were subject to income tax under Chapter 18.
(b) From the amount determined in subsection (a), deduct the following:
(1) The book value of all devices, facilities, or structures, and all identifiable components or materials for use therein, that are located in Alabama and are acquired or constructed primarily for the control, reduction, or elimination of air, ground, or water pollution or radiological hazards where such pollution or radiological hazards result from or would be caused by activities of the taxpayer in Alabama;
(2) The net amount invested by the taxpayer in any bond or other security issued before January 1, 2000, by the State of Alabama, or any county, municipality, or other political subdivision of the State of Alabama, or any public corporation agency or instrumentality of the foregoing but only until the year in which occurs the earlier of the final maturity date thereof or the date on which the principal of the bond or security shall be called for optional redemption prior to the final maturity thereof. For purposes of this subdivision, “net amount invested” means the amount of cash, including any premium and net of any discount, paid as the purchase price for the bond or other security, less the amount of any premium amortized and plus the amount of any discount accreted to the date of calculation, reduced by the proportionate amount of principal on the bond or other security that is amortized or otherwise paid or retired. This subdivision shall not apply if the taxpayer is a dealer in securities subject to the rules of 26 U.S.C. §1236;
(3) The balance of any reserve, account, or trust reasonably determined to satisfy any liability that is imposed by federal, state, or local government laws or regulations for reclamation, storage, disposal, decontamination, retirement, or other related costs associated with a plant, facility, mine, or site in Alabama;
(4) During the period beginning December 1, 1997, and ending on the date 20 years thereafter, the amount invested in all new and existing manufacturing facilities in this state by the taxpayer, which amount shall be limited to the investment in all real and tangible personal property, equipment, facilities, structures, components, and inventory in this state, provided that the taxpayer has met the criteria in paragraph a. below, and, in addition, has met the criteria in paragraph b. below:
a. The taxpayer must, not later than December 31, 2000, file with the department a statement of intent to claim the deduction provided under this section. This statement of intent shall contain any information required by the department.
b. During the period commencing with December 1, 1997, and ending on the date six years thereafter, the amount of new investment in all new and existing manufacturing facilities in this state by the taxpayer and, in addition, the number of new employees at all new and existing manufacturing facilities in this state shall meet or exceed the limits described in one of the following brackets:
Amount InvestedNumber of New Employees Not less than $1,000,000,000Not less than 500Not less than $900,000,000Not less than 600Not less than $800,000,000Not less than 700Not less than $700,000,000Not less than 800Not less than $600,000,000Not less than 900Not less than $100,000,000Not less than 1,000
No deduction shall be available under this subdivision (4) until the criteria defined in paragraph a. above, and, in addition, paragraph b. above have been met. The deduction available under this subdivision (4) shall only be available during those years within the 20 years after December 1, 1997, in which the taxpayer maintains the criteria defined in paragraph b. above.
(5) The amount invested by the taxpayer in the purchase of an existing manufacturing facility in this state, which amount shall be limited to the investment in all real and tangible personal property, equipment, facilities, structures, components, and inventory on or after January 1, 1998, and during the period for 20 years thereafter, provided that the taxpayer has met the criteria in paragraphs a., b., and c.
a. The taxpayer must, within six months of February 19, 1998, file with the department a statement of intent to claim the deduction provided pursuant to this subdivision (5). The statement of intent shall contain any information required by the department.
b. At the time of purchase, the existing manufacturing facility must have at least 1,000 employees, which employment level must be maintained during the period 20 years after the date of acquisition by the taxpayer.
c. At the time of purchase, the existing manufacturing facility must produce aluminum alloy can stock.
(6) At the election of the taxpayer,
a. The market value, or current use value if applicable, of the real property as last determined by the county assessing official on which the taxpayer is subject to the tax levied by Chapter 8, or,
b. The book value of the real property.
(7) The book value of personal property subject to the tax levied by Chapter 8.
(8) In the case of an Alabama S corporation, an amount equal to 30 percent of the corporation’s taxable income, or, if greater, the amount that would have been the corporation’s income tax liability if it were subject to income tax, computed according to the same method used to determine the amounts required to be included in the shareholders’ incomes and in accordance with generally accepted accounting principles.
(c) Nothing in this section shall be construed to allow any item to be deducted more than once or to allow a deduction for any item that is excluded from the initial taxable shares base.
(Act 99-665, 2nd Sp. Sess., p. 131, §2; Act 2000-705, p. 1442, §2; repealed by Act 2000-705, §12.)
(a) Every corporation organized, incorporated, qualified, or registered under Alabama law or doing business in Alabama as of the first day of a calendar year shall file a return with the department. The return is due not later than March 15 of each year or, in the case of a taxpayer not in existence, not qualifying to do business, or not doing business in Alabama on January 1 of the taxable year, two and one-half months after the taxpayer either comes into existence, qualifies or registers to do business, or commences doing business in Alabama. In cases where receivers, trustees in bankruptcy, or assignees are operating the property or business of taxpayers, those receivers, trustees, or assignees shall file returns for the taxpayers in the same manner and form as the taxpayers are required to file returns. Any tax due on the basis of returns filed by receivers, trustees, or assignees shall be collected in the same manner as if collected from the taxpayers for whose business or property they have custody and control. The department may grant a reasonable extension of time for filing returns under rules and regulations prescribed by the department. No extension shall be for more than six months.
(b) The shares tax provided in this article shall be reported on forms and in the manner as prescribed by the department. The failure to receive a form from the department shall not relieve a taxpayer from liability for any tax, penalty, or interest otherwise due. The tax due, as reported, shall constitute an admitted liability for that amount. The department may compute and assess additional tax, penalty, and interest against a taxpayer as provided in Chapter 2A. Interest on overpayments of shares tax will be computed and paid in the manner provided in Section 40-1-44(b)(1)b.
(c) A corporation that is a member of an Alabama affiliated group that has elected to file a consolidated return pursuant to Section 40-18-39, if it is subject to the shares tax imposed by this article, shall file a separate return reporting and paying the tax as provided in this article without regard to other members of the affiliated group.
(Act 99-665, 2nd Sp. Sess., p. 131, §2; Act 2000-705, p. 1442, §2; repealed by Act 2000-705, §12.)
The tax levied by this article shall be due at the same time the return is due. Remittance of the shares tax required by the above sections shall be made to the department at Montgomery, Alabama, for deposit to the State Treasurer of Alabama. In addition to all other appropriations heretofore or hereinafter made, there is hereby appropriated to the department for the fiscal year ending September 30, 2000, such amount as is reasonably required to offset its conversion costs as a first charge against the revenues from the tax levied by this article. For all subsequent years, there shall be appropriated to the department as a first charge against the revenues from the tax levied by this article an amount that will offset its actual costs in the administration and regulation of this tax.
The balance of the shares tax collected shall be distributed each fiscal year to the State General Fund.
(Act 99-665, 2nd Sp. Sess., p. 131, §2; Act 2000-705, p. 1442, §2; repealed by Act 2000-705, §12.)
Whenever a corporation organized or incorporated under the laws of this state is dissolved, terminated, liquidated, or otherwise wound-up, by an agreement of the stockholders filed in the office of the judge of probate of the county wherein the corporation was organized, the judge of probate shall at once give notice to the department and Secretary of State of the dissolution event, with name of the taxpayer and the date of dissolution, termination, liquidation, or other winding-up. When a dissolution of a corporation organized or incorporated under the laws of this state takes place by judgment of a court, upon the filing of a complaint under the laws of this state by the creditors, stockholders, or others, the clerk of the court shall at once notify the department and Secretary of State of such dissolution, termination, liquidation, or other winding up. In any cases where petitions are filed in any court by the creditors, stockholders, or others for the dissolution, termination, liquidation, or other winding-up of a taxpayer in case of insolvency of the taxpayer, the clerk of the court shall give notice of the civil action to the department so that the department may file a petition in the case in the court for the purpose of collecting any unpaid shares tax owing by the taxpayer.
(Act 99-665, 2nd Sp. Sess., p. 131, §2; Act 2000-705, p. 1442, §2; repealed by Act 2000-705, §12.)
The payment of the shares tax levied by this article shall not exempt any taxpayer from the payment of any regular license or privilege tax required by law for the engaging in or carrying on any business for which a license or privilege tax is required of individuals, firms, or corporations.
(Act 99-665, 2nd Sp. Sess., p. 131, §2; Act 2000-705, p. 1442, §2; repealed by Act 2000-705, §12.)
The taxes levied by this chapter shall not apply to any entity that was organized before January 1, 1999, was not subject to the franchise tax levied by former Chapter 14 of this title, and is entitled, pursuant to a contract entered into before January 1, 1999, to be indemnified for taxes upon net worth resulting from transactions or activities contemplated in the contract.
(Act 99-665, 2nd Sp. Sess., p. 131, §2.)
The taxes levied by this chapter shall not apply to any corporation that is wholly or partially exempt from the franchise tax imposed by former Chapter 14 of this title because it is a party to a contract with the Department of Economic and Community Affairs under the authority of Section 41-23-30.
(Act 99-665, 2nd Sp. Sess., p. 131, §2.)
The taxes levied by this chapter shall not apply to any organization described in 26 U.S.C. §501(a), any county, municipality, municipal corporation, or the State of Alabama, or any corporation or association owned solely by counties, municipalities, or the State of Alabama, any community chest, fund, or foundation, or any entity organized and operated exclusively for religious purposes, any homeowners association, any political party, political action committee, political campaign committee, or any agricultural cooperative.
(Act 99-665, 2nd Sp. Sess., p. 131, §2; Act 2000-705, p. 1442, §2.)
As used in this chapter, the following terms shall have the following meanings:
(1) AFFILIATE. An affiliate of another person shall include any of the following:
a. A person who directly or indirectly either:
Beneficially owns 15 percent or more of the outstanding voting securities or other voting ownership interests of the other person, whether through rights, options, convertible interests, or otherwise; or
Controls or holds power to vote 15 percent or more of the outstanding voting securities or other voting ownership interests of the other person.
b. A person owning 15 percent or more of the outstanding voting securities or other voting ownership interests of which are directly or indirectly either:
Beneficially owned by the other person, whether through rights, options, convertible interests, or otherwise; or
Controlled or held with power to vote by the other person.
c. A partnership or limited liability company in which the other person is a general partner, managing member or manager, as the case may be.
d. An officer, director, employee, or agent of the other person, or an immediate family member of the officer, director, employee, or agent.
(2) ALLOCATION DATE. The date on which the certified investors of a certified capital company are allocated certified capital by the Alabama Development Office under this chapter.
(3) CERTIFIED CAPITAL. An investment of cash by a certified investor in a certified capital company that fully funds the purchase price of an equity interest in the company or a qualified debt instrument issued by the certified capital company.
(4) CERTIFIED CAPITAL COMPANY. A partnership, corporation, or trust or limited liability company, whether organized on a profit or not-for-profit basis, that has as its primary business activity the investment of cash in qualified technology businesses and that is certified as meeting the criteria of this chapter.
(5) CERTIFIED INVESTOR. An insurance company or other person that has state premium tax liability, that contributes certified capital pursuant to an allocation of premium tax credits under this chapter.
(6) PERSON. A natural person or entity, including a corporation, general or limited partnership, or trust or limited liability company.
(7) PREMIUM TAX CREDIT ALLOCATION CLAIM. A claim for allocation of premium tax credits.
(8) QUALIFIED DEBT INSTRUMENT. A debt instrument issued by a certified capital company, at par value or a premium, that:
a. Has an original maturity date of at least five years after the date of issuance.
b. Has a repayment schedule that is not faster than a level principal amortization over five years.
c. Has no interest, distribution, or payment features that are related to the profitability of the certified capital company or the performance of the certified capital company’s investment portfolio.
(9) QUALIFIED DISTRIBUTION. Any distribution or payment from certified capital by a certified capital company in connection with the following:
a. The reasonable costs and expenses of forming, syndicating, managing, and operating the company, including reasonable and necessary fees paid for professional services, including legal and accounting services, related to the formation and operation of the company, and an annual management fee in an amount that does not exceed two and one-half percent of the certified capital of the company; provided that no distribution or payment authorized by this paragraph a. be made directly or indirectly to a certified investor, except for distributions or payments made in consideration for a guaranty, indemnity, bond, insurance policy, or other payment undertaking described by subsection (b) of Section 40-14B-4.
b. Any projected increase in federal or state taxes, including penalties and interest related to state and federal income taxes, of the equity owners of the company resulting from the earnings or other tax liability of the company to the extent that the increase is related to the ownership, management, or operation of the company.
(10) QUALIFIED INVESTMENT. The investment of cash by a certified capital company in a qualified technology business for the purchase of any debt, debt participation, equity, or hybrid security of any nature or description, including a debt instrument or security that has the characteristics of debt but that provides for conversion into equity or equity participation instruments such as options or warrants.
(11) QUALIFIED TECHNOLOGY BUSINESS. A business that, at the time of a certified capital company’s first investment in the business:
a. Is headquartered in this state and intends to remain in this state after receipt of the investment by the certified capital company, or is headquartered in another state and intends to relocate its headquarters to this state after receipt of the investment by the certified capital company.
b. Has its principal business operations located in this state and intends to maintain business operations in this state after receipt of the investment by the certified capital company, or has its principal business operations located in another state, and intends to relocate business operations to this state within 90 days after receipt of investment by the certified capital company.
c. Has agreed to use the qualified investment primarily to either support business operations in this state, or in the case of a start-up company, establish and support business operations in this state, except in each case, advertising, sales and promotional operations which may be conducted outside of this state.
d. Has not more than 100 employees and either employs at least 80 percent of its employees in this state, or pays at least 80 percent of its payroll to employees in this state.
e. Is primarily engaged in any of the following:
Manufacturing, processing, or assembling products.
Conducting research and development.
Providing services.
f. Is not primarily engaged in any of the following:
Retail sales.
Real estate development.
The business of insurance, banking, or lending.
The provision of professional services provided by accountants, attorneys, or physicians.
(12) STATE PREMIUM TAX LIABILITY. Includes:
a. Any liability incurred by any person under Chapter 4A of Title 27, the Alabama Insurance Code.
b. If the tax liability imposed under Chapter 4A of Title 27, the Alabama Insurance Code, on January 1, 2002, is eliminated or reduced, any tax liability imposed on an insurance company or other person that had premium tax liability under Chapter 4A of Title 27, the Alabama Insurance Code, on that date.
(Act 2002-429, p. 1108, §1.)
The Alabama Development Office shall administer this chapter and may adopt rules and forms as necessary to implement this chapter.
(Act 2002-429, p. 1108, §2.)
(a) The Director of the Alabama Development Office by rule shall establish the application procedures for certified capital companies.
(b) An applicant must file an application in the form prescribed by the Alabama Development Office accompanied by a nonrefundable application fee of seven thousand five hundred dollars ($7,500). The application must include an audited balance sheet of the applicant, with an unqualified opinion from an independent certified public accountant, as of a date not more than 35 days before the date of the application.
(c) To qualify as a certified capital company all of the following must apply:
(1) The applicant must have, at the time of application for certification, an equity capitalization of at least five hundred thousand dollars ($500,000) in the form of cash or cash equivalents. The applicant must maintain this equity capitalization until it receives an allocation of certified capital pursuant to Section 40-14B-17.
(2) At least two principals or persons employed or engaged to manage the funds of the applicant must have at least four years of experience making venture capital investments in small businesses on behalf of or as an institutional or accredited investor.
(3) The applicant must satisfy any additional reasonable informational requirement imposed by the Alabama Development Office by rule.
(4) The applicant must have incorporated or organized within the State of Alabama no later than 15 days before applying for certification.
(5) The applicant must have established an office within the State of Alabama before or within 60 days of certification.
(d) The Director of the Alabama Development Office shall review the application, organizational documents, and business history of each applicant and shall ensure that the applicant satisfies the requirements of this chapter.
(e) Not later than the 30th day after the date an application is filed, the Director of the Alabama Development Office shall either issue the certification or refuse to issue the certification and communicate in detail to the applicant the grounds for the refusal, including suggestions for the removal of these grounds. If an applicant submits an amended application within 15 days of receipt of refusal from the office, the office shall have 15 days from the receipt of such amended application by which to communicate its approval or refusal of such amended application to the applicant. The office shall review and approve or reject applications in the order submitted, and in the event more than one application is received by the office on any date, all such applications shall be reviewed and approved simultaneously, except in the case of incomplete applications or applications for which additional information is requested by the office and is not supplied by the applicant within the allowable time limits established by the office.
(Act 2002-429, p. 1108, §3.)
(a) An insurance company or other persons who may have state premium tax liability or the affiliates of the insurance companies or other persons may not, directly or indirectly, do any of the following:
(1) Manage a certified capital company.
(2) Beneficially own, whether through rights, options, convertible interests, or otherwise, more than 15 percent of the outstanding voting securities of a certified capital company.
(3) Control the direction of investments for a certified capital company.
(b) Not more than one certified investor in any certified capital company or affiliates thereof, may provide a guaranty, indemnity, bond, insurance policy, or other payment undertaking in favor of all of the certified investors of the certified capital company and its affiliates.
(c) Subsection (a) applies without regard to whether the insurance company or other person or the affiliate of the insurance company or other person is licensed by or transacts business in this state.
(d) This chapter does not preclude a certified investor, an insurance company, or any other person from exercising its legal rights and remedies, including interim management of a certified capital company, if authorized by law, with respect to a certified capital company that is in default of its statutory or contractual obligations to the certified investor, insurance company, or other person, or establishing controls to ensure that the certified capital company satisfies the requirements of this chapter.
(e) Nothing in this section shall limit an insurance company’s ownership of nonvoting equity interests in a certified capital company.
(Act 2002-429, p. 1108, §4.)
Any offering material involving the sale of securities of the certified capital company must include the following statement: “By authorizing the formation of a certified capital company, the State of Alabama does not endorse the quality of management or the potential for earnings of the company and is not liable for damages or losses to a certified investor in the company. Use of the word “certified” in an offering does not constitute a recommendation or endorsement of the investment by the Alabama Development Office of public accounts. If applicable provisions of law are violated, the State of Alabama may require forfeiture of unused premium tax credits and repayments of used premium tax credits.”
(Act 2002-429, p. 1108, §5.)
(a) To continue to be certified, a certified capital company shall make qualified investments according to the following schedule:
(1) Before the third anniversary of its allocation date, a company must have made qualified investments in an amount cumulatively equal to at least 35 percent of its certified capital.
(2) Before the fifth anniversary of its allocation date, a company must have made qualified investments in an amount cumulatively equal to at least 50 percent of its certified capital.
(b) The aggregate cumulative amount of all qualified investments made by the certified capital company after its allocation date shall be considered in the computation of the percentage requirements under this chapter. Any proceeds received from a qualified investment may be invested in another qualified investment and count toward any requirement in this chapter with respect to investments of certified capital.
(c) A business that is classified as a qualified technology business at the time of the first investment in the business by a certified capital company remains classified as a qualified technology business and may receive follow-on investments from any certified capital company. Except as provided by this subsection, a follow-on investment made under this subsection is a qualified investment even though the business may not meet the definition of a qualified technology business at the time of the follow-on investment. A follow-on investment does not qualify as a qualified investment if, at the time of the follow-on investment, the qualified technology business no longer has its headquarters in this state.
(d) A qualified investment may not be made at a cost to a certified capital company greater than 15 percent of the total certified capital of the company.
(e) If, before the 180th day after the date that a certified capital company makes an investment in a qualified technology business, the qualified technology business moves its principal business operations from this state, the investment may not be considered a qualified investment for purposes of the percentage requirements under this chapter.
(f) A certified capital company shall invest any certified capital not invested in qualified investments only as follows:
(1) Cash deposited with a federally insured financial institution.
(2) Certificates of deposit in a federally insured financial institution.
(3) Investment securities that are obligations of the United States or its agencies or instrumentalities or obligations that are guaranteed fully as to principal and interest by the United States.
(4) Debt instruments rated at least “A” or its equivalent by a nationally recognized credit rating organization, or issued by, or guaranteed with respect to payment by, an entity whose unsecured indebtedness is rated at least “A” or its equivalent by a nationally recognized credit rating organization, and which indebtedness is not subordinated to other unsecured indebtedness of the issuer or the guarantor.
(5) Obligations of this state or any municipality or political subdivision of this state.
(6) Any other investments approved in advance and in writing by the Alabama Development Office.
(Act 2002-429, p. 1108, §6.)
(a) A certified capital company may, before making an investment in a business, request from the Alabama Development Office a written opinion as to whether the business in which it proposes to invest is a qualified technology business.
(b) The Alabama Development Office shall, not later than the 15th business day after the date of the receipt of a request under subsection (a), determine whether the business meets the definition of a qualified technology business, and notify the certified capital company of the determination and an explanation of its determination or notify the certified capital company that an additional 15 days will be needed to review and make the determination.
(c) If the Alabama Development Office fails to notify the certified capital company with respect to the proposed investment within the period specified by subsection (b), the business in which the company proposes to invest is considered to be a qualified technology business.
(Act 2002-429, p. 1108, §7.)
(a) Each certified capital company shall report to the Alabama Development Office as soon as practicable after the receipt of certified capital the following:
(1) The name of each certified investor from whom the certified capital was received, including the certified investor’s insurance premium tax identification number.
(2) The amount of each certified investor’s investment of certified capital and premium tax credits.
(3) The date on which the certified capital was received.
(b) Not later than January 31 of each year, each certified capital company shall report to the Alabama Development Office all of the following:
(1) The amount of the company’s certified capital at the end of the preceding year.
(2) Whether or not the company has invested more than 15 percent of its total certified capital in any one business.
(3) Each qualified investment that the company made during the preceding year and, with respect to each qualified investment, the number of employees of the qualified technology business at the time the qualified investment was made.
(4) Any other information required by the Alabama Development Office.
(c) Not later than April 1 of each year, the company shall provide to the Alabama Development Office an annual audited financial statement that includes the opinion of an independent certified public accountant. The audit or other review by the certified public accountant shall address the methods of operation and conduct of the business of the company to determine whether:
(1) The company is complying with this chapter and the rules adopted under this chapter.
(2) The funds received by the company have been invested as required within the time provided by subsection (a) of Section 40-14B-6.
(3) The company has invested the funds in qualified technology businesses.
(Act 2002-429, p. 1108, §8.)
(a) Not later than January 31 of each year, each certified capital company shall pay a nonrefundable renewal fee of five thousand dollars ($5,000) to the Alabama Development Office. If a certified capital company fails to pay its renewal fee on or before that date, the company must pay, in addition to the renewal fee, a late fee of five thousand dollars ($5,000) to continue its certification.
(b) Notwithstanding subsection (a), a renewal fee is not required within six months of the date on which the company’s certification is issued pursuant to Section 40-14B-3.
(Act 2002-429, p. 1108, §9.)
(a) A certified capital company may make a qualified distribution at any time. To make a distribution or payment, other than a qualified distribution, a company must have made qualified investments in an amount cumulatively equal to at least 100 percent of its certified capital.
(b) Notwithstanding subsection (a), a company may make payments of principal and interest on its indebtedness without any restriction, including payments of indebtedness of the company on which certified investors earned premium tax credits.
(c) The State of Alabama shall receive a 10 percent share of any distributions other than qualified distributions and payments with respect to indebtedness from the certified capital company to its equity holders above and beyond the amount of distributions that would result in an internal rate of return on the total amount of certified capital allotted to the certified capital company plus any additional capital contribution to the certified capital company in excess of 15 percent.
(d) Once a certified capital company has made qualified investments in an amount cumulatively equal to 100 percent of the certified capital allocated to it, the certified capital company shall no longer be subject to regulation under this chapter.
(Act 2002-429, p. 1108, §10.)
(a) The Alabama Development Office shall conduct an annual review of each certified capital company to:
(1) Ensure that the company continues to satisfy the requirements of this chapter and that the company has not made any investment in violation of this chapter.
(2) Determine the eligibility status of its qualified investments.
(b) The cost of the annual review shall be paid by each certified capital company according to a reasonable fee schedule adopted by the Alabama Development Office.
(c) A material violation of Sections 40-14B-6, 40-14B-8, or 40-14B-9 is grounds for decertification of the certified capital company. If the Alabama Development Office determines that a company is not in compliance with Sections 40-14B-6, 40-14B-8, or 40-14B-9, the director shall notify the officers of the company in writing that the company may be subject to decertification after the 120th day after the date of mailing of the notice, unless the deficiencies are corrected and the company returns to compliance with those sections.
(d) The Director of the Alabama Development Office may decertify a certified capital company, after opportunity for hearing, if the director finds that the company is not in compliance with Sections 40-14B-6, 40-14B-8, or 40-14B-9 at the end of the period established by subsection (c). Decertification under this subsection is effective on receipt of notice of decertification by the company. The Alabama Development Office shall notify any appropriate state agency of the decertification.
(Act 2002-429, p. 1108, §11.)
(a) Decertification of a certified capital company may cause the recapture of premium tax credits previously claimed and the forfeiture of future premium tax credits to be claimed by certified investors with respect to the company, as follows:
(1) Except as set forth in subdivision (2), decertification of a company on or before the third anniversary of its allocation date causes the recapture of any premium tax credit previously claimed and the forfeiture of any future premium tax credit to be claimed by a certified investor with respect to the company.
(2) For a company that meets the requirements for continued certification under subdivision (1) of subsection (a) of Section 40-14B-6 and subsequently fails to meet the requirements for continued certification under subdivision (2) of subsection (a) of Section 40-14B-6, any premium tax credit that has been or will be taken by a certified investor on or before the third anniversary of the allocation date is not subject to recapture or forfeiture, but any premium tax credit that has been or will be taken by a certified investor after the third anniversary of the allocation date of the company is subject to recapture or forfeiture.
(3) For a company that has met the requirements for continued certification under subdivisions (1) and (2) of subsection (a) of Section 40-14B-6 and is subsequently decertified, any premium tax credit that has been or will be taken by a certified investor on or before the fifth anniversary of the allocation date is not subject to recapture or forfeiture, but any premium tax credit to be taken after the fifth anniversary of the allocation date is subject to forfeiture only if the company is decertified on or before the fifth anniversary of its allocation date.
(4) For a company that has invested an amount cumulatively equal to 100 percent of its certified capital in qualified investments, any premium tax credit claimed or to be claimed by a certified investor is not subject to recapture or forfeiture under this chapter.
(b) The Alabama Development Office shall send written notice to the address of each certified investor whose premium tax credit is subject to recapture or forfeiture, using the address shown on the last premium tax filing.
(Act 2002-429, p. 1108, §12.)
The certified capital company may agree to indemnify, or purchase a guaranty, indemnity, bond, insurance policy, or other payment undertaking for the benefit of a certified investor for losses resulting from the recapture or forfeiture of premium tax credits under Section 40-14B-12.
(Act 2002-429, p. 1108, §13.)
(a) A certified investor who makes an investment of certified capital shall in the year of investment earn a vested credit against state premium tax liability equal to 100 percent of the certified investor’s investment of certified capital, subject to the limits imposed by this chapter. A certified investor may take up to 12.5 percent of the vested premium tax credit in any taxable year of the certified investor, beginning in the second calendar year after the investment.
(b) The credit to be applied against state premium tax liability in any one year may not exceed the state premium tax liability of the certified investor for the taxable year. Any unused credit against state premium tax liability may be carried forward indefinitely until the premium tax credits are used.
(c) A certified investor claiming a credit against state premium tax liability earned through an investment in a company is not required to pay any additional retaliatory tax levied by law as a result of claiming that credit. An investment made under this chapter is an “Alabama investment” for purposes of this chapter.
(Act 2002-429, p. 1108, §14.)
(a) A premium tax credit allocation claim must be prepared and executed by a certified investor on a form provided by the Alabama Development Office. The certified capital company must file the claim with the Alabama Development Office not later than October 1, 2002. The premium tax credit allocation claim form must include an affidavit of the certified investor under which the certified investor becomes legally bound and irrevocably committed to make an investment of certified capital in a certified capital company in the amount allocated even if the amount allocated is less than the amount of the claim, subject only to the receipt of an allocation under Section 40-14B-19.
(b) A certified investor may not claim a premium tax credit under Section 40-14B-16 for an investment that has not been funded, even if the certified investor has committed to fund the investment.
(Act 2002-429, p. 1108, §15.)
(a) The total amount of certified capital for which premium tax credits may be allowed under this chapter for all years in which premium tax credits are allowed is one hundred million dollars ($100,000,000). Notwithstanding any provision of this chapter to the contrary, the granting of any credits against the insurance premium tax shall not affect the insurance premium tax receipts of the Education Trust Fund which is provided for in Act 93-679, 1993 Regular Session.
(b) No premium tax credits can be used until the second calendar year after the year of the investment by the certified investor.
(c) A certified investor may take up to 12.5 percent of the vested premium tax credit in any taxable year of the certified investor, once the credits are earned, except for the initial delay of this chapter.
(d) A certified capital company and its affiliates may not file premium tax credit allocation claims in excess of the maximum amount of certified capital for which premium tax credits may be allowed as provided in this chapter.
(e) The maximum amount of premium tax credit allocation claims that may be filed on behalf of any one insurance company, on an aggregate basis with its affiliates, in one or more certified capital companies, shall not exceed the greater of: Ten million dollars, or 15 percent of the aggregate limitation on credits provided in subsection (a).
(Act 2002-429, p. 1108, §16.)
(a) If the total premium tax credits claimed by all certified investors exceeds the total limits on premium tax credits established by subsection (a) of Section 40-14B-16, the Alabama Development Office shall allocate the total amount of premium tax credits allowed under this chapter to certified investors in certified capital companies on a pro rata basis in accordance with this chapter.
(b) The pro rata allocation for each certified investor shall be the product of:
(1) A fraction, the numerator of which is the amount of the premium tax credit allocation claim filed on behalf of the investor and the denominator of which is the total amount of all premium tax credit allocation claims filed on behalf of all certified investors.
(2) The total amount of certified capital for which premium tax credits may be allowed under this chapter.
(c) On October 15, 2002, the Alabama Development Office shall notify each certified capital company of the amount of tax credits allocated to each certified investor. Each certified capital company shall notify each certified investor of their premium tax credit allocation.
(d) If a certified capital company does not receive an investment of certified capital equaling the amount of premium tax credits allocated to a certified investor for which it filed a premium tax credit allocation claim before the end of the 10th business day after the date of receipt of notice of allocation, the company shall notify the Alabama Development Office by overnight common carrier delivery service and that portion of capital allocated to the certified investor shall be forfeited. The Alabama Development Office shall reallocate the forfeited capital among the certified investors in the other certified capital companies that originally received an allocation so that the result after reallocation is the same as if the initial allocation under this chapter had been performed without considering the premium tax credit allocation claims that were subsequently forfeited.
(Act 2002-429, p. 1108, §17.)
In any case under this chapter or another law of this state in which the assets of a certified investor are examined or considered, the certified capital may be treated as an admitted asset, subject to the applicable statutory valuation procedures.
(Act 2002-429, p. 1108, §18.)
A certified investor is not required to reduce the amount of premium tax included by the investor in connection with rate making for any insurance contract written in this state because of a reduction in the investor’s Alabama premium tax derived from the credit granted under this chapter.
(Act 2002-429, p. 1108, §19.)
(a) The Alabama Development Office shall adopt rules to facilitate the transfer or assignment of premium tax credits by certified investors. A certified investor may transfer or assign premium tax credits only in compliance with the rules adopted under this subsection.
(b) The transfer or assignment of a premium tax credit does not affect the schedule for taking the premium tax credit under this chapter.
(Act 2002-429, p. 1108, §20.)
(a) The Alabama Development Office shall prepare a biennial report with respect to results of the implementation of this chapter. The report must include all of the following:
(1) The number of certified capital companies holding certified capital.
(2) The amount of certified capital invested in each certified capital company.
(3) The amount of certified capital the certified capital company has invested in qualified technology businesses as of January 1, 2004, and the cumulative total for each subsequent year.
(4) The total amount of tax credits granted under this chapter for each year that credits have been granted.
(5) The performance of each certified capital company with respect to renewal and reporting requirements imposed under this chapter.
(6) With respect to the qualified technology businesses in which capital companies have invested all of the following:
a. The classification of the qualified businesses according to the industrial sector and the size of the business.
b. The total number of jobs created by the investment and the average wages paid for the jobs.
c. The total number of jobs retained as a result of the investment and the average wages paid for the jobs.
(7) The certified capital companies that have been decertified or that have failed to renew the certification and the reason for any decertification.
(b) The Alabama Development Office shall file the report with the Governor, the Lieutenant Governor, and the Speaker of the House of Representatives not later than December 15 of each even-numbered year.
(Act 2002-429, p. 1108, §21.)
(a) Subject to, and in accordance with, this chapter, there shall be a second allocation of premium tax credits to investors who contribute certified capital after June 14, 2007, to certified capital companies in an amount equal to the total pool of tax credits allocated pursuant to this chapter prior to June 14, 2007. Any limitations on the amount of certified capital that may be requested by a certified investor contained in this chapter shall be calculated with respect to this allocation without regard to any certified capital requested or invested by such investor prior to June 14, 2007. The Alabama Development Office shall promulgate rules to insure the certified capital program shall be inclusive and reflect the racial, gender, geographic, urban/rural, and economic diversity of the state.
(b) A certified investor who contributes certified capital in connection with the second allocation may take up to a maximum of five percent of the vested premium tax credit against its tax liability for any tax year of the certified investor, beginning in the second tax year after the investment. Provided, however, that for any tax beginning on or after January 1, 2014, a certified investor may take up to 17.5 percent of the vested premium tax credit until the tax credits taken by such investor equal 100 percent of the certified investor’s certified capital.
(c) The Alabama Development Office shall administer this chapter and shall adopt such rules as necessary to implement this chapter, including the second allocation provided in subsection (a) no later than the 180th day after June 14, 2007, and shall begin accepting applications with respect to the additional allocation of certified capital no later than 90 days thereafter.
(d) Notwithstanding any provision of this section to the contrary, the granting of any credits against the insurance premium tax shall not affect the insurance premium tax receipts of the Education Trust Fund which is provided for in Section 27-4A-3.
(Act 2002-429, p. 1108, §22; Act 2007-472, p. 993, §§1, 2.)
The terms “executor,” “administrator” and “legal representative,” used interchangeably in this chapter, shall be held to mean the executor or administrator or trustee or legal representative of the decedent whose estate is subject to an estate tax under this title. In the event no executor or administrator is appointed and qualified, then the term “executor” as used herein shall be held to mean any person in actual or constructive possession and acting for any estate subject to tax under this chapter.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §433.)
Subject to the exception hereinafter stated, there is hereby levied and imposed upon all net estates passing by will, devise or under the intestate laws of the State of Alabama, or otherwise, which are lawfully subject to the imposition of an estate tax by the State of Alabama, a tax equal to the full amount of state tax permissible when levied by and paid to the State of Alabama as a credit or deduction in computing any federal estate tax payable by such estate according to the act of Congress in effect, on the date of the death of the decedent, taxing such estate with respect to the items subject to taxation in Alabama. The tax hereby imposed shall not exceed in the aggregate amounts which may by any law of the United States be allowed to be credited against or deducted from such federal estate tax. The estate tax hereby levied shall be levied only so long as and during the time an inheritance or estate tax is enforced by the United States against Alabama inheritances or estates and shall only be exercised or enforced to the extent of absorbing the amount of any deduction or credit which may be permitted by the laws of the United States now existing or hereafter enacted to be claimed by reason thereof as a deduction or credit against such similar tax of the United States applicable to Alabama inheritances or estates. The rates of taxation, the definition of “net estate” and the methods of arriving thereat shall be as provided in such act of Congress.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §432.)
It is hereby made the duty of the executor of the estate of any person who has died a resident of Alabama and upon which estate the tax imposed under any federal revenue act has not been paid, and the executor of any person who may hereafter die a resident of this state, and whose estate is subject to the payment of a federal estate tax, to file with the Department of Revenue of Alabama a duplicate of all the returns which he is required to make to the federal authorities for the purpose of having the estate taxes determined. When such duplicate return is filed with the Department of Revenue, it shall compute the amount of tax that would be due upon said return as federal estate taxes imposed under any federal act permitting credit of inheritance or estate taxes to the states upon the property of said estate taxable in the State of Alabama and shall assess against said estate as estate tax for the State of Alabama the amount levied and found to be due under the provisions of such act or acts. If, after the filing of any duplicate returns herein required and the assessment of the state estate taxes, upon basis of return made, the federal authorities shall increase or decrease the amount of the federal estate tax, an amended return shall be filed with the Department of Revenue, showing all the changes made in the original return and the amount of increase or decrease in the federal estate tax, and the Department of Revenue shall assess against said estate the additional amount found to be due hereunder. In the event of a decrease in the federal estate tax, the state shall refund to the said estate its proportion of said decrease.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §434.)
The tax imposed by this chapter shall be paid and the return required by Section 40-15-3 shall be filed on or before nine months after the decedent’s death and shall be paid by the personal representative to the Department of Revenue; provided, that where the Department of Revenue finds that the payment on the due date of any part of the amount due would impose undue hardship upon the estate, the Department of Revenue may extend the time for payment of all or any part, not to exceed 10 years from the original due date. In such case the amount or amounts in respect of which the extension is granted shall be paid on or before the dates thus fixed, unless further extended within said limitation as to time. If the time for payment is extended, there shall be collected, in addition to the tax, interest thereon at the legal rate from the original due date of the tax to the date of payment. The Department of Revenue may, in its discretion, accept such security as it may approve for the deferred payments or may release any part of remainder of the estate from any claim or lien for the payment of the tax.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §435; Acts 1983, No. 83-740, p. 1208, §1; Acts 1992, No. 92-186, p. 349, §42.)
In the event that the federal authorities shall, after the filing of the return with the Department of Revenue, increase or decrease the amount of the federal estate taxes as a result of appeal or otherwise, an amended return shall be filed with the Department of Revenue showing all the changes made in the original return and the amount of final increase or decrease in the federal estate tax. If the amended return shall show an increase in the amount of the federal estate tax, the Department of Revenue shall assess against and there shall be payable in respect to said estate any deficiency in the tax theretofore paid or assessed. If the amended return shall show a decrease in the federal estate taxes, the Department of Revenue, on receipt of an appropriate certificate of refund, abatement or recovery, shall forthwith certify the amount of such refund found to be due to such estate to the Comptroller, who, upon receipt of such certificate of refund due, shall issue his warrant for the amount shown in said certificate, payable to the person legally authorized to receive such refund, such payment to be made from the general state funds.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §436.)
(a) Except as herein otherwise provided, all of the provisions of this chapter shall be applicable to so much of the estates of nonresident decedents as is subject to estate tax under the act of Congress in effect at the time of the death of decedent as consists of real estate or tangible personal property located within this state or other items of property or interest therein lawfully subject to the imposition of an estate tax by the State of Alabama.
(b) In assessing the tax upon any real estate or tangible property located within this state belonging to the estate of a nonresident decedent, which shall pass by will, devise or by the laws of intestacy, the Department of Revenue shall determine the tax due to be such proportion of the federal estate tax as would be leviable upon an estate of similar taxable net value, less that proportion of any exemption to which the estate is entitled, which the actual value of the real estate and tangible personal property located within this state belonging to the estate of the nonresident decedent bears to the actual value of the gross estate of the nonresident decedent wherever situated whether in this state or not.
(c) No tangible personal property located within this state belonging to the estate of a nonresident decedent and taxable under this chapter shall be transferred or delivered to any person except a legal representative of the estate of said deceased duly appointed whether in this state or in the state of the decedent’s domicile by a court having jurisdiction for the purpose.
(d) Such property shall not be transferred or delivered to a foreign legal representative until the tax has been paid, except under such conditions and after giving such security as the Department of Revenue may agree upon. Any person or corporation which shall transfer or deliver or having control thereof shall permit the transfer or delivery of any such property to any person other than a resident legal representative before such tax has been paid shall be liable for the tax and additional penalty of not more than $1,000 in an action brought by the Department of Revenue for the use of the state.
(e) Legal representatives shall be liable for such tax upon and to the extent of all such property which shall come into their hands as such, with interest as hereinafter provided.
(f) Every person having in his possession or control any tangible personal property belonging to the estate of a nonresident and taxable under this chapter shall, unless the property is delivered to a resident legal representative within 30 days after the death of the owner, notify the Department of Revenue and prepare and transmit to the department and the legal representative an itemized schedule of the property. If the tax is not paid or a resident legal representative appointed within nine months after the owner’s death, the Circuit Court of the County of Montgomery shall, upon petition of the Department of Revenue, appoint a resident legal representative, or a special legal representative as the circumstances of the case may require, to whom the property shall be transferred, whose duty it shall be to collect and pay the tax and to account for the balance of the property according to law under order of the court.
(g) All taxes imposed by this chapter in relation to estates of nonresident decedents shall be due and payable at the time of the death of the decedent; and, if not paid within nine months thereafter, unless the time for payment shall be extended, interest shall be charged and collected from the expiration of nine months after the death of the decedent, and said taxes and interest shall be and remain a lien on the property transferred until the same are paid.
(h) Real estate and tangible personal property within the jurisdiction of this state, except as otherwise provided, belonging to nonresidents which shall pass by deed, grant, bargain, sale or gift, made in contemplation of death, or made or intended to take effect in possession or enjoyment at or after the death of the grantor or donor, shall be subject to the same tax imposed upon transfers hereinbefore described by this chapter. The taxes upon such transfer shall become due and payable at once upon the death of the grantor or donor, and if not paid within nine months from the death of the grantor or donor, unless the time for payment shall be extended, shall be subject to interest as aforesaid after the expiration of said period until paid. Said taxes and interest shall be a charge against the person receiving such property, and the property transferred shall be subject to a lien to secure its payment. All persons or corporations within the jurisdiction of the state in whose possession or control any such property so transferred or to be transferred remains at the time of the death of the grantor or donor shall be subject to all the duties, liabilities, and penalties imposed herein upon persons having the possession or control of the personal estate of such decedent.
(i) A resident legal representative holding personal property of a deceased nonresident subject to said tax shall deduct the tax therefrom or collect it from the legal representative in the state of the decedent’s domicile and shall not deliver such property to him or any other person until he has collected the tax and paid the same to the Department of Revenue. When the transfer of such personal property is subject to a tax under the provisions of this chapter and the legal representative in the state of domicile neglects or refuses to pay the tax upon demand, or if for any reason the tax is not paid within nine months after the decedent’s death, or within the time extended, the resident legal representative may, upon such notice as the Circuit Court of the County of Montgomery may direct, be authorized to sell such property or, if the same can be divided, such portion thereof as may be necessary, and shall deduct the tax from the proceeds of such sale and shall account for the balance, if any, in lieu of the property. When a conveyance made by the nonresident decedent in his lifetime is subject to said tax, the resident legal representative shall collect the taxes due on account of such conveyance and may be authorized to sell any property subject to the lien of such tax, as in other cases.
(j) The Department of Revenue shall determine the amount of all taxes due and payable under the provisions of this chapter in relation to nonresident decedents and shall certify the amount due and payable to the resident legal representative, if any, otherwise, to the person or persons by whom the tax is payable.
(k) The Department of Revenue, whenever it has knowledge or reason to believe that any person, firm, or corporation has in his, its or their possession or control any tangible personal property belonging to the estate of a deceased nonresident upon or in respect to which the tax has not been paid and a schedule of which has not been furnished, as herein provided, or that any such person, firm, or corporation has received a transfer or delivery of such property or made such transfer or delivery, except to a resident legal representative, upon which or in respect to which the tax has not been paid, as herein provided, or that such person, firm, or corporation has knowledge of a transfer or delivery of any such personal property, of such nonresident decedent in his lifetime, by deed, grant, bargain, sale, or gift, made in contemplation of death, or made or intended to take effect in possession or enjoyment at or after the death of the grantor or donor, or has possession or control of property so transferred, may require such person or any member of such firm, or any officer of such corporation to appear at the office of the Department of Revenue at Montgomery, at such time as the Department of Revenue may designate, and then and there to produce for the use of the department all books or papers which may be in the possession or control of such person, firm, or corporation relating to such property or transfer or delivery and to furnish such other information relating to the same as he may be able and the department may require. Whenever the Department of Revenue shall require the attendance of any person, as herein provided, it shall issue a notice stating the time and place when such attendance is required and shall transmit the same by certified or registered mail, or cause a copy of the same to be given in hand, to such person at least 14 days before the date when such person is required to appear. If any person receiving such notice shall neglect or fail to attend or to give attendance so long as may be necessary, for the purpose for which the notice was issued, or refuse to furnish such books or papers or give such information, or if a corporation or firm whose officer or member is thus summoned refuses to permit him to produce such books or papers as are called for and are within the control of the corporation or firm, such person, firm, or corporation shall be liable to a penalty of $25 for each offense, which may be recovered by the Department of Revenue for the use of the state. Any person attending in response to summons as herein provided shall thereafter be entitled to the same travel and witness fees as are allowed to witnesses summoned to testify on behalf of the state in other cases.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §438; Acts 1983, No. 83-740, p. 1208, §2; Acts 1992, No. 92-186, p. 349, §43.)
Moneys, credits, securities and other intangible personal property within the state not employed in carrying on any business therein by the owner shall be deemed to be located at the domicile of the owner for purposes of death taxation and, if held in trust, shall not be deemed to be located in this state for purposes of death taxation because of the trustee’s being domiciled in this state; provided, that if no other state subjects such property held in trust to death taxation, it may be deemed property having a taxable situs within this state for purposes of death taxation.
(Acts 1939, No. 593, p. 965, §1; Code 1940, T. 51, §438(1).)
This chapter shall be effective only as to the property of residents of states which grant to property of residents of Alabama a similar exemption from death taxation. In the event, however, that such reciprocal provision contained in this section shall be declared unconstitutional or invalid, either in part or in whole, then Section 40-15-8 shall continue in full force and effect, it being the legislative intent to exempt the property described in Section 40-15-8 from death taxation notwithstanding any subsequent invalidation of the reciprocal provision herein contained.
(Acts 1939, No. 593, p. 965, §2; Code 1940, T. 51, §438(2).)
Such amount of money as shall be appropriated for each fiscal year by the Legislature to the Department of Revenue with which to pay the salaries, the cost of operation and the management of the said department shall be deducted, as a first charge thereon, from the taxes collected under and pursuant to Section 40-15-2; provided, that the expenditure of said sum so appropriated shall be budgeted and allotted pursuant to Article 4 of Chapter 4 of Title 41 and limited to the amount appropriated to defray the expenses of operating said department for each fiscal year. The balance of the tax collected under and pursuant to said Section 40-15-2 shall remain in the State Treasury to the credit of the State General Fund.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §441; Acts 1951, No. 939, p. 1606.)
(a) The State of Alabama shall have a lien for all taxes and interest thereon which are or may become due hereunder on all property which a decedent dies seized or possessed of subject to taxes under this chapter, in whatever form of investment it may happen to be, and all property acquired in substitution therefor.
(b) The personal representative of an estate may execute and record in the county of last domicile of the decedent and wherever the decedent’s probate estate is pending, an affidavit certifying that the estate is not taxable or alternatively, an affidavit certifying that the estate is taxable and that the proper copy of the federal estate tax return has or will be filed with the department within the proper time limits as provided by law. The affidavit shall begin by stating that it is being filed in accordance with this section. The content of the affidavit shall include, but not be limited to, the legal name of the decedent, the Social Security number of the decedent, the legal residence, including county, of the decedent, the date of death, whether a federal estate tax return will be filed, and the name and address of the administrator/executor. Assets, which are owned by the estate but held, administered, or maintained by a person other than the personal representative, may be transferred in reliance on the recorded affidavit, and without obtaining an Alabama Estate Tax Waiver, unless they know or should know of the incorrectness of the recorded affidavit.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §442; Act 2001-468, p. 622, §1; Act 2002-516, p. 1330, §1.)
The tax hereby levied, being based and conditioned upon the levy of a similar tax by the United States, in the event that after due return made the final assessment of the tax or final assessment as to the value of the estate for the purposes of such federal tax shall not have been arrived at when payment would otherwise become due or delinquent hereunder, then and in such event the time for payment of the tax due hereunder shall, on showing being made to the Department of Revenue, be extended until final agreement, determination or assessment of the tax or value of the estate for the determination of the tax shall have been made for the purpose of such federal tax; provided, that the Department of Revenue may demand and require the payment of such amount of the tax as it may determine will not be in excess of the total tax that will be due the State of Alabama under this chapter, as shown by the tax return made, when the final determination of the amount of the assessment of the tax shall have been made for federal tax purposes.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §443.)
Where appropriate returns are made and information supplied by the legal representative of any estate subject to the tax imposed hereby, the Department of Revenue shall assess the tax due in time to enable such legal representative to make payment of the same and receive credit upon the federal tax. The Department of Revenue may adopt the valuation arrived at by the federal authorities as the basis for the tax hereunder.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §444; Acts 1992, No. 92-186, p. 349, §44.)
In the event that the estate of any decedent taxable hereunder shall include property situated outside of the state, the proportion of the federal estate tax leviable hereunder against or in respect to the property of the estate subject to the tax imposed hereby shall be that proportion which the property of the estate within or subject to the tax jurisdiction bears to the gross value of the estate of the decedent not so subject to taxation.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §446.)
Unless the decedent directs otherwise in his or her will, all estate taxes, whether state or federal, payable by reason of the death of the decedent, shall be paid by the executor or other personal representative out of the estate property and shall be a charge against the residue thereof, and the executor or other personal representative shall be under no duty to recover from anyone for the benefit of the estate the pro rata portion of the estate tax attributable to inclusion in the gross estate of any property, including proceeds of policies of insurance upon the life of the decedent receivable by a beneficiary other than the executor or other personal representative, which does not pass to the executor or other personal representative as a part of the estate.
This section shall apply to the estate of any decedents who shall die on or after July 26, 1951, and before January 1, 2008, and to the estate of any decedent who dies after December 31, 2007, if the decedent continuously lacks testamentary capacity from January 1, 2008, until the date of death.
(Code 1940, T. 51, §449(1); Acts 1951, No. 291, p. 583; Act 2007-283, p. 501, §13.)
The administration of this chapter is vested in and shall be exercised by the Department of Revenue, which shall prescribe the forms and reasonable rules of procedure in conformity with this chapter for making returns and for ascertainment, assessment and collection of the taxes imposed hereunder.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §447.)
Pursuant to this chapter, the term “generation-skipping transfer” shall have the meaning ascribed to it in Section 2611 of the Internal Revenue Code, as amended from time to time.
(Acts 1988, 1st Ex. Sess., No. 88-837, p. 307, §1.)
Subject to the exception hereinafter stated, there is hereby levied and imposed upon all generation-skipping transfers occurring after December 31, 1987 that involve property subject to tax pursuant to Section 40-15A-3 hereunder, a tax equal to the full amount of state tax permissible when levied by and paid to the State of Alabama as a credit in computing any federal generation-skipping transfer tax imposed on such transfer according to the act of Congress in effect, on the date of the transfer. The tax hereby imposed shall not exceed in the aggregate amounts which may by any law of the United States be allowed to be credited against such federal generation-skipping transfer tax. The generation-skipping transfer tax hereby levied shall be levied only so long as and during the time a generation-skipping transfer tax is enforced by the United States against Alabama generation-skipping transfers and shall only be exercised or enforced to the extent of absorbing the maximum amount of any deduction or credit which may be permitted by the laws of the United States now existing or hereafter enacted to be claimed by reason thereof as a deduction or credit against such similar tax of the United States applicable to Alabama generation-skipping transfers. The rates of taxation, the method of arriving thereat and the definition of “generation-skipping transfer” and “transferor” shall be as provided in such act of Congress.
(Acts 1988, 1st Ex. Sess., No. 88-837, p. 307, §2.)
The tax imposed by the provisions of this chapter shall be applicable to the following property:
(1) Any intangible personal property of a transferor who is domiciled in the State of Alabama (i) as of the date of the transfer, or (ii) as of the date of his death if such transfer occurs after the date of his death,
(2) Any tangible personal property and real property of a transferor which is located in the State of Alabama as of the date of the generation-skipping transfer.
(Acts 1988, 1st Ex. Sess., No. 88-837, p. 307, §3.)
(a) The tax imposed by this chapter shall be paid by such individual or entity person as is liable for making payment of the federal generation-skipping transfer tax pursuant to federal law.
(b) The tax imposed by this chapter shall be charged to the same property as is designated by federal law for the payment of the federal generation-skipping tax, and if not so provided, then on the same basis and in the same manner as provided in Section 40-15-18 for the payment of estate taxes.
(Acts 1988, 1st Ex. Sess., No. 88-837, p. 307, §4.)
(a) A duplicate of all the returns filed with the federal authorities in connection with the federal generation-skipping transfer tax shall be filed with the Department of Revenue of the State of Alabama. When such duplicate return is filed with the Department of Revenue, it shall compute the amount of tax that would be due upon said return as federal generation-skipping transfer tax imposed under any federal act permitting credit for a state generation-skipping transfer tax and shall assess against the transfer the amount levied and found to be due under the provisions of such act or acts. If, after the filing of any duplicate returns herein required and the determination of the state generation-skipping transfer tax, the federal authorities shall increase or decrease the amount of the federal generation-skipping transfer tax, an amended return shall be filed with the Department of Revenue, showing all of the changes made in the original return and the amount of final increase or decrease in the federal tax. In the event of an increase in the federal tax, the Department of Revenue shall assess against the transfer the additional amount found to be due hereunder. In the event of a decrease in the federal tax, the state shall refund to the transferor its proportion of said decrease.
(b) The tax imposed by this chapter shall be due and payable on or before the time prescribed for filing the return and making payment of the federal generation-skipping transfer tax, and such payment and duplicate return shall be filed and paid with the Department of Revenue by the person who is required to make the return according to regulations prescribed by the Secretary of the Treasury, in accordance with the guidelines of §2662, Internal Revenue Code.
(c) All revenues collected under the provisions of this chapter shall be deposited to the State General Fund.
(Acts 1988, 1st Ex. Sess., No. 88-837, p. 307, §5.)
The tax hereby levied being based and conditioned upon the levy of a similar tax by the United States, in the event that after due return filed with the federal authorities and the Department of Revenue, the tax shall not have been arrived at when payment would otherwise become due or delinquent hereunder, then and in such event the time for payment of the tax due hereunder shall, on showing being made to the Department of Revenue, be extended until final agreement, determination or assessment of tax shall have been made by the federal authorities; provided, that the Department of Revenue may demand and require the payment of such amount of the tax as it may determine will not be in excess of the total tax that will be due the State of Alabama under this chapter, as shown by the tax return made, when the final determination of the amount of the assessment shall have been made for federal tax purposes.
(Acts 1988, 1st Ex. Sess., No. 88-837, p. 307, §7.)
The State of Alabama shall have a lien for all taxes and interest thereon which are or may become due hereunder on all property subject to taxes under this chapter, in whatever form of investment it may happen to be, and all property acquired in substitution therefor.
(Acts 1988, 1st Ex. Sess., No. 88-837, p. 307, §9.)
The administration of this chapter shall be conducted in accordance with Title 40, Chapter 15. The Department of Revenue shall prescribe the forms and reasonable rules of procedure in conformity with this chapter for making returns and for ascertainment, assessment and collection of the taxes imposed hereunder.
(Acts 1988, 1st Ex. Sess., No. 88-837, p. 307, §13.)
The Department of Revenue is hereby granted authority to issue regulations setting forth how an allocation of the tax imposed by this chapter shall be made in the event property subject to tax hereunder shall also be subject to a generation-skipping transfer tax in another state.
(Acts 1988, 1st Ex. Sess., No. 88-837, p. 307, §14.)
This chapter may be cited as the Alabama Uniform Estate Tax Apportionment Act.
(Act 2007-283, p. 501, §1.)
In this chapter:
(1) “Apportionable estate” means the value of the gross estate as finally determined for purposes of the estate tax to be apportioned reduced by:
(A) any claim or expense allowable as a deduction for purposes of the tax;
(B) the value of any interest in property that, for purposes of the tax, qualifies for a marital or charitable deduction or otherwise is deductible or is exempt; and
(C) any amount added to the decedent’s gross estate because of a gift tax on transfers made before death.
(2) “Estate tax” means a federal, state, or foreign tax imposed because of the death of an individual and interest and penalties associated with the tax. The term does not include an inheritance tax, income tax, or generation-skipping transfer tax other than a generation-skipping transfer tax incurred on a direct skip taking effect at death.
(3) “Gross estate” means, with respect to an estate tax, all interests in property subject to the tax.
(4) “Person” means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, government, governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.
(5) “Ratable” means apportioned or allocated pro rata according to the relative values of interests to which the term is to be applied. “Ratably” has a corresponding meaning.
(6) “Time-limited interest” means an interest in property which terminates on a lapse of time or on the occurrence or nonoccurrence of an event or which is subject to the exercise of discretion that could transfer a beneficial interest to another person. The term does not include a cotenancy unless the cotenancy itself is a time-limited interest. The term also does not include an interest in property to the extent the beneficiary has a right to accelerate, require, or elect to receive a distribution of the property.
(7) “Value” means, with respect to an interest in property, fair market value as finally determined for purposes of the estate tax that is to be apportioned, reduced by any outstanding debt secured by the interest without reduction for taxes paid or required to be paid or for any special valuation adjustment.
(Act 2007-283, p. 501, §2.)
(a) Except as otherwise provided in subsection (c), the following rules apply:
(1) To the extent that a provision of a decedent’s will expressly and unambiguously directs the apportionment of an estate tax, the tax must be apportioned accordingly.
(2) Any portion of an estate tax not apportioned pursuant to paragraph (1) must be apportioned in accordance with any provision of a revocable trust of which the decedent was the settlor which expressly and unambiguously directs the apportionment of an estate tax. If conflicting apportionment provisions appear in two or more revocable trust instruments, the provision in the most recently dated instrument prevails. For purposes of this paragraph:
(A) a trust is revocable if it was revocable immediately after the trust instrument was executed, even if the trust subsequently becomes irrevocable; and
(B) the date of an amendment to a revocable trust instrument is the date of the amended instrument only if the amendment contains an apportionment provision.
(3) If any portion of an estate tax is not apportioned pursuant to paragraph (1) or (2), and a provision in any other dispositive instrument expressly and unambiguously directs that any interest in the property disposed of by the instrument is or is not to be applied to the payment of the estate tax attributable to the interest disposed of by the instrument, the provision controls the apportionment of the tax to that interest.
(b) Subject to subsection (c), and unless the decedent expressly and unambiguously directs the contrary, the following rules apply:
(1) If an apportionment provision directs that a person receiving an interest in property under an instrument is to be exonerated from the responsibility to pay an estate tax that would otherwise be apportioned to the interest, the tax attributable to the exonerated interest must be apportioned ratably among the other persons receiving interests in the apportionable estate that are not exonerated from apportionment of the tax.
(A) Unless the decedent expressly and unambiguously directs to the contrary, a person receiving objects of personal use or ornament, including, but not limited to, wearing apparel, jewelry, books, pictures, art objects, sports equipment, hobby equipment, collections, automobiles, watercrafts, airplanes, household furniture and furnishings, by specific gifts or specific bequests pursuant to the provisions of a will or a revocable trust or by right of survivorship, is exonerated under this paragraph, up to a maximum of $100,000 of the interest received by the person, from the responsibility to pay the estate tax that would otherwise be apportioned with respect to the interests. All interests received by the person in property in excess of $100,000 shall not be exonerated under this subparagraph.
(B) Unless the decedent expressly and unambiguously directs to the contrary, a person receiving gifts or bequests of specific sums of money pursuant to the provisions of a will or a revocable trust that do not in the aggregate exceed $25,000 is exonerated under this paragraph from the responsibility to pay the estate tax that would otherwise be apportioned to the gifts or bequests. If the aggregate amount of the gifts or bequests to a person exceeds $25,000, none of the gifts or bequests to the person shall be exonerated under this subparagraph.
(2) If an apportionment provision directs that an estate tax is to be apportioned to an interest in property a portion of which qualifies for a marital or charitable deduction, the estate tax must first be apportioned ratably among the holders of the portion that does not qualify for a marital or charitable deduction and then apportioned ratably among the holders of the deductible portion to the extent that the value of the nondeductible portion is insufficient.
(3) Except as otherwise provided in paragraph (4), if an apportionment provision directs that an estate tax be apportioned to property in which one or more time-limited interests exist, other than interests in specified property under Section 40-15B-7, the tax must be apportioned to the principal of that property, regardless of the deductibility of some of the interests in that property.
(4) If an apportionment provision directs that an estate tax is to be apportioned to the holders of interests in property in which one or more time-limited interests exist and a charity has an interest that otherwise qualifies for an estate tax charitable deduction, the tax must first be apportioned, to the extent feasible, to interests in property that have not been distributed to the persons entitled to receive the interests.
(c) A provision that apportions an estate tax is ineffective to the extent that it increases the tax apportioned to a person having an interest in the gross estate over which the decedent had no power to transfer immediately before the decedent executed the instrument in which the apportionment direction was made. For purposes of this subsection, a testamentary power of appointment is a power to transfer the property that is subject to the power.
(Act 2007-283, p. 501, §3.)
To the extent that apportionment of an estate tax is not controlled by an instrument described in Section 40-15B-3 and except as otherwise provided in Sections 40-15B-6 and 40-15B-7, the following rules apply:
(1) Subject to paragraphs (2), (3), and (4), the estate tax is apportioned ratably to each person that has an interest in the apportionable estate.
(2) A generation-skipping transfer tax incurred on a direct skip taking effect at death is charged to the person to whom the interest in property is transferred.
(3) If property is included in the decedent’s gross estate because of Section 2044 of the Internal Revenue Code of 1986 or any similar estate tax provision, the difference between the total estate tax for which the decedent’s estate is liable and the amount of estate tax for which the decedent’s estate would have been liable if the property had not been included in the decedent’s gross estate is apportioned ratably among the holders of interests in the property subject to Section 2044 of the Internal Revenue Code of 1986 or any similar estate tax provision. The balance of the tax, if any, is apportioned ratably to each other person having an interest in the apportionable estate.
(4) Except as otherwise provided in Section 40-15B-3(b)(4) and except as to property to which Section 40-15B-7 applies, an estate tax apportioned to persons holding interests in property subject to a time-limited interest must be apportioned, without further apportionment, to the principal of that property.
(Act 2007-283, p. 501, §4.)
Except as otherwise provided in Sections 40-15B-6 and 40-15B-7, the following rules apply to credits and deferrals of estate taxes:
(1) A credit resulting from the payment of gift taxes or from estate taxes paid on property previously taxed inures ratably to the benefit of all persons to which the estate tax is apportioned.
(2) A credit for state or foreign estate taxes inures ratably to the benefit of all persons to which the estate tax is apportioned, except that the amount of a credit for a state or foreign tax paid by a beneficiary of the property on which the state or foreign tax was imposed, directly or by a charge against the property, inures to the benefit of the beneficiary.
(3) If payment of a portion of an estate tax is deferred because of the inclusion in the gross estate of a particular interest in property, the benefit of the deferral inures ratably to the persons to which the estate tax attributable to the interest is apportioned. The burden of any interest charges incurred on a deferral of taxes and the benefit of any tax deduction associated with the accrual or payment of the interest charge is allocated ratably among the persons receiving an interest in the property.
(Act 2007-283, p. 501, §5.)
(a) In this section:
(1) “Advanced fraction” means a fraction that has as its numerator the amount of the advanced tax and as its denominator the value of the interests in insulated property to which that tax is attributable.
(2) “Advanced tax” means the aggregate amount of estate tax attributable to interests in insulated property which is required to be advanced by uninsulated holders under subsection (c).
(3) “Insulated property” means property subject to a time-limited interest which is included in the apportionable estate but is unavailable for payment of an estate tax because of impossibility or impracticability.
(4) “Uninsulated holder” means a person who has an interest in uninsulated property.
(5) “Uninsulated property” means property included in the apportionable estate other than insulated property.
(b) If an estate tax is to be advanced pursuant to subsection (c) by persons holding interests in uninsulated property subject to a time-limited interest other than property to which Section 40-15B-7 applies, the tax must be advanced, without further apportionment, from the principal of the uninsulated property.
(c) Subject to Section 40-15B-9(b) and (d), an estate tax attributable to interests in insulated property must be advanced ratably by uninsulated holders. If the value of an interest in uninsulated property is less than the amount of estate taxes otherwise required to be advanced by the holder of that interest, the deficiency must be advanced ratably by the persons holding interests in properties that are excluded from the apportionable estate under Section 40-15B-2(1)(B) as if those interests were in uninsulated property.
(d) A court having jurisdiction to determine the apportionment of an estate tax may require a beneficiary of an interest in insulated property to pay all or part of the estate tax otherwise apportioned to the interest if the court finds that it would be substantially more equitable for that beneficiary to bear the tax liability personally than for that part of the tax to be advanced by uninsulated holders.
(e) When a distribution of insulated property is made, each uninsulated holder may recover from the distributee a ratable portion of the advanced fraction of the property distributed. To the extent that undistributed insulated property ceases to be insulated, each uninsulated holder may recover from the property a ratable portion of the advanced fraction of the total undistributed property.
(f) Upon a distribution of insulated property for which, pursuant to subsection (e), the distributee becomes obligated to make a payment to uninsulated holders, a court may award an uninsulated holder a recordable lien on the distributee’s property to secure the distributee’s obligation to that uninsulated holder.
(Act 2007-283, p. 501, §6.)
(a) In this section:
(1) “Special elective benefit” means a reduction in an estate tax obtained by an election for:
(A) a reduced valuation of specified property that is included in the gross estate;
(B) a deduction from the gross estate, other than a marital or charitable deduction, allowed for specified property; or
(C) an exclusion from the gross estate of specified property.
(2) “Specified property” means property for which an election has been made for a special elective benefit.
(b) If an election is made for one or more special elective benefits, an initial apportionment of a hypothetical estate tax must be computed as if no election for any of those benefits had been made. The aggregate reduction in estate tax resulting from all elections made must be allocated among holders of interests in the specified property in the proportion that the amount of deduction, reduced valuation, or exclusion attributable to each holder’s interest bears to the aggregate amount of deductions, reduced valuations, and exclusions obtained by the decedent’s estate from the elections. If the estate tax initially apportioned to the holder of an interest in specified property is reduced to zero, any excess amount of reduction reduces ratably the estate tax apportioned to other persons that receive interests in the apportionable estate.
(c) An additional estate tax imposed to recapture all or part of a special elective benefit must be charged to the persons that are liable for the additional tax under the law providing for the recapture.
(Act 2007-283, p. 501, §7.)
(a) A fiduciary may defer a distribution of property until the fiduciary is satisfied that adequate provision for payment of the estate tax has been made.
(b) A fiduciary may withhold from a distributee an amount equal to the amount of estate tax apportioned to an interest of the distributee.
(c) As a condition to a distribution, a fiduciary may require the distributee to provide a bond or other security for the portion of the estate tax apportioned to the distributee.
(Act 2007-283, p. 501, §8.)
(a) A fiduciary responsible for payment of an estate tax may collect from any person the tax apportioned to and the tax required to be advanced by the person.
(b) Except as otherwise provided in Section 40-15B-6, any estate tax due from a person that cannot be collected from the person may be collected by the fiduciary from other persons in the following order of priority:
(1) any person having an interest in the apportionable estate which is not exonerated from the tax;
(2) any other person having an interest in the apportionable estate;
(3) any person having an interest in the gross estate.
(c) A domiciliary fiduciary may recover from an ancillary personal representative the estate tax apportioned to the property controlled by the ancillary personal representative.
(d) The total tax collected from a person pursuant to this chapter may not exceed the value of the person’s interest.
(Act 2007-283, p. 501, §9.)
(a) A person required under Section 40-15B-9 to pay an estate tax greater than the amount due from the person under Section 40-15B-3 or 40-15B-4 has a right to reimbursement from another person to the extent that the other person has not paid the tax required by Section 40-15B-3 or 40-15B-4 and a right to reimbursement ratably from other persons to the extent that each has not contributed a portion of the amount collected under Section 40-15B-9(b). The right to reimbursement includes the right to receive interest on the amount of the estate tax payment from the date of the payment to the date of reimbursement at the interest rate that would be charged during such period on an estate tax deficiency by the taxing authority that imposed the estate tax. The right of reimbursement also includes the reasonable costs of collection including attorney’s fees.
(b) A fiduciary may enforce the right to reimbursement under subsection (a) on behalf of the person that is entitled to the reimbursement and shall take reasonable steps to do so if requested by the person.
(Act 2007-283, p. 501, §10.)
A fiduciary, transferee, or beneficiary of the gross estate may maintain an action for declaratory judgment to have a court determine and enforce this chapter. In the case of an estate that is being administered in a probate court that has equity powers, the fiduciary, transferee, or beneficiary may maintain such action in such probate court which shall have jurisdiction over such actions concurrent with the circuit court. In all other cases, the circuit court shall have exclusive jurisdiction.
(Act 2007-283, p. 501, §11.)
In applying and construing this uniform act, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.
(Act 2007-283, p. 501, §12.)
(a) Sections 40-15B-1 to 40-15B-12, inclusive, of this chapter do not apply with respect to a decedent who dies before January 1, 2008, nor with respect to a decedent who dies after December 31, 2007, if the decedent continuously lacked testamentary capacity from January 1, 2008, until the date of death.
(b) Notwithstanding the preceding, Sections 40-15B-1 to 40-15B-12, inclusive, of this chapter shall apply with respect to a decedent to whom the provisions would not otherwise apply if the decedent expressly and unambiguously directs that the provisions shall apply to such decedent.
(Act 2007-283, p. 501, §14.)
For the purpose of this chapter, the following terms shall have the respective meanings ascribed to them by this section:
(1) FINANCIAL INSTITUTION. Any person, firm, corporation, and any legal entity whatsoever doing business in this state as a national banking association, bank, banking association, trust company, industrial or other loan company or building and loan association, and such term shall likewise include any other institution or person employing moneyed capital coming into competition with the business of national banks, and shall apply to such person or institution regardless of what business form and whether or not incorporated, whether of issue or not, and by whatsoever authority existing. The common parent corporation of a controlled group of corporations eligible to elect to file a consolidated excise tax return, in accordance with Section 40-16-3, shall be considered a financial institution if such parent corporation is a registered bank holding company as defined by the Bank Holding Company Act of 1956, as amended. As a financial institution, the common parent corporation will be governed by Sections 40-16-1 through 40-16-11 and exempt from all income taxes under Chapter 18 of this title, with the exception that the credit for licenses or taxes as provided by Section 40-16-8 and the rules adopted pursuant thereto by the Department of Revenue will not apply to amounts of excise tax on financial institutions imposed hereby and paid by such parent corporation. Financial institution shall not mean or include individual citizens and fiduciaries acting in a representative capacity for individual citizens, not engaged in a banking, loan, investment, or similar business, but merely making personal investments of personal or fiduciary funds in bonds, notes, or other evidences of indebtedness and not made in competition with the business of national banks, nor shall such term apply to insurance companies or insurance associations merely making investments of reserves in bonds, notes or other evidences of indebtedness and not made in competition with the business of national banks.
(2) INTERNAL REVENUE CODE or U.S.C. All references in this chapter to the Internal Revenue Code or to 26 U.S.C. shall mean the applicable section of the Internal Revenue Code of 1986, as in effect from time to time, as codified in Title 26 of the United States Code, as in effect from time to time. The Department of Revenue may adopt reasonable rules under the Alabama Administrative Procedure Act prescribing operating rules with respect to the adoption by this state for its financial institution excise tax of certain provisions of the laws of the United States relating to the determination of taxable income for federal income tax purposes, similar to those contained in Section 40-18-1.1 to the extent consistent with this chapter.
(3) NET INCOME. In the case of a financial institution subject to the tax imposed by this chapter, the term means federal taxable income without the benefit of federal net operating losses, plus the additions prescribed and less the deductions and adjustments allowed by this chapter, as allocated and apportioned to Alabama according to rules adopted by the Department of Revenue pursuant to Section 40-16-4. Financial institutions not subject to the federal income tax shall begin the calculation of net income by performing a pro forma calculation of federal taxable income.
(4) TAX YEAR or TAXABLE YEAR. A full period of 12 consecutive months constituting the fiscal year or calendar year of each financial institution subject to the tax imposed by this chapter. In the case of any financial institution taxable under this chapter whose business was conducted only during a fractional period of any year, or a period of less than 12 months resulting from a change in accounting period permitted by applicable federal authorities, a return shall be made as herein provided and the tax computed as herein provided, and such tax as assessed shall be an excise tax for the privilege of doing business in this state for such fractional year.
(5) STATE TAX YEAR. The calendar year.
(6) TRUST. Any entity which is classified as a trust for federal income tax purposes.
(Acts 1935, No. 194, p. 256; Acts 1939, No. 48, p. 56; Acts 1939, No. 369, p. 496; Code 1940, T. 51, §425; Acts 1945, No. 130, p. 129; Acts 1945, No. 319, p. 520; Acts 1955, No. 568, p. 1232; Acts 1957, No. 639, p. 964; Acts 1978, No. 840, p. 1247, §1; Acts 1993, 1st Ex. Sess., No. 93-852, p. 95, §1; Act 2019-284, §2.)
(a) For purposes of this section, “trust” shall have the same meaning given to it in Section 40-18-1.
(b) Any trust which would be subject to tax under Chapter 18 but which also is a financial institution shall be taxed as a financial institution under this chapter, applying the applicable provisions of subsections (a), (b), (d), (e), (f), (h), and (i) of Section 40-18-25. Such a trust shall utilize the allocation and apportionment rules found in this chapter.
(c) If a person is treated as the owner of any portion of a trust pursuant to 26 U.S.C. §§ 671-679, relating to grantor trusts, and if such person is a financial institution, the person shall take into account the income, deductions, and credits of such trust as provided in 26 U.S.C. in computing its net income under this chapter. Such person also may deduct the administrative and other expenses of the portion of the trust which it is treated as owning.
(Act 2006-114, §3.)
(a) The following items shall be added to federal taxable income for purposes of computing net income under this chapter:
(1) The tax due under this chapter that is deducted in computing federal taxable income.
(2) State and local taxes that are deducted for purposes of calculating federal taxable income for which a credit is claimed under Section 40-16-8, to the extent the credit is utilized to reduce the tax owed under this chapter.
(3) Refunds of federal income taxes deducted in prior tax periods for purposes of computing the tax due under this chapter.
(4) Dividends received from a corporation in which the taxpayer owns less than 20 percent of the stock, by vote and value, but only to the extent the dividends are properly deducted in computing taxable income for federal income tax purposes.
(5) State, county, and municipal interest income from loans and securities that is exempt for federal income tax purposes.
(6) Any interest that was treated as paid or incurred in the current taxable year under 26 U.S.C. § 163(j)(2).
(7) The amount of foreign-derived intangible income and global intangible low-taxed income that was deducted under 26 U.S.C. § 250.
(8) The amount of any capital loss carryback or carryforward deducted for federal income tax purposes.
(b) The following items shall be deducted from federal taxable income for purposes of computing net income under this chapter:
(1) Refunds of the tax due under this chapter that are included in computing federal taxable income.
(2) Federal income taxes paid or accrued during the taxpayer’s taxable year in accordance with the taxpayer’s method of accounting.
(3) If the taxpayer owns 20 percent or more of the stock, by vote or value, of the distributing corporation, dividend income, including amounts described in 26 U.S.C. § 951, from non-U.S. corporations to the same extent such dividend income would be deductible under 26 U.S.C. § 243 if received from U.S. corporations.
(4) Federal Deposit Insurance Corporation (FDIC) insurance premiums not deductible for federal income tax purposes under 26 U.S.C. § 162(r).
(5) Interest not deductible for federal income tax purposes under 26 U.S.C. § 163(j)(1).
(6) Interest not deductible for federal income tax purposes under 26 U.S.C. §§ 265 or 291 related to tax-exempt securities.
(7) The amount of global intangible low-taxed income that is included in the gross income of such financial institution under 26 U.S.C. § 951A.
(8) The amount treated as dividends under 26 U.S.C. § 78.
(9) Expenses otherwise deductible that were not deducted for federal income tax purposes as a result of an election to claim a federal income tax credit for those expenses.
(10) Solely with respect to credit unions, the amount paid out as dividends on the withdrawable shares of such credit union.
(11) The amount of otherwise deductible capital losses incurred during the taxable year that were not deducted for federal income tax purposes.
(c) Nothing in this section shall be construed to allow any item to be deducted more than once or to allow a deduction for any item that is excluded from income or to allow any item to be included in the Alabama net income of more than one taxpayer.
(Act 2019-284, §3.)
(a) With respect to credit unions only, net income means financial statement income which is the final net income amount, total revenue less total expenses, calculated for financial statement purposes and reported to the Internal Revenue Service as a tax exempt organization and to the Alabama Credit Union Administration (ACUA) or other government regulatory authority as appropriate, less the subtractions specified in subsection (b) and as allocated and apportioned to Alabama according to rules adopted by the Department of Revenue pursuant to Section 40-16-4.
(b) Subtractions. The following items shall be subtracted from financial statement income for purposes of computing the net income of a credit union under this chapter:
(1) Dividends received from other credit unions and credit union service organizations as defined by federal law and the regulations of the National Credit Union Administration.
(2) Reasonable additions to regular reserves as defined by the Capital Preservation Plan approved by each credit union’s Board of Directors annually and accepted by the ACUA pursuant to ACUA regulations pertaining to Capital Preservation Plans. Upon withdrawal or reduction of such reserves the amount withdrawn or reduced shall be included in the calculation of taxable income for the tax year in which the withdrawal occurs. Provided that, direct transfers between reserve accounts, including the allowance for loan losses, that are not included in the calculation of net income shall not be includible in the calculation of taxable income.
(c) Nothing in this section shall be construed to allow:
(1) Any item to be deducted more than once.
(2) A deduction for any item that is excluded from income.
(3) Any item to be included in the Alabama net income of more than one taxpayer.
(d) No assessments of Financial Institution Excise Tax shall be entered or issued and no refunds shall be granted or paid for tax years ending on or before January 1, 2021, to adjust the amounts subtracted from net income of credit unions for additions to reserves, as previously provided in this section. Further, such amount included in any assessment entered prior to January 1, 2021, shall be void and unenforceable and shall be withdrawn or dismissed with prejudice by the department, and any such refund petitions filed prior to January 1, 2021, shall be denied by the department.
(Act 2019-284, §3; Act 2021-128, §1.)
Production credit associations, incorporated pursuant to the provisions of the act of Congress known as the Farm Credit Act of 1933, are not foreign corporations, and any such association which may become taxable by the state shall be subject to the same taxation imposed upon national banks under the provisions of this chapter, and such associations shall be exempt from all other forms of income, privilege and license taxes imposed by the state.
(Acts 1965, No. 276, p. 390.)
(a) Every financial institution, no later than the due date, including applicable extensions, for its corresponding federal income tax or federal information return, shall make and file with the Department of Revenue a return, signed under the penalties of perjury by its cashier, treasurer, or other authorized officer or employee, if a corporation, or by a person or authorized employee in charge of the conduct of the business to be taxed if an individual, firm, association, or other legal entity, in such form as may be prescribed by the Department of Revenue, giving such detailed information as the Department of Revenue may in its opinion require to determine the net income of the financial institution for the taxable year, by the net income of which the excise tax is to be measured.
(b) Qualified corporate groups, as in this chapter defined, shall have the option to file one excise tax return on a consolidated basis or to file separate returns. Qualified corporate groups electing to file one excise tax return on a consolidated basis shall be assessed no fee for the privilege of filing on a consolidated basis. Newly acquired corporations which have a potential separate return year as well as a consolidated year shall have the option of filing a separate return including all of their income for that year or filing as part of the consolidated group for the entire taxable year. Newly created, controlled corporations shall have the option of filing a separate return including all of their income for that year or filing as part of the consolidated group for the entire taxable year, as determined by the election of the corporate group for that year.
(c) In order for financial institution members of a controlled group to be eligible to elect to file on a consolidated basis, the members must meet the following two tests:
(1) OWNERSHIP TEST. Includable financial institutions connected through stock ownership with a common parent corporation are includable corporations if:
a. Stock possessing at least 80 percent of the voting power of all classes of stock and at least 80 percent of each class of the nonvoting stock of each of the includable corporations (except the common parent corporation) is owned directly or indirectly, applying the attribution rules of 26 U.S.C. § 318, by one or more of the other includable corporations; and
b. The common parent owns directly or indirectly, applying the attribution rules of 26 U.S.C. § 318, stock possessing at least 80 percent of the voting power of all classes of stock and at least 80 percent of each class of the nonvoting stock of at least one of the other includable corporations.
(2) FILING TEST. In order to be eligible for this election, each member must be a financial institution as defined in Section 40-16-1 and be required to file an excise tax return under this chapter.
(d) To the extent operating rules are required for the filing of a consolidated excise tax return, the consolidated return regulations of the Internal Revenue Code and the principles contained therein shall be used as a guideline in the absence of clarifying rules adopted by the Department of Revenue.
(e) Any election to file an Alabama consolidated excise tax return pursuant to this section shall be binding on both the Department of Revenue and the Alabama qualified corporate group for a period of not less than 10 taxable years, except that the election shall terminate automatically upon the revocation or termination of its federal consolidated return election.
(f) Returns filed inconsistent with this election shall be considered delinquent and subject to the penalties imposed by Section 40-2A-11.
(g) The Department of Revenue may adopt reasonable rules as it may deem necessary to determine whether business conducted in this state is properly classified as a financial institution under this chapter which is subject to the excise tax and to determine the net income of the business by which the tax is to be measured.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §426; Acts 1971, No. 1941, p. 3136; Acts 1978, No. 840, p. 1247, §2; Act 2019-284, §2.)
(a)(1) For tax years beginning on or after January 1, 2021, a financial institution excise taxpayer shall be allowed one month following the due date of the corresponding federal income tax return, including applicable extensions, to file the Alabama financial institution excise tax return as required by Section 40-16-3.
(2) For tax years beginning on or after January 1, 2020, but prior to January 1, 2021, the department may allow a financial institution excise taxpayer one additional month following the due date of the corresponding federal income tax return, including applicable extensions, to file the Alabama financial institution excise tax return, upon request by the taxpayer and approval by the department.
(b) The extension provided in this section shall not allow a taxpayer to defer payment of a financial institution excise tax liability beyond the original due date provided in Section 40-16-3.
(Act 2022-53, §3.)
(a)(1) Every such financial institution engaging in any of the following businesses:
(2) For purposes of the excise tax imposed by this chapter, any financial institution which has income from business activity that is taxable both within and without this state shall allocate and apportion its net income as provided in rules which shall be prescribed by the Department of Revenue, provided that such rules shall not conflict with any provision of this chapter and provided further that if such rules allocate and apportion the net income of the financial institution based, at least in part, on its property in the state, loans and credit card receivables shall be considered part of the financial institution’s property in the state and shall be sourced to the state using the same sourcing methods as the department uses to allocate and apportion a financial institution’s interest receipts from related loans and credit card receivables.
(3) The amount of the excise tax shall not be in excess of any limit fixed thereon by any present or future federal statute relating to the taxation of national banks by this state. Under no circumstances will any dividends paid from a financial institution to the common parent corporation of a controlled group of corporations, as defined in Section 40-16-3, be subject to excise tax.
(b) The excise tax provided in this chapter shall be reported in the form to be prescribed by the Department of Revenue. The amount shown to be due by the taxpayer’s return shall constitute and create a prima facie liability for the amount on which taxes shall be paid. Where the Department of Revenue determines that the amount due is different from that shown by the taxpayer’s return or where no return is filed, the department may determine the correct amount due pursuant to the procedures set forth in Chapter 2A of this title.
(c)(1) The Department of Revenue shall have 120 days from April 20, 2017 to promulgate rules consistent with this section. Such rules shall be promulgated in accordance with the Alabama Administrative Procedure Act and shall be effective for all tax years beginning on or after January 1, 2017.
(2) If, on or before December 31, 2030, the Alabama Department of Revenue certifies to the Legislature (1) that the applicable law in a majority of the states, including two states contiguous to Alabama, requires a financial institution to allocate and apportion its net income based at least in part on the institution’s property in that state, and (2) that the related definition of property in each of those states excludes a financial institution’s loans and credit card receivables, then the Alabama Department of Revenue shall promulgate a rule consistent with the applicable law in those states. Any rule promulgated in accordance with the foregoing sentence shall be promulgated in accordance with the Alabama Administrative Procedure Act and shall be effective for all tax years beginning on or after 120 days from the effective date of the rule.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §427; Acts 1978, No. 840, p. 1247, §3; Acts 1992, No. 92-186, p. 349, §45; Act 99-665, 2nd Sp. Sess., p. 131, §6; Act 99-664, 2nd Sp. Sess., p. 124, §1; Act 2016-283, §1; Act 2017-165, §§1,2,.)
[Repealed]
Repealed by Act 2019-284, §4, effective January 1, 2020.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §428; Acts 1943, No. 524, p. 490; Acts 1978, No. 840, p. 1247, §4; Acts 1992, No. 92-186, p. 349, §46.)
(a) Financial institutions shall pay estimated financial institution excise tax in accordance with 26 U.S.C. § 6655, except the provisions of 26 U.S.C. § 6655(g)(1)(A)(ii) through (iii) shall not apply. The balance of the tax owed, after reduction by the credits allowed by this chapter, and by prior payments including estimated payments as provided in this section, shall be due and paid at the same time as the due date of an original return.
(b) For the purposes of this section:
(1) Section 40-16-4 shall be substituted when 26 U.S.C. § 6655 refers to Chapter 1;
(2) Section 40-16-4 shall be substituted when 26 U.S.C. § 6655 refers to Section 11;
(3) The terms section 1201(a) and Subchapter L of Chapter 1 referred to in 26 U.S.C. § 6655(g)(1)(A)(i) shall be ignored for Alabama excise tax purposes;
(4) Section 40-16-8 shall be substituted when 26 U.S.C. § 6655(g)(1)(B) refers to Part IV of Subchapter A of Chapter 1;
(5) The term carrybacks referred to in 26 U.S.C. § 6655(g)(2)(B)(iii) shall be ignored for Alabama excise tax purposes;
(6) Commissioner shall be substituted when 26 U.S.C. § 6655 refers to Secretary.
(Act 2019-284, §3.)
(a) The remittance of the excise tax due under this chapter shall be made to the Department of Revenue at Montgomery, Alabama, with checks payable to the Department of Revenue.
(b) The Department of Revenue shall promptly distribute the balance of financial institution excise tax revenue, net of refunds, as of the close of each calendar quarter, with 50 percent of the revenue distributed to the general fund, 33.3 percent distributed to municipalities, and the remaining 16.7 percent distributed to counties.
(c) Beginning with the 2019 municipal financial institution excise tax distribution, each municipality shall receive a percentage share of the total municipal financial institution excise tax revenue equal to its average percentage share of the total municipal financial institution revenue distribution over the five years ending in 2018.
(d) The first 20 percent of total county financial institution excise tax revenue shall be distributed equally among all counties. The remaining 80 percent of county financial institution excise tax revenue shall be distributed among the counties based on each county’s share of total Alabama population as determined in the most recent federal census prior to the distribution.
(e) No municipality or county within the state may levy or assess any excise tax for the privilege of engaging in a business in addition to that levied and distributed to it as herein provided, except license taxes. However, license taxes on banks shall not be levied in excess of those which may be legally levied pursuant to Section 11-51-130, provided however, that the license authorized by subdivisions (1) to (12), inclusive, of subsection (a) of Section 11-51-130 may be levied only by the municipality where the bank has its principal place of business.
(Acts 1935, No. 194, p. 256; Acts 1939, No. 396, p. 517; Code 1940, T. 51, §429; Acts 1943, No. 547, p. 536; Acts 1951, No. 839, p. 1470; Acts 1991, No. 91-478, p. 866, § 1; Act 99-665, 2nd Sp. Sess., p. 131, §6; Act 99-664, 2nd Sp. Sess., p. 124, §1; Act 2019-284, §2.)
All moneyed capital employed in the business the privilege of engaging in which is hereby taxed and the shares of all financial institutions, as in this chapter defined, shall be exempted from assessment and payment of ad valorem taxes, except the moneyed capital and shares of any business hereby taxed which fails to make and file the returns required by this chapter and to pay the tax levied by this chapter as and when in this chapter provided. The real estate owned by every such financial institution shall not be exempted. If any other tax other than the privilege tax levied by Article 2 of Chapter 14A, whether on property (other than ad valorem taxes on real estate), income, business or any element thereof, except license taxes not in excess of those heretofore legally levied and in effect, at any time after July 10, 1935, has been, or is at any time hereafter levied by this state or by any political subdivision of this state on any financial institution as in this chapter defined, the amount of such other tax due by such institution shall be credited on account of the tax payable pursuant to the provisions of this chapter.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §431; Act 99-665, 2nd Sp. Sess., §6.)
Notwithstanding any other laws to the contrary, other than the tax credits allowed by Section 40-16-8, any law enacting or amending a tax credit allowed to a financial institution against the financial institution excise tax imposed by this chapter which becomes effective on or after January 1, 2016, shall be applied only to the state portion of the tax liability and shall not offset or reduce the financial institution excise tax distribution made to municipalities and counties pursuant to Section 40-16-6.
This section does not amend, repeal, or supersede any financial institution excise tax credit in effect on December 31, 2015.
(Act 2016-280, §1.)
(a) In computing the net income of financial institutions subject to the tax imposed by this chapter, there shall be allowed, in addition to the deductions specified therein, a deduction for the sum of the net operating losses which may be carried forward to the taxable year for which the net income of the financial institution is being computed.
(1) The term “net operating loss” for the purposes of this chapter means the amount by which net income of the financial institution, before the deduction allowed by this section, with respect to a taxable year is less than zero. For purposes of this section, the financial institution’s net income shall be determined under this chapter applicable to the year in which the net operating loss arises.
(2) A net operating loss shall be carried forward to the earliest subsequent taxable year in which the financial institution has net income greater than zero, determined without taking into account the deduction allowed by this subsection. The amount of a net operating loss which may be carried to any later taxable year shall be the excess of the net operating loss over the sum of the amounts thereof deductible under this subsection in all the taxable years preceding this taxable year.
(3) If net operating losses arising in more than one taxable year can be carried forward to a taxable year of the financial institution, the net operating loss arising from the earliest of those years shall be deducted first.
(4) The net operating loss allowed by this section shall be limited to sources attributable to Alabama, as determined by applying the allocation and apportionment methodology in the year in which the loss arose pursuant to Section 40-16-4.
(5) A net operating loss may be carried forward and deducted only during the 15 consecutive tax years immediately following the tax year in which it arose.
(b) In the case of a financial institution classified as an acquiring corporation within the meaning of 26 U.S.C. § 381, or in the case of a financial institution classified as a new loss corporation within the meaning of 26 U.S.C. § 382, or in the case of the recognized built-in gains of a financial institution classified as a gain corporation within the meaning of 26 U.S.C. § 384, only the net operating losses as are allowable in accordance with 26 U.S.C. §§ 381, 382, and 384 shall be allowed as a deduction under this section. This subsection shall be applied before the limitations in the preceding subsection are applied.
(c) Net operating losses incurred by members of a qualified corporate group, as defined in Section 40-16-3(c), (including those net operating losses described in subsection (b)) shall be deducted in the following order:
(1) Net operating losses shall be carried forward only on account of the member which incurs the loss (including any prior year net operating losses allocated from the parent under subdivision (2), which subsequently became part of the member’s loss carryforward) and shall be deducted prior to consolidating any resulting taxable income with the other members’ income on the consolidated return under Section 40-16-3(b). Any remaining net operating losses of the member shall be carried forward in accordance with this section.
(2) Any current year net operating losses of the parent of a qualified corporate group, as defined in Section 40-16-3(c), shall be allocated among the other members of the qualified corporate group based on the percentage which the gross assets of each member of the qualified corporate group bears to the total gross assets of all members of the qualified corporate group, excluding the parent of a qualified corporate group, and shall be deducted prior to consolidating any resulting taxable income with the other members’ income on the consolidated return under Section 40-16-3(b). To the extent this loss described in the preceding sentence creates or increases a loss for a member, such loss becomes part of that member’s net operating loss carryforward from the year of such allocation.
(Act 2019-284, §3.)
This section provides for transition rules for the implementation of the Financial Institution Excise Tax Reform Act of 2019.
(1) Act 2019-284 imposes for the first time a system of prepaid estimated tax payments patterned after the federal system and transitions the Financial Institution Excise Tax from the current post-payment system. To account for this transition, the Department of Revenue shall waive both penalties and interest attributable to underpayments of estimated tax payments occurring within the first two applicable tax years and not attributable to an intentional disregard of the law.
(2) Act 2019-284’s conformity of the depreciation deduction allowed in the calculation of the tax due under this chapter with the corollary deduction allowed for federal income tax purposes, as well as the act’s express rejection of the federal Tax Cuts and Jobs Act of 2017’s (i) limitations on the deductibility of Federal Deposit Insurance Corporation premiums under 26 U.S.C. § 162(r), (ii) limitations on the deductibility of certain interest under 26 U.S.C. § 163(j), and (iii) inclusion of global intangible low-taxed income (GILTI) under 26 U.S.C. § 951A and deduction of foreign-derived intangible income and GILTI under 26 U.S.C. § 250, are merely a clarification of existing law and shall apply retroactively to all open tax years.
(3) The enactment of Section 40-16-10 extends the carryforward period for net operating losses to a maximum of fifteen tax years, while eliminating the financial institution’s ability to carry back net operating losses to the prior two tax years. The fifteen tax year carryforward period shall only apply to net operating losses incurred in tax years beginning after December 31, 2019. The clarification of the ordering rules applicable to net operating losses provided by Section 40-16-10(c) shall apply to all open tax years.
(4) In addition to the deductions from federal taxable income provided by Section 40-16-1.2(b), subject to the limitation provided by Section 40-16-1.2(c), a financial institution may deduct the applicable percentage of dividend income from a Captive REIT if such dividend income would be deductible under 26 U.S.C. § 243 if received from an entity that is not a REIT, as defined in Section 40-18-1(27). For purposes of this subdivision, a “Captive REIT” shall include any REIT, as defined in Section 40-18-1(27), whose shares or certificates of beneficial interest are not regularly traded on an established securities market and are owned or controlled, at any time during the last half of the tax year, by an association taxable as a corporation that is not exempt from tax under 26 U.S.C. § 501(a) or a REIT, as defined in Section 40-18-1(27). For purposes of the definition of Captive REIT in this subdivision, own or control means to own or control directly, indirectly, beneficially, or constructively more than 50 percent of the voting power or value of an entity, applying the attribution rules of 26 U.S.C. § 318, as modified by 26 U.S.C. § 856(d)(5), in determining ownership and control. For purposes of this subdivision, the “applicable percentage” shall be: (i) One hundred percent for tax years beginning after December 31, 2019 and before January 1, 2021; (ii) Eighty percent for tax years beginning after December 31, 2020 and before January 1, 2022; (iii) Sixty percent for tax years beginning after December 31, 2021 and before January 1, 2023; (iv) Forty percent for tax years beginning after December 31, 2022 and before January 1, 2024; (v) Twenty percent for tax years beginning after December 31, 2023 and before January 1, 2025; and (vi) Zero percent for tax years beginning after December 31, 2024.
(5) Act 2019-284’s distribution formula percentages, as stated in § 40-16-6, shall apply to the annual 2019 financial institution excise tax distribution.
(Act 2019-284, §3.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1939, No. 590, p. 958, §1; Code 1940, T. 51, §665(1); Acts 1951, No. 902, p. 1539, §1; Acts 1953, No. 694, p. 947, §1; Acts 1980, No. 80-740, p. 1505; Acts 1992, 2nd Ex. Sess., No. 92-703, p. 172, §1; Acts 1995, No. 95-410, p. 881, §1.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1939, No. 590, p. 958, §2; Code 1940, T. 51, §665(2); Acts 1951, No. 902, p. 1539, §2; Acts 1953, No. 694, p. 947, §2; Acts 1955, 1st Ex. Sess., No. 42, p. 64; Acts 1971, No. 1727, p. 2889; Acts 1992, No. 92-205, p. 503, §1; Acts 1995, No. 95-410, p. 881, §1.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1939, No. 590, p. 958, §5; Code 1940, T. 51, §665(5); Acts 1995, No. 95-410, p. 881, §1.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1939, No. 590, p. 958, §6; Code 1940, T. 51, §665(6); Acts 1995, No. 95-410, p. 881, §1.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1939, No. 590, p. 958, §7; Code 1940, T. 51, §665(7); Acts 1951, No. 851, p. 1479; Acts 1992, No. 92-186, p. 349, §47; Acts 1995, No. 95-410, p. 881, §1.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1939, No. 590, p. 958, §12; Code 1940, T. 51, §665(12); Acts 1951, No. 902, p. 1539, §6.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1939, No. 590, p. 958, §8; Code 1940, T. 51, §665(8); Acts 1951, No. 902, p. 1539, §3; Acts 1995, No. 95-410, p. 881, §1.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1939, No. 590, p. 958, §13; Code 1940, T. 51, §665(13); Acts 1951, No. 838, p. 1469; Acts 1969, No. 786, p. 1416; Acts 1978, No. 581, p. 658.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1939, No. 590, p. 958, §14; Code 1940, T. 51, §665(14); Acts 1951, No. 902, p. 1539, §7; Acts 1995, No. 95-410, p. 881, §1.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1939, No. 590, p. 958, §19; Code 1940, T. 51, §665(19).)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1939, No. 590, p. 958, §22; Code 1940, T. 51, §665(20).)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1939, No. 590, p. 958, §18; Code 1940, T. 51, §665(18); Acts 1995, No. 95-410, p. 881, §1.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1992, 2nd Ex. Sess., No. 92-703, p. 173, §3; Acts 1995, No. 95-410, p. 881, §1.)
[Repealed]
Repealed by Act 2011-565, §45, p. 1084, effective October 1, 2012.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §646; Acts 1951, No. 847, p. 1477; Acts 1953, No. 772, p. 1036, §1.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1935, No. 194, p. 256; Acts 1936, Ex. Sess., No. 51, p. 28; Acts 1936-37, Ex. Sess., No. 157, p. 179; Code 1940, T. 51, §647; Acts 1943, No. 478, p. 422; Acts 1945, No. 367, p. 590, §1; Acts 1949, No. 72, p. 98; Acts 1949, No. 649, p. 998, §1; Acts 1953, No. 772, p. 1036, §2; Acts 1955, 1st Ex. Sess., No. 44, p. 73, §1; Acts 1961, No. 948, p. 1523, §1; Acts 1963, No. 254, p. 662, §1; Acts 1967, Ex. Sess., No. 221, p. 278; Acts 1977, No. 674, p. 1163; Acts 1979, No. 79-714, p. 1267; Acts 1986, No. 86-214, p. 282, §6; Acts 1987, No. 87-553, p. 854, §1; Acts 1991, No. 91-672, p. 1310, §1; Acts 1992, No. 92-203, p. 486, §1; Act 2000-220, p. 328, §44; Act 2000-736, p. 1608, §1; Act 2002-153, p. 401, §1.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §648; Acts 1945, No. 364, p. 580; Acts 1949, No. 94, p. 119; Acts 1949, No. 649, p. 998, §2; Acts 1953, No. 772, p. 1036, §3; Acts 1957, No. 650, p. 979.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §649; Acts 1945, No. 367, p. 590, §2; Acts 1949, No. 649, p. 998, §3; Acts 1961, No. 948, p. 1523; Acts 1963, No. 254, p. 662, §2.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §650.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §651; Acts 1951, No. 849, p. 1479.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §652.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §653.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1959, No. 299, p. 871; Acts 1982, No. 82-415, p. 626; Acts 1984, 1st Ex. Sess., No. 84-798, p. 211.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §654.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §658; Acts 1943, No. 473, p. 438; Acts 1951, No. 940, p. 1607, §1; Acts 1992, No. 92-186, p. 349, §48.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §659.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1951, No. 632, p. 1086.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §664.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1967, Ex. Sess., No. 222, p. 281.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1969, No. 918, p. 1656.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1936-37, Ex. Sess., No. 213, p. 248; Code 1940, T. 51, §665.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1967, Ex. Sess., No. 224, p. 295, §1; Acts 1971, 1st Ex. Sess., No. 153, p. 238, §1; Acts 1978, No. 582, p. 659, §1; Acts 1992, No. 92-203, p. 486, §2.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1967, Ex. Sess., No. 224, p. 295, §2.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1967, Ex. Sess., No. 224, p. 295, §3; Acts 1969, No. 784, p. 1410, §1; Acts 1971, 1st Ex. Sess., No. 153, p. 238, §2; Acts 1978, No. 582, p. 659, §2.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1967, Ex. Sess., No. 224, p. 295, §4; Acts 1969, No. 784, p. 1410, §2; Acts 1978, No. 582, p. 659, §3.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1967, Ex. Sess., No. 224, p. 295, §5; Acts 1969, No. 217, p. 536, §1.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1992, No. 92-203, p. 486, §3.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1953, No. 838, p. 1129, §§1, 2.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1955, No. 90, p. 337.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1967, Ex. Sess., No. 224, p. 295.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1967, Ex. Sess., No. 224, p. 295, §7; Acts 1969, No. 217, p. 536, §1.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1959, 1st Ex. Sess., No. 51, p. 95, §1.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1959, 1st Ex. Sess., No. 51, p. 95, §2.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1967, Ex. Sess., No. 224, p. 295, §8; Acts 1992, No. 92-203, p. 486, §4.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1967, Ex. Sess., No. 224, p. 295, §10.)
This section was amended and renumbered as §40-17-300 by Act 2008-275, p. 402, §6, effective August 6, 2008.
(Acts 1957, No. 743, p. 1173, §2.)
This section was amended and renumbered as §40-17-300 by Act 2008-275, p. 402, §6, effective August 6, 2008.
(Acts 1957, No. 743, p. 1173, §1.)
This section was amended and renumbered as §40-17-300 by Act 2008-275, p. 402, §6, effective August 6, 2008.
(Acts 1957, No. 743, p. 1173, §3; Acts 1959, No. 416, p. 1104, §1; Acts 1992, No. 92-203, p. 486, §5.)
This section was amended and renumbered as §40-17-300 by Act 2008-275, p. 402, §6, effective August 6, 2008.
(Acts 1957, No. 743, p. 1173, §4; Acts 1959, No. 416, p. 1104, §2; Acts 1969, No. 1155, p. 2160; Acts 1992, No. 92-203, p. 486, §6.)
This section was amended and renumbered as §40-17-300 by Act 2008-275, p. 402, §6, effective August 6, 2008.
(Acts 1957, No. 743, p. 1173, §5; Acts 1959, No. 416, p. 1104, §3; Acts 1969, No. 1155, p. 2160.)
This section was amended and renumbered as §40-17-300 by Act 2008-275, p. 402, §6, effective August 6, 2008.
(Acts 1957, No. 743, p. 1173, §6.)
This section was amended and renumbered as §40-17-300 by Act 2008-275, p. 402, §6, effective August 6, 2008.
(Acts 1957, No. 743, p. 1173, §7.)
This section was amended and renumbered as §40-17-300 by Act 2008-275, p. 402, §6, effective August 6, 2008.
(Acts 1957, No. 743, p. 1173, §7(a).)
This section was amended and renumbered as §40-17-300 by Act 2008-275, p. 402, §6, effective August 6, 2008.
(Acts 1957, No. 743, p. 1173, §8.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1969, No. 403, p. 789, §2.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1969, No. 403, p. 789, §1.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1969, No. 403, p. 789, §3; Acts 1992, No. 92-203, p. 486, §7.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1969, No. 403, p. 789, §5.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1992, No. 92-203, p. 486, §8.)
For the purpose of this article, the following terms shall have the meanings respectively ascribed by this section:
(1) MOTOR VEHICLE. Any passenger vehicle that has seats for more than nine passengers in addition to the driver, or any road tractor, or any tractor truck, or any truck having more than two axles.
(2) MOTOR CARRIER. Every person, firm, or corporation who or which operates or causes to be operated on any highway in this state any motor vehicle, as defined herein, except any resident person, firm, or corporation owning or operating not more than one such motor vehicle for his own use and not for hire, and except any person, firm, or corporation the motor vehicles of which are operated or caused to be operated wholly within this state.
(3) OPERATIONS. Operations of all motor vehicles, whether loaded or empty, whether for compensation or not for compensation, and whether owned by or leased to the motor carrier who operates them or causes them to be operated.
(4) MOTOR FUEL. Gasoline, diesel fuel, and any other inflammable liquid or substance by whatever name it may be known and sold, the use of which is as a fuel for the propulsion of motor vehicles.
(5) COMMISSIONER. The Commissioner of the state Department of Revenue.
(6) GASOLINE TAX. The tax imposed by Article 2 of this chapter and by Article 6 of this chapter.
(7) DIESEL FUEL TAX. The tax imposed by Sections 40-17-1 through 40-17-20 and by Article 6 of this chapter.
(Acts 1961, No. 674, p. 925, §1; Acts 1965, No. 750, p. 1357, §1; Acts 1980, No. 80-428, p. 595.)
Every motor carrier shall pay an excise tax upon motor fuels used in its operations within this state at the same rate per gallon as shall be currently in effect for the classifications of fuels so used under applicable statutes levying the gasoline tax and diesel fuel tax, as such terms are defined in subdivisions (6) and (7) of Section 40-17-140.
(Acts 1961, No. 674, p. 925, §2.)
(a) Every motor carrier subject to the tax hereby imposed shall be entitled to a credit on such tax equivalent to the rate per gallon of the applicable Alabama tax on motor fuel which is currently in effect on all motor fuel purchased by such motor carrier within this state for use in its operations either within or without this state and upon which the motor fuel tax has been paid by such motor carrier. Evidence of the payment of such taxes in such form as may be required by, or is satisfactory to, the commissioner shall be furnished by each such carrier claiming the credit herein allowed. When the amount of the credit herein provided to which any motor carrier is entitled for any quarter exceeds the amount of the tax hereby imposed for which the motor carrier is liable for the same quarter, such excess may under regulations of the commissioner be allowed as a credit on the tax hereby imposed for which such motor carrier would be otherwise liable for any of the three succeeding quarters; or upon application within three years from the end of any quarter, duly verified and presented, in accordance with regulations promulgated by the commissioner and supported by such evidence as may be satisfactory to the commissioner, such excess may be refunded if it shall appear that the applicant has paid to another state under a lawful requirement of such state a tax, similar in effect to the tax herein provided, on the use or consumption in such state of motor fuel purchased in Alabama to the extent of the rate of the rate per gallon of the applicable Alabama tax on motor fuel which is currently in effect.
(b) If the department shall deny a refund in the amount claimed by the applicant, the applicant may appeal such denial pursuant to the provisions provided in Chapter 2A of this title. Whenever any refund is ordered it shall be paid by warrant of the state Comptroller out of the same funds to which disbursed as provided in Section 40-17-146, and there is hereby appropriated out of said funds so much thereof as may be necessary to make refunds from time to time.
(Acts 1961, No. 674, p. 925, §3; Acts 1965, No. 750, p. 1357, §2; Acts 1980, No. 80-428, p. 595; Acts 1992, No. 92-186, p. 349, §49.)
Any person who willfully and knowingly makes a false statement orally or in writing or in the form of a receipt for the sale of motor fuel, for the purpose of obtaining or attempting to obtain or to assist any other person, partnership or corporation to obtain or attempt to obtain a credit or refund or reduction of liability for taxes under this article, shall be guilty of a misdemeanor.
(Acts 1961, No. 674, p. 925, §5.)
The tax hereby imposed shall be paid by each motor carrier quarterly to the commissioner on or before the last day of April, July, October, and January of each year and calculated upon the amount of motor fuel used in its operations within this state by each such motor carrier during the quarter ending with the last day of the preceding month.
(Acts 1961, No. 674, p. 925, §6.)
The proceeds of the tax hereby imposed shall be disbursed as follows: That portion thereof that is attributable to the use of motor fuel subject to the gasoline tax shall be disbursed in the manner provided by law for the disbursement of the proceeds of the gasoline tax; and that portion thereof that is attributable to the use of motor fuel subject to the diesel fuel tax shall be disbursed in the manner provided by law for the disbursement of the proceeds of the diesel fuel tax.
The cost of administering and enforcing this article for each fiscal year shall be paid to the state Department of Revenue, to be allotted and budgeted under Article 4 of Chapter 4 of Title 41, in addition to the regular appropriation to such department.
(Acts 1961, No. 674, p. 925, §7; Acts 1965, No. 750, p. 1357, §4.)
The amount of motor fuel used in the operations of any motor carrier within this state shall be such proportion of the total amount of such motor fuel used in its entire operations within and without this state as the total number of miles traveled within this state bears to the total number of miles traveled within and without this state.
(Acts 1961, No. 674, p. 925, §8.)
Every motor carrier subject to the tax imposed by this article shall, on or before the last day of April, July, October, and January of every year, make to the commissioner such reports of its operations during the quarter ending the last day of the preceding month as the commissioner may require and such other reports from time to time as the commissioner may deem necessary.
(Acts 1961, No. 674, p. 925, §9.)
(a) The commissioner shall provide by regulation for the issuance of an annual identification marker for every Alabama IFTA-based carriers’ qualified vehicles and the qualified vehicles from non-IFTA-member jurisdictions, as defined in Article 9 of Chapter 17 of this title, for a fee based on administrative costs of administering the agreements pursuant to Article 9 of Chapter 17 of this title. The identification marker shall be in the form and of the size as the commissioner may prescribe.
(b) The identification marker shall be attached or affixed to the vehicle in the place and manner prescribed by the commissioner so that the same is clearly displayed at all times.
(c) The identification markers herein provided for shall be issued on an annual basis as of January 1 each year and shall be valid through the next succeeding December 31.
(d) All identification markers issued by the commissioner shall remain the property of the state.
(e) For tour buses, as defined in subdivision (10) of Section 40-19-1, the fee levied by this section (fuel identification marker fee or trip permit fee) and the motor carrier registration fee levied pursuant to paragraph a. of subdivision (5) of Section 37-3-32 shall be paid by a single payment which may be paid by check, money order, or other means as may be provided by regulation and shall be submitted to the Department of Tourism and Travel payable to the Department of Revenue.
(f) The proceeds from the issuance of the identification marker fees collected shall accrue to the credit of, and be deposited in, the Public Road and Bridge Fund.
(g) It shall be a violation of this article for a motor carrier to operate or cause to be operated in this state any motor vehicle as defined herein unless the motor vehicle displays the required identification marker in the manner designated by the commissioner; provided, that the commissioner by regulation may exempt from the requirement for displaying the identification marker such motor vehicles as urban and public transit motor vehicles or others if in his discretion they are clearly identifiable and the effective enforcement of this article will not suffer thereby.
(h) In addition, the Commissioner of Revenue may authorize the operation of a motor vehicle without the identification marker required by issuing a trip permit, valid for not exceeding seven days, for a fee to be set by regulation based on administrative costs of administering the agreements pursuant to Article 9 of Chapter 17 of this title payable in advance. Trip permits are to be obtained by motor carriers having only occasional or infrequent trips into and through the state. To be valid a trip permit must be supported by a valid invoice of current date showing that sufficient tax-paid fuel was purchased in the state to propel the vehicle for the number of miles it traveled over the highways of the state.
(i) In order for the department to have sufficient time in which to prepare the identification markers for transmittal to the motor carrier, every motor carrier subject to this article shall, between the dates of October 1 and November 15 of each year, furnish to the Department of Revenue an application, listing all motor vehicles operated by the motor carrier and for which an identification marker is required, giving for each vehicle the make, serial number, and type fuel used. The application shall be accompanied by a remittance in an amount sufficient to cover the fee or fees herein provided for.
(j) Motor carriers acquiring additional motor vehicles after the date of November 15 of each year must obtain an identification marker for each motor vehicle before operating the motor vehicle over the streets and highways of this state.
(Acts 1961, No. 674, p. 925, §11; Acts 1965, No. 750, p. 1357, §6; Acts 1971, No. 1408, p. 2403; Acts 1992, 2nd Ex. Sess., No. 92-710, p. 205, §2; Acts 1994, No. 94-586, p. 1078, §7.)
The commissioner is hereby authorized to adopt, promulgate, and enforce reasonable rules and regulations as herein before provided for and such other reasonable rules and regulations relating to the administration and enforcement of the provisions of this article, not in conflict with the specific provisions hereof, as he may deem advisable.
(Acts 1961, No. 674, p. 925, §14.)
Nothing in this article shall apply to any motor vehicle owned and operated by any department, board, bureau, commission, or taxing area or other agency of the federal government or of the State of Alabama or any political subdivision thereof, nor shall the provisions of this article apply to any school bus operated by the State of Alabama, any political subdivision thereof, or any private or privately operated school or schools.
(Acts 1961, No. 674, p. 925, §16; Acts 1965, No. 750, p. 1357, §9.)
The taxes imposed on motor carriers by this article are in addition to any taxes of whatever character imposed on such motor carriers by any other provision of law.
(Acts 1961, No. 674, p. 925, §15.)
Failure to comply with any provisions of this article, including failure to pay the tax, to file the required reports, to keep the required books and records or to comply with any rule or regulation issued by the Commissioner of Revenue pursuant to the provisions of this article shall be deemed a violation of the article, and each such failure or violation shall constitute a Class B misdemeanor; and, upon conviction, any person who violates the article shall be punishable as provided by law. Each such violation shall constitute a separate offense.
(Acts 1961, No. 674, p. 925, §13; Acts 1965, No. 750, p. 1357, §8; Acts 1980, No. 80-428, p. 595.)
(a) In lieu of an excise tax on liquefied petroleum gas used to propel motor vehicles over the highways of this state, there is hereby levied an annual flat fee on the following classes of vehicles which require a motor vehicle license using liquefied petroleum gas as fuel. For all other purposes other than the excise tax, the term “liquefied petroleum gas” shall be included with the term gasoline as defined in Section 40-17-322:
Class 1. Passenger automobiles, vans, and trucks and pickups under one ton.....................$75.00
Class 2. Recreational vehicles and vans and trucks one ton or over but with a rear axle carrying capacity of less than 14,000 pounds.......$85.00
Class 3. Bobtail trucks and equivalent vehicles to be defined as any other vehicle having the capacity of carrying a loaded rear axle weight of 14,000 pounds or more.......$150.00
Class 4. Tractor/trailer units..............................................................$175.00
(b) In the event an additional excise tax is implemented for alternative fuel vehicles, other than those powered by compressed natural gas or liquefied natural gas, such excise tax shall also be applicable to liquefied petroleum gas used to propel motor vehicles over the highways of this state in lieu of the annual fee provided for in this section.
(Acts 1980, No. 80-739, p. 1503, §1; Acts 1981, 3rd Ex. Sess., No. 81-1136, p. 409, §1; Act 2017-229, §1.)
(a) Every person owning and/or operating such vehicles shall make application for and obtain an annual decal from the Liquefied Petroleum Gas Board which shall serve as an identification marker that the flat fee has been paid. Each decal issued by the Liquefied Petroleum Gas Board shall not exceed a cost of five dollars ($5). The decal shall be in such form and of such size as the Liquefied Petroleum Gas Board shall prescribe. The decal shall be attached or affixed to the vehicle in the place and manner prescribed by the Liquefied Petroleum Gas Board. The decals provided for in this chapter shall be issued for a term that shall begin at April 1 of each year and expire on March 31 of the following year. If any vehicle is acquired, liquefied petroleum gas system installed or vehicle put in operation after September 30 the fee shall be one-half the flat fee stated in Section 40-17-160, or after December 31, the fee shall be one-fourth of the flat fee stated in Section 40-17-160. Owners of all newly converted vehicles must apply for the required decal as provided for in Section 40-17-160 within 10 days of the completion date in which the liquefied petroleum system was installed on the vehicle. Failure to submit an application within the 10-day period requires the payment of penalties as prescribed by Section 40-17-164.
(b) The board administrator and the board inspectors shall have the power and authority to issue a uniform nontraffic citation to any person violating this section. For the purpose of enforcing this section, there shall be prima facie evidence that a connected, operational liquefied petroleum gas carburetion/injection system, which is part of a dual or switchable gasoline-liquefied petroleum gas system, has been in use, if there is liquefied petroleum gas in the liquefied petroleum gas tank. Any violation of this section shall constitute a Class B misdemeanor.
(Acts 1980, No. 80-739, p. 1503, §2; Acts 1981, 3rd Ex. Sess., No. 81-1136, p. 409, §1; Act 2014-145, p. 353, §1; Act 2017-229, §1.)
Every person required to make application for and receive a decal under this chapter shall at the time of making said application remit to the Liquefied Petroleum Gas Board the total amount of the flat fee due plus the cost of the decal issued. The proceeds of the flat fee shall be deposited by the Liquefied Petroleum Gas Board in the State Treasury to the credit of the Public Road and Bridge Fund. The proceeds of the decal issuance fee shall be deposited in the State Treasury to the credit of the Liquefied Petroleum Gas Board Fund. Any administration costs relating to such decals shall be paid by the Liquefied Petroleum Gas Board from such fees collected. Said costs are hereby appropriated from the Liquefied Petroleum Gas Board Fund.
(Acts 1980, No. 80-739, p. 1503, §3.)
The Liquefied Petroleum Gas Board is authorized to promulgate any rules and regulations necessary to carry out the provisions of this chapter.
(Acts 1980, No. 80-739, p. 1503, §4.)
Any person who fails to obtain a current decal within 30 days of the date the decal is required as provided in this chapter, shall be liable for a penalty of 20 percent of the fee in addition to the fee. The penalty shall be paid at the same time and in the same manner as the flat fee; and such penalty shall be deposited by the Liquefied Petroleum Gas Board in the State Treasury, to the credit of the Liquefied Petroleum Gas Board Fund.
(Acts 1980, No. 80-739, p. 1503, §5; Act 2014-145, p. 353, §1.)
If an out-of-state vehicle comes to a propane dealer or supplier in the State of Alabama to purchase fuel, the dealer must collect in lieu of any fees levied by this chapter an amount equal to the current Alabama motor fuel tax in effect as prescribed by subdivision (a)(2) of Section 40-17-325, and remit these funds to the Alabama LP-Gas Board before the 20th of the following month after the date of the sale. Decals for out-of-state vehicles can be purchased with decal fees and issuance fees to be paid as prescribed by Sections 40-17-160 and 40-17-161.
(Acts 1980, No. 80-739, p. 1503, §6; Acts 1981, 3rd Ex. Sess., No. 81-1136, p. 409, §1; Act 2014-145, p. 353, §1; Act 2017-229, §1.)
Any vehicles of the classes described in Section 40-17-160 owned by the state, county, or any incorporated municipality or agency, or instrumentality thereof, or any vehicle not requiring a license plate or motor vehicle license, including but not limited to forklift trucks and agricultural vehicles, shall be exempt from any excise tax levied by the provisions of this chapter.
(Acts 1980, No. 80-739, p. 1503, §7; Acts 1981, 3rd Ex. Sess., No. 81-1136, p. 409, §1.)
(a) The Legislature of Alabama makes the following findings and statements:
(1) The reduction of the dependence on foreign oil is necessary to reserve and protect our national security.
(2) Reliable and affordable energy is of great importance to all sectors of Alabama’s economy.
(3) Long-term sustainability of energy supply and efficient and effective distribution of energy is becoming increasingly important to Alabama’s population growth and economic expansion.
(4) The future energy needs of the state also present opportunities to diversify the state’s energy supply and provide new opportunities for Alabama-based clean energy technologies.
(5) The use of existing technology and development of new technologies including compressed and liquefied natural gas should be encouraged as a way of producing energy with reduced emissions.
(b) The Legislature recognizes that it is in the best interest of its citizens to remove existing barriers to implementing natural gas distribution for motor vehicles until such time as a comprehensive approach is established for regulating and taxing natural gas for motor vehicles. This includes temporarily eliminating the decals and associated fees that are currently required of owners or operators of motor vehicles using compressed and liquefied natural gas, as well as temporarily suspending any motor fuel excise taxes due on compressed or liquefied natural gas used as fuel for vehicles.
(c)(1) The requirement to obtain a decal from the Liquefied Petroleum Gas Board, as well as any requirement to collect the motor fuel tax as prescribed in this chapter, are hereby suspended from April 9, 2014, until October 1, 2018.
(2) This section shall not apply to the remainder of this article.
(Act 2014-408, p. 1506, §§1, 2; Act 2016-468, 1st Sp. Sess., §1; Act 2017-229, §1.)
The Legislature declares that the intent of this article is to establish an efficient, standardized motor fuel tax collection and enforcement system for the collection of the excise tax on compressed natural gas and liquefied natural gas.
(Act 2017-229, §2.)
For the purposes of this article, the following terms shall have the following meanings:
(1) COMMISSIONER. The Commissioner of the Department of Revenue.
(2) COMPRESSED NATURAL GAS or CNG. Natural gas compressed to a pressure at or above 200-248 bar (i.e., 2900-3600 pounds per square inch) and stored in high-pressure containers and used as a fuel for natural gas-powered vehicles.
(3) DEPARTMENT. The Department of Revenue.
(4) DIESEL GALLON EQUIVALENT or DGE or DIESEL-EQUIVALENT GALLON or DEG. The amount of alternative fuel it takes to equal the energy content of one liquid gallon of diesel fuel. The term is a measure for consumers to compare the energy content of competing fuels against diesel fuel and is 6.059 pounds of liquefied natural gas for one gallon of diesel fuel unless the National Conference for Weights and Measures establishes standards for converting liquefied natural gas to a gallon of diesel fuel at which time such standard conversion shall be used.
(5) FLEET PRODUCER OF CNG/LNG. Any person, entity, or business producing CNG or LNG for use in one or more vehicles designed to be operated on the public roads and highways that are owned and operated as a unit for commercial purposes.
(6) GASOLINE GALLON EQUIVALENT or GGE or GASOLINE-EQUIVALENT GALLON or GEG. The amount of alternative fuel it takes to equal the energy content of one liquid gallon of gasoline. The term is a measure for consumers to compare the energy content of competing fuels against gasoline and is 5.66 pounds of compressed natural gas or 126.67 cubic feet for one gallon of gasoline unless the National Conference for Weights and Measures establishes standards for converting compressed natural gas to a gallon of gasoline at which time such standard conversion shall be used.
(7) LIQUEFIED NATURAL GAS or LNG. Natural gas that has been liquefied by reducing its temperature to -260 degrees Fahrenheit at atmospheric pressure.
(8) NATURAL GAS. A gaseous mixture of hydrocarbon compounds, the primary one being methane.
(9) PERSONAL PRODUCER OF CNG. Any individual producing and using CNG as a fuel in a personal vehicle used for noncommercial purposes.
(10) PUBLIC SELLER OF CNG/LNG. Any person operating a service station or other retail outlet engaged in the selling of CNG or LNG to the ultimate consumer for use in a vehicle designed to be operated on public roads and highways.
(Act 2017-229, §2.)
(a) There is hereby levied a reduced rate excise tax on compressed natural gas (CNG) and liquefied natural gas (LNG) in an amount of $.08 per GGE or DGE effective October 1, 2018. Effective October 1, 2023, the reduced rate excise tax on compressed natural gas (CNG) and liquefied natural gas (LNG) will increase to $.13 per GGE or DGE. Effective October 1, 2028, the excise tax on compressed natural gas (CNG) will increase to the gasoline excise tax rate as prescribed by subsection (a)(1) of Section 40-17-325 per gasoline gallon equivalent (GGE) and the excise tax on liquefied natural gas (LNG) will increase to the diesel fuel excise tax rate as prescribed by subsection (a)(2) of Section 40-17-325 per diesel gallon equivalent(DGE). Effective October 1, 2028, in the event that an additional gasoline excise tax, which is not referenced in subsection (a)(1) of Section 40-17-325, is levied, the excise tax on compressed natural gas (CNG) will be calculated using the combined gasoline excise tax rates for compressed natural gas (CNG) per gasoline gallon equivalent (GGE). In the event that an additional diesel fuel excise tax, which is not referenced in subsection (a)(2) of Section 40-17-325, is levied, the excise tax on liquefied natural gas (LNG) will be calculated using the combined diesel fuel excise tax rates for liquefied natural gas (LNG) per diesel gallon equivalent (DGE).
(1) Every public seller must collect and pay over to the department an excise tax in an amount equal to the excise tax in effect as prescribed by this subsection per GGE on compressed natural gas or per DGE on liquefied natural gas upon the sale of the compressed natural gas or liquefied natural gas for use in a vehicle designed to be operated on the public roads and highways.
(2) Fleet producers of compressed natural gas or liquefied natural gas shall remit to the department an excise tax in an amount equal to the excise tax in effect as prescribed by this subsection per GGE on compressed natural gas or per DGE on liquefied natural gas withdrawn for use in a vehicle designed to be operated on the public roads and highways.
(b)(1) Personal producers of compressed natural gas who installed a system to compress natural gas, prior to January 1, 2019, that will be used to fuel a motor vehicle must submit an application fee, based upon the number of CNG powered vehicles, to the department no later than January 20, 2019. Beginning January 1, 2019, each personal producer of compressed natural gas must submit an application with the applicable fee per CNG vehicle to the department within 20 calendar days from the completed date of installation of a new system to compress natural gas that will be used to fuel a motor vehicle.
(2) There is hereby levied an annual application fee of one hundred ($100) per vehicle for all personal producers of compressed natural gas in lieu of the excise tax levied in subsection (a). The annual application fee is due January 20 of each calendar year beginning with January 1, 2019, and each calendar year thereafter. If a CNG vehicle is purchased, by the personal producer who has installed a system to compress natural gas, after January 1 in any calendar year, the application fee is due to the department within 20 calendar days following purchase or acquisition of the CNG powered vehicle. If any vehicle is acquired, natural gas system installed, or vehicle put in operation after June 30 the fee shall be one-half the flat fee stated in this section, or after September 30, the fee shall be one-fourth of the flat fee stated in this section. The personal producer must include the vehicle identification number of each vehicle that is powered by compressed natural gas, the purchase date of the CNG vehicle, date of installation of system, and any other documentation the department deems necessary on the annual application. The annual fee shall not apply to a fleet producer. A bond will not be required for a personal producer of compressed natural gas who files the annual application fee. A refund will not be granted to the personal producer if the vehicle is sold during the calendar year. The personal producer is required to notify the department within 20 calendar days if he or she ceases to be a personal producer of compressed natural gas for use in a vehicle.
(3) Failure to submit an application and required fee shall subject the personal producer to a penalty of not greater than five hundred dollars ($500) per vehicle.
(c) If the motor fuel excise tax is collected by the public seller or fleet producer of CNG or LNG or the annual application fee is remitted by the personal producer for compressed natural gas, the compressed natural gas or liquefied natural gas shall not be subject to sales or use tax levied by this state.
(Act 2017-229, §2.)
Each application for a license under this article must be made upon a form prescribed by the commissioner and furnished by the department.
(Act 2017-229, §2.)
Each person engaged in business in this state as a public seller of CNG/LNG or a fleet producer of CNG/LNG shall first obtain a public seller of CNG/LNG or a fleet producer of CNG/LNG license. The application fee for a public seller of CNG/LNG or a fleet producer of CNG/LNG license is fifty dollars ($50). Only one license is necessary for multiple locations; however, the public seller of CNG/LNG or a fleet producer of CNG/LNG must remit a twenty-five dollar ($25) registration fee for each additional location in existence or upon establishing or acquiring a new location.
(Act 2017-229, §2.)
(a) Upon approval of the application by the department, the applicant must file with the department a surety bond. The bond amount for an applicant for a license as a public seller of CNG/LNG or a fleet producer of CNG/LNG shall be a minimum of twenty-five thousand dollars ($25,000) or in the approximate amount of twice the average monthly tax liability, whichever is greater.
(b) The department shall review the bond amounts every five years beginning January 2023 to ensure that each public seller of CNG/LNG and each fleet producer of CNG/LNG has posted a surety bond sufficient to cover twice the average monthly tax liability as referenced in subsection (a). Based upon this review, or if at any time that the department determines that the bond amount is insufficient to cover twice the average monthly tax liability, the commissioner may require an additional surety bond from any licensee if:
(1) The commissioner determines that the surety on an existing bond is unsatisfactory;
(2) A surety notifies the department that it intends to cancel a bond as provided in subsection (d); or
(3) The commissioner, after reviewing the payment history of the licensee, determines that the existing bond of the licensee is insufficient in an amount to insure the prompt payment of all excise taxes that are due or may become due to the state by the licensee upon the sale or withdrawal of compressed natural gas or liquefied natural gas. However, in no case shall a new or additional bond be more than two months of average excise tax owed by the licensee.
(c)(1) The department shall notify a licensee at his or her last known address by first class U.S. mail or, at the option of the department, certified mail, return receipt requested, that it is requiring such new or additional bond for any reason as provided in subsection (b), and the licensee, within 60 days from the date the notice is mailed by the department, shall either:
a. File the new or additional bond as requested by the department; or
b. File a notice of appeal with the Alabama Tax Tribunal as allowed in Chapter 2A.
(2) The department may immediately cancel the licensee’s license upon the expiration of the 60-day period set out in subdivision (1) if the licensee fails to either provide the new or additional bond requested by the department or timely appeal to the Alabama Tax Tribunal.
(d)(1) Any surety on an existing bond furnished by a licensee may notify the department in writing of its intent to cancel the bond. The department shall immediately notify the licensee of the intent of the surety to cancel the surety bond, and the licensee shall have 60 days from the date the notice is mailed by the department to provide a sufficient replacement bond as requested by the department.
(2) The department may immediately cancel the licensee’s license upon expiration of the 60-day period set out in subdivision (1) if the licensee fails to either provide a new replacement bond as requested by the department or appeal the proposed revocation to the Alabama Tax Tribunal within the 60 days as allowed by Chapter 2A.
(3) The surety requesting to be released shall remain liable for any liability already accrued or which shall accrue during the 60-day period set out in subdivision (1), but shall not be responsible for any liability which accrues after the 60-day period.
(e) A surety providing a bond must be authorized to engage in business within this state. The surety bonds are conditioned upon faithful compliance with this article, including the filing of returns and the payment of all taxes prescribed in this article. The commissioner shall approve surety bonds that are sufficient in content and form, and the surety bonds shall indemnify the state against any loss arising from the failure of the licensee to pay, for any cause, the motor fuel excise tax levied by this article.
(f) A personal producer of CNG is not required to post a bond.
(Act 2017-229, §2; Act 2026-528, §1.)
(a) The department may refuse to issue a license under this article if the applicant or a principal of the applicant has done any of the following:
(1) Had a compressed natural gas or liquefied natural gas license or registration issued by this state or another state cancelled for cause.
(2) Been convicted of any offense involving fraud or misrepresentation.
(3) Been convicted of any other offense that indicates that the applicant may not comply with this article if issued a license.
(b) The department may also refuse to issue a license if the applicant is in arrears to the state for any taxes or for other good cause shown.
(c) Any refusal by the department under this section to issue a license may be appealed to the Alabama Tax Tribunal under Chapter 2A.
(Act 2017-229, §2.)
Upon approval of the required bond, the department shall issue the license to the applicant. The license is not transferable and remains in effect until surrendered or cancelled.
(Act 2017-229, §2.)
(a) A licensee who discontinues in its entirety the business for which a license was authorized by this article shall notify the department in writing at least 10 days prior to the time the discontinuance, sale, or transfer takes effect and shall surrender the license to the department. The notice shall state the effective date of the discontinuance and, if the licensee has transferred the business or otherwise relinquished control to another person by sale or other means, the date of the sale or transfer and the name and address of the person to whom the business is transferred or relinquished. The notice shall also include any other information required by the department.
(b) All taxes for which the licensee is liable under this article but are not yet payable shall be due on the date of the discontinuance. If the licensee has transferred the business to another person and does not give the notice required herein, the person to whom the business was transferred is jointly and severally liable for the amount of any tax owed by the licensee to this state on the date the business was transferred. The liability of the person to whom the business was transferred may not exceed the value of the property and business acquired from the licensee.
(Act 2017-229, §2.)
(a) In accordance with Chapter 2A, the department may cancel any license required under this article, upon written notice sent to the licensee’s last known address as it appears in the department’s files, for any of the following reasons:
(1) Filing by the licensee of a false report of the data or information required by this article.
(2) Failure, refusal, or neglect of the licensee to file a report or to provide any information required by this article.
(3) Failure of the licensee to pay the full amount of all excise taxes due or to pay any penalties or interest due.
(4) Failure of the licensee to keep accurate records of the quantities of compressed natural gas or liquefied natural gas produced, sold, or used in Alabama.
(5) Failure to file a new or additional surety bond upon request of the department pursuant to this article.
(6) Conviction of the licensee or a principal of the licensee for any act prohibited under this article.
(7) Failure, refusal, or neglect of a licensee to comply with any other provision of this article or any rule promulgated pursuant to this article.
(8) Having a compressed natural gas or liquefied natural gas license or registration issued by another state cancelled for cause.
(9) Change in the ownership or control of the licensee.
(b) The license can be cancelled upon the written request of the licensee.
(Act 2017-229, §2.)
(a) A licensed public seller of compressed natural gas or liquefied natural gas or the licensed fleet producer of compressed natural gas or liquefied natural gas may deduct the number of gallons of compressed natural gas or liquefied natural gas sold or disbursed to the following entities provided that the exempt entity has a valid exempt entity license issued in accordance with subsection (j) of Section 40-17-332:
(1) The United States government or any agency thereof.
(2) Any county governing body in this state.
(3) The governing body of any incorporated municipality in this state.
(4) City and county boards of education in this state.
(5) The Alabama Institute for Deaf and Blind, the Department of Youth Services school district, and private and church school systems, as defined in Section 16-28-1, which offer essentially the same curriculum as offered in grades K-12 in the public schools of this state.
(b) The exempt entity is not entitled to apply for a refund for any excise tax paid to the licensed public seller or licensed fleet producer. The licensed public seller or licensed fleet producer must take the deduction for all gallons of compressed natural gas or liquefied natural gas sold to the licensed exempt entity on the monthly tax return. The licensed exempt entity must provide the licensed public seller or licensed fleet producer with its exempt entity number prior to the purchase. If the licensed exempt entity is not subject to the excise tax levied under this article on compressed natural gas or liquefied natural gas, the licensed exempt entity will not be subject to the state inspection fee levied under Section 8-17-87.
(Act 2017-229, §2.)
(a) Each licensed public seller or licensed fleet producer shall file the monthly return required herein, in a format prescribed by the commissioner, on or before the 20th day of each calendar month for the preceding month.
(b) The tax levied by this article shall be paid to the department by each taxpayer on or before the 20th day of each calendar month for the preceding month and shall be accompanied by any required returns. The department may require all or certain taxpayers to file tax returns and payments electronically.
(c) If the returns or payments are not timely submitted, the taxpayer shall be subject to penalties in accordance with Chapter 2A of this title and interest in accordance with Chapter 1 of this title.
(Act 2017-229, §2.)
(a) Each return required to be filed under this article shall be on forms and by means prescribed by the commissioner and furnished by the department and shall contain any information the department considers necessary for the enforcement of this article.
(b) The report must contain all of the following information:
(1) A total of all monthly disbursements of compressed natural gas or liquefied natural gas, or both, made by the public seller or fleet producer for use in a motor vehicle for each location.
(2) A total of all monthly disbursements of compressed natural gas or liquefied natural gas to licensed exempt entities.
(3) The name and exempt entity license number of any exempt agency electing to be licensed under Section 40-17-332.
(c) The department may require the reporting of other information it considers reasonably necessary to the enforcement of this article.
(d) If the public seller or fleet producer has multiple locations, the public seller or fleet producer should file one monthly return for all locations in Alabama.
(Act 2017-229, §2.)
All tax payments due to this state that are received by a licensed public seller or a licensed fleet producer shall be held by the licensed public seller or the licensed fleet producer as trustee in trust for this state, and the licensed public seller or licensed fleet producer has a fiduciary duty to remit to the department the amount of tax received. A licensed public seller or licensed fleet producer is liable for the taxes paid to it or accrued at the time of the sale.
(Act 2017-229, §2.)
Each person required to be licensed under this article shall keep and maintain records of all purchases of natural gas, all sales or disbursement records, and other pertinent records and papers required by the department for the reasonable administration of this article for a period of no less than three years.
(Act 2017-229, §2.)
All excise taxes and fees collected under this article, less refunds and administrative fees for costs of collection, shall be paid into the State Treasury and distributed in accordance with Section 40-17-361(a).
(Act 2017-229, §2.)
(a) Each person who engages in any business activity for which a license is required by this article without having first obtained and subsequently retained a valid license shall be subject to the following civil penalties:
(1) Ten thousand dollars ($10,000) for the first violation.
(2) For each subsequent violation, the amount shall be increased by the sum of the current violation plus prior violations.
(b) Civil penalties prescribed under this section shall be assessed, collected, and paid in the same manner as the compressed natural gas or liquefied natural gas tax.
(Act 2017-229, §2.)
(a) Any person who willfully does any of the following is guilty of a Class A misdemeanor, but shall be fined not less than five thousand dollars ($5,000) nor more than twenty-five thousand dollars ($25,000):
(1) Fails to obtain a license as required by this article prior to engaging in an activity for which a license is required.
(2) Fails to pay to this state no more than 30 days after the date the tax is due the tax levied by this article.
(3) Makes a false statement on an application, return, ticket, invoice, statement, or any other document required under this article.
(4) Fails to file no more than 30 days after it is due any return required by this article.
(5) Fails to maintain any record required by this article.
(6) Makes a false statement in an application for a refund.
(7) Fails to make required disclosure of the correct amount of compressed natural gas or liquefied natural gas sold or used in this state.
(8) Dispenses into the supply tank of a motor vehicle any compressed natural gas or liquefied natural gas on which tax levied by this article has not been paid.
(b) Any person who willfully does any of the following with the intent to either evade or circumvent the tax levied by this article or assists any other person in efforts to evade or circumvent the tax shall be guilty of a Class C felony, but shall be fined not less than twenty-five thousand dollars ($25,000) nor more than fifty thousand dollars ($50,000):
(1) Fails to pay compressed natural gas or liquefied natural gas taxes and diverts the tax proceeds for other purposes.
(2) As a licensee or the agent or representative of a licensee, converts or attempts to convert compressed natural gas or liquefied natural gas tax proceeds for the use of the licensee or the licensee’s agent or representative, with the intent to defraud the state.
(3) Collects compressed natural gas or liquefied natural gas taxes when not authorized or licensed by the department to do so.
(4) Conspires with any other person or persons to engage in an act, plan, or scheme to defraud this state of compressed natural gas or liquefied natural gas tax proceeds.
(5) Fails to remit to the department any tax levied pursuant to this article if the person has added, or represented that he or she has added, the tax to the sales price for the compressed natural gas or liquefied natural gas and has collected the amount of the tax.
(c) Each offense under this section is subject to a separate criminal penalty.
(Act 2017-229, §2.)
There is appropriated from the Road and Bridge Fund to the Department of Revenue, for the fiscal year ending September 30, 2018, the department’s actual cost to implement and administer this article. Every year thereafter as a first charge against the revenues collected under this article, an amount of revenue is hereby appropriated to the Department of Revenue to offset its actual costs in the administration of this article. Such appropriations shall be in addition to any other appropriation.
(Act 2017-229, §3.)
The commissioner may adopt rules necessary to effectuate the reporting, collection, administration, and enforcement of the taxes imposed under this article. The commissioner shall prescribe the forms or format for reporting the information required in this article.
(Act 2017-229, §3.)
For the purpose of this article, the following terms shall have the meanings respectively ascribed by this section:
(1) LUBRICATING OIL. Any devices or substitutes therefor, commonly used in lubricating or oiling engines, bearings, journals, axles, hubs, and other parts of machinery; provided, that nothing contained in this article shall be held to apply to those products known commercially as “kerosene oil,” “fuel oil,” or “crude oil.”
(2) PERSON. Persons, corporations, copartnerships, companies, agencies, or associations, singular or plural.
(3) DISTRIBUTOR. Any person or manufacturer who engages in the selling of lubricating oil in this state by wholesale domestic trade, but shall not apply to any transaction by such distributor in interstate commerce.
(4) RETAIL DEALER. Any person herein defined as distributor who is also engaged in the selling of lubricating oils in this state at any place in this state in broken quantities.
(5) STORER. Any person who ships, causes to be shipped or brings into this state, or manufactures in this state, lubricating oils, as herein defined, in any quantity, stores the same in any container and withdraws same from storage for any purpose.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §630.)
Every distributor, manufacturer, retail dealer, or storer of lubricating oil, as herein defined, shall pay an excise tax of $.02 per gallon upon the selling, distributing, or withdrawing from storage in this state for any use lubricating oil as herein defined; provided, that this excise tax shall neither be levied upon the sale of lubricating oil in interstate commerce nor upon any sale of lubricating oil destined for out-of-state use which is transacted in a manner whereby an out-of-state purchaser takes delivery of such oil at a distributor’s plant within this state and transports it out-of-state; and provided further that this excise tax shall not be levied on lubricating oil sold to city and county governing bodies, city and county boards of education, the Alabama Institute for Deaf and Blind, the Department of Youth Services school district, and private and church schools as defined in Section 16-28-1, and which offer essentially the same curriculum as offered in grades K-12 in the public schools of this state; and provided further, that where the excise tax of $.02 per gallon upon the sale of the lubricating oil shall have been paid by a distributor, manufacturer, retail dealer, or storer, payment shall be paid but one time by any person so liable. The state Department of Revenue is hereby authorized to issue to the United States certificates of exemption, upon forms prescribed by the department, for use by the United States in purchasing lubricating oil within the State of Alabama and which is paid for by the United States. Any person in reporting and paying the tax to the department may deduct the number of gallons of lubricating oil so sold to the United States, as shown by the certificates of exemption duly executed by the United States and filed with the report. The department is authorized to adopt rules and regulations with respect to the issuance and use of the certificates.
(Acts 1935, No. 194, p. 256; Code 1940 T. 51, §631; Acts 1943, No. 477, p. 441; Acts 1980, No. 80-694, p. 1397; Acts 1987, No. 87-553, p. 854, §2; Act 2011-565, p. 1084, §44.)
Such amount of money as shall be appropriated for each fiscal year by the Legislature to the Department of Revenue with which to pay the salaries, the cost of operation and the management of the said department shall be deducted, as a first charge thereon, from the taxes collected under and pursuant to Section 40-17-171; provided, that the expenditure of said sum so appropriated shall be budgeted and allotted pursuant to Article 4 of Chapter 4 of Title 41, and limited only to the amount appropriated with which to defray the expenses of operating said department for each fiscal year. The balance of the tax collected under and pursuant to Section 40-17-171 shall remain in the State Treasury to the credit of the General Fund.
(Acts 1939, No. 386, p. 508; Code 1940, T. 51, §632; Acts 1943, No. 342, p. 323; Acts 1951, No. 846, p. 1477; Acts 1955, No. 42, p. 259.)
The excise tax imposed by this article shall apply to persons, firms, corporations, dealers, or distributors storing lubricating oil and distributing the same or allowing the same to be withdrawn from storage, whether such withdrawals are for sale or for use; provided, that “sellers” of lubricating oil and its substitutes paying the tax herein provided may pay the same computed and paid on a basis of their sales as hereinafter required, and storers and distributors shall compute and pay this tax on the basis of their withdrawals or distributions.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §633.)
(a) Each person, firm, corporation, or agency selling diesel fuel, other than transmix, across the rack at a terminal within this state shall pay to the Department of Revenue for the use of the state, within two weeks from the beginning of the fiscal year, a wholesale oil license fee equal to three-fourths of one cent per gallon for each gallon of diesel fuel so sold during the preceding fiscal year, including all diesel fuel whether manufactured or imported into the state prior to the sale. Exempted from this fee shall be diesel fuel exported from this state for which proof of export is available in the form of a terminal issued shipping document.
(b) Each importer of diesel fuel, other than transmix, into this state, other than by a bulk transfer, for delivery to a destination in this state shall pay to the Department of Revenue for the use of the state within two weeks from the beginning of the fiscal year, an import license fee equal to three-fourths of one cent per gallon for each gallon of diesel fuel imported during the preceding fiscal year; excluding any gallons for which a permissive supplier collected the fee from the importer, in accordance with subsection (c).
(c) A permissive supplier shall collect the import license fee imposed by subsection (b) from the person who purchases the diesel fuel, other than transmix, for import into this state. The permissive supplier shall remit the fee within two weeks from the beginning of the fiscal year, for each gallon of diesel fuel sold during the preceding fiscal year.
(d) The payment to the Department of Revenue shall be accompanied by a sworn statement verified by the person having knowledge of the facts showing the number of gallons of diesel fuel sold or imported into the state during the preceding fiscal year. No county license shall be charged under this section.
(e) The sale of biodiesel fuel to a licensed supplier when delivered to a terminal shall be exempted from the wholesale oil license fee imposed under this section.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §634; Acts 1996, No. 96-521, p. 669, §1; Act 2011-565, p. 1084, §44; Act 2013-372, p. 1350, §1.)
The statement herein required to be made by the distributor, manufacturer, storer, or retail dealer shall be sworn to before some officer authorized to administer oaths, and any false or fraudulent statement sworn to shall constitute perjury; and, upon conviction thereof, the person so convicted shall be punished as provided by law.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §635.)
All distributors, manufacturers, storers, or retail dealers shall keep within the State of Alabama at some certain place or office, such books, documents, or papers as will clearly show the amount of sales or withdrawals of any oils, greases, or their substitutes made in this state covered by this article.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §636; Acts 1951, No. 850, p. 1479; Acts 1992, No. 92-186, p. 349, §50.)
Every distributor, storer, retail dealer, or manufacturer engaged in the sale or withdrawal of any oils, greases, or their substitutes, as herein defined, shall make a report on blanks furnished by the Department of Revenue to the Department of Revenue showing the place and post-office address at which he is engaged in the business of distributor, storer, retail dealer, or manufacturer in any oils, greases, or their substitutes, as herein defined, which information shall be entered by the Department of Revenue on a book kept for that purpose, and should such distributor, manufacturer, storer, or retail dealer move his place of business from one post-office address to another, such distributor, manufacturer, storer, or retail dealer shall within 30 days thereafter notify the Department of Revenue of such removal, giving the former place and post-office address from which the business has been removed. No person shall become distributor, manufacturer, storer, or seller of any oils, greases, or their substitutes as herein defined in this article in this state until he shall have made such reports to the Department of Revenue.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §637.)
If any distributor, manufacturer, storer, or retail dealer in any oils, greases, or their substitutes in this state covered by the provisions of this article shall fail to make the reports, or any of them, to the Department of Revenue as herein required, or shall fail to keep the records required by this article, such distributor, manufacturer, storer, or retail dealer shall be guilty of a misdemeanor and upon conviction thereof shall be fined not less than $50 nor more than $300 for each offense.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §638.)
It shall be the duty of the Department of Revenue to enforce the provisions of this article, and the Department of Revenue or its agent shall have the right to examine the books, reports, and accounts of every such distributor, manufacturer, storer, or retail dealer of any oils, greases, or their substitutes covered in this article.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §639.)
The acceptance of any money paid for the excise tax provided for in this article shall in no way preclude the collection of the money actually due; provided, that the money actually paid shall constitute a credit against the money actually due. In the event of the payment of an amount in excess of the amount due, the department may credit such excess against the tax due for any subsequent monthly period, or such excess may be refunded pursuant to the refund procedures in Chapter 2A of this title, provided, that no credit shall be allowed unless made within the time provided for refunds under Chapter 2A of this title.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §640; Acts 1943, No. 472, p. 437; Acts 1951, No. 941, p. 1608, §1; Acts 1992, No. 92-186, p. 349, §51.)
The forms for all statements and reports required by the provisions of this article shall be prescribed and furnished by the Department of Revenue, and the cost of the enforcement of this article shall be paid out of the funds derived from the excise tax herein prescribed upon a warrant of the Comptroller upon a voucher of the Chairman of the Department of Revenue and approved by the Governor.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §641.)
Any distributor, manufacturer, storer, or retail dealer who shall violate any of the provisions of this article may be restrained and the proper prosecution instituted in the name of the State of Alabama by its Attorney General or under his direction by any district attorney from distributing, selling, or withdrawing from storage any oils, greases, or their substitutes as defined in this article, the sale or withdrawal of which is taxable under this article, until such person shall have complied with the provisions of this article.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §644.)
On or before the twentieth day of each calendar month, every person liable hereunder shall render to the Department of Revenue a true and correct statement of all sales and withdrawals of the products herein taxed and at the same time pay to the Department of Revenue an amount of money equal to the excise tax herein levied.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §645.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §688.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §689.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §691; Acts 1995, No. 95-410, p. 881, §1.)
(a) There is hereby levied in addition to all other taxes of every kind now imposed by law an excise tax on lubricating oil of $.04 per gallon, which shall be collected as herein provided.
(b) Every manufacturer, distributor, refiner, retail dealer, storer, or user of lubricating oil shall collect and pay over to the state Department of Revenue an excise tax of $.04 per gallon upon the selling, use or consumption, distributing, storing, or withdrawing from storage in this state for any use of lubricating oil as defined or otherwise referred to in this article, except lubricating oil expressly exempted by the provisions of this article. Provided, that where any excise tax imposed by this section upon the sale, use or consumption, distribution, storage or withdrawal from storage in this state of gasoline or lubricating oil shall have been paid to the state by a manufacturer, distributor, refiner or by any retail dealer, storer, or user, the payments shall be sufficient, the intent being that the tax shall be paid to the state but once.
(c) The following are expressly exempted from the provisions of this article:
(1) Lubricating oil used in aircraft powered by reciprocating engines, or jet or turbine engines;
(2) Lubricating oil used in ships, vessels, barges, railroad locomotives, and other railroad equipment;
(3) Lubricating oil sold to be used for agricultural purposes;
(4) Lubricating oil sold to governing bodies of counties and incorporated municipalities;
(5) Lubricating oil sold to be used in off-road vehicles which presently do not require state licensing; specifically, but not limited to, forklifts and other like devices not for use on the streets and highways of this state;
(6) Lubricating oil sold to city and county boards of education; and
(7) Lubricating oil sold to private and church school systems as defined in Section 16-28-1, and which offer essentially the same curriculum as offered in grades K-12 in the public schools of this state, Alabama Institute for Deaf and Blind, and the Department of Youth Services.
(8) Lubricating oil sold to the United States.
(Acts 1980, No. 80-427, p. 590, §1; Acts 1981, No. 81-787, p. 1379; Acts 1987, No. 87-553, p. 854, §3; Acts 1995, No. 95-410, p. 881, §1; Act 2004-546, p. 1164, §1; Act 2011-565, p. 1084, §44.)
The provisions of this article pertaining to lubricating oil and the tax herein levied on lubricating oil shall be administered and collected in accordance with Sections 40-17-170, 40-17-173, 40-17-176 through 40-17-186, or as otherwise provided in this title.
(Acts 1980, No. 80-427, p. 590, §2; Acts 1984, 1st Ex. Sess., No. 84-798, p. 211; Acts 1992, No. 92-186, p. 349, §52; Acts 1995, No. 95-410, p. 881, §1; Act 2011-565, p. 1084, §44.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1980, No. 80-427, p. 590, §3; Act 2004-546, §1.)
All revenues received or collected by the Department of Revenue upon the selling, use or consumption, distributing, storing, or withdrawing from storage in this state of lubricating oil remaining after the payment of the expense of administration and enforcement of this article are hereby allocated and appropriated in the following manner:
(1) Forty-five percent of the net tax proceeds is hereby allocated and appropriated for state highway purposes and as the state’s share of the net tax proceeds to be covered into the State Treasury to the credit of the Public Road and Bridge Fund and disbursed as provided in this article.
(2) Fifty-five percent of the net tax proceeds is hereby allocated and appropriated to be used for highway purposes by the counties and municipalities to be covered into the State Treasury and disbursed and allocated as hereinafter provided in this section.
a. A portion of the local subdivisions’ share of the net tax proceeds that is equal to 25 percent of the net tax proceeds shall be allocated equally among the 67 counties of the state.
b. The entire residue of the local subdivisions’ share of the net tax proceeds, being an amount equal to 30 percent of the net tax proceeds shall be allocated among the 67 counties of the state on the basis of the ratio of the population of each county to the total population of the state according to the then next preceding federal decennial census, or any special federal census heretofore held in any county subsequent to the effective date of the 1970 Federal Decennial Census. The allocation provided for in this subsection shall be made on or prior to the tenth day of each month with respect to receipts of the lubricating oil tax by the state during the preceding month.
c. The distributions provided for in this subdivision shall be made monthly. The amounts allocated or apportioned to each county shall be disposed of as follows:
Ten percent of the amount so allocated or apportioned to each county shall be distributed among the municipalities in the county with respect to which the allocation or apportionment is made, each distribution among the municipalities to be made on the basis of the ratio of the population of each municipality to the total population of all municipalities in the applicable county according to the then next preceding federal decennial census; and
The remaining portion of the amount so allocated or apportioned to each county shall be distributed to the county with respect to which the allocation or apportionment is made.
d. The population of any municipality incorporated subsequent to the taking of the then next preceding federal decennial census shall be deemed to be the population shown by the census for that municipality taken pursuant to the requirements of Section 11-41-4. Any municipality incorporated after September 30, 1978 shall not participate in the distribution provided for in this section until the fiscal year next succeeding the fiscal year during which it is incorporated, the first distribution to that municipality to be made in respect of receipts of the lubricating oil tax by the state during October of the fiscal year next succeeding its incorporation.
e. When requested to do so by any municipality, the Department of Transportation may at its discretion make available the services and advice of its engineers and other employees with respect to any work for which that municipality proposes to expend moneys distributed to it under this subdivision. Any services and advice that may be so made available shall be provided under the terms and conditions as may be mutually agreeable to the Department of Transportation and the municipality.
(Acts 1980, No. 80-427, p. 590, §4; Act 2011-565, p. 1084, §44.)
[Repealed]
Repealed by Act 2013-402, §2, effective August 1, 2013.
(Acts 1980, No. 80-427, p. 590, §5; Acts 1987, No. 87-675, p. 1205.)
The State Treasurer shall make all allocations of the revenue collections and shall make the distribution and payments thereof pursuant to such allocations provided for in this article.
(Acts 1980, No. 80-427, p. 590, §6.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1988, No. 88-641, p. 1027; Acts 1991, No. 91-672, p. 1310, §1.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1991, No. 91-665, p. 1273, §1.)
For the purpose of this article, the following words shall have the following meanings:
(1) AGREEMENT. The International Fuel Tax Agreement.
(2) BASE JURISDICTION. The member jurisdiction where qualified motor vehicles are based for vehicle registration purposes.
(3) COMMISSIONER. The Commissioner of the Department of Revenue.
(4) DEPARTMENT. The Department of Revenue.
(5) IN-JURISDICTION DISTANCE. The total number of miles or kilometers operated by a registrant’s/licensee’s qualified motor vehicles within a jurisdiction including miles operated under an International Fuel Tax Agreement temporary permit.
(6) JURISDICTION. Any of the states of the United States, the District of Columbia, or a state or province of a foreign country or a territory or possession of either the United States or a foreign country.
(7) LICENSEE. A person who holds a valid International Fuel Tax Agreement license issued by the base jurisdiction, as evidenced by an identification marker as defined under Section 40-17-150(a).
(8) MEMBER. A jurisdiction belonging to the International Fuel Tax Agreement, or other reciprocal agreements entered into on behalf of this state.
(9) MOTOR FUEL. Gasoline, diesel fuel, and any other inflammable liquid or substance by whatever name it may be known and sold, the use of which is as a fuel for the propulsion of motor vehicles.
(10) MOTOR VEHICLE. A motor vehicle designed, or maintained for transportation of persons or property, except recreational vehicles, and which meets any of the following:
a. Has two axles and a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds or 12,000 kilograms.
b. Has three or more axles regardless of weight.
c. Is used in combination, when the weight of the combination exceeds 26,000 pounds or 12,000 kilograms gross vehicle or registered gross vehicle weight.
(11) RECREATIONAL VEHICLE. Vehicles such as motor homes, pickup trucks with attached campers, and buses when used exclusively for personal pleasure by an individual, and not used in connection with any business endeavor.
(Acts 1994, No. 94-586, p. 1078, §1.)
(a) Notwithstanding any other provisions of this law, the Commissioner of the Department of Revenue is authorized to enter into reciprocal agreements on behalf of this state with the duly authorized representatives of any of the states of the United States, the District of Columbia, or a state or province of a foreign country or a territory or possession of either the United States or a foreign country providing for the uniform administration of motor fuels use taxation laws with respect to motor vehicles operated in multiple member jurisdictions.
(b) In exercising the authority granted by this article, the commissioner is expressly authorized and empowered to enter into and to become a member of the International Fuel Tax Agreement or any other designation that may, from time to time, be given to that plan, developed pursuant to the Federal Intermodal Surface Transportation Efficiency Act of 1991.
(c) The commissioner is authorized to promulgate and to enforce reasonable rules and regulations as may be necessary to carry out the International Fuel Tax Agreement or any other agreement entered into under the authority of this article.
(d) If the commissioner enters into the International Fuel Tax Agreement or into any other agreement under the authority of this article, and if the provisions set forth in the International Fuel Tax Agreement or other agreements are different from the provisions prescribed by this code or any rules or regulations promulgated by the commissioner pursuant to the authority granted hereunder to the commissioner, then the agreement provisions shall prevail.
(e) Any agreement entered into pursuant to this article shall be stated and agreed to in writing and shall be filed with the commissioner before it becomes effective. A current copy of any such agreement shall be maintained by the department.
(Acts 1994, No. 94-586, p. 1078, §2.)
An agreement pursuant to this article may provide for determining the base state for users, user’s records requirements, audit procedures, exchange of information, persons eligible for licensing, define qualified motor vehicles, determine bonding requirement, specify reporting requirements and periods, define uniform penalty and interest rates for late reporting, determine methods for the collecting and forwarding of motor fuel taxes and penalties to another jurisdiction, and may include other provisions to facilitate the administration of the agreement.
(Acts 1994, No. 94-586, p. 1078, §3.)
The department may collect any motor fuel taxes and fees due the members of the agreement under the provisions therein, and may deposit taxes and fees collected into an escrow account, until the time as the taxes and fees can be distributed to the respective members.
(Acts 1994, No. 94-586, p. 1078, §4.)
(a) The proceeds of the tax herein levied accruing to the State of Alabama, less the actual costs of collection, shall be paid by the department to the State Treasurer for disbursement as follows:
(1) That portion of the tax that is attributable to the use of motor fuel subject to the gasoline tax shall be disbursed in the manner provided by law for the disbursement of the proceeds of the gasoline tax.
(2) That portion of the tax that is attributable to the use of motor fuel subject to the diesel fuel tax shall be disbursed in the manner provided by law for the disbursement of the proceeds of the diesel fuel tax.
(b) The cost of collection shall be the sum of money appropriated each year by law to the department with which to pay salaries and the cost of operation of the department related to the taxes collected pursuant to this article, which shall be deducted, as a first charge from the taxes collected pursuant to this article. The expenditure of the funds appropriated shall be budgeted and allotted pursuant to Article 4 of Chapter 4 of Title 41, and shall be limited to the amount appropriated to defray the expenses of operating the department for each fiscal year related to the collection of this tax.
(Acts 1994, No. 94-586, p. 1078, §5.)
The agreement pursuant to this article may provide for each state to audit the records of persons based in the state to determine if the motor fuel taxes due each state are properly reported and paid. Each state shall forward the findings of the audits performed on persons based in this state to each state in which the person has used taxable motor fuels. For persons who are not based in this state and who have used taxable motor fuel in this state, the department shall serve the audit findings received from another state in the form of an assessment on the person as though an audit was conducted by the department.
(Acts 1994, No. 94-586, p. 1078, §6.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1995, No. 95-410, p. 881, §2.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1995, No. 95-410, p. 881, §3.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1957, No. 743, p. 1173, §2; §40-17-100; amended and renumbered by Act 2008-275, p. 402, §6.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1957, No. 743, p. 1173, §1; §40-17-101; amended and renumbered by Act 2008-275, p. 402, §6.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
Acts 1957, No. 743, p. 1173, §3; Acts 1959, No. 416, p. 1104, §1; Acts 1992, No. 92-203, p. 486, §5; §40-17-102; amended and renumbered by Act 2008-275, p. 402, §6.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1957, No. 743, p. 1173, §4; Acts 1959, No. 416, p. 1104, §2; Acts 1969, No. 1155, p. 2160; Acts 1992, No. 92-203, p. 486, §6; §40-17-103; amended and renumbered by Act 2008-275, p. 402, §6.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1957, No. 743, p. 1173, §5; Acts 1959, No. 416, p. 1104, §3; Acts 1969, No. 1155, p. 2160; §40-17-104; amended and renumbered by Act 2008-275, p. 402, §6.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1957, No. 743, p. 1173, §6; §40-17-105; amended and renumbered by Act 2008-275, p. 402, §6.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1957, No. 743, p. 1173, §7; §40-17-106; amended and renumbered by Act 2008-275, p. 402, §6.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1957, No. 743, p. 1173, §7(a); §40-17-107; amended and renumbered by Act 2008-275, p. 402, §6.)
[Repealed]
Repealed by Act 2011-565, p. 1084, §45, effective October 1, 2012.
(Acts 1957, No. 743, p. 1173, §8; §40-17-108; amended and renumbered by Act 2008-275, p. 402, §6.)
This article shall be known and may be cited as the Alabama Terminal Excise Tax Act.
(Act 2011-565, p. 1084, §1.)
The intent of this article is to establish an efficient, uniform, motor fuel tax collection and enforcement system, to increase conformity and compatibility with federal motor fuel laws, and to position the state to take advantage of advances in highway enforcement systems and technology in order to more effectively deter motor fuel tax evasion emanating from sources within and without this state.
(Act 2011-565, p. 1084, §2.)
As used in this article and unless the context requires otherwise, the following terms have the meaning ascribed herein:
(1) AIRCRAFT. Any airplane or helicopter.
(2) ASSOCIATE JOBBER. A person who acquires motor fuel from a licensed distributor in this state for subsequent sale. An associate jobber may obtain a distributor’s license even though it does not acquire fuel from a supplier in this state.
(3) AVIATION FUEL. Aviation gasoline or aviation jet fuel.
(4) AVIATION GASOLINE. Motor fuel designed for use in the operation of aircraft other than jet aircraft, and sold or used for that purpose.
(5) AVIATION JET FUEL. Motor fuel designed for use in the operation of jet or turbo-prop aircraft and sold or used for that purpose.
(6) BIODIESEL FUEL. Any motor fuel or mixture of motor fuels that is derived, in whole or in part, from agricultural products or animal fats, or the wastes of such products or fats, and is advertised as, offered for sale as, suitable for use or used as motor fuel in a diesel engine.
(7) BLENDED FUEL. A mixture composed of gasoline or diesel fuel and any other liquid that can be used as a motor fuel in a highway vehicle.
(8) BLENDER. A person who produces blended motor fuel outside the bulk transfer/terminal system.
(9) BLENDING. The mixing of one or more petroleum products, with or without another product, regardless of the original character of the product blended, if the product obtained by the blending is capable of use in the generation of power for the propulsion of a motor vehicle, an airplane, or a marine vessel. Blending does not include mixing that occurs in the process of refining by a refiner of crude petroleum and applicable feedstocks and blendstocks, or the blending of products known as lubricating oil in the production of lubricating oils and greases.
(10) BULK END USER. A person who receives into his or her own storage facilities, in transport truck lots, taxable motor fuel for his or her own consumption.
(11) BULK PLANT. A motor fuel storage and distribution facility that is not a terminal and from which motor fuel may be removed at a rack.
(12) BULK TRANSFER. Any transfer of motor fuel from one location to another by pipeline tender or marine delivery within a bulk transfer/terminal system, including, but not limited to, the following:
a. The movement of motor fuel from a refinery or terminal to a terminal by marine vessel or barge;
b. the movement of motor fuel from a refinery or terminal to a terminal by pipeline;
c. the book or in-tank transfer of motor fuel within a terminal between licensed suppliers prior to the completion of removal across the rack; and
d. a two-party exchange between licensed suppliers or between licensed suppliers and permissive suppliers.
(13) BULK TRANSFER/TERMINAL SYSTEM. The motor fuel distribution system consisting of refineries, pipelines, marine vessels, and terminals.
(14) CELLULOSIC BIOFUEL. Renewable fuel that is derived from any cellulose, hemi-cellulose, or lignin, or as may be defined as cellulosic biofuel by the Renewable Fuel Standards, 40 C.F.R. Part 80, Subpart M, as amended from time to time.
(15) CODE. The Code of Alabama 1975.
(16) COMMISSIONER. The Commissioner of the Alabama Department of Revenue.
(17) DEPARTMENT. The Alabama Department of Revenue.
(18) DESTINATION STATE. The state, territory, or foreign country to which motor fuel is directed for delivery.
(19) DIESEL FUEL. Any liquid that is advertised, offered for sale, or sold for use as or used as a motor fuel in a diesel-powered engine. Diesel fuel includes #1 and #2 fuel oils, kerosene, special fuels, and blended fuels which contain diesel fuel, but shall not include gasoline or aviation fuel.
(20) DISTRIBUTOR. A person who acquires motor fuel from a supplier in this state for subsequent sale.
(21) DYED DIESEL FUEL. Diesel fuel that meets the dyeing and marking requirements of Section 4082, Title 26 of the United States Code.
(22) EXPORT. Motor fuel obtained in Alabama for sale or other distribution in another state, territory, or foreign country.
(23) EXPORTER. A person who exports motor fuel.
(24) GASOHOL. A blended motor fuel composed of gasoline and motor fuel grade alcohol.
(25) GASOLINE. Any product commonly or commercially known as gasoline, regardless of classification, that is advertised, offered for sale, or sold for use as or used as motor fuel in an internal combustion engine, including gasohol and blended fuel which contains gasoline. Gasoline also includes gasoline blendstocks as defined under Section 4081, Title 26 of the United States Code and the regulations promulgated thereunder. Gasoline does not include special fuel or aviation gasoline sold to a licensed aviation fuel purchaser for use in an aircraft motor.
(26) GROSS GALLONS. The total measured product, exclusive of any temperature or pressure adjustments, considerations, or deductions, in U.S. gallons.
(27) HIGHWAY. Includes, but is not limited to, every highway, road, street, alley, lane, court, place, trail, drive, bridge, viaduct, or trestle located within this state and laid out or erected by the public or dedicated or abandoned to the public or intended for use by or for the public. The term shall also apply to and include driveways upon the grounds of universities, colleges, schools, and institutions but shall not be deemed to include private driveways, private roads, or private places not intended for use by the public.
(28) HIGHWAY VEHICLE. Any self-propelled vehicle that is designed for use on a highway.
(29) IMPORT. To bring motor fuel into this state for sale, use, or storage by any means of conveyance other than in the fuel supply tank of a motor vehicle. Motor fuel delivered into this state from out-of-state by or for the seller constitutes an import by the seller. Motor fuel delivered into this state from out-of-state by or for the purchaser constitutes an import by the purchaser.
(30) IMPORT VERIFICATION NUMBER. The number assigned by the department or its designee to an individual delivery of motor fuel by a transport truck or by another means of transfer outside the terminal transfer system.
(31) IMPORTER. A person who imports motor fuel into this state.
(32) IN THIS STATE. The area within the borders of Alabama, including all territory within the borders of Alabama that is owned by the United States of America.
(33) K-1 KEROSENE. A petroleum product having an A.P.I. gravity of not less than 40 degrees, at a temperature of 60 degrees Fahrenheit and a minimum flash point of 100 degrees Fahrenheit, and which meets American Society for Testing Materials Standard D-3699 as in effect on January 1, 1999.
(34) KEROSENE. All grades of kerosene, including, but not limited to, the two grades of kerosene, No. 1-K and No. 2-K, commonly know as K-1 kerosene and K-2 kerosene, respectively, described in the American Society for Testing Materials Standard D-3699, in effect on January 1, 1999, and kerosene-type jet fuel described in the American Society for Testing Materials Standard D-1655 and military specifications MIL-t-5624r and MIL-t-83133d (grades jp-5 and jp8), and any grade described as kerosene or kerosene-type jet fuel by the Internal Revenue Code and administrative guidance promulgated thereunder.
(35) LICENSEE. Any person licensed by the department pursuant to Section 40-17-332.
(36) LIQUID. Any substance that is liquid above its freezing point and at atmospheric pressure.
(37) MOTOR FUEL. Gasoline, blended fuel, aviation fuel, and diesel fuel.
(38) MOTOR FUEL TRANSPORTER. A person who transports motor fuel by pipeline or marine vessel, or outside the bulk transfer/terminal system by means of a transport vehicle, or a railroad tank car.
(39) MOTOR VEHICLE. Automobiles, motor carriers, motor trucks, motorcycles, and all other vehicles which are operated or propelled by combustion of motor fuel.
(40) NET GALLONS. The amount of motor fuel measured in gallons when adjusted to a temperature of 60 degrees Fahrenheit and a pressure of fourteen and seven-tenths pounds pressure per square inch.
(41) PERMISSIVE SUPPLIER. An out-of-state supplier that elects, but is not required, to have a supplier’s license.
(42) PERSON. Any individual, firm, cooperative, association, corporation, limited liability corporation, trust, business trust, syndicate, partnership, limited liability partnership, joint venture, receiver, trustee in bankruptcy, club, society, or other group or combination acting as a unit. Any public body, including, but not limited to, this state, any other state, and any agency, commissioner, institution, political subdivision, or instrumentality of this state or any other state shall be considered a person for the purposes of this article.
(43) POSITION HOLDER. The person who holds the motor fuel inventory position in a terminal, as reflected on the records of the terminal operator, including a terminal operator who owns motor fuel in the terminal. A person holds the inventory position in motor fuel when that person has a contract with the terminal operator for the use of storage facilities and terminaling services for motor fuel at the terminal.
(44) RACK. A mechanism for delivering motor fuel from a refinery, terminal, marine vessel, or bulk plant into a transport vehicle, railroad tank car, or other means of transfer that is outside the bulk transfer/terminal system.
(45) REFINER. Any person who owns, operates, or otherwise controls a refinery.
(46) REFINERY. A facility, other than natural gas processing or fractionation plants, used to produce taxable motor fuel from crude oil, unfinished oils, natural gas liquids, or other hydrocarbons and from which taxable motor fuel may be removed by pipeline, by vessel, or at a rack.
(47) REMOVAL. Physical transfer other than by evaporation, loss, or destruction. A physical transfer to a transport vehicle or other means of conveyance outside the bulk transfer/terminal system is complete upon delivery into the means of conveyance.
(48) RETAILER. A person other than a wholesale distributor that engages in the business of selling or distributing taxable motor fuel to the end user within this state.
(49) SHIPPING DOCUMENT. Any invoice, shipping paper, bill of lading, or drop ticket which discloses the destination state.
(50) SPECIAL FUEL. Any liquid, other than gasoline, used or suitable for use as motor fuel in a diesel-powered engine or motor to propel any form of vehicle, machine, or mechanical contrivance, and includes products commonly known as biodiesel fuel and transmix. Special fuel does not include any petroleum product or chemical compound such as alcohol, industrial solvent, or lubricant, unless blended in or sold for use as motor fuel in a diesel powered engine.
(51) STATE. The State of Alabama.
(52) SUPPLIER. A person who is subject to the general taxing jurisdiction of this state and registered under Section 4101 of the Internal Revenue Code for transactions in motor fuel in the bulk transfer/terminal distribution system and who owns motor fuel in the bulk transfer/terminal system, or a person who receives motor fuel in this state pursuant to a two-party exchange. A terminal operator shall not be considered a supplier based solely on the fact that the terminal operator handles motor fuel consigned to it within a terminal.
(53) TERMINAL. A motor fuel storage and distribution facility into which motor fuel is supplied by pipeline or marine vessel, and from which motor fuel may be removed at a rack.
(54) TERMINAL OPERATOR. A person who owns, operates, or otherwise controls a terminal.
(55) TRANSMIX. A mixture of finished fuels that no longer meets the specifications for a fuel that can be used or sold without further processing.
(56) TRANSPORT VEHICLE. A vehicle designed or used to carry motor fuel over the highway, including, but not limited to, a straight truck, a straight truck/trailer combination, and a semitrailer combination rig.
(57) TRUSTEE. A person who is licensed as a supplier or a permissive supplier and receives tax payments from and on behalf of another pursuant to Section 40-17-344.
(58) TWO-PARTY EXCHANGE. A transaction in which motor fuel is transferred from one licensed supplier or permissive supplier to another licensed supplier or permissive supplier pursuant to an exchange agreement; and
a. includes a transfer from the person who holds the inventory position in taxable motor fuel in the terminal as reflected on the records of the terminal operator;
b. is completed before or contemporaneous with the removal of the product from the terminal by the receiving exchange partner; and
c. is recorded on the terminal operator’s books and records with the receiving exchange partner as the supplier that removes the motor fuel across the terminal rack for purposes of reporting the transaction to this state.
(59) UNDYED DIESEL FUEL. Diesel fuel that has not been dyed in accordance with Internal Revenue Service fuel dyeing provisions.
(Act 2011-565, p. 1084, §3; Act 2013-372, p. 1350, §1.)
The commissioner may promulgate rules necessary to effectuate the reporting, collection, administration, and enforcement of the taxes imposed under this article. The commissioner shall prescribe the forms or format for reporting the information required herein.
(Act 2011-565, p. 1084, §4.)
The department, upon request from the officials to whom are entrusted the enforcement of the motor fuel laws of any other state, may forward to such officials any information which it may have in its possession relative to the manufacture, receipt, sale, use, transportation, or shipment by any person of motor fuel, subject to the provisions of Section 40-2A-10.
(Act 2011-565, p. 1084, §5.)
(a) Subject to the exemptions provided for in this article, the tax is imposed on net gallons of motor fuel according to Section 40-17-326 at the following rates:
(1) Eighteen cents ($.18) per gallon on gasoline, which is comprised of a seven cents ($.07) excise tax, a supplemental five cents ($.05) excise tax, and an additional six cent ($.06) excise tax.
(2) Nineteen cents ($.19) per gallon on diesel fuel, comprised of a thirteen cents ($.13) excise tax and an additional six cents ($.06) excise tax.
(3) Nine and one-half cents per gallon ($.095) on aviation gasoline and three and one-half cents per gallon ($.035) on aviation jet fuel when the aviation fuel is sold to a licensed aviation fuel purchaser. Aviation gasoline is to be taxed as gasoline and aviation jet fuel is to be taxed as diesel fuel when not sold to a licensed aviation fuel purchaser.
(b) The motor fuel subject to the excise tax levied by this section shall not be subject to any other excise tax levied by this state.
However, the payment of the motor fuel excise tax levied by this section shall not exempt the seller or importer of fuel from the license fees levied by Section 40-17-174.
(Act 2011-565, p. 1084, §6; Act 2015-54, §4.)
(a) A tax is imposed on the removal within this state of motor fuel from the terminal using the terminal rack, other than by bulk transfer. The supplier shall collect the tax imposed by this article from the person who orders the withdrawal at the terminal rack.
(b) Subject to Section 40-17-340, a tax is imposed at the time motor fuel is imported into this state, other than by a bulk transfer, for delivery to a destination in this state. The supplier or permissive supplier shall collect the tax imposed by this article from the person who imports the motor fuel into this state. If the seller is not a supplier or permissive supplier, then the person who imports the motor fuel into this state shall pay the tax.
(c) A tax is imposed on the sale or transfer of motor fuel in the bulk transfer/terminal system in this state by a supplier to a person who is not registered under Section 4101 of the Internal Revenue Code for transactions in motor fuel in the bulk transfer/terminal distribution system. The supplier shall collect the tax imposed by this article from the person who orders the sale or transfer in the bulk transfer/terminal system.
(d) A tax is imposed on the blending of motor fuel at the point blended fuel is made in this state outside the bulk transfer/terminal system. The blender shall pay the tax. The rate of tax owed will be at the rate applicable for gasoline or diesel fuel and will depend on which of these two fuels is used in the blending. The number of gallons of blended fuel on which the tax is imposed is equal to the difference between the number of gallons of blended fuel made and the number of gallons of previously taxed motor fuel used to make the blended fuel.
(e) A terminal operator in this state is considered a supplier for the purpose of the tax imposed under this article unless at the time of removal both of the following occur:
(1) The terminal operator has a terminal operator’s license issued by the department for the facility from which the motor fuel is withdrawn.
(2) The terminal operator verifies that the person who removes the motor fuel has a supplier’s license.
(f) In each subsequent sale of motor fuel on which the tax has been paid, the amount of the tax shall be added to the selling price so that the tax is paid ultimately by the person using or consuming the motor fuel. Motor fuel is considered to be used when it is delivered into a fuel supply tank.
(g) Motor fuel in a refinery, a pipeline, a terminal, or a marine vessel transporting motor fuel to a refinery or terminal is in the bulk transfer/terminal system. Motor fuel in a motor fuel storage facility including, but not limited to, a bulk plant that is not part of a refinery or terminal, in the motor fuel supply tank of any engine or motor vehicle, or in any tank car, rail car, trailer, truck, or other equipment suitable for ground transportation is not in the bulk transfer/terminal system.
(Act 2011-565, p. 1084, §7.)
(a) There is hereby annually levied a tax at the rates specified by Section 40-17-325 on taxable unaccounted for motor fuel losses at a terminal in this state. For the purposes of this section, taxable unaccounted for motor fuel losses shall mean the number of net gallons of unaccounted for motor fuel losses that exceed one half of one percent of the number of net gallons removed from the terminal during the year by a bulk transfer or at the terminal rack. Unaccounted for motor fuel losses means the difference between: (1) The amount of motor fuel in inventory at the terminal at the beginning of the calendar year plus the amount of motor fuel received by the terminal during the year; and (2) the amount of motor fuel in inventory at the terminal at the end of the calendar year plus the amount of motor fuel removed from the terminal during the year. Accounted for motor fuel losses which have been approved by the department or motor fuel losses constituting part of a transmix shall not constitute unaccounted for motor fuel losses.
(b) The terminal operator is liable for the tax levied by this section on unaccounted gallons. Motor fuel received by a terminal operator and not shown on an informational report filed by the terminal operator with the department as having been removed from the terminal is presumed to be unaccounted for motor fuel losses. A terminal operator may rebut this presumption by establishing that motor fuel received at a terminal, but not shown on an informational report as having been removed from the terminal, was an accounted for loss or constitutes part of a transmix.
(Act 2011-565, p. 1084, §8.)
(a) The tax levied pursuant to Section 40-17-325 is levied on all of the following:
(1) Dyed diesel fuel that is used to operate a highway vehicle other than dyed diesel fuel used in city and county vehicles.
(2) Motor fuel that is used to operate a highway vehicle after an application for a refund of tax paid on the motor fuel is made or allowed on the basis that the motor fuel was used for an off-highway purpose.
(3) Aviation gasoline on which a tax was imposed under subdivision (3) of subsection (a) of Section 40-17-325 that is used other than for fuel in an aircraft is subject to the tax rate imposed under subdivision (1) of subsection (a) of Section 40-17-325.
(4) Aviation jet fuel on which a tax was imposed under subdivision (3) of subsection (a) of Section 40-17-325 that is used other than for fuel in an aircraft is subject to the tax rate imposed under subdivision (2) of subsection (a) of Section 40-17-325.
(b) The operator of a highway vehicle that uses untaxed or refunded motor fuel that is taxable under subdivisions (1) and (2) of subsection (a) is liable for the tax. If the highway vehicle that uses the motor fuel is owned by or leased to a motor carrier, the operator of the highway vehicle and the motor carrier are jointly and severally liable for the tax. If the ultimate vendor of motor fuel taxable under this section knew or had reason to know that the motor fuel would be used for a purpose that is taxable under this section, the operator of the highway vehicle and the end seller are jointly and severally liable for the tax.
(c) The licensed aviation fuel dealer selling the aviation gasoline or aviation jet fuel that is not used in an aircraft is liable for the tax owed under subdivisions (3) and (4) of subsection (a).
(d) The tax liability levied by this section is in addition to any other penalty imposed pursuant to this article.
(Act 2011-565, p. 1084, §9.)
(a) Unless otherwise provided for in this subsection, sales of motor fuel to the following are exempt from the tax levied by subsection (a) of Section 40-17-325 and shall not be paid at the rack:
(1) All motor fuel exported from this state for which proof of export is available in the form of a terminal issued destination state shipping document that is a. exported by a supplier who is licensed in the destination state or b. is sold by a supplier to a licensed exporter for immediate export to a state for which the applicable destination state motor fuel excise tax has been collected by the supplier who is licensed to remit the tax to the destination state. If the motor fuel is exempt from the excise tax due to the product being exported from this state, then the motor fuel exported from this state shall also be exempt from the inspection fee imposed under Section 8-17-87. This exemption shall not apply to any motor fuel which is transported and delivered outside this state in the motor fuel supply tank of a highway vehicle.
(2) All K-1 Kerosene or aviation jet fuel that is produced at a refinery in this state and is either exported from this state directly by the operator of that refinery or is sold for immediate export by the operator to a licensed exporter. In either case proof of export is to be available in the form of a terminal destination state shipping document and in addition all relevant sales documents are to reference the product known as “K-1 Kerosene” or “aviation jet fuel,” as applicable. If the K-1 Kerosene is exempt from the excise tax due to the product being exported from this state, then the K-1 Kerosene that is exported shall also be exempt from the inspection fee imposed under Section 8-17-87.
(3) All sales of dyed diesel fuel.
(4) Gasoline blendstocks or cellulosic biofuel, as defined in Section 40-17-322, when sold to a. a licensed supplier or b. a person who will not be using the blendstocks or cellulosic biofuel in the manufacture of gasoline or as a motor fuel, as evidenced by the exemption certificate prescribed under regulations promulgated under Section 4081, Title 26 of the United States Code. If the gasoline blendstocks or cellulosic biofuel is exempt from the excise tax due to the product being sold to a licensed supplier or to a person who will not be using the blendstocks or cellulosic biofuel in the manufacture of gasoline or as a motor fuel, then the gasoline blendstocks or cellulosic biofuel shall also be exempt from the inspection fee imposed under Section 8-17-87.
(5) All motor fuel sold by a licensed supplier or licensed permissive supplier to an exempt agency electing to be licensed under Section 40-17-332. If the motor fuel is exempt from the excise tax due to the product being sold to the United States government or any agency thereof, who is a licensed exempt entity in this state, then the motor fuel sold to the United States government or any agency thereof shall also be exempt from the inspection fee imposed under Section 8-17-87. If the motor fuel is exempt from the excise tax due to the product being sold to a licensed exempt entity, other than the federal government, then the motor fuel sold to the licensed exempt entity shall be subject to the inspection fee imposed under Section 8-17-87 and the inspection fee shall be remitted by the supplier or permissive supplier on the monthly inspection fee return.
(6) Motor fuel that is delivered by a licensed supplier from one terminal to another terminal when ownership in the motor fuel has not changed, or by a licensed supplier from a terminal to a refinery operated by the licensed supplier. If the motor fuel is exempt from the excise tax due to the product being transferred from one terminal to another terminal, then the motor fuel transferred from one terminal to another terminal shall also be exempt from the inspection fee imposed under Section 8-17-87.
(b) Having first paid the tax owed under this article, a licensed distributor shall have the right to apply to the department on a monthly basis for a refund of the taxes paid on the gallons sold by that licensed distributor to the exempt agencies listed under subsection (e), provided the exempt agency has elected to obtain a license under Section 40-17-332. If the motor fuel is exempt from the excise tax due to the product being sold to the United States government or any agency thereof, who is a licensed exempt entity in this state, then the motor fuel sold to the United States government or any agency thereof shall also be exempt from the inspection fee imposed by Section 8-17-87. If the motor fuel is exempt from the excise tax due to the product being sold to a licensed exempt entity, other than the federal government, then the motor fuel sold to the licensed exempt entity shall be subject to the inspection fee imposed under Section 8-17-87. The department is authorized to reduce the excise tax refund by the amount of the inspection fee that is due.
(c) Having first paid the tax owed under this article, an exporter shall have the right to apply to the department on a monthly basis for a refund of the taxes paid to this state on the gallons of motor fuel that are ultimately exported by the exporter. The department will require the exporter to provide proof of payment of the applicable destination state excise taxes before issuing a refund. If the motor fuel is exempt from the excise tax due to the product being exported from this state, then the motor fuel exported from this state shall also be exempt from the inspection fee imposed under Section 8-17-87.
(d) Having first paid the tax owed under this article, a licensed aviation fuel purchaser shall have the right to apply to the department on a monthly basis for a refund of the taxes paid to this state on the gallons of jet fuel sold to a certificated or licensed air carrier that purchases jet fuel within this state and uses the jet fuel to propel aircraft powered by jet or turbine engines operated in scheduled all-cargo operations being conducted on international flights or in international commerce. For the purposes of this subsection, the following words or terms shall be defined and interpreted as follows:
(1) AIR CARRIER. Any person, firm, corporation, or entity undertaking by any means, directly or indirectly, to provide air transportation.
(2) ALL-CARGO OPERATIONS. Any flight conducted by an air carrier for compensation or hire other than a passenger carrying flight, except passengers as specified in Section 121.583 (a) or 135.85 of the Federal Aviation Regulations, as amended.
(3) INTERNATIONAL COMMERCE. Any air carrier engaged in all-cargo operations transporting goods for compensation or hire on international flights.
(4) INTERNATIONAL FLIGHTS. Any air carrier conducting scheduled all-cargo operations between any point within the 50 states of the United States and the District of Columbia and any point outside the 50 states of the United States and the District of Columbia, including any interim stops within the United States so long as the ultimate origin or destination of the aircraft is outside the United States and the District of Columbia.
(e) Having first paid the tax to its vendor, the following entities shall have the right to apply to the department for a refund on a quarterly basis for any purchases of motor fuel:
(1) The United States government or any agency thereof. If the motor fuel is exempt from the excise tax due to the product being sold to the United States government or any agency thereof, which is a licensed exempt entity in this state, then the motor fuel sold to the United States government or any agency thereof shall also be exempt from the inspection fee imposed under Section 8-17-87.
(2) Any county governing body of this state. If the motor fuel is exempt from the excise tax due to the product being sold to a licensed exempt entity, which is a county governing body, then the motor fuel sold to the licensed exempt entity shall be subject to the inspection fee imposed under Section 8-17-87. The department is authorized to reduce the excise tax refund by the amount of the inspection fee that is due.
(3) Any incorporated municipal governing body of this state. If the motor fuel is exempt from the excise tax due to the product being sold to a licensed exempt entity, which is an incorporated municipal governing body, then the motor fuel sold to the licensed exempt entity shall be subject to the inspection fee imposed under Section 8-17-87. The department is authorized to reduce the excise tax refund by the amount of the inspection fee that is due.
(4) City and county boards of education of this state. If the motor fuel is exempt from the excise tax due to the product being sold to a licensed exempt entity, which is a city or county board of education, then the motor fuel sold to the licensed exempt entity shall be subject to the inspection fee imposed under Section 8-17-87. The department is authorized to reduce the excise tax refund by the amount of the inspection fee that is due.
(5) The Alabama Institute for Deaf and Blind, the Department of Youth Services school district, and private and church school systems as defined in Section 16-28-1, and which offer essentially the same curriculum as offered in grades K-12 in the public schools of this state. If the motor fuel is exempt from the excise tax due to the product being sold to a licensed exempt entity, as listed herein, then the motor fuel sold to the licensed exempt entity shall be subject to the inspection fee imposed under Section 8-17-87. The department is authorized to reduce the excise tax refund by the amount of the inspection fee that is due.
(f) If the sale of taxable motor fuel to exempt entities listed in subsection (e) occurs at a fixed retail pump available to the general public and is charged to a credit card issued to the exempt entity, the issuer of the card, having billed the exempt entity without the tax, may apply on a quarterly basis for a refund of the motor fuel excise taxes by submitting the application and supporting documentation as prescribed by the department. If the motor fuel is exempt from the excise tax due to the product being sold to the United States government or any agency thereof, which is a licensed exempt entity in this state, then the motor fuel sold to the United States government or any agency thereof shall also be exempt from the inspection fee imposed under Section 8-17-87. If the motor fuel is exempt from the excise tax due to the product being sold to any of the entities listed in subdivisions (2) through (5) of subsection (e), which is a licensed exempt entity in this state, then the motor fuel sold to the entities listed in subdivisions (2) through (5) of subsection (e) shall be subject to the inspection fee imposed under Section 8-17-87. The department is authorized to reduce the excise tax refund by the amount of the inspection fee that is due.
(g) Having first paid the tax, a licensed air carrier with a hub operation within this state shall have the right to apply to the department for a refund on a quarterly basis for any purchases of jet fuel used to propel aircraft. For the purposes of this subsection, the words “hub operation within this state” shall be construed to have all of the following criteria:
(1) 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; and
(2) Passengers and/or property are regularly exchanged at the location between flights of the same or a different certificated or licensed air carrier.
(h) End users who first pay the tax levied by subdivision (2) of subsection (a) of Section 40-17-325 on all gallons of diesel fuel used in designated off-road vehicles, other off-road equipment, or for other off-road use may apply to the department for a refund on a quarterly basis. The end users who apply for a refund under this subsection shall be subject to the inspection fee levied under Section 8-17-87 unless the end user is taxed at a reduced rate or exempt from the inspection fee under Section 8-17-98. The department is authorized to reduce the excise tax refund by the amount of the inspection fee that is due.
(i) End users who first pay the tax levied by subdivision (1) of subsection (a) of Section 40-17-325 on gallons of gasoline blendstocks not used in the manufacture of gasoline or as a motor fuel may apply to the department for a refund on a quarterly basis. The end user shall be exempt from the inspection fee on blendstocks not used in the manufacture of gasoline or as a motor fuel.
(j) Tax paid on motor fuel that (1) is lost or destroyed as a direct result of a sudden and unexpected casualty, or (2) becomes unsalable or unusable as highway fuel due to such things as the contamination by dye or mixture of gasoline and diesel shall be refundable. If a refund is issued for the excise tax due to a casualty or contamination, the inspection fee levied under Section 8-17-87 shall not be due.
(k) Tax paid on transmix not used as a motor fuel or that is delivered to a refinery for further processing shall be refundable, with the person so using the transmix being eligible to file for the refund on a quarterly basis or if a licensed supplier, a credit may be taken on its monthly supplier return. If a refund or credit is issued for the excise tax on transmix, the inspection fee levied under Section 8-17-87 shall not be due.
(l) Tax paid on motor fuel within the bulk transfer system may be refunded upon sufficient proof that (1) a second tax had been paid pursuant to Section 40-17-325 or (2) the fuel was exported to another state or country. The party paying the second tax or exporting the fuel may file for a refund on a monthly basis. If a refund is issued for the excise tax due to payment of a second tax or exported in the bulk transfer system, the inspection fee levied under Section 8-17-87 shall not be due.
(Act 2011-565, p. 1084, §10; Act 2013-200, p. 391, §1; Act 2013-372, p. 1350, §1; Act 2015-54, §4.)
(a) Any person entitled to a refund pursuant to Section 40-17-329 within two years of the date that the motor fuel was purchased shall present to the department a petition accompanied by the original or duplicate original sales slip, invoice, or any other documentation approved by the department showing the gallons of motor fuel purchased and the taxes paid. The petition shall be in a format prescribed by the commissioner, shall be accompanied by supporting records, and sworn to by the applicant under the penalty of perjury.
(b) The licensed distributor filing a refund claim pursuant to subsection (b) of Section 40-17-329 shall be eligible for an administrative allowance of two cents ($.02) on each gallon of gasoline and diesel fuel covered by the claim.
(c) The right to receive any refund under this section is not assignable and any assignment thereof is void and of no effect.
(d) Any applicant for a refund who willfully files an inaccurate petition or false claim for a refund shall be subject to a penalty of 100 percent of the refund claimed, along with interest assessed according to the provisions of Section 40-1-44.
(e) The department may make any investigation or audit any records considered necessary before refunding to a person the tax levied by Section 40-17-325.
(f) Persons filing refund petitions in accordance with subsection (e) of Section 40-17-329 shall accurately maintain adequate records as required under regulations promulgated by the department in accordance with the provisions of Chapter 22 of Title 41.
(g) Whenever it is determined to the satisfaction of the department that any person is entitled to a refund for taxes paid pursuant to this article, the commissioner shall certify the amount of the refund.
(Act 2011-565, p. 1084, §11.)
(a) There is hereby imposed a floor-stocks tax on motor fuel held in inventory outside of the bulk transfer/terminal system on the effective date of the tax increase and on the date of each subsequent tax increase levied by the Rebuild Alabama Act.
(b) Each rate of the tax imposed by this section shall be the incremental amount of tax imposed under the Rebuild Alabama Act.
(c) Any wholesale distributor holding motor fuel in inventory outside of the bulk transfer/terminal system on the effective date of each tax increase levied by the Rebuild Alabama Act shall be liable for the tax.
(d) The tax imposed by the Rebuild Alabama Act shall be paid on or before the last day of the third month following each tax increase and shall be paid in the manner prescribed by the department.
(Act 2011-565, p. 1084, §12; Act 2019-2, 1st Sp. Sess., §3.)
(a) Each person engaged in business in this state as a supplier shall first obtain a supplier’s license. The fee for a supplier’s license is two hundred dollars ($200). A supplier engaged in business in this state will be deemed a permissive supplier with respect to its transactions outside of this state and will have all of the responsibilities and obligations applicable to a permissive supplier as covered in this article.
(b) A person who elects to collect the tax imposed by this article as a supplier and who meets the definition of a permissive supplier may obtain a permissive supplier’s license. Application for or possession of a permissive supplier’s license does not in itself subject the applicant or licensee to the jurisdiction of this state for a purpose other than administration and enforcement of this article.
(c) Each terminal operator other than a supplier licensed under subsection (a) engaged in business in this state as a terminal operator shall first obtain a terminal operator’s license for each terminal site.
(d) The state shall require any exporter, other than a licensed supplier, who exports products to another state to first obtain an exporter’s license prior to any exports. The fee for an exporter’s license is one hundred dollars ($100).
(e) Each person who is not licensed as a supplier shall obtain a transporter’s license before transporting taxable motor fuel by whatever manner whether the person is engaged for hire in interstate commerce or for hire in intrastate commerce. The fee for a transporter’s license is fifty dollars ($50).
(f) Each person other than a licensed supplier who wishes to cause motor fuel to be delivered into this state on his or her behalf, for his or her own account, or for resale to a purchaser in this state from another state in a fuel transport truck or railcar shall apply and obtain an importer’s license. The fee for an importer’s license is one hundred dollars ($100).
(g) Each person other than a licensed supplier who is required to pay the tax imposed by subsection (d) of Section 40-17-326 shall obtain a blender’s license.
(h) Each person other than a licensed supplier who purchases taxable motor fuel for resale within this state from a licensed terminal supplier shall first obtain a distributor’s license which is operative for all locations controlled or operated by that licensee in this state or in any other state from which the person removes fuel for delivery and use in Alabama. The fee for a distributor’s license is fifty dollars ($50).
(i) Each person, other than a licensed supplier, who desires to purchase aviation fuel at the rate of tax specified under subdivision (3) of subsection (a) of Section 40-17-325 must first obtain an aviation fuel purchaser license. The fee for an aviation fuel dealer/consumer license is two hundred dollars ($200).
(j) The United States government or any agency thereof, any county governing body of this state, any incorporated municipal governing body of this state, city and county boards of education of this state, the Alabama Institute for Deaf and Blind and the Department of Youth Services school district, and private and church school systems as defined in Section 16-28-1, and which offer essentially the same curriculum as offered in grades K-12 in the public schools of this state may apply for a license to purchase motor fuel on a tax exempt basis. The exempt agency will be responsible for supplying to its motor fuel vendor a copy of the license as issued by the department in support of its tax exempt status.
(k) Any person, other than one who possesses a valid Alabama supplier’s license, engaged in more than one activity for which a license is required shall obtain a separate license for each activity.
(l) All fees collected under this section, except those refunded, shall be paid into the State Treasury to the credit of the State Public Road and Bridge Fund.
(Act 2011-565, p. 1084, §13.)
Each application for a license under this article must be made upon a form prescribed by the commissioner and furnished by the department.
(Act 2011-565, p. 1084, §14.)
(a) A person may elect to obtain a permissive supplier license to collect the tax levied by Section 40-17-325 for motor fuel that is removed at a terminal in another state and has Alabama as the destination state.
(b) A licensed permissive supplier removing motor fuel at a terminal located in another state with Alabama as its destination state shall do all of the following:
(1) Collect the tax due this state on the motor fuel.
(2) Waive any defense that this state lacks jurisdiction to require the supplier to collect the tax due this state on the motor fuel under this article.
(3) Report and pay the tax due on the motor fuel in the same manner as if the removal had occurred at a terminal located in Alabama.
(4) Keep records of the removal of the motor fuel and submit to audits concerning the motor fuel as if the removal had occurred at a terminal located in Alabama.
(c) A licensed permissive supplier acknowledges that this state imposes the requirements listed in subsection (b) under its general police power and submits to the jurisdiction of this state for purposes related to the administration of this article.
(Act 2011-565, p. 1084, §15.)
(a) Upon approval of the application by the department, the applicant shall file with the department a surety bond.
(1) The bond amount for an applicant for a license as a supplier, permissive supplier, or terminal operator shall be in the approximate amount of twice the average monthly tax liability, not to exceed two million dollars ($2,000,000), except as provided under subdivision (3).
(2) The bond amount for an applicant for a license as an exporter, blender, importer, or distributor shall be a minimum of two thousand dollars ($2,000) or the approximate amount of twice the average monthly tax liability, whichever is greater, except as provided under subdivision (3).
(3) The bond for distributors, suppliers, and permissive suppliers who are licensed with the department on October 1, 2012, shall remain at the amount that is filed with the department on that date, except as provided under subsection (b).
(4) For an applicant for a license only as a motor fuel transporter or aviation fuel purchaser, there shall be no bond.
(5) Only one bond shall be required of an applicant for multiple licenses. Except as provided under subdivision (3), the bond amount shall be based on the highest average monthly tax liability of the separate licenses, but shall cover all licenses.
(b) The commissioner may require an additional surety bond from any licensee if: (i) the commissioner determines that the surety on an existing bond is unsatisfactory; (ii) a surety notifies the department that it intends to cancel a bond as provided in subsection (d); or (iii) the commissioner, after reviewing the financial condition of the licensee, determines that the existing bond of the licensee is insufficient in an amount to insure the prompt payment of all excise taxes that are due or may become due the state by the licensee upon the sale or withdrawal of motor fuel. However, in no case shall a new or additional bond be more than two months of average excise tax owed by the licensee.
(c) The department shall notify a licensee at his or her last known address by first class U.S. mail or, at the option of the department, certified mail, return receipt requested, that the department is requiring a new or additional bond for any reason as provided above, and the licensee, within 60 days from the date the notice is mailed by the department, shall either: (i) file the new or additional bond as requested by the department; or (ii) file a notice of appeal with the Alabama Tax Tribunal as allowed in Chapter 2A. The department may immediately cancel the licensee’s license upon the expiration of the 60-day period if the licensee fails to either provide the new or additional bond requested by the department or timely appeal to the Alabama Tax Tribunal.
(d) Any surety on an existing bond furnished by a licensee may notify the department in writing of its intent to cancel the bond. The department shall immediately notify the licensee of the intent of the surety to cancel and the licensee shall have 60 days from the date the notice is mailed by the department to provide a sufficient replacement bond as requested by the department. The department may immediately cancel the licensee’s license upon expiration of the 60-day period if the licensee fails to either provide a new replacement bond as requested by the department or appeal the proposed revocation to the Alabama Tax Tribunal within the 60 days as allowed by Chapter 2A. The surety requesting to be released shall remain liable for any liability already accrued or which shall accrue during the 60-day period, but shall not be responsible for any liability which accrues after the 60-day period.
(e) A surety providing a bond must be authorized to engage in business within this state. The surety bonds are conditioned upon faithful compliance with this article, including the filing of returns and the payment of all tax prescribed in this article. The commissioner shall approve surety bonds that are sufficient in content and form, and the surety bonds shall indemnify the state against any loss arising from the failure of the licensee to pay, for any cause, the motor fuel excise tax levied by this article and Article 12A, Chapter 17 of this title.
(Act 2011-565, p. 1084, §16; Act 2015-316, p. 954, §1(b)(6); Act 2015-368, p. 1139, §1(b)(6); Act 2021-146, §2; Act 2026-528, §1.)
(a) The department may refuse to issue a license under this article if the applicant or any principal of the applicant has done any of the following:
(1) Had a license or registration issued under prior law or this article canceled by the department for cause.
(2) Had a motor fuel license or registration issued by another state canceled for cause.
(3) Had a federal certificate of registry issued under Section 4101 of the Internal Revenue Code, or a similar federal authorization, revoked.
(4) Been convicted of any offense involving fraud or misrepresentation.
(5) Been convicted of any other offense that indicates that the applicant may not comply with this article if issued a license.
(b) The department may also refuse to issue a license if the applicant is in arrears to the state for any taxes or for other good cause shown.
(c) Any refusal by the department under this section to issue a license may be appealed to the Alabama Law Tribunal under the provisions of Chapter 2B of this title.
(Act 2011-565, p. 1084, §17; Act 2015-316, §1; Act 2015-368, §1.)
Upon approval of the bond required, the department shall issue to the applicant the appropriate license or licenses. The license is not transferable and remains in effect until surrendered or canceled.
(Act 2011-565, p. 1084, §18.)
(a) A licensee who discontinues in its entirety the business for which a license was authorized by this article shall notify the department in writing at least 10 days prior to the time of the discontinuance, sale, or transfer takes effect, and shall surrender the license to the department. The notice shall state the effective date of the discontinuance and, if the licensee has transferred the business or otherwise relinquished control to another person by sale or other means, the date of the sale or transfer and the name and address of the person to whom the business is transferred or relinquished. The notice shall also include any other information required by the department.
(b) All taxes for which the licensee is liable under this article but are not yet payable shall be due on the date of the discontinuance. If the licensee has transferred the business to another person and does not give the notice required herein, the person to whom the business was transferred is jointly and severally liable for the amount of any tax owed by the licensee to this state on the date the business was transferred. The liability of the person to whom the business was transferred shall not exceed the value of the property and business acquired from the licensee.
(Act 2011-565, p. 1084, §19.)
(a) In accordance with the provisions of Chapter 2A of this title, the department may cancel any license required under Section 40-17-332, upon written notice sent to the licensee’s last known address, as it appears in the department’s files, for any of the following reasons:
(1) Filing by the licensee of a false report of the data or information required by this article.
(2) Failure, refusal, or neglect of the licensee to file a report or to provide any information required by this article.
(3) Failure of the licensee to pay the full amount of all excise taxes due or to pay any penalties or interest due.
(4) Failure of the licensee to keep accurate records of the quantities of motor fuel received, produced, refined, manufactured, compounded, sold, or used in Alabama.
(5) Failure to file a new or additional cash deposit or surety bond upon request of the department pursuant to Section 40-17-335.
(6) Conviction of the licensee or a principal of the licensee for any act prohibited under this article.
(7) Failure, refusal, or neglect of a licensee to comply with any other provision of this article or any rule promulgated pursuant to this article.
(8) Having a motor fuel license or registration issued by another state canceled for cause.
(9) For any change in the ownership or control of the business.
(b) Upon cancellation of any license for any cause listed above, the tax levied under this article becomes due and payable on all untaxed motor fuel held in storage or otherwise in the possession of the licensee and all motor fuel sold, delivered, or used prior to the cancellation on which the tax has not been paid.
(c) The license can be canceled upon the written request of the licensee.
(Act 2011-565, p. 1084, §20.)
(a) Each supplier, importer, blender, permissive supplier, and exporter shall file the monthly return required herein, in a format prescribed by the commissioner, on or before the 22nd day of each calendar month for the preceding month.
(b) Other than importers, the tax levied by this article shall be paid to the department by each taxpayer on or before the 22nd day of each calendar month for the preceding month and shall be accompanied by any required returns. The department may require all or certain taxpayers to file tax returns and payments electronically.
(c) Importers importing motor fuel from a bulk plant or some other non-terminal storage location shall pay the tax levied by this article to the department on or before the 22nd day of each calendar month for the preceding month, and the payment shall be accompanied by any required returns. The department may require all or certain taxpayers to file tax returns and payments electronically.
(d) Importers importing motor fuel acquired at an out-of-state terminal from a supplier who has not precollected the tax imposed under Section 40-17-325 at the time of such removal shall pay the tax so levied to the department on or before the 3rd business day following the day of importation, and the payment shall be accompanied by any required returns.
(e) A supplier or permissive supplier who timely files a return with the payment due may deduct from the amount of tax payable with the return an administrative discount of one half of one percent (.005) of the amount of tax payable to the state.
(Act 2011-565, p. 1084, §21; Act 2013-372, p. 1350, §1; Act 2015-54, §4.)
(a) Each distributor or importer shall remit to the supplier or permissive supplier, as applicable, the motor fuel tax levied by Section 40-17-325 due on motor fuel removed at a terminal rack. At the election of a licensed distributor or licensed importer, the supplier or permissive supplier may not require the licensed distributor or licensed importer to pay the tax levied by Section 40-17-325 earlier than one business day before the date the supplier or permissive supplier is required to pay the tax to this state. An election under this subsection is subject to the condition that remittances by the licensed distributor or licensed importer of all tax due to the supplier or permissive supplier shall be paid by electronic funds transfer. An election under this subsection may be terminated by the supplier or permissive supplier if the licensed distributor or licensed importer does not make timely payments to the supplier or permissive supplier as required by this subsection.
(b) A licensed exporter shall remit destination state tax due on motor fuel removed at a terminal rack to the supplier of the motor fuel. If the laws of the destination state prohibit the collection of the destination state’s tax, the tax levied by Section 40-17-325 shall be collected.
(c) All tax payments received by a supplier or permissive supplier shall be held in trust by the supplier or permissive supplier until the supplier or permissive supplier remits the tax payment to this state or to another state, and the supplier or permissive supplier shall constitute the trustee for the tax payments.
(d) A licensed distributor or importer that timely pays the tax due a supplier or permissive supplier as required in this section, may deduct from the amount otherwise due to the supplier or permissive supplier a discount of four tenths of one percent (.004) of the amount of tax payable. The discount covers the expense of furnishing a bond and losses due to shrinkage and evaporation. A supplier or permissive supplier may not directly or indirectly deny the discount to a licensed distributor or licensed importer that timely pays the tax due the supplier or permissive supplier as required by this section.
(Act 2011-565, p. 1084, §22.)
Every return required to be filed under this article shall be on forms and by means prescribed by the commissioner and furnished by the department and shall contain any information the department considers necessary for the enforcement of this article
(Act 2011-565, p. 1084, §23.)
(a) The supplier or permissive supplier may deduct from the next monthly return those tax payments that were not remitted for the previous month to the supplier or permissive supplier by any licensed distributor or any licensed importer who removed motor fuel on which the tax is due from the supplier’s or permissive supplier’s terminal. The licensed supplier or permissive supplier is eligible to take this deduction if the licensed supplier or permissive supplier notifies the state within 20 business days after a return is due of any licensed distributor, importer, or exporter who did not pay to the supplier or permissive supplier the tax due this state by the time the supplier or permissive supplier filed the monthly return and if, when a licensed distributor or licensed importer fails to remit the tax to the licensed supplier or permissive supplier, the licensed supplier or permissive supplier is not eligible to take the deduction for any tax payments that accrue after the 20 business day period referenced above for delinquent distributors or importers. The notice shall be transmitted to the state in the form required by the department. If a licensee later pays to a supplier or permissive supplier the tax owed, but the payment occurs after the supplier or permissive supplier has deducted the amount of the tax on a return, the supplier or permissive supplier shall remit the payment to the department with the next monthly return filed subsequent to receipt of the tax.
(b) A supplier or permissive supplier who timely files a return with the payment due may deduct, from the amount of tax payable with the return, an administrative discount of one tenth of one percent of the amount of tax payable to this state, not to exceed two thousand dollars ($2,000) per month.
(Act 2011-565, p. 1084, §24.)
(a) All tax payments due to this state that are received by a supplier or permissive supplier shall be held by the supplier or permissive supplier as trustee in trust for this state, and the supplier or permissive supplier has a fiduciary duty to remit to the department the amount of tax received. A supplier or permissive supplier is liable for the taxes paid to it.
(b) A supplier or permissive supplier of motor fuel at a terminal shall notify the department within the time period established by the department of any licensed distributors, licensed exporters, or licensed importers who did not pay the tax due when the supplier or permissive supplier filed its return. The notice shall be transmitted in the form required by the department.
(Act 2011-565, p. 1084, §25.)
(a) Any importer bringing motor fuel into this state in a transport truck, or by other means outside the terminal transfer system, who has not acquired the fuel from a supplier or permissive supplier who has pre-collected the tax shall be required to obtain an import verification number from the department or its designee prior to the actual importation of that fuel.
(b) An importer who knowingly imports taxable motor fuel in a transport truck in violation of the provisions of this article, without either a valid importer’s license or supplier’s license and either an import verification number or a shipping paper showing on its face that the tax on the fuel is not due shall be subject to a civil penalty of one thousand dollars ($1,000) for each occurrence, to be multiplied by the sum of the current violation plus prior violations.
(c) When obtaining an import verification number an importer is required to show that number on a shipping paper or invoice associated with that specific load.
(Act 2011-565, p. 1084, §26.)
(a) A person who is licensed as an exporter shall file monthly returns with the department on forms prescribed and furnished by the department concerning the amount of taxable motor fuel exported from this state.
(b) The report must contain all of the following information with respect to motor fuel other than diesel fuel dyed in accordance with the Internal Revenue Code:
(1) All shipments of taxable motor fuel removed from a terminal in this state as to which the tax imposed by this article previously was paid or accrued for direct delivery outside of this state by the exporter.
(2) All shipments of taxable motor fuel acquired free of this state’s motor fuel tax at a terminal in this state for direct delivery outside of Alabama but as to which the destination state’s motor fuel tax was paid or accrued to the supplier at the time of removal from the terminal.
(3) The gallons delivered to taxing jurisdictions outside this state out of bulk plant storage and whether by transport truck or tank wagon.
(4) The name and federal employer identification number of the person receiving the exported taxable motor fuel from the exporter.
(5) The date of the shipments.
(6) The carrier name and federal employee identification number.
(c) The department in addition may require the reporting of other information it considers reasonably necessary to the enforcement of this article.
(d) The return shall serve as a claim for a refund for tax paid to this state on exported motor fuel.
(Act 2011-565, p. 1084, §27.)
(a) A terminal operator shall file with the department a monthly informational report showing the amount of motor fuel received and removed from the terminal during the month. The report is due by the last day of the month following the month covered by the report. The report shall contain all of the following information and any other information required by the department:
(1) The terminal code assigned by the Internal Revenue Service.
(2) The beginning and ending inventory which pertains to the applicable reporting month.
(3) The number of net gallons of motor fuel received in inventory at the terminal during the month and each position holder for the motor fuel.
(4) The number of net gallons of motor fuel removed from inventory at the terminal during the month and, for each removal, the position holder for the motor fuel and the destination state of the motor fuel.
(5) The number of net gallons of motor fuel gained or lost at the terminal during the month.
(b) Each person operating a terminal in this state shall file an annual report for each terminal within this state on forms provided by the department. The report must be filed for each calendar year on or before January 31 of the following year. This report must include all of the following data:
(1) The net amount of monthly net gallons, gains or losses.
(2) The total net gallons removed from the terminal in bulk and across the rack during the calendar year and any other information as the department considers reasonably necessary to determine the tax liability of the terminal operator under this article.
(3) The amount of tax due calculated pursuant to Section 40-17-327.
(Act 2011-565, p. 1084, §28.)
(a) A person licensed as a motor fuel transporter in this state shall file a monthly informational report with the department on forms prescribed and furnished by the department concerning the amount of motor fuel received or delivered for import or export by the motor fuel transporter during the month.
(b) The report required by this section is due by the last day of the month following the month covered by the report.
(c) Any transporter failing to make the reports required by this section shall be subject to a civil penalty of one thousand dollars ($1,000) for each violation, as reasonably determined by the department.
(Act 2011-565, p. 1084, §29.)
(a) Persons violating any provision of this article may be restrained from distributing, using, or withdrawing from storage any taxable motor fuel, as herein defined, and may be prosecuted in the name of the State of Alabama by the Attorney General or, under his or her direction, by a district attorney or, with the approval of the Governor, an attorney employed by the department until that person has complied with this article.
(b) It shall be unlawful for any person to sell for use or to use motor fuel upon which the tax levied by this article has not been paid or the payment assumed by a licensee. Any person who willfully fails to comply with this article, for each failure, shall be subject to a penalty imposed by the department of not less than one hundred dollars ($100) nor more than ten thousand dollars ($10,000).
(Act 2011-565, p. 1084, §30.)
(a) Each person operating a refinery or terminal in Alabama shall prepare and provide to the driver of every highway vehicle receiving motor fuel at the facility a shipping document setting out on its face the destination state as represented to the terminal operator by the shipper or the shipper’s agent. Failure to comply with this subsection may result in a department imposed penalty of not less than five hundred dollars ($500) nor more than one thousand dollars ($1,000), to be multiplied by the sum of the current violation plus prior violations of this subsection.
(b) Every person transporting motor fuel in Alabama in a highway vehicle other than in its supply tank shall carry on board a shipping document issued by the facility where the motor fuel was obtained. The shipping document shall set out on its face the state of destination of the motor fuel transported in the highway vehicle. Violation of this subsection constitutes a Class A misdemeanor. Failure to comply with this subsection may result in a department imposed penalty of not less than five hundred dollars ($500) nor more than one thousand dollars ($1,000), to be multiplied by the sum of the current violation plus prior violations of this subsection.
(c) Every person transporting in Alabama motor fuel received from a terminal operator or refiner shall provide the original or a copy of the terminal issued shipping document accompanying the shipment to the operator of the retail outlet to which delivery of the shipment was made. Knowingly violating or knowingly aiding and abetting another person in violating this subsection shall constitute a Class C felony. Failure to comply with this subsection may result in a department imposed penalty of not less than five hundred dollars ($500) nor more than one thousand dollars ($1,000), to be multiplied by the sum of the current violation plus prior violations of this subsection.
(d) Each operator of a retail outlet shall receive, examine, and retain the shipping document received from the transporter for every shipment of motor fuel that is delivered to each location, and retain the shipping document at the location for not less than 30 days. At the end of 30 days, the shipping document shall be maintained with the required books and records for a period of three years from the date of shipment. Knowingly violating or knowingly aiding and abetting another person in violating this subsection shall constitute a Class C felony. Failure to comply with this subsection may result in a department imposed penalty of not less than five hundred dollars ($500) nor more than one thousand dollars ($1,000), to be multiplied by the sum of the current violation plus prior violations of this subsection.
(e) No bulk end user, retail dealer, or wholesale distributor shall knowingly accept delivery of motor fuel into storage facilities in Alabama if that delivery is not accompanied by a shipping document that sets out on its face Alabama as the state of destination of the motor fuel. Knowingly violating or knowingly aiding and abetting another person in violating this subsection shall constitute a Class C felony. Failure to comply with this subsection may result in a department imposed penalty of not less than five hundred dollars ($500) nor more than one thousand dollars ($1,000), to be multiplied by the sum of the current violation plus prior violations of this subsection.
(f) The department shall provide for relief in a case where a shipment of motor fuel is legitimately diverted from the represented destination state after the shipping document has been issued by the terminal operator or where the terminal operator failed to cause proper information to be printed on the shipping document. These relief provisions shall include the requirement that the shipper or its agent provide notification as prescribed by the department before the diversion or correction is to occur.
(g) A terminal operator or bulk plant operator may rely on the representation made by the purchaser of motor fuel or the purchaser’s agent concerning the destination state of the motor fuel. A purchaser is liable for any tax due as a result of the purchaser’s diversion of motor fuel from the represented destination state.
(h) Every person hauling, transporting, or conveying motor fuel over any of the navigable waters of this state, during the entire time so engaged, must maintain possession of an invoice, bill of sale, or shipping document showing the legal name and physical address of the person from whom motor fuel was received, the legal name and physical address of every person or persons to whom deliveries of motor fuel will be made, and the number of gallons delivered. The person hauling, transporting, or conveying the motor fuel shall, at the request of any person authorized by law to inquire into or investigate these matters, produce and offer for inspection the invoice, bill of sale, or shipping document. Failure to comply shall be prima facie evidence of a violation of this section.
(1) No person shall haul, transport, or convey motor fuel in boats or barges over any of the navigable waters of the state except in boats or barges plainly visibly marked on both sides and above the water line thereof with the word “gasoline” or other name of the motor fuel being transported, in letters at least four inches high and of correspondingly appropriate width, together with the legal name and physical address of the owner of the boat or barge in which the gasoline is contained.
(2) This subsection shall not apply to boats transporting gasoline to be used solely for motive power of the boats.
(i) Every motor vehicle being operated by private and for-hire carriers of property must be marked as specified in this section if that vehicle is transporting hazardous materials including gasoline of a kind or quantity that requires the vehicle to be marked or placarded in accordance with Section 177.823 of the Hazardous Materials Regulations of the Department of Transportation and is operating under its own power, either alone or in combination.
(1) The marking shall display all of the following information:
a. The name or trade name of the private and for-hire carrier operating the vehicle.
b. The city or community and state abbreviation in which the carrier maintains its principal office or in which the vehicle is customarily based.
c. If the name of a person other than the operating carrier appears on the vehicle, the words “operated by” immediately preceding the information required by this section.
d. Other identifying information may be displayed on the vehicle if it is not inconsistent with the information required by this section.
(2) The marking must meet all of the following requirements:
a. Appear on both sides of the vehicle.
b. Be in letters that contrast sharply in color with the background.
c. Be readily legible during daylight hours from a distance of 50 feet while the vehicle is stationary.
d. Be kept and maintained in a manner that retains the legibility required by this section.
e. The marking may consist of a removable device if that device meets the identification and legibility requirements of this article.
(j) Willful violation of any of the provisions of subsection (h) or (i) shall constitute a Class C felony.
(k) The marking provisions of this section as to the word “gasoline” shall not apply to a vehicle transporting gasoline in the fuel tank supplied by the manufacturer with the vehicle, or carried in an auxiliary fuel tank, connected directly with the carburetor of the vehicle and used exclusively for propelling it, to vehicles transporting gasoline in quantities of not more than five gallons for delivery in response to emergency calls, or to gasoline being transported by common carriers in railroad cars.
(l)(1) The Director of the Department of Transportation may employ qualified employees to enforce this section. The employees shall be employed pursuant to the Merit System Act. The employees or agents shall be considered to be and shall be vested with the powers and authority of law enforcement officers, including the power to maintain public order, make arrests for all offenses and investigate the commission or suspected commission of those offenses, and investigate the commission or suspected commission of transportation, public safety, and revenue offenses, including, but not limited to, those offenses regarding gasoline tax and tax on motor fuels or any substitute thereof, licensing and registration of motor vehicles, and violations of Title 32 and this title. Transportation law enforcement officers so designated are authorized to issue or cause to be issued citations, tickets, complaints, subpoenas, and other process so as to commence and direct actions, prosecutions, and proceedings to be instituted to enforce the laws of this state in any county of the State of Alabama. The employees shall be and are hereby constituted peace officers of the State of Alabama provided they comply with the requirements set forth by the Alabama Peace Officers’ Standards and Training Commission.
(2) Inspections shall be performed in a reasonable manner and at times that are reasonable under the circumstances, taking into consideration the normal business hours of the place to be entered. Inspections may be at any place at which taxable motor fuel is or may be produced or stored or at any inspection site where evidence of activities may be discovered. These places include, but are not limited to, any of the following:
a. A terminal.
b. A motor fuel storage facility that is not a terminal.
c. A retail motor fuel facility.
d. A state or local highway inspection station, weigh station, agricultural inspection station, mobile station, or other location designated by the commissioner or his or her designated agent to be used as a motor fuel inspection site.
(3) Officers or employees of the State of Alabama, or law enforcement officers of any county or municipality in the State of Alabama, may do any of the following:
a. Physically inspect, examine, or otherwise search any tank, reservoir, or other container that can or may be used for the production, storage, or transportation of motor fuel, fuel dyes, or fuel markers. Inspection may also be made of any equipment used for, or in connection with, production, storage, or transportation of motor fuel, fuel dyes, or fuel markers. This includes any equipment used for the dyeing or marking of diesel fuel, and shall include the inspection of related shipping documents.
b. Detain any vehicle, train, or boat for the purpose of inspecting its fuel tanks and storage tanks. Detainment may continue for any reasonable period of time, not to exceed one hour, necessary to determine the amount and composition of the motor fuel.
c. Take and remove samples of motor fuel in reasonable quantities necessary to determine its composition.
(4) Penalties.
a. Any person refusing to allow an inspection may be penalized one thousand dollars ($1,000) for each refusal. This penalty is in addition to any other penalties or tax that may be imposed upon that person or any other person liable for motor fuel excise taxes.
b. The following acts shall be subject to a civil penalty payable to the department:
Transporting motor fuel in a railroad tank car or transport truck without a shipping document or with a false or an incomplete shipping document.
Delivering motor fuel to a destination state other than that shown on the shipping document.
c. The penalty imposed under paragraph b. is payable by the person in whose name the conveyance is registered, tagged, or titled, or the lessee if the conveyance is a transport truck. If the conveyance is a railroad tank car, it is payable by the person responsible for the movement of motor fuel in that conveyance. The amount of the penalty shall depend upon the amount of fuel improperly transported or diverted and whether the person against whom the penalty is assessed has previously been assessed a penalty under this subsection. For a first assessment under this subsection, the penalty is twice the amount of excise tax payable on the improperly transported or diverted motor fuel. For a second or subsequent assessment under this subsection, the penalty is the greater of five thousand dollars ($5,000) or five times the amount of excise tax payable on the improperly transported or diverted motor fuel. The penalty imposed under this subsection shall be in addition to any fuel excise tax assessed.
d. It is unlawful to use dyed diesel fuel for highway use, with the exception of a city or county vehicle and those permitted under 26 U.S.C. § 4082. The operation of a motor vehicle on a highway with a supply tank containing dyed diesel fuel, the use of which is unlawful under this section, or the use of other motor fuel on which the tax imposed by the state has not been paid, shall constitute a Class A misdemeanor and may result in a civil penalty. The penalty is payable to the department by the person in whose name the motor vehicle is registered or the driver of the vehicle, or both. The penalty shall be the greater of one thousand dollars ($1,000) or ten dollars ($10) per gallon of the motor fuel involved. In the case of repeated violations, the penalty is to be multiplied by the current violation plus prior violations that have been imposed under this section in addition to any fuel tax assessed. A county or municipality shall be entitled to 25 percent of any penalty authorized by this section if law enforcement officers in its employment provide information that leads to the arrest and conviction of any person violating this section or to the assessment and collection of the excise taxes from any person violating this section.
(Act 2011-565, p. 1084, §31.)
(a) Any person who engages in any business activity for which a license is required by this article without having first obtained and subsequently retained a valid license shall be subject to the following civil penalties:
(1) Ten thousand dollars ($10,000) for the first violation.
(2) For each subsequent violation, the amount is to be multiplied by the sum of the current violation plus prior violations.
(b) Civil penalties prescribed under this section shall be assessed, collected, and paid in the same manner as the motor fuel tax.
(Act 2011-565, p. 1084, §32.)
(a) Any person who willfully does any of the following is guilty of a misdemeanor and upon conviction thereof shall be fined not less than five thousand dollars ($5,000) nor more than twenty-five thousand dollars ($25,000), or imprisoned for not more than one year, or both:
(1) Fails to obtain a license as required by this article prior to engaging in an activity for which a license is required.
(2) Fails to pay to this state no more than 30 days after the date the tax is due the tax levied by this article.
(3) Makes a false statement on an application, return, ticket, invoice, statement, or any other document required under this article.
(4) Fails to file no more than 30 days after it is due any return required by this article.
(5) Fails to maintain any record required by this article.
(6) Makes a false statement in an application for a refund.
(7) Fails to make required disclosure of the correct amount of fuel sold or used in this state.
(8) Fails to show or give a shipping document as required under this article.
(9) Uses, delivers, or sells any aviation fuel for use or intended for use in highway vehicles or watercraft.
(10) Interferes with or refuses to permit seizures authorized under Section 40-17-353.
(11) Delivers motor fuel from a transport vehicle to the fuel supply tank of a highway vehicle.
(12) Dispenses into the supply tank of a highway vehicle, watercraft, or aircraft any motor fuel on which tax levied by Section 40-17-325 has not been paid.
(13) Allows to be dispensed into the supply tank of a highway vehicle, watercraft, or aircraft any motor fuel on which tax levied by Section 40-17-325 has not been paid.
(14) Purchases motor fuel from an unlicensed distributor, unlicensed importer, or unlicensed supplier.
(b) Any person who willfully does any of the following with the intent to either evade or circumvent the tax levied by Section 40-17-325 or assists any other person in efforts to evade or circumvent the tax shall be guilty of a felony and upon conviction thereof shall be fined not less than twenty-five thousand dollars ($25,000) nor more than fifty thousand dollars ($50,000), or imprisoned in a state correctional facility for not less than one nor more than five years, or both fined and imprisoned:
(1) Fails to pay motor fuel taxes and diverts the tax proceeds for other purposes.
(2) As a licensee or the agent or representative of a licensee, converts or attempts to convert motor fuel tax proceeds for the use of the licensee or the licensee’s agent or representative, with the intent to defraud this state.
(3) Collects motor fuel taxes when not authorized or licensed by the department to do so.
(4) Imports motor fuel into this state in contravention of this article.
(5) Conspires with any other person or persons to engage in an act, plan, or scheme to defraud this state of motor fuel tax proceeds.
(6) Alters or attempts to alter the strength or composition of any dye or marker in any dyed diesel fuel intended to be used for a taxable purpose.
(7) Fails to remit to the department any tax levied pursuant to this article if the person has added, or represented that he or she has added, the tax to the sales price for the motor fuel and has collected the amount of the tax.
(c) Each offense under this section is subject to a separate criminal penalty.
(Act 2011-565, p. 1084, §33.)
(a) Upon the discovery of any motor fuel illegally imported into or illegally transported, delivered, stored, or sold in this state, the commissioner shall order the tank or other storage receptacle in which the motor fuel is located to be seized and locked or sealed until the tax, interest, and penalties levied under this article are assessed and paid.
(b) If the assessment for the tax described in subsection (a) is not paid within 60 days, the commissioner, in addition to the other remedies in this article, may sell the motor fuel and use the proceeds of the sale to satisfy the assessment due, with any excess funds after payment of the assessment and costs of the sale being returned to the owner of the motor fuel.
(c) All motor fuel and any property, tangible or intangible, which is found upon the person or in any vehicle which the person is using, including the vehicle itself, to transport or sell illegally transported, delivered, stored, sold, imported, or acquired motor fuel, and any property found in the immediate vicinity, including motor vehicles, tanks, and other storage devices, used to aid in the illegal transportation or sale of motor fuel, shall be considered contraband and shall be forfeited to this state.
(Act 2011-565, p. 1084, §34; Act 2026-528, §1.)
Each person required to be licensed under Section 40-17-332 and each bulk user and retailer shall keep and maintain all records pertaining to motor fuel received, produced, manufactured, refined, compounded, used, sold, or delivered, together with delivery tickets, invoices, bills of lading, and other pertinent records and papers required by the department for the reasonable administration of this article, for a period of no less than three years.
(Act 2011-565, p. 1084, §35.)
(a) A person who refuses to permit an inspection or audit authorized by this article is subject to a civil penalty of five thousand dollars ($5,000) in addition to any penalty imposed by other provisions of this article.
(b) A person who refuses, for the purpose of evading tax, to allow an inspection, in addition to being liable for other penalties imposed by this article, is guilty of a felony and upon conviction shall be fined not more than ten thousand dollars ($10,000) or imprisoned not more than three years, or both.
(Act 2011-565, p. 1084, §36.)
A notice stating: “DYED DIESEL FUEL, NON-HIGHWAY USE ONLY, PENALTY FOR HIGHWAY USE” or a similar phrase that clearly indicates that the diesel fuel is not to be used to operate a highway vehicle shall be provided or posted in all of the following circumstances:
(1) By the terminal operator to a person who receives dyed diesel fuel at a terminal rack of that terminal operator.
(2) By a seller of dyed diesel fuel to its buyer if the diesel fuel is located outside the bulk transfer/terminal system and is not sold from a retail pump or bulk plant posted in accordance with the requirements of this section.
(3) By a seller on a retail pump or bulk plant where it sells dyed diesel fuel for use by its buyer.
(4) By the time of the removal or sale appears on shipping documents, bills of lading, and invoices accompanying the sale or removal of the dyed diesel fuel.
(Act 2011-565, p. 1084, §37.)
Beginning October 1, 2012, no city or town may levy or impose a new or additional excise or license tax on the sale, distribution, storage, use, or consumption of gasoline or any substitute therefor which is consumed as aviation fuel, as defined under subdivision (2) of Section 40-17-322. Any ordinance enacted or adopted contrary to the provisions of this section shall be null and void.
(Act 2011-565, p. 1084, §38.)
All municipalities and all counties currently levying an excise or privilege license tax upon the sale, use, or consumption, distribution, storage, or withdrawal from storage of gasoline or motor fuel may require that where the tax has been paid to the municipality or county by a distributor, refiner, or by any retail dealer, storer, or user, such payment shall be sufficient, the intent being that the tax shall be borne by the consumer and paid to the municipality or county but once.
(Act 2011-565, p. 1084, §39.)
(a) For the purpose of this section, the following terms shall have the meanings ascribed below:
(1) BASE ANNUAL COUNTY DISTRIBUTION. Five hundred fifty thousand dollars ($550,000).
(2) COST OF COLLECTION. The amounts from the proceeds of the highway gasoline tax that may be appropriated by the Legislature to the department for its operating expenses.
(3) COUNTY. Each county in the state.
(4) FISCAL YEAR. The fiscal year of the state.
(5) DEPARTMENT OF TRANSPORTATION. The Department of Transportation of the state.
(6) HIGHWAY GASOLINE TAX. Both of the following:
a. The excise tax levied under subdivision (1) of subsection (a) of Section 40-17-325, with the exception of those portions of the tax levied on aviation fuel and marine gasoline.
b. The excise tax levied by Sections 40-17-140 to 40-17-155, inclusive, except that portion of the tax imposed on diesel fuel.
(7) LOCAL SUBDIVISIONS’ SHARES OF THE NET TAX PROCEEDS. The 55 percent of the net tax proceeds referred to in the first sentence of subsection (d).
(8) MUNICIPALITY. An incorporated city or town in the state.
(9) NET TAX PROCEEDS. The entire proceeds from the highway gasoline tax, except the proceeds from the supplemental excise tax of five cents ($.05) per gallon and additional six cents ($.06) imposed by subdivision (1) of subsection (a) of Section 40-17-325, less the cost of collection and less any refunds pursuant to the provisions of this article.
(10) PUBLIC HIGHWAY. Every highway, road, street, alley, lane, court, place, trail, drive, bridge, viaduct, or trestle located either within a municipality or in unincorporated territory and laid out or erected by the public or dedicated or abandoned to the public or intended for use by or for the public. The term “public highway” shall apply to and include driveways upon the grounds of universities, colleges, schools, and institutions but shall not be deemed to include private driveways, private roads, or private places not intended for use by the public.
(11) STATE. The State of Alabama.
(12) STATE’S SHARE OF THE NET TAX PROCEEDS. The 45 percent of the net tax proceeds referred to in the first sentence of subsection (c).
(13) SUPPLEMENTAL NET TAX PROCEEDS. That portion of the highway gasoline tax remaining after the deduction of the net tax proceeds and one-third of all revenues received or collected by the department remaining after the payment of refunds from the additional six cents ($.06) tax levied on gasoline under Section 40-17-325(a)(1) and two-thirds revenues received or collected by the department after the payment of refunds and the expense of administration and enforcement of this article from the additional six cents ($.06) tax levied on gasoline under Section 40-17-325(a)(1), less the cost of collection and less any refunds of the highway gasoline tax applicable to the supplemental gasoline excise tax imposed in subdivision (1) of subsection (a) of Section 40-17-325.
The foregoing definitions shall be deemed applicable whether terms defined are used in the singular or plural.
(b) The revenue, less the cost of collection and refunds authorized by law, from the seven cents ($.07) excise tax and the supplemental excise tax of five cents ($.05) per gallon on gasoline, shall not be used for any purposes other than the following:
(1) The Legislature hereby finds as a fact that of all the gasoline sold in this state not less than one and twenty-three hundredths percent thereof is used for marine purposes to propel vessels on inland and coastal waterways of this state. The Legislature hereby declares that it is the policy of this state to use the funds derived pursuant to this section from the sale of marine gasoline to provide for the programs and activities of the Marine Police, Marine Resources, and Wildlife and Freshwater Fisheries Divisions of the Department of Conservation and Natural Resources in this state as follows:
a. Thirty-five one hundredths of one percent of all state-imposed taxes collected pursuant to this subsection on the sale of gasoline, except gasoline and other fuels consumed in airplanes, shall be credited as follows: 60 percent to the State Water Safety Fund of the Marine Police Division and 40 percent to the Seafood Fund of the Marine Resources Division.
b. An amount equal to seventy-one hundredths of one percent of all state-imposed taxes levied pursuant to this subsection and collected on the sale of gasoline, except gasoline and other fuels consumed in airplanes, and which would otherwise be credited to the Public Road and Bridge Fund pursuant to this section shall be credited to the Game and Fish Fund of the Division of Wildlife and Freshwater Fisheries. Provided, however, that the above credit to the Game and Fish Fund shall not diminish the allocations provided by subsection (d).
c. An amount equal to eighteen one hundredths of one percent of all state-imposed taxes levied pursuant to this subsection and collected on the sale of gasoline, except gasoline and other fuels consumed in airplanes, and which would otherwise be credited to the Public Road and Bridge Fund pursuant to this section shall be credited as follows: 60 percent to the State Water Safety Fund of the Marine Police Division and 40 percent to the Seafood Fund of the Marine Resources Division. Provided, however, that this additional credit to the State Water Safety Fund and Seafood Fund shall not diminish the allocations provided by subsection (d).
(2) The revenue arising from the sale of gasoline as herein defined, except gasoline sold for use as fuel to propel aircraft and which gasoline is subject to the tax imposed in subdivision (3) of subsection (a) of Section 40-17-325, and except for revenues from the supplemental net tax proceeds, for all other purposes shall not be used for any purpose other than for the construction, improvement, maintenance, and supervision of highways, bridges, and streets, including the retirement of bonds for the payment of which such revenues have been or may hereafter be pledged. The payment of the per diem and mileage of members of county governing bodies when engaged in supervising the construction, improvement, and maintenance of highways, bridges, and streets shall be construed as used in supervision. The governing body of each county may expend an amount not to exceed one third of the total amount of such revenue that may be received by such county in the payment of any debt that may have been incurred by such county for the construction or maintenance of roads or bridges. This fund shall be allocated in the manner now provided by law. On the 20th day of each month following that quarter of any fiscal year, all revenue derived from the sale of gasoline to be consumed in the motor of a boat or vessel as defined in subdivision (1) shall be allocated to the State Water Safety Fund, Seafood Fund, and Game and Fish Fund.
(c) Distribution of forty-five percent of net tax proceeds shall be distributed as follows:
(1) Forty-five percent of the net tax proceeds are hereby allocated and appropriated for state highway purposes and as the state’s share of the net tax proceeds to be covered into the State Treasury to the credit of the Public Road and Bridge Fund and to be disbursed as hereinafter provided in this section.
(2) A portion of the state’s share of the net tax proceeds that is equal in amount to two sevenths (equivalent to six twenty-firsts) of the net tax proceeds shall be disbursed, to pay at their respective maturities the principal of and interest on the bonds issued prior to March 1, 1967, by the Alabama Highway Authority, a public corporation organized and existing under the provisions of Sections 23-1-150 to 23-1-160, inclusive, in the order in which the two sevenths of the net tax proceeds were pledged for the bonds.
(3) A portion of the state’s share of the net tax proceeds that is equal in amount to two twenty-firsts of the net tax proceeds shall be disbursed to pay at their respective maturities the principal of and interest on the bonds issued prior to March 1, 1967, by the Alabama Highway Authority, in the order in which the two twenty-firsts of the net tax proceeds were pledged for the bonds.
(4) A portion of the state’s share of the net tax proceeds that is equal in amount to one twenty-first of the net tax proceeds shall be disbursed to pay at their respective maturities the principal of and interest on the bonds issued by the Alabama Highway Authority after March 1, 1959, and prior to March 1, 1967, in the order in which the one twenty-first of the net tax proceeds was pledged for the bonds.
(5) The residue of the state’s share of the net tax proceeds remaining after provision shall have been made out of the aforesaid nine twenty-firsts of the net tax proceeds for payment of the obligations referred to in the foregoing subdivisions (2), (3), and (4) shall be disbursed for the following purposes, in the following order and to the extent necessary:
a. For payment at their respective maturities of the principal of and interest on bonds, other than refunding bonds, issued by the Alabama Highway Authority under the provisions of Act No. 225, 1967 Special Session (Acts 1967, p. 302), to the extent that the portion of the motor vehicle license taxes and registration fees provided in Section 40-12-270, to be used for the payment of the principal of and interest on the bonds, other than refunding bonds, issued by the Alabama Highway Authority under the provisions of Act No. 225, should be insufficient to pay the principal and interest at their respective maturities.
b. For payment at their respective maturities of the principal of and interest on the bonds, other than refunding bonds, issued by the Alabama Highway Authority under the provisions of Act No. 781, 1969 Regular Session (Acts 1969, p. 1398), to the extent that the portion of the motor vehicle license taxes and registration fees provided in Section 40-12-270, to be used for the payment of the principal of and interest on the bonds, other than refunding bonds, issued by the Alabama Highway Authority under the provisions of Act No. 781, should be insufficient to pay the principal and interest at their respective maturities.
c. For payment at their respective maturities of the principal of and interest on the bonds, other than refunding bonds, issued by the Alabama Highway Authority under the provisions of Act No. 1416, 1971 Regular Session (Acts 1971, p. 2412), to the extent that the portion of the motor vehicle license taxes and registration fees provided in Section 40-12-270, to be used for the payment of the principal of and interest on the bonds, other than refunding bonds, issued by the Alabama Highway Authority under the provisions of Act No. 1416, should be insufficient to pay the principal and interest at their respective maturities.
d. For payment at their respective maturities of the principal of and interest on any bonds or other obligations, including refunding obligations, issued after December 1, 1977, by a public corporation existing at the time of issuance under the laws of the state pursuant to then existing statutory authorization, or by the state pursuant to then existing authorization, effective at the time of issuance, under the constitution and laws of the state, and for which the aforesaid residue, referred to in this subdivision, of the state’s share of the net tax proceeds shall have been appropriated and pledged in a then effective statute or constitutional provision (including any enabling act under a constitutional provision) under which the bonds may be issued, all in the manner and to the extent and subject to the priorities in rank as may be provided in a statute or constitutional provision or in any authorizing resolution thereunder.
e. For allocation on September 30 of each fiscal year to each county to which allocation shall have been made under the provisions of subsection (d), during that fiscal year less than the base annual county distribution, which, when added to the amounts so allocated to that county under subsection (d), will equal the base annual county distribution.
(6) The state’s share of the net tax proceeds paid into the Public Road and Bridge Fund and not required for any of the purposes referred to in any of the foregoing subdivisions (2), (3), (4), and (5) may be withdrawn by the Department of Transportation and used by it for highway purposes.
(d) Fifty-five percent of net tax proceeds shall be distributed as follows:
(1) Fifty-five percent of the net tax proceeds are hereby allocated and appropriated to be used for highway purposes by the counties and municipalities to be covered into the State Treasury and shall be disbursed and allocated as hereinafter provided in this section.
(2) A portion of the local subdivisions’ shares of the net tax proceeds that is equal to 25 percent of the net tax proceeds shall be allocated equally among the 67 counties of the state.
(3) The entire residue of the local subdivisions’ shares of the net tax proceeds, being an amount equal to 30 percent of the net tax proceeds less any amount paid pursuant to the contingent appropriation in subdivision (2), shall be allocated among the 67 counties of the state on the basis of the ratio of the population of each county to the total population of the state according to the then next preceding federal decennial census, or any special federal census heretofore held in any county subsequent to the effective date of the 1960 Federal Decennial Census. The allocation provided for in this subdivision shall be made on or prior to the tenth day of each month with respect to receipts of the highway gasoline tax by the state during the preceding month.
(e)(1) The amounts allocated or apportioned to each county pursuant to each of subsections (c) and (d) shall be disposed of as follows:
a. Ten percent of the amount so allocated or apportioned to each county shall be distributed among the municipalities in the county with respect to which the allocation or apportionment is made; each distribution among the municipalities shall be made on the basis of the ratio of the population of each municipality to the total population of all municipalities in the applicable county according to the then next preceding federal decennial census.
b. The remaining portion of the amount so allocated or apportioned to each county shall be distributed to the county with respect to which the allocation or apportionment is made. The distributions provided for in this subsection shall be made monthly.
(2) The population of any municipality incorporated subsequent to the taking of the then next preceding federal decennial census shall be deemed to be the population shown by the census for that municipality taken pursuant to the requirements of Section 11-41-4. Any municipality incorporated after September 30, 1967, shall not participate in the distribution provided for in this section until the fiscal year next succeeding the fiscal year during which it is incorporated, the first distribution to the municipality to be made from the receipts of the highway gasoline tax by the state during October of the fiscal year next succeeding its incorporation.
(3) When requested to do so by any municipality, the Department of Transportation may make available the services and advice of its engineers and other employees with respect to any work for which that municipality proposes to expend moneys distributed to it under this section. Any services and advice that may be made available shall be provided under the terms and conditions that may be mutually agreeable to the Department of Transportation and the municipality.
(f) Three-fifths of the supplemental net tax proceeds on gasoline, as defined in subsection (a), shall be deposited in the State Treasury to the credit of the Public Road and Bridge Fund of the Department of Transportation and shall be used exclusively in the construction, repair, maintenance, and operation of public roads and bridges in this state, including public roads in state parks and any toll road or toll bridge constructed by the state Department of Transportation or maintained and operated by it or under its supervision. It is further provided that of the receipts collected under this section dedicated to the Public Road and Bridge Fund, the sum of one million dollars ($1,000,000) shall be set aside in the fiscal year ending September 30, 1992, and the sum of at least five hundred thousand dollars ($500,000) for the fiscal year ending September 30, 1993, and in each fiscal year thereafter, to coordinate with the Department of Conservation and Natural Resources on the construction, maintenance, and repair of public roads in the state’s park system. The remaining two-fifths of the supplemental net tax proceeds shall be distributed, as provided for distribution of the net tax proceeds, according to subsections (c), (d), and (e). Any local laws or general laws of local application now in effect regarding the distribution of the tax levied by Section 40-17-325 shall govern the distribution of the amounts allocated or apportioned within every county by this section. The Legislature may by general or local laws prescribe other distributions within counties to local governments. The two fifths of the supplemental net tax proceeds shall be used for the same purposes and deposited in the same state, county, and municipal funds as provided by Section 40-17-362. Where the use is by a county, the funds may be used to match federal aid on any projects that meet the requirements for federal funding and the funds may also be used for new construction without regard to the provision that 90 percent of the county’s paved road system has achieved a grade of 85 percent based on the State of Alabama Department of Transportation’s annual maintenance report of county roads and bridges.
(g) In all counties wherein members of the county governing bodies are compensated or paid on a salary basis, the county governing bodies may pay a part of the salary out of the county gasoline tax revenues. The part paid out of county gasoline tax revenues shall bear the same proportion to the total salary paid to the member as the time devoted by the member to supervising, inspecting, accepting, building, or repairing county roads or bridges bears to the total time devoted by the member to all of his or her duties as a member of the county governing body.
The county governing body may determine the proportions set out in this section.
(h) The county commissions may pay a portion of the compensation of their clerks out of the Public Road and Bridge Fund or gasoline tax funds in the county treasury; provided, that not more than 75 percent of the total salary payable shall be paid out of the fund or funds.
(i) For the purpose of this section, each federal decennial census shall be deemed to be effective on October 1 next following the publication of the results of the decennial census.
(j) Wherever in this section any portion of the net tax proceeds is provided to be applied or used for highway purposes, it shall be used as follows:
(1) Where the use is by the Department of Transportation, with the approval of the Governor, the use shall be for the construction of public roads and bridges in the state, the maintenance of public roads and bridges on the state highway system, the equipment and preparation of convicts for use upon the public roads and bridges in the state, the maintenance of the convicts while at work upon the roads and bridges, the compensation to the state for the use of any convicts, and for other public road and bridge purposes in the state as may be authorized by the Department of Transportation with the approval of the Governor.
(2) Where the use is by a county, the use shall be for transportation planning, the construction, reconstruction, maintenance, widening, alteration, and improvement of public roads and bridges as is now or may hereafter be provided by law, including payment of the principal of and interest on any securities at any time issued by the county pursuant to law for payment of which all or any of the net tax proceeds were or may be lawfully pledged, and the use may also be for the purpose and subject to the provisions contained in subsection (g).
(3) Where the use is by a municipality, the use shall be for transportation planning, the construction, reconstruction, maintenance, widening, alteration, and improvement of public roads, bridges, streets, and other public ways, including payment of the principal of and interest on any securities at any time issued by the municipality pursuant to law for the payment of which any part of the net tax proceeds were or may be lawfully pledged; provided, that no part of the net tax proceeds referred to in this section shall be expended contrary to the provisions of the constitution; and provided further, that funds distributed to municipalities under the provisions of this section shall not be commingled with other funds of the municipality and shall be kept and disbursed by the municipality from a special fund only for the purposes hereinabove provided.
(k) The county commission of each of the counties may use or expend the proceeds of the state gasoline tax levied by Section 40-17-325, distributed to the county pursuant to this section, for the construction and maintenance of streets within the corporate limits of any municipality located within the county, anything in Sections 40-17-322 to 40-17-356, inclusive, to the contrary notwithstanding.
(l) The county commission of each of the counties may use or expend the state gasoline tax proceeds referred to in subsection (k) for the construction, reconstruction, maintenance, and repair of public highways and traffic control areas located on public school property or state school property within the county.
(m) The State Treasurer shall make all allocations of the net tax proceeds and the supplemental net tax proceeds and shall make the distributions and payments thereof pursuant to the allocations provided for in this section.
(n) It is the intention of the Legislature in enacting this section to preserve inviolate all pledges heretofore made pursuant to law of any portion of the proceeds derived from the highway gasoline tax for the benefit of those bonds now outstanding that are referred to in subsection (c), or for the benefit of securities now outstanding that were issued pursuant to law by any county or municipality.
(o) One-third of all revenues received or collected by the department from the additional six cents ($.06) tax levied on gasoline under subdivision (1) of subsection (a) of Section 40-17-325, remaining after the payment of refunds of this article shall be paid into the State Treasury and distributed by the State Treasurer as prescribed under Section 8-17-91.
(p) The remaining two-thirds revenues received or collected by the department from the additional six cents ($.06) tax levied on gasoline under subdivision (1) of subsection (a) of Section 40-17-325, after the payment of refunds and the expense of administration and enforcement of this article shall be paid into the State Treasury and distributed by the State Treasurer as follows:
(1) Forty-five percent for state highway purposes and as the state’s share of the remaining two-thirds revenues received or collected by the department from the additional six cents ($.06) tax levied. This 45 percent shall be deposited into the State Treasury to the credit of the Public Road and Bridge Fund and shall be disbursed as provided in this article.
(2) Fifty-five percent for highway purposes by the counties and municipalities. The 55 percent of the remaining two-thirds revenues received or collected by the department from the additional six cents ($.06) tax levied shall be deposited into the State Treasury and shall be disbursed and allocated as hereinafter provided in this section.
a. A portion of the local subdivisions’ shares of the remaining two-thirds revenue received or collected by the department from the additional six cents ($.06) tax levied that is equal to 25 percent of the remaining two-thirds revenue received or collected by the department from the additional six cents ($.06) tax levied shall be allocated equally among the 67 counties of the state.
b. The entire residue of the local subdivisions’ shares of the remaining two-thirds revenues received or collected by the department from the additional six cents ($.06) tax levied, being an amount equal to 30 percent of the remaining two-thirds revenues received or collected by the department from the additional six cents ($.06) tax levied, shall be allocated among the 67 counties of the state on the basis of the ratio of the population of each county to the total population of the state according to the then next preceding federal decennial census, or any special federal census heretofore held in any county subsequent to the effective date of the 1970 Federal Decennial Census. The allocation provided for in this subsection shall be made on or prior to the tenth day of each month with respect to receipts of the highway gasoline tax by the state during the preceding month.
c. The distributions provided for in this subdivision shall be made monthly. The amounts allocated or apportioned to each county shall be disposed of as follows:
Ten percent of the amount so allocated or apportioned to each county shall be distributed among the municipalities in the county with respect to which the allocation or apportionment is made, each distribution among the municipalities shall be made on the basis of the ratio of the population of each municipality to the total population of all municipalities in the applicable county according to the then next preceding federal decennial census. Provided, that any local laws or general laws of local application now in effect regarding the distribution of the tax levied by Section 40-17-325 shall govern the distribution of the amounts allocated or apportioned within every county by this section; provided further, that the Legislature may by general or local laws prescribe other distributions within counties to local governments.
The remaining portion of the amount so allocated or apportioned to each county shall be distributed to the county with respect to which such allocation or apportionment is made.
d. The population of any municipality incorporated subsequent to the taking of the then next preceding federal decennial census shall be deemed to be the population shown by the census for that municipality taken pursuant to the requirements of Section 11-41-4. Any municipality incorporated after September 30, 1978, shall not participate in the distribution provided for in this section until the fiscal year next succeeding the fiscal year during which it is incorporated, the first distribution to the municipality shall be made in respect of receipts of the highway gasoline tax by the state during October of the fiscal year next succeeding its incorporation.
e. When requested to do so by any municipality, the Department of Transportation may at its discretion make available the services and advice of its engineers and other employees with respect to any work for which that municipality proposes to expend moneys distributed to it under this subdivision. Any services and advice that may be so made available shall be provided under the terms and conditions as may be mutually agreeable to the Department of Transportation and the municipality.
(q) The State Treasurer shall make all allocations of the revenue collections and shall make the distribution and payments thereof pursuant to such allocations provided for in this article.
(Act 2011-565, p. 1084, §40; Act 2015-54, §4.)
The revenue, less the cost of collection, obtained from the tax levied in subdivision (3) of subsection (a) of Section 40-17-325 shall be paid into the State Treasury to the credit of the Department of Transportation and be used exclusively for the purpose of paying the cost of acquiring, engineering, construction, improvement, and maintenance of existing or proposed airports and other air navigation facilities within the state, for the payment of the salaries of all employees who have been transferred from the Alabama Department of Aeronautics to the Department of Transportation under Article 12 of Chapter 1 of Title 23, and for the payment of administrative expenses incurred by the Department of Transportation in performing aeronautical activities and for the further purpose of creating a sinking fund for the payment of the interest and retirement of the principal of all bonds which may be hereafter lawfully issued, sold, and delivered for funds to be used exclusively for the enumerated purposes.
(Act 2011-565, p. 1084, §41.)
(a) The proceeds of the thirteen cents ($.13) diesel excise tax imposed by this article, when collected, shall be applied as follows:
(1) For payment of the costs of collection thereof, being the amount appropriated for each fiscal year by the Legislature to the department for the administration of this article.
(2) For payment of the principal of and interest on bonds issued after October 1, 1969, and prior to December 1, 1977, by the Alabama Highway Authority, a public corporation and instrumentality of the state, all in the manner and to the extent and subject to the priorities as to rank as are provided in the respective statutes under which the bonds were issued.
(3) For payment of the principal of and interest on bonds and other obligations, including refunding obligations, issued after December 1, 1977, by a public corporation existing at the time of issuance under the laws of Alabama pursuant to then existing statutory or constitutional authorization, or by the State of Alabama pursuant to authorization, effective at the time of issuance, under the Constitution and laws of the state, and for which the excise tax imposed by this article shall have been appropriated and pledged in a then effective statute or constitutional provision, including any enabling act under a constitutional provision, all in the manner and to the extent and subject to the priorities in rank as may be provided in the statute or constitutional provision or in an authorizing resolution thereunder.
(4) The balance shall be covered into the State Treasury to the credit of the Department of Transportation to be used exclusively in the construction, repair, maintenance, and operation of public roads and bridges in this state, including any toll road or toll bridge constructed by the Department of Transportation or maintained and operated by it or under its supervision.
(b) Revenues received or collected from the additional six cents ($.06) excise tax by the department upon the selling, use or consumption, distributing, storing, or withdrawing from storage in this state of diesel fuel remaining after the payment of the expense of administration and enforcement of this section shall be distributed as follows:
(1) Four and sixty-nine one hundredths percent shall be distributed equally among each of the 67 counties of the state monthly. These funds shall be used by counties for the purposes specified in paragraph a. of subdivision (2) of subsection (a) of Section 8-17-91.
(2) Ninety-three one hundredths of one percent shall be allocated among the incorporated municipalities of the state and distributed and used as provided in paragraph c. of subdivision (2) of subsection (a) of Section 8-17-91.
(3) The balance shall be paid to the State Treasury to be used for highway purposes by the Department of Transportation.
Provided, that for the first five full fiscal years commencing October 1, 2004, if distributions to the counties and municipalities provided for in subdivisions (1) and (2) above are insufficient to ensure, in combination with the distributions provided in Section 8-17-91, that the counties and municipalities receive no less than the distributions received for fiscal year 2003 under the previous provisions of Section 8-17-91, then the above percentages shall be adjusted accordingly. After the first five full fiscal years, the above percentages shall not be adjusted.
(Act 2011-565, p. 1084, §42.)
(a) For the purposes of this section, the following words and phrases shall have the following meanings:
(1) BRIDGE REPLACEMENT. Bridge replacement includes the replacement of existing bridge structures and, if necessary, the realignment of the adjacent approaches.
(2) RESURFACING, RESTORATION, AND REHABILITATION. Work undertaken primarily to preserve an existing facility. Restoration and rehabilitation is work required to return the existing pavement or bridge deck, including shoulders, to a condition of adequate structural support or to a condition adequate for placement of an additional state of construction. Resurfacing consists of the placement of additional surface material over the existing, restored, or rehabilitated roadway or bridge deck to improve serviceability or to provide additional strength. Resurfacing, restoration, and rehabilitation work may include changes to geometric features, such as minor widening, flattening curves, or improving sight distances.
(3) VEGETATION MANAGEMENT. Action taken to maintain the right-of-way of a paved road in a condition that is beneficial to public safety and the longevity of the road infrastructure including, but not limited to, restoration and maintenance and cleaning of the full width of the right-of-way through the use of herbicides, heavy equipment, and other means.
(b) It is the intent of the Legislature that the proceeds of the remaining two-thirds revenues received or collected by the department from the additional six cents ($.06) gasoline excise tax levied under Section 40-17-325(a)(1) and the revenues received or collected by the department from the additional six cents ($.06) diesel fuel excise tax under Section 40-17-325(a)(2) shall be used in the following manner:
(1) Where the use is by the Department of Transportation, the use shall, with the approval of the Governor, be for the construction and maintenance of public roads and bridges on the state highway system.
(2) Where the use is by a county, the use shall be for vegetation management or resurfacing, restoration, and rehabilitation of the paved county roads and bridges or bridge replacement on the county road system. These funds shall not be used for new construction unless 90 percent of the county’s paved road system has achieved a grade of 85 percent based on the State of Alabama Department of Transportation’s annual maintenance report of county roads and bridges. These funds shall not be used for the purchase of equipment or herbicides. The net tax proceeds distributed to the county shall not be commingled with other funds of the county, including any other gasoline tax revenues, and shall be kept and disbursed by the county from a special fund only for the purposes hereinabove provided.
(3) Where the use is by a municipality, the use shall be for resurfacing, restoration, and rehabilitation of roads, bridges, and streets within the municipality. The use may also be for bridge replacement within the municipality. From time to time, the funds may also be used to construct new roads and streets within the municipality. These funds shall not be commingled with other funds of the municipality, including any other gasoline tax revenues, and shall be kept and disbursed by the municipality from a special fund only for the purposes hereinabove provided.
(Act 2011-565, p. 1084, §43; Act 2013-372, p. 1350, §1; Act 2013-402, p. 1541, §1; Act 2015-54, §4.)
Except for those taxes on motor fuels that are levied or that may be levied by a county or municipality pursuant to a local law or general law of local application that is in effect on August 1, 2023, all taxes on motor fuels, as defined in Section 40-17-322, whether called an excise tax, license tax, or otherwise, levied by a municipality or county after August 1, 2023, may be used only for the cost of administering the tax; the cost of construction, reconstruction, maintenance, mass transit, and repair of roads, bridges, and rights-of-ways; cost of traffic regulation; and the cost of enforcing traffic and motor vehicle laws.
(Act 2023-288, §1.)
There is appropriated to the Department of Revenue, as a first charge against the revenues collected under the provisions of this article for the fiscal year ending September 30, 2012, one hundred fifty thousand dollars ($150,000), to be utilized for the implementation and administration of this article, and every year thereafter as a first charge against the revenues collected under the provisions of this article, an amount of revenue shall be appropriated to the department to offset its costs in the administration of this article.
(Act 2011-565, p. 1084, §46.)
(a) Effective for tax periods beginning after August 31, 2019, an additional excise tax of six cents ($0.06) is imposed on each net gallon of gasoline and diesel fuel.
(b) Effective October 1, 2020, this additional excise tax is increased by two cents ($.02) to eight cents ($0.08) on each net gallon of gasoline and diesel fuel.
(c) Effective October 1, 2021, this additional excise tax is increased by two cents ($.02) to ten cents ($0.10) on each net gallon of gasoline and diesel fuel.
(d) Beginning October 1, 2023, and on July 1 of every other year thereafter, the excise tax rate provided in this section shall be adjusted by the percentage change in the yearly average of the National Highway Construction Cost Index (NHCCI) issued by the U. S. Federal Highway Administration (FHWA) for the most recent 12-month period ending December 31, compared to the base year average, which is the average for the 12-month period ending December 31, 2020 and rounded to the nearest whole cent. The maximum amount of increase or decrease in the excise tax rate shall not exceed $.01 per net gallon of gasoline or diesel fuel and shall take effect every other year. The Department of Revenue shall notify each terminal supplier, position holder, licensed distributor, and importer of the tax rate adjustment applicable under this subsection on or before March 1.
(e) This additional excise tax shall be levied, administered, and collected in accordance with Article 12, provided that the due date for payment and filing of returns for all motor fuel taxes, including the additional amounts levied in this article, shall be the 20th day of the month following the month in which the tax accrues, except as otherwise provided in Section 40-17-340 (d), and the bond required under Section 40-17-335 (a)(1) shall not exceed three million dollars ($3,000,000). The net tax proceeds, after the cost of collection and distribution to the Alabama Highway Finance Corporation authorized by this article shall be distributed to the state and to each county and municipality for transportation infrastructure purposes in accordance with this article.
(Act 2019-2, 1st Sp. Sess., §6.)
(a) The Alabama Department of Revenue shall retain one-quarter of one percent (0.25%) of the tax proceeds, less any refunds, from this additional excise tax on gasoline and diesel fuel for its cost of collection. The department may adopt rules and such forms as may be necessary for the administration of the excise tax provided for in this article.
(b) Each month, prior to the remaining payments provided in this article, up to $750,000 of the tax proceeds from the additional excise tax on gasoline and up to $230,000 of the tax proceeds from the additional excise tax on diesel fuel shall be distributed first to the Alabama Highway Finance Corporation for the payment of the principal of and interest on bonds to be issued by it to finance improvements to the ship channel providing access to the facilities of the Alabama State Docks, to the extent necessary for such purpose. The amount distributed pursuant to this section may be pledged as security for any loan or debt proceeds as deemed necessary by the Alabama Highway Finance Corporation to finance the improvements, but not to exceed one-hundred fifty million dollars ($150,000,000) in aggregate principal amount to be used for improvement projects. This distribution of tax proceeds to the Alabama Highway Finance Corporation shall terminate at the final maturity of the bonds secured by these tax proceeds, provided that the bond term shall not exceed 20 years.
(c) Notwithstanding any other law to the contrary, the net tax proceeds remaining after any refunds, the cost of collection, and the distribution to the Alabama Highway Finance Corporation authorized above shall be distributed as follows:
(1) Sixty-six and sixty-seven one hundreths percent (66.67%) shall be allocated to ALDOT and deposited in the Rebuild Alabama Fund, to be used for transportation infrastructure improvement, preservation and maintenance projects pursuant to the Rebuild Alabama Act. The net tax proceeds may be used to match any available federal, state, and local transportation funding. The funds allocated to the department shall be audited by the Department of Examiners of Public Accounts in the same manner as all other department funds. The Director of ALDOT, with approval of the Governor, may also pledge a share of the net tax proceeds not to exceed fifty percent (50%) of the proceeds as security for the issuance or refinancing of any loan or debt obligation used for transportation infrastructure improvement, preservation and maintenance of projects pursuant to the Rebuild Alabama Act. This pledge shall be irrevocable for the duration of the loan or debt obligations for which the net tax proceeds are pledged.
a. ALDOT shall not use the net tax proceeds for any of the following purposes:
Salaries, benefits, or any other form of compensation for state or contract employees except as included as direct project costs and subject to audit by the Department of Examiners of Public Accounts.
The purchase, lease, or maintenance of equipment, other than equipment purchased and permanently installed as a part of a road or bridge project.
The maintenance or construction of public buildings or other structures that are not integral to the system of roads and bridges.
b. Beginning on October 1, 2019, and each October 1 thereafter, ALDOT shall allocate $400,000 to each county in exchange for the annual federal allocation of $533,000 which was being distributed to each county on March 12, 2019. Nothing in the Rebuild Alabama Act shall prohibit ALDOT from utilizing these exchanged federal funds at its discretion and in a manner consistent with Federal Highway Administration (FHWA) procedures.
c. The $400,000 annual allocation to each county shall be utilized first as matching funds for any balance in the county’s federal allocation not authorized by September 30, 2019. Once these unexpended funds are authorized for an individual county, all remaining and future allocations established herein shall be expended for road and bridge projects on county roads classified as minor collectors or higher, or for bridge structures on the National Bridge Inspection Inventory, or for both.
d. The provisions of this section notwithstanding, counties shall retain the ability to be awarded and utilize other federal funds or state grants which are or may become available after the effective date of the exchange of current federal funds. Further, the exchange of current federal funds does not preclude a county from the award or utilization of any federal funds earmarked in the future for local governments through FHWA, or any federal appropriation legislation, or for both.
(2) Twenty-five percent (25%) shall be allocated to counties of the state to be used for transportation infrastructure improvement, preservation, and maintenance as provided for in the Rebuild Alabama Act. It shall be allocated and disbursed among the 67 counties of the state as follows:
a. Forty five percent (45%) of the amount shall be allocated equally among the 67 counties of the state.
b. Fifty-five percent (55%) of the amount shall be allocated among the 67 counties of the state on the basis of the ratio of the population of the state according to population projections from the U.S. Census Bureau Population and Housing Estimates Program or any prior special federal census held in any county. Beginning in 2020, the ratio of the population of each county to the total population of the state shall be updated every five years.
c. The net tax proceeds may be used to match any available federal, state, and local transportation funding. The governing body of a county may also pledge its share of the net tax proceeds not to exceed fifty percent (50%) of the proceeds as security for the issuance or refinancing of any loan or debt obligation used for transportation infrastructure improvement, preservation, and maintenance. This pledge shall be irrevocable for the duration of the loan or debt obligations for which the net tax proceeds are pledged.
d. Counties must ensure that at least fifty percent (50%) of the funds are allocated for projects utilizing established bidding procedures submitted by the Association of County Engineers of Alabama and approved by the Department of Examiners of Public Accounts. In addition, the county may utilize such funds to meet any other project matching requirements associated with other federally or state funded transportation projects, upon approval of the county commission. A county may utilize over fifty percent of its annual allocation of these funds for project match if the project follows the provisions for bidding herein described or is let to contract through ALDOT.
(3) Eight and thirty-three one hundreths percent (8.33%) shall be allocated and disbursed to the municipalities of the state to be used for transportation infrastructure improvement, preservation, and maintenance, as provided for in this article, as follows:
a. Twenty-five percent (25%) of this amount shall be allocated equally among the municipalities of the state.
b. Seventy-five percent (75%) of this amount shall be allocated among the municipalities of the state on the basis of the ratio of the population of each municipality to the total population of all municipalities of the state according to the population projections from the U.S. Census Bureau Population and Housing Estimates Program or any prior special federal census held in any municipality. Beginning in 2020, the ratio of the population of each municipality to the total population of the state shall be updated every five years. The population of any municipality incorporated subsequent to the taking of the last federal decennial census shall be deemed to be the population shown by the census for that municipality. Any municipality incorporated after March 12, 2019, shall not participate in the distribution provided for in this subsection until the fiscal year next succeeding the fiscal year during which it is incorporated.
c. The net tax proceeds may be used to match any available federal, state, and local transportation funding. The governing body of a municipality may also pledge its share of the net tax proceeds as security for the issuance or refinancing of any loan or debt obligation used for transportation infrastructure improvement, preservation, and maintenance. This pledge shall be irrevocable for the duration of the loan or debt obligations for which the net tax proceeds are pledged. Any Class 1 through 4 municipality that provides or operates public transportation services on March 12, 2019, may utilize an amount not to exceed ten percent (10%) of the net tax proceeds received annually by that municipality pursuant to the Rebuild Alabama Act to match any available federal or state transportation funding available for public transportation infrastructure improvements.
(d) The distribution prescribed by this section shall begin no later than January 2020.
(Act 2019-2, 1st Sp. Sess., §7)
For the purposes of this article, the following words have the following meanings:
(1) DEPARTMENT. The Alabama Department of Revenue.
(2) DIESEL FUEL. Any liquid that is advertised, offered for sale, or sold for use as or used as a motor fuel in a diesel-powered engine. Diesel fuel includes #1 and #2 fuel oils, kerosene, special fuels, and blended fuels which contain diesel fuel, but does not include gasoline or aviation fuel.
(3) DYED DIESEL FUEL. Diesel fuel that meets the dyeing and marking requirements of 26 U.S.C §4082.
(4) GASOLINE. Any product commonly or commercially known as gasoline, or any substitute therefor, regardless of classification, that is advertised, offered for sale, or sold for use as or used as fuel in an internal combustion engine, including gasohol and blended fuel which contains gasoline. Gasoline does not include aviation gasoline sold for use in an aircraft motor.
(5) KEROSENE. All grades of kerosene, including, but not limited to, the two grades of kerosene, No. 1-K and No. 2-K, commonly known as K-1 kerosene and K-2 kerosene, respectively, described in the American Society for Testing Materials Standard D-3699, in effect on January 1, 1999, and kerosene-type jet fuel described in the American Society for Testing Materials Standard D-1655 and military specifications MIL-t-5624r and MIL-t-83133d (grades jp-5 and jp8), and any grade described as kerosene or kerosene-type jet fuel by the Internal Revenue Code and administrative guidance promulgated thereunder.
(6) MOTOR FUEL. Gasoline and diesel fuel, but shall not include aviation fuel.
(7) PERSON. Any individual, firm, cooperative, association, corporation, limited liability corporation, trust, business trust, syndicate, partnership, limited liability partnership, joint venture, receiver, trustee in bankruptcy, club, society, or other group or combination acting as a unit.
(8) SPECIAL FUEL. Any liquid, other than gasoline, used or suitable for use as motor fuel in a diesel-powered engine or motor to propel any form of vehicle, machine, or mechanical contrivance, and includes products commonly known as biodiesel fuel. Special fuel does not include any petroleum product or chemical compound such as alcohol, industrial solvent, or lubricant, unless blended in or sold for use as motor fuel in a diesel powered engine.
(9) TAX. Any amount, including applicable penalty and interest, levied or assessed against a taxpayer and which the department or any county, municipality, or their designees are required or authorized to administer under the provisions of Alabama law.
(10) TAXPAYER. Any person subject to or liable for any local tax; any person required to file a return with respect to, or to pay, or withhold and remit any local tax or to report any information or value to the department, a county, municipality, or its designee; or any person required to obtain or holding any interest in any license, permit, or certificate of title issued by the department, a county, municipality, or its designee, or any person that may be affected by any act or refusal to act by the department, a county, municipality, or its designee, or to keep any records required by this article.
(Act 2018-469, §1.)
(a) Notwithstanding any law or ordinance regarding standardization of local levies, no later than October 31, 2019, the Department of Revenue shall develop and make available a system which allows any taxpayer required to timely file and remit a county motor fuel tax calculated on a per gallon basis or municipal motor fuel license tax calculated on a per gallon basis the capability to file and remit motor fuel tax returns and payments through an electronic single point of filing program. The system shall be available for use by any taxpayer for tax periods after September 30, 2019, provided the taxpayer complies with this article and any rules adopted by the department for the administration of the system. The system shall allow for motor fuel tax return filing and tax remittance only and may not provide for the administration or enforcement of local motor fuel taxes. This applies to all local motor fuel taxes calculated on a per gallon basis whether a tax or a license fee adopted pursuant to Section 11-51-90.
(b) There shall be no charge to local taxing jurisdictions for use of the system by a taxpayer or a local taxing jurisdiction or its designee.
(c) The system developed and implemented pursuant to subsection (a) shall have the capability to allow a taxpayer to timely file an electronic tax return for each local taxing jurisdiction in which the taxpayer is required to file and remit a motor fuel tax calculated on a per gallon basis. The department along with the Local Motor Fuel Tax Advisory Committee shall establish the required information for the electronic tax return, and all information included in the electronic tax return shall be electronically available to each appropriate local taxing jurisdiction without delay. The department shall consult with the Local Motor Fuel Tax Advisory Committee established in Section 40-17-383 regarding development and implementation of the system.
(d) On or before May 1, 2019, every local taxing jurisdiction levying or administering a motor fuel tax shall submit to the department a list of the motor fuel taxes levied or administered by that local taxing jurisdiction which are calculated on a per gallon basis, including current rates. Every local taxing jurisdiction shall provide notice in a form prescribed by the department of any new or amended motor fuel tax calculated on a per gallon basis no later than 60 days prior to the effective date of the new or amended motor fuel tax. The department shall thereafter notify all taxpayers registered in state-administered taxing jurisdictions of the jurisdiction’s intent to enact or amend the tax. Failure of the local jurisdiction or the department to provide notice as prescribed in this subsection shall not invalidate the levy of the tax or negate the taxpayer’s obligation to remit the tax to the taxing authority, except that the department may not be required to program new motor fuel taxes or tax rates in the system until the notice is provided as required herein. Unless first authorized by a local law, a new or amended motor fuel tax may not be adopted during the same meeting of the local taxing jurisdiction that the new or amended motor fuel tax is introduced.
(e) The department shall make available to each local taxing jurisdiction a monthly report for that jurisdiction summarizing all taxes paid using the system. Such report shall include, but not be limited to, the name and address of the taxpayer, the number of gallons sold by the taxpayer, and the amount of tax remitted.
(Act 2018-469, §2.)
(a) All local taxing jurisdictions in the state shall authorize use of the system for any taxpayer required to file a return for a local motor fuel tax calculated on a per gallon basis and remit the tax payments. The return shall include, but not be limited to, the name of the store, the physical address of the store, the sales tax number of each store, the number of gallons of excise taxable motor fuel sold by the distributor to the store, the local excise tax paid, and any other information required by the department. Any taxpayer using the system for filing an electronic tax return for a local taxing jurisdiction shall be required to simultaneously remit payment through the system or through another method of payment accepted by the local taxing jurisdiction or its designee for which payment is being made.
(b) Not later than June 30, 2019, each local taxing jurisdiction shall provide the department with necessary information to allow all motor fuel tax payments to be remitted directly to the bank account or other account designated by the local taxing jurisdiction. Each non-state administered local taxing jurisdiction shall set up their accounts to allow dishonored payments to be reversed. All tax payments made through the system for non-state administered local taxing jurisdictions shall be remitted directly from the taxpayer to the designated bank account or other account of the local taxing jurisdiction with the system serving as a conduit only.
(c) No taxpayer shall be required to use the system for tax return filing and remittance of local motor fuel taxes; provided, however, any taxpayer using the system shall comply with this article and any rules adopted by the department for the administration of this article. Additionally, any taxpayer using the system shall comply with any rule of the local taxing jurisdiction regarding the audit, enforcement, and administration of the local motor fuel tax.
(d) The local motor fuel tax return and payment submitted through this system shall be due on or before the 20th day of the month next succeeding the month in which the tax accrues. No local motor fuel tax return or payment shall be accepted through this system after the due date prescribed herein. A taxpayer who is required to submit a local motor fuel tax return and payment after the due date prescribed herein shall file a return and make any payment directly to that local taxing jurisdiction or its designee.
(e) All petitions for refunds of taxes paid through the system shall be made to the local taxing jurisdiction.
(Act 2018-469, §3.)
(a)(1) To ensure that local taxing jurisdictions have meaningful input into the development and operation of the system, a Local Motor Fuel Tax Advisory Committee is established to review the design and operation of the system and to make recommendations regarding system requirements and functionality to the Commissioner of Revenue.
(2) The committee shall consist of the following persons:
a. Three representatives of county government, appointed by the Association of County Commissions of Alabama.
b. Three representatives of municipal government, appointed by the Alabama League of Municipalities.
c. Three representatives of the retail community, appointed by the Petroleum and Convenience Marketers of Alabama.
d. The Commissioner of Revenue or his or her designee.
e. One representative of a county and one representative of a municipality that levies a motor fuel tax appointed by the Speaker of the House of Representatives who shall be nonvoting members.
f. One representative of the business community appointed by the President Pro Tempore of the Senate who shall be a nonvoting member.
(3) The designating and appointing authorities shall coordinate their designations and appointments to assure the advisory committee is inclusive and reflects the racial, gender, geographic, urban, rural, and economic diversity of the state.
(4) The committee members shall receive no compensation or reimbursement of expenses from the state for serving on the committee.
(b) The committee shall meet with the Commissioner of Revenue and with other employees of the department as the commissioner deems appropriate. The initial meeting shall be at a time and place to be determined by the commissioner and shall be held not later than September 30, 2018. At the initial meeting, the committee shall organize itself and shall determine the timing and frequency of subsequent meetings.
(c) The role of the committee shall be limited to providing input and recommendations on the development and functionality of the system related to the filing of motor fuel tax returns calculated on a per gallon basis and remittance of payments using the system. The committee shall not review the department’s administration of state taxes, state-administered local taxes, or any other department matter beyond the system.
(d) If the commissioner fails to act on recommendations made by the committee regarding the system, the committee, by majority vote, may appeal to the Legislative Council for a determination on whether the committee’s recommendations shall be implemented. The determination of the Legislative Council shall be final.
(Act 2018-469, §4.)
Nothing in this article shall be construed to authorize the Department of Revenue to impose fees on the local taxing jurisdictions or their designees for the maintenance or operation of the system.
(Act 2018-469, §5.)
As used in this chapter, the following words shall have the meanings herein ascribed, except where the context directly requires otherwise:
(1) COMMISSIONER. The Commissioner of Revenue.
(2) CONTROLLED SUBSTANCE. Any drug or substance, whether real or counterfeit, as defined in the Alabama Uniform Controlled Substances Act, that is held, possessed, transported, transferred, sold, or offered to be sold in violation of Alabama laws. “Controlled substance,” as used in this chapter, does not include marihuana.
(3) DEALER. A person who in violation of Alabama law manufactures, produces, ships, sells, uses, distributes, transports, or imports into Alabama or in any manner acquires or possesses more than 42 1/2 grams of marihuana, or seven or more grams of any controlled substance, or 10 or more dosage units of any controlled substance which is not sold by weight, or dosage units, shall include the weight or dosage units of the substance whether pure, impure, or diluted, in the dealer’s possession. A quantity of a controlled substance is diluted if it consists of a detectable quantity of a pure controlled substance and any excipients or fillers.
(4) DEPARTMENT. Department of Revenue of the State of Alabama.
(5) DOSAGE UNIT. A tablet, capsule, vial, or ampule of a controlled substance or, in cases of mass volume or diluted quantities, the proper dose or quantity of a controlled substance to be taken all at one time or in fractional amounts within a given period, as defined and adopted by the United States Pharmacopeia.
(6) MARIHUANA. Any marihuana, whether real or counterfeit, as defined in Section 20-2-2, that is held, possessed, transported, transferred, sold, or offered to be sold in violation of Alabama laws.
(7) POSSESSION. For the purposes of this chapter, to include either actual possession, or constructive possession, or a combination of both actual and constructive possession.
(Acts 1988, 1st Ex. Sess., No. 88-785, p. 218, §1.)
The Commissioner of Revenue shall administer the provisions of this chapter. Payments required by this chapter shall be made to the commissioner on the form provided by the commissioner. The commissioner shall collect all taxes under this chapter.
(Acts 1988, 1st Ex. Sess., No. 88-785, p. 218, §2.)
The said commissioner may promulgate rules and regulations necessary to enforce and administer the revenue and taxation provisions of this chapter and shall adopt a uniform system of providing, affixing, and displaying official stamps, official labels, or other official indicia for marihuana and controlled substances on which a tax is imposed.
(Acts 1988, 1st Ex. Sess., No. 88-785, p. 218, §3.)
No dealer may possess, distribute, sell, transport, import, transfer, or otherwise use any marihuana or controlled substance upon which a tax is imposed by Section 40-17A-8 unless the tax has been paid on the marihuana or other controlled substance as evidenced by a stamp or other official indicia.
(Acts 1988, 1st Ex. Sess., No. 88-785, p. 218, §4.)
Nothing in this chapter may in any manner provide immunity for a dealer from criminal prosecution pursuant to Alabama law.
(Acts 1988, 1st Ex. Sess., No. 88-785, p. 218, §5.)
Nothing in this chapter requires persons registered under Section 20-2-51, or otherwise lawfully in possession of marihuana or a controlled substance, to pay the tax required under this chapter.
(Acts 1988, 1st Ex. Sess., No. 88-785, p. 218, §6.)
For the purpose of calculating the tax under Section 40-17A-8, an amount of marihuana or other controlled substance is measured by the weight of the substance or by number of dosage units in the dealer’s possession.
(Acts 1988, 1st Ex. Sess., No. 88-785, p. 218, §7.)
A tax is imposed on marihuana and controlled substances as defined in Section 40-17A-1 at the following rates:
(1) On each gram of marihuana, or each portion of a gram, $3.50; and
(2) On each gram of controlled substance, or portion of a gram, $200; or
(3) On each 50 dosage units of a controlled substance that is not sold by weight, or portion thereof, $2,000.
(Acts 1988, 1st Ex. Sess., No. 88-785, p. 218, §8.)
(a) Any dealer violating this chapter is subject to a penalty of 100 percent of the tax in addition to the tax imposed by Section 40-17A-8. In addition to the tax and penalty imposed, a dealer failing to affix the appropriate stamps, labels, or other indicia is guilty of a Class C felony, and, upon conviction, may be punished as provided in the Alabama Criminal Code. Such penalty shall be cumulative to any other penalty or crime.
(b) Notwithstanding any other provision of the criminal laws of this state, an indictment may be found and filed upon any criminal offense specified in this section, in the proper court within six years after the commission of this offense.
(Acts 1988, 1st Ex. Sess., No. 88-785, p. 218, §9.)
Official stamps, labels, or other indicia to be affixed to all marihuana or controlled substances shall be purchased from the Department of Revenue. The purchaser shall pay 100 percent of face value for each stamp, label, or other indicia at the time of the purchase. The department shall make the stamps, labels, or other indicia in denominations as provided by the department by regulation.
(Acts 1988, 1st Ex. Sess., No. 88-785, p. 218, §10.)
(a) When a dealer purchases, acquires, transports, or imports into this state marihuana or controlled substances on which a tax is imposed by Section 40-17A-8, and if the indicia evidencing the payment of the tax have not already been affixed, the dealer shall have them permanently affixed on the marihuana or controlled substance immediately after receiving the substance. Each stamp or other official indicia may be used only once.
(b) Payable on possession. Taxes imposed upon marihuana or controlled substances by this chapter are due and payable immediately upon acquisition or possession in this state by a dealer.
(Acts 1988, 1st Ex. Sess., No. 88-785, p. 218, §11.)
(a) An assessment for a dealer not possessing stamps or other official indicia showing that the tax has been paid shall be considered a jeopardy assessment or collection, as provided in Section 40-29-91. The commissioner shall assess a tax based on personal knowledge or information available to the commissioner, mail to the taxpayer at the taxpayer’s last known address or serve in person, a written notice of the amount of tax; demand its immediate payment; and, if payment is not immediately made, collect the tax by any method prescribed in either Section 40-2-11 or Section 40-29-23, except that the commissioner need not await the expiration of the times specified in Section 40-29-23, nor shall he be required to obtain a circuit court order to levy upon any assets or other property to obtain immediate collection of the tax.
(b) No person may bring suit to enjoin the assessment or collection of any taxes, interest, or penalties imposed by this chapter except law enforcement officials when acting for the purpose of carrying out subsection (d) of Section 40-17A-13.
(c) The tax and penalties assessed by the commissioner are presumed to be valid and correctly determined and assessed. The burden is upon the taxpayer to show their incorrectness or invalidity. Any statement or assessment filed by the commissioner with any court, or any other certificate by the commissioner of the amount of tax and penalties determined or assessed is admissible in evidence and is prima facie evidence of the facts it contains.
(Acts 1988, 1st Ex. Sess., No. 88-785, p. 218, §12.)
(a) Notwithstanding any law to the contrary, neither the commissioner nor a public employee may reveal facts contained in a report or return required by this chapter, nor can any information contained in such a report or return be used against the dealer in any criminal proceeding, except in connection with a proceeding involving taxes due under this chapter, unless such information is independently obtained.
(b) Any person violating this section shall be guilty of a Class C misdemeanor.
(c) This section does not prohibit the Commissioner of Revenue from publishing statistics that do not disclose the identity of dealers or the contents of particular returns or reports.
(d) Notwithstanding any provision of this chapter or any other provision of law, including the revenue code, collection of any taxes under this chapter or imposition of any revenue liens arising as a result of this chapter, shall not interfere with any forfeiture and condemnation of money or any other type or kind of property whatsoever under the drug forfeiture laws of this state, or with any distribution of property or funds under the drug forfeiture laws of this state. Regardless of the order in which proceedings are begun, condemnation and forfeiture of money or any other type or kind of property whatsoever and distribution of property and funds under the drug forfeiture laws of this state shall always take precedence over any proceedings to collect taxes under this chapter.
(Acts 1988, 1st Ex. Sess., No. 88-785, p. 218, §13.)
For the purpose of determining the correctness of any return, determining the amount of tax that should have been paid, determining whether or not the dealer should have made a return or paid taxes, or collecting any taxes under this act, the commissioner may examine, or cause to be examined, any books, papers, records, or memoranda, that may be relevant to making such determinations, whether the books, papers, records, or memoranda, are the property of or in the possession of the dealer or another person. The commissioner may require the attendance of any person having knowledge or information that may be relevant, compel the production of books, papers, records, or memoranda by persons required to attend, take testimony on matters material to the determination, and administer oaths or affirmations. The commissioner may issue subpoenas which may be served by authorized agents of the Department of Revenue to compel the attendance of witnesses or the production of documents, books, papers, records, bank records, and any other writing or memoranda.
(Acts 1988, 1st Ex. Sess., No. 88-785, p. 218, §14.)
All taxes or other funds received or collected by the Department of Revenue of the State of Alabama under the provisions of this chapter remaining after the payment of the expenses of administration and enforcement of this chapter shall be deposited into the State Treasury to the credit of the State General Fund.
(Acts 1988, 1st Ex. Sess., No. 88-785, p. 218, §15.)
It is declared to be the intent of this chapter to levy this tax upon illegal drugs in an effort to compensate for the lost revenue from a section of the economy that has not heretofore borne its fair share of the tax burden. This chapter is not intended to inculpate anyone or otherwise cause any individual to incriminate himself or herself in violation of that person’s constitutional rights.
(Acts 1988, 1st Ex. Sess., No. 88-785, p. 218, §16.)
For the purpose of this chapter, the following terms shall have the respective meanings ascribed by this section:
(1) ADVANCED FOSSIL-BASED GENERATION. The production of electricity from fossil-based generation with the use of technology or efficiency improvements to control or reduce carbon emissions, including but not limited to, technologies described in 26 U.S.C. § 48A(f), as such provision existed on December 31, 2007.
(2) ALTERNATIVE ENERGY RESOURCES. Coal gasification or liquefaction, nuclear, and advanced fossil-based generation.
(3) BIOMASS. Animals and plants, and the waste, by-products, or derivatives of either, including, but not limited to, the materials described in 26 U.S.C. §§ 45(c)(2), 45(c)(3), 45K(c)(3), or 48B(c)(4).
(4) BUSINESS TRUST. Any entity which is a business trust for federal income tax purposes.
(5) CAPTIVE REIT. Any REIT whose shares or certificates of beneficial interest are not regularly traded on an established securities market and are owned or controlled, at any time during the last half of the tax year, by an association taxable as a corporation that is not exempt from tax under 26 U.S.C. § 501(a), and is not any of the following: (i) a REIT; (ii) a listed Australian property trust (including any trust that a listed Australian property trust owns or controls, directly or indirectly, seventy-five percent or more of the voting power or value of the beneficial interests or shares of such trust); or (iii) any qualified foreign entity. The term Captive REIT shall not include any REIT at least 50 percent of the shares of which (by vote or value) are owned or controlled, directly or indirectly, at any time during the last half of the tax year, by a financial institution, as such term is defined in Chapter 16. For purposes of this definition, own or control means to own or control directly, indirectly, beneficially, or constructively more than fifty percent (50%) of the voting power or value of an entity. The attribution rules of 26 U.S.C. § 318, as modified by 26 U.S.C. § 856(d)(5), apply in determining ownership and control.
(6) CASH. Any legal tender, negotiable paper, or solvent credit.
(7) COAL GASIFICATION OR LIQUEFACTION. Liquid or gaseous fuels which are produced from coal, including lignite and including but not limited to fuels described in 26 U.S.C. §§ 45(c)(7)(A)(i), 45K(c)(1)(C), 48A(c)(7), or 48B(c)(2) as to coal, as such provisions existed on December 31, 2007.
(8) CORPORATION. The term includes associations, joint stock companies, and any other entity classified as an association taxable as a corporation for federal income tax purposes.
(9) DISREGARDED ENTITY. Any entity which is disregarded for federal income tax purposes.
(10) DOMESTIC. When applied to a corporation or subchapter K entity means created or organized under the laws of the State of Alabama.
(11) FIDUCIARY. A guardian, trustee, executor, administrator, personal representative, receiver, conservator, or any person acting in any fiduciary capacity for any person.
(12) FISCAL YEAR. An accounting period of 12 months ending on the last day of any month other than December.
(13) FOREIGN. When applied to a corporation or a subchapter K entity means created or organized under a jurisdiction other than the State of Alabama.
(14) GEOTHERMAL. Any geothermal reservoir in Alabama consisting of natural heat which is stored in rocks or in an aqueous liquid or vapor, whether or not under pressure.
(15) HEAD OF FAMILY. As used in this chapter, the term head of family has the same meaning as the term head of household as defined in 26 U.S.C. §2(b).
(16) HYDROPOWER PRODUCTION. The hydropower production of any hydroelectric dam or pumped hydro facility in Alabama, including, but not limited to, the hydropower production described in 26 U.S.C. § 45(c)(8), as such provision existed on December 31, 2007.
(17) INTANGIBLE EXPENSES AND COSTS. Any expenses, losses, and costs for, related to, or in connection directly or indirectly with the acquisition, use, maintenance, management, ownership, sale, exchange, or disposition of intangible property to the extent such amounts are allowed as deductions in determining taxable income before operating loss deduction and special deductions for the taxable year including, without limitation, expenses or losses related to or incurred in connection directly or indirectly with factoring transactions or discounting transactions, royalties, patents, technical and copyright licensing fees, and other similar expenses and costs. Intangible expenses and costs paid for the use of intangible property in this state are, to the recipient, income derived from sources within Alabama.
(18) INTANGIBLE PROPERTY. Patents, patent applications, trade names, trademarks, service marks, franchises, know-how, formulas, designs, patterns, processes, formats, copyrights and similar types of intangible assets, choses in action, and accounts receivable.
(19) INTEREST EXPENSES AND COSTS. Amounts directly or indirectly allowed as deductions under 26 U.S.C. § 163 for purposes of determining taxable income under the Internal Revenue Code. Interest expenses and costs paid to a related member by a subchapter K entity or a corporation, to the extent apportioned to Alabama by the payor, are to the recipient related member income derived from sources within Alabama.
(20) MUNICIPAL SOLID WASTE. The definition given in 26 U.S.C. § 45(c)(6), if located in Alabama.
(21) NONRESIDENT ESTATE. An estate other than a resident estate of this state.
(22) NONRESIDENT TRUST. A trust other than a resident trust of this state.
(23) NUCLEAR. Any nuclear facility the reactor design for which is approved after December 31, 1993, by the Nuclear Regulatory Commission, including, but not limited to, the facilities described in 26 U.S.C. § 45J(d), as such provision existed on December 31, 2007.
(24) PAID. For the purpose of deductions and credits hereinafter provided for with respect to income tax means paid or accrued or paid or incurred, and the terms paid or accrued and paid or incurred shall be construed according to the method of accounting on the basis of which the net income is computed under this chapter.
(25) PERSON. Any individual, trust, estate, corporation, association, disregarded entity, or subchapter K entity.
(26) QUALIFIED FOREIGN ENTITY. An entity organized outside of the U.S. that is similar in operation and form to a U.S. REIT that is not a captive REIT, and shall take into account the entity’s: (i) total real estate assets; (ii) tax transparency; (iii) actual distribution or required distribution of taxable income; and (iv) concentration of ownership.
(27) REIT. A Real Estate Investment Trust having the meaning ascribed to that term in 26 U.S.C. §§ 856 to 858, inclusive.
(28) RELATED ENTITY. A stockholder who is an individual, or a member of the stockholder’s family enumerated in 26 U.S.C. § 318, if the stockholder and the members of the stockholder’s family own, directly, indirectly, beneficially, or constructively, in the aggregate, at least 50 percent of the value of the taxpayer’s outstanding stock; a stockholder, or a stockholder’s partnership, limited liability company, estate, trust or corporation, if the stockholder and the stockholder’s partnerships, limited liability companies, estates, trusts, and corporations own directly, indirectly, beneficially, or constructively, in the aggregate, at least 50 percent of the value of the taxpayer’s outstanding stock; or a corporation, or a party related to the corporation in a manner that would require an attribution of stock from the corporation to the party or from the party to the corporation under the attribution rules of 26 U.S.C. § 318, if the taxpayer owns, directly, indirectly, beneficially, or constructively, at least 50 percent of the value of the corporation’s outstanding stock. The attribution rules of 26 U.S.C. § 318 shall apply for purposes of determining whether the ownership requirements of this subdivision have been met.
(29) RELATED MEMBER. A person that, with respect to the taxpayer any time during the taxable year, is a related entity as defined in this section, a component member as defined in 26 U.S.C. § 1563(b) of a controlled group of which the taxpayer is also a component, or is a person to or from whom there is attribution of stock ownership in accordance with 26 U.S.C. § 1563(e).
(30) RENEWABLE ENERGY RESOURCES. Wind, biomass, black liquor, tidal or ocean current, geothermal, solar energy, small irrigation, municipal solid waste, and hydropower production, and such term also includes hydrogen when derived or produced from some other renewable energy resource.
(31) REPORT FROM SOURCE. All individuals, corporations, associations, and partnerships, in whatever capacity acting, including lessees or mortgagors of real or personal property, fiduciaries, employers, and all other officers and employees of the state or of any municipal corporation or political subdivision of the state having control, receipt, custody, or payment of interest, rent, salaries, wages, premiums, annuities, compensation, remunerations, emoluments, barter income, or other fixed or determinable annual or periodical gains, profits, and income taxable under this chapter.
(32) RESIDENT ESTATE. The estate of any person who was a resident of Alabama at the time of his or her death.
(33) RESIDENT TRUST. A trust is a resident trust for a taxable year if it is a trust which meets both a. and b.:
a. The trust is created by the will of a decedent who was an Alabama resident at death or by a person who was an Alabama resident at the time such trust became irrevocable; and
b. For more than seven months during such taxable year, a person, as defined in this section, who either resides in or is domiciled in Alabama is either a fiduciary of the trust or a beneficiary of the trust to whom distributions currently may be made.
(34) SMALL IRRIGATION. An irrigation system canal or ditch in Alabama which does not include a dam or impoundment of water, including, but not limited to, facilities in Alabama described in 26 U.S.C. § 45(c)(5).
(35) SUBCHAPTER K ENTITY. A partnership, including a limited partnership or limited liability partnership, limited liability company, or any other entity subject to subchapter K of the Internal Revenue Code, 26 U.S.C. §§ 701 to 761, for federal income tax purposes, not including a single member limited liability company.
(36) TAXABLE YEAR. The calendar year or the fiscal year ending during the calendar year upon the basis of which net income is computed, or a period of less than 12 months resulting from a change in accounting period as provided in Section 40-18-30.
(37) TAXPAYER. Any person subject to a tax imposed by this chapter, or whose income is, in whole or in part, subject to a tax imposed by this chapter.
(38) TRUST. Any entity which is a trust for federal income tax purposes.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §373; Acts 1985, No. 85-515, §4; Acts 1990, No. 90-583, p. 988, §1; Acts 1997, No. 97-625, p. 1048, §3; Act 2001-1088, 4th Sp. Sess., p. 1095, §1; Act 2006-114, p. 173, §2; Act 2008-275, p. 402, §7; Act 2008-543, p. 1175, §1.)
(a) For purposes of this chapter, the statement that gain, loss, income, basis, earnings and profits, or any other item shall be determined in accordance with a specified section or sections of Title 26 United States Code (26 U.S.C.) or a specified federal public law (Pub. L. or P.L.) means that the principles set forth in such specified section or sections and the computations required by such section or sections shall be applied for purposes of this chapter, but shall be applied to the amounts of gain, loss, income, basis, earnings, and profits or other items determined for purposes of this chapter and not to such items for federal income tax purposes.
(b) The Legislature hereby finds and declares that the adoption by this state for its personal and corporate income tax purposes of certain provisions of the laws of the United States relating to the determination of income for federal income tax purposes will (1) simplify preparation of state income tax returns by taxpayers, (2) improve enforcement of the state income tax laws through better use of information obtained from federal income tax audits, and (3) aid the interpretation of the state tax laws through increased use of federal judicial and administrative determinations and precedents. The Legislature does therefore declare that the amendments to this section are intended to accomplish the foregoing purposes. Accordingly, for the purposes of this chapter, the term “26 U.S.C.” means the Internal Revenue Code, Title 26 of the United States Code, as in effect from time to time.
(c) The Department of Revenue shall have the authority to prescribe rules and regulations necessary to implement the principles stated above in the enforcement of this chapter.
(Acts 1985, No. 85-515, §5; Acts 1990, No. 90-583, p. 988, §2.)
(a) In addition to all other taxes now imposed by law, there is hereby levied and imposed a tax on the taxable income, as defined in this chapter, which tax shall be assessed, collected, and paid annually at the rate specified herein and for each taxable year as hereinafter provided. Persons and subjects taxable under this chapter are:
(1) Every individual residing in the State of Alabama.
(2) Every corporation domiciled in the State of Alabama or licensed or qualified to transact business in the State of Alabama.
(3) Every corporation doing business in the State of Alabama or deriving income from sources within the State of Alabama, including income from property located in the State of Alabama.
(4) Every nonresident estate or nonresident trust receiving income from property owned or business transacted in the State of Alabama.
(5) Every resident estate and resident trust.
(6) Every nonresident individual receiving income from property owned or business transacted in the State of Alabama, except as provided in Section 40-18-2.2.
(b) Every natural person domiciled in the State of Alabama, and every other natural person who maintains a permanent place of abode within the state or spends in the aggregate more than seven months of the income year within the state, shall be presumed to be residing within the state for the purposes of determining liability for income taxes under this chapter.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §373; Act 98–502, p. 1083, §1; Act 2006-114, p. 173, §2; Act 2025-334, §1.)
All income earned from any missionary service rendered by a foreign missionary while he or she is physically present in a foreign country or countries for a minimum of 24 months and is employed or appointed by a church or other like religious organization is hereby exempted from any state income taxation or like taxation by whatever name called.
(Acts 1984, 1st Ex. Sess., No. 84-816, p. 249.)
(a) As used in this section, the following words have the following meanings:
(1) PROFESSIONAL ATHLETE. An athlete who performs services in a professional athletic event for compensation.
(2) PROFESSIONAL ENTERTAINER. An individual who performs services in the professional performing arts for compensation on a per-event basis.
(3) PUBLIC FIGURE. An individual of prominence who performs services at discrete events, such as speeches, public appearances, or similar events, for compensation on a per-event basis.
(b) Compensation subject to withholding pursuant to Article 2, without regard to any withholding tax exception set forth in this chapter, paid to a nonresident individual is exempt from the tax levied under Article 2 if all of the following conditions apply:
(1) The compensation is paid for employment duties performed by the individual in this state on 30 or fewer days in the calendar year.
(2) The individual performed employment duties in more than one state during the calendar year.
(3) The compensation is not paid for employment duties performed by the individual in the individual’s capacity as a professional athlete, professional entertainer, or public figure.
(4) The nonresident individual’s state of residence:
a. Provides a substantially similar exclusion;
b. Does not impose an individual income tax; or
c. The individual’s income is exempt from taxation by this state under the United States Constitution or federal statute.
(c) Except as otherwise provided in this chapter, an employer is not required to withhold taxes from compensation that is paid to an employee described in subsection (b). If, during the calendar year, the number of days an employee spends performing employment duties in this state exceeds the 30-day threshold described in subsection (b), an employer shall withhold and remit the tax to this state for every day in that calendar year, including the first 30 days, on which the employee performs employment duties in this state.
(d) Notwithstanding any provision of this section to the contrary, there shall be no withholding or remittance obligation, and the compensation shall be exempt from state and local taxes with respect to wages or salary paid to a nonresident who is in this state on a temporary basis for the purpose of performing disaster or emergency-related work in response to a declaration by the President of the United States or the Governor of this State to be an emergency. The provisions of this subsection are supplemental to the exemptions and related provisions of Section 40-31-3 and should not be construed to narrow the provisions of that section.
(e) If an employer maintains a time and attendance system that tracks where employees perform services on a daily basis, then data from the time and attendance system shall be used. For purposes of this section, time and attendance system means a system:
(1) In which the employee is required, on a contemporaneous basis, to record the work location for every day worked outside of the state where the employment duties are primarily performed; and
(2) That is designed to allow the employer to allocate the employee’s wages for income tax purposes among all states in which the employee performs services.
(f) The Department of Revenue shall not require the payment of any penalties or interest otherwise applicable for failing to deduct and withhold income taxes as required under Article 2 if, when determining whether withholding was required, the employer met either of the following conditions:
(1)a. The employer, at its sole discretion, maintains a time and attendance system specifically designed to allocate employee wages for income tax purposes among all taxing jurisdictions in which the employee performs employment duties for the employer, and relied on data from that system.
b. An employer maintaining records under paragraph a. shall not preclude an employer’s ability to rely on an employee’s determination under subdivision (2).
(2) The employer does not maintain a time and attendance system, and the employer relied on the employee’s annual determination of the time the employee expected to spend performing employment duties in this state, provided, however, that the employer did not have actual knowledge of fraud on the part of the employee in making the determination and provided that the employer and the employee did not collude to evade taxation in making the determination.
(g) For purposes of this section, an employee shall be considered present and performing employment duties within this state for a day if the employee performs more of the employee’s employment duties in this state than in any other state during that day. Any portion of the day during which the employee is in transit shall not be considered in determining the location of an employee’s performance of employment duties. However, if an employee performs employment duties in a resident state and in only one nonresident state during one day, such employee shall be considered to have performed more of the employee’s duties in the nonresident state than in the resident state for such day.
(h) The Department of Revenue shall adopt rules necessary for the administration of this section.
(i) The provisions of this section shall be effective for tax years beginning on or after January 1, 2026.
(Act 2025-334, §2.)
The salaries, fees, commissions, or other income of officers or agents of the United States or its agencies and instrumentalities or its contractees, received from the United States or from its agencies and instrumentalities, shall be subject to income taxes levied by the State of Alabama as other income is taxed, but without discrimination, and only to the same extent and in the same manner as other income is taxed, insofar as the State of Alabama may be constitutionally or legally authorized to tax such income; provided, that money paid by the United States to a person as compensation for active service as a member of the armed forces of the United States, including members of the National Guard and Reserve components, in a combat zone designated by executive order of the President of the United States, deployed to locations outside the United States, or activated by the Governor of the State of Alabama or the President of the United States to support state or federal response to emergencies within or outside of the United States shall not be subject to income taxes levied by the State of Alabama.
(Acts 1939, No. 64, p. 94; Code 1940, T. 51, §374; Acts 1945, No. 34, p. 42; Acts 1953, No. 872, p. 1168; Acts 1965, 3rd Ex. Sess., No. 28, p. 236; Act 2024-170, §1.)
Interest or other income on obligations of the United States, or its possessions, or interest or other income on bonds or other securities of any agencies or instrumentalities of the United States, or of corporations organized under the laws of the United States, received by any resident individual or by any corporation organized under the laws of the State of Alabama, shall be included in the gross income of such person or corporation in determining liability for income taxes due by such person or corporation, but without discrimination, and only to the same extent and in the same manner other income is taxed, insofar as the State of Alabama may be constitutionally or legally authorized to tax such income.
(Acts 1939, No. 62, p. 93; Code 1940, T. 51, §375.)
The tax levied and imposed by Section 40-18-2 shall be computed as follows:
(1) For a single person, head of family, or married persons filing separate returns:
a. Two percent of taxable income not in excess of five hundred dollars ($500).
b. Four percent of taxable income in excess of five hundred dollars ($500) and not in excess of three thousand dollars ($3,000).
c. Five percent of taxable income in excess of three thousand dollars ($3,000).
(2) For married persons filing a joint return:
a. Two percent of taxable income not in excess of one thousand dollars ($1,000).
b. Four percent of taxable income in excess of one thousand dollars ($1,000) and not in excess of six thousand dollars ($6,000).
c. Five percent of taxable income in excess of six thousand dollars ($6,000).
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §377; Acts 1982, No. 82-465, p. 759, §1; Acts 1982, 1st Ex. Sess., No. 82-667, p. 85, §1; Act 98-502, p. 1083, §1.)
(a) Basis (unadjusted) of property. The basis of property shall be the cost of the property with the following exceptions:
(1) INVENTORY VALUE. If the property should have been included in the last inventory, the basis shall be the last inventory value thereof.
(2) GIFT or TRANSFER IN TRUST. If the property was acquired by gift or by a transfer in trust the basis shall be determined in accordance with 26 U.S.C. § 1015. If property was acquired by gift or transfer in trust on or after December 31, 1932 and prior to March 15, 1985, the basis shall be the fair and reasonable market value of the property at the time of the acquisition.
(3) PROPERTY TRANSMITTED AT DEATH. If the property was acquired from a decedent, the taxpayer’s basis in the property shall be determined in accordance with 26 U.S.C. § 1014.
(4) PROPERTY ACQUIRED UPON LIKE-KIND EXCHANGE. If the property was acquired upon an exchange described in subsection (c) of Section 40-18-8, the basis shall be determined in accordance with 26 U.S.C. § 1031(d).
(5) TRANSFERS TO CORPORATION. The basis of property received by a distributee in a transaction described in subsection (e) or (f) of Section 40-18-8 shall be determined in accordance with 26 U.S.C. § 358. The basis of property acquired by a corporation in a transaction described in subsection (e) or (f) of Section 40-18-8 shall be determined in accordance with 26 U.S.C. § 362.
(6) PROPERTY ACQUIRED ON LIQUIDATION OF SUBSIDIARY. The basis of property acquired by a corporation as a result of a liquidation of a subsidiary to which Section 40-18-8(h) applies shall be determined in accordance with 26 U.S.C. § 334(b).
(7) BASIS OF PROPERTY OF SUBSIDIARY AFTER ACQUISITION. The basis of property owned by a corporation shall be determined under 26 U.S.C. § 338, relating to the treatment of certain stock purchases as asset acquisitions, if an election under the section is in effect for federal income tax purposes.
(8) BASIS OF PROPERTY RECEIVED IN LIQUIDATION IN WHICH GAIN OR LOSS IS RECOGNIZED. The basis of property received in a distribution in complete liquidation in which a gain or loss is recognized on the receipt of the property shall be determined in accordance with 26 U.S.C. § 334(a).
(9) BASIS OF STOCK AFTER STOCK DIVIDEND. The basis of stock with respect to which a corporation makes a distribution of its stock and the basis of the stock so distributed shall be determined in accordance with 26 U.S.C. § 307.
(10) INVOLUNTARY CONVERSION. If property was acquired in connection with an involuntary conversion in which a gain or loss was not recognized under subsection (d) of Section 40-18-8, the basis of the property shall be determined in accordance with 26 U.S.C. § 1033.
(11) PROPERTY ACQUIRED BEFORE JANUARY 1, 1933. The basis for determining gain or loss on the sale or disposition of property acquired prior to January 1, 1933, shall be the fair and reasonable market value as of January 1, 1933. In determining the fair and reasonable market value of stock in a corporation as of January 1, 1933, due regard shall be given to the fair and reasonable market value of the assets of the corporation as of that date.
(12) DETERMINATION OF AMOUNT OF LOSS OR GAIN OR OF DEPRECIATION OR DEPLETION. Whenever in the calculation of income taxable hereunder for any taxable year it is necessary to determine the amount of gain or loss or of depreciation or depletion in the case of property acquired before January 1, 1933, the basis of property shall be fixed in the same manner as is provided in subdivision (11) of this subsection.
(13) PROPERTY ACQUIRED FROM SPOUSE OR FORMER SPOUSE. If the property was acquired from a spouse or former spouse in a transaction in which a gain or loss was determined under Section 40-18-8(m), then the basis shall be determined in accordance with 26 U.S.C. § 1041.
(14) BASIS OF REPLACEMENT PROPERTY IN SALE OF STOCK TO EMPLOYEE STOCK OWNERSHIP PLAN OR COOPERATIVE. If, in connection with a sale of securities to an employee stock ownership plan or an eligible worker-owned cooperative, any gain was not recognized pursuant to Section 40-18-8(n), the basis of the qualified replacement property, as defined in 26 U.S.C. § 1042, shall be determined in accordance with 26 U.S.C. §1042(d).
(15) BASIS OF PROPERTY TO SUBCHAPTER K ENTITY. The basis of property contributed to a subchapter K entity under Section 40-18-8(o) shall be determined in accordance with 26 U.S.C. §723.
(16) BASIS OF INTEREST IN SUBCHAPTER K ENTITY.
a. Initial basis. The basis of an interest in a subchapter K entity resulting from a contribution of property described in Section 40-18-8(o) shall be determined in accordance with 26 U.S.C. §722.
b. Adjustments to basis. The basis determined under paragraph a. shall be increased or decreased in accordance with 26 U.S.C. §705. The amount of the increases and decreases shall be determined without regard to the allocation and apportionment rules of Section 40-18-22.
c. Special basis adjustments. If a subchapter K entity has in effect an election under 26 U.S.C. §754, the basis of the property of the subchapter K entity shall be determined in accordance with 26 U.S.C. §§734 and 743.
(17) BASIS OF PROPERTY DISTRIBUTED BY SUBCHAPTER K ENTITY. The basis of property distributed by a subchapter K entity shall be determined in accordance with 26 U.S.C. §732.
(b) Adjusted basis. The adjusted basis for determining the gain or loss from the sale or other disposition of property, whenever acquired, shall be the basis determined under subsection (a), adjusted as hereinafter provided. Proper adjustment in respect of the property shall in all cases be made:
(1) For expenditures, receipts, losses, or other items, properly chargeable to capital account, including taxes and other carrying charges on unimproved and unproductive real property, but no such adjustment shall be made for taxes or other carrying charges for which deductions have been taken by the taxpayer in determining taxable income for the taxable year or prior taxable year.
(2) For exhaustion, wear and tear, obsolescence, amortization, and depletion, to the extent allowed, but not less than the amount allowable under this chapter.
(3) In the case of stock, to the extent not provided for in the foregoing paragraphs, for the amount of distributions previously made which, under the law applicable to the year in which the distribution was made, either were tax-free or were applicable in reduction of basis.
(4) Basis of property of individuals establishing Alabama domicile. Property, both real and personal, owned on the date Alabama domicile is established shall have the same basis for Alabama income tax purposes as its basis for federal income tax purposes as of that date.
(5) Allocation of basis. The basis of property acquired in an applicable asset acquisition (as defined in 26 U.S.C. §1060) shall be determined in accordance with 26 U.S.C. §1060.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §378; Acts 1985, No. 85-515, §6; Acts 1985, 2nd Ex. Sess., No. 85-940, p. 252, §4; Acts 1990, No. 90-583, p. 988, §3; Acts 1997, No. 97-625, p. 1048, §3; Act 98-502, p. 1083, §1.)
(a) The provisions in 26 U.S.C. § 1400Z-2 shall be applicable to an investment in an approved opportunity fund in calculating both of the following:
(1) The income tax levied by this chapter, or the estimated income tax payment.
(2) The financial institution excise tax found in Chapter 16.
(b) Any approved opportunity fund may enter into a project agreement with ADECA to provide to the fund’s investors impact investment tax credits against any tax liability described in subdivisions (1) and (2) of subsection (a). The impact investment tax credits shall be allocated annually, but only to the extent that one or more projects undertaken by the fund are not producing the returns provided in the project agreement. Provided however, the calculation of the impact investment tax credit does not guarantee a rate of return that is more than the 52-week average yield rate for the United States 10-year Treasury Note from the prior calendar year. The project agreement may authorize the fund to allocate the credits among some or all of the owners in any manner specified, regardless of whether the allocation follows rules similar to 26 U.S.C. § 704(b) and the regulations thereunder. Unused credits may carry forward for five years.
(c) The project agreement shall require an approved opportunity fund to obtain investment from a qualified fund and require that the qualified fund receive a fixed portion of any distributions in excess of the amounts stated in the project agreement.
(d)(1) In no event shall the credits allowed under this section exceed $50 million cumulatively. In no event shall the credits be allocated during the first four years of the existence of the fund, but credits may be allocated in the fifth year to account for inadequate aggregate returns during the first four years. Credits may not be allocated to projects in which an approved opportunity fund has committed to invest prior to August 5, 2019.
(2) The project agreement shall provide that ADECA shall receive regular financial performance information about the fund, and the information shall, at a minimum, include all information provided to other investors in the fund. Prior to claiming the credits provided in subdivision (1), a fund shall submit to ADECA a certification as to the financial performance of the fund or assets which are the subject of the project agreement. ADECA may choose to request other information, and the fund shall comply with such requests. Following the examination as it deems necessary, ADECA may certify the information and deliver the same to the Department of Revenue. Thereafter, the Department of Revenue shall allow the credits in the amount determined by ADECA.
(e) ADECA may charge reasonable fees for its negotiation and entry into project agreements provided herein, and it may charge fees for its financial and oversight audits of the funds. ADECA may retain consultants to assist it with the powers and responsibilities delegated to it herein.
(f) For purposes of this section:
(1) “ADECA” shall mean the Department of Economic and Community Affairs.
(2) An “approved opportunity fund” is a fund which meets all the criteria in Section 41-10-46.01(b)(2).
(3) A “qualified fund” is a fund which meets all the criteria in Section 41-10-46.01(b)(3).
(g) ADECA shall not enter into any project agreements under this section after December 31, 2024.
(h) ADECA shall report to the Legislature in the third year following passage of Act 2019-392, and annually thereafter, on the overall economic activity, usage, and impact to the state from opportunity fund investments for which impact investment tax credits have been allowed. The information in the reports shall be consistent with the information required by the Legislature pursuant to, and shall be provided by ADECA to the Legislature in accordance with, Section 40-1-50, and rules adopted thereunder. Information provided pursuant to this section is exempt from the confidentiality provisions of Section 40-2A-10.
(Act 2019-392, §4.)
(a) Computation of gain or loss. Except as hereinafter provided in this section, the gain from the sale or other disposition of property shall be the excess of the amount realized therefrom over the adjusted basis provided in subsection (b) of Section 40-18-6, and the loss shall be the excess of such basis over the amount realized.
(b) Amount realized. The amount realized from the sale or other disposition of property shall be the sum of any money received plus the fair and reasonable market value of the property, other than money, received.
(c) Recognition of gain or loss. In the case of a sale or exchange, the extent to which the gain or loss as determined under this section shall be recognized for the purposes of this title, shall be determined under the provisions of Section 40-18-8.
(d) Installment sales. Nothing in this section shall be construed to prevent, in the case of property sold under contract providing for payment in installments, the taxation of that portion of any installment payment representing gain or profit in the year in which such payment is received.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §379.)
(a) General rule. Except as provided in this section, upon the sale or exchange of property, the entire amount of the gain or loss determined under Section 40-18-7 shall be recognized.
(b) Exchange of stock for stock of same corporation. No gain or loss shall be recognized if common stock in a corporation is exchanged solely for common stock in the same corporation, or if preferred stock in a corporation is exchanged solely for preferred stock in the same corporation.
(c) Like-kind exchanges. If an exchange of property satisfies the requirements of 26 U.S.C. § 1031, relating to like-kind exchanges, then the amount of gain or loss recognized in the exchange shall be determined in accordance with 26 U.S.C. § 1031.
(d) Involuntary conversions. If a taxpayer validly elects to determine the amount of gain recognized for federal income tax purposes under 26 U.S.C. § 1033, relating to involuntary conversions, the amount of gain recognized shall be determined in accordance with 26 U.S.C. § 1033.
(e) Transfer of property to corporation controlled by transferor. If property is transferred to a corporation in a transaction which satisfies the requirements of 26 U.S.C. § 351, relating to transfers to corporations controlled by the transferor, the amount of gain or loss recognized shall be determined in accordance with 26 U.S.C. § 351, as modified by 26 U.S.C. § 357, relating to the recognition of gain as a result of the transferee corporation’s assumption of liabilities.
(f) Reorganizations. In the case of a reorganization defined in 26 U.S.C. § 368, relating to definitions applicable to corporate reorganizations, or a distribution, other than a reorganization, subject to 26 U.S.C. § 355, the amount of gain or loss recognized shall be determined in accordance with 26 U.S.C. §§ 354, 355, 356, 361, 371, and 374.
(g) Exchange of stock for property. No gain or loss shall be recognized by a corporation on the receipt of money or other property in exchange for stock, including treasury stock, of the corporation or with respect to the acquisition or lapse of an option to buy or sell its stock.
(h) Complete liquidation of subsidiaries. No gain or loss shall be recognized on the receipt by a corporation of property on the complete liquidation of a subsidiary corporation when the requirements of 26 U.S.C. § 332, relating to complete liquidation of subsidiaries, are satisfied.
(i) Gain or loss on sales or exchanges in connection with certain liquidations. The amount of gain or loss recognized by a corporation on the sale or exchange of property shall be determined in accordance with 26 U.S.C. § 337 if every requirement for the application of 26 U.S.C. § 337 is satisfied.
(j) Election under 26 U.S.C. § 338. If a valid election under 26 U.S.C. § 338 is made, the amount of gain recognized by the target corporation shall be determined in accordance with 26 U.S.C. § 338.
(k) Taxability of corporation on distribution. The amount of gain recognized by a corporation on the distribution of its stock, rights to acquire its stock, or property shall be determined in accordance with 26 U.S.C. § 311, relating to taxability of corporations on distributions.
(l) Gain recognized on liquidation. The amount of gain recognized by a liquidating corporation on the distribution of its property in complete liquidation shall be determined in accordance with 26 U.S.C. § 336.
(m) Gain or loss on property transferred to spouse or former spouse. The amount of gain or loss on the transfer of property to a spouse or former spouse shall be determined in accordance with 26 U.S.C. § 1041.
(n) Sales of stock to employee stock ownership plans or certain cooperatives. The amount of gain recognized by a taxpayer who has validly elected to determine the amount of gain recognized for federal income tax purposes under 26 U.S.C. § 1042, relating to sales of stock to employee stock ownership plans or certain cooperatives, shall be determined in accordance with 26 U.S.C. § 1042. If a taxpayer disposes of any qualified replacement property and recognizes gain under 26 U.S.C. § 1042(e), then, notwithstanding any other provision of this chapter, gain, if any, shall be recognized to the same extent and at the same time for purposes of this chapter as under 26 U.S.C. § 1042(e). The term “qualified replacement property” shall have the meaning set forth in 26 U.S.C. § 1042.
(o) Contribution of property to subchapter K entity. The amount of gain or loss recognized on the contribution of property to a subchapter K entity in exchange for an interest in the subchapter K entity shall be determined in accordance with 26 U.S.C. § 721.
(p) Distribution of property by subchapter K entity. The amount of gain or loss recognized on the distribution of property by a subchapter K entity shall be determined in accordance with 26 U.S.C. § 731.
(q) Transfer of property to trust. Gain or loss shall not be recognized on the transfer of property to a trust.
(r) Nonrecognition treatment for certain transfers from common trust funds to regulated investment companies. The tax consequences of the transfer of assets of a common trust fund in exchange for stock in one or more regulated investment companies and the tax consequences of the distribution of the stock to the participants of the common trust fund shall be determined in accordance with 26 U.S.C. § 584.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §380; Acts 1959, No. 191, p. 726; Acts 1985, No. 85-515, §7; Acts 1985, 2nd Ex. Sess., No. 85-940, p. 252, §3; Acts 1990, No. 90-583, p. 988, §4; Acts 1997, No. 97-194, p. 305, §1; Acts 1997, No. 97-625, p. 1048, §3; Act 98-502, p. 1083, §1.)
(a) A qualified employee’s gain shall not be recognized upon the disposition of his or her ownership interest in a qualified entity, and a qualified investment fund’s gain shall not be recognized upon the disposition of the fund’s ownership interest in a qualified entity.
(b) Subsection (a) shall be applied as to each of the following taxes:
(1) The income tax levied by this chapter, or the estimated income tax payment; and
(2) The financial institution excise tax found in Chapter 16.
(c) The following terms shall have the following meanings:
(1) A company is anyone or anything with the powers to conduct a lawful business.
(2) The disposition date is the date on which an ownership interest in a qualified entity is sold or otherwise disposed of, triggering a capital gain.
(3) A qualified entity is any company which meets all of the following:
a. As of August 5, 2019, Alabama is not the company’s headquarters, the place of residence of its top three executives, or the place of residence of at least 75 percent of its employees.
b. The company has at least 100 employees on the disposition date.
c. For a period of at least three years prior to the disposition date and for a period of at least five years after the disposition date, Alabama is the company’s headquarters, the place of residence of its top three executives, and the place of residence of at least 75 percent of its employees.
d. From the date that the company makes Alabama its headquarters and continuing until the date which is five years after the disposition date, the company meets all criteria set forth in Section 40-18-376.3(c).
(4) A company shall not be eliminated from the definition of a qualified entity merely because the disposition is in the form of a sale of substantially all of the assets of such company to a successor company, or in the form of a merger of such company into a successor company, so long as such successor company itself meets all criteria set forth in paragraphs a., b, and d., and if Alabama is such successor company’s headquarters, the place of residence of its top three executives, and the place of residence of at least 75 percent of its employees for a period of at least five years after the disposition date.
(5) A qualified employee is any employee of a qualified entity who meets all the following:
a. The employee’s primary residence is not in Alabama on August 5, 2019.
b. The employee’s primary residence is in Alabama continuously for the period beginning three years prior to the disposition date and continuing for five years after the disposition date.
c. Within three months of the disposition date, the employee ceases employment at the qualified entity.
d. Within nine months of the disposition date, the employee begins employment at or ownership or some other company which meets all the criteria set forth in Section 40-18-376.3(c).
e. The employee demonstrates to the Alabama Department of Revenue that he or she has an educational degree within the general areas of science, technology, engineering, and mathematics.
(g) A qualified investment fund is any company which meets both the following:
a. The fund made its investment in the qualified entity after August 5, 2019.
b. For a period of five years after the disposition date, the fund invests the moneys resulting from the disposition in another qualified entity.
(d) The Department of Revenue may assess a qualified employee for any exclusion from income under this section to which the employee is not ultimately entitled, with allowed interest and penalties, pursuant to the terms of Chapter 2A or 29. The statute of limitations shall be tolled for a period of ten years beginning on the date of the return under which the exclusion from income in this section is claimed. The Department of Revenue may prescribe forms for the enforcement of this section.
(Act 2019-392, §4.)
If, in the case of a taxpayer owning any noninterest-bearing obligation issued at a discount and redeemable for fixed amounts increasing at stated intervals, the increase in the redemption price of such obligation occurring in the taxable year does not, under the method of accounting used in computing his net income, constitute income to him in such year, such taxpayer may, at his election made in his return for any taxable year beginning after December 31, 1942, treat such increase as income received in such taxable year. If any such election is made with respect to any such obligation it shall apply also to all such obligations owned by the taxpayer at the beginning of the first taxable year to which it applies and to all such obligations thereafter acquired by him and shall be binding for all subsequent taxable years, unless upon application by the taxpayer the Commissioner of Revenue permits him, subject to such conditions as the Commissioner of Revenue deems necessary, to change to a different method. In the case of any such obligations owned by the taxpayer at the beginning of the first taxable year to which his election applied, the increase in the redemption price of such obligations occurring between the date of acquisition and the first day of such taxable year shall also be treated as income received in such taxable year.
In the case of any obligation of the United States or any of its possessions or of a state or territory, or any political subdivision thereof, or of the District of Columbia, issued on or after March 1, 1941, on a discount basis and payable without interest at a fixed maturity date not exceeding one year from the date of issue, the amount of discount at which such obligation is originally sold shall not be considered to accrue until the date on which such obligation is paid at maturity, sold or otherwise disposed of.
(Acts 1943, No. 439, p. 404.)
Whenever in the opinion of the Department of Revenue the use of inventories is necessary in order clearly to determine the income of any taxpayer, the inventory shall be taken by such taxpayer in accordance with the methods and procedures prescribed in 26 U.S.C. §§263A, 471, 472, 473 and 474.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §381; Acts 1990, No. 90-583, p. 988, §5.)
[Repealed]
Repealed by Act 98-502, § 2.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §382.)
(a) Income shall be computed on the basis of the same taxable year and in accordance with the same method of accounting that the taxpayer properly employs for federal income tax purposes. If no such method of accounting has been employed or if the method so employed does not clearly reflect income, computation shall be made upon such basis and in such manner as in the opinion of the Department of Revenue, and consistent with federal income tax treatment, does clearly reflect income. If the taxpayer has no annual accounting period or does not keep proper books of account, the income shall be computed on the basis of the calendar year.
(b) In the case of a partnership, Alabama S corporation, or personal service corporation electing a taxable year under 26 U.S.C. §444, this section shall be applied without regard to the requirement to make payments under 26 U.S.C. §7519.
(Acts 1935, No. 194. p. 256; Code 1940, T. 51, §383; Acts 1990, No. 90-583, p. 988, §6; Act 98-502, p. 1083, §1.)
AMENDED BY ACT 2026-551, EFFECTIVE MAY 1, 2026. SEE ACT FOR REVISED LANGUAGE.
(a) The term “gross income” as used herein:
(1) Includes gains, profits and income derived from salaries, wages, or compensation for personal services of whatever kind, or in whatever form paid, including the salaries, income, fees, and other compensation of state, county, and municipal officers and employees, or from professions, vocations, trades, business, commerce or sales, or dealings in property whether real or personal, growing out of ownership or use of or interest in such property; also from interest, royalties, rents, dividends, securities, or transactions of any business carried on for gain or profit and the income derived from any source whatever, including any income not exempted under this chapter and against which income there is no provision for a tax. The term “gross income” as used herein also includes alimony and separate maintenance payments to the extent they are includable in gross income for federal income tax purposes under 26 U.S.C. § 71, relating to alimony and separate maintenance payments. The term “gross income” as used herein also includes any amount included in gross income under 26 U.S.C. § 83 at the time it is so included under 26 U.S.C. § 83.
(2) For purposes of this chapter, the reductions in tax attributes required by 26 U.S.C. § 108 shall be applied only to the net operating losses determined under this chapter and the basis of depreciable property. The basis reductions of depreciable property shall not exceed the basis reductions for federal income tax purposes. All other tax attribute reductions required by 26 U.S.C. § 108 shall not be recognized.
(3) Gross income does not include the following items which shall be exempt from income tax under this chapter:
a. Amounts received under life insurance policies and contracts paid by reason of the death of the insured in accordance with 26 U.S.C. § 101;
b. Amounts received, other than amounts paid by reason of the death of the insured, under life insurance, endowment or annuity contracts, determined in accordance with 26 U.S.C. § 72;
c. The value of property acquired by gift, bequest, devise, or descent, but the income from such property shall be included in the gross income, in accordance with 26 U.S.C. § 102;
d. Interest upon obligations of the United States or its possessions; or securities issued under provisions of the Federal Farm Loan Act of July 18, 1916;
e. Any amounts received by an individual which are excludable from gross income under 26 U.S.C. § 104, relating to compensation for injuries or sickness, or 26 U.S.C. § 105, relating to amounts received under accident or health plans;
f. Interest on obligations of the State of Alabama and any county, municipality, or other political subdivision thereof;
g. The rental value of a parsonage provided to a minister of the gospel to the extent excludable under 26 U.S.C. § 107;
h. Income from discharge of indebtedness to the extent allowed by 26 U.S.C. § 108;
i. For each individual resident taxpayer, or each husband and wife filing a joint income tax return, as the case may be, any gain realized from the sale of a personal residence of the taxpayer shall be excluded to the extent excludable for federal income tax purposes under 26 U.S.C. § 121;
j. Contributions made by an employer on behalf of an employee to a trust which is part of a qualified cash or deferred arrangement, as defined in 26 U.S.C. § 401(k)(2) or 5 U.S.C. § 8437, under which the employee has an election whether the contribution will be made to the trust or received by the employee in cash and contributions made by an employer for an employee for an annuity contract, which contributions would be excludable from the gross income, for federal income tax purposes, of the employee in accordance with the provisions of 26 U.S.C. § 403(b). The limitations imposed by 26 U.S.C. § 402(g) shall apply for purposes of this paragraph;
k. Amounts that an employee is allowed to exclude from gross income for federal income tax purposes pursuant to 26 U.S.C. § 125, relating to cafeteria plans, and 26 U.S.C. § 132, relating to certain fringe benefits; and
l. Amounts paid or incurred by an employer on behalf of an employee if the amounts may be excluded from gross income for federal income tax purposes by an employee pursuant to 26 U.S.C. § 129, relating to dependent care expenses.
m.1.(i) Amounts received by a full-time hourly waged paid employee as compensation for work performed in excess of 40 hours in a week.
(ii) The exemption provided pursuant to this subparagraph shall be available for tax years that begin after December 31, 2023, and end on October 1, 2024.
2.(i) Amounts paid as overtime compensation in accordance with the U.S. Fair Labor Standards Act.
(ii) The exemption provided pursuant to this subparagraph shall be available beginning on October 1, 2024, through June 30, 2025.
Notwithstanding subparagraph 2., for employers governed by the National Railway Labor Act, the exemption provided in this paragraph applies to hourly component overtime compensation as defined in applicable collective bargaining agreements.
Each employer shall submit to the Department of Revenue, on forms prescribed by the department, all of the following:
(i) For the tax year beginning January 1, 2023, the total amount received by full-time hourly wage-paid employees as compensation for work performed in excess of 40 hours in a week and the total number of employees for which it was paid. The data shall be due no later than January 31, 2024.
(ii) For the tax year beginning on or after January 1, 2024, through September 30, 2024, the total amount received by full-time hourly wage-paid employees as compensation for work performed in excess of 40 hours in a week. Beginning on October 1, 2024, and each year thereafter, the total amount paid pursuant to this paragraph and the total number of employees for which it was paid. The data shall be provided monthly or quarterly and shall be due no later than the due date for the corresponding monthly or quarterly withholding tax returns.
(iii) Additional information as may be required by the department.
n. Any net capital gain derived from the exchange of precious metal bullion. For purposes of this paragraph, “precious metal bullion” means coins, bars, or rounds containing primarily refined gold, silver, platinum, or palladium that is marked and valued primarily by its weight, purity, and content.
(4) The term “gross income,” in the case of a resident individual, includes income from sources within and outside Alabama, including without limitation, the resident’s proportionate share of any income arising from a Subchapter K entity, Alabama S corporation, or estate or trust, regardless of the geographic source of the income. The term “gross income,” in the case of a nonresident individual, includes only income from property owned or business transacted in Alabama. For purposes of this article, “proportionate share” shall be defined by reference to (i) the status of the individual owner as a partner or member of a Subchapter K entity, shareholder of an Alabama S corporation, or beneficiary of an estate or trust, and (ii) the allocable interest in that entity owned by the individual.
(b) The Department of Revenue may adopt rules to provide for the administration of this section.
(Acts 1943, No. 439, p. 404; Acts 1965, 1st Ex. Sess., No. 249, p. 364; Acts 1975, No. 1086, p. 2153, §§1, 2; Acts 1982, No. 82-465, p. 759, §2; Acts 1982, 1st Ex. Sess., No. 82-667, p. 85, §2; Acts 1984, 1st Ex. Sess., No. 84-806, p. 230; Acts 1985, No. 85-515, §9; Acts 1985, 2nd Ex. Sess., No. 85-940, p. 252, §1; Acts 1987, No. 87-622, p. 1107; Acts 1990, No. 90-583, p. 988, §7; Act 98-502, p. 1083, §1; Act 2012-427, p. 1163, §1; Act 2023-421, §1; Act 2024-437, §1 Act 2024-447, §2.)
Notwithstanding any other laws, all deferred compensation plans for public or private employees authorized in this state shall receive the same tax deferred treatment for state income tax purposes which the plan receives from the Internal Revenue Service for federal income tax purposes in a tax year. Contributions to such a plan which are subject to state income tax for the 1996 calendar year and prior years shall not be subject to any further state income taxation at the time of withdrawal.
(Acts 1996, No. 96-526, p. 683, §1.)
(a) The term “adjusted gross income,” as used in this section, shall mean the gross income as defined by Section 40-18-14, minus the following deductions:
(1) The deductions allowed by this chapter, other than the net operating loss deduction allowed under Section 40-18-15.2, which are attributable to a trade or business carried on by the taxpayer if the trade or business does not consist of the performance of services by the taxpayer as an employee;
(2) The deduction allowed by this chapter for travel expenses of Alabama state legislators while away from home to the extent reimbursed by the State of Alabama;
(3) The deductions allowed by this chapter which consist of expenses paid or incurred by the taxpayer in connection with the performance by him or her of services as an employee, to the extent reimbursed by his or her employer;
(4) The deductions allowed by this chapter attributable to property held for the production of rents or royalties;
(5) The deductions allowed by this chapter to a life tenant of property or to an income beneficiary of property held in trust;
(6) The deduction allowed by this chapter as losses from the sale or exchange of property;
(7) The deduction allowed by this chapter relating to adoption expenses;
(8) The deduction allowed by this chapter for individual retirement accounts;
(9) The deduction allowed by this chapter relating to retirement plans;
(10) The deduction allowed by this chapter relating to alimony;
(11) The deduction allowed by this chapter relating to moving expenses;
(12) The deduction allowed by Section 40-18-15(a)(25) relating to grants-in-aid.
(b) Nothing in this section shall allow any item to be deducted more than once.
(Act 98-502, p. 1083, §1.)
Gross income shall include original issue discount determined in accordance with 26 U.S.C. §§1271 to 1275, inclusive, and interest or other income determined in accordance with 26 U.S.C. §7872, related to certain related party loans, tax avoidance loans, etc. with below-market interest rates.
(Acts 98-502, p. 1083, §1.)
AMENDED BY ACT 2026-604, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
(a) No deduction shall be allowed for any losses, expenses, or interest deferred or disallowed pursuant to 26 U.S.C. § 267 or for any cost required to be capitalized in accordance with 26 U.S.C. § 263A; otherwise, there shall be allowed as deductions:
(1) All ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, as determined in accordance with 26 U.S.C. § 162.
(2) Interest paid or accrued within the taxable year on indebtedness, limited to the amount allowable as an interest deduction for federal income tax purposes in the corresponding tax year or period pursuant to the provisions of 26 U.S.C. §§ 163, 264, and 265.
(3) The following taxes paid or accrued within the taxable year:
a. Income taxes, Federal Insurance Contribution Act taxes, taxes on self-employment income and estate and gift taxes imposed by authority of the United States or any possession of the United States.
b. State and local, and foreign, occupational license taxes, and contributions to state unemployment funds.
c. State and local, and foreign, real property taxes.
d. State and local personal property taxes.
e. The generation-skipping transfer (GST) tax imposed on income distributions by 26 U.S.C. § 2601.
f. The taxes described in paragraphs c., d., and e. shall be deductible only to the extent that the taxes are deductible for federal income tax purposes under 26 U.S.C. § 164 (relating to taxes).
g. In addition, there shall be allowed as a deduction, state and local, and foreign taxes, except income taxes, and taxes imposed by authority of the United States or any possession of the United States, which are paid or accrued within the taxable year in carrying on a trade or business or an activity described in 26 U.S.C. § 212 (relating to expenses for the production of income).
h. Notwithstanding paragraph g., any tax described in any paragraph preceding paragraph g. that is paid or accrued in connection with an acquisition or disposition of property shall be treated as part of the cost of the acquired property or, in the case of a disposition, as a reduction in the amount realized on the disposition of that property.
(4) Losses sustained during the taxable year and not compensated for by insurance or otherwise if incurred in a trade or business, in accordance with 26 U.S.C. § 165(c)(1).
(5) Losses sustained during the taxable year and not compensated for by insurance or otherwise, if incurred in any transaction entered into for profit, though not connected with the trade or business in accordance with 26 U.S.C. § 165(c)(2); but, in the case of a taxpayer other than a resident of the state, only as to those transactions within the state.
(6) Casualty and theft losses sustained during the taxable year of property not connected with the conduct of a trade or business or a transaction entered into for profit as determined in accordance with subsections (c)(3) and (h) of 26 U.S.C. § 165. In the case of a nonresident, the deduction shall be allowed only for the losses arising from property located within the State of Alabama and the limitations in 26 U.S.C. § 165 shall be applied with regard only to the taxpayer’s Alabama adjusted gross income. No loss shall be allowed if at the time of filing the return, the loss has been claimed on a federal estate tax return.
(7) Losses from debts ascertained to be worthless and charged off during the taxable year of ascertainment, if sustained in the conduct of the regular trade or business of the taxpayer.
(8) A reasonable allowance for the exhaustion, wear and tear of property from which any income is derived, including a reasonable allowance for obsolescence, in accordance with 26 U.S.C. §§ 167 and 168, and an allowance for the amortization of intangibles determined in accordance with 26 U.S.C. § 197.
(9) In the case of mines, oil, and gas wells, other natural deposits and timber, a reasonable allowance for depletion and for depreciation of improvements, according to the peculiar condition in each case based upon the cost, including the cost of development not otherwise deducted, such reasonable allowance in all cases to be made under rules and regulations to be prescribed by the Department of Revenue; and, in the case of leasehold interests, the deduction allowed by this section shall be equitably apportioned between the lessor and the lessee.
(10) Charitable contributions to the extent allowed for federal income tax purposes under 26 U.S.C. § 170 (relating to charitable contributions and gifts).
(11) The deduction allowed to the individual for federal income tax purposes by 26 U.S.C. § 219 (relating to retirement savings).
(12) The deduction allowed for federal income tax purposes by 26 U.S.C. § 404 (relating to qualified pension, profit sharing, stock bonus, and annuity plans).
(13) For each individual income taxpayer, medical and dental expenses, including amounts paid for medicine and drugs and amounts paid for accident and health insurance, as determined in accordance with 26 U.S.C. § 213; provided, however, that the limitation of the deduction to the excess of those expenses over 7.5 percent of adjusted gross income as provided in 26 U.S.C. § 213 shall instead be limited to the excess of those expenses over 4.0 percent of adjusted gross income.
(14) For each individual income taxpayer, the deduction determined in accordance with 26 U.S.C. § 212 for all the ordinary and necessary expenses paid or incurred during the taxable year for the production or collection of income, or for the management, conservation, or maintenance of property held for the production of income, or in connection with the determination, collection, or refund of any tax.
(15) Any expense not exceeding $1,000 actually incurred during the taxable year in constructing on his or her property a family radioactive fallout shelter, as approved and certified by the State Department of Emergency Management, and any amount not exceeding $1,000 which he or she contributed during the taxable year toward the construction of a community radioactive fallout shelter.
(16) A deduction from the taxpayer’s adjusted gross income for state income tax purposes of the total cost of installation for conversion from gas or electricity to wood as the primary energy source for heating their individual domestic homes for the taxable year during which a conversion was completed.
(17) Alimony and separate maintenance payments, the amount deductible to be the same as the amount deductible for federal income tax purposes under 26 U.S.C. § 215 (relating to alimony payments).
(18) Moving expenses paid or incurred during the taxable year as allowed under 26 U.S.C. § 217 (relating to moving expenses). However, in applying 26 U.S.C. § 217, the term “new principal place of work” means only places of work located within the State of Alabama.
(19) Any expense not exceeding $35,000 actually incurred during the taxable year in removing from his or her property any architectural or transportation barriers to handicapped persons with nonambulatory and semiambulatory disabilities; provided, however, that any improvements resulting from that expense shall not be eligible to be capitalized for depreciation.
(20) Notwithstanding subdivision (1), the deduction for expenses of travel, entertainment, and meals shall be determined in accordance with 26 U.S.C. § 274.
(21) The deduction allowed by 26 U.S.C. § 179 (relating to expensing certain depreciable property), provided that no deduction shall be allowed under subdivision (8) for any amount allowed as a deduction under this subdivision.
(22) The deduction allowed by 26 U.S.C. § 195 (relating to amortization of start-up expenditures), but in the case of a nonresident, only if the principal place of business of the business investigated, created, or acquired is located in the State of Alabama.
(23) The deduction allowed by subdivision (1), to the extent that it consists of unreimbursed employee business expenses, and the deduction allowed by subdivision (14) shall be allowed only to the extent that the aggregate of the deductions exceeds 2 percent of adjusted gross income.
(24) The reasonable medical and legal expenses paid or incurred by the taxpayer in connection with the adoption of a minor. For purposes of this subdivision, medical expenses shall include any medical and hospital expenses of the adoptee and the adoptee’s biological mother which are incident to the adoptee’s birth and subsequent medical care and which, in the case of the adoptee, are paid or incurred before the petition is granted.
(25) The amount of any aid or assistance, whether in the form of property, services, or monies, provided to the State Industrial Development Authority pursuant to Section 41-10-44.8(d) in order to induce an approved company to undertake a major project within the state.
(26) The amount of premiums paid pursuant to a qualifying insurance contract for qualified long-term care coverage.
(27) The amount deductible by the taxpayer in accordance with 26 U.S.C. § 162(h).
(28) The amount, up to five thousand dollars ($5,000) per annum, contributed subsequent to December 31, 2007, to the Alabama Prepaid Affordable College Tuition Program or the Alabama College Education Savings Program as defined in Chapter 33C of Title 16. If the taxpayer makes a nonqualified withdrawal as defined by Section 529 of the Internal Revenue Code (26 U.S.C. 529), the amount of the nonqualified withdrawal, plus 10 percent of the amount withdrawn, shall be added back to the income of the contributing taxpayer in the year the nonqualified withdrawal was distributed.
(b)(1) In lieu of the deductions allowable to individual taxpayers, as provided in subdivision (1) of subsection (a) to the extent of unreimbursed employee business expenses, and as provided in subdivisions (2), (3), (5), (6), (10), (13), (14), (15), (16), (19), (22), and (26) of subsection (a), the taxpayer may elect to take the optional standard deduction of 20 percent of the adjusted gross income or $2,000, whichever is the lesser. Taxpayers filing jointly as defined in Section 40-18-27 may elect to take the optional standard deduction of 20 percent of the adjusted gross income or $4,000, whichever is the lesser.
(2) For tax years beginning after December 31, 2006, the optional standard deduction shall be determined as follows:
a. The standard deduction for married taxpayers filing jointly with adjusted gross income of $20,000 or less shall be $7,500. For married taxpayers filing jointly with adjusted gross income of greater than $20,000, the standard deduction shall be reduced by $175 for each $500 of adjusted gross income in excess of $20,000. Notwithstanding the preceding sentence, the standard deduction shall not be less than $4,000 for married taxpayers filing jointly.
b. The standard deduction for married taxpayers filing separate returns with adjusted gross income of $10,000 or less shall be $3,750. For married taxpayers filing separate returns with adjusted gross income of greater than $10,000, the standard deduction shall be reduced by $88 for each $250 of adjusted gross income in excess of $10,000. Notwithstanding the preceding sentence, the standard deduction shall not be less than $2,000 for married taxpayers filing separate returns.
c. The standard deduction for head of family taxpayers with adjusted gross income of $20,000 or less shall be $4,700. For head of family taxpayers with adjusted gross income of greater than $20,000, the standard deduction shall be reduced by $135 for each $500 of adjusted gross income in excess of $20,000. Notwithstanding the preceding sentence, the standard deduction shall not be less than $2,000 for head of family taxpayers.
d. The standard deduction for single taxpayers with adjusted gross income of $20,000 or less shall be $2,500. For single taxpayers with adjusted gross income of greater than $20,000, the standard deduction shall be reduced by $25 for each $500 of adjusted gross income in excess of $20,000. Notwithstanding the preceding sentence, the standard deduction shall not be less than $2,000 for single taxpayers.
(3) For tax years beginning after December 31, 2018, the optional standard deduction shall be determined as follows:
a. The standard deduction for married taxpayers filing jointly with adjusted gross income of less than $23,000 shall be $7,500. For married taxpayers filing jointly, the standard deduction shall be reduced further by $175 for each $500 of adjusted gross income in excess of $23,000. Notwithstanding the preceding sentence, the standard deduction shall not be less than $4,000 for married taxpayers filing jointly.
b. The standard deduction for married taxpayers filing separate returns with adjusted gross income of less than $10,500 shall be $3,750. For married taxpayers filing separate returns, the standard deduction shall be reduced further by $88 for each $250 of adjusted gross income in excess of $10,500. Notwithstanding the preceding sentence, the standard deduction shall not be less than $2,000 for married taxpayers filing separate returns.
c. The standard deduction for head of family taxpayers with adjusted gross income of less than $23,000 shall be $4,700. For head of family taxpayers, the standard deduction shall be reduced further by $135 for each $500 of adjusted gross income in excess of $23,000. Notwithstanding the preceding sentence, the standard deduction shall not be less than $2,000 for head of family taxpayers.
d. The standard deduction for single taxpayers with adjusted gross income of less than $23,000 shall be $2,500. For single taxpayers, the standard deduction shall be reduced further by $25 for each $500 of adjusted gross income in excess of $23,000. Notwithstanding the preceding sentence, the standard deduction shall not be less than $2,000 for single taxpayers.
(4) For tax years beginning after December 31, 2021, the optional standard deduction shall be determined as follows:
a. The standard deduction for married taxpayers filing jointly with adjusted gross income of less than twenty-five thousand five hundred dollars ($25,500) shall be eight thousand five hundred dollars ($8,500). For married taxpayers filing jointly, the standard deduction shall be reduced further by one hundred seventy-five dollars ($175) for each five hundred dollars ($500) of adjusted gross income in excess of twenty-five thousand five hundred dollars ($25,500). Notwithstanding the preceding sentence, the standard deduction shall not be less than five thousand dollars ($5,000) for married taxpayers filing jointly.
b. The standard deduction for married taxpayers filing separate returns with adjusted gross income of less than twelve thousand seven hundred fifty dollars ($12,750) shall be four thousand two hundred fifty dollars ($4,250). For married taxpayers filing separate returns, the standard deduction shall be reduced further by eighty-eight dollars ($88) for each two hundred fifty dollars ($250) of adjusted gross income in excess of twelve thousand seven hundred fifty dollars ($12,750). Notwithstanding the preceding sentence, the standard deduction shall not be less than two thousand five hundred dollars ($2,500) for married taxpayers filing separate returns.
c. The standard deduction for head of family taxpayers with adjusted gross income of less than twenty-five thousand five hundred dollars ($25,500) shall be five thousand two hundred dollars ($5,200). For head of family taxpayers, the standard deduction shall be reduced further by one hundred thirty-five dollars ($135) for each five hundred dollars ($500) of adjusted gross income in excess of twenty-five thousand five hundred dollars ($25,500). Notwithstanding the preceding sentence, the standard deduction shall not be less than two thousand five hundred dollars ($2,500) for head of family taxpayers.
d. The standard deduction for single taxpayers with adjusted gross income of less than twenty-five thousand five hundred dollars ($25,500) shall be three thousand dollars ($3,000). For single taxpayers, the standard deduction shall be reduced further by twenty-five dollars ($25) for each five hundred dollars ($500) of adjusted gross income in excess of twenty-five thousand five hundred dollars ($25,500). Notwithstanding the preceding sentence, the standard deduction shall not be less than two thousand five hundred dollars ($2,500) for single taxpayers.
(c) A deduction is allowable for the amount of federal income tax paid or accrued within the taxable year. In the case of a nonresident taxpayer, the amount of federal income tax deductible to Alabama shall be determined by the ratio that the amount of adjusted gross income received from sources within the State of Alabama bears to the amount of adjusted gross income received from sources within and outside the State of Alabama.
(d) If separate returns are filed by husband and wife and one spouse elects to claim the optional standard deduction, the other spouse must also claim the optional standard deduction, unless, for the tax returns filed for the 2014 and subsequent tax years, the spouses have lived apart for the entire year. In this case, each spouse may claim either the optional standard deduction or itemized deductions. Neither spouse may claim a deduction for expenses paid by the other spouse.
(e) In the case of a nonresident individual:
(1) The deductions allowed in subdivisions (1), (2), (3), (4), (5), (7), (8), (9), (11), (12), (19), (21), (23), and (25) of subsection (a) shall be allowed only to the extent that they are paid or incurred in carrying on a trade or business within the State of Alabama and the deduction allowed by Section 40-18-15.2 shall be allowed only to the extent it arose from a trade or business carried on in Alabama.
(2) The deductions allowed by subdivisions (2), (3), (5), (8), (9), (14), and (19) of subsection (a) shall be allowed only to the extent arising from property located in Alabama or transactions producing income that is subject to tax in the State of Alabama.
(3) The amount of the deductions allowed by subdivisions (2), (3), (6), (10), (13), (15), (16), (17), (19), (24), and (26) of subsection (a) (and not allowed by subdivisions (1) or (2) of this subsection), or by subsection (b) if the taxpayer elects the standard deduction, shall be limited to the amount determined by multiplying the total of such deductions by a fraction, the numerator of which is the taxpayer’s adjusted gross income determined using the rules provided in subdivisions (1) and (2) of this subsection and the denominator of which is the taxpayer’s adjusted gross income determined under Section 40-18-14.2. The deduction allowed in subdivision (17) of subsection (a) shall not be subtracted in calculating either the numerator or denominator in the previous sentence.
(f) Nothing in this section shall allow any item to be deducted more than once.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §385; Acts 1943, No. 448, p. 412; Acts 1945, No. 318, p. 515; Acts 1947, No. 693, p. 527; Acts 1951, No. 148, p. 382; Acts 1951, No. 208, p. 470; Acts 1951, No. 674, p. 1167, §1; Acts 1961, Ex. Sess., No. 303, p. 2363; Acts 1963, No. 580, p. 1266; Acts 1965, No. 748, p. 1354; Acts 1965, 1st Ex. Sess., No. 246, p. 361; Acts 1965, 2nd Ex. Sess., No. 56, p. 82; Acts 1977, No. 594, p. 793; Acts 1977, No. 796, p. 1376; Acts 1979, No. 79-618, p. 1088; Acts 1982, No. 82-465, p. 759, §3; Acts 1982, 1st Ex. Sess., No. 82-667, p. 85, §3; Acts 1985, No. 85-515, p. 517, §10; Acts 1985, No. 85-545, p. 785, §1; Acts 1985, No. 85-940, p. 252, §2; Acts 1987, No. 87-805, p. 1579, §1; Acts 1988, 2nd Ex. Sess., No. 88-954, p. 669, §1; Acts 1990, No. 90-583, p. 988, §8; Acts 1990, No. 90-596, p. 912, §3; Acts 1990, No. 90-554, p. 1041, §36; Acts 1993, 1st Ex. Sess., No. 93-852, p. 95, §2; Acts 1995, No. 95-255, p. 427, §1; Acts 1995, No. 95-738, p. 1578, §4; Act 98-502, p. 1083, §1; Act 2006-352, p. 927, §1; Act 2008-377, p. 691, §1; Act 2014-406, p. 1498, §1; Act 2018-232, §1; Act 2022-292, §1; Act 2022-297, §1.)
For purposes of this chapter, the term “taxable income” or “net income” shall mean “gross income,” as defined in Section 40-18-14, less the deductions allowed to individuals by this chapter.
(Act 98-502, p. 1083, §1.)
Individuals may calculate a net operating loss from a trade or business and apply the net operating loss against prior taxable income or future taxable income pursuant to this section.
(1) For purposes of this section, the term “net operating loss” means the excess of the deductions allowed by this chapter over the gross income. The excess shall be computed with the modifications specified in subdivision (5).
(2) A net operating loss may be carried back to each of the two taxable years preceding the taxable year of the loss. A net operating loss carryover may be carried to each of the 15 years following the taxable year of the loss.
(3) The entire amount of the net operating loss for any taxable year (hereinafter referred to as the “loss year”) shall be carried to the earliest of the taxable years to which, by reason of subdivision (2) that loss may be carried. The portion of the loss which shall be carried to each of the other taxable years shall be the excess, if any, of the amount of the loss over the sum of the taxable income for each of the prior taxable years to which the loss may be carried. For purposes of the preceding sentence, the taxable income for any such prior taxable year shall be computed:
a. With the modifications specified in subdivision (5)b. and d.
b. By determining the amount of the net operating loss deduction without regard to the net operating loss for the loss year or for any taxable year thereafter, and the taxable income so computed shall not be considered to be less than zero.
(4) Any taxpayer entitled to a carryback period under subdivision (2) may elect to relinquish the entire carryback period in one of two ways. An election shall be made in a manner prescribed by the Department of Revenue, and shall be made by the due date of the loss year return, including extensions, for which the election is to be in effect. If no election is made by the due date of the loss year, including return extensions, then the filing of the subsequent year’s return by the due date, including extensions, and claiming the loss thereon shall be deemed to be the taxpayer’s election to forego the entire carryback period. An election, once made for any taxable year, shall be irrevocable for that taxable year.
(5) The modifications referred to in this subdivision are as follows:
a. No net operating loss deduction shall be allowed.
b. No deduction shall be allowed under Sections 40-18-19(a) (8) and (a)(9) and 40-18-19(b), relating to personal exemptions and credit for dependents.
c. The deductions allowable by this chapter which are not attributable to a taxpayer’s trade or business, including the federal individual income tax deduction, shall be allowed only to the extent of the amount of the gross income not derived from a trade or business. For purposes of the preceding sentence:
Any gain or loss from the sale or other disposition of property used in the trade or business of a character which is subject to the allowance for depreciation provided in Section 40-18-15 (a) (8) and (a)(9), or real property used in the trade or business, shall be treated as attributable to the trade or business.
Any deduction allowable in Section 40-18-15(a) (6), relating to casualty losses, shall not be taken into account.
Any deduction allowed under Section 40-18-15(a) (12) to the extent attributable to contributions which are made on behalf of an individual who is an employee within the meaning of said 26 U.S.C. § 401(c) (1), relating to self-employed individuals, shall not be treated as attributable to the trade or business of such individual.
d. The optional standard deduction allowed under Section 40-18-15(b) shall be treated as a deduction allowed by this chapter. For purposes of subdivision (1), the deduction provided by the preceding sentence shall be in lieu of any itemized deductions of the taxpayer.
(6) In determining the amount of any net operating loss carryback or carryover to any taxable year, the necessary computations involving any other taxable year shall be made under the law applicable to the other taxable year.
(7) Nonresident taxpayers shall be allowed only that portion of the net operating loss attributed to income related to Alabama. Proration of income shall be computed based upon the ratio of gross income from all sources to Alabama gross income.
(Act 98-502, p. 1083, §1.)
(a) As used in this section, the following terms shall have the following meanings:
(1) QUALIFYING EMPLOYEES. Alabama resident employees who are employed by qualifying employers, earn no more than $50,000 of wages in the applicable tax year, and report no more than $75,000 of adjusted gross income on their Alabama individual income tax return ($150,000 if married filing jointly) for the applicable year.
(2) QUALIFYING EMPLOYERS. Employers with less than 25 employees.
(b) For tax years beginning after December 31, 2010, in addition to any other Alabama income tax deduction that a qualifying employee may be entitled to with respect to the payment of health insurance premiums, qualifying employees shall be allowed to deduct from Alabama gross income 100 percent of the amounts they pay as health insurance premiums as part of an employer provided health insurance plan provided by a qualifying employer.
(c) In addition to any other Alabama income tax deduction that a qualifying employer may be entitled to with respect to the payment of health insurance premiums paid on behalf of qualifying employees, the qualifying employer shall be allowed as a deduction in the computation of Alabama taxable income 100 percent of the amounts they pay as health insurance premiums on behalf of qualifying employees in connection with an employer provided health insurance plan.
(Act 2008-559, p. 1282, §§1, 2; Act 2011-155, p. 285, §1.)
(a) An individual taxpayer, whose legal residence is located in an Alabama Insurance Underwriting Association zone pursuant to Section 27-1-17, shall be allowed a deduction from taxable income, regardless of whether the taxpayer itemizes his or her income tax deductions, in calculating the income tax imposed pursuant to Section 40-18-5, for certain retrofit costs as described in this section. The deduction shall be allowed for the costs incurred to retrofit, as specified in Section 27-31D-2, a structure qualifying as the legal residence of a taxpayer to make the residence more resistant to loss due to a hurricane, tornado, or other catastrophic windstorm event.
(b) In order to qualify for the state income tax deduction allowed pursuant to this section, the costs may not include ordinary repair or replacement of existing items, and shall be associated with those fortification measures defined in Chapter 31D of Title 27, designed to increase the resistance of the residence to hurricane, tornado, or catastrophic windstorm event damage. A taxpayer claiming the deduction shall receive certification, as prescribed by Chapter 31D of Title 27, that the fortification measures were implemented and costs were incurred, and shall provide the certification upon request of the Department of Revenue to prove the taxpayer is entitled to the deduction.
(c) The aggregate tax deduction allowed pursuant to this section for all taxable years beginning with the 2011 tax year shall not exceed the lesser of the following:
(1) Fifty percent of the retrofitting cost incurred.
(2) Three thousand dollars ($3,000).
(d) The cost of items that otherwise qualify for the deduction that are purchased with any available grant funds are not eligible for this deduction if the grants are not included in the income of the taxpayer.
(e) Costs incurred by the taxpayer and used as the basis for a deduction under Section 40-18-15.5 may not be used as the basis for a deduction under this section. The deductions under Section 40-18-15.5 and this section combined may not exceed three thousand dollars ($3,000).
(Act 2011-644, p. 1640, §1.)
(a) Any individual taxpayer, whose legal residence is located in Alabama, shall be allowed a deduction from taxable income, regardless of whether the taxpayer itemizes his or her income tax deductions, in calculating the income tax imposed pursuant to Section 40-18-5, for certain retrofit costs as described in this section. The deduction shall be allowed for the costs incurred to retrofit a structure qualifying as the legal residence of the taxpayer to make the structure more resistant to loss due to hurricane, tornado, other catastrophic windstorm event, or rising floodwaters.
(b) In order to qualify for the state income tax deduction allowed pursuant to this section, costs may include ordinary repair, replacement, and upgrades to existing residential property and new construction so long as the repair, replacement, and upgrades are designed to resist loss associated with any windstorm event or rising floodwater, and meet or exceed the standards set forth in the most recent editions of the Institute for Business and Home Safety published Fortified for Safer Living, the Institute for Business and Home Safety published Fortified for Existing Homes, the International Code Council published ICC 600, the International Code Council ICC 500, or any specifically designated wind resistant feature, technology, or code approved by the Alabama Residential and Energy Codes Board. A taxpayer claiming the deduction shall receive certification in a manner prescribed by the Alabama Residential and Energy Codes Board that the fortification measures were implemented and costs were incurred, and shall provide the certification upon request of the Department of Revenue to prove the taxpayer is entitled to the deduction.
(c) The aggregate tax deduction allowed pursuant to this section for all taxable years beginning with the 2011 tax year shall not exceed the lesser of the following:
(1) Fifty percent of the repair, replacement, and upgrade cost incurred.
(2) Three thousand dollars ($3,000).
(d) The cost of items that otherwise qualify for the deduction that are purchased with any available grant funds are not eligible for this deduction if the grants are not included in the income of the taxpayer.
(e) Costs incurred by the taxpayer and used as the basis for a deduction under Section 40-18-15.4 may not be used as the basis for a deduction under this section. The deductions under Section 40-18-15.4 and this section combined may not exceed three thousand dollars ($3,000).
(Act 2011-644, p. 1640, §2.)
(a) For the purposes of this section, health savings account contributions are defined as contributions made by a taxpayer to his or her health savings account up to the maximum amount allowed pursuant to 26 USC §223.
(b) Alabama residents will be allowed to deduct contributions made on or after January 1, 2018, by or on behalf of such individual to a health savings account of such individual to coincide with annual amount allotted by federal law or regulation. Employer contributions are not includible in an employee’s income and are therefore not deductible.
(Act 2016-345, §1.)
(a) A person qualifying for the optional increased standard deduction is an Alabama resident, single person, or married persons filing a joint return that meet all of the following criteria:
(1) Alabama gross income of less than one hundred thousand dollars ($100,000).
(2) Zero dollars ($0) of non-wage income.
(3) Has no dependents or is not claiming any expense or deduction associated with any dependents.
(4) Does not claim any itemized deductions.
(5) Does not claim any adjustments to income as prescribed in Section 40-18-14.2.
(6) Does not claim the federal income tax deduction as provided in Section 40-18-15.
(7) Does not claim any credits that are available to offset any portion of the tax levied in this chapter.
(8) Is not required to make estimated payments as provided for in Sections 40-18-80.
(9) Is not claiming any gain or loss as prescribed in this chapter.
(b) Notwithstanding Section 40-18-15, the standard deduction allowed for returns filed pursuant to this section shall be as follows:
(1) Single persons shall be allowed a standard deduction of two thousand two hundred fifty dollars ($2,250), or the standard deduction allowed by Section 40-18-15, whichever is greater.
(2) Taxpayers filing married filing jointly as defined in Section 40-18-27 shall be allowed a standard deduction of four thousand five hundred dollars ($4,500), or the standard deduction allowed by Section 40-18-15, whichever is greater.
(c) Persons qualifying for the optional increased standard deduction are allowed to claim a personal exemption in accordance with Section 40-18-19. The personal exemption and optional increased standard deduction are the only exemption or deduction that shall be allowed by persons opting to claim the optional increased standard deduction.
(d) Persons qualifying for the optional increased standard deduction must voluntarily forego their right to claim the federal income tax deduction as allowed by Section 40-18-15.
(e) Any persons qualifying for the optional increased standard deduction, pursuant to this section, must acknowledge that they are voluntarily foregoing other deductions, credits, and exemptions that may otherwise be available to such persons.
(f) Persons qualifying for and electing to claim the optional increased standard deduction shall file the return on a simplified short form and in a manner prescribed by the department.
(g) The department may promulgate rules to assist with the administration of this section.
(Act 2017-405, §§2, 3.)
(a) An individual taxpayer shall be allowed a deduction from gross income, regardless of whether the taxpayer itemizes income tax deductions in calculating the income tax imposed pursuant to Section 40-18-5, for contributions made to an Alabama Achieving a Better Life Experience (ABLE) savings account, defined in Section 16-33C-3, as prescribed by this section.
(b) An individual taxpayer will be allowed to deduct contributions made on or after January 1, 2021, to an Alabama ABLE savings account, by or on behalf of such individual, of an amount up to five thousand dollars ($5,000) per annum. If the taxpayer makes a nonqualified withdrawal as defined by Section 529A of the Internal Revenue Code, 26 U.S.C. § 529A, the amount of the nonqualified withdrawal, plus 10 percent of the amount withdrawn, shall be added back to the income of the contributing taxpayer in the year the nonqualified withdrawal was distributed. Rollover amounts transferred to an Alabama ABLE savings account shall not be considered contributions for purposes of this deduction to the extent that an Alabama income tax deduction has already been claimed for the rollover contribution amounts.
(c) The Department of Revenue may adopt rules to assist with the administration of this section.
(d) The deduction allowed under this section may not be claimed for tax years that begin after December 31, 2030.
(Act 2021-514, §§1-3; Act 2025-402, §1.)
(a) Basis for depreciation. The basis upon which exhaustion, wear and tear, depreciation and obsolescence are to be allowed shall be such reasonable allowance as may be determined by the Department of Revenue on the adjusted basis provided in Section 40-18-6 for the purpose of determining the gain or loss upon sale or other disposition of such property.
(b) Basis for depletion.
(1) GENERAL RULE. The basis upon which depletion is to be allowed shall be such reasonable allowance as may be determined by the Department of Revenue on the adjusted basis provided in Section 40-18-6 for the purpose of determining the gain or loss upon the sale or other disposition of such property, except as provided in subdivision (2) of this subsection.
(2) AMOUNT. In the case of oil and gas wells, the allowance for depletion shall be 12 percent of the gross income from the property during the taxable year, excluding from such gross income an amount equal to any rents or royalties paid or incurred by the taxpayer in respect to the property. Such amounts shall not exceed 50 percent of the net income of the taxpayer, computed without allowance for depletion, from the property, except that in no case shall the depletion allowance be less than the amount allowable under federal income tax law. In the case of leases the deductions allowed by this paragraph shall be equitably apportioned between the lessor and the lessee.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §386; Acts 1953, No. 719, p. 973; Act 99-664, 2nd Sp. Sess., p. 124, §1.)
In computing net income, no deduction shall in any case be allowed in respect of personal, living, or family expense; any amount paid out for new buildings or for permanent improvements or betterment made to increase the value of any property or estate; any amount expended in restoring property or in making good the exhaustion thereof, for which an allowance is or has been made; or premiums paid on any life insurance policy covering the life of any officer or employee or of any person financially interested in any trade or business carried on by the taxpayer when the taxpayer is directly or indirectly a beneficiary under such policy.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §387.)
[Repealed]
Repealed by Act 98-502, § 2.
(Acts 1943, No. 470, p. 434.)
AMENDED BY ACT 2026-603, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
(a) The following exemptions from income taxation shall be allowed to every individual resident taxpayer:
(1) Retirement allowances, pensions and annuities, or optional allowances, approved by the Board of Control of the Teachers’ Retirement System of Alabama, which exempt status is set out in Section 16-25-23.
(2) Retirement allowances, pensions and annuities, or optional allowances, approved by the Board of Control of the Employees’ Retirement System of Alabama, which exempt status is set out in Section 36-27-28.
(3) The first eight thousand dollars ($8,000) of any retirement compensation, retirement allowances, pensions and annuities, or optional allowances, received by any eligible firefighter, as defined in Sections 36-32-1 and 36-32-2, or his or her designated beneficiary, from any firefighting agency established in the State of Alabama, but only if such retirement compensation, retirement allowances, pensions and annuities, or optional allowances as are awarded as a result of fire protection services rendered. This subdivision shall become effective for the taxable years beginning January 1, 1987, and thereafter following its passage and approval by the Governor, or upon its otherwise becoming a law; provided, that for the taxable years beginning on or after January 1, 1991, all of the pension and retirement payments shall be exempt from taxation.
(4) The first eight thousand dollars ($8,000) of any retirement compensation, retirement allowances, pensions and annuities, or optional allowances received by any eligible peace officer, as defined in subdivision (11) of Section 36-21-60, or his or her designated beneficiary, from any police retirement system established in the State of Alabama, but only if the retirement compensation, retirement allowances, pensions and annuities, or optional allowances are awarded as a result of police services rendered. This subdivision shall become effective for taxable years beginning January 1, 1984, and thereafter; provided, that for the taxable years beginning on or after January 1, 1991, all of the pension and retirement payments shall be exempt from taxation.
(5) Income received as annuities under the United States Retirement System from the United States Government Civil Service Retirement and Disability Fund, including income received from the Tennessee Valley Authority’s pension system, income received as annuities under the United States Foreign Service Retirement and Disability Fund, or income received from any other United States government retirement and disability fund.
(6) Beginning January 1, 1991, all payments made on or after such date to a retiree or his designated beneficiary under a “defined benefit plan,” as defined under 26 U.S.C. § 414(j), to the extent such payment would be taxable for federal income tax purposes.
(7) Net income realized by individuals and partnerships from time to time in the business of conducting a financial business employing monied capital coming into competition with the business of national banks, but only if such individuals and partnerships are subject to an excise tax imposed by this state on or with respect to such income.
(8) In the case of a single person or a married person not living with husband or wife, a personal exemption of one thousand five hundred dollars ($1,500) or, in the case of a head of a family or a married person living with husband or wife, a personal exemption of three thousand dollars ($3,000), but a husband and wife living together shall receive only one personal exemption of three thousand dollars ($3,000) against their aggregate income, and in case they make separate returns each must claim a personal exemption of one thousand five hundred dollars ($1,500).
(9) a. Three hundred dollars ($300) for each person, other than husband or wife, dependent upon the taxpayer, and over half of whose support, for the calendar year in which the taxable year for the taxpayer begins, was received from the taxpayer.
b. For tax years beginning after December 31, 2006, for taxpayers with adjusted gross income equal to or less than twenty thousand dollars ($20,000), one thousand dollars ($1,000) for each person other than husband or wife, dependent upon the taxpayer, and over half of whose support, for the calendar year in which the taxable year for the taxpayer begins, was received from the taxpayer.
c. For tax years beginning after December 31, 2006, for taxpayers with adjusted gross income in excess of twenty thousand dollars ($20,000) and equal to or less than one hundred thousand dollars ($100,000), five hundred dollars ($500) for each person other than husband and wife, dependent upon the taxpayer, and over half of whose support, for the calendar year in which the taxable year for the taxpayer begins, was received from the taxpayer.
d. For tax years beginning after December 31, 2021, for taxpayers with adjusted gross income equal to or less than fifty thousand dollars ($50,000), one thousand dollars ($1,000) for each person other than husband or wife, dependent upon the taxpayer, and over half of whose support, for the calendar year in which the taxable year for the taxpayer begins, was received from the taxpayer.
e. For tax years beginning after December 31, 2021, for taxpayers with adjusted gross income in excess of fifty thousand dollars ($50,000) and equal to or less than one hundred thousand dollars ($100,000), five hundred dollars ($500) for each person other than husband and wife, dependent upon the taxpayer, and over half of whose support, for the calendar year in which the taxable year for the taxpayer begins, was received from the taxpayer.
For the purposes of this section, “dependent” shall mean: A son or daughter of the taxpayer or a descendant of either; a stepson or stepdaughter of the taxpayer; a brother, sister, stepbrother, or stepsister of the taxpayer; the father or mother of the taxpayer or an ancestor of either; a stepfather or stepmother of the taxpayer; a son or daughter of a brother or sister of the taxpayer; a brother or sister of the father or mother of the taxpayer; a son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law of the taxpayer. As used in this paragraph the terms “brother” and “sister” include a brother or sister by the half blood. For the purpose of determining whether any of the foregoing relationships exist, a legally adopted child of a person shall be considered a child of such a person by blood.
(10) Beginning January 1, 1998, all income, interest, dividends, gains, or benefits of any kind received from savings accounts or prepaid tuition contracts administered under Title 16, Chapter 33C, are exempt from all income taxation by the state and by all of its political subdivisions to the extent that the amounts remain on deposit in the PACT Trust Fund or the ACES Trust Fund, or are used to pay the designated beneficiary’s qualified higher education expenses as defined in 26 U.S.C. § 529, or are refunded under such terms as would not carry a penalty under 26 U.S.C. § 529.
(11) Beginning January 1, 2016, all income, interest, dividends, gains, or benefits of any kind received from ABLE savings accounts administered under Title 16, Chapter 33C, are exempt from all income taxation by the state and by all of its political subdivisions to the extent that the amounts remain on deposit in the ABLE Trust Fund, or are used to pay the designated beneficiary’s qualified disability expenses as defined in 26 U.S.C. § 529A, or are refunded under such terms as would not carry a penalty under 26 U.S.C. § 529A, or other applicable federal law.
(12) Beginning January 1, 2018, amounts received by an individual from sources within a foreign country or countries which constitute a housing allowance, and earned income attributable to services performed by such individual received during the tax period are exempt from all income taxation by the state and by all of its political subdivisions to the extent such income is exempt from federal income tax pursuant to 26 U.S.C. § 911.
(13) a. Beginning January 1, 2023, the first six thousand dollars ($6,000) of taxable retirement income.
b. This exemption may only be claimed by individual taxpayers who are 65 years of age or older.
(b) Of the following personal exemptions allowed resident taxpayers, each nonresident individual taxpayer shall be allowed that proportion thereof that the adjusted gross income received by said nonresident individual taxpayer from sources within the State of Alabama bears to his or her adjusted gross income received from sources within and without the State of Alabama: In the case of a single person or a married person not living with husband or wife, a personal exemption of one thousand five hundred dollars ($1,500) or, in the case of a head of a family or a married person living with husband or wife, a personal exemption of three thousand dollars ($3,000), a husband and wife living together shall receive but one personal exemption of three thousand dollars ($3,000) against their aggregate income; and, in case they make separate returns, each must claim a personal exemption of one thousand five hundred dollars ($1,500); and the amount in subdivision (9) of subsection (a) for each person, other than husband or wife, dependent upon and receiving his or her chief support from the taxpayer.
(c) The Department of Revenue may enact rules as necessary to implement and administer the provisions of this act.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §388; Acts 1945, No. 39, p. 45; Acts 1947, No. 367, p. 254; Acts 1953, No. 693, p. 945; Acts 1959, No. 112, p. 634, §1; Acts 1965, No. 552, p. 1021, §1; Acts 1969, Ex. Sess., No. 20, p. 44, §1; Acts 1982, No. 82-441, p. 692, §1; Acts 1982, No. 82-465, p. 759, §4; Acts 1982, 1st Ex. Sess., No. 82-667, p. 85, §4; Acts 1987, No. 87-630, p. 1130; Acts 1990, No. 90-596, p. 1041, §1; Acts 1991, No. 91-480, p. 869, §1; Acts 1997, No. 97-547, p. 957, §2; Act 2006-62, p. 75, §1; Act 2006-352, p. 927, §1; Act 2015-442, p. 1419, §1; Act 2018-232, §1; Act 2022-292, §1; Act 2022-297, §1; Act 2022-294, §2.)
(a) Effective for the 1997 state income tax year and through tax year ending December 31, 2019, an amount up to twenty-five thousand dollars ($25,000) received as severance, unemployment compensation or termination pay, or as income from a supplemental income plan, or both, by an employee who, as a result of administrative downsizing, is terminated, laid-off, fired, or displaced from his or her employment, shall be exempt from any state, county, or municipal income tax.
(b) Effective for tax years beginning after December 31, 2019, an amount up to fifty thousand dollars ($50,000) per tax year received as severance, unemployment compensation, or termination pay, or as income from a supplemental income plan, or both, by an employee who, as a result of administrative downsizing, is terminated, laid-off, fired, or displaced from his or her employment, shall be exempt from any state, county, or municipal income tax. The exemption is limited to the amount of the actual payment or payments, but in no case shall exceed fifty thousand dollars ($50,000) per tax year.
(c) Notwithstanding subsections (a) and (b), for taxable years 2020 and 2021, any amount received as unemployment compensation as a result of the federal Coronavirus Aid, Relief, and Economic Securities Act, as provided in 15 U.S.C. § 9021, 15 U.S.C. § 9023, or as provided in Section 201 or 203 (Extension of CARES Act Unemployment Provisions) of the Consolidated Appropriations Act, 2021 Pub. L. 116-260, or as a result of further extension of these benefits shall be exempt from any state, county, or municipal income tax.
(d) An employee whose termination from employment is due to misconduct shall not be allowed to take the tax exemption provided in this section.
(e) The department shall adopt rules to administer this section.
(Acts 1997, No. 97-705, p. 1456, §1; Act 2021-240, §4.)
(a) Effective for the 2006 state income tax year and each year thereafter, any death benefit payments listed in subsection (e) that are paid to the designated beneficiary of a peace officer or fireman killed in the line of duty, as determined by the awarding authority, shall be exempt from any state income tax.
(b) For purposes of this section, the terms peace officer and fireman are defined in the same manner as provided in Section 36-30-1. For purposes of this section, the term awarding authority shall mean an entity or body authorized by law to award any of the death benefit payments listed in subsection (e).
(c) Any determinations made by an awarding authority pursuant to this section shall apply only to death benefit payments made by that awarding authority.
(d)(1) For purposes of this section, the phrase line of duty shall mean arising out of and in the course of that person’s assigned duty, including all normal and special assignments as ordered by his or her superiors or assignments undertaken while acting as a peace officer under rules, directions, or regulations promulgated by the appropriate employing authority, within or outside of normal duty hours.
(2) With respect to firemen, the phrase line of duty shall also include any death occurring while performing assigned duties, or while traveling to or returning from a fire alarm, rescue operation, or any other emergency operation.
(3) With respect to peace officers, the phrase line of duty shall include, but is not limited to, any of the following:
a. While the peace officer was present on or about the premises where his or her duties were being performed or where his or her duties require the officer’s presence as a part of his or her duties at the time of the accident and during the hours of service as a peace officer.
b. While engaged in any training which is mandated to maintain his or her general or specialized assignment as a peace officer.
c. While the peace officer was in conflict, pursuit, or observation of a person or persons suspected or under suspicion of breaking the law, or has broken the law, or is in the process of breaking the law.
d. While the peace officer was defending persons or property.
e. While engaged in performing a law enforcement duty at the direction of his or her supervisor.
(e) This section applies to any death benefit payments received by the designated beneficiary of a peace officer or fireman killed in the line of duty that are paid from the State Treasury pursuant to Section 36-30-2, paid from the Alabama Peace Officers’ Annuity and Benefit Fund pursuant to Section 36-21-72, or paid from any governmental plan that is exempt from federal income taxation pursuant to 26 U.S.C.A. §101(h), as amended.
(f) This section shall not apply with respect to the death of any peace officer or fireman if it is determined by the awarding authority that any of the following occurred or will occur:
(1) The death was caused by the intentional misconduct of the officer or fireman or by the officer’s or fireman’s intention to bring about his or her death.
(2) The officer or fireman was voluntarily intoxicated at the time of death.
(3) The officer or fireman was performing his or her duties in a grossly negligent manner at the time of death.
(4) The payment is to an individual whose actions were a substantial contributing factor to the death of the officer or fireman.
(Act 2006-424, §2.)
(a) A volunteer first responder, as defined in Section 9-3-18.1, shall be entitled to a state income tax credit for the use of his or her personal motor vehicle to respond to fire, emergency, and rescue calls. The tax credit shall be effective beginning January 1, 2024. The tax credit is allowed up to the amount of the tax liability of the taxpayer. The tax credit is not refundable or transferable and may not be carried forward to a subsequent tax year. A taxpayer claiming this tax credit may not also claim the same unreimbursed mileage as a deduction on the taxpayer’s income tax return.
(1) The tax credit amount shall equal total annual unreimbursed mileage at the standard mileage allowance for state employees pursuant to Section 36-7-22.
(2) Total annual mileage shall be recorded and verified as follows:
a. After each fire, emergency, or rescue call, the head of the department shall verify in writing that a first responder used a personal motor vehicle to travel from his or her home or place of employment to the fire, emergency, or rescue call, and from which the first responder returned to his or her home or place of employment, indicating the total number of miles traveled.
b. At the end of the calendar year, the head of the department shall provide to the first responder a signed statement of the total mileage for trips that meet the requirements of paragraph a. for the preceding year.
(b) The Department of Revenue may adopt rules and forms for the implementation of this section, including the following:
(1) A standardized certificate to be signed by the head of the department and the first responder indicating the total mileage for the year.
(2) A requirement that the first responder provide a copy of the certificate with his or her income tax return in order to obtain the credit.
(c) For purposes of this section, “head of the department” means, in the case of a volunteer fire department, the fire chief or assistant fire chief, and in the case of a rescue squad, the captain or squad leader.
(Act 2023-510, §§ 4, 5.)
(a) In recognition that it is the policy of the State of Alabama to encourage organ donation to individuals in dire medical need, as set forth in Section 22-19-71.1, the tax credit provided in this section is intended by the Legislature to foster employment conditions that encourage organ donation.
(b) For purposes of this section, the following terms have the following meanings:
(1) MINIMUM LEAVE PERIOD. Fifteen days.
(2) TAXPAYER. A private sector employer.
(c) Effective for tax years beginning January 1, 2027, and ending December 31, 2031, a taxpayer shall be entitled to a state income tax credit for providing paid leave to employees for the purpose of making an organ donation subject to all of the following requirements:
(1) The taxpayer must adopt a formal, written policy that allows an employee to take a paid leave of absence of no less than the minimum leave period to undergo a medical procedure to donate all or part of an organ to another individual.
(2) The leave policy must be available without any reduction in pay or loss of vacation time, compensatory time, personal days, or sick leave for no less than the minimum leave period.
(3) The leave policy may apply only to an employee for whom the taxpayer is responsible for providing an IRS Form W-2 Wage and Tax Statement.
(4) The leave policy shall require the employee to provide signed authorization to disclose to the taxpayer and the Department of Revenue documentation from the employee’s medical provider which verifies the organ donation, in compliance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA), 42 U.S.C. § 1320d et seq.
(5) The tax credit amount shall be equal to 25 percent of the amount of gross compensation paid to the worker for the period of leave taken, up to 30 days, credited to the taxpayer’s state income tax liability.
(6) The total amount that may be credited to the taxpayer’s state income tax liability for a tax year is two thousand dollars ($2,000).
(7) If there is a medical determination after the taxpayer’s approval of the leave of absence that the employee does not qualify as an organ donor, the amount of the tax credit shall be limited to the amount of gross compensation paid to the worker from the beginning of the leave period through the day of the medical determination.
(8) If the amount of the credit exceeds the tax liability for the year, the excess may be carried forward and applied to the tax liability for up to the three succeeding tax years.
(9) A taxpayer may not sell or transfer any tax credit that the taxpayer is eligible to claim under this section.
(d) The Department of Revenue shall adopt rules, forms, and worksheets for the implementation of this section.
(Act 2026-559, §5.)
(a) The first $4,750 retirement or compensation received as retirement benefit from the military services by any person retired from the military services of the United States of America and survivor benefits derived therefrom is hereby exempt from any state, county or municipal income tax or like tax by whatever name called.
(b) Effective January 1, 1983, the amount of the exemption provided for in subsection (a) of this section shall be increased to $8,000.
(c) Effective January 1, 1985, the amount of the exemption provided for in subsection (b) of this section shall be increased to $10,000.
(d) Effective January 1, 1989, and for all successive tax years, all retirement payments or compensation recognized under this section shall be exempt.
(Acts 1975, No. 1036, p. 2078, §1; Acts 1982, No. 82-416, p. 627; Acts 1990, No. 90-596, p. 1041, §2.)
(a)(1) For the purpose of ascertaining the income tax due under the provisions of this chapter by individual residents of Alabama whose gross income, as defined herein, is derived from sources both within and outside the State of Alabama, there shall be allowed a credit against the amount of tax found to be due by such resident, on account of income derived from outside the State of Alabama, the amount of income tax actually paid by such resident to any state or territory on account of business transacted or property held, directly or indirectly, outside the State of Alabama. Resident individual owners of Subchapter K entities, Alabama S corporations, and beneficiaries of estates or trusts who include their proportionate share of the income arising from one or more of these entities in their Alabama gross income shall be allowed a credit for their proportionate share of the income tax actually paid by the entity to any state or territory on account of business transacted or property held outside the State of Alabama, whether the payment was made on behalf of the resident individual owner or because the entity was not recognized by such state or territory as a non-taxable pass-through entity. For purposes of this subsection, income tax shall be defined to include, but not be limited to, any tax based in whole or in part on the entity’s net income, net profits, or gross profits; provided, however, that the term income tax shall not include any tax based on the entity’s net worth, capital, or asset values, and shall not include any tax for which an exclusion or deduction is claimed in the calculation of taxable income reported on the Alabama income tax return.
(2) In case the amount of income tax actually paid by or on behalf of an individual resident of Alabama, or by one of the entities described in subdivision (a)(1) above, to another state or territory is in excess of the amount of tax that would be due on the same income computed using the applicable Alabama income tax rates, then only such amount as would be due in this state on such taxable income shall be allowed as a credit. In no event shall the credit for income taxes paid to another state or territory exceed the amount of tax that would be due on the same taxable income computed using the applicable Alabama income tax rates.
(3) As a further limitation, the credit for taxes paid to another state or territory shall only be utilized against that portion of a taxpayer’s Alabama income tax liability that is attributable to income from other states or territories to which income taxes were paid with respect to that tax year, which shall be determined by multiplying the taxpayer’s Alabama income tax liability before consideration of any credit described in subdivision (a)(1) by a fraction, the numerator of which is the taxpayer’s Alabama adjusted gross income attributable to other states or territories to which income taxes or the equivalent thereof were paid by or on behalf of an individual resident of Alabama, or by one of the entities described in subdivision (a)(1), and the denominator of which is total Alabama adjusted gross income.
(4) If the amount of income tax actually paid by or on behalf of an individual resident of Alabama to any other state or territory on account of business transacted or property held is less than the amount of tax that would be due, as computed using the applicable Alabama income tax rates, then the income tax levied herein shall be computed on the entire taxable income from sources from both within and outside the state as defined herein, and the tax shall be paid less the credit allowed in this section for tax paid on income derived, directly or indirectly, from outside the state.
(5) Before a resident of Alabama may claim the credit allowed under this subsection (a), he or she shall file with his or her Alabama income tax return a certificate showing the amount of gross and net income derived, directly or indirectly, from sources outside this state, together with the amount of tax paid or to be paid on such income.
(b) Any taxpayer described in Section 40-18-2(1) or Section 40-18-2(6), who, during any year, has been assessed a job development fee as described in Section 41-10-44.8(b), shall be allowed a credit against the amount of income tax due under the provisions of this chapter in such year in an amount equal to the job development fee withheld from the taxpayer’s wages during the year.
(c)(1) A resident individual taxpayer, who is either a partner or member of a Subchapter K entity, a shareholder of an Alabama S corporation, or a beneficiary of an estate or trust, during all or part of a year, shall be allowed a credit equal to fifty percent (50%) of his or her proportionate share of the income taxes paid or accrued, including a payment recognized by 26 U.S.C. §901, to a foreign country with respect to the trade or business or investment income of such business, including related operations and affiliates.
(2) Notwithstanding the foregoing, the credit allowed in this subsection shall not exceed the amount of income tax that would otherwise be imposed by Alabama on the individual’s income derived from the foreign country.
(d) Timely filed petitions for refund of overpaid income tax for the 2013 through 2017 tax years shall be granted, as otherwise appropriate, without consideration of the additional limitation provided in subdivision (a)(3) of this section or the limitation contained in the version of Ala. Admin. Code Department of Revenue Rule 810-3-21-.03 as of March 29, 2018; provided, however, that refund petitions for overpayment of income tax paid for tax years prior to 2017 related to the credit for taxes paid to other states or territories must be filed with the department by the earlier of (1) the expiration of the period in which to file refund petitions set forth in Section 40-2A-7, or (2) Saturday, June 30, 2018. No adjustments included in or portions of any preliminary assessment or final assessment, or proposed adjustments or portions of proposed adjustments of income tax attributable to the application of the additional limitation provided in subdivision (a)(3) of this section or the limitation contained in the version of Ala. Admin. Code Department of Revenue Rule 810-3-21-.03 as of March 29, 2018, may be entered or issued with respect to tax years ending on or before December 31, 2017, and any such assessment, adjustment, or portion thereof entered in violation of this provision shall be void and unenforceable and shall promptly be withdrawn, revised, or dismissed with prejudice by the department.
(e) The department may adopt rules to assist with the administration of this section.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §390; Acts 1993, 1st Ex. Sess., No. 93-852, p. 95, §3; Acts 1997, No. 97-625, p. 1048, §3; Act 2007-366, p. 718, §1; Act 2012-427, p. 1163, §1; Act 2018-465, §1,2,5.)
The Department of Revenue shall report annually to the Legislature the extent to which credits for taxes paid to foreign countries are claimed during the preceding tax year. The report shall be due on the fifth legislative day of each regular session and shall state the number of taxpayers who claim the credits and the total amount of credits claimed during the year.
(Act 2012-427, p. 1163, §2.)
Taxpayers, including corporations, as well as subchapter K entities and Alabama S corporations, engaged in multistate business in such a manner as to subject their income to allocation and apportionment provided by the Multistate Tax Compact shall allocate and apportion their income, gains, losses, deductions, credits, and exemptions in the manner provided by Chapter 27. This section shall not apply to individuals.
(Acts 1967, No. 396, p. 999, §1; Acts 1997, No. 97-625, p. 1048, §3; Act 2006-114, p. 173, §2.)
Any taxpayer who has taxable income from business activities both within and without this state, whose only business activities within this state consist of sales and do not include owning or renting real estate or tangible personal property, and whose dollar volume of gross sales made during the tax year within this state is not in excess of $100,000 may elect to report and pay any income tax due on the basis of a percentage of such volume. If a taxpayer elects to report and pay income tax due on the basis of a percentage of sales in this state, the percentage rate shall be one fourth of one percent of such volume of sales. The report shall be made on forms prescribed by the Commissioner of Revenue and shall be due and payable on the same date and in the same manner as provided in Sections 40-18-27 and 40-18-39.
(Acts 1967, No. 392, p. 979, §1.)
(a) The amount of income, deduction, gain, loss, or credit includable or deductible by an owner of an interest in a subchapter K entity shall be determined in accordance with subchapter K of the Internal Revenue Code, 26 U.S.C. §§ 701-761.
(b) For purposes of computing its net income, a subchapter K entity shall add back otherwise deductible interest expenses and costs and intangible expenses and costs directly or indirectly paid, accrued or incurred to, or in connection directly or indirectly with, one or more direct or indirect transactions, with one or more related members, except to the extent the subchapter K entity shows, upon request by the commissioner, that the corresponding item of income was in the same taxable year:
(1) subject to a tax based on or measured by the related member’s net income in Alabama or any other state of the United States, or
(2) subject to a tax based on or measured by the related member’s net income by a foreign nation which has in force an income tax treaty with the United States, if the recipient was a “resident” (as defined in the income tax treaty) of the foreign nation.
(c) For purposes of subsection (b), “subject to a tax based on or measured by the related member’s net income” means that the receipt of the payment by the recipient related member is reported and included in income for purposes of a tax on net income, and not offset or eliminated in a combined or consolidated return which includes the payor.
(d) The subchapter K entity shall make the adjustments required in subsection (b) of this section unless the subchapter K entity establishes that the adjustments are unreasonable, or the subchapter K entity and the Commissioner of Revenue agree in writing to the application or use of alternative adjustments and computations. Nothing in this section shall be construed to limit or negate the commissioner’s authority to otherwise enter into agreements and compromises otherwise allowed by law.
(e) The adjustments required in subsection (b) shall not apply to that portion of interest expenses and costs and intangible expenses and costs if the subchapter K entity can establish that the transaction giving rise to the interest expenses and costs or the intangible expenses and costs between the subchapter K entity and the related member did not have as a principal purpose the avoidance of any Alabama tax and the related member is not primarily engaged in the acquisition, use, licensing, maintenance, management, ownership, sale, exchange, or any other disposition of intangible property, or in the financing of related entities. If the transaction giving rise to the interest expenses and costs or intangible expenses and costs, as the case may be, has a substantial business purpose and economic substance and contains terms and conditions comparable to a similar arm’s length transaction between unrelated parties, the transaction will be presumed to not have as its principal purpose tax avoidance, subject to rebuttal by the Commissioner of the Department of Revenue.
(f) Nothing in this section shall require a subchapter K entity to add to its net income more than once any amount of interest expenses and costs or intangible expenses and costs that the subchapter K entity pays, accrues, or incurs to a related member described in subsection (b).
(g) Nothing in this section shall be construed to limit or negate the commissioner’s authority to make adjustments under this chapter.
(h) Subsection (b) shall not limit the deduction of the interest portion of rent paid under lease agreements described in Section 40-18-35(a)(9).
(i) Except with regard to payments described in Sections 40-18-35(a)(4)b and 40-18-35(a)(9), nothing in this section shall be construed to allow any item to be deducted more than once or to allow a deduction for any item that is excluded from income or to allow any item to be included in the Alabama taxable income of more than one taxpayer.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §391; Acts 1997, No. 97-625, p. 1048, §3; Act 2001-1088, 4th Sp. Sess., p. 1095, §1.)
[Repealed]
Repealed by Act 2009-144, p. 268, §12, effective January 1, 2009.
(Act 2001-1105, 4th Sp. Sess., p. 1169, §1.)
(a) For purposes of this section and Section 40-18-24.3, the following terms shall have the following meanings:
(1) MEMBER. An individual, estate, trust or business trust as defined in Section 40-18-1, a corporation as defined in Section 40-18-1, or Subchapter K entity as defined in Section 40-18-1, that is a partner in a general, limited, limited liability, or limited liability limited partnership, or a member of a limited liability company.
(2) NONRESIDENT. a. An individual who is not a resident of or domiciled in this state during the applicable tax year.
b. A nonresident trust as defined in Section 40-18-1.
c. A nonresident estate as defined in Section 40-18-1.
d. A foreign corporation as defined in Section 40-18-1, not commercially domiciled in this state during the applicable tax year.
e. A Subchapter K entity or business trust that is created or organized under the laws of a jurisdiction other than this state and that is not commercially domiciled in this state.
(3) PASS-THROUGH ENTITY. A partnership or other entity classified as a Subchapter K entity under Section 40-18-1. Neither estates nor trusts, including business trusts, are included in this definition or subject to this section except in their capacity as a nonresident member, as herein defined, of a pass-through entity or lower-tier pass-through entity.
(4) QUALIFIED INVESTMENT PARTNERSHIP. A partnership or other entity classified as a Subchapter K entity, or a business trust as defined in Section 40-18-1, that meets all of the following requirements for the applicable tax period:
a. No less than 90 percent of the cost of the entity’s total assets consists of qualifying investment securities and office facilities and tangible personal property reasonably necessary to carry on its activities in this state as an investment partnership.
b. No less than 90 percent of its gross income consists of interest, dividends, distributions, and gains and losses from the sale or exchange of qualifying investment securities, and management fees paid by its members.
c. An authorized officer, partner, member, or manager of the entity files on behalf of the entity a certification that it meets the above two criteria with respect to the tax period covered by the certification, in a form and at the time prescribed by the Department of Revenue.
(5) QUALIFYING INVESTMENT SECURITIES. Except as provided in Section 40-18-24.3, includes all of the following:
a. Common stock, including preferred or debt securities convertible into common stock; and preferred stock, including debt securities convertible into preferred stock.
b. Bonds, debentures, and other debt securities.
c. Deposits and any other obligations of banks and other financial institutions.
d. Stock and bond index securities, future contracts, derivative securities, warrants or options on securities, and other similar financial securities and instruments.
e. Interests in a Subchapter K entity that itself qualifies as a qualified investment partnership.
f. Other similar or related financial or investments contracts, instruments, or securities.
(b)(1) Except as provided in subsection (c), a pass-through entity shall file with the Department of Revenue, at the time the entity’s annual return is required to be filed with the Department of Revenue for each taxable year, a composite income tax return on behalf of its nonresident members and shall report and pay the income tax imposed by this chapter at the highest applicable marginal rate provided in Section 40-18-5 on the nonresident members’ distributive shares of the income of the pass-through entity apportioned and allocated at the entity level to this state under Chapter 27 of this title.
(2) A nonresident member that has been included in a composite income tax return filed pursuant to this section may file its own Alabama income tax return and shall receive credit for Alabama income tax paid on the member’s behalf by the pass-through entity.
(3) The Department of Revenue may enter into agreements to permit the filing of annual composite income tax returns on behalf of one or more nonresident owners of pass-through entities who are not defined as nonresident members above, or of other forms of business entities the income of which is taxable at the owner level.
(c)(1) The pass-through entity shall be liable to the State of Alabama for the payment of the tax required to be remitted under this section, together with applicable interest and penalties, but shall not be liable to any such member for any amount withheld from distributions to or the distributive share of such member and remitted in compliance with this section. A member of a pass-through entity that is itself a pass-through entity, a lower-tier pass-through entity, shall be subject to the same requirement to file a composite income tax return with respect to the distributive share of the apportioned and allocated income of the lower-tier pass-through entity. The Department of Revenue shall apply the Alabama income tax remitted by a pass-through entity on behalf of the lower-tier pass-through entity to the remittance obligation imposed by this subsection on the lower-tier pass-through entity.
(2) A pass-through entity, at the time of payment pursuant to this section, shall deliver to the Department of Revenue a return on a form prescribed by the department showing the total amounts paid or credited to its nonresident members, the amounts of income tax remitted in accordance with this section, if any, and any other information the department may reasonably require. A pass-through entity shall furnish to its nonresident members annually, but not later than the 15th day of the third month after the end of its taxable year, a record of the amount of Alabama income tax remitted on behalf of such member, on a form prescribed by the department.
(3) Notwithstanding subsection (b), a pass-through entity shall not be required to remit Alabama income tax on behalf of a nonresident member if any of the following applies:
a. The Department of Revenue determines by regulation or ruling that the nonresident member’s income should not be subject to composite return reporting, such as a member that is exempt from Alabama income tax.
b. The pass-through entity is a qualified investment partnership, or a publicly traded partnership as defined by 26 U.S.C. §7704(b) that is treated as a partnership for federal income tax purposes, which provides for inspection by the Department of Revenue upon reasonable notice a list of the names of each of its nonresident owners or unit holders together with their addresses, taxpayer identification numbers, and other information reasonably requested by the department.
(Act 2009-144, p. 268, §10.)
(a) Notwithstanding any other provision of this chapter to the contrary, including Sections 40-18-2 and 40-18-24.2, no income tax shall be due the State of Alabama from a nonresident member of a qualified investment partnership, or from the qualified investment partnership itself, with respect to the nonresident member’s distributive share of interest, dividends, distributions, or gains and losses from qualifying investment securities owned by the entity, as long as the nonresident member does not actively participate in the day-to-day management of the entity. Provided, however, that in the event a qualified investment partnership invests in the qualifying investment securities of an entity that is majority owned by a nonresident member of the qualified investment partnership, income tax shall be due by such nonresident member with respect to the member’s distributive share of any interest, dividends, distributions, or gains and losses from the qualifying investment securities of the other entity. For purposes of this section and Section 40-18-24.2, “majority owned” means ownership of more than 50 percent of the issued and outstanding voting stock of the other entity, applying the attribution rules of 26 U.S.C. §318.
(b) The terms “nonresident,” “member,” “qualified investment partnership,” and “qualifying investment securities” shall have the same meanings ascribed to them in Section 40-18-24.2.
(c) The Department of Revenue shall promulgate reasonable rules to effectuate the intent of this section, including rules permitting certain corporate members of qualified investment partnerships to be eligible for the provisions of this section. Further, if the Commissioner of Revenue determines that this section is being used in an abusive fashion principally to avoid Alabama income tax liability, the commissioner shall have the authority to promulgate rules to distribute, apportion, or allocate gross income in order to clearly reflect the income of any such entity engaged in such tax avoidance.
(Act 2009-144, p. 268, §10.)
(a) This section shall be known and may be cited as the Alabama Electing Pass-Through Entity Tax Act.
(b) For the purposes of this section, “electing pass-through entity” means any Alabama S corporation, as is defined by Section 40-18-160, and any subchapter K entity, as is defined by Section 40-18-1, that has made an election pursuant to subsection (d) to pay Alabama income tax at the rate prescribed in subsection (e).
(c) For tax years beginning on or after January 1, 2021, any Alabama S corporation, as defined in Section 40-18-160, and any subchapter K entity, as defined in Section 40-18-1, may elect to be taxed as an electing pass-through entity.
(d)(1) For tax years beginning on or after January 1, 2021, through December 31, 2023, an electing pass-through entity shall submit the appropriate form to the Department of Revenue at any time during the tax year or on or before the fifteenth day of the third month following the close of that tax year for which the entity elects to be taxed as an electing pass-through entity. For tax years beginning on or after January 1, 2024, an electing pass-through entity shall submit the appropriate form to the department on or before the due date for filing the applicable income tax return, including any extensions that have been granted following the close of that tax year for which the entity elects to be taxed as an electing pass-through entity.
(2) This election shall be binding for that year and all subsequent tax years and shall not be revoked unless the electing pass-through entity submits the appropriate form to the Department of Revenue at any time during a subsequent tax year or on or before the due dates provided in this subsection following the close of that tax year for which the entity elects to no longer be taxed as an electing pass-through entity. Both the election to become an electing pass-through entity and the revocation of that election shall be accomplished by a vote by or written consent of the members of the governing body of the entity as well as a vote by or written consent of the owners, members, partners, or shareholders holding greater than 50 percent of the voting control of the entity, within the time prescribed above.
(3) For tax years beginning on or after January 1, 2025, the election or revocation shall be made on the timely filed return, including any extensions that have been granted.
(e) An electing pass-through entity shall pay a tax at the highest marginal rate provided in Section 40-18-5, calculated in accordance with Section 40-18-24 or Section 40-18-161 and Section 40-18-162, as appropriate, and apportioned in accordance with Chapter 27. An electing pass-through entity shall be subject to Section 40-18-80.1 (estimated tax for corporations). In calculating taxable income for the purposes of this subsection, Alabama tax paid under this subsection shall not be deducted in calculating Alabama taxable income.
(f) The owners, members, partners, or shareholders shall not be liable for the tax otherwise imposed by Chapter 16 and this chapter on their pro rata or distributive shares of the electing pass-through entity’s income.
(g) The adjusted basis of the owners, members, partners, or shareholders of an electing pass-through entity in their stock or other ownership interests in the entity shall be calculated without regard to the election under this section.
(h) Notwithstanding anything in this chapter to the contrary, neither the election by an electing pass-through entity under this section nor its revocation of the election shall be considered a liquidation or termination of the entity or an otherwise taxable event.
(i) No refunds shall be granted or paid for tax years ending before January 1, 2020, related to Act 2021-1.
(j) The Department of Revenue may adopt rules for the implementation and administration of this section.
(Act 2021-1, §§10-12; Act 2024-113.)
(a) Notwithstanding any other provision of Chapters 16 and 18 of this title to the contrary, for tax years beginning on or after January 1, 2021, any owner, member, partner, or shareholder of an electing pass-through entity shall report its pro rata or distributive share of the income of the entity in accordance with the provisions of Sections 40-16-4, 40-18-24, 40-18-26, 40-18-27, 40-18-28, 40-18-29, and 40-18-39, as applicable.
(b) The owner, member, partner, or shareholder of an electing pass-through entity reporting income in accordance with subsection (a) shall be entitled to a refundable credit in an amount equal to its pro rata or distributive share of the Alabama income tax paid by the electing pass-through entity with respect to the corresponding tax year.
(c) The Department of Revenue may waive any estimated tax penalties and interest assessments for the quarterly estimated tax payment due on April 15, 2021, which may otherwise be assessed for individual or pass-through entity taxpayers who are adversely impacted by the retroactive effective date of this section.
(d) Any provision of Chapters 16 or 18 of this title regarding the liability of an owner, member, partner, or shareholder of electing pass-through entity for tax imposed by Chapters 16 or 18 of this title on their pro rata or distributive share of an electing pass-through entity’s income that is in conflict with Act 2021-423 is hereby superseded.
(e) The Department of Revenue may adopt rules for the implementation and administration of Act 2021-423.
(Act 2021-423, §1.)
(a) For purposes of this chapter, the income and deductions, including the distribution deduction, of estates and trusts shall be determined in accordance with Subchapter J of Chapter 1 of Subtitle A of the Internal Revenue Code, 26 U.S.C. §641 et seq., relating to estates, trusts, beneficiaries, and decedents, except as otherwise provided in this section.
(1) The income and deductions shall be increased by any items that are includable or deductible by an individual in computing Alabama income tax but are not includable or not deductible by an individual in computing federal income tax.
(2) The income and deductions shall be decreased by any items that are not includable or not deductible by an individual in computing Alabama income tax but are includable or deductible by an individual in computing federal income tax.
(b) For purposes of this chapter, the income and deductions of beneficiaries of estates and trusts, and persons who are treated as owners of any portion of a trust, shall be determined in accordance with Subchapter J of Chapter 1 of Subtitle A of the Internal Revenue Code, U.S.C. §641 et seq., relating to estates, trusts, beneficiaries, and decedents, except as otherwise provided in this section.
(1) There shall be included in the income of the beneficiary of an estate or trust to whom an amount is paid or deemed to have been paid that beneficiary’s share of the taxable income that is allowed to the estate or trust as a distribution deduction under subsection (a) of this section.
(2) The character of any item of income, gain, loss, deduction, or credit included in a beneficiary’s income pursuant to subdivision (1) shall be determined as if such item were realized directly from the source from which realized by, or incurred in the same manner as incurred by, the estate or trust.
(3) In the case of a nonresident beneficiary, income derived through an estate or trust is taxable by this state only to the extent it is derived from property owned or business transacted in this state and as determined in accordance with this section.
(4) The provisions of 26 U.S.C. §642(h) shall not apply.
(c)(1) If a resident estate or resident trust receives income from the conduct of a trade or business in Alabama and in one or more other states or territories, such estate or trust shall be allowed a credit for the amount of income tax actually paid by such estate or trust (or by a fiduciary or beneficiary of such estate or trust to the extent that the amount is attributable to the estate or trust) to such states or territories.
(2) In case the amount of tax actually paid by a resident estate or resident trust to another state or territory is in excess of the amount that would be due on the same income computed on the income tax rate in Alabama, then only such amount as would be due in Alabama on such taxable income shall be allowed as a credit pursuant to subdivision (1).
(d) The tax on an electing small business trust, for which an election under 26 U.S.C. §1361(e) is in effect, and on the beneficiaries of such trust shall be determined as follows:
(1) The portion of the trust that consists of stock in one or more Alabama S corporations, as defined in Section 40-18-160, shall be treated as a separate trust. The net income of the separate trust shall be computed including only the items taken into account under Section 40-18-162, gain or loss from the disposition of stock of an Alabama S corporation, and federal income taxes and administrative expenses allocable to the income items treated under this subdivision. The net income shall be taxed at the rate of five percent. The separate trust shall not be allowed any personal exemption.
(2) No item of income or loss shall be apportioned to any beneficiary of the trust from the separate trust described in subdivision (1).
(3) The income taxation of the remainder of the trust that does not own the stock of any Alabama S corporation and its beneficiaries shall be determined under subsections (a) and (b) without regard to the income, gain, deductions, loss, or credits of the separate trust owning stock in one or more Alabama S corporations.
(e) In the case of a qualified subchapter S trust, as defined in 26 U.S.C. §1361(d), all the items of income, deduction, and credit of the portion of the trust consisting of the stock in an Alabama S corporation shall not be subject to tax under this section but shall be included in computing the net income of the beneficiary of such trust.
(f) Notwithstanding subsections (a) and (b), no deduction otherwise allowable under 26 U.S.C. §691(c)(1)(A) shall be allowed to a person who includes an amount in gross income under 26 U.S.C. § 691(a).
(g) Except as may be provided for by the Department of Revenue regulations, any trust described in 26 U.S.C. §671 shall be subject to the filing and reporting requirements of Section 40-18-29. Notwithstanding such filing and reporting requirements, the grantor of such trust, or other person treated as the owner of such trust, shall take into account the income, deductions, and credits of such trust as provided in 26 U.S.C.
(h) For the purpose of determining any income tax due by any nonresident beneficiary of any trust or estate, the income from intangible personal property shall not be construed to arise from sources within the state merely because the title and ownership of such intangible personal property is vested in a resident fiduciary, resident trust, or resident estate or the evidence of ownership thereof is located within the state.
(i) For purposes of the taxation of the income (or the net income) of a business trust under this title, a business trust shall be classified for tax purposes in the same manner as it is classified for federal income tax purposes.
(j) A person who is treated as the owner of any portion of a trust pursuant to 26 U.S.C. §671-679, relating to grantor trusts, may deduct, in computing adjusted gross income under this chapter, the administrative and other expenses of the portion of the trust treated as owned by that person.
(Acts 1935, No. 194, p. 256; Acts 1939, No. 558, p. 880; Code 1940, T. 51, §392; Acts 1945, No. 316, p. 507; Acts 1982, No. 82-465, p. 759, §5; Acts 1982, 1st Ex. Sess., No. 82-667, p. 85, §5; Acts 1985, No. 85-515, §§11-12; Acts 1997, No. 97-625, p. 1048, §3; Act 98-299, p. 487, §1; Act 98-502, p. 1083, §1; Act 2006-114, p. 173, §2.)
(a) Trusts shall be exempt from the tax imposed by this chapter if they are exempt from federal income tax under 26 U.S.C. § 501 (relating to exempt organizations), § 401 (relating to pension and profit sharing trusts), § 408 and § 408A (relating to individual retirement accounts and individual retirement annuities), § 530 (relating to Coverdell education savings accounts), or § 664 (relating to charitable remainder trusts). The foregoing exemption shall not apply, however, to any entity that is not exempt from federal income tax by reason of 26 U.S.C. §§ 502 or 503, nor to any income of an otherwise exempt organization to the extent that such income constitutes “unrelated business taxable income,” as defined in 26 U.S.C. § 512.
(b) The taxation of distributions from a trust described in 26 U.S.C. § 401 that constitutes a “defined contribution plan” as defined in 26 U.S.C. § 414(i) shall be determined in accordance with 26 U.S.C. § 402. The penalty taxes imposed by 26 U.S.C. § 72(t) shall not apply. For purposes of this section, the taxpayer’s investment in the contract shall include amounts contributed prior to January 1, 1982, to a trust described in subsection (a) for which no deduction was allowed under Section 40-18-15 or corresponding provisions of prior laws of Alabama, or in the case of salary reduction plans, were not excluded from gross income under Section 40-18-14.
(c) Contributions to a trust made by an employer during a taxable year of the employer which ends within or with a taxable year of the trust for which the trust is not exempt from federal income tax under 26 U.S.C. § 501 shall be taxed in accordance with 26 U.S.C. § 402(b).
(d) The taxation of distributions from a trust described in 26 U.S.C. §§ 408, 408A, or 530 shall be determined in accordance with whichever of those sections is applicable. The penalty taxes imposed by 26 U.S.C. § 72(t) shall not apply. For purposes of this section, the taxpayer’s investment in the contract shall include:
(1) Amounts contributed prior to January 1, 1982, by an individual for himself or herself, his or her spouse, or both, under an individual retirement account, annuity, or bond for which no deduction was allowed under Section 40-18-15 or corresponding provisions of prior laws of this state.
(2) The amount included in gross income in prior years by the employee, the distributee, his or her predecessor in interest, or the trust by reason of the lack of exemption from the tax imposed by this chapter of a trust, individual retirement account, individual retirement annuity, or individual retirement bond to which contributions described in subdivision (1) were made.
(3) The amount included in gross income by the employee, distributee, or predecessor in interest as a result of a distribution from any other trust, individual retirement plan, individual retirement account, individual retirement bond, or custodial account because such distribution was not excludable from gross income as a rollover distribution, as defined in 26 U.S.C. §402(c) or equivalent provisions of prior law, when made or was includable pursuant to 26 U.S.C. § 408(m), relating to investments in collectibles treated as distributions.
(Act 2006-114, §3.)
(a) Nothing in Act 2006-114 shall be construed to change or otherwise affect a taxpayer’s liability relating to a tax year beginning prior to the effective date of Act 2006-114.
(b) Should:
which is classified as a disregarded entity for federal income tax purposes, be taxed separately from its owner or owners during tax years prior to the effective date of Act 2006-114, any net operating loss of such trust existing on December 31, 2004, shall be allowed as a deduction from the gross income, or net income, of the owner or owners of the trust in a tax year beginning after December 31, 2004.
(c) The deduction allowed in subsection (b) to the owner or owners of the trust shall be in an amount not to exceed the greater of the following amounts:
(1) the amount which is equal to the net income generated by the trust during the tax year; or
(2) the amount which is equal to one tenth of the loss existing on December 31, 2004.
(d) A trust’s loss existing on December 31, 2004, shall be allowed to the owner or owners pursuant to subsection (b) during the time period which is the shorter of the 10 tax years beginning on or after January 1, 2005, or until such time as all such net operating loss has been deducted by the owner or owners of the trust.
(e) The net operating loss provisions applicable to the owner or owners shall be applied to the loss which is deductible by the owner or owners, except that no loss shall be carried back to prior years to the extent that the loss arises because of the operation of this section.
(f) Act 2006-114 shall not be relevant to or otherwise considered in determining a taxpayer’s liability for tax years beginning prior to the effective date of Act 2006-114.
(Act 2006-114, p. 173, §4; Act 2007-147, p. 180, §1.)
Every resident individual, corporation, association, or agent shall make a report to the Department of Revenue of complete information covering the amount of all interest, rent, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable gains, profits and income, except interest coupons payable to bearer, of any taxpayer taxable under this chapter, of $1,500 or more in any taxable year under such regulations and in such form and manner and to such extent as may be prescribed by the Department of Revenue.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §393.)
(a) Every taxpayer having gross income before the deductions allowed by this chapter for the taxable year exceeding the sum of the allowable standard deduction as provided in Section 40-18-15 and the personal exemption as provided in Section 40-18-19, as allowed for his or her respective filing status, shall each year file with the Department of Revenue a return stating specifically the items of gross income, the deductions and credits allowed by this chapter, the place of residence, and post office address.
(b) A taxpayer other than a resident shall not be entitled to the deductions authorized by Sections 40-18-15 and 40-18-15.2 unless the taxpayer files a complete return showing the gross income of the taxpayer both from within and outside the state. Included on every income tax return shall be the name, address, and Social Security number or preparer taxpayer identification number of the person who prepared the return. The taxpayer shall be held liable for any statement made by an agent of the taxpayer with reference to any information required by law to be furnished in connection with that tax return.
(c) Returns shall be filed by the same date as the corresponding federal income tax returns are required to be filed as provided under federal law. The department may grant a reasonable extension of time for filing returns, under rules and regulations as it shall prescribe. Except in the case of taxpayers who are abroad, no extension shall be for more than six months. If the taxpayer has requested an extension of time for the filing of a return, the period during which the return will be considered timely filed shall not expire until 10 days after the department mails to the taxpayer a rejection of the request for an extension of time for filing the return. The return must be signed or otherwise validated by both the taxpayer(s) and, if applicable, the tax return preparer under rules or regulations of the department and must contain a printed declaration that the return is filed under the penalties of perjury.
(d) Every individual who willfully files and signs or otherwise validates under rules or regulations of the department a return which the individual does not believe to be true and correct as to every material particular shall be guilty of perjury and, upon conviction thereof, shall be imprisoned in the penitentiary for not less than one, nor more than five years.
(e) In the event a husband and wife file a joint return, the husband and wife shall be jointly and severally liable for the income tax shown on the return or as may be determined by the department to be due by them to the State of Alabama. Notwithstanding the foregoing, a husband or wife shall be relieved of certain liabilities to the same extent and in the same manner as allowed by the Internal Revenue Code for federal income tax purposes, including Title 26 U.S.C. §§ 6015(b), 6015(c), and 6015(f), as amended from time to time.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §§388, 394; Acts 1945, No. 39, p. 45; Acts 1945, No. 75, p. 72; Acts 1947, No. 367, p. 254; Acts 1953, No. 693, p. 945; Acts 1955, 1st Ex. Sess., No. 46, p. 80, §1; Acts 1959, No. 112, p. 634; Acts 1965, No. 552, p. 1021, §1; Acts 1969, Ex. Sess., No. 20, p. 44, §1; Acts 1985, No. 85-515, p. 517, §13; Acts 1986, No. 86-375, p. 560; Acts 1987, No. 87-641, p. 1145; Act 98-468, p. 903, §1; Act 98-502, p. 1083, §1; Act 2012-474, p. 1316, §1; Act 2014-146, p. 378, §3; Act 2018-412, p. 1147, §1; Act 2018-453, §1.)
Every subchapter K entity, and every single member limited liability company, shall make a return to the Department of Revenue for each taxable year, stating specifically the items of its gross income and the deductions allowed by this chapter, and shall include in the return the names and addresses of the partners or members and the amount of the distributive share of each partner or member. The return must be subscribed by the person who makes it and must contain a printed declaration that it is made under the penalties of perjury. A person who willfully makes and subscribes a return which he or she does not believe to be true and correct as to every material particular shall be guilty of perjury and upon conviction shall be punished as prescribed in Section 40-18-27.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §395; Acts 1961, Ex. Sess., No. 188, p. 2158; Acts 1997, No. 97-625, p. 1048, §3.)
(a) Every fiduciary, except receivers appointed by authority of law in possession of part only of the property of a taxpayer, shall make a return for the taxpayer for whom he acts, first, if the net income of such taxpayer is $1,500 or over, if single or if married and not living with husband or wife, or $3,000 or over, if married and living with husband or wife, or second, if the net income of such taxpayer, if an estate or trust, is $1,500 or over, or if any beneficiary is a taxpayer other than a resident of the state, which returns shall state specifically the items of the gross income and the deductions, exemptions and credits allowed by this chapter under such regulations as the Department of Revenue may prescribe, a return made by one or two or more joint fiduciaries and filed in the office of the Department of Revenue shall be a sufficient compliance with the above requirement. The fiduciary shall certify that he has sufficient knowledge of the affairs of such individual, estate or trust to enable him to make the return, and that the same is, to the best of his knowledge and belief, true and correct. Except as herein provided and as provided in Section 40-18-42, fiduciaries required to make returns under this chapter shall be subject to all provisions of this chapter which apply to taxpayers.
(b) Returns made on the basis of a calendar year shall be filed on or before April 15 following the close of such calendar year. Returns made on the basis of a fiscal year shall be filed on or before the fifteenth day of the fourth month following the close of such fiscal year. The Commissioner of Revenue or such person as may be in charge of the Department of Revenue may grant any reasonable extension of time for filing returns.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §396; Acts 1953, No. 126, p. 174; Acts 1971, No. 1939, p. 3134.)
(a) Taxpayer filing separate returns. If a taxpayer, with the approval of the Department of Revenue, changes the basis of computing taxable income from the fiscal year to the calendar year, a separate return shall be filed for the period between the close of the last fiscal year for which return shall be made and the following December 31. If the change is made from the calendar year to the fiscal year, a separate return shall be filed for the period between the close of the last calendar year for which return was filed and the date designated as the close of the last fiscal year. If the change is made from one fiscal year to another fiscal year, a separate return shall be filed for the period between the close of the former fiscal year and the date designated as the close of the new fiscal year. If a taxpayer filing the taxpayer’s first return for income tax keeps accounts on the basis of a fiscal year, the taxpayer shall file a separate return for the period between the beginning of a calendar year in which such fiscal year ends and the end of such fiscal year. In all of the above cases the taxable income shall be computed on the basis of such period for which the separate return is filed, and the tax shall be paid thereon at the rate in effect during the calendar year in which such period is included; and, except for the period during which the taxpayer dies, the exemptions allowed in this chapter shall be reduced respectively to amounts which bear the same ratio to the full exemptions provided for as the number of months in such period to 12 months.
(b) Corporations filing Alabama consolidated returns. If a corporation changes the basis of computing its income from the fiscal year to the calendar year by virtue of its election to file an Alabama consolidated return under Section 40-18-39, an Alabama consolidated return shall be filed for the period between the close of the last fiscal year for which the return shall be filed and the following December 31. If the change is made from the calendar year to the fiscal year, and the taxpayer elects to file an Alabama consolidated return under Section 40-18-39, an Alabama consolidated return shall be filed for the period between the close of the last calendar year for which the return was filed and the date designated as the close of the first fiscal year. If the change is made from one fiscal year to another fiscal year, and the taxpayer elects to file an Alabama consolidated return under Section 40-18-39, an Alabama consolidated return shall be filed for the period between the close of the former fiscal year and the date designated as the close of the new fiscal year for the Alabama affiliated group. If a taxpayer filing an initial return for income tax keeps accounts on the basis of a fiscal year, and the taxpayer elects to file an Alabama consolidated return under Section 40-18-39, the taxpayer shall file an Alabama consolidated return for the period between the beginning of the calendar year in which its fiscal year ends and the end of such fiscal year for the Alabama consolidated group. In all the above cases, the taxpayer’s taxable income shall be computed on the basis of the period for which the Alabama consolidated return is filed, and the tax shall be paid thereon at the rate in effect during the calendar year in which such period is included.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §397; Acts 1982, No. 82-465, p. 759, §6; Acts 1982, 1st Ex. Sess., No. 82-667, p. 85, §6; Act 98-502, p. 1083, §1.)
(a) A corporation subject to the tax imposed by Section 40-18-2 shall pay a tax equal to six and one-half percent of the taxable income of the corporation, as defined in this chapter.
(b) If the taxpayer elects to file an Alabama consolidated return under Section 40-18-39, the tax shall be assessed, collected, and paid annually for each taxable year at the rate specified in subsection (a), upon and with respect to the taxable income of the Alabama affiliated group.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §398; Acts 1963, 2nd Ex. Sess., No. 104, p. 284, §1; Act 98-502, p. 1083, §1; Act 99-664, 2nd Sp. Sess., p. 124, §1.)
[Repealed]
Repealed by Act 99-664, effective Dec. 31, 2000.
(Acts 1995, No. 95-591, p. 1251, §1.)
(a)(1) Individuals who are residents or domiciliaries of this state and business entities that are organized or commercially domiciled in this state have substantial nexus with this state.
(2) Nonresident individuals and business entities organized outside of the state that are doing business in this state have substantial nexus and are subject to the taxes provided for in Chapters 14A, 18, and 16 of this title, when in any tax period the property, payroll, or sales of the individual or business in the state, as they are defined in subsection (d), exceeds the thresholds set forth in subsection (b).
(b) Substantial nexus is established if any of the following thresholds are exceeded during the tax period:
(1) A dollar amount of fifty thousand dollars ($50,000) of property.
(2) A dollar amount of fifty thousand dollars ($50,000) of payroll.
(3) A dollar amount of five hundred thousand dollars ($500,000) of sales, as defined in subdivision (3) of subsection (d).
(4) Twenty-five percent of total property, total payroll, or total sales.
(c) At the end of each year, the commissioner shall review the cumulative percentage change in the Consumer Price Index. The commissioner shall adjust the thresholds set forth in subsection (b) if the Consumer Price Index has changed by any of the following:
(1) Five percent or more since January 1, 2015, or since the date that the thresholds were last adjusted under this subsection. The thresholds shall be adjusted under this subsection. The thresholds shall be adjusted to reflect that cumulative percentage change in the Consumer Price Index. The adjusted thresholds shall be rounded to the nearest one thousand dollars ($1,000). As used in this subsection, Consumer Price Index means the Consumer Price Index for All Urban Consumers (CPI-U) available from the Bureau of Labor Statistics of the United States Department of Labor.
(2) Any adjustment shall apply to tax periods that begin after the adjustment is made.
(d) Property, payroll, and sales are defined as follows:
(1) Property counting toward the threshold is the average value of the taxpayer’s real property and tangible personal property owned or rented and used in this state during the tax period. Property owned by the taxpayer is valued at its original cost basis. Property rented by the taxpayer is valued at eight times the net annual rental rate. Net annual rental rate is the annual rental rate paid by the taxpayer less any annual rental rate received by the taxpayer from sub-rentals. The average value of property shall be determined by averaging the values at the beginning and ending of the tax period; but the tax administrator may require the averaging of monthly values during the tax period if reasonably required to reflect properly the average value of the taxpayer’s property.
(2) Payroll counting toward the threshold is the total amount paid by the taxpayer for compensation in this state during the tax period. Compensation means wages, salaries, commissions, and any other form of remuneration paid to employees and defined as gross income under the Internal Revenue Code §61. Compensation is paid in this state if a. the individual’s service is performed entirely within the state; b. the individual’s service is performed both within and without the state, but the service performed without the state is incidental to the individual’s service within the state; c. some of the service is performed in the state and 1. the base of operations or, if there is no base of operations, the place from which the service is directed or controlled is in the state, or 2. the base of operations or the place from which the service is directed or controlled is not in any state in which some part of the service is performed, but the individual’s residence is in this state.
(3) Sales counting toward the threshold include the total dollar value of the taxpayer’s gross receipts from transactions in the current period, from a. the sale, lease, or license of real property located in this state; b. the lease or license of tangible personal property located in this state; c. the sale of tangible personal property received in this state as indicated by receipt at a business location of the seller in this state or by instructions, known to the seller, for delivery or shipment to a purchaser, or to another at the direction of the purchaser, in this state; and d. the sale, lease, or license of services, intangibles, and digital products for primary use by a purchaser known to the seller to be in this state. If the seller knows that a service, intangible, or digital product will be used in multiple states because of separate charges levied for, or measured by, the use at different locations, because of other contractual provisions measuring use, or because of other information provided to the seller, the seller shall apportion the receipts according to usage in each state; e. if the seller does not know where a service, intangible, or digital product will be used or where a tangible will be received, the receipts shall count toward the threshold of the state indicated by an address for the purchaser that is available from the business records of the seller maintained in the ordinary course of business when such use does not constitute bad faith. If that is not known, then the receipts shall count toward the threshold of the state indicated by an address for the purchaser that is obtained during the consummation of the sale, including the address of the purchaser’s payment instrument, if no other address is available, when the use of this address does not constitute bad faith.
(4) Notwithstanding the other provisions of this subsection, for a taxpayer subject to special apportionment methods, the property, payroll, and sales for measuring against the nexus thresholds shall be defined as they are for apportionment purposes under those special apportionment methods or regulations associated with that special apportionment method. Financial institutions subject to an apportioned income tax shall determine property, payroll, and sales for nexus threshold purposes the same as for apportionment purposes under Chapter 16 of this title. Pass-through entities, including, but not limited to, partnerships, limited liability companies, S corporations, and trusts shall determine threshold amounts at the entity level. If property, payroll, or sales of an entity in this state exceeds the nexus threshold, members, partners, owners, shareholders, or beneficiaries of that pass-through entity are subject to tax on the portion of income earned in this state and passed through to them.
(e) A state without jurisdiction to impose tax on or measured by net income on a particular taxpayer because that taxpayer comes within the protection of Public Law 86-272, 15 U.S.C. § 381, does not gain jurisdiction to impose such a tax even if the taxpayer’s property, payroll, or sales in the state exceeds a threshold in subsection (b). Public Law 86-272 preempts the state’s authority to tax and will therefore cause sales of each protected taxpayer to customers in the state to be thrown back to those sending states that require throwback. If Congress repeals the application of Public Law 86-272 to this state, an out-of-state business shall not have substantial nexus in this state unless its property, payroll, or sales exceeds a threshold in this section.
(Act 2015-505, 1st Sp. Sess., §1.)
With the exception of unrelated business taxable income determined in accordance with 26 U.S.C. § 512, the tax imposed by Section 40-18-31 shall not apply to the organizations referred to in 26 U.S.C. § 501(a), and the following entities:
(1) Farmers and other mutual hail, cyclone, or fire insurance companies, mutual ditch or irrigation companies or like organizations of a purely local character, the income of which consists solely of assessments, dues, and fees collected from members for the sole purpose of meeting expenses;
(2) Farmers, fruit growers, or like associations organized and operated as sales agents for the purpose of marketing the products of members and turning back the proceeds of sales, less the necessary selling expenses, on the basis of quantity of produce furnished by them;
(3) Federal land banks and national farm loan associations as provided in 12 U.S.C. § 2055;
(4) All national banks and national banking associations and all corporations engaged in the business of banking and of conducting a financial business employing moneyed capital coming into competition with the business of national banks during and for the periods during which such national banks and corporations are subject to an excise tax imposed by this state on or with respect to their respective incomes;
(5) Building and loan associations, substantially all the business of which is confined to making loans to members and insurance companies upon which the statutes of Alabama impose a tax upon their premium income; and
(6) Counties, municipalities, municipal corporations, political subdivisions of the state, instrumentalities of counties, municipalities, municipal corporations, the State of Alabama, and corporations or associations owned solely by counties, municipalities or the State of Alabama.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §399; Acts 1985, No. 85-515, §14; Acts 1986, No. 86-375, p. 560; Act 99-664, 2nd Sp. Sess., p. 124, §1; Act 2000-702, p. 1425, §1.)
In the case of a corporation subject to the tax imposed by Section 40-18-31, the term “taxable income” means federal taxable income without the benefit of federal net operating losses plus the additions prescribed and less the deductions and adjustments allowed by this chapter and as allocated and apportioned to Alabama.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §400; Act 98-502, p. 1083, §1; Act 99-664, 2nd Sp. Sess., p. 124, §1.)
The following items shall be added to federal taxable income for purposes of computing taxable income under this chapter:
(a) State and local income taxes that are deductible in computing federal taxable income.
(b) Interest on obligations of state or local governments other than Alabama that is excludable from gross income for federal income tax purposes.
(c) Refunds of federal income taxes deducted.
(d) Dividends received from a corporation in which the taxpayer owns less than 20% of the stock (by vote and value), but only to the extent such dividends are properly deducted in computing taxable income for federal income tax purposes.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §401; Acts 1975, No. 1195, p. 2348, §1; Acts 1985, No. 85-515, §15; Act 98-502, p. 1083, §1; Act 99-664, 2nd Sp. Sess., p. 124, §1; Act 2000-702, p. 1425, §1.)
(a) The following items shall be deducted from federal taxable income for purposes of computing taxable income under this chapter:
(1) Refunds of state and local income taxes.
(2) Federal income tax paid or accrued during the taxpayer’s taxable year. The portion of federal income tax deductible by a corporation earning income from sources both inside and outside of Alabama shall be determined by the ratio that the corporation’s taxable income, computed without the deduction for federal income tax, apportioned and allocated to Alabama bears to the corporation’s taxable income, computed without the deduction for federal income tax, apportioned and allocated everywhere.
(3) Interest income earned on obligations of the United States.
(4)a. Interest income earned on obligations of the State of Alabama or its subdivisions or instrumentalities thereof to the extent included in gross income for the purposes of federal income taxation.
b. Interest income earned on obligations of the State of Alabama or its subdivisions or instrumentalities thereof to the extent included in gross income for the purposes of federal income taxation if such obligations were issued prior to January 1, 1995, to pay the cost of assets to which subsections (c) through (e) of Section 40-9B-7 apply.
(5) The amount of any aid or assistance, whether in the form of property, services or monies, provided to the State Industrial Development Authority pursuant to Section 41-10-44.8(d) in order to induce an approved company to undertake a major project within the state.
(6) Expenses otherwise deductible that were not deducted on the federal income tax return as a result of an election to claim a credit for those expenses.
(7) If the taxpayer owns greater than 20 percent of the stock, by vote or value, of the distributing corporation the following deductions are allowed:
a. Amounts described in 26 U.S.C. § 78;
b. Dividend income, including amounts described in 26 U.S.C. § 951, from non-U.S. corporations to the same extent such dividend income would be deductible under 26 U.S.C. § 243 if received from U.S. corporations; and
c. Dividends received from foreign sales corporations as defined in 26 U.S.C. § 922.
d. Dividend income from a Captive REIT to the same extent such dividend income would be deductible under 26 U.S.C. § 243 if received from an entity that is not a REIT.
(8) The portion of total deductible interest expense classified as nonbusiness interest expense not deductible at arriving at apportioned income, but instead allocated to the situs of the related nonbusiness income producing assets, shall be based upon the ratio of the average cost of the corporation’s nonbusiness assets to the average cost of the corporation’s total assets.
(9) The interest portion of rent paid under lease agreements entered into prior to January 1, 1995, relating to obligations issued by the State of Alabama or subdivisions or instrumentalities thereof, to the extent that such obligations were issued to pay the cost of assets to which subsections (c) through (e) of Section 40-9B-7 apply.
(10) The amount by which the depletion allowance specified in Section 40-18-16(b) exceeds the depletion allowance deducted in calculating federal taxable income.
(b) Restrictions on the deductibility of certain intangible expenses and interest expenses with a related member.
(1) For purposes of computing its taxable income, a corporation shall add back otherwise deductible interest expenses and costs and intangible expenses and costs directly or indirectly paid, accrued, or incurred to, or in connection directly or indirectly with one or more direct or indirect transactions, with one or more related members, except to the extent the corporation shows, upon request by the commissioner, that the corresponding item of income was in the same taxable year: a. Subject to a tax based on or measured by the related member’s net income in Alabama or any other state of the United States, or b. subject to a tax based on or measured by the related member’s net income by a foreign nation which has in force an income tax treaty with the United States, if the recipient was a “resident” (as defined in the income tax treaty) of the foreign nation. For purposes of this section, subject to a tax based on or measured by the related member’s net income means that the receipt of the payment by the recipient related member is reported and included in income for purposes of a tax on net income, and not offset or eliminated in a combined or consolidated return which includes the payor. Any portion of an item of income that is not attributed to the taxing jurisdiction, as determined by that jurisdiction’s allocation and apportionment methodology or other sourcing methodology, is not included in income for purposes of a tax on net income and, therefore, shall not be considered subject to a tax. That portion of an item of income which is attributed to a taxing jurisdiction having a tax on net income shall be considered subject to a tax even if no actual taxes are paid on such item of income in the taxing jurisdiction by reason of deductions or otherwise.
(2) The corporation shall make the adjustments required in subdivision (1) unless the corporation establishes that the adjustments are unreasonable, or the corporation and the Commissioner of Revenue agree in writing to the application or use of alternative adjustments and computations. Nothing in this section shall be construed to limit or negate the commissioner’s authority to otherwise enter into agreements and compromises otherwise allowed by law.
(3) The adjustments required in subdivision (1) shall not apply to that portion of interest expenses and costs and intangible expenses and costs if the corporation can establish that the transaction giving rise to the interest expenses and costs or the intangible expenses and costs between the corporation and the related member did not have as a principal purpose the avoidance of any Alabama tax and the related member is not primarily engaged in the acquisition, use, licensing, maintenance, management, ownership, sale, exchange, or any other disposition of intangible property, or in the financing of related entities. If the transaction giving rise to the interest expenses and costs or intangible expenses and costs, as the case may be, has a substantial business purpose and economic substance and contains terms and conditions comparable to a similar arm’s length transaction between unrelated parties, the transaction will be presumed to not have as its principal purpose tax avoidance, subject to rebuttal by the Commissioner of the Department of Revenue.
(4) The adjustments required in subdivision (b)(1) shall not apply to that portion of interest expenses and costs and intangible expenses and costs that the corporation can establish was paid, accrued or incurred, directly or indirectly, by the related member during the same taxable year to a person that is not a related member.
(5) Nothing in this section shall require a corporation to add to its taxable income more than once any amount of interest expenses and costs or intangible expenses and costs that the corporation pays, accrues or incurs to a related member described in subdivision (1).
(6) Nothing in this section shall be construed to limit or negate the commissioner’s authority to make adjustments under this chapter.
(7) This subsection shall not limit the deduction of the interest portion of rent paid under lease agreements described in subsection (a)(9).
(c) Restrictions on the deductibility of Captive REIT dividends. For purposes of computing its taxable income, a Captive REIT shall add back any dividend paid to a related member that it deducted pursuant to Section 10-13-21 and/or 26 U.S.C. §§ 561 and 857.
(d) Except with regard to payments described in subsections (a)(4)b and (a)(9), nothing in this section shall be construed to allow any item to be deducted more than once or to allow a deduction for any item that is excluded from income or to allow any item to be included in the Alabama taxable income of more than one taxpayer.
(e) The following credits shall be allowed against the tax levied by Section 40-18-31:
(1) the amount provided to an approved company pursuant to Section 41-10-44.8(a)(1), subject however, to the limitations contained in Section 41-10-44.8(c); and
(2) the amount provided in Section 41-10-44.9 to an approved company for a payment by such company into a tax increment fund.
(Acts 1935, No. 194, p. 256; Acts 1939, No. 399, p. 521; Code 1940, T. 51, §402; Acts 1945, No. 317, p. 510; Acts 1963, 2nd Ex. Sess., No. 107, p. 289, §1; Acts 1969, Ex. Sess., No. 24, p. 55, §1; Acts 1969, No. 1136, p. 2115, §1; Acts 1973, No. 1071, p. 1819, §1; Acts 1973, No. 1170, p. 1969; Acts 1982, No. 82-465, p. 759, §7; Acts 1982, 1st Ex. Sess., No. 82-667, p. 85, §7; Acts 1985, No. 85-515, §16; Acts 1985, No. 85-545, §1; Acts 1988, 2nd Ex. Sess., No. 88-954, §2; Acts 1990, No. 90-583, p. 588, §9; Acts 1996, No. 96-550, p. 803, §2; Act 98-502, p. 1083, §1; Act 99-664, 2nd Sp. Sess., p. 124, §1; Act 2000-702, p. 1425, §1; Act 2001-1088, 4th Sp. Sess., p. 1095, §1; Act 2008-543, p. 1175, §1.)
In computing the taxable income of corporations subject to income tax as outlined in Section 40-18-35, there shall be allowed, in addition to the deductions specified therein, a deduction for the sum of the net operating losses which may be carried forward to the taxable year for which the net income of the corporation is being computed.
(1) The term “net operating loss” for the purposes of this section means the excess of the deductions (other than the deduction allowed by this subdivision) allowed by this chapter during a taxable year of the corporation over the corporation’s gross income during that taxable year. For purposes of this paragraph, the corporation’s gross income and allowable deductions shall be determined under the provisions of this chapter applicable to the year in which the net operating loss arises.
(2) A net operating loss shall be carried forward to the earliest subsequent taxable year in which the corporation has taxable income (determined without taking into account the deduction allowed by this subdivision). The amount of a net operating loss which may be carried to any later taxable year shall be the excess of the net operating loss over the sum of the amounts thereof deductible under this subdivision in all the taxable years preceding this taxable year.
(3) If net operating losses arising in more than one taxable year can be carried forward to a taxable year of the corporation, the net operating loss arising from the earliest of those years shall be deducted first.
(4) The net operating loss deduction allowed by this section shall be limited to sources attributable to Alabama.
(5) A net operating loss may be carried forward and deducted only during the 15 consecutive year period immediately following the taxable year in which it arose.
(6) In the case of an acquiring corporation subject to the rules of 26 U.S.C. § 381, or in the case of a new loss corporation within the meaning of 26 U.S.C. § 382, or in the case of the recognized built-in gains of a gain corporation within the meaning of 26 U.S.C. § 384, only the net operating losses as are allowable in accordance with 26 U.S.C. §§ 381, 382, and 384 shall be allowed as a deduction under this section. This subdivision shall be applied before the limitations in the preceding subdivisions are applied.
(7) Notwithstanding the foregoing provisions of this section, for a taxpayer’s taxable year beginning during calendar year 2001 no deduction for any net operating loss shall be allowed or allowable. If and only to the extent that any net operating loss deduction is disallowed by reason of this subdivision, the date on which the amount of the disallowed net operating loss deduction would otherwise expire will be extended by one year. A corporation dissolved and completely liquidated within calendar year 2001 may use its net operating loss without the restrictions provided in this subdivision.
(Acts 1983, No. 83-741, p. 1214, §6; Acts 1985, No. 85-515, §17; Acts 1990, No. 90-583, p. 988, §10; Act 98-502, p. 1083, §1; Act 2001-1088, 4th Sp. Sess., p. 1095, §1.)
All amounts included in income under 26 U.S.C. § 951A shall be deducted from federal taxable income for purposes of computing taxable income under this chapter. However, any amount subtracted under this section is allowed only to the extent such amount is not deductible in determining federal taxable income. As to any amount subtracted under this section, there shall be added to such taxable income all expenses deducted under any section of 26 U.S.C. on the taxpayer’s return for the taxable year which are attributable, directly or indirectly, to such subtracted amount. The deduction provided by 26 U.S.C. § 250 shall apply only to the extent the same income was included in Alabama taxable income under this chapter.
(Act 2021-1, §7.)
The amount of any contribution by the State of Alabama or any political subdivision thereof computed in accordance with 26 U.S.C. § 118(b)(2), to the extent that the amount is included in the corporation’s federal taxable income pursuant to 26 U.S.C. § 118(b)(2) shall be deducted from federal taxable income for purposes of computing taxable income under this chapter.
(Act 2021-1, §8.)
[Repealed]
Repealed by Act 99-664, effective Dec. 31, 2000.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §403; Acts 1985, No. 85-515, §18.)
In computing net income of corporations, no deduction shall in any case be allowed in respect to any of the items specified in Section 40-18-17.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §404.)
[Repealed]
Repealed by Act 99-664, effective Dec. 31, 2000.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §405; Acts 1993, 1st Ex. Sess., No. 93-852, p. 95, §4.)
(a) Except as provided in subsection (c), every corporation, joint stock company, or association subject to income tax under this chapter shall file a return with the Department of Revenue for each taxable year, stating specifically the items of its gross income and the deductions and credits allowed by this chapter. In cases where receivers, trustees in bankruptcy, or assignees are operating the property or business of corporations, such receivers, trustees, or assignees shall file returns for such corporations in the same manner and form as corporations are required to file returns. Any tax due on the basis of such returns filed by receivers, trustees, or assignees shall be collected in the same manner as if collected from the corporations of whose business or property they have custody and control. Returns shall be filed by the same date as the corresponding federal income tax returns are required to be filed as provided under federal law. The Department of Revenue may grant a reasonable extension of time for filing returns under such rules and regulations as it shall prescribe. Except in the case of taxpayers who are abroad, no such extension shall be for more than six months.
(b) As used in this chapter, unless the context requires otherwise:
(1) “Alabama affiliated group” means a group of corporations, each member of which is subject to tax under Section 40-18-31 and Public Law 86-272 (15 U.S.C. §§ 381-384), which are members of an affiliated group as defined in 26 U.S.C. § 1504 and which affiliated group files a federal consolidated corporate income tax return, each member of which:
a. Has the same taxable year;
b. Is a member of the group for the entire taxable year or was a member of the group for a portion of the taxable year if the member was subject to Section 40-18-31 during the entire portion of the taxable year during which it was not a member of the federal consolidated group;
c. Apportions Alabama taxable income or loss separately for each corporation;
d. Allocates taxable income or loss separately for each corporation in accordance with Section 40-27-1, Article IV;
e. Computes apportionable income or loss utilizing separate apportionment factors for each corporation in accordance with Section 40-27-1, Article IV; and
f. Combines and reports taxable income or loss computed in accordance with paragraphs c through e of this subsection on a single return for the Alabama affiliated group;
and which includes all members of the affiliated group included on the federal consolidated income tax return that are eligible under this section to be included in the Alabama affiliated group; but shall not include corporations subject to the insurance premium license tax imposed by Section 27-4A-1 et seq. or the financial institution excise tax imposed by Section 40-16-1 et seq.
(2) “Alabama consolidated return” means an Alabama corporation income tax return filed by or on behalf of the members of an Alabama affiliated group in accordance with this section, pursuant to an election made under subsection (c) below.
(3) “Separate return” means an Alabama corporation income tax return filed by a single corporation in accordance with this chapter.
(4) “Common parent” shall have the meaning given to that term by 26 U.S.C. § 1504(a).
(5) “Treasury regulations” means final and temporary regulations now or hereafter promulgated by the U.S. Treasury Department pursuant to 26 U.S.C. § 1501 et seq. References to applicable Internal Revenue Code sections in this section shall include the related Treasury regulations.
(c)(1) An Alabama affiliated group filing or required to file a federal consolidated income tax return may elect to file an Alabama consolidated return for the same taxable year. However, under no circumstances may the Department of Revenue compel a taxpayer to file an Alabama consolidated return if the taxpayer has not so elected.
(2) Notwithstanding any provision in this section to the contrary, foreign corporations that are members of an Alabama affiliated group electing to file an Alabama consolidated return and not otherwise subject to the business privilege tax levied by Section 40-14A-22 shall not become subject to the business privilege tax by virtue of being a member of an Alabama affiliated group filing an Alabama consolidated return.
(3) All transactions between and among members of the Alabama affiliated group shall be reported on an arm’s length basis consistent with subsection (j) in determining the property, payroll, and sales factors of each member of the Alabama affiliated group, in determining the separate allocation and apportionment of income and loss by each member of the Alabama affiliated group, and in computing taxable income in accordance with Section 40-18-33.
(4) The election made in accordance with this subsection shall be filed by the common parent of the Alabama affiliated group as agent for all members of the Alabama affiliated group, on a form prescribed by the Department of Revenue. If the common parent is not a member of the Alabama affiliated group, the members shall designate to the Department of Revenue which member of the Alabama affiliated group shall serve in that role for purposes of this section. The election and designation of common parent, if required, shall be filed with the department on or before the due date of the Alabama consolidated return, including extensions, for the first taxable year for which the election is made and is to be effective.
(5) Each member of the Alabama affiliated group shall determine and allocate and apportion its separate income and loss under Chapter 27 before consolidation. For purposes of allocation and apportionment, each member of the Alabama affiliated group shall be considered a separate taxpayer. Any taxable loss of a member of the Alabama affiliated group shall be deductible against the taxable income of any other member of the Alabama affiliated group only if and to the extent such loss is apportioned and allocated to Alabama.
(6) The tax liability of the Alabama affiliated group shall be determined by applying the rate specified in Section 40-18-31 to the taxable income of the Alabama affiliated group. The separate taxable income or loss of each corporation that is included in the Alabama affiliated group shall be included in the consolidated taxable income or loss to the extent that its taxable income or loss is separately apportioned or allocated to the State of Alabama. The separate taxable income or loss of each member of the Alabama affiliated group, and the separate business and nonbusiness income of each member, shall be computed and determined in accordance with this chapter and with the rules of allocation and apportionment under Section 40-27-1, Article IV, and the regulations promulgated thereunder by the Department of Revenue.
(7) Any election to file an Alabama consolidated return pursuant to this subsection shall be binding on both the Department of Revenue and the Alabama affiliated group for a period beginning with the first month of the first taxable year for which the election is made and ending with the conclusion of the taxable year in which the one hundred twentieth consecutive calendar month expires, except that the election shall terminate automatically upon the revocation or termination of its federal consolidated return election. If an election made pursuant to this subsection is terminated by an Alabama affiliated group by virtue of the revocation or termination of its federal or Alabama consolidated return election, no member of the Alabama affiliated group may be included in an Alabama consolidated return filed by the Alabama affiliated group, or by another Alabama affiliated group with the same common parent or a successor to the same common parent, before the sixty-first month beginning after the first taxable year for which the election was revoked; provided, however, that the Department of Revenue may waive application of this provision to any corporation or Alabama affiliated group for any period, consistent with the provisions of 26 U.S.C. § 1504.
(8) An Alabama affiliated group that has made an Alabama consolidated return election under this subsection shall be assessed an annual fee for the privilege of filing an Alabama consolidated return, which shall be assessed, collected, and distributed as an income tax but shall be due and payable at the time the return is due, including any extensions thereof. The annual fee shall be a graduated fee based upon the aggregate amount of total assets, determined in accordance with Treasury Department Form 1120 or any successor form, of the Alabama affiliated group for the taxable year to which the fee relates, as set out below:
Total AssetsAnnual Fee$0 to $2,500,000$5,000$2,500,001 to $5,000,000 $10,000$5,000,001 to $7,500,000 $15,000$7,500,001 to $10,000,000 $20,000$10,000,001 and over $25,000
(d) Each corporation included as part of an Alabama affiliated group filing an Alabama consolidated return shall be jointly and severally liable for the Alabama income tax liability of the Alabama affiliated group with respect to the taxable year, and the fee prescribed above; except that any corporation which was not a member of the Alabama affiliated group for the entire taxable year shall be jointly and severally liable only for the portion of the Alabama consolidated income tax liability attributable to that portion of the year during which the corporation was a member of the Alabama affiliated group, prorated on a daily basis.
(e) Every corporation return or report required by this chapter shall be executed by one of the following officers of the corporation: The president, vice-president, secretary, treasurer, assistant secretary, assistant treasurer, or chief accounting or financial officer, except that in the case of an Alabama affiliated group filing an Alabama consolidated return, one of the above-described officers of the common parent of the Alabama affiliated group may execute the return on behalf of the Alabama affiliated group. The Department of Revenue may require a further or supplemental report of information and data necessary for computation of the tax.
(f) If the taxpayer has requested an extension of time for the filing of a separate or Alabama consolidated return, the period during which such return will be considered timely filed shall not expire until 10 days after the Department of Revenue mails to the taxpayer a rejection of its request for an extension of time for filing such return.
(g) If, in a taxable year preceding the filing of the first Alabama consolidated return for the Alabama affiliated group of which the corporation is a member, (1) the corporation realized a gain or loss on a transaction; (2) the corporation was subject to tax under Section 40-18-31 in the year; (3) the transaction was treated as a deferred intercompany transaction for federal income tax purposes; and (4) the transaction was not deferred for Alabama income tax purposes, the taxable income and basis in the hands of the Alabama affiliated group shall be adjusted to reflect the different treatment of the transaction and any property acquired or disposed of in the transaction.
(h) If, in a taxable year before the corporation became a member of an Alabama affiliated group that has elected to file an Alabama consolidated return, the corporation incurred a net operating loss, the deductibility of the loss on the Alabama consolidated return shall be limited to only the amount necessary to reduce to zero the Alabama taxable income, calculated on a separate return basis, of the corporation that incurred the net operating loss. Except as provided in the preceding sentence, the separate return limitation year (“SRLY”) rules contained in 26 U.S.C. § 1502 shall apply.
(i) Nothing in this section shall be construed as allowing or requiring the filing of a combined income tax return under the unitary business concept.
(j) The Department of Revenue shall promulgate regulations interpreting the provisions of this section that are consistent, to the maximum extent possible, with applicable Treasury regulations. The regulations shall further provide that, if the commissioner, for the tax year in question, establishes that one or more members of an Alabama affiliated group have engaged in any nonarm’s-length transaction that causes a material distortion of income allocated or apportioned to this state, the commissioner may deny retroactively, for the taxable year or years in which the material distortion occurs or occurred, the consolidation election of any member of an Alabama affiliated group, in order to fairly represent the tax base attributable to this state.
(k) Notwithstanding subdivision (c) (7), due to the material change in the criteria for qualification as a member of an Alabama affiliated group, an Alabama affiliated group filing an Alabama consolidated return under this section, prior to its amendment by Act 2001-1089, shall have the option either to terminate its election with respect to tax years after the period covered by the last Alabama consolidated return due under this section prior to its amendment, or to re-elect under the revised criteria imposed by Act 2001-1089 and to begin another 120 calendar month election period. The decision of an Alabama affiliated group currently filing an Alabama consolidated income tax return to opt out of the Alabama consolidated return election shall be evidenced by written notice thereof to the department. Such notice shall be filed by March 15, 2002, or the due date, with extensions, of the last consolidated income tax return due to be filed under the law prior to its amendment by Act 2001-1089, whichever date occurs last. The failure to timely file such notice shall be deemed an election by those members of the Alabama affiliated group that are subject to tax under Section 40-18-31 and otherwise qualify under this section as members of an Alabama affiliated group to file an Alabama consolidated return under this section, as amended, including a new 120-calendar month election period under subdivision (c)(7).
Acts 1935, No. 194, p. 256; Code 1940, T. 51, §406; Acts 1971, No. 1940, p. 3135; Acts 1985, No. 85-515, p. 517, §19; Act 98-502, p. 1083, §1; Act 2000-705, p. 1442, §3; Act 2001-1089, 4th Sp. Sess., p. 1113, §1; Act 2016-412, §1.)
(a) For a tax year in which the business interest expense deduction of the taxpayer, or of any federal consolidated return group of which the taxpayer is a member, is not limited pursuant to 26 U.S.C. § 163(j) on the federal income tax return for the tax year, the taxpayer shall not be subject to a limitation on the taxpayer’s business interest expense deduction other than the limitation provided in Section 40-18-35(b) for interest expense with a related member.
(b)(1) For a tax year in which the business interest expense deduction of the taxpayer, or of any federal consolidated return group of which the taxpayer is a member, is limited pursuant to 26 U.S.C. § 163(j) on the federal income tax return for the tax year, the taxpayer shall calculate the business interest expense deduction limitation under 26 U.S.C. § 163(j), for purposes of computing Alabama taxable income, on a separate-entity basis, or in the case of the members of an Alabama affiliated group, as defined in Section 40-18-39(b)(1), which files an Alabama consolidated return as defined in Section 40-18-39(b)(2), on the basis of the Alabama consolidated return group.
(2) The gross receipts test under 26 U.S.C. § 163(j)(3) shall apply to each separate entity which is subject to Alabama income tax, or in the case of an Alabama affiliated group, as defined in Section 40-18-39(b)(1), which files an Alabama consolidated return as defined in Section 40-18-39(b)(2), to the Alabama consolidated return group.
(3) The limitation provided in subsection (a) will apply before the application of the limitation provided in Section 40-18-35(b) for interest expense with a related member. For purposes of the limitation provided in Section 40-18-35(b), the net interest deduction limitation calculated under this subsection shall be allocated on a pro rata basis to the interest income recipients. Any resulting interest expense carryforward shall also be allocated on a pro rata basis to the interest income recipients. In any tax year in which a taxpayer deducts business interest expense on its federal tax return, or the tax return of the federal consolidated group of which it is a member, which was carried forward from a previous tax year and which is also subject to the add back provisions for interest expense with a related member under Section 40-18-35(b), the taxpayer shall apply Section 40-18-35(b) to the amount of the interest expense carried forward in addition to the amount accrued or incurred in the current tax year. Taxpayers that determine their business interest expense deduction pursuant to this subsection shall submit to the Department of Revenue the appropriate forms, schedules, and statements needed in order to confirm the business interest expense deduction was calculated correctly.
(4) A taxpayer with nonbusiness income or nonbusiness interest expense shall allocate nonbusiness interest expense to nonbusiness income and shall calculate a limit on the business interest expense deduction associated with nonbusiness income and nonbusiness interest expense on a pro rata basis. Nonbusiness interest expense shall be assigned to nonbusiness income and shall only be allowed to reduce nonbusiness income.
(Act 2021-1, §9.)
(a)(1) For tax years beginning on or after January 1, 2021, a corporate income taxpayer shall be allowed one month following the due date of the corresponding federal income tax return, including applicable extensions, to file the Alabama corporate income tax return as required by Section 40-18-39.
(2) For tax years beginning on or after January 1, 2020, but prior to January 1, 2021, the department may allow a corporate income taxpayer one additional month following the due date of the corresponding federal income tax return, including applicable extensions, to file the Alabama corporate income tax return, upon request by the taxpayer and approval by the department.
(b) The extension provided in subsection (a) shall not allow a taxpayer to defer payment of a corporate income tax liability beyond the original due date provided in Section 40-18-39.
(Act 2022-53, §3.)
The income tax provided in this chapter shall be reported on forms as prescribed by the department. The failure to receive such form from the department shall not relieve a taxpayer from liability for any tax penalty or interest otherwise due. The tax due as reported on such return shall constitute a prima facie liability for that amount. The department may compute and assess additional tax penalty or interest against a taxpayer in accordance with the procedures set forth in Chapter 2A of this title.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §407; Acts 1992, No. 92-186, p. 349, §53.)
Any surplus remaining from the proceeds of the tax imposed by this chapter after providing for interest and installment annual payments or annual amortization installments on the current debts of the state as of September 30, 1932, shall be applied to the reduction of the ad valorem state tax on real and personal property.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §408.)
(a) Time of payment for individuals. In the case of individuals, the total balance of the tax owed after credits for taxes paid through withholding as provided in Section 40-18-78, or through estimated payments as provided in Sections 40-18-82 and 40-18-83, shall be due and payable at the same time as the due date of an original return.
(b) Time of payment for fiduciaries. In the case of fiduciaries, the total amount of the tax imposed by this chapter shall be paid on April 15 following the close of the calendar year or, if the return should be made on the basis of a fiscal year, then on the fifteenth day of the fourth month following the close of the fiscal year.
(c) Time of payment for corporations. In the case of corporations, the balance of the tax owed after credits for taxes paid through estimated payments as provided in Section 40-18-80.1 shall be due and paid at the same time as the due date of an original return.
(d) Voluntary advance payment. The tax imposed by this chapter or any estimated tax payment thereof may be paid, at the election of the taxpayer, prior to the date prescribed for its payment.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §409; Acts 1953, No. 127, p. 175; Acts 1955, 1st Ex. Sess., No. 46, p. 80, §2; Acts 1955, No. 289, p. 661, §16; Acts 1983, No. 83-741, p. 1214, §1; Act 2001-1088, 4th Sp. Sess., p. 1095, §3; Act 2016-412, §1.)
(a) This section shall be known and may be cited as the David E. Scott Tax Filing Act of 2021.
(b)(1) Notwithstanding anything to the contrary in Chapter 16 or this chapter, payments of income tax or financial institution excise tax originally due between April 15, 2021, and June 30, 2021, shall be due on the revised due dates for the corresponding federal payments.
(2) The Department of Revenue is authorized to delay for a reasonable time period the due date for filing and payment of any tax administered by the department for taxpayers residing in areas within a state or territory of the United States for which the President of the United States or the governor of that state or territory has declared a state of emergency or disaster.
(3) The department may adopt rules necessary to administer this section.
(Act 2021-203, §§1,2.)
Income arising from an installment sale (including the sale by a dealer in personal property) may be reported in accordance with 26 U.S.C. §453, provided that the amendment made to said Section 453 by the Tax Reform Act of 1984 (Pub. L. No. 98-369), adding 26 U.S.C. §453(i), shall not apply. The Department of Revenue shall prescribe regulations relating to the election to report on the installment method or not to report on the installment method.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §411; Acts 1985, No. 85-515, p. 517, §20; Acts 1990, No. 90-583, p. 988, §11.)
Any person or corporation, joint stock company or association liable to income tax under this chapter, which shall fail to make return as required by this chapter within the time allowed, shall be guilty of a misdemeanor and on conviction thereof shall be fined not less than $10, nor more than $1,000.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §417.)
In every respect herein specified in this chapter, returns for the levy and collection of the taxes herein provided for shall be subject to the lien provisions of this title.
All income taxes collected by the Department of Revenue shall be as soon as practicable turned over to the Treasurer and his receipt taken therefor.
The Department of Revenue shall not take any action to collect any income tax before the same becomes delinquent, except in cases of emergency where delayed action might result in the loss of such taxes.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §418.)
All income tax returns filed under this chapter, or copies thereof on file with the State Department of Revenue, shall be open to inspection by officials or duly authorized agents of the Bureau of Internal Revenue lawfully charged with the administration or enforcement of the federal income tax law or officials or duly authorized agents lawfully charged with the administration or enforcement of the income tax laws of any state which allows the State of Alabama or its authorized officials or agents a like privilege, for the purpose of administration and enforcement of such laws, subject to the conditions hereinafter included. The inspection shall only be permitted under such rules and regulations as may be prescribed by the Commissioner of Revenue.
(Acts 1951, No. 848, p. 1478; Acts 1953, No. 207, p. 275.)
The assessment and collection of the income taxes imposed by this chapter shall be under the supervision of the Department of Revenue.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §420.)
Every corporation, joint stock company, or association organized under the laws of the state or organized under the laws of any other state, nation, or territory and doing business in this state, whether taxable under this chapter or not, shall furnish to the officers and employees of the state charged with the duties of carrying out the provisions of this chapter, a true and accurate statement at such times and in such manner and form and setting forth such facts as the Department of Revenue shall deem necessary to enforce the provisions of this chapter. Such statement shall be made upon oath or affirmation of the officer or employee of the corporation, joint stock company, or association best qualified to furnish the desired information.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §421.)
The Department of Revenue may at any time, in its discretion, require the taxpayer to furnish a sworn statement of the annual return of income made under the provisions of the act of Congress of the United States for the calendar or fiscal year in question or for the preceding calendar or fiscal year. Any person who shall willfully fail to comply with this demand shall be guilty of a misdemeanor and, on conviction thereof, shall be fined not more than $100, and may be sentenced to hard labor for the county for not more than six months, or both. No taxpayer shall be subjected to unnecessary examination or investigation, and only one inspection of a taxpayer’s books or accounts shall be made for a taxable year unless the taxpayer requests otherwise or unless the Department of Revenue, after investigation, notifies the taxpayer in writing that an additional inspection is necessary, together with the reasons for such additional inspection.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §422; Acts 1992, No. 92-186, p. 349, §54.)
The Department of Revenue shall from time to time, as said department shall deem desirable, promulgate such reasonable rules and regulations governing procedure and methods of ascertaining and determining gains and income so as to conform as nearly as possible to the best accounting practice in every trade or business and as most clearly reflecting the income therefrom.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §423.)
There is hereby appropriated out of the proceeds of the income tax levied and collected under the provisions of this chapter to the Property Tax Relief Fund such an amount as may be necessary for the replacement of any revenues lost by reason of the exemption of homesteads from all state ad valorem taxes as provided for in this title, after provision has been made for the payment of any and all expenses incurred by the Department of Revenue in the administration of this chapter and in the collection of the taxes as provided herein; provided, that the amount of such expenses, including salary, travel, equipment, and all items of cost necessary for the enforcement of the provisions of this chapter shall be limited to the amount appropriated therefor by the Legislature in the general appropriation bill and shall be budgeted, allotted and expended pursuant to the provisions of Article 4 of Chapter 4 of Title 41. The Comptroller, with the approval of the Governor, is hereby directed to transfer out of the proceeds of the income tax levied and collected under the provisions of this chapter, after payment of the expenses in the administration of this chapter as provided herein, to the Property Tax Relief Fund such amount as may be necessary for the replacement of any revenues lost by exemption of homesteads from all state ad valorem taxes as is provided for in this title, and the residue shall be placed in the State Treasury to the credit of the Education Trust Fund to be used for the payment of public school teachers’ salaries only.
(Acts 1939, No. 253, p. 421; Code 1940, T. 51, §424; Acts 1951, No. 842, p. 1473.)
In addition to all other appropriations heretofore or hereinafter made, there is hereby appropriated to the Department of Revenue for the fiscal year ending September 30, 2000, such amount as is reasonably required to offset its conversion costs as a first charge against the revenues from the tax levied by Act 99-664. For all subsequent years, there shall be appropriated to the Department of Revenue as a first charge against the revenues from the tax levied by Act 99-664 an amount that will offset its actual costs in the administration and regulation of this tax.
(Act 99-664, 2nd Sp. Sess., p. 124, §3.)
This section shall be known and may be cited as the “COVID-19 Recovery Capital Credit Protection Act of 2021.”
(b) For the purposes of this section the following terms shall have the assigned meanings:
(1) APPROVED PROJECT ENTITY. An entity that has filed a notice of intent with the department on or before January 1, 2016, and that has subsequently filed or will file a report of investment in project with the department to claim a capital credit under the Capital Credit Program.
(2) DEPARTMENT. The Alabama Department of Revenue.
(3) QUALIFYING PROJECT. A project that has been placed into service in calendar years 2019, 2020, or 2021.
(c)(1) The one-year period in which to satisfy the initial employment and wage requirements for an approved project entity shall be extended to a period not to exceed two years for any otherwise qualifying project placed into service in calendar years 2019, 2020, or 2021 that have been directly affected by the COVID-19 pandemic.
(2) An approved project entity’s qualifying project, that fails to meet the annual employment and wage requirements for tax years beginning after December 31, 2019, but before January 1, 2022, will not be considered in the determination of disqualification from the capital credit program; provided that the COVID-19 pandemic is the primary cause of the disqualification.
(3) An approved project entity shall not be subject to certain forfeiture penalties imposed on qualifying projects that fail to maintain employment and wage requirements for any tax year ending before January 1, 2022. For tax years beginning on or after January 1, 2022, the applicable forfeiture penalty shall be equal to 100 percent of the capital credits claimed in the year immediately preceding the year in which the approved project entity fails to maintain the employment and wage requirements of this section. The forfeiture percentage shall be reduced to 20 percent for each successive prior year in the five-year forfeiture period.
(d) The department shall adopt rules for the implementation and administration of this section.
(Act 2021-240, §§1-3,5.)
For tax years ending after March 11, 2021, the date of enactment of the federal American Rescue Plan Act, any amount received from the Administrator of the Small Business Administration in the form of a restaurant revitalization grant under Section 5003 of the American Rescue Plan Act shall be all of the following:
(1) Exempt from the income taxes imposed by this chapter to the same extent as the amount is exempt from federal income tax under Section 9673 of the American Rescue Plan Act.
(2) Not considered in determining deductibility of otherwise deductible expenses allowed to be paid with the exempt funds, including, but not limited to, payroll, utilities, mortgage interest, or rent, to the same extent as the expenses remain deductible in calculating federal income tax under Section 9673 of the American Rescue Plan Act.
(3) Excluded from any and all calculations in determining a taxpayer’s federal income tax deduction pursuant to this chapter.
(Act 2021-540, §2.)
(a) Effective for tax years beginning on or after January 1, 2024, research and experimental expenditures for Alabama tax purposes under Chapter 16 and Chapter 18 shall not follow the provisions of 26 U.S.C § 174, as amended by the Tax Cuts and Jobs Act (TCJA), P.L. 115-97. Taxpayers shall have the option to currently deduct research and experimental expenditures or treat the expenditures as deferred expenses in the same manner as provided in 26 U.S.C § 174 prior to tax year 2022.
(b) The Department of Revenue may adopt rules to implement and administer this section.
(Act 2025-400, §§1, 2.)
For the purpose of this article, the following terms shall have the respective meanings ascribed by this section:
(1) EMPLOYEE. Employee as defined in the Internal Revenue Code, as amended from time to time.
(2) EMPLOYER. Employer as defined in the Internal Revenue Code, as amended from time to time. An employer is required to withhold tax from the wages of employees to the extent that such wages are earned in Alabama, whether the employee is a resident or a nonresident of the state.
(3) INTERNAL REVENUE CODE. The Internal Revenue Code of the United States, as amended from time to time.
(4) PROVISIONAL CONSTRUCTION EMPLOYERS. A provisional construction employer is any employer, including members of its affiliated group as that term is defined in the Internal Revenue Code, that (i) employs 50 or more employees in a construction project for qualified property located in a tax increment district in which not less than 50 percent, by area, of the real property within the tax increment district is an enhanced use lease area, as these terms are defined in Section 40-9E-1, a construction project for a qualifying industrial or research enterprise described in Section 40-9B-3(a)(8)e., or a construction project, the cost of which is part of a qualifying entity’s capital cost, as these terms are defined in Section 40-9D-3, and (ii) has not registered in the tax year preceding the current tax year with the Alabama Department of Revenue for withholding tax purposes. If the provisional construction employer reports and pays all past withholding taxes due the state and continues to report and pay for a one-year period all withholding taxes due to Alabama, the employer will no longer be deemed to be a provisional construction employer.
(5) WAGES. Wages as defined in the Internal Revenue Code, as amended from time to time. However, Alabama does differentiate from federal requirements for certain classes and amounts pursuant to departmental rules adopted via the procedures in Title 41.
(Acts 1955, No. 289, p. 661, §1; Act 2007-199, p. 234, §5; Act 2008-275, p. 402, §9; Act 2010-184, p. 262, §3.)
(a) Every employer, as defined under the laws of the United States in effect July 1, 1982, or as subsequently may be defined, with respect to income tax collected at source, making payment of wages as defined under such laws to employees, shall deduct and withhold upon such wages, reduced by the optional standard deduction provided in subsection (b) of Section 40-18-15 and the federal income tax withheld, a tax equal to two percent of the first $500 or less, four percent of the next $2,500 or less, five percent of the excess over $3,000, by which the amount of such wages paid or to be paid in the calendar year by such employer to such employee, exceeds the amount of the exemptions granted to such employee under Section 40-18-19 as claimed on a certificate to be filed with the employer in such form and containing such information and detail as may be prescribed by the commissioner, pursuant to the provisions of Section 40-18-73; provided, however, that in determining the amount to be deducted and withheld under this subsection (a), an employer shall allow as a credit against such amount the job development fee described in Section 41-10-44.7(b).
(b) At the election of the employer with respect to such employee, the employer may deduct and withhold upon the wages paid to such employee a tax determined on the basis of tables to be prepared and furnished by the commissioner, which tax shall be substantially equivalent to the tax provided in subsection (a) of this section and which shall be in lieu of the tax required in such subsection.
(c) In determining the amount to be deducted and withheld under this section, the wages may, at the election of the employer, be computed to the nearest dollar.
(d) The department may, by regulations, authorize employers:
(1) To estimate the wages which will be paid to any employee in any quarter of the calendar year;
(2) To determine the amount to be deducted and withheld upon each payment of wages to such employee during such quarter as if the appropriate average of the wages so estimated constituted the actual wages paid; and
(3) To deduct and withhold upon any payment of wages to such employee during such quarter such amount as may be necessary to adjust the amount actually deducted and withheld upon the wages of such employee during such quarter to the amount that would be required to be deducted and withheld during such quarter if the payroll period of the employee was quarterly.
(e) The department is authorized to provide by regulation, under such conditions and to such extent as it deems proper, for withholding in addition to that otherwise required under this section and in cases in which the employer and the employee agree to such additional withholding. Such additional withholding shall, for all purposes, be considered the tax required to be deducted and withheld under this chapter.
(Acts 1955, No. 289, p. 661, §2; Acts 1965, No. 748, p. 1354, §1; Acts 1982, No. 82-465, p. 759, §8; Acts 1982, 1st Ex. Sess., No. 82-667, p. 85, §8; Acts 1993, 1st Ex. Sess., No. 93-852, p. 95, §5.)
If the remuneration paid by an employer to an employee for services performed during one half or more of any payroll period of not more than 31 consecutive days constitutes wages, all the remuneration paid by such employer to such employee for such period shall be deemed to be wages; but if the remuneration paid by an employer to an employee for services performed during more than one half of any such payroll period does not constitute wages, then none of the remuneration paid by such employer to such employee for such period shall be deemed to be wages.
(Acts 1955, No. 289, p. 661, §3.)
(a) Every employee, on or before the date of commencement of employment, shall furnish his or her employer with a signed Alabama withholding exemption certificate relating to the number of withholding exemptions which he or she claims, which in no event shall exceed the number to which the employee is entitled. In the event the employee inflates the number of exemptions allowed by this Chapter on Form A-4, the employee shall pay a penalty of five hundred dollars ($500) for such action pursuant to Section 40-29-75.
(b) Due to the fact that the federal exemptions differ significantly from Alabama law, federal Form W-4 is not an acceptable filing under this section; rather Alabama Form A-4 must be utilized to comply with this section. The Department of Revenue may provide downloadable withholding forms in English and other languages on the department website.
(c) In the event the employee fails to furnish the employer a signed Alabama Form A-4, the employer must withhold on such employee’s wages using no exemptions.
(d) Withholding exemption certificates shall take effect upon the beginning of the employee’s first payroll period, or the first payment of wages made without regard to a payroll period, after the date on which the certificate is completed and submitted.
(e) A withholding exemption certificate which takes effect under this section shall continue in effect with respect to the employer until another certificate takes effect under this section. If a withholding exemption certificate is submitted to take the place of an existing certificate, the employer, at his or her option, may continue the old certificate in force with respect to all wages paid on or before the first status determination date and adjust the withholding on January 1 or July 1, whichever occurs at least 30 days after the date on which the new certificate is furnished, or may adjust the withholding immediately.
(f) If, on any day during the calendar year, the number of withholding exemptions to which the employee may reasonably be expected to be entitled at the beginning of his or her next taxable year is different from the number to which the employee is currently entitled, the employee shall, according to rules established by the department, provide the employer with a withholding exemption certificate relating to the number of exemptions which he or she claims with respect to the next taxable year, which shall not exceed the number to which he or she may reasonably be expected to be so entitled. Exemption certificates issued pursuant to this subsection shall not take effect with respect to any payment of wages made in the calendar year in which the certificate is submitted.
(g) Whenever the number of exemptions of an employee either increases or decreases, the employee shall submit to the employer a new exemption certificate which accurately states the true number of exemptions to which that employee is entitled.
(h) An employer must submit to the department a copy of any withholding exemption certificates where the employee claims eight or more exemptions. Employers failing to provide such withholding exemption certificates within 60 days of the date employment begins, shall be subject to the “failure to timely file” penalty of fifty dollars ($50) per certificate.
(i) Withholding exemption certificates shall be in the form and contain that information which the department may require, and be submitted in accordance with regulations which the department shall prescribe.
(Acts 1955, No. 289, p. 661, §4; Act 98-468, p. 903, §1; Act 2007-199, p. 234, §5; Act 2015-504, 1st Sp. Sess., §3.)
(a) This section shall be known and may be cited as the “Provisional Construction Employer Withholding Act.”
(b)(1) Subsequent to August 1, 2007, in addition to the other requirements contained in this title, all provisional construction employers shall be required to:
a. Post a bond of not less than the average estimated annual withholding.
b. Provide a minimum bond in all cases not to be less than five hundred dollars ($500) per employee.
c. Provide the bond in the form of a surety bond, cash bond, or by other bonding or credit device deemed acceptable by the Commissioner of Revenue.
(2) The Department of Revenue will issue a notice of compliance to those provisional construction employers that are in compliance with the registration and bond requirements contained in this section.
(3) If the provisional construction employer fails to provide the notice of compliance to parties upon which they have engaged in contractual relationships, such parties must escrow 10 percent of the total amount of the contract for payment of taxes due the State of Alabama.
(Act 2007-199, p. 234, §6.)
(a) Every employer required to deduct and withhold tax under Section 40-18-71 shall for each quarterly period, on or before the last day of the month following the close of each quarterly period, file a return and pay to the Department of Revenue the tax required to be withheld under Section 40-18-71. Where the aggregate amount required to be deducted and withheld by any employer for either the first or second month of a calendar quarter exceeds $1,000 the employer shall by the fifteenth day of the succeeding month file a return and pay the aggregate amount to the Department of Revenue. The amount paid shall be allowed as a credit against the liability shown on the employer’s quarterly withholding return required by this section. Any employer required under this section to make monthly payments of the aggregate amount required to be deducted and withheld that does not file a return and pay the aggregate amount by the prescribed date shall be subject to the same penalties provided in Section 40-2A-11.
(b) If the department, in any case, has reason to believe that the collection of the tax provided for in Section 40-18-71 is in jeopardy, it may require the employer to file a return and pay the tax at any time.
(c) Every employer, who fails to withhold or pay to the department any sums required by this chapter to be withheld and paid, shall be personally and individually liable therefor to the State of Alabama, and any sum or sums withheld in accordance with the provisions of Section 40-18-71 shall be deemed to be held in trust for the state.
(d) In the event an employer fails to withhold or pay to the department any amount required to be withheld under Section 40-18-71, that amount may be assessed against the employer in the same manner as is prescribed for the assessment of income tax under the provisions of Section 40-18-40. The employer may appeal from the final assessment in the same manner as is prescribed by law for appeals by the taxpayer. When no appeal is taken by the employer, execution may be issued upon the final assessment in the same manner as is provided by law for the issuance of an execution by the Department of Revenue.
(e) The state shall have a lien upon all the property of any employer who fails to withhold or pay to the department sums required to be withheld under Section 40-18-71. If the employer withholds but fails to pay the amounts withheld to the department, the lien shall accrue as of the date the amounts withheld were required to be paid to the department. If the employer fails to withhold, the lien shall accrue at the time the liability of the employer becomes fixed.
(Acts 1955, No. 289, p. 661, §5; Acts 1981, No. 81-102, p. 122; Act 98-502, p. 1083, §1; Act 99-367, p. 591, §1.)
(a) Every person required to deduct and withhold from an employee a tax under Section 40-18-71 shall furnish to each such employee in respect of the remuneration paid by such person to such employee during the calendar year, on or before January 31 of the succeeding year, or, if his employment is terminated before the close of such calendar year, within 30 days from the day on which the last payment of remuneration is made, a written statement showing the following:
(1) The name of such person;
(2) The name of the employee and his Social Security account number;
(3) The total amount of wages, as defined in Section 40-18-70;
(4) The total amount deducted and withheld as tax under Section 40-18-71.
(b) The statement required to be furnished by this section in respect of any wages shall be furnished at such other times, shall contain such other information and shall be in such forms as the department may by regulations prescribe. A duplicate of such statement, if made and filed in accordance with regulations prescribed by the department, shall constitute the return required to be made in respect of such wages under Section 40-18-26.
(c) The department may promulgate regulations providing for reasonable extensions of time, not in excess of 30 days, to employers required to furnish statements under this section.
(Acts 1955, No. 289, p. 661, §6.)
An employer shall be liable for the payment of the tax required to be deducted and withheld under Section 40-18-71 and shall not be liable to any person for the amount of any such payment.
(Acts 1955, No. 289, p. 661, §7.)
(a) Where there has been an overpayment of tax under Section 40-18-71, refund or credit shall be made to the employer only to the extent that the amount of such overpayment was not deducted and withheld under Section 40-18-71 by the employer.
(b) Any refund allowed by this section shall be administered in accordance with the procedures set out in Chapter 2A of this title.
(Acts 1955, No. 289, p. 661, §8; Acts 1992, No. 92-186, p. 349, §55.)
The amount deducted and withheld as tax under Section 40-18-71 during any calendar year upon the wages of any individual shall be allowed as a credit to the recipient of the income against the tax imposed by Section 40-18-5 for taxable years beginning in such calendar year. If more than one taxable year begins in such calendar year, such amount shall be allowed as a credit against the tax for the last taxable year so beginning.
(Acts 1955, No. 289, p. 661, §9.)
Where there has been an overpayment of any tax imposed under Section 40-18-71 or 40-18-80, the amount of such overpayment, if a petition for refund is timely filed or the department otherwise allows an automatic refund within that period, may be credited against any income tax or installment thereof then due from the taxpayer, and any balance shall be refunded to the taxpayer or if the taxpayer’s bank or other financial institution, pursuant to the State Financial External Lead Program or any other similar program selected by the department, certifies a petition for reimbursement that it has credited the taxpayer’s account in the amount of the refund due the taxpayer because the taxpayer’s refund was erroneously reversed by the department, then the balance shall be paid to the bank or other financial institution as reimbursement. Any costs or reimbursement incurred shall be paid from the same funds to which income tax revenues are deposited.
(Acts 1955, No. 289, p. 661, §10; Acts 1957, No. 393, p. 539; Acts 1992, No. 92-186, p. 349, §56; Act 2017-227, §3.)
(a) Individuals. Individuals shall pay estimated income tax in accordance with 26 U.S.C. § 6654 except:
(1) The provisions of 26 U.S.C. § 6654(d)(2)(C)(iii) and 26 U.S.C. § 6654(f)(2) shall not apply;
(2) Five hundred dollars ($500) shall be substituted for the amount provided for in 26 U.S.C. § 6654(e)(1).
(b) For the purposes of this section:
(1) Section 40-18-2 shall be substituted when 26 U.S.C. § 6654 refers to Chapter 1 and Chapter 2;
(2) Section 40-18-71 shall be substituted when 26 U.S.C. § 6654 refers to Section 31;
(3) Sections 40-18-21(a), 40-18-132, 40-18-136, 40-18-194, 40-18-220, 40-18-243, and 41-23-24 shall be substituted when 26 U.S.C. § 6654 refers to part IV of subchapter A of Chapter 1;
(4) Commissioner shall be substituted when 26 U.S.C. § 6654 refers to Secretary;
(5) The terms alternative minimum taxable income and adjusted self-employment income referred to in 26 U.S.C. § 6654(d)(2)(C)(i) shall be ignored for Alabama purposes.
(Acts 1955, No. 289, p. 661, §11; Acts 1983, No. 83-741, p. 1214, §2; Acts 1992, No. 92-186, p. 349, §57; Act 2001-1088, 4th Sp. Sess., p. 1095, §3; Act 2010-685, p. 1150, §1.)
(a) Corporations. Corporations shall pay estimated income tax in accordance with 26 U.S.C. § 6655 except:
The provisions of 26 U.S.C. § 6655(g)(1)(A)(ii) through (iv) shall not apply.
(b) For the purposes of this section:
(1) Section 40-18-2 shall be substituted when 26 U.S.C. § 6655 refers to Chapter 1;
(2) The terms alternative minimum taxable income and modified alternative minimum taxable income referred to in 26 U.S.C. § 6655(e)(2)(B)(i) shall be ignored for Alabama purposes;
(3) Section 40-18-31 shall be substituted when 26 U.S.C. § 6655 refers to Section 11;
(4) The terms 1201(a) and subchapter L of Chapter 1 referred to in 26 U.S.C. § 6655(g)(1)(A)(i) shall be ignored for Alabama purposes;
(5) Sections 40-18-35(e), 40-18-136, 40-18-194, 40-18-220, 40-18-243, and 41-23-24 shall be substituted when 26 U.S.C. § 6655(g)(1)(B) refers to part IV of subchapter A of Chapter 1;
(6) Alabama Affiliated Group shall be substituted when 26 U.S.C. § 6655 refers to Controlled Group;
(7) The term carrybacks referred to in 26 U.S.C. § 6655(g)(2)(B)(iii) shall be ignored for Alabama purposes;
(8) Commissioner shall be substituted when 26 U.S.C. § 6655 refers to Secretary.
(Act 2001-1088, 4th Sp. Sess., p. 1095, §4; Act 2010-568, p. 1150, §1.)
Any individual may elect to file a “short form” return provided by the Department of Revenue and pay any tax due; provided, that the individual does not have income from sources other than wages except for interest and dividend income of not more than $1,500. Items allowed on the short forms shall be determined by regulation under the provisions of the Alabama Administrative Procedure Act.
(Acts 1955, No. 289, p. 661, §12; Acts 1965, No. 748, p. 1354, §2; Acts 1982, No. 82-465, p. 759, §9; Acts 1982, 1st Ex. Sess., No. 82-667, p. 85, §9; Act 98-502, p. 1083, §1.)
[Repealed]
Repealed by Act 2010-568, effective with tax years beginning December 31, 2009.
(Acts 1955, No. 289, p. 661, §13; Acts 1983, No. 83-741, p. 1214, §3; Acts 1993, 1st Ex. Sess., No. 93-852, p. 95, §6; Act 2001-1088, 4th Sp. Sess., p. 1095, §5.)
[Repealed]
Repealed by Act 2010-568, effective with tax years beginning December 31, 2009.
(Acts 1955, No. 289, p. 661, §14; Acts 1983, No. 83-741, p. 1214, §4; Act 2001-1088, 4th Sp. Sess., p. 1095, §5.)
[Repealed]
Repealed by Act 2010-568, effective with tax years beginning December 31, 2009.
(Acts 1983, No. 83-741, p. 1214, §5.)
[Repealed]
Repealed by Act 98-502, §2.
(Acts 1955, No. 289, p. 661, §15.)
[Repealed]
Repealed by Act 2010-568, effective with tax years beginning December 31, 2009.
(Acts 1955, No. 289, p. 661, §17.)
(a) As used in this section, the term nonresident of Alabama shall include individuals, trusts, partnerships, corporations, and unincorporated organizations. Any seller or transferor who meets all of the following conditions and who provides the buyer or transferee with an affidavit signed under oath swearing or affirming that all of the following conditions are met will be deemed a resident for purposes of this section:
(1) The seller or transferor has filed Alabama income tax returns or appropriate extensions have been received for the two income tax years immediately preceding the year of sale.
(2) The seller or transferor is in business in Alabama and will continue substantially the same business in Alabama after the sale or the seller or transferor has real property remaining in the state at the time of closing of equal or greater value than the withholding tax liability as measured by the 100 percent property tax assessment of such remaining property.
(3) The seller or transferor will report the sale on an Alabama income tax return for the current year and file it by the due date.
(4) If the seller or transferor is a corporation or limited partnership, it is registered to do business in Alabama.
(b)(1) Except as otherwise provided in this section, in the case of any sale or transfer of real property and related tangible personal property located in Alabama by a nonresident of Alabama, the buyer or transferee shall be required to withhold and remit to the Commissioner of Revenue on forms provided by the commissioner a withholding tax for individual buyers or transferees equal to three percent of the purchase price or consideration paid for the sale or transfer, and for corporate, partnership, or unincorporated association buyers or transferees equal to four percent of the purchase price or consideration paid for the sale or transfer; provided, however, that if the amount required to be withheld pursuant to this subsection exceeds the net proceeds payable to the seller or transferor, the buyer or transferee shall withhold and pay over to the commissioner only the net proceeds otherwise payable to the seller or transferor. Any buyer or transferee who fails to withhold such amount shall be personally liable for the amount of the tax.
(2) The liability imposed by this subsection shall be paid upon notice and demand by the commissioner or the commissioner’s delegate and shall be assessed and collected in the same manner as all other withholding taxes imposed by this article.
(c) If the seller or transferor determines that the amount required to be withheld pursuant to subdivision (1) of subsection (b) will result in excess withholding on any gain required to be recognized from the sale, the seller or transferor may provide the buyer or transferee with an affidavit signed under oath swearing or affirming to the amount of the gain required to be recognized from the sale, and any individual buyer or transferee shall withhold three percent of the amount of the gain required to be recognized, if any, and the corporate, partnership, or unincorporated association buyers or transferee shall withhold four percent of the amount of the gain required to be recognized, if any, stated in the affidavit rather than as provided in subdivision (1) of subsection (b). If, however, the amount required to be withheld pursuant to this subsection exceeds the net proceeds payable to the seller or transferor, the buyer or transferee shall withhold and pay over to the commissioner only the net proceeds otherwise payable to the seller or transferor.
(d) Subsection (b) shall not apply where any of the following occur:
(1) The real property being sold or transferred is a principal residence of the seller or transferor within the meaning of Section 121 of the Internal Revenue Code.
(2) The seller or transferor is a mortgagor conveying the mortgaged property to a mortgagee in foreclosure or in a transfer in lieu of foreclosure with no additional consideration.
(3) The transferor or transferee is an agency or authority of the United States of America, an agency or authority of the State of Alabama, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, or the Government National Mortgage Association, or a private mortgage insurance company.
The commissioner may by rule set a purchase price amount below which no withholding is required.
(e)(1) Unless otherwise provided, if the seller or transferor is a partnership or Subchapter “S” corporation or other unincorporated organization which certifies to the buyer or transferee that a composite return is being filed on behalf of the nonresident partners, shareholders, or members and that the partnership, Subchapter “S” corporation, or unincorporated organization remits the tax on the gain on behalf of the nonresident partners, shareholders, or members, the buyer or transferee shall not be required to withhold as provided in this section. Any nonresident partner, shareholder, or member who falsely certifies that a composite return is being filed on behalf of such partner, shareholder, or member shall be liable for a penalty in the amount of five hundred dollars ($500) or 10 percent of the amount required to be withheld, whichever is greater.
(2) The penalty imposed by this subsection shall be paid upon notice and demand by the commissioner or the commissioner’s delegate and shall be assessed and collected in the same manner as the withholding tax imposed by this article.
(f) Every buyer or transferee of real property located in Alabama who is required to deduct and withhold the withholding tax imposed by subsection (b) shall file the required return and remit payment to the Department of Revenue on or before the last day of the calendar month following the calendar month within which the sale or transfer giving rise to the withholding tax occurred.
(Act 2008-504, p. 1114, §1.)
As used in this division, the following terms shall have the following meanings, respectively, unless the context clearly indicates otherwise:
(1) PERSON. Individuals, firms, partnerships, companies, corporations, associations, trustees, receivers, the State of Alabama, and any of its agencies, authorities, boards, bureaus, commissions, departments, and instrumentalities, each incorporated municipality and any agencies, authorities, boards, bureaus, commissions, and departments of such municipalities, and the several counties of the State of Alabama and any agencies, authorities, boards, bureaus, commissions, and departments of such counties, and any other political subdivisions of the State of Alabama by whatever name or description.
(2) STATE. The State of Alabama.
(3) WINNINGS SUBJECT TO WITHHOLDING. Proceeds from a wagering transaction in those amounts and sources as defined in 26 U.S.C. §3402, as amended from time to time.
(4) PROCEEDS FROM A WAGER. Those proceeds as described in 26 U.S.C. §3402, as amended from time to time.
(5) WAGERING TRANSACTION. A wagering transaction as described in 26 U.S.C. §3402, as amended from time to time.
(Acts 1988, 2nd Ex. Sess., No. 88-952, p. 575, §1.)
(a) Each person making any payment of proceeds from a wager which constitutes “winnings subject to withholding” as defined by Section 40-18-90, shall deduct and withhold income tax in the amount of five percent of the payment.
(b) Each person making withholding of state income taxes as required by this division shall remit the same to the state Revenue Department in the same manner and at the same time as that provided for payments of other withheld income taxes as set out in Article 2, Chapter 18, of this title, and shall be subject to the same penalties as provided therein. Each person required to make withholding of state income taxes, who shall fail to do so, shall be personally liable for all amounts required to be withheld as provided in Sections 40-18-74, 40-18-76, 40-29-73 and 40-29-111.
(c) Any person receiving proceeds from a wager which constitutes winnings subject to withholding shall furnish the payer a statement, made under the penalties of perjury, which contains such information as shall be designated by the state Revenue Department as necessary to identify the recipient for tax compliance purposes.
(d) The payer shall furnish to the recipient a statement of the amount of winnings subject to withholding and the amount of tax withheld in accordance with procedures which shall be established by the state Revenue Department. Furthermore, the payer shall report to the Department of Revenue the payment of all such proceeds from wagers in those amounts as the same are required to be reported pursuant to 26 U.S.C. §6041, as amended from time to time.
(e) Each person for whom income tax was withheld pursuant to this division shall be entitled to a credit therefor against any income tax liability due this state as imposed by Chapter 18, Title 40.
(Acts 1988, 2nd Ex. Sess., No. 88-952, p. 575, §18.)
For the purposes of this article, the following terms shall have the following meanings:
(1) CLAIMANT AGENCY. Any of the following:
a. The Alabama Commission on Higher Education with respect to the collection of debts under either of the following:
The Alabama Student Grant Program provided for by Chapter 33A of Title 16.
The Alabama Guaranteed Student Loan Program provided for by Chapter 33B of Title 16.
b. The Alabama Department of Human Resources with respect to the collection of debts and money owed under any and all of its public assistance programs and other programs administered by that department, including support programs administered pursuant to the requirements of Title IV-D of the Social Security Act.
c. The Alabama Medicaid Agency with respect to the collection of debts and money owed under any and all of the programs it administers.
d. The Alabama Department of Labor with respect to the collection or recovery, or both, of debts owed as a result of overpayments of state unemployment compensation benefits.
e. The Unified Judicial System with respect to the collection of fines and court costs owed as a result of any court or judicial proceeding.
f. Counties and municipalities acting through an organization as provided in Section 40-18-103, with respect to the collection of any debt owed and finalized by law, ordinance, or resolution. For the purposes of this section and Section 40-18-103, counties and municipalities, without limitation, shall include all corporations and other instrumentalities whose governing boards are comprised of a majority of members who are appointed or elected by counties or municipalities.
g. A housing authority under Chapter 1, Title 24, with respect to the collection of debts and money owed under any and all of the programs administered by the authority.
(2) DEBTOR. Any individual owing money or having a delinquent account with any claimant agency, which obligation has not been adjudicated, satisfied by court order, set aside by court order, or discharged in bankruptcy.
(3) DEBT. Any liquidated sum due and owing any claimant agency which has accrued through contract, subrogation, tort, or operation of law regardless of whether there is an outstanding judgment for that sum, or any liquidated sum of child or spousal support, or both child and spousal support, due and owing any individual eligible for and receiving child support enforcement services through the Alabama Department of Human Resources. An agreement between a claimant agency defined in paragraph f. of subdivision (1) and a public entity or non-profit established by a public entity authorized by subdivision (30) of subsection (a) of Section 22-21-318 or Section 11-62-7 for management or administrative services does not affect the claimant agency’s ability to collect the debt defined herein.
(4) DEPARTMENT. The Department of Revenue of the State of Alabama.
(5) REFUND. The Alabama income tax refund which the department determines to be due any individual taxpayer.
(Acts 1981, No. 81-696, p. 1168, §1; Acts 1985, 2nd Ex. Sess., No. 85-994, p. 360, §1; Acts 1995, No. 95-750, p. 1748, §1; Acts 1997, No. 97-246, p. 426, §1; Act 2004-505, p. 981, §1; Act 2014-321, p. 1145, §1; Act 2014-424, p. 1553, §2; Act 2019-184, §1.)
The collection remedy authorized by this article is in addition to and not in substitution for any other remedy available by law.
(Acts 1981, No. 81-696, p. 1168, §1.)
(a) A claimant agency may submit debts in excess of $25 to the department for collection through setoff, under the procedure established by this article, except in cases where the validity of the debt is legitimately in dispute, an alternate means of collection is pending and believed to be adequate, or such collection would result in a loss of federal funds or federal assistance.
(b) Upon the request of a claimant agency, the department shall set off any refund, as defined in subdivision (5) of Section 40-18-100, against the sum certified by the claimant agency as provided in this article.
(Acts 1981, No. 81-696, p. 1168, §1; Acts 1985, 2nd Ex. Sess., No. 85-994, p. 360, §2.)
(a) A county or municipality may submit a debt of at least $25 owed to it for collection under this chapter. Provided, however, that a county or municipality must submit the debt to the department through one of the following:
(1) The Association of County Commissions of Alabama or an entity established through the Association of County Commissions of Alabama.
(2) The Alabama League of Municipalities or an entity established through the Alabama League of Municipalities.
The organization which submits a debt on behalf of any county or municipality may assess a reasonable fee, which shall be twenty-five dollars ($25) for submitting the debt. This fee may be assessed against the debtor and collected as the first amount set off against any tax refund.
(b) Within a time frame specified by the department, a claimant agency seeking to collect a debt through setoff shall supply the information necessary to identify each debtor whose refund is sought to be set off and certify the amount of debt or debts owed by each such debtor.
(c) If a debtor identified by a claimant agency is determined by the department to be entitled to a refund of at least $25 the department shall transfer an amount equal to the refund owed, not to exceed the amount of the claimed debt certified, to the claimant agency. When the income tax refund owed exceeds the claimed debt, the department shall send the excess amount to the debtor within a reasonable time after such excess is determined.
(d) At the time of the transfer of funds to a claimant agency pursuant to subsection (c), the department shall notify the taxpayer or taxpayers whose refund is sought to be set off that the transfer has been made. Such notice shall clearly set forth the name of the debtor, the manner in which the debt arose, the amount of the claimed debt, the transfer of funds to the claimant agency pursuant to subsection (c) and the intention to set off the refund against the debt, the amount of the refund in excess of the claimed debt, the taxpayer’s opportunity to give written notice to contest the setoff within 30 days of the date of mailing of the notice, the name and mailing address of the claimant agency to which the application for a hearing must be sent, and the fact that the failure to apply for such a hearing, in writing, within the 30-day period will be deemed a waiver of the opportunity to contest the setoff. In the case of a joint return or a joint refund, the notice shall also state the name of the taxpayer named in the return, if any, against whom no debt is claimed, the fact that a debt is not claimed against such taxpayer, the fact that such taxpayer is entitled to receive a refund if it is due him or her regardless of the debt asserted against his or her spouse, and that in order to obtain a refund due, such taxpayer must apply, in writing, for a hearing with the claimant agency named in the notice within 30 days of the date of the mailing of the notice. If a taxpayer fails to apply in writing for such a hearing within 30 days of the mailing of such notice, the taxpayer will have waived the opportunity to contest the setoff.
(e) Notwithstanding subsection (d), a claimant county or municipality as provided for in subsection (a) shall, at the time of the transfer of funds to the claimant county or municipality, notify the taxpayer or taxpayers whose refund is sought to be set off that the transfer has been made. Such notice shall clearly set forth the name of the debtor, the manner in which the debt arose, the amount of the claimed debt, the transfer of funds to the claimant county or municipality pursuant to subsection (c) and the intention to set off the refund against the debt, notice that any refund in excess of the claimed debt will be sent to the taxpayer, the taxpayer’s opportunity to give written notice to contest the setoff within 30 days of the date of mailing of the notice, the name and mailing address of the claimant county or municipality to which the application for a hearing must be sent, and the fact that the failure to apply for such a hearing, in writing, within the 30-day period will be deemed a waiver of the opportunity to contest the setoff. In the case of a joint return or a joint refund, the notice shall also state the name of the taxpayer named in the return, if any, against whom no debt is claimed, the fact that a debt is not claimed against such taxpayer, the fact that such taxpayer is entitled to receive a refund if it is due him or her regardless of the debt asserted against his or her spouse, and that in order to obtain a refund due, such taxpayer must apply, in writing, for a hearing with the claimant county or municipality named in the notice within 30 days of the date of the mailing of the notice. If a taxpayer fails to apply in writing for such a hearing within 30 days of the mailing of such notice, the taxpayer will have waived the opportunity to contest the setoff.
(f) Upon receipt of funds transferred from the department pursuant to subsection (c), the claimant agency shall deposit and hold such funds in an escrow account until a final determination of the validity of the debt.
(Acts 1981, No. 81-696, p. 1168, §1; Act 2014-321, p. 1145, §1.)
(a) When the claimant agency receives a protest or application in writing from a taxpayer within 30 days of the notice issued by the department pursuant to subsection (c) of Section 40-18-103, the claimant agency shall set a date to hear the protest and give notice to the taxpayer by registered or certified mail of the date so set. The time and place of such hearing shall be designated in such notice and the date set shall not be less than 15 days from the date of such notice. If, at hearing, the sum asserted as due and owing is found not to be correct, an adjustment to the claim may be made. The claimant agency shall give notice to the debtor of its final determination and inform the debtor of his right to appeal such final determination as provided in subsection (c) of this section.
(b) No issues shall be reconsidered at the hearing which have been previously litigated.
(c) If any debtor is dissatisfied with the final determination made at the hearing by the claimant agency, he may appeal the final determination to the Circuit Court of Montgomery County or to the circuit court of the county in which the debtor resides by filing notice of appeal with the administrative head of the claimant agency and with the clerk or register of the circuit court of the county to which the appeal shall be taken within 30 days from the date notice of final determination was given by claimant agency.
(Acts 1981, No. 81-696, p. 1168, §1.)
(a) Upon final determination of the amount of the debt due and owing by means of a hearing provided by Section 40-18-104 or by the taxpayer’s default through failure to comply with Section 40-18-103 mandating timely request for review, the claimant agency shall remove the amount of the debt due and owing from the escrow account established pursuant to Section 40-18-103 and credit such amount to the debtor’s obligation.
(b) Upon transfer of the debt due and owing from the escrow account to the credit of the debtor’s account, the claimant agency shall notify the debtor in writing of the finalization of the setoff. Such notice shall include a final accounting of the refund which was set off including the amount of the refund to which the debtor was entitled prior to the setoff, the amount of the debt due and owing, the amount of the refund in excess of the debt which was returned to the debtor by the department pursuant to subsection (b) of Section 40-18-103, and the amount of the funds transferred to the claimant agency pursuant to Section 40-18-103 in excess of the debt determined to be due and owing at a hearing held pursuant to Section 40-18-104, if such a hearing was held. At such time, the claimant agency shall refund to the debtor the amount of the claimed debt originally certified and transferred to it by the department in excess of the amount of the debt finally found to be due and owing.
(Acts 1981, No. 81-696, p. 1168, §1.)
The department has priority over every claimant agency for collection by setoff under this article.
(Acts 1981, No. 81-696, p. 1168, §1.)
(a) Notwithstanding any confidentiality statute, the Commissioner of Revenue may provide to a claimant agency all information necessary to accomplish and effectuate the intent of this article.
(b) The information obtained by a claimant agency from the department in accordance with the provisions of this article shall retain its confidentiality and shall only be used by a claimant agency in pursuit of its debt collection duties and practices; and any employee or prior employee of any claimant agency who unlawfully discloses any such information for any other purpose, except as specifically authorized by law, shall be subject to the same penalties specified by law for unauthorized disclosure of confidential information by an agent or employee of the Department of Revenue.
(Acts 1981, No. 81-696, p. 1168, §1; Acts 1992, No. 92-186, p. 349, §58.)
When the setoff authorized by this article is exercised, the refund which is set off shall be deemed granted.
(Acts 1981, No. 81-696, p. 1168, §1.)
In those cases where the amount claimed to be due and owing by the claimant agency is less than the refund due the taxpayer the State Treasurer is authorized upon the request of the department to issue two warrants, one payable to the claimant agency for the amount claimed to be due and owing and one to the taxpayer for the amount of the refund in excess of the amount claimed to be due and owing by the claimant agency.
(Acts 1981, No. 81-696, p. 1168, §1.)
(a) The fee charged to the department by the United States Department of the Treasury to intercept a federal income tax refund and forward it to the department to pay any unpaid Alabama tax liability that is eligible to be submitted to the United States Department of the Treasury for collection shall be considered reasonable and shall be paid by the debtor whose federal income tax refund was intercepted.
(b) The fee charged to the department by the United States Department of the Treasury shall be deducted from the debtor’s federal income tax refund by the United States Department of the Treasury and the eligible debt submitted by the department will further reduce the debtor’s federal income tax refund.
(Act 2009-223, p. 320, §1.)
(a) As used in this article, the following terms have the following meanings:
(1) MANUFACTURED HOME. Any structure built to the Manufactured Home Construction and Safety Standards which displays a red certification label on the exterior of each transportable section.
(2) PRIMARY RESIDENCE. Any manufactured home or single family residence building that is the full-time legal residence of the taxpayer and is used for purposes of the taxpayer’s income tax calculation.
(3) QUALIFIED STORM SHELTER. A storm shelter or safe room to which all of the following apply:
a. The design is capable of withstanding an EF5 tornado.
b. The shelter or room is placed in service as an attachment to the taxpayer’s primary residence, or on the same lot or parcel as the primary residence, and no other qualified storm shelter is attached to the primary residence or on the lot.
c. The shelter or room meets or exceeds the most recent Federal Emergency Management Agency minimum criteria for the design, construction, and operation of residential safe rooms.
d. The shelter or room is built on the site of the taxpayer’s primary residence or is manufactured offsite and installed on the site of the taxpayer’s primary residence.
(4) SINGLE FAMILY RESIDENCE BUILDING. A structure designed according to the International Residential Codes or its predecessor codes.
(b) An Alabama income tax credit is established for eligible taxpayers who incur costs for the construction, acquisition, or installation of a qualified storm shelter at their primary residence in the state. The tax credit shall equal three thousand dollars ($3,000) or 50 percent of the total cost of the construction, acquisition, and installation of the qualified storm shelter at the primary residence, whichever is less. The total costs for purposes of the tax credit calculation under this subsection shall exclude any costs reimbursed or expected to be reimbursed by any other entity including, but not limited to, insurance reimbursements, grants, or other government subsidies or incentives. The tax credit must be applied for and claimed in the tax year in which the taxpayer was issued a tax credit certificate under subsection (f).
(c) The tax credit issued under this article may not decrease a taxpayer’s tax liability to less than zero. If the tax liability of the taxpayer is less than the tax credit issued under this article, the taxpayer may only utilize the amount of the credit that reduces the taxpayer liability to zero. The tax credit is not refundable nor transferable and may not be carried forward. A taxpayer applying for the tax credit shall only apply for the tax credit for the year in which the qualified storm shelter was acquired, constructed, or installed, regardless of the tax liability of the taxpayer.
(d) The Department of Revenue shall grant the tax credit against the state income tax that is due by the taxpayer holding the tax credit certificate issued under subsection (f) in the amount stated on the tax credit certificate, subject to the limitations of subsection (c). The department may audit and reassess any credit improperly obtained by the taxpayer, in accordance with the Alabama Taxpayers’ Bill of Rights and Uniform Revenue Procedures Act under Chapter 2A.
(e) The tax credit authorized by this article is limited to an aggregate amount for all taxpayers of two million dollars ($2,000,000) annually.
(f) Prior to claiming the income tax credit authorized under subsection (b), the taxpayer shall file an annual informational report in a manner prescribed by the Alabama Emergency Management Agency, which includes information reflecting the costs for construction, acquisition, or installation of the qualified storm shelter at the primary residence, along with additional information as required by the Alabama Emergency Management Agency. Following the receipt of all information required by this subsection, the Alabama Emergency Management Agency shall issue a tax credit certificate to the taxpayer seeking the credit. Tax credit certificates shall be issued on a first come, first served basis until the annual cap provided by subsection (e) is met. In the event the reservations of tax credits equal the total amount available for reservations during the tax year, all eligible taxpayers with applications then awaiting approval or thereafter submitted shall be notified in a manner as prescribed by the Alabama Emergency Management Agency that no additional tax credits shall be granted during that tax year and, notwithstanding any provision of this section to the contrary, shall be allowed to seek a tax credit certificate in the next tax year, subject to the limitations of subsection (c).
(g) The Alabama Emergency Management Agency shall prepare a report detailing the number of qualified storm shelters constructed, acquired, and installed and the amount of tax credits claimed under this article. The information on the report shall be consistent with the information required under Section 40-1-50 and rules adopted by the Department of Revenue. Information provided under this section is exempt from the confidentiality provisions of Section 40-2A-10 and shall be provided by the Alabama Emergency Management Agency to the Legislature in accordance with Section 40-1-50 and rules adopted by the Department of Revenue.
(h) The Alabama Emergency Management Agency may adopt rules to implement and administer this article.
(i) The tax credit allowed under this section shall be effective January 1, 2022, for the 2022 tax year, and shall continue through the 2028 tax year, unless continued by an act of the Legislature.
(Act 2021-540, §1; Act 2024-223, §1.)
[Repealed]
Repealed by Act 98-502, §2.
(Acts 1981, No. 81-479, p. 831.)
[Repealed]
Repealed by Act 98–502, §2.
(Acts 1981, No. 81-480, p. 834.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.V
It is the intent of the Legislature to institute programs that will make Alabama more competitive with other states in the recruitment and retention of physicians and reduce inequities that a small or rural hospital and small or rural communities have in the funding and recruitment of physician services.
(Acts 1993, No. 93-313, p. 470, §1.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
For the purposes of this article, the following words have the following meanings, respectively, unless the context clearly indicates otherwise:
(1) RURAL PHYSICIAN. A physician licensed to practice medicine in Alabama who practices and resides in a small or rural community and has admission privileges to a small or rural hospital.
(2) SMALL OR RURAL COMMUNITY. A community in Alabama that has less than 25,000 residents according to the latest decennial census and has a hospital with an emergency room.
(3) SMALL OR RURAL HOSPITAL. An acute care hospital that meets one of the following requirements:
a. Contains less than 105 beds and is located more than 20 miles, under normal travel conditions, from another acute care hospital located in Alabama.
b. Receives Medicare rural reimbursement from the federal government.
(Acts 1993, No. 93-313, p. 470, §2.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
Beginning with the 1994 tax year, a person qualifying as a rural physician shall be allowed a credit against the tax imposed by Section 40-18-2, in the sum of $5,000. No credit shall be allowed to a rural physician who is, on May 4, 1993, practicing in a small or rural community. No credit shall be allowed to a physician who has previously practiced in a small or rural community unless, after May 4, 1993, that physician returns to practice in a small or rural community after having practiced in a large or urban community for at least three years. The tax credit may be claimed for not more than five consecutive tax years. The Department of Revenue shall promulgate any rules and regulations necessary to implement and administer the provisions of this article.
(Acts 1993, No. 93-313, p. 470, §3.)
(a) The Rural Physician Tax Credit, Article 4A, commencing with Section 40-18-130, Chapter 18, of Title 40, is repealed effective December 31, 2028, unless extended by an act of the Legislature prior to that date for no more than five additional years.
(b) The repealing of the incentives in subsection (a) shall only affect the availability of the tax credits after December 31, 2028, and shall not cause a reduction or suspension of any credits awarded on or prior to December 31, 2028.
(Act 2023-546, §§3, 11.)
The following definitions apply to this article:
(1) APPROVED BASIC SKILLS EDUCATION PROGRAM. A basic skills education program that has received written approval from the Alabama Department of Education pursuant to this article.
(2) BASIC SKILLS EDUCATION PROGRAM. An approved employer provided or employer sponsored education program that enhances basic skills of employees up to and including the twelfth grade functional level.
(3) COSTS OF EDUCATION. Direct instructional expenses incurred for or relating to instructors, materials, or equipment used in the qualifying program, or for supplies, textbooks, or salaries, including compensation paid to employees while participating in an approved basic skills education program.
(4) EMPLOYEE. An individual resident of Alabama who is employed for at least 24 hours per week by the employer seeking the tax credit and who has been continuously employed for at least 16 weeks.
(5) EMPLOYER. An individual or corporate business, including, but not limited to, a subchapter “S” corporation, that is subject to the state income tax.
(6) EMPLOYER PROVIDED. An approved basic skills education program offered by the employer on the premises of the employer or on premises approved by the Alabama Department of Education.
(7) EMPLOYER SPONSORED. A contractual arrangement with a school, college, university, adult basic skills education program, or other approved provider that offers an approved basic skills education program that is paid for by the employer.
(Acts 1993, 1st Ex. Sess., No. 93-907, p. 204, §1.)
Beginning with tax year 1993, a tax credit of 20 percent of the actual costs of education shall be provided to an employer who provides or sponsors an approved basic skills education program pursuant to this article.
(Acts 1993, 1st Ex. Sess., No. 93-907, p. 204, §2.)
The tax credit available to an employer pursuant to this article shall be limited to the amount of the employer’s income tax liability for the taxable year as computed without regard to this article.
(Acts 1993, 1st Ex. Sess., No. 93-907, p. 204, §3.)
The Alabama Department of Education shall promulgate and adopt rules regarding the methods, procedures, and standards it deems necessary for approving employer provided or employer sponsored basic skills education programs. The Department of Education shall include in its rules and regulations a means to determine and set for each individual the maximum number of months that said individual may be eligible for the education program provided herein.
(Acts 1993, 1st Ex. Sess., No. 93-907, p. 204, §4.)
No tax credit shall be granted pursuant to this article to any employer of an employee participating in a basic skills education program if the employer receives or requires reimbursement or any form of remuneration for any cost of the education.
(Acts 1993, 1st Ex. Sess., No. 93-907, p. 204, §5.)
(a)(1) Each Alabama resident individual income taxpayer desiring to contribute to any of the programs listed in subsection (b) may designate an amount of his or her refund, rounded off in whole dollars, in an appropriate box on the state income tax return form, to be credited to the program.
(2) All future check-offs, duly enacted by the Legislature subsequent to April 17, 2006, shall be accorded an appropriate box on the state income tax return forms, subject to the terms and conditions prescribed herein, without the requirement that they be added by amendment to this section.
(b) Contributions received for the following authorized charitable and nonpolitical income tax check-off recipients, less costs of administration to the Department of Revenue not to exceed five percent, shall be distributed and appropriated as provided herein:
(1) Contributions to the Alabama Aging Program shall be deposited with the State Treasurer into the Alabama Senior Services Trust Fund for preserving, protecting, perpetuating, and enhancing the abilities of aging citizens to remain independent, under the auspices of the Department of Senior Services.
(2) Contributions to the Arts Development Fund shall be deposited into the General Fund of the State Treasury, to be appropriated to the Council on the Arts and Humanities to fund grants to tax exempt organizations or associations to encourage development of high quality and artistically significant arts activities or cultural facilities in local areas and shall be distributed in accordance with Article 3, commencing with Section 41-9-40, Chapter 9, Title 41.
(3) Contributions to Alabama Nongame Wildlife Program shall be deposited in the Alabama Nongame Wildlife Fund in the State Treasury to the credit of the Game and Fish Fund to be used exclusively for purposes of preserving, protecting, perpetuating, and enhancing nongame wildlife in this state. Nothing contained herein shall be construed to give any rights of condemnation to the Department of Conservation and Natural Resources.
(4) Contributions to the Children’s Trust Fund shall be deposited with the State Treasurer into the State Child Abuse and Neglect Prevention Board Operations Fund, as provided for under Section 26-16-30.
(5) Contributions to the Alabama Veterans’ Program shall be deposited in the State Treasury to the credit of the Department of Veterans’ Affairs to be used exclusively for purposes of providing nursing home and health care for aged and disabled veterans in this state.
(6) Contributions to the Alabama Indian Children’s Scholarship Fund shall be deposited with the State Treasurer for distribution to the Alabama Indian Affairs Commission for educational scholarships.
(7) Contributions to the Penny Trust Fund shall be deposited with the State Treasurer for distribution according to Section 41-15A-2.
(8) Contributions to the Foster Care Trust Fund, established under Sections 38-10-50 and 38-10-51, shall be deposited with the State Treasurer to be continuously appropriated to the Department of Human Resources to assist all children in temporary or permanent custody in foster care.
(9) Contributions designated for mental health on the Alabama state resident individual income tax return shall be deposited with the State Treasurer and shall be distributed equally to the Alliance for the Mentally Ill of Alabama and to the Mental Health Consumers of Alabama.
(10) Contributions to the Alabama Breast and Cervical Cancer Research Program shall be deposited with the State Treasurer and distributed to the University of Alabama at Birmingham, which shall implement and administer the program.
(11) Contributions to the Neighbors Helping Neighbors Fund shall be deposited with the State Treasurer for distribution by the Department of Economic and Community Affairs for weatherization assistance as provided for under Article 6, commencing with Section 41-23-100, Chapter 23, Title 41.
(12) Contributions to the Alabama 4-H Club Foundation, Incorporated, shall be deposited with the State Treasurer and distributed to the Alabama 4-H Club Foundation, Incorporated.
(13) Contributions to the Alabama Organ Center Donor Awareness Fund shall be deposited with the State Treasurer for distribution to the fund.
(14) Contributions to the Alabama National Guard Foundation, Incorporated, shall be deposited with the State Treasurer for distribution to the fund.
(15) Contributions to the Cancer Research Institute shall be deposited with the State Treasurer for distribution to the institute.
(16) Contributions to the Alabama State Historic Preservation Fund shall be deposited with the State Treasurer for distribution to the fund, as provided for in Section 41-9-255.
(17) Contributions to the Archives Services Fund shall be deposited with the State Treasurer for distribution to the fund as provided for in Section 41-6-76.
(18) Contributions to the Alabama Firefighters Annuity and Benefit Fund shall be deposited with the State Treasurer for distribution to the fund.
(19) Contributions to VOCAL’s Victims of Violence Assistance shall be deposited with the State Treasurer for distribution to Victims of Crime and Leniency, Inc. (VOCAL).
(20) Contributions, beginning in the 2015 tax year, to the Children First Trust Fund shall be deposited with the State Treasurer for distribution to the trust fund.
(21) Contributions, beginning in the 2015 tax year, to the USS Alabama Battleship Commission.
(22) Contributions, beginning in the 2018 tax year, to the Alabama State Veterans Cemetery at Spanish Fort Foundation, Incorporated.
(23) Contributions, beginning in the 2024 tax year, to the State Parks Division of the Department of Conservation and Natural Resources shall be deposited with the State Treasurer for distribution to the department.
(24) Contributions, beginning in the 2024 tax year, to the Department of Mental Health shall be deposited with the State Treasurer for distribution to the department.
(25) Contributions, beginning in the 2024 tax year, to the Alabama Medicaid Agency shall be deposited with the State Treasurer for distribution to the agency.
(c) In the event that three years after adoption, a check-off authorized under subsection (b) or subdivision (2) of subsection (a) fails to achieve average annual gross contributions of seven thousand five hundred dollars ($7,500) for a subsequent three-year period, its name will be dropped from the state income tax return forms for the succeeding tax year and its original authorization shall be effectively repealed.
(Acts 1982, No. 82-385, p. 562, §1; Act 2006-503, p. 1145, §1; Act 2011-552, p. 1019, §1; Act 2011-620, p. 1426, §1; Act 2012-259, p. 499, §1; Act 2015-443, p. 1433, §1; Act 2015-447, p. 1440, §1; Act 2015-454, p. 1484, §7; Act 2018-405, §1; Act 2023-327, §1.)
[Repealed]
Repealed by Act 2006-503, p. 1145, §2, effective for tax years beginning after December 31, 2005.
(Acts 1982, No. 82-385, p. 562, §2.)
[Repealed]
Repealed by Act 2006-503, p. 1145, §2, effective for tax years beginning after December 31, 2005.
(Acts 1982, No. 82-424, p. 666, §1.)
[Repealed]
Repealed by Act 2006-503, p. 1145, §2, effective for tax years beginning after December 31, 2005.
(Acts 1982, No. 82-424, p. 666, §2.)
[Repealed]
Repealed by Act 2006-503, p. 1145, §2, effective for tax years beginning after December 31, 2005.
(Acts 1982, No. 82-424, p. 666, §3.)
[Repealed]
Repealed by Act 2006-503, p. 1145, §2, effective for tax years beginning after December 31, 2005.
(Acts 1982, No. 82-424, p. 666, §4.)
(a) For purposes of this article, the term “political party” shall be defined as provided in Section 17-16-2.
(b) Every individual who files a state income tax return may designate a contribution to a political party as provided under this section. Amounts of contributions for an individual return shall be $1 and, for a joint return, $2. Such contributions shall increase the tax liability of the taxpayer by the amount contributed.
(c) The designation for a political party shall appear on the face of the individual income tax return. The contributions so designated by the taxpayer and collected by the State of Alabama, Department of Revenue, shall be reserved for remittance to the appropriate officials of the state governing authority of the designated political party. The state Revenue Commission shall annually certify by December 1, all such designated amounts to be paid by the State Comptroller, and the Comptroller shall remit by the following January 1, such funds to the appropriate officials of the state governing authority of the designated political party.
(Acts 1983, No. 83-781, p. 1429.)
[Repealed]
Repealed by Act 2006-503, p. 1145, §2, effective for tax years beginning after December 31, 2005.
(Acts 1984, No. 84-247, p. 389; Act 2000-717, p. 1539, §1.)
[Repealed]
Repealed by Act 2006-503, p. 1145, §2, effective for tax years beginning after December 31, 2005.
(Acts 1988, 1st Ex. Sess., No. 88-853, p. 325.)
[Repealed]
Repealed by Act 2006-503, p. 1145, §2, effective for tax years beginning after December 31, 2005.
(Acts 1990, No. 90-387 p. 529.)
[Repealed]
Repealed by Act 2006-503, p. 1145, §2, effective for tax years beginning after December 31, 2005.
(Acts 1992, No. 92-605, §1.)
[Repealed]
Repealed by Act 2006-503, p. 1145, §2, effective for tax years beginning after December 31, 2005.
(Acts 1997, No. 97-631, p. 1145, §1.)
[Repealed]
Repealed by Act 2006-503, p. 1145, §2, effective for tax years beginning after December 31, 2005.
(Act 2001-465, p. 619, §1.)
[Repealed]
Repealed by Act 2006-503, p. 1145, §2, effective for tax years beginning after December 31, 2005.
(Act 2003-341, p. 850, §1.)
(a) Each Alabama state individual income tax return form for the 2009 tax year and each year thereafter shall contain a designation as follows:
“Alabama Military Support Foundation, Incorporated.
“Check ( ) if you wish to designate $1, $5, $10, or more of your state income tax refund.
“If joint return, check ( ) if spouse wishes to designate $1, $5, $10 or more.”
(b) Each individual taxpayer required to file a state income tax return desiring to contribute to the Alabama Military Support Foundation, Incorporated, may designate, by placing an “X” in the appropriate box on the state income tax form, that such contribution shall be credited to the foundation.
(c) The Department of Revenue shall determine annually the total amount designated pursuant to subsection (b) for the commission and shall deposit such amount, less costs of administration not to exceed 10 percent of revenue produced, to the Alabama Military Support Foundation, Incorporated.
(d) The commissioner of the department is authorized to prescribe and implement such forms, rules, and regulations as shall be necessary to carry out the intent of this section with the approval of the Alabama Military Support Foundation, Incorporated.
(Act 2009-731, p. 2183, §1.)
(a) Each Alabama state individual income tax return form for the 2010 tax year and each year thereafter shall contain a designation as follows:
“Alabama Firefighters Annuity and Benefit Fund.
“Check ( ) if you wish to designate $2 or more of your state income tax refund.
“If joint return, check ( ) if spouse wishes to designate $2 or more.”
(b) Each individual taxpayer required to file a state income tax return desiring to contribute to the Alabama Firefighters Annuity and Benefit Fund, may designate, by placing an “X” in the appropriate box on the state income tax form, that such contribution shall be credited to the foundation.
(c) The Department of Revenue shall determine annually the total amount designated pursuant to subsection (b) for the fund and shall deposit such amount, less costs of administration not to exceed three percent of revenue produced, to the fund.
(d) The commissioner of the department is authorized to prescribe and implement such forms, rules, and regulations as shall be necessary to carry out the intent of this section.
(Act 2011-312, p. 583, §2.)
(a) Each Alabama state individual income tax return form for the 2012 tax year and each year thereafter shall contain a designation which allows each individual taxpayer to designate a contribution to the Alabama Veterinary Medical Foundation for the Spay-Neuter Program.
(b) The Department of Revenue shall determine annually the total amount designated pursuant to subsection (a) for the foundation and shall deposit such amount, less costs of administration not to exceed five percent of revenue produced, to the Alabama Veterinary Medical Foundation.
(c) The Commissioner of the Department of Revenue is hereby authorized to prescribe and implement such forms, rules, and regulations as shall be necessary to implement and administer the provisions of this section.
(Act 2012-305, p. 667, §1.)
(a) A minimum annual contribution of two dollars ($2) may be voluntarily contributed to the Alabama Association of Rescue Squads on the income tax return of the contributor by indicating on a check-off box which shall be provided. The check-off shall be described as the “Alabama Association of Rescue Squads.” If a taxpayer voluntarily indicates, two dollars ($2) or more may be deducted from his or her income tax refund and shall be paid to the appropriate person or authority administering the association.
(b) The net amount of all contributions shall be remitted by the person or authority collecting the amount to the executive director of the association on the tenth day of each month next succeeding that in which the contribution is paid.
(c) Each Alabama state individual income tax return form for the 2012 tax year and each year thereafter shall contain a designation as follows:
“Alabama Association of Rescue Squads.
“Check ( ) if you wish to designate $2 or more of your state income tax refund.
“If joint return, check ( ) if spouse wishes to designate $2 or more.”
(d) Each individual taxpayer required to file a state income tax return desiring to contribute to the Alabama Association of Rescue Squads may designate, by placing an “X” in the appropriate box on the state income tax form, that such contribution shall be credited to the association.
(e) The Department of Revenue shall determine annually the total amount designated pursuant to subsection (d) for the association and shall deposit the amount, less costs of administration not to exceed three percent of revenue produced, to the fund.
(f) The commissioner of the department is authorized to prescribe and implement such forms, rules, and regulations as shall be necessary to carry out the intent of this section.
(Act 2012-543, p. 1612, §§1, 2.)
(a) An Alabama S corporation shall not be subject to the tax imposed by Section 40-18-31.
(b) For purposes of this chapter, an “Alabama S corporation” is a corporation:
(1) With respect to which an election under 26 U.S.C. §1362 is in effect; or
(2)a. With respect to which there is in effect an election under 26 U.S.C. §1361(b)(3) to treat such corporation as a qualified subchapter S subsidiary; and
b. All the stock of which is owned by an S corporation qualifying as an “Alabama S corporation” under subdivision (b)(1).
No corporation shall be an Alabama S corporation for any portion of a taxable year of the corporation during which an election under 26 U.S.C. §1362 or §1361(b)(3), whichever is applicable, is not in effect for federal income tax purposes. No corporation shall be an Alabama S corporation if it is a financial institution, as defined in Section 40-16-1.
(c) For purposes of this chapter, an “Alabama C corporation” means any corporation other than an Alabama S corporation.
(d) With respect to a qualified subchapter S subsidiary for which there is in effect an election under 26 U.S.C. § 1361 (b)(3), all of its assets, liabilities, and items of income, deductions, and credit shall be treated as assets, liabilities, and such items, as the case may be, of the Alabama S corporation owning the stock of the qualified subchapter S subsidiary.
(Code 1975, §40-14-90; Acts 1984, 1st Ex. Sess., No. 84-756, p. 121, §1; Acts 1985, No. 85-515, §3; Acts 1989, No. 89-837, p. 1671, §1; Acts 1997, No. 97-625, p. 1048, §3; Act 99-314, p. 423, §1.)
(a) The taxable income of an Alabama S corporation shall be determined in the same manner as in the case of an individual except that the items determined in subdivision (1), subsection (a) of Section 40-18-162 shall be separately stated, and the following deductions shall not be allowed:
(1) Personal exemptions otherwise allowed by Section 40-18-19.
(2) Charitable contributions otherwise allowed by Section 40-18-15, subdivision (a)(10).
(3) The net operating loss deduction otherwise allowed by Section 40-18-15, subdivision (a)(16).
(4) Medical expenses otherwise allowed by Section 40-18-15, subdivision (a)(13).
(5) Alimony otherwise allowed by Section 40-18-15, subdivision (a)(18).
(6) The deduction for certain expenses of producing income and determining taxes otherwise allowed by Section 40-18-15, subdivision (a)(14).
(7) Contributions to individual retirement accounts otherwise allowed by Section 40-18-15, subdivision (a)(11).
(8) Depletion on oil or gas wells otherwise allowed by Section 40-18-15, subdivision (a)(9).
(b) Amounts of income, loss, deduction, or credit for purposes of this article shall be determined under the allocation and apportionment rules of Chapter 27.
(c) Any election affecting the computation of items derived from an Alabama S corporation shall be made by the corporation.
(d)(1) If an Alabama S corporation was an Alabama C corporation for the last taxable year before the first taxable year during which it became an Alabama S corporation, and the corporation inventoried goods under the LIFO method for the last taxable year, the LIFO recapture amount shall be included in the gross income of the corporation for the last taxable year and appropriate adjustments to the basis of the inventory shall be made to take into account the amount included in gross income under this subdivision.
(2) Any increase in the tax imposed by this chapter by reason of this subsection shall be payable in four equal installments. The first installment shall be paid not later than the due date, (without extension), for filing the return for the last taxable year before the corporation became an Alabama S corporation and the three succeeding installments shall be paid not later than the due date, (without extension), for filing the returns for the succeeding three years. For purposes of computing interest on underpayments, the last three installments shall not be considered underpayments until after the payment dates specified in the previous sentence.
(3) For purposes of this subsection, the term “LIFO recapture amount” means the excess, (if any), of
a. the inventory amount of the inventory assets under the first-in, first-out method over
b. the inventory amount of such assets under the LIFO method. For purposes of the preceding sentence, inventory amounts shall be determined as of the close of the last taxable year before the corporation became an Alabama S corporation.
(4) For purposes of this subsection:
a. The term “LIFO method” means the method authorized by 26 U.S.C. § 472.
b. The term “inventory assets” means stock in trade of the corporation or other property of a kind which would properly be included in the inventory of the corporation if on hand at the close of the taxable year.
c. The inventory amount of assets under the first-in, first-out method shall be determined - as follows:
By using the retail method of valuing inventories if the corporation uses that method in connection with the LIFO method, or
If subparagraph 1 does not apply, then by using cost or market, whichever is lower.
(Code 1975, §40-14-91; Acts 1984, 1st Ex. Sess., No. 84-756, p. 121, §2; Acts 1989, No. 89-837, p. 1671, §2; Acts 1997, No. 97-625, p. 1048, §3.)
(a) In determining the tax of a shareholder for the shareholder’s taxable year in which the taxable year of the Alabama S corporation ends, or for the final taxable year of a shareholder who dies or of a trust or estate that terminates before the end of the corporation’s taxable year, there shall be taken into account the shareholder’s pro rata share of the corporation’s:
(1) Items of income, including tax-exempt income, loss, deduction, or credit the separate treatment of which could affect the liability for tax of any shareholder, including charitable contributions, and
(2) Nonseparately computed income or loss. The term “nonseparately computed income or loss” means gross income minus the deductions allowed to the corporation under this article, determined by excluding all items described in subdivision (1) of this subsection.
(b) The character of any item included in a shareholder’s pro rata share under subsection (a) of this section shall be determined as if the item were realized directly from the source from which realized by the corporation, or incurred in the same manner as incurred by the corporation.
(c) In any case where it is necessary to determine the gross income of a shareholder for purposes of this article, such gross income shall include the shareholder’s pro rata share of the gross income of the corporation.
(d) The following special rules for losses and deductions shall apply:
(1) The aggregate amount of losses and deductions taken into account by a shareholder under subsection (a) of this section for any taxable year shall not exceed the sum of:
a. The adjusted basis of the shareholder’s stock in the Alabama S corporation as determined with regard to subsections (a) and (b)(1) of Section 40-18-164 for the taxable year, and
b. The shareholder’s adjusted basis of any indebtedness of the Alabama S corporation to the shareholder as determined without regard to any adjustment under subsection (c)(2) of Section 40-18-164 for the taxable year.
(2) Any loss or deduction which is disallowed for any taxable year by reason of subdivision (1) of this subsection shall be treated as incurred by the corporation in the succeeding taxable year with respect to that shareholder.
(3) The carryover of disallowed losses and deductions to the post-termination transition period shall be determined as follows:
a. If for the last taxable year of a corporation for which it was an Alabama S corporation, a loss or deduction was disallowed by reason of subdivision (1) of this subsection, the loss or deduction shall be treated as incurred by the shareholder on the last day of any post-termination transition period.
b. The aggregate amount of losses and deductions taken into account by a shareholder under paragraph a of this subdivision shall not exceed the adjusted basis of the shareholder’s stock in the corporation as determined at the close of the last day of the post-termination transition period and without regard to this paragraph.
c. The shareholder’s basis in the stock of the corporation shall be reduced by the amount allowed as a deduction by reason of this subdivision.
(e) If any Alabama income tax is imposed under Section 40-18-174 for any taxable year on an Alabama S corporation, for purposes of subsection (a), the amount of each recognized built-in gain, within the meaning of Section 40-18-174, for the taxable year shall be reduced by its proportionate share of the tax.
(f) If any tax is imposed under Section 40-18-175 for any taxable year on an Alabama S corporation, for purposes of subsection (a), each item of passive investment income shall be reduced by an amount which bears the same ratio to the amount of such tax as the amount of the item bears to the total passive investment income for the taxable year.
(Code 1975, §40-14-92; Acts 1984, 1st Ex. Sess., No. 84-756, p. 121, §3; Acts 1989, No. 89-837, p. 1671, §3; Acts 1997, No. 97-625, p. 1048, §3.)
If an individual who is the spouse or lineal descendant or ancestor of one or more shareholders of an Alabama S corporation or who is a spouse, a lineal descendant or ancestor of a beneficiary of a trust which is a shareholder of an Alabama S corporation renders services for the corporation or furnishes capital to the corporation without receiving reasonable compensation therefor, the Department of Revenue shall make such adjustments in the items taken into account by such individual and such shareholders as may be necessary in order to reflect the value of such services or capital.
(Code 1975, §40-14-93; Acts 1984, 1st Ex. Sess., No. 84-756, p. 121, §4.)
(a) The basis of each shareholder’s stock in an Alabama S corporation shall be increased for any period by the sum of the following items determined with respect to that shareholder for the period:
(1) The items of income described in subdivision (1) of subsection (a) of Section 40-18-162.
(2) Any nonseparately computed income determined under subdivision (2) of subsection (a) of Section 40-18-162.
(3) The excess of the deductions for depletion over the basis of the property subject to depletion.
(b) The basis of each shareholder’s stock in an Alabama S corporation shall be decreased for any period, but not below zero, by the sum of the following items determined with respect to the shareholder for the period:
(1) Distributions by the corporation which were not includable in the income of the shareholder by reason of Section 40-18-165.
(2) The items of loss and deduction described in subdivision (1) of subsection (a) of Section 40-18-162.
(3) Any nonseparately computed loss determined under subdivision (2) of subsection (a) of Section 40-18-162.
(4) Any expense of the corporation not deductible in computing its taxable income and not properly chargeable to capital account.
(5) The amount of the shareholder’s deduction for depletion for any oil and gas property held by the S corporation to the extent such deduction does not exceed the proportionate share of the adjusted basis of such property allocated to the shareholder.
(c) The following special rules shall apply:
(1) The increases under subsection (a) and the decreases under subsection (b) shall include the entire amount, without allocation and apportionment under Chapter 27, of the shareholder’s pro rata share of such increases and decreases during the taxable year.
(2)a. If for any taxable year the amounts specified in subdivisions (2), (3), (4), and (5) of subsection (b) of this section exceed the amount which reduces the shareholder’s basis to zero, the excess shall be applied to reduce, but not below zero, the shareholder’s basis in any indebtedness of the Alabama S corporation to the shareholder.
b. If for any taxable year there is a reduction under paragraph (a) of this subdivision in the shareholder’s basis in the indebtedness of an Alabama S corporation to a shareholder, any net increase, after the application of subsections (a) and (b) of this section, for any subsequent taxable year shall be applied to restore such reduction in basis before any of it may be used to increase the shareholder’s basis in stock of the Alabama S corporation.
(3) This section and Sections 40-18-162 and 40-18-163 shall be applied before determining the amount of loss in any taxable year of the shareholder or the corporation in which the security or debt becomes worthless.
(4) An item of income which is required to be included in the gross income of a shareholder and shown on his or her return shall be taken into account under subdivisions (a)(1) and (a)(2) of this section only to the extent such amount is included in the shareholder’s gross income on his or her return, increased or decreased by any adjustment of such amount in a redetermination of the shareholder’s tax liability. If an item of income is subject to allocation and apportionment, the basis increases provided by subdivisions (a)(1), (a)(2), and (c)(1) shall be allowed only in the proportion that the amount of such income reported on the taxpayer’s return bears to the amount of income properly allocated and apportioned to Alabama and required to be included in gross income and reported by the shareholder, increased or decreased by any adjustment of such amount in a redetermination of the shareholder’s tax liability.
(5) Adjustments in case of inherited stock.
a. If any person acquires stock in an Alabama S corporation by reason of the death of a decedent or by bequest, devise, or inheritance, then the treatment of any item of income of the S corporation shall be determined in accordance with 26 U.S.C. § 691, which shall be applied as if the decedent had held directly his or her pro rata share of such item.
b. The basis determined under Section 40-18-6 of any stock in an S corporation shall be reduced by the portion of the value of the stock that is attributable to items constituting income in respect of the decedent.
(Code 1975, §40-14-94; Acts 1984, 1st Ex. Sess., No. 84-756, p. 121, §5; Acts 1989, No. 89-837, p. 1671, §4; Acts 1997, No. 97-625, p. 1048, §3.)
(a) A distribution of property made by an Alabama S corporation with respect to its stock to which, but for this article, Section 40-18-36 would apply shall be treated in the manner provided in subsection (b) or (c) of this section, whichever applies.
(b) In the case of a distribution described in subsection (a) of this section by an Alabama S corporation which has no accumulated earnings and profits:
(1) The distribution shall not be included in gross income to the extent that it does not exceed the adjusted basis of the stock.
(2) If the amount of the distribution exceeds the adjusted basis of the stock, such excess shall be treated as gain from the sale or exchange of property.
(c) In the case of a distribution described in subsection (a) of this section by an Alabama S corporation which has accumulated earnings and profits:
(1) That portion of the distribution which does not exceed the accumulated adjustments account shall be treated in the manner provided by subsection (b) of this section.
(2) That portion of the distribution which remains after the application of subdivision (c)(1) of this section shall be treated as a dividend to the extent it does not exceed the accumulated earnings and profits of the Alabama S corporation.
(3) Any portion of the distribution remaining after the application of subdivision (2) of this subsection (c) of this section shall be treated in the manner provided by subsection (b) of this section. Except to the extent provided in regulations, if the distributions during the taxable year exceed the amount in the accumulated adjustments account at the close of the taxable year, for purposes of this subsection, the balance of such account shall be allocated among such distributions in proportion to their respective sizes.
(d) Subsections (b) and (c) of this section shall be applied by taking into account to the extent proper:
(1) The adjustments to the basis of the shareholder’s stock described in Section 40-18-164, and
(2) The adjustments to the accumulated adjustments account which are required by Section 40-18-166.
(e) In the case of any distribution made during any taxable year, the adjusted basis of the stock shall be determined with regard to the adjustments provided in subsection (a) of Section 40-18-164 for the taxable year.
(Code 1975, §40-14-95; Acts 1984, 1st Ex. Sess., No. 84-756, p. 121, §6; Acts 1989, No. 89-837, p. 1671, §5; Acts 1997, No. 97-625, p. 1048, §3.)
(a)(1) Except as provided in subsection (b), for purposes of this article, the term “accumulated adjustments account” means an account of the Alabama S corporation which is adjusted for the S period in a manner similar to the adjustments under Section 40-18-164 hereof including subdivision (4) of subsection (c), except that no adjustment shall be made for income and related expenses which are exempt from tax under this chapter and the phrase “but not below zero” shall be disregarded in Section 40-18-164(c)(2)a.
(2) In the case of any redemption which is treated as an exchange under Section 40-18-36, the adjustment in the accumulated adjustments account shall be an amount which bears the same ratio to the balance in the account as the number of shares redeemed in such redemption bears to the number of shares of stock in the corporation immediately before the redemption.
(3) In applying this section to distributions during any taxable year, the amount of the accumulated adjustments account as of the close of the taxable year shall be determined without regard to any net negative adjustment for the taxable year. The term “net negative adjustment” means, with respect to any taxable year, the excess, if any, of the reductions in the account for the taxable year, other than for distributions, over the increases in such account for the taxable year.
(4) For purposes of this article, the term “S period” means the most recent continuous period during which the corporation has been an Alabama S corporation. The period shall not include any taxable year beginning before January 1, 1985.
(b) An Alabama S corporation may, with the consent of all of its affected shareholders, elect to have subdivision (1) of subsection (c) of Section 40-18-165 not apply to all distributions made during the taxable year for which the election is made. For purposes of this subsection, the term “affected shareholder” means any shareholder to whom a distribution is made by the Alabama S corporation during the taxable year.
(Code 1975, §40-14-96; Acts 1984, 1st Ex. Sess., No. 84-756, p. 121, §7; Acts 1989, No. 89-837, p. 1671, §6; Acts 1997, No. 97-625, p. 1048, §3.)
Except to the extent inconsistent with this article, the rules of Article 1 of this chapter shall apply to an Alabama S corporation and its shareholders.
(Code 1975, §40-14-97; Acts 1984, 1st Ex. Sess., No. 84-756, p. 121, §8; Acts 1997, No. 97-625, p. 1048, §3.)
No carryforward and no carryback arising for a taxable year for which a corporation is not an Alabama S corporation may be carried to a taxable year which such corporation is an Alabama S corporation. No carryforward and no carryback shall arise at the corporate level for a taxable year for which a corporation is an Alabama S corporation. Nothing in this section shall prevent treating a taxable year for which a corporation is an Alabama S corporation as a taxable year for purposes of determining the number of taxable years to which an item may be carried back or carried forward.
(Code 1975, §40-14-98; Acts 1984, 1st Ex. Sess., No. 84-756, p. 121, §9.)
(a) Except as provided in subsections (b) and (c) of this section, no adjustment shall be made to the earnings and profits of an Alabama S corporation.
(b) In the case of any transaction involving redemption, liquidation, reorganization or division of any Alabama S corporation, proper adjustment to any accumulated earnings and profits of the corporation shall be made.
(c) Subsection (a) of this section shall not apply with respect to that portion of a distribution which is treated as a dividend under subdivision (2) of subsection (c) of Section 40-18-165.
(d) Any distribution of money by a corporation with respect to its stock during a post-termination transition period shall be applied against and reduce the adjusted basis of the stock, to the extent that the amount of the distribution does not exceed the accumulated adjustments account. An Alabama S corporation may elect to have the first sentence of this subsection not apply to all distributions made during a post-termination transition period described in Section 40-18-172 but only if all the shareholders of the Alabama S corporation to whom distributions are made by the Alabama S corporation during such post-termination transition period consent to such election.
(Code 1975, §40-14-99; Acts 1984, 1st Ex. Sess., No. 84-756, p. 121, §10; Acts 1989, No. 89-837, p. 1671, §7.)
For purposes of applying the provisions of this chapter which relate to employee fringe benefits, the Alabama S corporation shall be treated as a partnership, and any two-percent shareholder of the Alabama S corporation shall be treated as a partner of such partnership. The term “two-percent shareholder” means any person who owns, or is considered as owning in accordance with 26 U.S.C. §318, as in effect from time to time, on any day during the taxable year of the Alabama S corporation more than two percent of the outstanding stock of such corporation or stock possessing more than two percent of the total combined voting power of all stock of such corporation.
(Code 1975, §40-14-100; Acts 1984, 1st Ex. Sess., No. 84-756, p. 121, §11; Acts 1989, No. 89-837, p. 1671, §8.)
(a) For purposes of this article, except as provided in subsection (b), each shareholder’s pro rata share of any item for any taxable year shall be the sum of the amounts determined with respect to the shareholder by assigning an equal portion of the item to each day of the taxable year, and then by dividing that portion pro rata among the shares outstanding on the day.
(b) Under regulations prescribed by the Department of Revenue, if any shareholder terminates his or her interest in the corporation during the taxable year and all affected shareholders and the corporation agree to the application of this subsection, subsection (a) of this section shall be applied to the affected shareholders as if the taxable year consisted of two taxable years the first of which ends on the date of the termination.
(c) For purposes of subsection (b), the term “affected shareholders” means the shareholder whose interest is terminated and all shareholders to whom such shareholder has transferred shares during the taxable year. If such shareholder has transferred shares to the corporation, the term “affected shareholders” shall include all persons who are shareholders during the taxable year.
(Code 1975, §40-14-101; Acts 1984, 1st Ex. Sess., No. 84-756, p. 121, §12; Acts 1997, No. 97-625, p. 1048, §3.)
(a) For purposes of this article, the term “post-termination transition period” means:
(1) The period beginning on the day after the last day of the corporation’s last taxable year as an Alabama S corporation and ending on the later of:
a. The day which is one year after the last day.
b. The due date for filing the return for the last year as an Alabama S corporation, including extensions.
(2) The 120-day period beginning on the date of a determination pursuant to an audit of the taxpayer which follows the termination of the corporation’s election to be treated as a federal S corporation and which adjusts a subchapter S item of income, loss, or deduction of the corporation arising during the S period.
(3) The 120-day period beginning on the date of a determination that the corporation’s election under 26 U.S.C. § 1362 had terminated for a previous taxable year.
(b) For purposes of subsection (a), the term “determination” means:
(1) A determination as defined in 26 U.S.C. § 1313(a); or
(2) An agreement between the corporation and the U.S. Secretary of the Treasury that the corporation failed to qualify as an S corporation.
(Code 1975, §40-14-102; Acts 1984, 1st Ex. Sess., No. 84-756, p. 121, §13; Acts 1997, No. 97-625, p. 1048, §3.)
Due consideration shall be given in the interpretation of this article to applicable sections of the U.S. Internal Revenue Code in effect from time to time, its rulings and regulations provided such Code, rulings, and regulations are not in direct conflict with any portion of this article.
(Code 1975, §40-14-103; Acts 1984, 1st Ex. Sess., No. 84-756, p. 121, §14.)
(a) If for any taxable year beginning in the recognition period an Alabama S corporation has a net recognized built-in gain, there is hereby imposed a tax (computed under subsection (b)) on the income of such corporation for such taxable year.
(b)(1) The amount of the tax imposed by subsection (a) shall be computed by multiplying five percent by the net recognized built-in gain of the Alabama S corporation for the taxable year.
(2) Notwithstanding Section 40-18-168, any net operating loss carryforward which would be deductible except for Section 40-18-168 and which arose in a taxable year for which the corporation was not an Alabama S corporation, shall be allowed as a deduction against the net recognized built-in gain of the Alabama S corporation for the taxable year. For purposes of determining the amount of any such loss which may be carried to subsequent taxable years, the net recognized built-in gain shall be treated as taxable income.
(c) The following limitations shall apply:
(1) Subsection (a) shall not apply to any corporation that has had in effect an election to be treated as an S corporation under Subchapter S of the U.S. Internal Revenue Code, Title 26, U.S.C., as in effect from time to time or as recodified, for each of its taxable years. Except as provided in regulations, an Alabama S corporation and any predecessor corporation shall be treated as one corporation for purposes of the preceding sentence.
(2) The amount of the net recognized built-in gain taken into account under this section for any taxable year shall not exceed the excess (if any) of the net unrealized built-in gain over the net recognized built-in gain for prior taxable years beginning in the recognition period.
(d) For purposes of this section:
(1) The term “net unrealized built-in gain” means the amount (if any) by which the fair market value of the assets of the corporation exceeds the aggregate adjusted basis of such assets as of the beginning of its first taxable year for which it is treated as an Alabama S corporation.
(2)a. The term “net recognized built-in gain” means, with respect to any taxable year in the recognition period, the lesser of (i) the amount which would be taxable income of the Alabama S corporation for such taxable year if (except as provided in subsection (b)(2)) only recognized built-in gains and recognized built-in losses were taken into account, or (ii) such corporation’s taxable income for such taxable year (determined as provided in subsection (b)(1) of Section 40-18-175).
b. If, for any taxable year, the amount referred to in clause (i) of paragraph a. exceeds the amount referred to in clause (ii) of paragraph a., such excess shall be treated as a recognized built-in gain in the succeeding taxable year.
(3) The term “recognized built-in gain” means any gain recognized during the recognition period on the disposition of any asset except to the extent that the Alabama S corporation established that
a. Such asset was not held by the Alabama S corporation as of the beginning of the first taxable year for which it was an Alabama S corporation, or
b. Such gain exceeds the excess (if any) of the fair market value of such asset as of the beginning of such first taxable year, over the adjusted basis of the asset as of such time.
(4) The term “recognized built-in loss” means any loss recognized during the recognition period on the disposition of any asset to the extent that the Alabama S corporation establishes that
a. Such asset was held by the Alabama S corporation as of the beginning of the first taxable year referred to in subdivision (3), and
b. Such loss does not exceed the excess of the adjusted basis of such asset as of the beginning of such first taxable year, over the fair market value of such asset as of such time.
(5)a. Any item of income which is properly taken into account during the recognition period but which is attributable to periods before the first taxable year for which the corporation was an Alabama S corporation shall be treated as a recognized built-in gain for the taxable year in which it is properly taken into account.
b. Any amount which is allowable as a deduction during the recognition period but which is attributable to periods before the first taxable year referred to in paragraph a. shall be treated as a recognized built-in loss for the taxable year for which it is allowable as a deduction.
c. The amount of the net unrealized built-in gain shall be properly adjusted for amounts treated as recognized built-in gains or losses under this subdivision.
(6) If the adjusted basis of any asset is determined (in whole or in part) by reference to the adjusted basis of any other asset held by the Alabama S corporation as of the beginning of the first taxable year referred to in subdivision (3)
a. Such asset shall be treated as held by the Alabama S corporation as of the beginning of such first taxable year, and
b. Any determination under subdivision (3)b or (4)b with respect to such asset shall be made by reference to the fair market value and adjusted basis of such other asset as of the beginning of such first taxable year.
(7) The term “recognition period” means the ten-year period beginning with the first day of the first taxable year for which the corporation was an Alabama S corporation.
(8)a. Except to the extent provided in regulations, if an Alabama S corporation acquires any asset, and the Alabama S corporation’s basis in such asset is determined (in whole or in part) by reference to the basis of such asset (or any other property) in the hands of an Alabama C corporation, then a tax is hereby imposed on any net recognized built-in gain attributable to any such assets for any taxable year beginning in the recognition period. The amount of such tax shall be determined under the rules of this section as modified by paragraph b.
b. For purposes of this subdivision, the modifications of this paragraph are as follows: (i) The preceding subdivisions of this subsection shall be applied by taking into account the day on which the assets were acquired by the Alabama S corporation in lieu of the beginning of the first taxable year for which the corporation was an Alabama S corporation, and (ii) subdivision (1) of subsection (c) shall not apply.
(9) Any reference in this section to the first taxable year for which the corporation was an Alabama S corporation shall be treated as a reference to the first taxable year for which the corporation most recently became an Alabama S corporation.
(e) The Department of Revenue shall prescribe such regulations as may be necessary to carry out the purposes of this section including regulations providing for the appropriate treatment of successor corporations.
(Acts 1989, No. 89-837, p. 1671, §9.)
(a) If for the taxable year an Alabama S corporation has accumulated earnings and profits at the close of the taxable year derived from years during which the corporation was an Alabama C corporation, and gross receipts more than 25 percent of which are passive investment income, then there is imposed a tax on the income of the corporation for the taxable year. The tax shall be computed by multiplying the excess net passive income by five percent.
(b) (1) For purposes of this section:
a. Except as provided in paragraph b below, the term “excess net passive income” means an amount which bears the same ratio to the net passive income for the taxable year as (i) the amount by which the passive investment income for the taxable year exceeds 25 percent of the gross receipts for the taxable year, bears to (ii) the passive investment income for the taxable year.
b. The amount of the excess net passive income for any taxable year shall not exceed the corporation’s taxable income for the taxable year as determined under Section 40-18-161 without regard to the deduction under subdivisions (a)(14) and (a)(15) of Section 40-18-35 and under Section 40-18-35.1.
(2) The term “net passive income” means passive investment income, reduced by the deductions allowable under this chapter which are directly connected with the production of the income, other than deductions allowable by subdivisions (a)(14) and (a)(15) of Section 40-18-35 and by Section 40-18-35.1.
(3) The terms “passive investment income” and “gross receipts” shall have the same respective meanings as when used in 26 U.S.C. § 1362(d)(3).
(4) Notwithstanding subdivision (3), the amount of passive investment income shall be determined by not taking into account any recognized built-in gain or loss of the Alabama S corporation for any taxable year in the recognition period. Terms used in the preceding sentence shall have the same respective meanings as when used in Section 40-18-174.
(c) If the Alabama S corporation establishes to the satisfaction of the Department of Revenue that it determined in good faith that it had no earnings and profits at the close of a taxable year derived from years during which it was an Alabama C corporation, and during a reasonable period of time after it was determined that it did have such earnings and profits, the earnings and profits were distributed, the Department of Revenue may waive the tax imposed by subsection (a) for the taxable year.
(Acts 1989, No. 89-837, p. 1671, §10; Acts 1997, No. 97-625, p. 1048, §3.)
(a) The Department of Revenue shall permit an Alabama S corporation to file composite returns and to make composite payments on behalf of some or all of its nonresident shareholders if there are one or more nonresident shareholders during any part of the taxable year. The Department of Revenue may permit composite returns and payments to be made by an Alabama S corporation on behalf of its resident shareholders.
(b) For purposes of this section, a “composite return” means an informational return similar in form to U.S. Treasury Department Schedule K-1 containing information concerning one or more Alabama S corporation shareholder’s respective shares of income, deductions and losses passed through to them by virtue of their status as shareholders of an Alabama S corporation, any credit to which the shareholder is entitled to claim by virtue of the Alabama S corporation’s payment of tax on his or her behalf pursuant to subsection (e), and containing other information as the Department of Revenue shall prescribe. For purposes of this section, a “composite payment” means a remittance of tax by the Alabama S corporation on behalf of the shareholder or shareholders to which the accompanying composite return relates, applying the highest marginal Alabama income tax rate applicable to individuals for the period in question.
(c) An Alabama S corporation shall file with the Department of Revenue, in the form prescribed by the Department of Revenue, the agreement of each nonresident shareholder of the corporation (1) to file a return and to make timely payment of all taxes imposed by this chapter on the shareholder with respect to the income of the Alabama S corporation, and (2) to be subject to personal jurisdiction in this state for purposes of the collection of unpaid income tax, together with related interest and penalties, from the nonresident shareholder. If the Alabama S corporation fails timely to file the agreements required by the preceding sentence on behalf of each of its nonresident shareholders, then the corporation shall, at the times set forth in subsection (d) for the filing of the agreements, pay to this state on behalf of each nonresident shareholder in respect of whom an agreement has not been timely filed an amount equal to five percent multiplied by the amount of the shareholder’s pro rata share of the income allocated and apportioned to Alabama, as reflected on the corporation’s return for the period in question. The payment made by the Alabama S corporation on behalf of a nonresident shareholder shall be considered a loan from the corporation to the shareholder, payable on demand, bearing interest from the date of the loan to the date of its payment, at the minimum “applicable federal rate” with respect to demand instruments, as provided under 26 U.S.C. § 7872.
(d) The agreements required to be filed pursuant to subsection (c) shall be filed at the following times:
(1) At the time the annual return is required to be filed for the first taxable year for which the Alabama S corporation becomes subject to this article, and
(2) At the time the annual return is required to be filed for any taxable year in which the Alabama S corporation had a nonresident shareholder on whose behalf the agreement has not previously been filed.
(e) Any amount paid by the Alabama S corporation to this state pursuant to subsection (a) or (c) shall be considered to be a payment by the shareholder on account of the income tax imposed on the shareholder for the year in question.
(Acts 1989, No. 89-837, p. 1671, §11; Acts 1997, No. 97-625, p. 1048, §3.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Acts 1995, No. 95-187, p. 250, §1; Acts 1997, No. 97-446, p. 765, §1; Act 2001-965, 3rd Sp. Sess., p. 854, §1; Act 2008-275, p. 402, §10; Act 2009-722, p. 2143, §2; Act 2012-54, p. 76, §1; Act 2012-210, p. 351, §2; Act 2012-436, p. 1215, §2.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Acts 1995, No. 95-187, p. 250, §2.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Acts 1995, No. 95-187, p. 250, §3.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Acts 1995, No. 95-187, p. 250, §4; Acts 1997, No. 97-446, p. 765, §1; Act 2001-965, 3rd Sp. Sess., p. 854, §1; Act 2009-722, p. 2143, §2; Act 2012-210, p. 351, §2; Act 2012-436, p. 1215, §2.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Act 2012-436, p. 1215, §3.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Acts 1995, No. 95-187, p. 250, §5; Act 2003-375, p. 1062, §1; Act 2008-275, p. 402, §10; Act 2009-722, p. 2143, §2; Act 2012-385, p. 1025, §1.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Acts 1995, No. 95-187, p. 250, §6.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Act 2012-54, p. 76, §§2-4.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Acts 1995, No. 95-187, p. 250, §7.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Acts 1995, No. 95-187, p. 250, §8; Acts 1997, No. 97-446, p. 765, §1.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Acts 1995, No. 95-187, p. 250, §9; Acts 1997, No. 97-446, p. 765, §1.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Acts 1995, No. 95-187, p. 250, §10.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Acts 1995, No. 95-187, p. 250, §11.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Acts 1995, No. 95-187, p. 250, §13.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Acts 1995, No. 95-187, p. 250, §15.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Act 2008-275, p. 402, §11; Act 2009-722, p. 2143, §2.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Acts 1995, No. 95-187, p. 250, §16.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Act 2011-648, p. 1651, §1.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Act 2011-648, p. 1651, §2.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Act 2011-648, p. 1651, §3.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Act 2011-648, p. 1651, §4.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Act 2011-648, p. 1651, §5.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Act 2011-648, p. 1651, §6.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Act 2011-648, p. 1651, §7.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Act 2011-648, p. 1651, §8.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Act 2011-648, p. 1651, §9.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Act 2011-648, p. 1651, §10.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Act 2011-648, p. 1651, §11.)
(a) For the tax years beginning on and after January 1, 1995, every person that is doing business in Alabama, as a producer of coal mined in Alabama, shall be allowed a coal production credit to be used as provided in subsection (b) in the amount of one dollar ($1) per ton of increased production of coal over the previous year’s production of coal as set out herein. The tax credit shall be based on coal produced after January 1, 1995, provided the coal was mined in Alabama as certified by the producer of the coal. The amount of the total of credit in any one year shall be based on the number of tons of Alabama coal produced by the person in the year which exceeds the number of tons of Alabama coal produced by the person in calendar year 1994. In the event a person did not produce Alabama coal during calendar year 1994, the person must establish a base year by producing Alabama coal for 12 consecutive months. Thereafter, the person shall be eligible for the tax credit as specified in this subsection over the base year production.
(b) The coal production credit described in subsection (a) shall be used as follows:
(1) To offset the income taxes found in this chapter, or as an estimated tax payment of income taxes;
(2) To offset the taxes imposed by Sections 40-21-82 and 40-21-102; or
(3) To offset some combination of the foregoing, so long as the same credit is used only once.
(c)(1) The coal production credit may be claimed as a credit against the taxes in subsection (b) that are actually paid. In any one year, if the credit exceeds the amount of taxes that are owed by the person, the person may carry the credit forward. No carryforward shall be allowed for more than five years. Rules similar to those used for Section 40-18-15.2 shall be applied.
(2) A person that is taxed as a flow-through entity may allocate the coal production credit among some or all of the owners in any manner specified, regardless of whether the allocation follows rules similar to 26 U.S.C. § 704(b) and the regulations thereunder. The owners may then use their allocated share of the coal production credit to offset any of the taxes listed in subsection (b), as provided in subdivision (1). This subdivision shall be liberally construed to apply to multiple levels of companies, to allow the coal production credit to be used by those persons bearing the tax burdens of the production of coal in Alabama, and such companies shall include, but shall in no way be limited to, flow-through entities, employee stock ownership plans, mutual funds, real estate investment trusts, and it shall also apply to offset the income tax liability of employee/owners of a flow-through entity owned by an employee stock ownership plan trust.
(3) Prior to claiming the coal production credit as provided in subdivision (c)(1), the person producing Alabama coal shall submit to the Department of Revenue a certification as to the amount of increased production of coal for the calendar year over the previous year’s production of coal. Following such examination as it deems necessary, the Department of Revenue shall allow the coal production credit.
(d) The coal production tax credit shall be subject to the reporting requirements of Section 40-1-50.
(Acts 1995, No. 95-239, p. 403, §1; Act 2023-546, §1.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
The Department of Revenue shall promulgate and issue rules and regulations to implement and administer this article.
(Acts 1995, No. 95-239, p. 403, §2.)
(a) The Coal Production Tax Credit, Article 8, commencing with Section 40-18-220, Chapter 18, of Title 40, is repealed effective December 31, 2028, unless extended by an act of the Legislature prior to that date for no more than five additional years.
(b) The repealing of the incentives in subsection (a) shall only affect the availability of the tax credits after December 31, 2028, and shall not cause a reduction or suspension of any credits awarded on or prior to December 31, 2028.
(Act 2023-546, §§4, 11.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Act 2001-503, p. 886, §1.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Act 2001-503, p. 886, §2.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Act 2001-503, p. 886, §3.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Act 2001-503, p. 886, §4.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Act 2001-503, p. 886, §5.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Act 2001-503, p. 886, §6.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Act 2001-503, p. 886, §7.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Act 2001-503, p. 886, §8.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Act 2001-503, p. 886, §9.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Act 2001-503, p. 886, §10.)
[Repealed]
REPEALED IN THE 2015 REGULAR SESSION BY ACT 2015-27 EFFECTIVE JULY 2, 2015.
(Act 2001-503, p. 886, §11.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
This article shall be known as the Reemployment Act of 2010.
(Act 2010-557, p. 1132, §1.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
(a) An Alabama income tax deduction is established for employers that create new jobs for unemployed persons. The deduction shall equal 50 percent of the gross wages paid to each person hired by an employer who, at the time of such employment, was drawing unemployment compensation or whose unemployment benefits had expired. The unemployment status of the employee at the time of the employment shall be certified by the local employment agency. The deduction may be claimed in only one tax year and may not be claimed until the employee has been continuously employed by the employer for 12 months following the hire date. The deduction shall be allowed against the tax imposed by this chapter. The deduction is not refundable or transferable. The deduction shall be available, on a pro rata basis, to the owners of qualified employers that are entities taxed under subchapters S or K of the Internal Revenue Code.
(b) The deduction allowed in subsection (a) shall be further limited as follows:
(1) A 50 percent deduction would be granted to wage rates of fourteen dollars ($14) per hour and above.
(2) A 40 percent deduction would be granted for wage rates between twelve dollars ($12) and fourteen dollars ($14) per hour.
(3) A 35 percent deduction would be granted for wage rates between ten dollars ($10) and twelve dollars ($12) per hour.
(4) No deduction would be granted for jobs paying less than ten dollars ($10) per hour.
(5) No deductions would be granted for less than full-time jobs (37.5 hours).
(Act 2010-557, p. 1132, §2.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
The Department of Revenue shall have the authority to adopt such rules as necessary to carry out this article.
(Act 2010-557, p. 1132, §3.)
(a) The Reemployment Act of 2010, Article 10, commencing with Section 40-18-270, Chapter 18, of Title 40, is repealed effective December 31, 2028, unless extended by an act of the Legislature prior to that date for no more than five additional years.
(b) The repealing of the incentives in subsection (a) shall only affect the availability of the tax credits after December 31, 2028, and shall not cause a reduction or suspension of any credits awarded on or prior to December 31, 2028.
(Act 2023-546, §§ 5, 11.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
This article may be cited as the Full Employment Act of 2011.
(Act 2011-551, p. 1017, §1.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
For purposes of this article, a small business is defined as a business that employs 50 or fewer employees on the effective date of this act.
(Act 2011-551, p. 1017, §2.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
The Legislature finds and determines, in accordance with its goal, shared by Governor Robert Bentley, of achieving statistical full employment for Alabama’s citizens, that the Legislature intends to foster an optimal environment for job growth throughout the state.
(Act 2011-551, p. 1017, §3.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
(a) An Alabama income and financial institution excise tax credit is hereby established for small businesses that create new jobs paying more than ten dollars ($10) per hour. The credit shall equal one thousand dollars ($1,000) and shall be available in the tax year during which the employee has completed 12 months of consecutive employment.
(b) The employer must have a net increase in the total number of full time employees in Alabama on the last date of each tax year during which employees are hired for which the employer claims a credit, over the number employed in Alabama as of the last day of the tax year immediately preceding the first employment year. The increase must equal or exceed the number of newly hired employees for which a credit is sought by one employee for each newly hired employee for whom a credit is being sought for the current year, plus one employee for all employees for whom credits were claimed in prior years.
(c) The credit shall be allowed against the tax imposed by Chapter 16 or Chapter 18, of this title. This tax credit shall not be allowed to decrease a taxpayer’s tax liability to less than zero. The credit is not refundable or transferable. The credit shall be available, on a pro rata basis, to the owners of qualified employers that are entities taxed under subchapters S or K of the Internal Revenue Code.
(d) A financial institution shall be allowed to claim the credit against the liability determined in Chapter 16 of this title.
(e) The income tax credit provided in this section may be claimed only for employees who are hired following June 9, 2011.
(Act 2011-551, p. 1017, §4.)
(a) The Full Employment Act of 2011, Article 11, commencing with Section 40-18-290, Chapter 18, of Title 40, is repealed effective December 31, 2028, unless extended by an act of the Legislature prior to that date for no more than five additional years.
(b) The repealing of the incentives in subsection (a) shall only affect the availability of the tax credits after December 31, 2028, and shall not cause a reduction or suspension of any credits awarded on or prior to December 31, 2028.
(Act 2023-546, §§6, 11.)
AMENDED BY ACT 2026-100, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
As used in this article, the following terms shall have the following meanings:
(1) CATASTROPHE SAVINGS ACCOUNT. A regular savings account or money market account established by an insurance policyholder who is a state income taxpayer for residential property in this state to cover an insurance deductible under an insurance policy for the taxpayer’s legal residence property that covers hurricane, rising floodwaters, or other catastrophic windstorm event damage or by an individual to cover self-insured losses for the taxpayer’s legal residence from a hurricane, rising floodwaters, or other catastrophic windstorm event. The account must be labeled as a catastrophe savings account in order to qualify as a catastrophe savings account as defined in this article. A taxpayer may establish only one catastrophe savings account and shall specify that the purpose of the account is to cover the amount of insurance deductibles and other uninsured portions of risks of loss from hurricane, rising floodwater, or other catastrophic windstorm event.
(2) WINDSTORM EVENT. Windstorms, cyclones, hurricanes, tornadoes, high winds, and hail, and similar perils not normally among those covered under most property casualty insurance policies but obtainable through the purchase of wind, wind and hail, storm or windstorm coverage, or all.
(Act 2012-413, p. 1123, §1.)
AMENDED BY ACT 2026-100, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
(a) An individual taxpayer is allowed a deduction against income earned for state income tax purposes imposed pursuant to Section 40-18-5, for amounts contributed to a catastrophe savings account in accordance with subsection (c) and all interest income earned by a catastrophe savings account is exempt from the tax imposed pursuant to Section 40-18-5.
(b) A catastrophe savings account is not subject to attachment, levy, garnishment, or legal process in this state.
(c) The total amount that may be contributed to a catastrophe savings account must not exceed any of the following:
(1) In the case of an individual whose qualified deductible is less than or equal to one thousand dollars ($1,000), two thousand dollars ($2,000).
(2) In the case of an individual whose qualified deductible is greater than one thousand dollars ($1,000), the amount equal to the lesser of fifteen thousand dollars ($15,000) or twice the amount of the taxpayer’s qualified deductible.
(3) In the case of a self-insured individual who chooses not to obtain insurance on his or her legal residence, two hundred fifty thousand dollars ($250,000), but in no event may the amount contributed exceed the value of the individual taxpayer’s legal residence.
(d) If a taxpayer contributes in excess of the limits provided in subsection (c), the taxpayer shall withdraw the amount of the excess contributions and include that amount in Alabama income for purposes of Section 40-18-5 in the year of withdrawal.
(Act 2012-413, p. 1123, §2.)
AMENDED BY ACT 2026-100, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
(a) A distribution from a catastrophe savings account must be included in the income of the taxpayer unless the amount of the distribution is used to cover qualified catastrophe expenses.
(b) No amount is included in income, pursuant to subsection (a), if the qualified catastrophe expenses of the taxpayer during the taxable year are equal to or greater than the aggregate distributions during the taxable year.
(c) If aggregate distributions exceed the qualified catastrophe expenses during the taxable year, the amount otherwise included in income must be reduced by the amount of the distributions for qualified catastrophe expenses.
(d)(1) The tax paid pursuant to Section 40-18-5, attributable to a taxable distribution must be increased by two and one-half percent of the amount which is includable in income.
(2) This additional tax does not apply if any of the following occur:
a. The taxpayer no longer owns a legal residence that qualifies pursuant to Chapter 7.
b. The distribution is from an account conforming with subdivision (3) of subsection (c) of Section 40-18-311 and is made on or after the date on which the taxpayer attains the age of 70.
(3) If a taxpayer receives a nontaxable distribution under this subsection, the taxpayer must not make further contributions to any catastrophe savings account.
(e) If a taxpayer who owns a catastrophe savings account dies, his or her account is included in the income of the person who receives the account, unless that person is the surviving spouse of the taxpayer. Upon the death of the surviving spouse, the account is included in the income of the person who receives the account. The additional tax in subsection (d) does not apply to distribution on death of the taxpayer or the surviving spouse.
(Act 2012-413, p. 1123, §3.)
The Department of Revenue may promulgate rules necessary to implement and administer this article.
(Act 2012-413, p. 1123, §4.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
This article shall be known and may be cited as the Veterans Employment Act.
(Act 2012-168, p. 254, §1; Act 2018-194, §1.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
As used in this article, the following terms have the following meanings:
(1) COMBAT VETERAN. A member of the Armed Forces of the United States who served in a United States Department of Defense designated combat zone and was a resident of the State of Alabama at the time of his or her service.
(2) RECENTLY DEPLOYED UNEMPLOYED VETERAN. An individual who meets the criteria for an unemployed veteran except that he or she must have received an honorable or general discharge from active, federal military service within the two-year period preceding the date of hire.
(3) UNEMPLOYED VETERAN. An individual who is all of the following:
a. Was a resident of Alabama at the time of entry into military service or was mobilized to active, federal military service while a member of the Alabama National Guard or other reserve unit located in Alabama, regardless of the resident’s home of record.
b. Received an honorable or general discharge from active, federal military service preceding the date of hire.
c. Has certification by the Department of Labor at the time of hire of either of the following:
Collecting or eligible to collect unemployment benefits.
Having exhausted his or her unemployment benefits.
(Act 2018-194, §2.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
In addition to the tax credit allowed for in the Full Employment Act of 2011 or the Alabama Small Business and Agribusiness Jobs Act, an additional one thousand dollar ($1,000) tax credit is available to a business that meets the requirements for a tax credit under Section 40-18-290 through 40-18-293 or Sections 40-18-391 and 40-18-392, for each unemployed or combat veteran hired for a full-time position paying at least fourteen dollars ($14) per hour, the majority of the duties of which are at a business location within Alabama. The additional credit shall be available in the tax year during which the employee has completed 12 months of consecutive employment.
(Act 2012-168, p. 254, §2; Act 2016-188, p. 435, §5; Act 2018-194, §3.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
For all tax years beginning on or after January 1, 2018, a qualified employer subject to the requirements of this article and Sections 40-18-290 through 40-18-293 shall be eligible for an additional nonrefundable credit against the income tax liability imposed or the state portion of the financial institution excise tax owed in an amount equal to two thousand dollars ($2,000) for each new unemployed or combat veteran hired after March 12, 2018, for a full-time position paying at least fourteen dollars ($14) per hour, the majority of the duties of which are at a business location within Alabama. The additional credit shall be available in the tax year during which the employee has completed 12 months of consecutive employment.
(Act 2012-168, p. 254, §3; Act 2018-194, §3.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
(a) In addition to the definition in Section 40-18-321, EXPENSE ASSOCIATED WITH A START-UP BUSINESS is defined as any of the following:
(1) Expenses associated with the development of a business plan.
(2) Professional services associated with the formation of the business (e.g., attorney and accounting services).
(3) An analysis or survey of potential markets, products, labor supply, or transportation facilities.
(4) Advertisements for the opening of the business.
(5) Salaries and wages for employees who are being trained and their instructors.
(6) Travel and other necessary costs for securing prospective distributors, suppliers, or customers.
(7) Salaries and fees for executives and consultants, or for similar professional services.
(b) For all tax years beginning on or after January 1, 2012, a recently deployed unemployed veteran shall be eligible for a nonrefundable credit against the income tax liability imposed in an amount up to a total of $2,000 for expenses associated with one start-up business in which the recently deployed unemployed veteran holds at least 50-percent ownership interest. A credit under this subsection may only be taken for a business started after April 2, 2012, that is located within Alabama and that shows a net profit of at least $3,000 for the year in which the credit is taken.
(c) An employer shall not claim the credit in Section 40-18-322 for an employee who has claimed the credit under Section 40-18-323, and a recently deployed unemployed veteran shall not claim the credit in Section 40-18-323 if an employer has claimed his or her hire for the credit in Section 40-18-322.
(Act 2012-168, p. 254, §4.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
(a) The Department of Labor, in coordination with the Department of Revenue, the Department of Economic and Community Affairs, and the Department of Veterans’ Affairs shall:
(1) Promote awareness of the unemployed veteran tax credit authorized in this article to employers and eligible veterans.
(2) Establish procedures for prequalifying an individual as an unemployed veteran and for providing notice to the Department of Labor when a new full-time employee is hired.
(3) Establish procedures for certifying a qualified employer’s compliance, or in the case of a credit under subsection (b) of Section 40-18-323, a recently deployed unemployed veteran’s compliance, with the eligibility and expense verification requirements to claim the credit authorized under this section.
(4) Adopt measurable goals, outcomes, and an audit strategy to assess the utilization and performance of the credits authorized in this article.
(5) On or before January 15, 2014, submit a written report on its assessment of the credits to the Alabama House Committees on Military and Veterans Affairs, Commerce and Small Business and Ways and Means-Education, and to the Alabama Senate Committees on Veterans and Military Affairs, Finance and Taxation-ETF, and Job Creation and Economic Development.
(6) Engage in efforts to promote the hiring of unemployed veterans through hiring practices of the State of Alabama.
(b) The tax credits authorized by Act 2018-194 shall not be claimed by a qualified employer until the status of the unemployed veteran is verified by the Alabama Department of Labor.
(c) The tax credits authorized by Act 2018-194 shall not be available for any unemployed veteran hired after December 31, 2023, unless extended by an act of the Legislature.
(d) The Department of Revenue shall, on an annual basis, provide the Legislative Services Agency with the total amount of credits claimed under the Veterans Employment Act in accordance with Act 2015-237.
(Act 2012-168, p. 254, §5; Act 2018-194, §§3-6.)
(a) The Veterans Employment Act, Article 13, commencing with Section 40-18-320, Chapter 18, of Title 40, is repealed effective December 31, 2028, unless extended by an act of the Legislature prior to that date for no more than five additional years.
(b) The repealing of the incentives in subsection (a) shall only affect the availability of the tax credits after December 31, 2028, and shall not cause a reduction or suspension of any credits awarded on or prior to December 31, 2028.
(Act 2023-546, §§7, 11.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
As used in this article, the following terms shall have the following meanings:
(1) AGRICULTURAL TRADE OR BUSINESS. Any trade or business described in the 2007 North American Industry Classification System, Sector 11, and includes such trades or businesses that may be hereafter reclassified in any subsequent publication of the North American Industry Classification System.
(2) OFF-STREAM UPLAND RESERVOIR. A reservoir that does not dam the stream and is not built within the stream bed or wetlands.
(3) QUALIFIED IRRIGATION EQUIPMENT. Equipment used by agricultural trade or business in irrigation systems, including but not limited to equipment used to construct irrigation systems and water wells.
(4) QUALIFIED RESERVOIR. An off-stream upland reservoir used as a source of water for irrigation by an agricultural trade or business.
(Act 2012-391, p. 1049, §1.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
Notwithstanding any other provision of law to the contrary, for all tax years beginning after December 31, 2011, any agricultural trade or business may elect to expense qualified irrigation equipment under the provisions of 26 U.S.C. §179, as such section existed on January 1, 2011.
(Act 2012-391, p. 1049, §2.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
(a)(1) Subject to subdivision (2), for all tax years beginning after December 31, 2011, until tax year ending December 31, 2017, there shall be allowed to any agricultural trade or business an income tax credit equal to 20 percent of the cost of the purchase and installation of any qualified irrigation equipment and any conversion costs related to the conversion of irrigation equipment from fuel to electricity or qualified reservoirs. For a surface water withdrawal irrigation system to be eligible for credit, the irrigation system must operate utilizing a qualified reservoir, except when the surface water withdrawal is directly from any river or stream whose average annual flow exceeds 8,000 cubic feet per second. A qualified reservoir is not required for a ground water withdrawal irrigation system. The credit shall be equal to 20 percent of the accrued cost of the qualified irrigation equipment and the cost of constructing the qualified reservoir, but shall not exceed $10,000 and shall not exceed the taxpayer’s Alabama income tax liability computed without regard to the credit. The credit shall be taken in the year in which the qualified irrigation equipment or the qualified reservoir is placed in service.
(2) The credit provided in this subsection shall be limited to only one purchase and installation of qualified irrigation equipment or one qualified reservoir per taxpayer.
(b)(1) Subject to subdivision (2), for all tax years beginning after December 31, 2017, until tax year ending December 31, 2022, unless extended by an act of the Legislature, there shall be allowed to any agricultural trade or business an income tax credit equal to 20 percent of the cost of the purchase and installation of any qualified irrigation equipment and any conversion costs related to the conversion of irrigation equipment from fuel to electricity or qualified reservoirs. For a surface water withdrawal irrigation system to be eligible for credit, the irrigation system must operate utilizing a qualified reservoir, except when the surface water withdrawal is directly from any river or stream whose average annual flow exceeds 8,000 cubic feet per second. A qualified reservoir is not required for a ground water withdrawal irrigation system. The credit shall be equal to a percent of the accrued cost of the qualified irrigation equipment and the cost of constructing the qualified reservoir, as follows: Twenty percent of the accrued cost not to exceed ten thousand dollars ($10,000) or 10 percent of the accrued cost not to exceed fifty thousand dollars ($50,000), whichever is greater. The credit shall not exceed the taxpayer’s Alabama income tax liability computed without regard to the credit. The credit shall be taken in the year in which the qualified irrigation equipment or the qualified reservoir is placed in service.
(2) The credit provided in this subsection shall be limited to only one purchase and installation of qualified irrigation equipment or one qualified reservoir per taxpayer.
(c)(1) Subject to subdivision (2), for all tax years beginning after December 31, 2022, there shall be allowed to any agricultural trade or business an income tax credit equal to 20 percent of the cost of the purchase and installation of any qualified irrigation equipment and any conversion costs related to the conversion of irrigation equipment from fuel to electricity or qualified reservoirs. For a surface water withdrawal irrigation system to be eligible for credit, the irrigation system must operate utilizing a qualified reservoir, except when the surface water withdrawal is directly from any river or stream whose average annual flow exceeds 8,000 cubic feet per second. A qualified reservoir is not required for a ground water withdrawal irrigation system. The credit shall be equal to 20 percent of the accrued cost of the qualified irrigation equipment and the cost of constructing the qualified reservoir, but shall not exceed $10,000 and shall not exceed the taxpayer’s Alabama income tax liability computed without regard to the credit. The credit shall be taken in the year in which the qualified irrigation equipment or the qualified reservoir is placed in service.
(2) The credit provided in this subsection shall be limited to only one purchase and installation of qualified irrigation equipment or one qualified reservoir per taxpayer.
(d) The credit may be carried to each of the five years following the taxable year the qualified irrigation system or reservoir is placed in service. The portion of the credit which shall be carried to each of the other taxable years shall be the excess, if any, of the amount of credit over the sum of the income tax due for each of the prior taxable years to which the credit may be carried.
(e) The Legislature recognizes that a substantial number of businesses are organized as limited liability companies, partnerships, and other types of business entities and that certain business entities organized as corporations elect to be treated as “S” corporations under federal and state tax laws, and that it is essential that the irrigation credit amount shall be available on a pass-through basis. The shareholders, partners, members, owners, or beneficiaries of any of the aforementioned businesses claiming the credit allowed in this section shall be allowed their pro rata share of the credit against their income tax levied.
(f)(1) Effective for tax years beginning after December 31, 2017, the agricultural trade or business receiving tax credits pursuant to this section shall file an annual informational report in a manner as prescribed by the Department of Agriculture and Industries prior to claiming the credits on a tax return. All information submitted to the Department of Agriculture and Industries by taxpayers claiming or seeking certification of a credit shall be subject to the confidentiality provisions of Section 40-2A-10.
(2) The information on the reports required by this subsection shall be consistent with the information required by the Legislature pursuant to Section 40-1-50, and rules adopted thereunder. Aggregated information provided pursuant to this section is exempt from the confidentiality provisions of Section 40-2A-10, and shall be provided by the Department of Agriculture and Industries to the Legislature in accordance with Section 40-1-50 and rules adopted by the Department of Revenue.
(Act 2012-391, p. 1049, §3; Act 2013-66, p. 129, §1; Act 2017-352, §§1,2; Act 2018-468, §1.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
Nothing in this article changes the applicability of existing environmental and water laws and regulations in the State of Alabama including the Alabama Water Use Reporting Program administered by the Alabama Office of Water Resources.
(Act 2012-391, p. 1049, §4.)
[Repealed]
REPEALED BY ACT 2023-546, EFFECTIVE DECEMBER 1, 2028 UNLESS EXTENDED BY AN ACT OF THE LEGISLATURE.
The Department of Revenue shall promulgate rules and regulations for the implementation of the credit authorized in this article and shall coordinate with the Alabama State Soil and Water Conservation Committee (ASWC) for technical service for the eligible applicants.
(Act 2012-391, p. 1049, §5.)
(a) The Irrigation Equipment Tax Credit, Article 14, commencing with Section 40-18-340, Chapter 18, of Title 40, is repealed effective December 31, 2028, unless extended by an act of the Legislature prior to that date for no more than five additional years.
(b) The repealing of the incentives in subsection (a) shall only affect the availability of the tax credits after December 31, 2028, and shall not cause a reduction or suspension of any credits awarded on or prior to December 31, 2028.
(Act 2023-546, §§ 8, 11.)
As used in this article, the following terms shall have the following meanings:
(1) COMMISSIONER. The Commissioner of Revenue of the State of Alabama.
(2) OUT-OF-STATE ADOPTION. An adoption through an out-of-state or foreign agency or government, through private individuals who are not residents of Alabama, or where the adoptee is otherwise not a resident of Alabama or citizen of the United States, in which the adoptive parent or parents reside in Alabama.
(3) PRIVATE ADOPTION. An adoption through a private agency, or through private individuals without an agency, in which the adoptive parent or parents reside in Alabama.
(4) QUALIFIED FOSTER CHILD. Any individual who either:
a. Is in the permanent legal custody of the Alabama Department of Human Resources.
b. Is placed in a licensed or approved foster home by the Alabama Department of Human Resources for the purpose of adoption pursuant to an approved case plan.
(Act 2014-413, p. 1517, §1; Act 2018-549, §1; Act 2022-299, §1.)
(a) A taxpayer shall be allowed a one time, refundable credit against the tax imposed by Section 40-18-2, for a private adoption or the adoption of a qualified foster child until December 31, 2022. The amount of such credit shall be one thousand dollars ($1,000) per child adopted through a private adoption or qualified foster child to be claimed in the year in which the adoption becomes final.
(b)(1) For tax years beginning on and after January 1, 2023, and ending December 31, 2027, a taxpayer shall be allowed a one time, refundable credit against the tax imposed by Section 40-18-2, for a private adoption, an out-of-state adoption, or the adoption of a qualified foster child. The credit may be claimed in the year in which the adoption becomes final.
(2) The amount of the credit shall be two thousand dollars ($2,000) per child adopted through a private adoption or per the adoption of a qualified foster child, provided that the adopted child is a resident of Alabama.
(3) If the child is adopted through an out-of-state adoption or is not otherwise a resident of Alabama, the amount of the credit shall be one thousand dollars ($1,000) per child.
(c) A taxpayer who adopts a child of his or her spouse is not eligible for a tax credit under this section.
(d) For tax years beginning on and after January 1, 2028, a taxpayer shall be allowed a one time, refundable credit against the tax imposed by Section 40-18-2, for a private adoption or the adoption of a qualified foster child. The amount of such credit shall be one thousand dollars ($1,000) per child adopted through a private adoption or qualified foster child to be claimed in the year in which the adoption becomes final.
(Act 2014-413, p. 1517, §2; Act 2018-549, §1; Act 2022-299, §1.)
[Repealed]
Repealed by Act 2015-121 effective October 15, 2015.
(Act 2014-413, p. 1517, §3.)
The commissioner shall be authorized to promulgate any rules necessary to implement and administer this article.
(Act 2014-413, p. 1517, §4.)
(a) This article shall be known and may be cited as the Alabama Jobs Act.
(b) The Legislature makes the following findings:
(1) The economic well-being of the citizens of the state will be enhanced by the increased development and growth of employment within Alabama.
(2) It is in the best interests of the state to provide certain incentives to allow the state to foster economic development through the recruitment of quality projects and the expansion of existing businesses within Alabama.
(3) The incentives provided for in this article do not raise any taxes for any individuals or businesses in Alabama under state law.
(4) The incentives provided in this article will allow the state to encourage the creation of new jobs that may not otherwise exist within the State of Alabama.
(5) The incentives provided in this article will increase revenues for the state without increasing taxes.
(6) The Constitution of Alabama grants the Legislature the authority to approve and authorize exemptions, exclusions, deductions, and credits from taxation in order to define the net proceeds of any tax payable under state law.
(7) The Constitution of Alabama was framed, and the laws of the state were enacted, with the goal of protecting, encouraging, and developing individual enterprise.
(8) The incentives provided in this article will not decrease the salary paid to any education personnel.
(9) The powers to be granted and the purposes to be accomplished by this article will create an environment for the recruitment of quality projects and the expansion of existing businesses within Alabama.
(10) Economic development through tax and financial incentives benefits the citizens of the state and is a public purpose of the state.
(c) In addition to the definitions found in Section 40-18-1, the following words and phrases have the following meanings:
(1) APPROVED COMPANY. Any company determined by the Secretary of Commerce and the Governor to meet the criteria provided in Section 40-18-373.
(2) CAPITAL INVESTMENT. All costs and expenses incurred by the incentivized company in connection with the acquisition, construction, installation, and equipping of a qualifying project, if such costs are required to be capitalized for purposes of the federal income tax, determined without regard to any rule that permits expenditures properly chargeable to a capital account to be treated as current expenditures. However, for any project involving the extraction of natural resources, the capital investment shall not include the costs of acquiring land, land recording fees, architectural and engineering services, environmental studies and environmental mitigation.
(3) COMPANY. Anyone or anything that has the powers to own a project and have employees.
(4)EMPLOYEES. Individuals employed in full time positions created by or through a qualifying project:
a. Who are being paid directly by an approved company, related company, common paymaster, or joint venturer; and
b. Whom the approved company, related company, common paymaster, or joint venturer identifies as its employees to the Department of Revenue, or the Department of Labor on returns or reports filed with the foregoing, including, but not limited to, Form A-6, Form A-1, Form A-2, UC-CR-4, and UC-10-R.
(5) INCENTIVE PERIOD. The period or periods of time during which an incentivized company can receive one or more of the jobs act incentives.
(6) INCENTIVIZED COMPANY. An approved company and any related company that are allowed to claim one or more of the jobs act incentives as provided for in the project agreement.
(7) INVESTMENT CREDIT. The annual incentive provided in Section 40-18-376.
(8) JOBS ACT INCENTIVES. The jobs credit and the investment credit as authorized and provided for in this article.
(9) JOBS CREDIT. The annual incentive provided in Section 40-18-375.
(10) NAICS CODE. Any sector, subsector, industry group, industry or national industry of the 2012 North American Industry Classification System, or any similar classification system developed in conjunction with the United States Department of Commerce or Office of Management and Budget.
(11) PROJECT. Any land, building, or other improvements, and all real and personal properties, whether or not contiguous and whether or not previously in existence, if in Alabama and if deemed necessary or useful in connection with an activity listed in Section 40-18-372(1).
(12) PROJECT AGREEMENT. The agreement entered into between an approved company and the Governor establishing the terms and conditions for the provision of the jobs act incentives, as provided for in Section 40-18-374.
(13) QUALIFYING PROJECT. Any project to be undertaken by an approved company that satisfies Section 40-18-372.
(14) RELATED COMPANY. Any entity that owns or is owned, directly or through one or more entities, a 50 percent or greater interest in the capital or profits of another.
(15) RENEWABLE ENERGY GENERATION. Energy derived from biomass, geothermal, hydrogen, hydropower, marine energy, solar, or wind.
(16) UTILITY TAXES. The taxes imposed by Sections 40-21-82 and 40-21-102.
(17) WAGES. Total wages of an employee, including gross wages, salaries, overtime and bonuses, defined by reference to Section 25-4-16(b), without application of Sections 25-4-16(b)(1), 25-4-16(b)(2)a., 25-4-16(b)(3), and 25-4-16(b)(4).
(Act 2015-27, p. 103, §§1-3; Act 2016-321, p. 799, §1; Act 2017-442, §1(b)(7); Act 2023-34, §2.)
The Legislature finds as follows:
(a) While Alabama’s incentive programs have succeeded in growing industry in the more populated parts of the state, Alabama’s rural and low growth communities have not enjoyed the same rates of success.
(b) Alabama’s incentives grew out of a need to attract heavy industry to the state. Now, Alabama must also prepare for the future by attracting and retaining high-tech companies, and preparing and retaining a workforce trained for such jobs.
(c) New tools must be brought to bear to solve Alabama’s rural, low growth, and high-tech deficits.
(d) It is a public purpose to expand Alabama’s incentives laws to attract and retain companies in rural and low growth areas in Alabama, and high-tech companies and workers throughout the state. The tools used in Act 2019-392 are urgently needed to solve these problems.
(e) The Legislature finds that the enhancements to the Alabama Jobs Act, as found in Act 2019-392, may be made without compromising on the strict requirement that the state shall not offer any such incentives to the extent that the tax incentives sought exceed the anticipated revenues to the state, as required by Section 40-18-373(1)c.
(Act 2019-392, §2.)
For a company to receive one or both of the jobs act incentives provided in this article, all of the following shall occur:
(1) There must be a qualifying project predominantly conducting an activity specified in Section 40-18-372(1);
(2) The qualifying project shall create at least the number of new jobs specified in Section 40-18-372(2);
(3) The company proposing the qualifying project must be an approved company, as provided in Section 40-18-373;
(4) The approved company and the Governor must enter into a project agreement, as provided in Section 40-18-374;
(5) If the incentivized company is allowed a jobs credit, the proof of wages actually paid shall have been delivered and certified, as provided in Section 40-18-375; and
(6) If the incentivized company is allowed an investment credit, the proof of capital actually invested shall have been delivered and certified, as provided in Section 40-18-376.
(Act 2015-27, p. 103, §3; Act 2017-442, §2(b)(8), 2(b)(9).)
A qualifying project must be found by the Secretary of Commerce to conduct an activity specified in subdivision (1) and to meet the minimum standard set forth in subdivision (2).
(1) A qualifying project must predominantly conduct an activity that is any one or more of the following:
a. Described by NAICS Code 1133, 115111, 2121, 22111, 221330, 31 (other than 311811), 32, 33, 423, 424, 482, 4862, 48691, 48699, 48819, 4882, 4883 (other than 48833), 493, 5121 (other than 51213), 5122, 513, 517, 518 (without regard to the premise that data processing and related services be performed in conjunction with a third party), 51929, 52232, 54133 (if predominantly in furtherance of another activity described in this article), 54134 (if predominantly in furtherance of another activity described in this article), 54138, 5415, 541614, 5417, 55 (if not for the production of electricity), 561422 (other than establishments that originate telephone calls), 562213, 56291, 56292, 611512, 927, or 92811.
b. The production of biofuel as such term is defined in Section 2-2-90(c)(2).
c. A renewable energy generation facility that is owned by one or more electric providers, as the term is defined in Section 37-16-3, for providing electric service at retail in Alabama. For purposes of this subdivision, an “electric provider” shall also include an authority as defined in Section 11-50A-1. In the case of an electric provider that is also a tax-exempt organization under the 26 U.S.C. § 501, notwithstanding Section 40-18-376(b)(3), any investment credit may be transferred for the entire term of the project agreement, as approved by the Governor. A “renewable energy generation facility” as used in this paragraph shall include any tangible property that is part of renewable energy generation, including any addition, modification, expansion, or upgrade to transmission or distribution systems that is required to accommodate the interconnection of renewable energy generation.
d. The conduct of original investigations undertaken on a systematic basis to gain new knowledge or the application of research findings or other scientific knowledge to create new or significantly improved products or processes.
e. The national or regional headquarters for a company that conducts significant business operations outside the state and that will serve as the principal office of the company’s principal operating officer with chief responsibility for the daily business operations of the company.
f. A target of the state’s economic development efforts pursuant to the comprehensive economic development plan, CatALyst, or any amended version or successor document thereto.
g. A type listed in a rule adopted by the Department of Commerce, other than an emergency rule.
Notwithstanding the foregoing, a qualifying project may not engage predominantly in farming activities involving trees, animals, or crops, and a qualifying project may not engage predominantly in the retail sale of tangible personal property or services, and may not be a shopping center, restaurant, movie theater, bowling alley, fitness center, miniature golf course, nightclub, gaming facility, or establishment serving the local community. However, if the excluded activities are not the predominant activity at the project, and if the project is otherwise a qualifying project, then the project agreement may provide that the capital investment may include costs related to excluded activities that are ancillary to the primary business conducted as part of the project. This provision shall not be deemed to exclude customer service centers, call centers, or headquarters otherwise allowed by this subdivision.
(2) A qualifying project shall create a significant number of new jobs for the area in which the qualifying project shall be located. Absent a finding of extraordinary circumstances by the Secretary of Commerce, a qualifying project shall employ either of the following number of new employees:
a. Any number of new employees for a qualifying project in which the predominant activity involves chemical manufacturing, data centers, renewable energy generation, engineering, design, or research, metal/machining technology or toolmaking; or
b. At least 50 new employees for all other qualifying projects.
(Act 2015-27, p. 103, §3; Act 2023-34, §2; Act 2026-550, §1.)
In order for a company to be an approved company, all of the following shall occur:
(1) For any company that proposes a qualifying project, the Secretary of Commerce shall make all of the following findings:
a. That the project is in fact a qualifying project;
b. That the qualifying project will not decrease, directly or indirectly, Alabama’s exports; and
c. That the amount of tax incentives sought are exceeded by anticipated revenues for the state, including income, property, business privilege, utility, gross receipts, sales, and use tax revenues that are generated by the economic activity resulting from the project, as they arise from the following aspects of the qualifying project:
Construction activities related to the qualifying project;
The purchase of building materials and the initial equipping of the qualifying project;
The subsequent equipping of the qualifying project; and
The operation of the qualifying project.
(2) Upon making affirmative findings on the criteria set forth in subdivision (1) that are applicable, the Secretary of Commerce shall recommend to the Governor that the company be designated as an approved company. The name of the company and information collected about it shall be forwarded to the Governor.
(3) After reviewing the information provided by the Secretary of Commerce, the Governor shall also determine whether the company meets the criteria set forth in subdivision (1). If the Governor makes such a finding, the company shall be an approved company.
(Act 2015-27, §3.)
(a) An incentivized company may claim either or both of the jobs act incentives, to the extent provided in the project agreement.
(b) In order for an incentivized company to claim the jobs act incentives, the Governor and the incentivized company shall execute a project agreement. The agreement shall contain all of the following:
(1) The name of the incentivized company.
(2) The location of the qualifying project.
(3) The activity to be conducted at the qualifying project.
(4) The jobs act incentives to be granted.
(5) The capital investment to be made at the qualifying project.
(6) The time period for the capital investment to be made at the qualifying project.
(7) The number of employees at the qualifying project.
(8) The anticipated wages to be paid to or for the benefit of employees during the incentive period for the jobs created.
(9) The dates or conditions that shall begin the running of the incentive periods for applicable jobs act incentives.
(10) The lengths of the incentive periods for the jobs act incentives.
(11) Any annual or aggregate limitations on the amount of either or both of the jobs act incentives that can be claimed during an incentive period.
(12) Provisions governing the recapture of all or part of the jobs act incentives awarded to the qualifying project, should the approved company default on its obligations in the project agreement.
(13) Whether the project agreement may be assigned by the approved company to some other purchaser, assignee, or successor.
(14) Any other terms, conditions, and limitations that this article or the Governor may require for an incentivized company to qualify for and receive a jobs act incentive.
(15) Any other terms the parties deem necessary or desirable.
(c) The Governor may decrease the amounts and durations of the jobs act incentives to ensure that the anticipated revenues for the state will exceed the amount of tax incentives sought.
(Act 2015-27, p. 103, §3; Act 2023-34, §2.)
(a)(1) If provided for in the project agreement and in accordance with the terms therein, the incentivized company is allowed a jobs credit against utility taxes, in an annual amount up to 3 percent of the wages paid to eligible Alabama resident employees during the prior year. The incentive period shall be not exceed 10 years.
(2) If the incentivized company is engaged in pharmaceutical, biomedical, medical technology, or medical supplies manufacturing, or its related research and development activities, the incentivized company is allowed a jobs credit against utility taxes, in an annual amount up to four percent of the wages paid to Alabama resident employees during the prior year. The incentive period shall not exceed 10 years. This applies to companies that predominantly conduct an activity described by NAICS code 3254, 339112, or 339113, to include related research and development.
(b) The project agreement shall provide that one of the following methods shall be used to realize the benefits of the jobs credit:
(1)a. As further provided in the project agreement, the jobs credit may be paid to the incentivized company as a refund out of utility taxes during the incentive period, regardless of the amount of utility taxes actually paid by the incentivized company.
b. For each year of the incentive period for the jobs credit, the incentivized company shall submit to the Department of Commerce a certification as to the wages paid to employees during the prior year. Following such examination as it deems necessary, the Department of Commerce may certify the information and deliver the same to the Department of Revenue. Thereafter, the Department of Revenue shall calculate the correct refund and issue it directly to the incentivized company.
(2)a. The jobs credit may be claimed as a credit against utility taxes actually paid until April 20, 2023, after which time the provisions of subdivision (1) shall control, and the offset provided in this subdivision shall cease unless the provisions stated in subdivision (b)(1) are explicitly stated in the project agreement that was executed prior to April 20, 2023. In any one year, if the credit exceeds the amount of taxes that are allowed to be offset by the project agreement and that are owed by the incentivized company, the incentivized company may carry the credit forward, to the extent allowed in the project agreement. No carryforward shall be allowed for more than five years. Rules similar to those used for Section 40-18-15.2 shall be applied.
b. Prior to claiming the jobs credit as provided in this subdivision, the incentivized company shall submit to the Department of Commerce a certification as to the wages paid to employees during the prior year. Following such examination as it deems necessary, the Department of Commerce may certify the information and deliver same to the Department of Revenue. Thereafter, the Department of Revenue shall allow the jobs credit.
(c) The realization methods in subsection (b) shall not create debts of the state within the meaning of Section 213 of the Constitution of Alabama of 2022.
(d) The Department of Finance shall adopt rules to ensure that the credit in no case would reduce the distribution for the Alabama Special Mental Health Trust Fund by using any unencumbered funds.
(Act 2015-27, p. 103, §3; Act 2021-2, §1; Act 2023-34, §2.)
(a) If provided for in the project agreement, the incentivized company is allowed an investment credit in an annual amount up to 1.5 percent of the capital investment incurred as of the beginning of the incentive period, to be used as follows:
(1) To offset the income taxes found in this chapter, or as an estimated tax payment of income taxes;
(2) To offset the financial institution excise tax found in Chapter 16;
(3) To offset the insurance premium tax levied by Section 27-4A-3(a), or as an estimated payment of insurance premium tax;
(4) To offset utility taxes;
(5) To offset state license taxes levied by Article 2 of Chapter 21; or
(6) To offset some combination of the foregoing, so long as the same credit is used only once.
The incentive period shall begin no earlier than the placed-in-service date. The incentive period shall not exceed 10 years.
(b) A project agreement may specify any one or more of the following methods by which the investment credit shall be realized by the incentivized company, so long as a credit is not utilized more than once:
(1)a. The investment credit may be claimed as a credit against the taxes in subsection (a) that are actually paid. In any one year, if the credit exceeds the amount of taxes that are allowed to be offset by the project agreement and that are owed by the incentivized company, the incentivized company may carry the credit forward, to the extent allowed in the project agreement. No carryforward shall be allowed for more than five years. Rules similar to those used for Section 40-18-15.2 shall be applied.
b. Prior to claiming the investment credit as provided in this subdivision, the incentivized company shall submit to the Department of Commerce a certification as to its capital investment as of the dates specified in the project agreement. Following such examination as it deems necessary, the Department of Commerce may certify the information and deliver the same to the Department of Revenue. Thereafter, the Department of Revenue shall allow the investment credit.
(2) The project agreement may authorize an incentivized company that is taxed as a flow-through entity to allocate the credit among some or all of the owners in any manner specified, regardless of whether the allocation follows rules similar to 26 U.S.C. § 704(b) and the regulations thereunder. The owners may then use their allocated share of the investment credit to offset any of the taxes listed in subsection (a), as provided in subdivision (1). This subdivision shall be liberally construed to apply to multiple levels of companies, to allow the investment credits to be used by those persons bearing the tax burdens of the qualifying project, and such companies shall include but shall in no way be limited to flow-through entities, employee stock ownership plans, mutual funds, and real estate investment trusts, and it shall also apply to offset the income tax liability of employee/owners of a flow-through entity owned by an employee stock ownership plan trust.
(3) The Secretary of Commerce may recommend to the Governor that the incentivized company be granted transferability of the investment credit for up to the first five years. Any investment credit transferred shall be at the value of at least 85 percent of the value of the credit. Any one year’s investment credit shall not be purchased by more than three transferees, unless such limitation is found by the Secretary of Commerce to unnecessarily limit the class of potential transferees. If approved by the Governor, transferability shall be allowed in the project agreement, subject to any notice and verification requirements determined by the Department of Commerce. Prior to any transfer, the investment credit shall be certified by the Department of Commerce pursuant to paragraph (b)(1)b. of this section. The Department of Revenue shall adopt a transfer statement form to be filed by the transferor in a manner prescribed by the Department of Revenue. The transfer statement form shall include the name and federal taxpayer identification number of the transferor and each transferee listed therein along with the amount of the tax credit to be transferred to each transferee listed on the form. The transfer statement form shall also contain such other information as the Department of Revenue may reasonably require. For each transfer of a credit, the incentivized company shall file with the Department of Revenue, and a copy to the Department of Commerce: (i) A completed transfer statement form; (ii) a copy of the investment credit certification issued by the Department of Commerce; and (iii) a copy of the executed transfer agreement. Filing of the executed transfer agreement with the Department of Revenue shall perfect the transfer with respect to the transferee, and the Department of Revenue shall thereafter allow the appropriate amount of the investment credit to offset the tax liability of the transferee for any of the taxes listed in subsection (a) and, for any project agreements entered into after January 1, 2021 only, state license taxes levied by Article 2 of Chapter 21. In any one year, if the investment credit exceeds the amount of taxes that are allowed to be offset and that are owed by the transferee, the transferee may carry the credit forward for five years. A transferee may not make a subsequent transfer of the credit. The Department of Revenue may adopt rules necessary to implement and administer the transfer provisions as provided in this article. If a credit is transferred, an incentivized company that is later determined by the Secretary of Commerce to have defaulted under the project agreement shall be liable for the underpayment of tax attributable to the credit and for penalties and interest thereon. Unless the purchase of the credits is determined to have been made in a fraudulent manner, or is a transfer in anticipation of bankruptcy, insolvency, or closure, a transferee shall not be liable for the unpaid tax attributable to the credit, or for penalties or interest thereon.
(c) The realization methods in subsection (b) shall not create debts of the state within the meaning of Section 213 of the Constitution of Alabama of 2022.
(d)(1) To the extent the investment credit is used to offset a financial institution excise tax liability, in making the report required by Section 40-16-6(d), the financial institution receiving the investment credit shall not take into account the qualifying project, and the Department of Finance shall adopt rules to ensure that the credit in no case would reduce the distribution for municipalities and counties.
(2) To the extent the investment credit is used to offset an insurance premium tax liability, the Department of Finance shall adopt rules to ensure that the credit would in no case reduce the distributions to the Alabama Special Mental Health Trust Fund by using any unencumbered funds.
(3) To the extent the investment credit is used to offset liability for the tax imposed by Section 40-21-82 or Article 2 of Chapter 21, the Department of Finance shall adopt rules to ensure that the credit in no case would reduce the distribution for the Alabama Special Mental Health Trust Fund by using any unencumbered funds.
(Act 2015-27, p. 103, §3; Act 2019-392, §3; Act 2021-2, §1; Act 2021-423, §2; Act 2023-34, §2.)
(a) As used in this section, the following terms have the following meanings:
(1) JUMP START COUNTY. Any Alabama county that meets all the following:
a. Does not qualify as a targeted county.
b. Has experienced negative population growth over the last five years as determined by the Commissioner of Labor as of each January 1 using the most current data available from the United States Departments of Labor or Commerce, the United States Bureau of the Census, or any other federal or state agency or department.
c. Contains no more than two opportunity zones as they existed on June 1, 2019.
(2) TARGETED COUNTY. Any Alabama county that has a population of 60,000 or less, as determined by the Commissioner of Labor as of each January 1 using the most current data available from the United States Departments of Labor or Commerce, the United States Bureau of the Census, or any other federal or state agency or department.
(b) In making the findings required by Section 40-18-373, a company that proposes a qualifying project in a targeted or jumpstart county shall be an approved company for purposes of this section only if the Secretary of Commerce makes the additional finding that the qualifying project will increase the economic diversity of, or otherwise benefit, the targeted or jumpstart county.
(c) For purposes of determining in Section 40-18-372(2)b. whether a qualifying project may receive the jobs act incentives, a project to be located in a targeted or jumpstart county shall employ at least 10 new employees and shall involve, directly or indirectly, at least two million dollars ($2,000,000) of capital, absent a finding of extraordinary circumstances by the Secretary of Commerce.
(d) If the qualifying project is located in a county which is deemed to be a targeted or jumpstart county on the date the project agreement is executed, the following shall be applicable:
(1) The jobs credit provided in Section 40-18-375(a) shall be up to 4.0 percent of the wages paid to Alabama resident employees during the prior year; and
(2) The investment credit provided in Section 40-18-376(a) shall have an incentive period not to exceed 15 years.
(e) Each year, the incentives in subsection (d) may be extended to no more than two qualifying projects not in targeted or jumpstart counties. Such incentives shall be granted in project agreements executed by the Governor on the recommendation of the Secretary of Commerce.
(Act 2015-41, p. 146, §3; Act 2017-442, §1(b)(10); Act 2019-392, §3; Act 2023-34, §2.)
(a) The provisions in this section shall apply to the following:
(1) Any incentivized company that employed, in the prior year, at least 12 percent of its employees as veterans who received an honorable or general discharge.
(2) Any incentivized company with a qualifying project located within a former active duty military installation closed by the Base Realignment and Closure process.
(b)(1) Any incentivized company described by subdivision (a)(1) shall receive an additional 0.5 percent jobs credit provided in Section 40-18-375(a) on the wages paid during the prior year to Alabama resident employees who are veterans.
(2) Any incentivized company described by subdivision (a)(2) shall receive an additional 0.5 percent jobs credit provided in Section 40-18-375(a) on the wages paid during the prior year to Alabama resident employees.
(c) No incentivized company claiming the credit provided by subdivision (b)(1) shall also claim the credit provided by Article 13 of this chapter for any portion of the project.
(d) The Department of Labor shall periodically verify the actual number of veterans employed by the incentivized company described in subdivision (a)(1) and the wages of the veterans during the relevant year. If the Department of Labor is not able to provide the verification utilizing all available resources, it may request any additional information from the incentivized company as may be necessary.
(Act 2015-41, p. 446, §3; Act 2016-321, p. 799, §1; Act 2023-34, §2.)
(a)(1) This section shall be applicable to a technology company so long as there is a project agreement which provides that Alabama is or will become the company’s headquarters, the place of residence of its top three executives, and the place of residence of at least 75 percent of its employees.
(2) In making the findings required by Section 40-18-373(1), a technology company that proposes a qualifying project shall be an approved company for purposes of this section only if the Secretary of Commerce makes the additional finding that the qualifying project will increase the economic diversity of, or otherwise benefit, the state.
(3) A qualifying project shall be deemed to be in existence, notwithstanding the requirements of Section 40-18-372, so long as at least 10 new employees are employed at the qualifying project, absent a finding of extraordinary circumstances by the Secretary of Commerce.
(b) If provided for in the project agreement, the following shall be allowed to any company which meets all the criteria in subsection (a):
(1) A jobs credit against utility taxes in an annual amount up to 4 percent of the wages paid to Alabama resident employees during the prior year. The incentive period shall not exceed 10 years.
(2) An investment credit as provided in Section 40-18-376.
(c) A “technology company” is any company that meets all the criteria in subdivision (1) or (2):
(1) A company that earns at least 75 percent of its revenues from either of the following:
a. Activities within subsector 518; industry group 5112, 5121 (other than 51213), 5415, or 5417; or industry 51913 of the 2012 North American Industry Classification System, or any similar classification system developed in conjunction with the United States Department of Commerce or Office of Management and Budget.
b. The use of technology to develop new coding or processes for the creation or delivery of goods or services in the following fields, or any additional activities determined by the Secretary of Commerce to be beneficial to the enhancement of businesses rooted in either of the following fields:
Any of the fields of education, healthcare, energy, agriculture, infrastructure, software, robotics, nutrition, aerospace, automotive, or financial services.
Any fields related to science, technology, engineering, or mathematics.
(2) A company that, for a fixed term, educates and mentors early-stage technology companies recruited to a location in Alabama, with the goal of accelerating the companies’ development and growth.
(Act 2019-392, §5; Act 2021-2, §1; Act 2023-34, §2.)
(a) This section shall be applicable to an underrepresented company, as defined in this section. In making the findings required by Section 40-18-373(1), an underrepresented company that proposes a qualifying project shall be an approved company for purposes of this section only if the Secretary of Commerce makes the additional finding that the qualifying project will increase economic diversity and will benefit the state.
(b) If provided for in the project agreement, the following shall be allowed to any company that meets all of the criteria in subsection (a):
(1) Absent a finding of extraordinary circumstances by the Secretary of Commerce, a qualifying project shall be deemed to be in existence notwithstanding the requirements of Section 40-18-372 so long as 10 new jobs are created.
(2) A jobs credit against utility taxes, in an annual amount up to 4 percent of the wages paid to Alabama resident employees during the prior year.
(3) The investment credit provided in Section 40-18-376(a) shall have an incentive period not to exceed 15 years.
(c) An “underrepresented company” is any company that meets all the criteria in subdivision (1) or (2):
(1) The company is a for-profit business headquartered in a community eligible for investment through the federal New Markets Tax Credit program under 26 U.S.C. § 45D(e) as those communities were identified as of January 1, 2015, or in such a community identified thereafter, has fewer than 10 employees at the time the project agreement is executed, and has average gross revenues of less than five hundred thousand dollars ($500,000) in the company’s three years prior to the execution of the project agreement; or
(2) The company is a for-profit business that is independently owned and controlled and is at least 51 percent owned and controlled by one or more underrepresented persons or, in the case of a publicly-owned business, the company is a for-profit business of which at least 51 percent of the stock is owned and controlled by one or more underrepresented persons and whose daily management and operations are under the control of one or more underrepresented persons. As used herein, an “underrepresented person” is a United States citizen who is a woman or is African American.
(Act 2021-2, §10; Act 2023-34, §2; Act 2024-441, §1.)
(a) After its execution, the Department of Commerce shall forward to the Department of Revenue a copy of any project agreement that allows an incentivized company to claim a jobs act incentive.
(b) Jobs act incentives shall not be considered securities under Section 8-6-2(10).
(c) The acceptance of a tax credit under this article shall constitute approval and written consent by the taxpayer to disclose to the Secretary of Commerce the total tax liability, net operating loss, amount of credit claimed, recipient of the credit, and any transferor and transferee information. The Department of Revenue shall disclose the information to the Department of Commerce upon written request by the Secretary of Commerce. The information shall be limited to what is necessary to administer this article. Upon receipt of this information, Section 40-2A-10 shall apply to the Department of Commerce and its employees with respect to the use, dissemination, or other handling of the information.
(Act 2015-27, §3; p. 103, Act 2023-34, §2.)
(a) The Department of Labor shall periodically verify the actual number of employees employed at the qualifying project and the wages of the employees during the relevant year. If the Department of Labor is not able to provide the verification utilizing all available resources, it may request any additional information from the incentivized company as may be necessary. The Department of Revenue may periodically audit any incentivized company to monitor compliance by the incentivized company with this article. Nothing in this article shall be construed to limit the powers otherwise existing for the Department of Revenue to audit and assess an incentivized company. The Department of Insurance shall have similar audit rights over any incentivized company that is subject to the insurance premium tax.
(b) The project agreement shall include provisions for the incentivized company to return any unearned credit amounts.
(c)(1) An incentivized company shall be liable for any unearned portion of the jobs credit or investment credit it claims or transfers pursuant to this article. The jobs credit will be considered unearned when the incentivized company fails to pay the full amount of wages or create the full number of jobs upon which the credit was based and claimed. The investment credit will be considered unearned when the incentivized company fails to make the full capital investment upon which the credit was based and claimed or upon which the credit was valued and then transferred. The incentivized company shall be liable for only that portion of the jobs credit or investment credit that was unearned. Any credit claimed by an owner of an incentivized company is deemed to have been claimed by the incentivized company for purposes of this subsection.
(2) The Secretary of Commerce may report to the Department of Revenue any failure of an incentivized company to meet the jobs, wage, or investment requirements specified in the project agreement. The report will be made by March 31 of the year following the calendar year in which the failure occurs and shall contain sufficient information for the Department of Revenue to calculate the unearned portion of the jobs credit or investment credit. The underpayment of the applicable tax will be deemed to have occurred upon the filing of the report. The report shall be treated as the filing of a return by the incentivized company for purposes of any applicable period of limitation.
(3) The Department of Revenue may assess an incentivized company for any unearned portion of the investment credit or jobs credit, with allowed interest and penalties, pursuant to the terms of Chapter 2A or Chapter 29. The liability shall be considered an underpayment of the tax against which the respective credit was applied or refunded.
(4) If more than one company is considered the incentivized company under the terms of the project agreement, each such company will be jointly and severally liable for any liability associated with the unearned credit.
(d) Notwithstanding the provisions of subsection (c), no credit authorized under this article shall be approved and issued prior to the credit being earned.
(Act 2015-27, p. 103, §3; Act 2023-34, §2.)
(a) There is hereby created a permanent Joint Legislative Advisory Committee on Economic Incentives, hereinafter referred to as the committee.
(b) The committee shall be comprised of all of the following persons:
(1) The chairs of the House Ways and Means General Fund and Education Fund committees.
(2) The chairs of the Senate Finance and Taxation General Fund and Education Fund committees.
(3) The Speaker of the House, or his or her designee, and two members of the House of Representatives to be appointed by the Speaker of the House.
(4) The President Pro Tempore of the Senate, or his or her designee, and the chair of the Senate Committee on Fiscal Responsibility and Economic Development or its successor committee, if any.
(5) One member of the Senate to be appointed by the President Pro Tempore of the Senate.
(c)(1) The committee shall hold an organizational meeting by August 1, 2015, and shall therein elect a chair and vice chair from among its members. Thereafter, the committee shall meet at the call of the chair or any majority of members thereof; provided that the committee shall meet at least two times annually. Other than the organizational meeting, such meetings shall be held with the Secretary of Commerce in attendance, or his or her designee. The committee may meet, act, and conduct its business during the sessions of the Legislature or any recess thereof, and in the interim period between sessions.
(2) Beginning July 1, 2023, in the first year of each quadrennium, the committee shall elect from its membership a chair and vice-chair, which shall rotate between members from the House and Senate. The chair shall be elected from the House and the vice-chair from the Senate to serve the first two years of each quadrennium. Beginning with the third January 1 of the quadrennium and to serve for the remainder of the quadrennium, the vice-chair shall become the chair, and the chair shall become the vice-chair. If the chair becomes vacant, the vice-chair shall serve as chair until a replacement chair is elected. An election to fill a vacancy of the chair or vice-chair shall occur at the next meeting of the committee.
(d) The committee shall adopt its own rules of procedure for the transaction of committee business, and a majority of the members present shall constitute a quorum for the purpose of transacting or performing authorized duties.
(e) The committee shall monitor and evaluate the management process and standards used by the Department of Commerce in the development of project agreements and in the awarding of economic development incentives as authorized by the laws of this state. The committee may provide recommendations to the Secretary of Commerce regarding the same and shall act in an advisory role only. Such recommendations may include certain identified minimum standards to be set forth in project agreements and otherwise in the awarding of economic development incentives, as well as recommendations regarding the recruitment of certain industries to the various geographic regions of the state. The committee may also request from the Department of Commerce specific, non-confidential information on successfully negotiated and executed project agreements as well as non-confidential information on unsuccessful project agreement negotiations.
(f) The Department of Commerce shall provide to the committee, upon request, an aggregated list of the amounts and types of economic development incentives awarded, as well as an analysis of the cost and benefits of the incentives awarded. The Department of Revenue shall assist the Department of Commerce in the calculations required in this section.
(g) The Department of Commerce, the Department of Revenue, and the Department of Finance shall collectively report, no later than January 1 of each year, the aggregate amount of incentives committed by tax source on executed project agreements during the past fiscal year. Nothing in this subsection shall require or authorize the disclosure of any individual taxpayer or taxpayer identifying information.
(h)(1) The committee may request that a third-party evaluation be conducted assessing the impacts of state economic development incentives, in the form of an annual Executive Report. The committee shall designate the third party and shall determine the form and contents of the Executive Report, that may include historical economic incentives.
(2) The Department of Commerce, the Department of Revenue, and the Department of Labor shall cooperate with, and timely provide requested nonconfidential information to, the chosen third party conducting the evaluation.
(3) An Executive Report provided to the committee pursuant to this subsection shall not be considered a public record under Article 3 of Chapter 12 of Title 36.
(i) The committee shall make an annual report of its findings and recommendations to the Legislature during each regular session, and in its discretion may submit additional reports from time to time, or at any time.
(j) In no event shall the Department of Commerce be required to disclose matters which would cause it to violate any nondisclosure agreement executed for a project. In no event shall the Department of Commerce be required to disclose matters which would cause the State of Alabama to be at a competitive disadvantage in ongoing or future project negotiations. The Department of Commerce shall not be required under this article to disclose confidential information to the committee that involves ongoing project negotiations.
(k) Meetings of the committee are exempt from Chapter 25A of Title 36, provided that the minutes of each meeting shall be made available for public inspection. In order to balance the privacy needs of economic development negotiations with openness to the public, the committee may use code names in its deliberations about various applicants and in the minutes of its proceedings.
(l) The membership of the committee shall be inclusive and shall reflect the racial, gender, geographic, urban/rural, and economic diversity of the state.
(m) Upon request of the chair, the Secretary of the Senate and the Clerk of the House shall provide clerical assistance as the committee requires.
(Act 2015-27, p. 103, §3; Act 2023-36, §1.)
The Department of Commerce shall publish all of the following information on its website:
(1) For each project incentivized under this article:
a. The name of the incentivized company.
b. The county of the qualifying project.
c. The estimated capital investment.
d. The estimated number of new jobs.
e. The estimated average hourly wage.
f. The estimated value of the jobs credit.
g. The estimated value of the investment credit.
h. The projected 10-year and 20-year return on incentives.
i. The value of any cash incentive that was committed.
(2) Aggregated performance data on all projects incentivized under this article.
(Act 2023-36, §2)
(a) The Departments of Commerce, Labor, Insurance, Revenue, and Finance shall implement this article, exercise all powers as authorized in this article, and promulgate regulations to implement and administer the provisions of this article.
b) All filings made by a private party with any department of the state government shall be made using forms promulgated by such department. Any such filing shall be treated as a tax return, subject to penalties imposed by the Department of Revenue.
(Act 2015-27, §3.)
(a) Nothing in this article shall be construed to constitute a guarantee or assumption by the state of any debt of any company nor to authorize the credit of the state to be given, pledged, or loaned to any company.
(b) The provisions of this article shall not be construed in a manner adverse to the validity of any jobs act incentives.
(c) Nothing in this article shall be construed to make available to any company any right to the jobs act incentives absent strict compliance with this article.
(Act 2015-27, §3.)
The incentives authorized by this article shall not be available for qualifying projects for which project agreements have not been executed on or prior to July 31, 2028, unless the Legislature enacts legislation to continue or reinstate the incentives for new projects after that date. No action or inaction on the part of the Legislature shall reduce or suspend any incentive awarded pursuant to this article in any past or future calendar year with respect to qualifying projects for which project agreements have been executed on or prior to July 31, 2028, it being the sole intention of this section that failure of the Legislature to enact legislation continuing the incentives authorized by this article for periods after July 31, 2028, shall affect only the availability of the incentives to qualifying projects for which project agreements have not been executed on or prior to July 31, 2028, and shall not affect qualifying projects for which project agreements have been executed on or prior to July 31, 2028.
(Act 2015-27, p. 103, §5; Act 2017-314, §1; Act 2021-2, §1; Act 2023-34, §2.)
(a) At no time prior to the calendar year ending December 31, 2021, shall the annualized balance of the outstanding jobs act incentives exceed three hundred fifty million dollars ($350,000,000), which amount shall increase to three hundred seventy-five million dollars ($375,000,000) for the calendar year ending December 31, 2023, four hundred million dollars ($400,000,000) for the calendar year ending December 31, 2024, four hundred twenty-five million dollars ($425,000,000) for the calendar year ending December 31, 2025, four hundred fifty million dollars ($450,000,000) for the calendar year ending December 31, 2026, and four hundred seventy-five million dollars ($475,000,000) for the calendar year ending December 31, 2027, unless the Legislature enacts legislation to allow additional jobs act incentives. Of the above annualized balance, twenty million dollars ($20,000,000) shall apply to qualifying projects located in targeted or jumpstart counties as described in Section 40-18-376.1.
(b) Jobs act incentives under this article shall not be available for any qualifying project unless at least 80 percent of the employees created by the qualifying project are employed full time.
(Act 2015-27, p. 103, §§6, 7; Act 2017-314, §§1,2; Act 2021-2, §1; Act 2023-34, §2.)
(a) Both of the following shall be considered industrial or research enterprises for purposes of Chapter 9B of this Title 40, approved activities for purposes of Chapter 9G of this Title 40, and qualifying projects for purposes of Article 16 of Chapter 18 of this Title 40:
(1) Any trade or business predominately consisting of an activity described in Section 40-18-376.3(c).
(2) The agricultural center described in Section 40-18-417(a)(2)b.
(b) The agricultural center is allowed the investment credit as provided in Section 40-18-376 for a period not to exceed 10 years.
(c) For purposes of Article 16 of Chapter 18 of Title 40, the Governor may decrease the amounts and durations of the jobs act incentives. The Department of Commerce may charge fees for amendments to project agreements entered into under Article 16 of Chapter 18 of Title 40.
(d) As to the agricultural center described in Section 40-18-417(a)(2)b., all of the years of the investment credit may be made transferable in the project agreement, using rules similar to those provided in Section 40-18-376(b)(3).
(Act 2019-392, §7, Act 2022-371, §1(b)(5).)
The departments of Economic and Community Affairs, Revenue, Commerce, and Finance shall implement Act 2019-392, exercise all powers as authorized in Act 2019-392, and adopt rules to implement and administer Act 2019-392.
(Act 2019-392, §8.)
Notwithstanding the provisions of Section 40-18-376(d)(2), to the extent the investment credit is used to offset an insurance premium tax liability and a portion of the insurance premium taxes are deposited into the Education Trust Fund, the Department of Finance shall adopt rules to ensure that the credit would reduce the distribution for the Education Trust Fund. Thereafter, the credit will reduce the distributions to the state General Fund only.
(Act 2019-392, §11.)
In no event does Act 2023-34 authorize any electric provider to provide retail electric service outside of its electric service territory as determined under the applicable provisions of Chapter 14 of Title 37. Nothing in Act 2023-34 is intended to amend, repeal, enlarge, or otherwise affect Chapter 14 of Title 37.
(Act 2023-34, §3.)
This article shall be known and may be cited as the Alabama Small Business and Agribusiness Jobs Act.
(Act 2016-188, §1.)
For the purpose of this article, the following words and phrases shall have the following meanings:
(1) ALABAMA SMALL BUSINESS EMPLOYER. A business organization duly formed, organized, or qualified to do business in the state, with its headquarters or principal place of business in the state, and having 75 or fewer employees during the tax year in which the tax credit is claimed pursuant to this article, other than new employees for which a credit is allowed by this article.
(2) DEPARTMENT. The Alabama Department of Revenue.
(3) NET EMPLOYEE GROWTH. An Alabama small business employer’s net increase in the total number of full-time employees residing in Alabama based on the following:
a. The total number of full-time Alabama employees on the last date of each tax year in which the employer is claiming a credit pursuant to this article; minus,
b. The total number of full-time Alabama employees on July 24, 2016.
(4) QUALIFIED NEW EMPLOYEE. A new employee of an Alabama small business employer that, for a qualifying time period of 12 consecutive months, satisfies all of the following criteria:
a. Was employed on a full-time basis.
b. Was an Alabama resident.
c. Received wages from the Alabama small business employer that met or exceeded a total of forty thousand dollars ($40,000).
d. Was not a full-time employee of the Alabama small business employer during any time 12 months prior to the start of such qualifying time period.
(5) WAGES. Total wages paid to an employee, including gross wages, salaries, overtime, and bonuses.
(Act 2016-188, §2.)
(a) An Alabama small business tax credit is hereby allowed for any Alabama small business employer that creates a new job and hires a new full-time employee to fill that job. The credit shall be a one-time credit equal to one thousand five hundred dollars ($1,500) for each qualified new employee, and shall only be applicable to a tax year in which the new employee has completed 12 months of consecutive full-time employment with the employer.
(b) To qualify for the credit, the employer must have a net employee growth as of the last date of each tax year during which the employer claims a credit pursuant to this article. The net employee growth must equal or exceed the number of qualified new employees for which a credit is sought in the current or applicable tax year, plus the total number of qualified new employees for whom credits were claimed pursuant to this article in a prior tax year.
(c)(1) The credit shall be allowed against the tax imposed by Chapter 16 or Chapter 18, of this title. A financial institution shall be allowed to claim the credit against the liability determined in Chapter 16 of this title. The credit shall be available, on a pro rata basis, to the owners or members of qualified Alabama small business employers that are entities taxed under subchapters S or K of the Internal Revenue Code.
(2) An Alabama small business employer may receive a credit under this section or under the Full Employment Act of 2011, Article 11 of this chapter, but in no case shall the employer receive both a credit under this article and a credit provided under the Full Employment Act of 2011. Once a credit is claimed for an employee under this section or the Full Employment Act of 2011, the employer may not thereafter make a claim for a credit of that employee under the other article.
(d) This tax credit may not be allowed to decrease a taxpayer’s tax liability to less than zero in any tax year, but any unused portion may be carried forward for a period of up to three years. The credit is not refundable or transferable.
(e) To the extent the credit is used to offset a financial institution excise tax liability, the Department of Finance shall promulgate rules to ensure that the credit in no case would reduce the distribution for municipalities and counties.
(f) The income tax credit provided in this section may be claimed only for employees who are hired following July 25, 2016, and shall only apply to tax years beginning on or after January 1, 2016.
(g) The tax credit provided in this section shall expire on January 1, 2019, unless otherwise extended by the Legislature.
(Act 2016-188, §3.)
The department may adopt rules consistent with this article as necessary to implement and administer this article. Rules may be adopted to include, but not limited to, a requirement that, upon request, taxpayers shall receive credits for up to, but no more than, the number of qualified new employees hired after July 25, 2016. In no case shall an employer claim a credit under this article for the same qualified employee more than once. Nor shall the number of qualified new employees, for which a credit is claimed, exceed the number of employees at the end of the tax year less the number of employees at the beginning of the tax year.
(Act 2016-188, §4.)
By December 31, 2016, the Department of Revenue shall create and implement a program to actively promote to small business owners, tax professionals, and other appropriate parties the tax credits allowed under the Alabama Small Business Jobs Act created by this article, the Full Employment Act of 2011, Article 11 of this chapter, the Heroes for Hire Tax Credit Act of 2012, Article 13 of this chapter, and other tax credits available to small businesses and independently owned business entities.
(Act 2016-188, §6.)
For the purposes of this article, the following words and phrases shall have the following meanings:
(1) BASE CARGO VOLUME. The greater of the following:
a. One hundred five percent of the cargo volume of a port facility user in the 12-month period immediately preceding the application.
b. Ten TEUs for cargo measured by TEU, 75 net tons for cargo measured by net ton, or 400 VEUs for cargo measured by VEU.
(2) CARGO VOLUME. The total amount of noncontainerized general cargo or containers, measured in TEUs, in net tons, in kilograms, or in VEUs transported by way of a waterborne ship, air cargo aircraft, or railroad through a port facility; provided that such cargo shall be owned by the port facility user at the time the port facility is used.
(3) COMMISSION. The Renewal of Alabama Commission created by Section 40-18-402.
(4) COMPANY. Anyone or anything which has the powers to conduct the activities required to claim the port credit.
(5) INLAND PORTS. Physical sites located away from traditional land, air, and coastal borders with the vision to facilitate and process international and domestic trade through strategic investment in multi-modal transportation assets and by promoting value-added services as goods move through the supply chain.
(6) PORT FACILITY. Any type of deep draft ship terminal facility located within this state’s ports of entry, including publicly owned inland ports, through which cargo is transported by way of a waterborne ship, air cargo aircraft, or railroad, to or from destinations inside or outside this state and which handles cargo owned by third parties in addition to cargo owned by the port facility’s owner.
(7) PORT CREDIT. The credit provided for in Section 40-18-403.
(8) PORT FACILITY USER. A company engaged in manufacturing, warehousing, or distribution which uses a port facility.
(9) TEU. A “20-foot equivalent unit” volumetric measure based on the size of a container 20 feet long by eight feet wide by eight feet, six inches high.
(10) VEHICLE. Any motorized vehicle as defined in Section 32-1-1.1.
(11) VEU. A “Vehicle Equivalent Unit” volumetric measure of one cubic meter.
(Act 2016-102, p. 148, §2; Act 2021-2, §1.)
(a) The port credit provided for in Section 40-18-403 is created by this article and is allowed upon strict compliance with the provisions herein.
(b) Prior to the allowance of the port credit, an application shall be filed with the commission, on a form promulgated by the commission.
(1) The application shall be filed by the port facility user desiring to claim the credit.
(2) The commission shall establish deadlines for applications. Such applications shall solicit whatever information the commission deems important to its determination of whether granting a port credit will create new, high paying jobs in the state, bring substantial capital to the state, increase the usage of a port facility, promote the development of clusters of businesses in the state, or promote the economic development efforts of the state.
(3) Upon review of the applications, the commission may approve such applications as shall result in port credits being awarded so as not to exceed twelve million dollars ($12,000,000) for the life of the program, and shall not exceed five million dollars ($5,000,000) in a fiscal year.
(4) The commission shall charge application fees to offset the costs of administration of this article.
(c) Prior to claiming a port credit, the company shall submit to the Department of Commerce a certification containing information adequate to prove that the company is entitled to the credit. Following such examination as it deems necessary, the Department of Commerce may certify the information and deliver the same to the Department of Revenue. Thereafter, the Department of Revenue shall allow the tax credit.
(d)(1) Nothing in this article shall be construed to constitute a guarantee or assumption by the state of any debt of any company nor to authorize the credit of the state to be given, pledged, or loaned to any company.
(2) Nothing in this article shall be construed to make available to any company any right to the benefits conferred by this article absent strict compliance with this article.
(3) Nothing in this article shall be construed to change or lessen the requirements for claiming jobs act incentives under the Alabama Jobs Act, Section 40-18-370, et seq. Companies claiming the jobs act incentives must strictly comply with the Alabama Jobs Act.
(4) All filings made by a private party with the commission or any department of state government shall be made using forms adopted by the commission or department. Any such filing shall be treated as a tax return, subject to penalties imposed by the Department of Revenue.
(5) Nothing in this article shall be construed to limit the powers otherwise existing for the Department of Revenue to audit and assess any company claiming a port credit.
(Act 2016-102, §2.)
(a) There is hereby created the Renewal of Alabama Commission.
(b) The commission shall be comprised of all of the following persons:
(1) The Director of Finance, or his or her designee.
(2) The Secretary of Commerce, or his or her designee.
(3) The Chair of the House Ways and Means Education Committee, or its successor committee, if any, or his or her designee.
(4) The Chair of the Senate Finance and Taxation Education Committee, or its successor committee, if any, or his or her designee.
(5) Three persons appointed by the Governor, at least one of whom shall be a resident of an area of the state the source of whose primary power supply is the Tennessee Valley Authority or its lawfully authorized distributor.
(6) One person appointed by the Speaker of the House, who shall be an employee, board member, or trustee of an Alabama public community college or four-year institution of higher education.
(7) One person appointed by the President Pro Tempore of the Senate, who shall be an employee or a board member of an Alabama public school system providing K-12 education.
(c) All persons appointed to the commission shall have one or more of the following qualifications:
(1) Members must be knowledgeable in the management of money and finance.
(2) Members must have experience in international trade.
(3) Members must have experience as chief executive officers, chief financial officers, or other executive level management roles in businesses in this state which employ Alabama residents.
(d) (1) All appointing authorities shall coordinate their appointments so that diversity of gender, race, and geographical areas are reflective of the makeup of the state.
(2) No person appointed to the commission shall serve a term longer than four years. Persons may serve consecutive subsequent four-year terms.
(e) The Secretary of Commerce, or his or her designee, shall be the chair of the commission and shall preside over all meetings of the commission. The commission may elect such other officers as it may find necessary or desirable. The commission shall have a board secretary to keep minutes of its proceedings. No officer of the commission other than the chair need be a member of the commission.
(f) No member of the commission shall vote or participate in any matter in which the member or a family member of the member has any financial gain or interest.
(g) Members of the commission shall serve without compensation.
(h) The commission shall meet at the call of the chair or any majority of members thereof at least two times annually.
(i) The commission shall adopt its own rules of procedure for the transaction of its business, and a majority of the members present shall constitute a quorum for the purpose of transacting or performing authorized duties. Meetings of the commission are subject to Chapter 25A of Title 36. In order to balance the privacy needs of companies with openness to the public, the commission may use code names in its deliberations about various applicants and in the minutes of its proceedings.
(j) The Department of Commerce shall provide administrative and staffing support for the commission. The Department of Revenue shall disclose to the commission whatever information it may possess which would allow the commission to fulfill this article. The information shall only be disclosed and discussed in a closed session. The Department of Revenue may require members of the commission to execute confidentiality agreements before the disclosure of information.
(k) The commission shall make an annual report on the use of funds pursuant to this article. Such report shall be made to the Chair of the House Ways and Means Education Committee, the Chair of the Senate Finance and Taxation Education Committee, and the members of the Joint Legislative Advisory Committee on Economic Incentives established by Section 40-18-379, at the times and in the manner requested by the committee. Any publicly available version of the report may redact information which the Department of Commerce believes would place the state at a competitive disadvantage.
(l) The commission and the Department of Commerce and Department of Revenue are authorized to adopt rules as necessary to implement and administer this article and Article 19.
(m) Members of the commission shall be public officials for purposes of the ethics laws in Chapter 25 of Title 36.
(Act 2016-102, §2.)
(a) If approved by the commission, a port credit is allowed, in an amount equal to the cargo volume calculated from subdivisions (1) and (2) as follows multiplied by the appropriate amount shown in the table in subsection (b):
(1) The port user’s cargo volume in the 12-month period for which the commission has granted approval for the port user to claim the port credit, minus
(2) The port user’s base cargo volume.
(b) Port credit amount.
| Increase in cargo volume over base cargo volume | TEU | Net Ton | Kilogram for Air Freight | VEU | | --- | --- | --- | --- | --- | | Under 4.99 percent | $50 | $3 | $0.04 | $2.91 | | 5 to 14.99 percent | $75 | $4.5 | $0.06 | $4.37 | | 15 to 24.99 percent | $100 | $6 | $0.08 | $5.82 | | 25 percent or greater | $125 | $7.5 | $0.1 | $7.28 |
(c) The commission shall decrease the amount of the port credit to ensure that the anticipated revenues for the port facility and state will exceed the amount of the port credit sought. The port credit may be conditioned on whatever requirements the commission shall impose. The port credits shall only be available to the extent that a port facility user ships more than 105 percent of its cargo volume from the 12-month period immediately preceding the port facility user’s application. Moreover, the port credit shall only be available to the extent a port facility user ships more than 10 TEUs, for cargo measured by TEU, more than 75 net tons, for cargo measured by net ton, more than fifteen thousand (15,000) kilograms for air cargo measured by kilograms, or more than 400 VEUs, for cargo measured by VEU.
(d) The following methods may be used to realize the port credit:
(1) The port credit may offset the tax levied by this chapter, but not below zero. The port credit may also offset the estimated payments of the tax levied by this chapter, but not below zero. In no event shall the port credits be allowed to reduce any estimated payment of the tax levied by this chapter before October 1, 2016. In any one year, if the port credit exceeds the amount of tax liability, the port user may carry forward the unused port credit. No carryforward shall be allowed for more than five years. Rules similar to those used for Section 40-18-15.2 shall be applied.
(2) A company may assign and convey a port credit to another company if substantially all of the assets of the company are assigned and conveyed in the same transaction. Proof of such transfer shall be submitted to the Department of Revenue.
(e) To the extent that the port credit is utilized by the port user or by a transferee company, no deduction for the related expenses shall be allowed.
(f) For any company that enters into an economic development project agreement with the state, the project agreement may provide for an allocation to the company of any port credits that have not been allocated pursuant to this article. Allocations made pursuant to this subsection shall meet all of the following requirements:
(1) Allocations shall be made by the Governor and approved by the commission.
(2) Allocations for a project shall not exceed three million dollars ($3,000,000).
(3) Allocations shall be granted only to a new warehouse or distribution facility that commits to investing at least twenty million dollars ($20,000,000) at a single site and to creating 75 net new jobs in Alabama.
(4) Port credits may not be used until the Department of Commerce has received satisfactory proof that the capital investment and job creation requirements have been satisfied.
(5) Any port credit granted by this procedure shall not be granted for more than a 3-year period.
(6) Allocations shall not exceed the per unit amounts stated in subsection (b).
(7) Anticipated revenues for the state shall exceed the port credit granted, and the project agreement shall provide for recapture of all or part of the port credit should the company default on its obligations in the project agreement.
(Act 2016-102, p. 148, §2; Act 2021-2, §1; Act 2023-419, §1.)
THIS SECTION WAS REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-2.
(Act 2016-102, p. 148, §3; Act 2019-392, §3.)
THIS SECTION WAS REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-2
(Act 2016-102, p. 148, §3; Act 2019-392, §3.)
THIS SECTION WAS REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-2.
(Act 2016-102, p. 148, §3; Act 2019-392, §3.)
THIS SECTION WAS REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-2.
(Act 2016-102, p. 148, §3; Act 2019-392, §3.)
THIS SECTION WAS REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-2.
(Act 2016-102, p. 148, §3; Act 2019-392, §3.)
THIS SECTION WAS REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-2.
(Act 2016-102, §3.)
THIS SECTION WAS REPEALED IN THE 2021 REGULAR SESSION BY ACT 2021-2.
(Act 2016-102, §3.)
This article shall be known and may be cited as the Growing Alabama Act.
(Act 2021-2, §2.)
For the purposes of the Growing Alabama Act pursuant to this article, the following words and phrases have the following meanings:
(1) CAPITAL IMPROVEMENTS. Construction and rehabilitation expenses of a capital nature at an inland port or intermodal facility, the dredging of waterways in the immediate vicinity of an inland port, and the expansion of onsite storage facilities at an inland port or intermodal facility.
(2) ECONOMIC DEVELOPMENT ACTIVITIES. Activities and initiatives that enhance the use of, and flow of goods through, an inland port or intermodal facility.
(3) ECONOMIC DEVELOPMENT ORGANIZATION. A local economic development organization or a state economic development organization.
(4) GROWING ALABAMA CREDIT. The credit provided for in Section 40-18-417.4(a).
(5) INDUSTRY or BUSINESS. An entity that would conduct at a site an activity that is primarily described in Section 40-18-372(1).
(6) INLAND PORT. Any port on a navigable river away from traditional land, air, and coastal borders.
(7) INTERMODAL FACILITY. Any facility that interconnects two or more different modes of air, rail, or road traffic serving multiple customers, and which involves storage facilities.
(8) LOCAL ECONOMIC DEVELOPMENT ORGANIZATION. Organizations that are determined by the Department of Commerce to meet both of the following criteria:
a. The organization is an Alabama entity not operating for profit, including, but not limited to, a municipality or county, an industrial board or authority, a chamber of commerce, or some other foundation or Alabama nonprofit corporation charged with improving a community or region of the state.
b. The organization has a record of supporting or otherwise participating in economic development in some part of this state.
(9) RENEWAL OF ALABAMA COMMISSION. The Renewal of Alabama Commission created by Section 40-18-402.
(10) SITE. Real property owned by one or more local economic development organizations and intended for use by an industry or business.
(11) STATE ECONOMIC DEVELOPMENT ORGANIZATION. An organization that is determined by the Department of Commerce to be an Alabama entity not operating for profit which is charged with improving the state or a region of the state and has a record of supporting or otherwise participating in economic development in the state.
(Act 2021-2, §3; Act 2021-423, §3; Act 2023-34, §2; Act 2026-533, §1.)
(a)(1) A local economic development organization that owns a site, either solely or jointly with other local economic development organizations, may apply to the Department of Commerce for funding to solve an inadequacy involving the site. For sites with multiple owners, all owners shall submit a joint application as co-applicants. The application shall include at least one of the following:
a. If there is a pending expression of interest about the site from an industry or business, a list of the site preparation or public infrastructure work needed to make the site acceptable to the industry or business.
b. If the site has been offered to one or more industries or businesses but the offer did not result in the industry or business locating on the site, a list of the site preparation or public infrastructure work that, if it had been completed, would have made the site acceptable to the industries or businesses.
c. If the site is an industrial or research park that needs connections to interstates, highways, roadways, rail systems, or sewer, fiber, electrical, gas, or water infrastructure, a list of the site preparation or public infrastructure work needed.
d. Capital improvements or economic development activities at an inland port or intermodal facility, as described in Section 40-18-417.1, provided that the application is accompanied by an economic impact report on such improvements or activities.
e. Any site improvement or public infrastructure work in census tracts that meets the definition of low-income communities pursuant to 26 U.S.C. § 45D(e) as those communities were identified as of January 1, 2015, or in such a community identified thereafter.
(2) An economic development organization may apply to the Department of Commerce for funding to undertake the construction, maintenance, promotion, operation, management, leasing, and subleasing of an agricultural center that includes a multi-use facility and related commercial and noncommercial structures for livestock, equestrian, small animal shows and events, spectator events, trade shows, educational conferences, agricultural and agricultural-related industries, educational, demonstrational or training purposes, educational and training conferences or events, recreational vehicle rallies, recreational vehicle multi-day parking, hosting of corporate and non-corporate organization meetings, use as fair grounds, operation of retail activities, and other events and facilities expected to draw participants and spectators from states located across the southeastern United States, with a projected total annual economic impact upon completion of all phases of the agricultural center of at least thirty-five million dollars ($35,000,000) and with the related and supporting infrastructure and facilities having a projected capital expenditure upon completion of all phases of the agricultural center of at least one hundred million dollars ($100,000,000), provided that the application is accompanied by an economic impact report on the agricultural center.
(b) The application shall include quotes for the completion of the work, following compliance with the procedures set forth by the Department of Economic and Community Affairs, as if the organization were disbursing state funds received from the department.
(c) The application provided in paragraph (a)(1)a. or b. shall include an estimate of the number of jobs, wages, and capital investments that would have been undertaken by the industries or businesses referred to in paragraph (a)(1)a. or b.
(d) The application provided in subsection (a) shall include proof that each applicant or co-applicant has in full force and effect a conflict of interest policy consistent with that found in the instructions to Form 1023 issued by the Internal Revenue Service.
(e) The application provided in subsection (a) shall include a notarized affirmation by an officer of the economic development organization that the submission of the application did not violate the conflict of interest policy referred to in subsection (d).
(f) If the site is owned by one or more economic development organizations, the application provided in subsection (a) must be jointly submitted by all economic development organizations. Each co-applicant must submit the conflict of interest policy referred to in subsections (d) and (e).
(Act 2021-2, §4; Act 2023-34, §2; Act 2024-441, §1; Act 2026-533, §1.)
(a) Following a review, if the Department of Commerce approves the application provided in Section 40-18-417.2(a), it shall forward the application to the Renewal of Alabama Commission.
(b) The Renewal of Alabama Commission shall consider the application and shall approve it if the commission deems it worthy of approval. As to improvements at industrial sites, the commission shall give preference to sites with at least 1,000 acres of available space. As to applications for projects located in communities which have the potential to provide additional funding separate from the Growing Alabama Credits, the commission shall take into consideration whether the separate funding is to be provided to the project that is the subject of the application. Meetings of the commission are subject to Chapter 25A of Title 36. Notwithstanding the foregoing, the commission may meet by telephone or some other telecommunications device so long as members of the public are allowed the opportunity to listen to or otherwise observe the commission’s deliberations.
(c) The approval of an application by the commission shall specify the amount of money which the economic development organization is allowed to receive so that it can complete the work specified in the application.
(d) Following approval by the commission, the Department of Commerce shall enter into an agreement with all applicants or co-applicants. The agreement shall require all co-applicants to be jointly and severally liable for the proper disposition of funds and for the submission of all required reports and financial reviews. The agreement shall also do all of the following:
(1) Require the economic development organization to use funding received as a result of this law only for the purposes approved by the commission as expressed in the agreement.
(2) Require the economic development organization to make periodic reports, not more often than annually, to the Department of Commerce and the commission, as required by the commission, on the disposition of the funds. As to a project described in Section 40-18-417.2(a)(1), the report shall include information on the marketing of the site and the ultimate use of the site until such time as the economic development organization makes a final report. As to a project related to inland ports or intermodal facilities as described in Section 40-18-417.2(a)(1)d. or a project related to an agricultural center as described in Section 40-18-417.2(a)(2), the report shall include an economic impact report.
(3) Require the economic development organization to provide a review of its financial accounts as directed by the Renewal of Alabama Commission.
(e) For any approved applications, the Department of Commerce shall notify the Department of Revenue of the information specified in subsection (c).
(f) The Department of Commerce shall publish on its website a list of all approved applications and a list of the economic development organizations that made the approved applications.
(Act 2021-2, §5; Act 2023-34, §2; Act 2026-533, §1.)
(a) A taxpayer is allowed a Growing Alabama Credit to be applied against all of the following:
(1) To offset the income taxes levied in this chapter, or as an estimated tax payment of income taxes.
(2) To offset the state portion of the financial institution excise tax levied in Chapter 16.
(3) To offset the insurance premium tax levied by subsection (a) of Section 27-4A-3.
(4) To offset state license taxes levied by Article 2 of Chapter 21.
(b) In no event shall the Growing Alabama Credit cause a taxpayer’s tax liability to be reduced by more than 50 percent. Unused credits may be carried forward for no more than five years.
(c) Growing Alabama Credits shall be granted to taxpayers using an online system administered by the Department of Revenue. The online system shall allow taxpayers to agree to make a cash contribution to an economic development organization which was approved by the Renewal of Alabama Commission, as provided in Section 40-18-417.3. The online system shall ensure that credits are not granted for contributions to an economic development organization in excess of the amounts approved by the Renewal of Alabama Commission, as provided in Section 40-18-417.3.
(d) The cumulative amount of funding approved pursuant to this section shall not exceed twenty million dollars ($20,000,000) in a calendar year for calendar years ending prior to January 1, 2024, which amount shall increase to twenty-three million dollars ($23,000,000) for the calendar year ending December 31, 2024, twenty-six million dollars ($26,000,000) for the calendar year ending December 31, 2025, twenty-nine million dollars ($29,000,000) for the calendar year ending December 31, 2026, thirty-two million dollars ($32,000,000) for the calendar year ending December 31, 2027, and thirty-five million dollars ($35,000,000) for calendar year ending December 31, 2028.
(e) The Renewal of Alabama Commission shall reserve at least 25 percent of the amounts specified in subsection (d) for projects located in targeted or jumpstart counties as defined in Section 40-18-376.1. In the event applications are not received and credits are not allocated for projects in these areas by the close of the second quarter of the program year, the funds may revert for allocations of other project applications.
(f) To the extent that a Growing Alabama Credit is used by a taxpayer, the taxpayer shall not be allowed any deduction that would have otherwise been allowed for the taxpayer’s contribution. Credits may only be claimed by the donating taxpayer and may not be assigned or transferred to any other taxpayer. For purposes of this section, a donating taxpayer includes a taxpayer who is a shareholder of an Alabama S corporation or a partner or member of a subchapter K entity that made a contribution to an economic development organization which was approved by the Renewal of Alabama Commission.
(g) The Department of Finance shall adopt rules to ensure that the Growing Alabama Credit in no case would reduce the distribution for the Alabama Special Mental Health Trust Fund by using any unencumbered funds.
(Act 2021-2, §6; Act 2021-423, §4; Act 2023-34, §2; Act 2023-512, §1.)
(a) Upon receipt of funding provided by the tax credit process in Section 40-18-417.4, the economic development organization shall proceed with the work that was specified in the application required by Section 40-18-417.2.
(b)(1) As to a project described in subdivision (a)(1) of Section 40-18-417.2, the economic development organization shall report to the Department of Commerce upon the completion of the site preparation or public infrastructure work, upon the transfer of the site to an industry or business, and at other times as may be required or requested by the Department of Commerce.
(2) As to a project described in subdivision (a)(2) of Section 40-18-417.2, the economic development organization shall report to the Department of Commerce upon the completion of the work and at such times as may be required or requested by the Department of Commerce.
(c) The Department of Commerce shall make an annual report on the use of funds pursuant to Act 2021-2 to the Chair of the House Ways and Means Education Committee, the Chair of the Senate Finance and Taxation Education Committee, and the members of the Joint Legislative Advisory Committee on Economic Incentives established by Section 40-18-379, at the times, and in the manner, requested by the committee.
(Act 2021-2, §7.)
(a) All filings and applications made with any department of the state government shall be made using forms adopted by the department. The filing shall be treated as a tax return, subject to penalties imposed by the Department of Revenue.
(b) Nothing in this article shall be construed to constitute a guarantee or assumption by the state of any debt of any company nor to authorize the credit of the state to be given, pledged, or loaned to any company.
(c) Nothing in this article shall be construed to make available to any taxpayer any right to the benefits conferred by this article absent strict compliance with this article.
(d) Nothing in this article shall be construed to limit the powers otherwise existing for the Department of Revenue to audit and assess a taxpayer claiming the Growing Alabama Credit.
(e) Nothing in this article shall be construed to change or lessen the requirements for claiming jobs act incentives under the Alabama Jobs Act in Article 16 of Chapter 18. Companies claiming the jobs act incentives must strictly comply with Article 16 of Chapter 18.
(f) The Department of Commerce and Department of Revenue are authorized to adopt rules as necessary to implement and administer this article.
(Act 2021-2, §8.)
The Growing Alabama Credits provided in this article shall not be available for qualifying applicants as described in this article, for which applications are not approved on or prior to July 31, 2028, unless the Legislature enacts legislation to extend the date. This shall only affect the availability of credits for applications not approved on or prior to July 31, 2028, and shall not cause a reduction or suspension of any credits awarded on or prior to July 31, 2028.
(Act 2021-2, §9; Act 2023-34, §2.)
(a) Notwithstanding subsection (f) of Section 40-18-417.4, for tax years beginning on or after January 1, 2021, the credit issued to a parent or holding company may be claimed by the subsidiary, provided both parent or holding company and subsidiary are filing as part of an Alabama consolidated return. (b) The Department of Revenue may adopt rules for the implementation and administration of this section.
(Act 2023-313, §1.)
In no event does Act 2023-34 authorize any electric provider to provide retail electric service outside of its electric service territory as determined under the applicable provisions of Chapter 14 of Title 37. Nothing in Act 2023-34 is intended to amend, repeal, enlarge, or otherwise affect Chapter 14 of Title 37.
(Act 2023-34, §3.)
This article shall be known and may be cited as the Apprenticeship Tax Credit Act of 2016.
(Act 2016-314, §1.)
For the purposes of this article, the following terms shall have the following meanings:
(1) APPRENTICE. A worker at least 16 years of age, except where a higher minimum age standard is otherwise fixed by law, who is employed to learn an apprenticeable occupation as provided in 29 C.F.R. Part 29.4. The term includes a person who is compensated by a third party but whose apprenticeable work occurs under the supervision of an eligible employer.
(2) APPRENTICESHIP AGREEMENT. A written agreement, complying with 29 C.F.R. Part 29.2 between an apprentice and either the apprentice’s program sponsor, or an apprenticeship committee acting as agent for the program sponsors, which contains the terms and conditions of the employment and training of the apprentice.
(3) DIVISION. The Workforce Development Division of the Department of Commerce.
(4) ELIGIBLE EMPLOYER. A taxpayer who employs an apprentice pursuant to an apprentice agreement registered with the Office of Apprenticeship of the Employment and Training Administration of the United States Department of Labor.
(Act 2016-314, §2.)
[Repealed]
REPEALED BY ACT 2023-539, EFFECTIVE SEPTEMBER 1, 2023.
(a) For tax years beginning on or after January 1, 2017, through the tax year beginning January 1, 2019, an Alabama income tax credit is allowed for eligible employers that employ an apprentice for at least seven full months of the prior taxable year. The credit shall equal up to one thousand dollars ($1,000) for each apprentice employed, not to exceed five apprentices employed. The Department of Revenue, in consultation with the Workforce Development Division of the Department of Commerce, shall establish a scale reflecting ranges of amounts of money an employer has invested in an eligible apprentice and a corresponding tax credit amount and shall award the tax credit in accordance with this scale following confirmation from the Workforce Development Division that the apprentice for whom the credit is claimed is in compliance with all federal and state requirements for the apprenticeship program. The credit shall not be available for an individual apprentice for more than four taxable years.
(b) For tax years beginning on or after January 1, 2020, eligible employers that employ an apprentice for at least seven full months of the prior taxable year shall receive a credit equal to one thousand two hundred fifty dollars ($1,250) for each apprentice employed, not to exceed 10 apprentices employed. The Department of Revenue, in consultation with the Workforce Development Division of the Department of Commerce and the Alabama Office of Apprenticeship, shall establish a scale reflecting ranges of amounts of money an employer has invested in an eligible apprentice and a corresponding tax credit amount and shall award the tax credit in accordance with this scale following confirmation from the Workforce Development Division and the Alabama Office of Apprenticeship that the apprentice for whom the credit is claimed is in compliance with all federal and state requirements for the apprenticeship program. The credit shall not be available for an individual apprentice for more than four taxable years.
(c) For each credit claimed for each qualified apprentice under subsection (b) associated with an apprentice enrolled in a secondary or postsecondary career and technical education program, who is under the age of 18 years at the time the credit is claimed, and who is participating in a youth registered or industry-recognized apprenticeship program registered with the Alabama Office of Apprenticeship and funded through the Carl D. Perkins Career and Technical Education Act of 2006, P.L. 109-270, as revised by the Strengthening Career and Technical Education for the 21st Century Act, P.L. 115-224, adult basic education and literacy programs funded under Title II of the Workforce Innovation and Opportunity Act, P.L. 113-128, or public workforce programs funded under Title I and Title III of the Workforce Innovation and Opportunity Act, P.L. 113-128, an eligible employer may qualify for an additional tax credit, not to exceed five hundred dollars ($500) to offset the costs associated with hiring each apprentice who is under the age of 18, not to exceed the aggregate cap of 10 apprentices hired, as provided in subsection (b). An eligible employer under this subsection may claim the additional tax credit described in this subsection after employing an in-school youth apprentice, who satisfies the specifications provided in this subsection, for 90 days.
(d) The credit shall be allowed against the tax imposed by Chapter 16 or Chapter 18. This tax credit shall not be allowed to decrease a taxpayer’s tax liability to less than zero. The credit is not refundable or transferable. The credit shall be available, on a pro rata basis, to the owners of qualified employers that are entities taxed under subchapters S or K of the Internal Revenue Code or limited liability companies or professional corporations authorized to do business in this state. An employer applying for a tax credit must apply each year to receive the credit for the preceding calendar year.
(e) The cumulative amount of tax credits issued pursuant to this article shall not exceed seven million five hundred thousand dollars ($7,500,000) annually. The Department of Revenue shall ensure that this cap is not exceeded, shall prescribe the various methods by which these credits are to be issued, and shall develop procedures to notify taxpayers at such points in time when the tax credit caps in this subsection have been reached for the applicable tax credit year.
(f) If an employer employs an apprentice for less than the full preceding calendar year, but for at least 210 days during the full preceding calendar year, then the employer may apply for the full value of the credit.
(g) The Department of Revenue shall prescribe a form to claim this credit that provides information to the department sufficient for the proper administration of the credit.
(h) The participation of an employee with an apprenticeship program under this article and registration with the Alabama Office of Apprenticeship shall not constitute union affiliation, unless the employee expressly elects to affiliate with a union.
(Act 2016-314, p. 784, §3; Act 2019-506, §8; Act 2025-539, §14.)
[Repealed]
REPEALED BY ACT 2023-539, EFFECTIVE SEPTEMBER 1, 2023.
(a) The Alabama Office of Apprenticeship, under the direction of the Workforce Development Division of the Department of Commerce, with the consultation of the Board of Trustees of the Alabama Community College System or its designee, may adopt any rules necessary to establish standards for participation and eligibility and to implement and administer this article. The Alabama Office of Apprenticeship shall consult with the Department of Revenue to coordinate implementation and administration of this article.
(b) The Alabama Office of Apprenticeship shall provide an annual report to the Chair of the House Ways and Means Education Committee and the Chair of the Senate Finance and Taxation Education Committee to account for the effectiveness of the apprenticeship program under this article.
(Act 2016-314, p. 784, §4; Act 2019-506, §8; Act 2023-539, §14.)
[Repealed]
REPEALED BY ACT 2023-539, EFFECTIVE SEPTEMBER 1, 2023.
The tax credits allowed under this article shall be effective January 1, 2017, for the 2017 taxable year and shall continue through the 2025 tax year, unless extended by act of the Legislature.
(Act 2016-314, p. 784, §5; Act 2019-506, §8; Act 2023-539, §14.)
This article shall be known and may be cited as the “Alabama Taxpayer Protection and Assistance Act.”
(Act 2017-363, §1.)
The Alabama Taxpayer Protection and Assistance Act is enacted to protect consumers by establishing a mechanism to ensure that qualified individuals provide tax preparation services in Alabama.
(Act 2017-363, §2.)
When used in this article, the following terms shall have the following meanings:
(1) DEPARTMENT. The Alabama Department of Revenue.
(2) INCOME TAX RETURN PREPARER.
(a) A person who prepares for compensation, or who employs one or more persons to prepare for compensation, any income tax return or claim for refund, required to be filed pursuant to this chapter. The preparation of a substantial portion of a return or claim for refund shall be treated as the preparation of that return or claim for refund.
(b) A person is not an income tax preparer if all he or she solely performs the following duties:
furnishes typing, reproducing, or other mechanical assistance;
prepares returns or claims for refunds for the employer by whom he or she is regularly and continuously employed, or for an affiliate of that employer, including a subchapter K entity for which he or she prepares a return;
prepares as a fiduciary, returns or claims for refunds for any person; or
prepares claims for refunds for a taxpayer in response to any notice of deficiency issued to that taxpayer or in response to any waiver of restriction after the commencement of an audit of that taxpayer or of another taxpayer if a determination in the audit of the other taxpayer directly or indirectly affects the tax liability of the taxpayer whose claims he or she is preparing.
(3) PERSON. An individual, firm, proprietorship, association, corporation, or another entity.
(4) PTIN. Preparer Tax Identification Number issued by the Internal Revenue Service and referenced in Internal Revenue Service Notice 2011-6.
(Act 2017-363, §3.)
No person may provide tax preparation services for Alabama income tax returns, unless an IRS issued Preparer Tax Identification Number is provided by such preparer when submitting a return and signing as a paid preparer.
(Act 2017-363, §4.)
(a) For taxable years beginning on or after January 1, 2018, the department, by rule, shall require any income tax return preparer, as defined in this article, to include his or her PTIN on any tax return prepared by the income tax return preparer and filed under this chapter, or any claim for refund of tax imposed by this chapter.
(b) The department shall develop and by rule implement a program using the PTIN as an oversight mechanism to assess returns, to identify high error rates, patterns of suspected fraud, and unsubstantiated basis for tax positions by income tax return preparers.
(c) The department, by rule, shall establish formal and regular communication protocols with the Commissioner of the Internal Revenue Service to share and exchange PTIN information on income tax return preparers who are suspected of fraud, disciplined, or barred from filing tax returns with the department or the Internal Revenue Service. The department, by rule, may establish additional communication protocols with other states to exchange similar enforcement or discipline information.
(Act 2017-363, §5.)
(a) The department may investigate the actions of any income tax return preparer filing Alabama income tax returns and may bar or suspend an income tax return preparer from filing returns with the department for good cause, subject to the appeal rights under Chapter 2A of this title.
(b) In addition to all other penalties provided by law, any person violating this act by failing to provide his or her PTIN shall pay a civil penalty to the department in the amount of $50 per offense, but not to exceed $25,000 per calendar year; however, no penalty shall be imposed if the failure is due to reasonable cause and not due to willful neglect, as determined by the department.
(Act 2017-363, §6.)
The department shall adopt rules to assist with the implementation and enforcement of this article.
(Act 2017-363, §10.)
(a) Any tax credits or advance refund amounts received as a result of the federal Coronavirus Aid, Relief, and Economic Security Act, as provided in 26 U.S.C. § 6428, or as a result of Section 272 of the COVID-related Tax Relief Act of 2020 (RELIEF Act), Pub. L. 116-260, as provided in 26 U.S.C. § 6428A, or as a result of other similar COVID-related relief measures for individuals enacted by the United States Congress, as applicable to the 2021 tax year, shall be excluded from Alabama individual income taxation.
(b) Any tax credits or advance refund amounts received as a result of the federal Coronavirus Aid, Relief, and Economic Security Act, as provided in 26 U.S.C. § 6428, or as a result of Section 272 of the RELIEF Act, Pub. L. 116-260, as provided in 26 U.S.C. § 6428A, or as a result of other similar COVID-related relief measures for individuals enacted by the United States Congress shall also be excluded from any and all calculations in determining a taxpayer’s federal income tax deduction pursuant to Section 40-18-15.
(c) Principal or interest payments incurred by an employer on any qualified education loan that is excluded from an employee’s federal gross income pursuant to 26 U.S.C. § 127(c)(1)(B), under the provisions of Section 2206(a) of the Coronavirus Aid, Relief, and Economic Security Act, as amended by Section 120 of the Taxpayer Certainty and Disaster Relief Tax Act of 2020, Pub. L. 116-260, shall be excluded from the gross income of the employee for income taxes imposed by this chapter to the same extent as the amount is excluded from the federal gross income.
(d) Any amount received from a Qualified Emergency Federal Aid Grant shall be excluded from the gross income of the grant recipient for income taxes imposed by this chapter to the same extent as the amount is excluded from the federal gross income under Section 277 of the RELIEF Act.
(e) Any Alabama taxpayer subject to the tax imposed by Chapter 16 or this chapter shall be exempt from recognizing as income any amount received from the state Coronavirus Relief Fund provided by the United States Congress to the State of Alabama from the Coronavirus Aid, Relief, and Economic Security Act.
(f) Any qualifying disaster relief payment received by an Alabama taxpayer which would be excluded from federal income taxation pursuant to 26 U.S.C. § 139 as a result of the Presidential Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak shall be excluded from the gross income of the taxpayer for income taxes imposed by this chapter to the same extent as the amount is excluded from federal gross income.
(g) This section applies to tax years ending after March 27, 2020.
(Act 2021-1, §2.)
(a) Any amount of cancellation of indebtedness income resulting from a loan forgiven under Section 1106 or Section 1109 of the federal Coronavirus Aid, Relief, and Economic Security Act as redesignated or amended by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, Pub. L. 116-260, or under Section 311 thereof:
(1) Shall be exempt from the financial institution excise tax imposed by Chapter 16 and the income taxes imposed by this chapter to the same extent as the amount is exempt from the federal income tax under Sections 276 or 278 of the RELIEF Act.
(2) Shall not be considered in determining the deductibility of otherwise deductible expenses, such as payroll, utilities, mortgage interest, and rent, allowed to be paid with the exempt funds, to the same extent as the expenses remain deductible in calculating federal income tax under Sections 276 or 278 of the RELIEF Act.
(3) Shall also be excluded from any and all calculations in determining a taxpayer’s federal income tax deduction pursuant to Chapter 16 or this chapter.
(b) This section applies to tax years ending after March 27, 2020.
(Act 2021-1, §3.)
(a) Any subsidy payment for covered loans as described in Section 1112(c) of the federal Coronavirus Aid, Relief, and Economic Security Act; any amounts received as Emergency EIDL Grants under Section 1110 of the federal Coronavirus Aid, Relief, and Economic Security Act, as amended by Section 332 of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act; and any amounts received as Grants to Shuttered Venues or as Targeted EIDL Advances under Sections 324 or 331, respectively, of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act:
(1) Shall be exempt from financial institution excise tax imposed by Chapter 16 and the income taxes imposed by this chapter to the same extent as the amount is exempt from federal income tax under Section 278 of the RELIEF Act.
(2) Shall not be considered in determining deductibility of otherwise deductible expenses, such as payroll, utilities, mortgage interest, and rent, allowed to be paid with the exempt funds, to the same extent as the expenses remain deductible in calculating federal income tax under Section 278 of the RELIEF Act.
(3) Shall also be excluded from any and all calculations in determining a taxpayer’s federal income tax deduction pursuant to Chapter 16 or this chapter.
(b) This section applies to tax years ending after March 27, 2020.
(Act 2021-1, §4.)
(a) This article shall be known and may be cited as the Sweet Home Alabama Tourism Investment Act.
(b) For purposes of this article, the following words and phrases have the following meanings:
(1) APPLICANT. Any corporation, limited liability company, partnership, sole proprietorship, business trust, or other legal entity authorized to do business in the State of Alabama.
(2) APPROVED COMPANY. Any company approved for tax rebates for operating a certified tourism destination project.
(3) APPROVED COSTS. Costs relating to the following:
a. Land acquisition.
b. Construction.
c. Engineering.
d. Design.
e. Contract bonds and insurances.
f. Installation of utilities paid by the applicant, including project-specific off-site extensions.
(4) BOARD. Alabama Tourism Advisory Board established pursuant to Section 41-7-3.
(5) CAPITAL INVESTMENT. All costs and expenses incurred by the incentivized company in connection with the acquisition, construction, installation, and equipping of a qualifying project, if the costs are required to be capitalized for purposes of the federal income tax, determined without regard to any rule that permits expenditures properly chargeable to a capital account to be treated as current expenditures. However, any project involving the extraction of natural resources shall not be included as a capital investment expenditure.
(6) CERTIFIED TOURISM DESTINATION PROJECT.
a. A certified tourism destination project must conduct an activity specified in subparagraphs 1. through 7.
A qualifying project that has seventy-five million dollars ($75,000,000) of capital investments may be considered a mega project.
A qualifying project may be a tourist destination attraction with a minimum private investment of not less than fifty million dollars ($50,000,000).
A qualifying project may be a tourism attraction with a minimum private investment of thirty-five million dollars ($35,000,000). The attraction must be open to the public at least five days per week, serve food and beverages, and provide live entertainment at least three nights per week.
A qualifying project may be a resort development with a minimum investment of thirty-five million dollars ($35,000,000) and consist of a hotel with a minimum of 200 guest rooms or 200 units that may be used for vacation rental. The development must also include guest amenities such as restaurants, golf courses, spas, entertainment activities, and other amenities.
A qualifying project may be a tourism destination attraction with a minimum investment of thirty-five million dollars ($35,000,000) located within a historic district where the district is listed in the National Register of Historic Places.
Retail related to a qualifying project must consist primarily of upscale brands or their equivalent. Retail activities not eligible for a rebate include the following:
i. Department stores.
ii. Convenience stores.
iii. Grocery stores.
iv. Liquor and tobacco stores.
v. Discount stores.
vi. Multiplex theaters.
vii. Facilities that perform cleaning, repair, or alteration services.
viii. Facilities that perform personal salon services such as tanning, nail, and beauty.
b. Projects that may not be certified as an eligible certified tourism destination project include the following:
Expansions of any existing projects previously approved that are not equal to the lesser of 75 percent of the original capital investment or thirty-five million dollars ($35,000,000).
Facilities that are primarily developed for retail sales that are not certified as a resort development. Pro shops, souvenir shops, gift shops, concessions, and similar retail activities may not be included within the definition of “tourism destination project.”
(7) COMPLETION DATE. A date by which the approved company shall have completed the tourism destination project. The completion date must occur within three years of the date of the financial incentive agreement unless an extension is granted by the board. Completion date is the date the project is placed in service and is generating revenue.
(8) DEPARTMENT. The Alabama Tourism Department.
(9) PROJECT. Any land, building, or other improvement, and all real and personal property, whether or not contiguous and whether or not previously in existence, if in Alabama and if deemed necessary or useful in connection with certified destination projects.
(10) QUALIFYING PROJECT. Any project to be undertaken by an approved company that is deemed a certified tourism destination project.
(11) TOURISM DESTINATION ATTRACTION. Tourist attractions that qualify include the following:
a. Theme parks.
b. Water parks.
c. Entertainment parks or outdoor adventure parks.
d. Cultural or historical interpretive educational centers or museums.
e. Motor speedways.
f. Indoor or outdoor entertainment centers or complexes.
g. Convention centers.
h. Professional sports facilities.
i. Attractions created around a natural phenomenon or scenic landscape.
j. Waterfront marina facilities, including, but not limited to, indoor marine vessel storage, restaurants, and marine sales and service.
k. Aquariums.
(Act 2023-34, §§4, 5; Act 2026-204, §1.)
(a) Prior to the allowance of a tax rebate on transactional taxes, an application shall be filed with the tourism department in the manner established by the department.
(b) The tourism department shall adopt standards to be used by the Alabama Tourism Advisory Board for the review and approval of certified tourism destination projects for which a tax rebate for transactional taxes is sought.
(c) The tourism department shall establish deadlines for applications. Applications shall solicit whatever information the department deems important to its determination of authorizing a tax rebate.
(Act 2023-34, §5; Act 2026-204, §1.)
(a) In order for an applicant that proposes a certified tourism destination project to be an approved company, the board shall make both of the following findings:
(1) That the project is in fact a certified tourism destination project.
(2) That the amount of tourism rebates sought are exceeded by anticipated revenues for the state, including income, property, business privilege, utility, gross receipts, and sales and use tax revenues that are generated by the economic activity resulting from the project.
(b) The Alabama Tourism Advisory Board shall review qualifying projects meeting the established criteria and approve eligible projects for tax rebates. Upon a determination that all program requirements are met, the board shall issue an Alabama Tourism Advisory Board Act Certificate. Each certificate shall include the amount of the approved project costs, the maximum rebate available, and the rebate term of 10 years from the completion date or the date on or which five million dollars ($5,000,000) of the approved project costs has been rebated to the applicant, whichever threshold is met first.
(Act 2023-34, §5; Act 2023-512, §2; Act 2026-204, §1.)
(a) A tax rebate from taxes generated within the tourism destination attraction by the certified tourism destination project over a 10-year period from the commencement of operation, which must occur after June 15, 2023, in the amount of up to five million dollars ($5,000,000) may be claimed. No approved company may receive more than one million dollars ($1,000,000) in tourism rebates in a calendar year.
(b)(1) The tax rebates authorized by this article are limited to an aggregate amount for all certified tourism destination projects of ten million dollars ($10,000,000) annually with 10 percent set aside annually for certified tourism destination projects located in targeted or jumpstart counties.
(2) An approved company with a certified tourism destination project may be granted a tax rebate on any combination of the state and local sales and use taxes, lodging taxes, or other transactional taxes generated by or arising within the tourism destination project after June 15, 2023.
(3) An approved company shall have no obligation to refund or otherwise return any amount of taxes authorized for rebate to the persons from whom the taxes were collected.
(4) Rebates authorized under this article shall be for up to 10 years, commencing on the date the tourism attraction opens for business, which must occur after June 15, 2023, and begins to collect taxes generated by, or arising within, the tourism destination project.
(5) Tax rebates may be a combination of state and local retail sales taxes, state and local lodging taxes, and any other taxes generated by, or arising within, the tourism destination project after June 15, 2023. The municipality or the taxing district where the tourism destination project will be located must support and approve the facility. The approval must be in the form of a resolution of the governing authority acknowledging support of the project and acknowledging that a portion of no less than 20 percent of the tax rebates will be comprised of municipal taxes.
(6) The Alabama Department of Revenue, in consultation with the Alabama Tourism Department, shall adopt rules and require the filing of a rebate form designed by the Alabama Department of Revenue to reflect the intent of this article. To begin the rebate process, once project phases open for business after June 15, 2023, the approved company must provide a listing of all sales tax accounts and account numbers related to the project. The Alabama Department of Revenue will provide these accounts and will begin making the required diversions into the Tourism Project Sales Tax Incentive Fund the month following notification. Rebate payments from the fund will be made each January and July to the approved company.
(7) No tax rebate shall be granted to an approved company during a tax year that the approved company is simultaneously receiving any other state tax incentive associated with any individual tourism attraction project.
(8) Any tax rebate shall be first applied to any outstanding tax obligation of the approved company which is due and payable to the state.
(9) Rebates under this article shall be made without interest.
(10) Tax rebates authorized under this article are transferrable to future owners of the qualifying tourism destination project.
(11) The tax rebate allowed under this article shall be effective beginning August 1, 2023, for projects placed into service after June 15, 2023, and shall continue through July 31, 2028, unless continued by an act of the Legislature.
(12) Tax rebates for certified tourism destination projects are to be administered by the Alabama Department of Revenue.
(c) Notwithstanding the ten million dollar ($10,000,000) annual aggregate cap on tax rebates allowed, the board may approve an annual one-time designation of an additional two million five hundred thousand dollars ($2,500,000) in tax rebates for one project per calendar year with a minimum capital investment amount of seventy-five million dollars ($75,000,000). Additionally, a company that is awarded the supplemental rebate may claim up to seven million five hundred thousand dollars ($7,500,000) in total, up to one million five hundred thousand dollars annually ($1,500,000), and is not subject to the caps otherwise provided for in this article.
(d) Within three months after the completion date, the approved company shall document the actual cost of the project through certification of the costs by an independent certified public accountant acceptable to the board.
(e) For purposes of determining whether a project has met the minimum capital investment requirements, only bona fide, third-party, arms-length capital expenditures shall be included. The certification of project costs required under this subsection shall expressly verify all of the following:
(1) Each cost included in the capital investment calculation represents an actual expenditure paid to an independent, third-party vendor not related to the applicant, developer, or any affiliate thereof.
(2) No cost included in the calculation consists of any payment, fee, or charge paid directly or indirectly to the project developer, any member, partner, shareholder, manager, officer, affiliate, parent entity, subsidiary, or any entity under common ownership or control, including, but not limited to, developer fees, consulting fees, project-management fees, internal labor allocations, overhead charges, reimbursed salaries, or similar related-party payments.
(3) All costs included are properly capitalizable under the Internal Revenue Code and represent legitimate project expenditures necessary for the acquisition, construction, or completion of the certified tourism destination project.
(4) Any related-party transactions, if disclosed, are excluded from the capital investment amount used to determine eligibility for the supplemental rebate or any other investment-based incentive threshold.
(Act 2023-34, §5; Act 2023-512, §2; Act 2026-204, §1.)
There is created the Tourism Project Sales Tax Incentive Fund, which may consist of monies appropriated or otherwise made available by the Legislature in any manner, and monies from any other source designated for deposit into such fund, but not include monies subject to a constitutional designation for some other purpose. Unexpended amounts remaining in the fund at the end of each fiscal year of the state revert. Any investment earnings or interest earned on amounts in the fund shall be credited to the fund.
(Act 2023-34, §5.)
The department shall report to the Legislature by the second legislative day of the 2026 Regular Session, and annually thereafter, on the overall economic activity, usage, and impact to the state of the tax rebates allowed for tourism destination projects. The information in the reports shall be consistent with the information required by the Legislature in accordance with Section 40-1-50. Information provided pursuant to this section is exempt from the confidentiality provisions of Section 40-2A-10.
(Act 2023-34, §5.)
In no event does Act 2023-34 authorize any electric provider to provide retail electric service outside of its electric service territory as determined under the applicable provisions of Chapter 14 of Title 37. Nothing in Act 2023-34 is intended to amend, repeal, enlarge, or otherwise affect Chapter 14 of Title 37.
(Act 2023-34, §3.)
For the purposes of this article, the following words have the following meanings:
(1) QUALIFIED RESCUE SQUAD MEMBER. An active member of an organized rescue squad of a city, town, county, or other subdivision of the state or a public corporation and a member of the Alabama Association of Rescue Squads who is licensed by the Alabama Department of Public Health as an Emergency Medical Services Provider.
(2) QUALIFIED VOLUNTEER FIREFIGHTER. An active volunteer firefighter who is a member of a volunteer fire department as recognized by the State Forestry Commission, and certified by the Alabama Firefighter’s Personnel Standards and Education Commission as a firefighter or licensed by the Alabama Department of Public Health as an Emergency Medical Services Provider.
(Act 2022-298, §1.)
(a) For tax years beginning on and after January 1, 2023, and ending December 31, 2027, unless extended by an act of the Legislature, a qualified volunteer firefighter who is a certified volunteer firefighter or a licensed EMT-Basic, or a qualified rescue squad member who is a licensed EMT-Basic, shall be entitled to a state income tax credit in the amount of three hundred dollars ($300) each year if he or she submits proof of training meeting the requirements of subsection (c).
(b) For tax years beginning on and after January 1, 2023, and ending December 31, 2027, unless extended by an act of the Legislature, a qualified volunteer firefighter who is certified as a Firefighter II or a licensed Advanced EMT or EMT-Paramedic, or a qualified rescue squad member who is a licensed Advanced EMT or EMT-Paramedic, shall be entitled to a state income tax credit of six hundred dollars ($600) each year if he or she submits proof of training meeting the requirements of subsection (c).
(c)(1) The member of a volunteer fire department certified by the State Forestry Commission, including a combination fire department, or organized rescue squad claiming an income tax credit under this section shall submit proof of not less than 30 hours of training each year.
(2) In order to qualify as training hours for purposes of this section, the training hours shall be obtained by either of the following:
a. Participation in organized training in a class approved for use in the fire service or emergency medical services in providing service as a firefighter.
b. Participation in organized training in a class approved for use in rescue squad and emergency medical services in providing service as a rescue squad member.
(3) Training hours shall be certified for the purposes of this article if the training hours are approved in advance of the training by the volunteer fire department or the organized rescue squad of which the individual receiving the training is a member.
(d) The Department of Revenue shall do the following:
(1) Provide a standardized format for a certificate to be signed by the qualifying taxpayer and a certifying supervisor to indicate the number of certified training hours and other information required to substantiate the credit being claimed.
(2) Require a taxpayer to provide a copy of the certificate when claiming the tax credit pursuant to this article. Failure to file the required certificate shall result in the automatic denial of the credit.
(e) The Department of Revenue may adopt rules for the implementation and administration of this article.
(Act 2022-298, §2.)
This article shall be known and cited as the Small Business Relief and Revitalization Act of 2022.
(Act 2022-53, §1.)
For tax years ending after the enactment of the federal American Rescue Plan Act of 2021, any amount of cancellation of indebtedness income resulting from a loan forgiven under Section 1005 of the federal American Rescue Plan Act shall be all of the following:
(1) Exempt from income taxes imposed by this chapter to the same extent as the amount is exempt from federal income tax under Section 1005 of the federal American Rescue Plan Act of 2021.
(2) Not considered in determining the deductibility of otherwise deductible expenses allowed to be paid with the exempt funds, including, but not limited to, payroll, utilities, mortgage interest, or rent, to the same extent as the expenses remain deductible in calculating federal income tax under Section 1005 of the federal American Rescue Plan Act of 2021.
(3) Excluded from any and all calculations in determining a taxpayer’s federal income tax deduction pursuant to this chapter.
(Act 2022-53, §2.)
The Department of Revenue may adopt rules for the implementation and administration of this article.
(Act 2022-53, §6.)
In addition to any other transfers that may be provided by law, the state Comptroller shall direct from the Education Trust Fund to the Refundable Tax Credit Fund the amount needed to make the payments of the one-time refundable tax credit provided for in Section 40-18-511, as well as the amount necessary to offset the administrative cost for the implementation of this article to the Department of Revenue. The fund may accrue interest that shall be used to offset the administrative costs associated with the implementation of this article.
(Act 2023-377, §1; Act 2023-511, §1.)
(a) As used in this section, the term “qualified taxpayer” means an individual taxpayer who filed an Alabama individual income tax return pursuant to the tax levied in Section 40-18-5, on or before October 17, 2022, for the taxable year that began on January 1, 2021, including any extensions that have been granted. The term shall not include any of the following:
(1) A nonresident.
(2) An estate or trust.
(3) An individual who was claimed as a dependent by another taxpayer for federal or Alabama income tax purposes for the taxable year that began on January 1, 2021.
(b) Each qualified taxpayer is entitled to a one-time refundable income tax credit to partially offset the amount of sales tax paid on groceries in the taxable year in an amount based on the qualified taxpayer’s filing status for the taxable year that began on January 1, 2021, equal to:
(1) One hundred fifty dollars ($150) for single, head of family, and married filing separate.
(2) Three hundred dollars ($300) for married filing joint.
(c) The refundable income tax credit shall be electronically deposited into the bank account of the qualified taxpayer based on the appropriate information as indicated on the return for the taxable year that began on January 1, 2021; except for any qualified taxpayer of which the Department of Revenue does not have bank account information, in which case the refundable income tax credit shall be mailed by check to the qualified taxpayer.
(d) The Alabama Department of Revenue shall commence issuing refundable income tax credits no sooner than November 30, 2023.
(e) The refundable income tax credit shall not constitute taxable income for Alabama income tax purposes. The refundable income tax credit provided under this section shall not be subject to offset or debt collection against any liability.
(f) In no event shall the refundable income tax credit provided accrue interest for the benefit of the qualified taxpayer or be paid or credited to the qualified taxpayer with interest.
(g) The Department of Revenue may adopt rules for the implementation and administration of this article.
(Act 2023-377, §2; Act 2023-511, §2.)
It is not the intent of this article to make appropriations, but the funding required to implement this article shall be made in a supplemental appropriations act.
(Act 2023-377, §3; Act 2023-511, §3.)
This article shall be known and may be cited as the Preceptor Tax Incentive Program Act.
(Act 2023-519, §1.)
For the purposes of this article, the following terms have the following meanings:
(1) CLINICAL PRECEPTORSHIP. A clinical educational or training rotation for a student in any of the following programs that are physically located in this state and approved by and provided through a qualified health professions training program, for which the community-based faculty preceptor, also physically located in this state, is otherwise not compensated for the preceptorship:
a. A medical allopathic or osteopathic program.
b. A dental program.
c. An optometric program.
d. A physician assistant program.
e. An anesthesia assistant program.
f. A certified registered nurse practitioner program.
g. A certified nurse midwife program.
h. A certified registered nurse anesthetist program.
(2) COMMUNITY-BASED ADVANCE PRACTICE NURSE PRECEPTOR. A certified registered advance practice nurse licensed under Chapter 21 of Title 34 who provides medical services in a health care facility that is physically located in this state and not owned or operated by a qualified nursing, medical, or osteopathic school and who, through an agreement with a qualified nursing school physically located in this state, provides one or more clinical preceptorships for training to students in a certified registered nurse practitioner, certified nurse midwife, or certified registered nurse anesthetist program for which he or she receives no monetary compensation.
(3) COMMUNITY-BASED ASSISTANT TO PHYSICIAN PRECEPTOR. An assistant to physician licensed under Chapter 24 of Title 34, and practicing pursuant to a registration agreement with a licensed physician, who provides medical services in a health care facility that is physically located in this state and not owned or operated by a qualified medical, nursing, or osteopathic school and who, through an agreement with a qualified health professions program physically located in this state, provides one or more clinical preceptorships for students in a physician assistant or anesthesia assistant program for which he or she receives no monetary compensation.
(4) COMMUNITY-BASED FACULTY PRECEPTOR. A community-based advance practice nurse preceptor; community-based assistant to physician preceptor; or community-based physician, dentist, or optometrist preceptor.
(5) COMMUNITY-BASED PHYSICIAN, DENTIST, OR OPTOMETRIST PRECEPTOR. A physician licensed under Chapter 24 of Title 34; a dentist licensed under Chapter 9 of Title 34; or an optometrist licensed under Chapter 22 of Title 34, who provides medical services in a health care facility that is physically located in this state and not owned or operated by a qualified medical, dental, optometric, nursing, or osteopathic school and who, through an agreement with a qualified medical school physically located in this state, provides one or more clinical preceptorships for students in a medical program, dental program, optometric program, physician assistant program, anesthesia assistant program, or certified registered nurse practitioner, certified nurse midwife, or certified registered nurse anesthetist program for which he or she receives no monetary compensation.
(6) MEDICALLY UNDERSERVED RURAL AREA. A primary care service area with a deficit, or surplus of less than 2.0 of primary-care physicians, as shown by the most-recent Status Report of the Alabama Primary Care Physician Workforce from the Office for Family Health, Education and Research at the UAB Huntsville Regional Medical Campus.
(7) PROGRAM. The Preceptor Tax Incentive Program.
(8) QUALIFIED HEALTH PROFESSIONS TRAINING PROGRAM. An institution of higher education that is physically located in this state and has an accredited educational program for medicine, dentistry, optometry, physician assistants, anesthesia assistants, or certified registered nurse practitioners, certified nurse midwives, or certified registered nurse anesthetists.
(Act 2023-519, §2.)
(a)(1)The Alabama Statewide Area Health Education Centers Program Office shall administer the program and certify clinical preceptorships on behalf of all eligible qualified health professions training programs.
(2) A clinical preceptorship may not be certified as eligible under the program unless the clinical preceptorship is performed in a medically underserved rural area.
(b)(1) Prior to the certification of any clinical preceptorship, the Alabama Statewide Area Health Education Centers Program Office shall conduct a needs assessment of the current number and current need for community-based faculty preceptors in the state and submit a final report of the assessment to the Governor, Speaker of the House of Representatives, President Pro-Tempore of the Senate, the Chairs of the Senate Healthcare and House Health Committees, and the Chairs of the Senate Committee on Finance and Taxation Education and the House Ways and Means Education Committees.
(2) The Alabama Statewide Area Health Education Center Program Office shall consult with the Alabama Commission on the Evaluation of Services to develop the appropriate measures and methodology for conducting the needs assessment.
(Act 2023-519, §3.)
(a)(1) Beginning with the 2024 tax year, a community-based faculty preceptor, if he or she conducts a clinical preceptorship, shall be allowed a credit against the tax imposed by Section 40-18-2, in the following amounts:
a. A community-based physician, dentist, or optometrist preceptor shall be allowed a credit of five hundred dollars ($500) per rotation, up to an annual maximum of six thousand dollars ($6,000).
b. A community-based assistant to physician preceptor shall be allowed a credit of four hundred twenty-five dollars ($425) per rotation, up to an annual maximum of five thousand one hundred dollars ($5,100).
c. A community-based advance practice nurse preceptor shall be allowed a credit of four hundred twenty-five dollars ($425) per rotation, up to an annual maximum of five thousand one hundred dollars ($5,100).
(2) An individual may not accrue more than 12 clinical preceptorships in any combination of the categories described in subdivision (1) in one calendar year.
(b) A community-based faculty preceptor may not earn hours credited toward the tax credit pursuant to subsection (a) unless the clinical preceptorship has been certified by the Alabama Statewide Area Health Education Centers Program Office as eligible for the credit.
(c)(1) To receive the credit provided by this article, a community-based faculty preceptor shall claim the credit on his or her state income tax return for the tax year in which he or she completed the clinical preceptorship rotation; shall certify that he or she, and the health care center or facility through which he or she is employed, did not receive monetary payment during the tax year from any source for the training of medical, optometry, dental, physician assistant, anesthesia assistant, or certified registered nurse practitioner, certified nurse midwife, and certified registered nurse anesthetist students; and shall submit supporting documentation, including certification obtained from the Alabama Statewide Area Health Education Centers Program Office, to the Department of Revenue.
(2) Failure to provide the required documents shall result in the automatic denial of the credit.
(d) In no event shall the total amount of the tax credit provided by this section for a taxable year exceed the income tax liability of the taxpayer. No tax credit shall be allowed the taxpayer against his or her tax liability for prior or succeeding years.
(e) Adjudication of possible filing errors or violations of this article shall be determined by the Department of Revenue.
(Act 2023-519, §4.)
The Alabama Statewide Area Health Education Centers Program Office shall do both of the following:
(1) Issue to an eligible taxpayer a credit certificate to indicate the number of approved preceptor rotations and other information required by the Department of Revenue to certify the credit being claimed.
(2) Submit an annual informational report to the Department of Revenue by January 31 annually, which provides all taxpayer issued certificates with information required by the Department of Revenue for credit verification.
(Act 2023-519, §5.)
(a) Annually, on or before the first day of December, the Alabama Statewide Area Health Education Centers Program Office shall report on the condition, performance, and accomplishments of the program to the Governor, Speaker of the House of Representatives, President Pro-Tempore of the Senate, the Chairs of the Senate Healthcare and House Health Committees, and the Chairs of the Senate Committee on Finance and Taxation Education and the House Ways and Means Education Committees.
(b) The Alabama Statewide Area Health Education Center Program Office shall consult with the Alabama Commission on the Evaluation of Services to develop performance metrics and other measures of success to include in the annual report required pursuant to subsection (a). During the 2030 fiscal year, the program shall undergo an evaluation by the Alabama Commission on the Evaluation of Services to determine whether the program is impacting the determined measures of success.
(Act 2023-519, §6.)
The Department of Revenue may adopt rules for the implementation and administration of this article.
(Act 2023-519, §7.)
This article shall be repealed on September 29, 2031, unless extended by act of the Legislature.
(Act 2023-519, §8.)
This article shall be known and may be cited as the Alabama Workforce Housing Tax Credit Act.
(Act 2024-302, §1.)
Regarding the adoption of qualified allocation plans as they relate to the workforce housing tax credit by the authority, the authority shall incentivize and prioritize four percent qualified projects, or in the case of awards under Section 40-18-533(f), qualified projects in areas identified by the Department of Commerce concerning its priorities for the location and type, including new construction, rehabilitation, or both, of multifamily housing which will support economic development efforts and the creation of stable, good-paying jobs in the State of Alabama. It is the desire of the Legislature that the efforts of the Department of Commerce in seeking to create jobs will be generally supported by the creation of multifamily rental housing opportunities supported by the workforce housing tax credit.
(Act 2024-302, §2.)
For the purposes of this article, the following terms have the following meanings:
(1) ALABAMA TAX LIABILITY. The taxes otherwise due under Sections 27-3-29, 27-4A-3, 40-16-4, or 40-18-2.
(2) AUTHORITY. The Alabama Housing Finance Authority or its successor authority or agency.
(3) AWARD. The issuance by the authority of either of the following:
a. A reservation letter pursuant to the qualified allocation plan.
b. A determination letter for workforce housing tax credits to a qualified project during an award cycle, the amount of which award shall be claimed in each year of the credit period.
(4) AWARD CYCLE. Each fiscal year or other 12-month period designated by the authority over which the authority awards workforce housing tax credits to qualified projects.
(5) AWARD CYCLE CAP. The sum of all of the following:
a. Five million dollars ($5,000,000) for each year of the 10-year credit period as defined in 26 U.S.C. § 42(f)(1). Any funds not awarded may be carried forward to the next award cycle.
b. The amount, if any, by which the award cycle cap prescribed by this article for the preceding award cycle exceeds the workforce housing tax credits awarded by the authority in that award cycle.
c. The amount of workforce housing tax credits recaptured or otherwise disallowed under Section 40-18-533(e) in the preceding fiscal year.
(6) CREDIT PERIOD. The 10-year credit period as defined in 26 U.S.C. § 42(f)(1), subject to the special rule for the first year of the credit period as set forth in 26 U.S.C. § 42(f)(2).
(7) DEPARTMENT. The Alabama Department of Revenue, or its successor agency.
(8) ELIGIBILITY CERTIFICATE. A certificate issued by the authority to the owner of a qualified project certifying that the project is a qualified project that qualifies for the workforce housing tax credit authorized by this article and specifying the annual amount of workforce housing tax credits that may be claimed in each year of the credit period. The authority shall issue an eligibility certificate to a qualified project upon the authority’s approval of a final cost certification that complies with the authority’s requirements.
(9) FEDERAL LOW-INCOME HOUSING TAX CREDIT or FEDERAL TAX CREDIT. The federal tax credit as provided in 26 U.S.C. § 42.
(10) FOUR PERCENT QUALIFIED PROJECT. A qualified project that is eligible for federal low-income housing tax credits pursuant to 26 U.S.C. § 42(h)(4).
(11) MULTIFAMILY HOUSING REVENUE BOND POLICY. The authority’s policy, as amended from time to time, regarding the allocation of tax-exempt bond volume cap for affordable multifamily housing.
(12) QUALIFIED ALLOCATION PLAN. As defined in 26 U.S.C. § 42(m)(1)(B), subject to additions and modifications necessary to implement this article.
(13) QUALIFIED PROJECT. A qualified low-income building, as defined in 26 U.S.C. § 42(c)(2), that is located in the state, is eligible for the federal low-income housing tax credit, and is placed in service on or after January 1, 2025.
(14) QUALIFIED TAXPAYER. A taxpayer owning an interest, directly or indirectly, through one or more pass-through entities, in a qualified project at any time prior to filing a tax return claiming a workforce housing tax credit.
(15) TAXPAYER. An individual, corporation, S corporation, partnership, limited partnership, limited liability partnership, limited liability company, joint venture, financial institution, fiduciary of an estate of a trust, or insurer.
(16) WORKFORCE HOUSING TAX CREDIT or TAX CREDIT. The tax credit created by this article.
(Act 2024-302, §3.)
(a)(1) For applications for federal tax credits submitted to the authority on and after January 1, 2025, the authority, upon approving a federal low-income housing tax credit for a qualified project pursuant to the authority’s qualified allocation plan or multifamily housing revenue bond policy, may award a workforce housing tax credit under this article to the owner of the qualified project so long as doing so will not result in exceeding the award cycle cap prescribed by this subsection. The workforce housing tax credit shall be in an amount determined by the authority to be necessary for the financial feasibility of the qualified project and consistent with the qualified allocation plan and multifamily housing revenue bond policy, as applicable, but the annual award for each qualified project shall not be greater than two million dollars ($2,000,000).
(2) The authority shall send written notice of the award to the owner of the qualified project. The award notice shall state the amount of workforce housing tax credit awarded for each year of the qualified project’s credit period and stipulate that receipt of the tax credit is contingent upon issuance of an eligibility certificate.
(3) Upon issuance of an eligibility certificate, a copy of which shall be provided to the department and the Alabama Department of Insurance, a workforce housing tax credit shall be allowed for the qualified project for each year of the credit period in the amount specified in the eligibility certificate.
(4) The total amount of tax credit awards made by the authority under this article in each award cycle shall not exceed the award cycle cap.
(b)(1) The tax credit may be allocated by pass-through entities to some or all of its partners, members, or shareholders, including any not-for-profit entity that is a partner, member, or shareholder, in any manner agreed to by such persons, regardless of whether or not the person is allocated or allowed any portion of any federal low-income housing tax credit with respect to the qualified project, whether the allocation of the tax credit under the terms of the agreement has substantial economic effect within the meaning of 26 U.S.C. § 704(b), and whether the person is deemed a partner for federal income tax purposes as long as the partner or member would be considered a partner or member under applicable state law governing such entity, and has been admitted as a partner or member on or prior to the date for filing the qualified taxpayer’s tax return, including any amendments thereto, with respect to the year of the tax credit. Such pass-through entities or qualified taxpayer may assign all or any part of its interest, including its interest in the tax credits, to one or more pass-through entities or qualified taxpayers, and the qualified taxpayer shall be able to claim the tax credit so long as its interest is acquired prior to the filing of its tax return claiming the tax credit.
(2) If the tax credit is used to offset the financial institution excise tax, the offset shall be limited to the state portion of the financial institution excise tax.
(c) The workforce housing tax credit authorized by this article shall not be refundable. Any tax credit not used in a taxable year may be carried forward by a qualified taxpayer for the succeeding five years.
(d) Prior to filing the tax return, or in the case of pass-through entities, prior to passing the credit to the qualified taxpayer, a project owner that has been awarded a workforce housing tax credit shall submit a copy of the eligibility certificate to the department in a manner prescribed by the department.
(e) If under 26 U.S.C. § 42, a portion of any federal low-income housing credits taken on a qualified project is required to be recaptured or is otherwise disallowed during the credit period, the qualified taxpayer claiming workforce housing tax credits with respect to the qualified project shall also be required to recapture a portion of any tax credits authorized by this article. The percentage of workforce housing tax credits subject to recapture shall be equal to the percentage of federal low-income housing credits subject to recapture or otherwise disallowed during such period. Any tax credits recaptured or disallowed shall increase the income tax liability of the qualified taxpayer who claimed the tax credits in a like amount and shall be included on the tax return of the qualified taxpayer submitted for the taxable year in which the recapture or disallowance event is identified. The owner of the qualified project shall report any recapture event to the department, the Department of Insurance, the authority, and, in the same manner done for the recapture of federal low-income housing credits, the qualified taxpayer, if the project owner is not the qualified taxpayer.
(f) For each award cycle, the authority shall award at least 20 percent, but not more than 25 percent, of the award cycle cap to qualified projects located in areas designated as rural by the authority, subject to viable requests being received. The authority shall award the balance of the remaining available award cycle cap to four percent qualified projects without any geographic limitation.
(g) An insurance company claiming a workforce housing tax credit against the taxes, licenses, and other fees, fines, and penalties imposed, including any retaliatory tax imposed on insurance companies by Section 27-3-29, shall not be required to pay any additional tax as a result of claiming the tax credit. The workforce housing tax credit may fully offset any retaliatory tax imposed by the Code of Alabama 1975. A reduction in the taxes of a foreign insurance company to the extent obtained through a claim for credit under this article does not increase the retaliatory tax liability otherwise charged against that company.
(Act 2024-302, §4.)
The authority shall administer the workforce housing tax credit program and shall adopt the guidelines and qualified allocation plans necessary to implement and administer this article consistent with federal law provided in 26 U.S.C. § 42. The qualified allocation plan shall provide a preference for applications in which there is a commitment for: (i) a furnished children’s activity center which will be made available at no cost to a licensed, qualified, and insured childcare provider for after-school care for children in grades K through 8 residing at the qualified project during ordinary school days from 2:30 p.m. to 6:00 p.m.; or (ii) the qualified project owner shall subsidize the cost of after-school care for children grades K through 8 residing at the qualified project for at least three years from the placed in service date, by the lesser of one thousand dollars ($1,000) per year per unit occupied by a student participating in the after-school program or fifty thousand dollars ($50,000) per annum. The authority shall permit reserves to be established from project sources to fund such subsidy costs. The workforce housing tax credit authorized by this article shall not be available to taxpayers that submit an application for federal low-income housing tax credits for a qualified project after September 30, 2027. No action or inaction on the part of the Legislature shall reduce or suspend the tax credits authorized by this article in any past or future calendar year with respect to a qualified project if the application to the authority was substantially complete on or prior to September 30, 2027, even if the award is made after such date, the qualified project is placed in service after September 30, 2027, or the first workforce housing credits are available to the qualified taxpayer after September 30, 2027.
(Act 2024-302, §5.)
(a) The tax credit created pursuant to this article may only be claimed with respect to taxable years beginning on or after January 1, 2025. The tax credit provided in this article shall be subject to the reporting requirements of Section 40-1-50.
(b) The department and the Alabama Department of Insurance may adopt rules for the administration of this article.
(Act 2024-302, §6.)
The Legislature hereby makes the following findings of fact and declares its intent to be as follows: Alabama is currently attracting and creating jobs and business investments at a record-setting pace. Despite historically low unemployment rates, Alabama’s workforce participation rate ranked among the lowest in the country. One possible barrier to entering the workforce for some Alabamians is a lack of available, affordable, high-quality child care. Furthermore, the grant, and any appropriations by the Legislature in furtherance thereof, serves a public purpose by conferring a direct public benefit of a reasonably general character through the promotion of public health, safety, morals, security, prosperity, contentment, and the general welfare of the community. The grant achieves this public purpose by increasing the quality of child care to the general public, which has the effect of encouraging high-quality care and education for children and facilitating greater workforce participation throughout the state. It is the intent of the Legislature, by the passage of this article, to encourage more Alabamians to enter the workforce and gain employment by improving the quality and availability of child care options for working parents. Accordingly, future efforts to extend or reauthorize this article should be preceded by consideration of the effectiveness of this article in achieving these policy goals. To this end, once this article has had a sufficient opportunity to be implemented and its effects measured, but before extending or reauthorizing this article, the Legislature should request and examine reports from: (i) the Alabama Department of Revenue, to determine the usage of the tax credits; and (ii) the Alabama Department of Labor and the Alabama Department of Commerce, to determine the impact of the tax credits on workforce participation.
(Act 2024-303, §1.)
For the purposes of this article, the following terms have the following meanings:
(1) APPLICABLE TAXES. An employer’s, taxpayer’s, or child care provider’s, or in the case of a pass-through entity that is an employer, taxpayer, or child care provider, such employer’s, taxpayer’s, or child care provider’s owners’ taxes as follows:
a. Taxes levied in Chapter 18 of Title 40.
b. The state portion of taxes levied in Chapter 16 of Title 40.
c. Taxes levied in Section 27-4A-3(a).
d. Taxes levied in Article 2 of Chapter 21 of Title 40, not to include the freight line and equipment tax levied in Section 40-21-52.
(2) CHILD or CHILDREN. Individuals who are five years of age or less.
(3) CHILD CARE FACILITY. A facility meeting the definition found in Section 38-7-2(7), which is licensed by the Department of Human Resources and is participating in the quality rating and improvement system.
(4) CHILD CARE PROVIDER. An Alabama taxpayer that owns a child care facility or a nonprofit entity that owns and operates a child care facility in this state.
(5) ELIGIBLE CHILD or ELIGIBLE CHILDREN. Children who participate in the Child Care Subsidy Program administered by the Department of Human Resources and who attend a child care facility operated by a child care provider.
(6) ELIGIBLE EXPENSES. a. Expenses incurred by an employer for:
The construction, renovation, expansion, or repair of a child care facility, or for the purchase of equipment for such facility, or for the maintenance and operation thereof.
Payments made to child care facilities or employees for the provision of child care at child care facilities for children of employees.
Payments made to child care facilities to reserve services for children of employees.
b. For purposes of this definition, “child care facility” or “child care facilities” shall also include a facility meeting the definition found in Section 38-7-2(7), which is operated, directly or indirectly, by a public institution of higher education as defined in Section 16-5-1.
(7) EMPLOYEE. A resident of this state who works on a full-time or part-time basis for an employer. An employee shall include independent contractors engaged by an employer and the owners of an employer that also work for such employer on a full-time or part-time basis. Employees whose wages, excluding any overtime or bonuses, exceed eighty thousand dollars ($80,000) in a calendar year are not employees for the purposes of this article.
(8) EMPLOYER. A for-profit business lawfully operating in this state.
(9) EMPLOYER TAX CREDIT. A tax credit to be applied against applicable taxes for the year in which the eligible expenses are incurred by an employer, equal to the total eligible expenses incurred by the employer, up to six hundred thousand dollars ($600,000) per year for each employer.
(10) FACILITY TAX CREDIT. A tax credit to be applied against applicable taxes, calculated in accordance with Section 40-18-543(a), but not exceeding twenty-five thousand dollars ($25,000) per year for each child care facility.
(11) GRANT. A grant awarded by the Department of Human Resources to nonprofit child care providers for the purpose of funding expenses related to the construction, expansion, improvement, repair, or operation of a child care facility or child care facilities, so long as such expenses are made in furtherance of the child care services offered at such child care facility and result in increased quality of care or increased capacity for children at each applicable child care facility.
(12) OWNER. A shareholder, partner, or member of a pass-through entity.
(13) PASS-THROUGH ENTITY. An Alabama S corporation or a subchapter K entity.
(14) QUALITY RATING. The rating applicable to a child care facility under the quality rating and improvement system.
(15) QUALITY RATING AND IMPROVEMENT SYSTEM. A system of the Department of Human Resources known as the Alabama Quality STARS program that measures the quality of child care facilities on a scale of one to five stars, with five stars denoting the highest level of quality.
(16) RURAL AREA. Any Alabama county that meets the definition of “targeted county” found in Section 40-18-376.1(a)(2).
(17) SMALL BUSINESS. An employer that has fewer than 25 employees.
(18) STATE. The State of Alabama.
(Act 2024-303, §2.)
(a) Effective for tax years beginning on or after January 1, 2025, and ending December 31, 2027, unless extended by an act of the Legislature, an employer may apply to the Department of Revenue for an employer tax credit to be applied against applicable taxes. The employer tax credit shall be in an amount equal to 75 percent of the eligible expenses incurred by an employer; except, in the case of a small business, the employer tax credit shall be in an amount equal to 100 percent of the eligible expenses incurred by an employer.
(b) For the calendar year ending December 31, 2025, the employer tax credit is limited to an aggregate amount for all employers of fifteen million dollars ($15,000,000), which amount shall increase to seventeen million five hundred thousand dollars ($17,500,000) for the calendar year ending December 31, 2026; and twenty million dollars ($20,000,000) for the calendar year ending December 31, 2027.
(c) The Department of Revenue shall:
(1) Provide a standardized format for, and require completion of, a certificate to be signed by the employer applying for the employer tax credit certifying that the expenses incurred by the employer were eligible expenses incurred to support the provision of child care at child care facilities for the children of employees.
(2) Require the employer to provide documentation to substantiate to the satisfaction of the Department of Revenue the amount of the employer tax credit applied for pursuant to this section and that the expenses incurred by the employer were eligible expenses incurred to support the provision of child care at child care facilities for the children of employees.
(3) If the employer is a pass-through entity, require that the employer identify the identity and pro rata percentage ownership of its owners.
(d) The Department of Revenue shall award the tax credit to the employer after the employer provides the documentation required in subsection (c). Failure to provide the documentation required in subsection (c) shall result in the automatic denial of the employer tax credit.
(Act 2024-303, §3.)
(a) Effective for tax years beginning on or after January 1, 2025, and ending December 31, 2027, unless extended by an act of the Legislature, a child care provider may apply to the Department of Revenue for a facility tax credit to be applied against applicable taxes, in an amount equal to the average monthly number of eligible children, multiplied by a dollar amount which shall be based upon the quality rating of the child care facility as follows:
(1) Five star quality rating - two thousand dollars ($2,000) per eligible child.
(2) Four star quality rating - one thousand seven hundred fifty dollars ($1,750) per eligible child.
(3) Three star quality rating - one thousand five hundred dollars ($1,500) per eligible child.
(4) Two star quality rating - one thousand two hundred fifty dollars ($1,250) per eligible child.
(5) One star quality rating - one thousand dollars ($1,000) per eligible child.
(b) The facility tax credit is limited to an aggregate amount for all child care providers of five million dollars ($5,000,000) in a calendar year.
(c) The Department of Revenue shall:
(1) Provide a standardized format for, and require completion of, a certificate to be completed and signed by the child care provider applying for the facility tax credit, certifying each child care provider’s ownership of applicable child care facilities, the quality rating of each facility, and the average number of eligible children attending each facility monthly.
(2) Require the child care provider to provide documentation to substantiate to the satisfaction of the Department of Revenue the amount of the facility tax credit applied for pursuant to this section, the quality rating of each applicable child care facility, and the average number of eligible children attending each facility monthly.
(3) If the child care provider is a pass-through entity, require that the child care provider identify the identity and pro rata percentage ownership of its owners.
(d) The Department of Revenue shall award the facility tax credit to a child care provider after the child care provider provides the documentation required in subsection (c). Failure to provide the documentation required in subsection (c) shall result in the automatic denial of the child care facility tax credit.
(e) The Department of Human Resources and the Department of Revenue shall enter into a Memorandum of Understanding as to the information necessary to permit the Department of Revenue to effectively administer this section.
(Act 2024-303, §4.)
(a) The Department of Human Resources may make grants to nonprofit child care providers as provided in this section.
(b) The Department of Human Resources may establish priorities, guidelines, standards, and processes by which grants may be awarded.
(c) The Department of Human Resources shall require interested nonprofit child care providers to complete applications on forms issued by the Department of Human Resources which shall include at least the following:
(1) Child care provider ID.
(2) Licensee’s name.
(3) License number.
(4) Verification of nonprofit status.
(5) A certification from the applicant nonprofit child care provider that will comply with any rules adopted by the Department of Human Resources related to the grant.
(d) Failure to provide the information required by the Department of Human Resources may result in the automatic denial of the grant.
(e) No nonprofit child care provider shall be eligible to receive more than fifty thousand dollars ($50,000) under this section during a single calendar year.
(f) The aggregate amount of funding approved pursuant to this section shall not exceed five million dollars ($5,000,000) in a calendar year.
(g) The amount and all terms and conditions of each grant shall be memorialized in a grant agreement between the Department of Human Resources and the nonprofit child care provider, which agreement shall include at least the following terms and conditions:
(1) The amount of the grant.
(2) The nonprofit child care provider will use the grant solely in accordance with this section.
(3) The nonprofit child care provider will comply with any rules adopted by the Department of Human Resources related to the grant.
(4) The requirement that the default of the nonprofit child care provider, under any provision of the grant agreement, shall result in the repayment of any grant monies paid to the nonprofit child care provider by the Department of Human Resources.
(Act 2024-303, §5.)
(a) The Department of Human Resources and the Department of Revenue shall adopt rules as necessary, on or before January 1, 2025, for the implementation and administration of this article. Such rules shall ensure that:
(1) At least 25 percent of the amounts specified in Section 40-18-542(b) are reserved for awards to small businesses or employers that are headquartered in rural areas and at least 25 percent of the amounts specified in Section 40-18-543(b) are reserved for awards to child care providers operating child care facilities exclusively in rural areas; and that at least 25 percent of the amounts specified in Section 40-18-544(f) are reserved for awards to nonprofit child care providers operating the applicable child care facility in a rural area;
(2) In the event the Department of Revenue or the Department of Human Resources does not receive applications for and thereby does not allocate the reserved tax credits and grants by the close of the second quarter of the calendar year, the funds may revert for allocations to other applications;
(3) Employer tax credits and facility tax credits shall be awarded based on the order in which they are requested by employers and child care providers, respectively; and
(4) The employer tax credits shall not be awarded to employers who cannot demonstrate that they prioritize the payment of eligible expenses for the benefit of employees that are eligible for earned income tax credit under Title 26 of the United States Code, if any.
(b) Employer tax credits and facility tax credits may only be claimed by an employer or child care provider, or a taxpayer who is an owner of a pass-through entity that is an employer or child care provider, but may not be otherwise assigned or transferred to any other taxpayer. A taxpayer who is an owner of a pass-through entity that is an employer or child care provider may only claim the pro rata share of the employer tax credit or facility tax credit, respectively, equal to their percentage ownership of the employer or child care provider.
(c) Where the applicable taxes owed by the child care provider are less than the employer tax credit or facility tax credit received by such entities, the child care provider shall be entitled to claim a refund for the difference but may not carry the employer tax credit or facility tax credit forward for additional tax years. In the case of owners of pass-through entities where the taxes owed by such persons are less than their pro rata share of the employer tax credit or facility tax credit received, such persons shall be entitled to claim a refund for only the pro rata share of the employer tax credit or facility tax credit such persons receive in the tax year for which the employer tax credits or facility tax credits are awarded.
(d) The Department of Revenue shall also prescribe the various methods by which employer tax credits or facility tax credits are to be issued to employers and child care providers. Refunds under subsection(c) of employer tax credits and facility tax credits that are awarded against the applicable taxes in Section 40-18-541 shall be paid out of sales tax collections made to the Education Trust Fund and set aside by the Comptroller in the Child Care Tax Credit Account created in subsection (e), in the same manner as refunds of such taxes otherwise provided by law, and there is hereby appropriated therefrom, for such purpose, so much as may be necessary to annually pay for such tax credits as provided by this article.
(e) There is created within the Education Trust Fund a separate account named the Child Care Tax Credit Account for the payment of any refunds under subsection (c) of employer tax credits or facility tax credits awarded against the applicable taxes defined in Section 40-18-541. The Commissioner of Revenue shall certify to the Comptroller the amount of such tax credit refunds due to child care providers under this section and the Comptroller shall transfer into the Child Care Tax Credit Account only the amount from sales tax revenues within the Education Trust Fund that is sufficient for the Department of Revenue to use to cover the refunds for the applicable tax year. The Commissioner of Revenue shall distribute the funds in the Child Care Tax Credit Account to child care providers pursuant to this article.
(f) The Alabama Department of Finance shall adopt rules to ensure that the employer tax credit and the facility tax credit, in any case, would not reduce the distribution for the Alabama Special Mental Health Trust Fund by using any unencumbered funds to ensure that the employer tax credit and the facility tax credit shall not be limited, prevented, or reduced.
(Act 2024-303, §6.)
(a) All filings and applications made with the Department of Revenue in relation to the employer tax credit or the facility tax credit shall be made using forms adopted by the Department of Revenue. Such applications and filings shall be treated as tax returns, subject to penalties imposed by the Department of Revenue.
(b) All filings and applications made with the Department of Human Resources in relation to the nonprofit provider grant program shall be made using forms adopted by the Department of Human Resources.
(c) Nothing in this article shall be construed to constitute a guarantee or assumption by the state of any debt of any company nor to authorize the credit of the state to be given, pledged, or loaned to any company.
(d) Nothing in this article shall be construed to make available to any taxpayer any right to the benefits conferred by this article absent strict compliance with this article.
(Act 2024-303, §7.)
This article, the purpose of which is to generate additional funds for eligible rural general acute care, critical access, and rural emergency hospitals to strengthen their financial viability, shall be known and may be cited as the “Rural Hospital Investment Act of 2025.”
(Act 2025-404, §1.)
For the purposes of this article, the following terms have the following meanings:
(1) BOARD. The Rural Hospital Investment Program Board.
(2) DEPARTMENT. The Alabama Department of Revenue.
(3) ELIGIBLE RURAL HOSPITAL. A hospital that meets the requirements set out in Section 40-18-553.
(4) ELIGIBLE TAXES. Financial institution excise tax, income tax, insurance premium tax, and utility tax.
(5) FINANCIAL INSTITUTION EXCISE TAX. The taxes levied and collected pursuant to Chapter 16.
(6) INCOME TAX. The taxes levied and collected pursuant to Chapter 18.
(7) INSURANCE PREMIUM TAX. The taxes levied and collected pursuant to Chapter 4A of Title 27.
(8) PROGRAM. The Rural Hospital Investment Program.
(9) QUALIFIED DONATION. An unrestricted transfer of funds for eligible rural hospitals.
(10) QUALIFIED DONOR. Any person, third party, or organization that makes a qualified donation to an eligible rural hospital.
(11) RURAL HOSPITAL. A rural general acute care, rural emergency, or critical access hospital determined to be located in a rural area as set out in Section 40-18-553(a)(2).
(12) TAX YEAR. The calendar year for which annual income is reported to the State of Alabama by a person that makes a qualified donation.
(13) THIRD PARTY. An entity classified as a tax-exempt nonprofit organization by the Internal Revenue Service which participates in soliciting, administering, or managing qualified donations for eligible rural hospitals.
(14) UTILITY TAX. The taxes levied and collected pursuant to Articles 3 and 4 of Chapter 21 and the tax levied in Sections 40-21-50, 40-21-51, and 40-21-53.
(Act 2025-404, §2; Act 2026-34, §1.)
(a) The Rural Hospital Investment Program Board is established within the department to oversee the development and operation of the Rural Hospital Investment Program. The board shall consist of the following members:
(1) The Governor, or his or her designee.
(2) The State Treasurer, or his or her designee.
(3) The Commissioner of Revenue, or his or her designee.
(4) The President Pro Tempore of the Senate, or his or her designee.
(5) The Speaker of the House of Representatives, or his or her designee.
(6) Two representatives of the Alabama Hospital Association, appointed by the association.
(7) Two representatives of business, appointed by the Business Council of Alabama.
(b)(1) The appointing authorities for the members appointed pursuant to subdivisions (a)(6) and (a)(7) shall each appoint one initial member to the board for a term of two years and one initial member to the board for a term of four years.
(2) Members subsequently appointed to the board pursuant to subdivisions (a)(6) and (a)(7) shall each serve for a term of four years.
(3) A vacancy on the board of a representative appointed pursuant to subdivisions (a)(6) and (a)(7) shall be filled by the respective appointing authority before the next scheduled meeting of the board, and the appointee shall serve for the remainder of the unexpired term.
(c) Designees or appointees to the board shall be inclusive and reflect the racial, gender, geographic, urban, rural, and economic diversity of the state.
(d)(1) The board shall meet at least once a year in Montgomery, Alabama, but thereafter shall meet as necessary to conduct its business.
(2) A quorum for a meeting of the board shall be five members.
(3) The board may meet by electronic means, so long as there is a quorum of participating members.
(4) The legislative members of the board shall be entitled to their legislative compensation, per diem, and travel expenses for each day they attend a meeting of the board pursuant to Section 49 of the Constitution of Alabama of 2022.
(5) The nonlegislative members of the board shall serve without compensation but may be reimbursed for necessary expenses in attending meetings of the board pursuant to the policies of his or her respective appointing authority.
(Act 2025-404, §3; Act 2026-34, §1.)
(a) In order to receive qualified donations as an eligible rural hospital under the program, a health care institution shall meet all of the following requirements:
(1) Be a rural general acute care hospital, a rural emergency hospital, or a critical access hospital licensed by the Alabama Department of Public Health pursuant to Section 22-21-22.
(2) Be in a location considered to be a rural area under the federal Centers for Medicare & Medicaid Services’ eligibility definition of “rural” as verified through the Federal Office of Rural Health Policy in the Rural Health Information website supported by the federal Health Resources and Services Administration.
(3) Provide hospital services to both Medicare and Medicaid participants without discrimination.
(4) Provide hospital services to indigent patients, regardless of ability to pay.
(5) Be in compliance with all reports and audits required by law.
(6) Before any rural hospital organization is included on the list as eligible to receive contributions from the tax credit provided in this article, the organization shall submit to the board a five-year plan detailing the financial viability and stability of the rural hospital. The criteria to be included in the five-year plan shall be established by the board.
(b) A hospital shall only be eligible to receive assistance from the provisions of this article in a year in which the total support from the local governing body, in the form of direct tax revenue, budget appropriation, in-kind services, or other financial assistance, is equal to or more than 10 percent of the assistance provided to the local hospital under this article, with no more than five percent counted as in-kind contributions from the local governing body.
(Act 2025-404, §4.)
The board shall do all of the following:
(1) No later than November 1 of each year, create an operations manual for identifying rural hospitals and ranking the rural hospitals in order of financial need according to the criteria included in the hospital’s five-year plan. The manual shall include all of the following:
a. All deadlines for submitting required information to the board.
b. The criteria to be included in the five-year plan submitted pursuant to Section 40-18-553(a)(6).
c. The formula applied to rank the rural hospitals.
(2) No later than December 1 of each year, post all of the following in a prominent location on the department’s website:
a. The list and ranking order of rural hospitals eligible to receive contributions.
b. The operations manual created pursuant to subdivision (1).
c. All pertinent timelines relating to the tax credit, including, but not limited to:
The beginning date when contributions may be submitted for preapproval by donors for the tax period; and
The ending date when contributions may be submitted for preapproval by donors for the tax period.
(3) Annually post the following information in a prominent location on the department’s website:
a. The annual report prepared pursuant to Section 40-18-556.
b. The total preapproved contributions to date by a rural hospital or third party.
c. The total contributions received to date by each rural hospital.
d. The total aggregate amount of preapproved contributions made to date.
e. The aggregate amount of tax credits available.
f. A list of all preapproved contributions that were made to an unspecified rural hospital and the rural hospital that received the contributions.
g. The total amount received by each third party that participated in soliciting, administering, or managing donations.
(Act 2025-404, §5.)
(a) An eligible rural hospital shall only use qualified donations for the purpose of providing health care to the residents of the area that the rural hospital serves, which may include operational expenditures and expenditures for maintenance, capital upgrades, and improvements.
(b) An eligible rural hospital may retain a person, a third party, or an organization to solicit or manage the qualified donations the rural hospital receives for a percentage fee of the qualified donations solicited or managed, but total fees shall not exceed five percent of the total amount of qualified donations received during a calendar year.
(c) Any third party that participates in soliciting, advertising, or managing donations shall provide the complete list of eligible rural hospitals as published by the department to any potential donor regardless of whether a third party has a relationship or agreement with an eligible rural hospital.
(d) Starting in March of tax year 2027, an eligible rural hospital shall file a report with the board, on a form to be provided by the board which shall include all of the following information:
(1) A schedule of each qualifying donation received during the preceding tax year, which includes the amount, identifies the qualified donors, and describes how the qualified donation was or is planned to be spent.
(2) A schedule of payments made to any person, third party, or organization during the preceding tax year for the purpose of soliciting or managing the qualified donations received.
(e) An eligible rural hospital shall report all donations received to the department within 30 days of the receipt of that donation.
(Act 2025-404, §6.)
Annually, the board and the department shall jointly prepare a report that, at a minimum, includes all qualified donations reported by eligible rural hospitals and all tax credits claimed and approved pursuant to this article for the preceding tax year. This report shall be provided to the Legislature by the fifth day of the next regular session.
(Act 2025-404, §7.)
(a) A taxpayer may claim a tax credit to offset eligible taxes for each qualified donation as provided in this section.
(1) For a donor who is a single individual, a head of household, or married filing a separate return: an amount equal to 100 percent of the qualified donations the taxpayer made during the tax year for which the credit is claimed, not to exceed fifteen thousand dollars ($15,000).
(2) For a donor who is married filing a joint return: 100 percent of the qualified donations the taxpayer made during the tax year for which the credit is claimed, not to exceed thirty thousand dollars ($30,000).
(3)a. For a qualified donor that is taxed as an electing pass-through entity under Section 40-18-24.4: 100 percent of the qualified donations the taxpayer made during the tax year for which the credit is claimed, not to exceed four hundred fifty thousand dollars ($450,000).
b. The tax credit shall be taken by the taxpayer on a pro rata basis according to the percentage of ownership in the entity or the limitations set forth in this section, whichever is less. In the case of a donor that is taxed as a corporation under the Internal Revenue Code: an amount equal to 100 percent of the qualified donations the taxpayer made during the tax year for which the credit is claimed, or 75 percent of the corporation’s income, excise, or insurance premium tax, not to exceed the amount of the corporation’s income, excise, or insurance premium tax liability, whichever is less, with a contribution limit each tax year of five hundred thousand dollars ($500,000).
(4)a. A credit for utility taxes may be claimed in an amount equal to 100 percent of total qualified donations during the taxable year for which the credit is claimed. In order to claim a credit against utility tax payments levied in Articles 3 and 4 of Chapter 21 under this subdivision, a taxpayer must have a utility tax direct pay permit from the department pursuant to its requirements. A taxpayer shall provide a copy of the utility tax direct pay permit to each utility provider from whom the taxpayer receives services. A taxpayer holding a direct pay permit shall notify the department of each qualified donation pursuant to the department’s procedures. To the extent credits are available, the department shall reserve credits for a taxpayer and provide written confirmation thereof.
b. Upon receipt of a qualified donation, the recipient shall submit to the department certification of the donation received from a taxpayer under this subdivision pursuant to procedures established by the department within 30 business days after receipt of each donation. Upon receipt of the certification from the recipient, the department shall provide written confirmation to the taxpayer within 30 business days that the reserved credits of the taxpayer in the amounts of qualified donations actually made and not yet claimed are eligible to be used on its monthly utility tax direct pay return. A taxpayer may not use a credit against the utility tax until such time as the department provides the notification described in the previous sentence.
(b)(1) The total amount of the tax credit for a tax year may not exceed the taxpayer’s tax liability or, for financial institutions, the state portion of the taxpayer’s financial institution excise tax liability.
(2) Any unused tax credit may be carried forward for up to three years following the qualified donation but shall not be transferable.
(c)(1) The tax credits may be claimed beginning January 1, 2026, for the 2026 tax year.
(2) Any unused tax credit may be carried forward for up to three years following the qualified donations but shall not be transferable.
(Act 2025-404, §8; Act 2026-34, §1.)
(a) The statewide annual aggregate of the tax credit allowed for qualified donations shall not exceed the following amounts:
(1) Twenty million dollars ($20,000,000) in the tax year ending December 31, 2026.
(2) Twenty-five million dollars ($25,000,000) in the tax year ending December 31, 2027.
(3) Thirty million dollars ($30,000,000) for all subsequent tax years.
(b) No more than seven hundred fifty thousand dollars ($750,000) shall be contributed to any eligible rural hospital in the tax year ending December 31, 2026; one million dollars ($1,000,000) for the tax year ending on December 31, 2027; and one million two hundred fifty thousand dollars ($1,250,000) each year thereafter, to be limited by the annual aggregate amount applicable in subsection (a).
(c) In the event a qualified donor desires to make a contribution to an individual eligible rural hospital that has received the maximum amount of contributions for that year, the donor shall be provided, upon request to the board, the published list of eligible rural hospitals that are still eligible to receive contributions that year.
(d) In the event a qualified donor desires to make a contribution to an individual eligible rural hospital that exceeds the maximum amount allowed for that year, the department shall not deny the desired contribution but shall approve the proportional amount of the desired contribution up to the eligible rural hospital’s maximum amount of contributions for that year and any remainder shall be attributed to an eligible rural hospital according to the ranking as published under Section 40-18-554(1) which has not yet received the maximum amount of contributions for that year.
(e) In the event that a qualified donor desires to make a contribution to an unspecified or undesignated rural hospital, the donation shall be attributed to the eligible rural hospital according to the ranking as published under Section 40-18-554(1) which has not yet received the maximum amount of contributions for that year, regardless of whether a third party has a relationship or agreement with any eligible rural hospital.
(f) The department shall preapprove each qualified donation for compliance with each applicable limit in subsections (a) and (b).
(Act 2025-404, §9.)
AMENDED BY ACT 2026-34, EFFECTIVE FEBRUARY 4, 2026. SEE ACT FOR REVISED LANGUAGE.
(a) The department shall adopt rules pursuant to the Alabama Administrative Procedure Act on or before January 1, 2026, as necessary to administer and implement this article. The rules shall provide for all of the following:
(1) That the tax credits will not reduce the distribution for the Alabama Special Mental Health Fund.
(2) That the tax credits shall be awarded based on the order in which the credits are requested.
(b) The department shall prescribe the method by which the tax credits are to be issued to eligible taxpayers.
(Act 2025-404, §10.)
THIS SECTION WAS REPEALED BY ACT 2026-34, EFFECTIVE FEBRUARY 4, 2026.
(a) The State Treasurer shall adopt rules on or before January 1, 2026, pursuant to the Alabama Administrative Procedure Act necessary to implement the responsibilities of the board and this article.
(b) The board may retain an Alabama company to publicize the program, including the development of promotional and information literature and a program website for use by eligible rural hospitals and qualified donors.
(Act 2025-404, §11.)
The tax credits created by this article may also qualify for federal income tax credits or deductions, but it is not intended for any qualified donation under this article to automatically qualify for any federal income tax credit or deduction.
(Act 2025-404, §12.)
(a) The tax credits provided by this article may be claimed beginning January 1, 2026, for the 2026 tax year.
(b) Except as provided in Section 40-18-557(b)(2), no tax credit may be claimed after tax year 2028.
(Act 2025-404, §13.)
The following words, terms and phrases, when used in this chapter, shall have meanings ascribed to them in this section, except where the context clearly indicates a different meaning:
(1) VEHICLE TRANSPORTING PROPERTY. A straight truck with two axles, a trailer, a truck semitrailer with three axles, and a straight truck with three axles.
(2) MOTOR CARRIER. Any person, firm, partnership, association, joint stock company, corporation, lessee, trustee, or receiver appointed by any court controlling, operating, or managing any motor vehicle used for the transportation of persons or property for hire.
(3) DEPARTMENT. The Department of Revenue of the State of Alabama.
(4) COMMISSIONER. The Commissioner of Revenue of the State of Alabama.
(5) TAXPAYER. Any person, firm, partnership, association, joint stock company, corporation, lessee, trustee, or receiver appointed by any court liable for taxes under this chapter.
(6) PERSON. Any individual, firm, copartnership, association, corporation, receiver, trustee, or any other group or combination acting as a unit, and the plural as well as the singular number, unless the intention to give a more limited meaning is disclosed by the context.
(7) SEATING CAPACITY. The actual number of regular passenger-carrying seats in a motor vehicle.
(8) REGULAR PASSENGER-CARRYING SEATS. A seat ordinarily and customarily used by one passenger but does not include folding or collapsible emergency aisle seats.
(9) AXLE. A shaft on which a wheel or wheels run and, for the purposes of this article, two such shafts connected in tandem and commonly known as a tandem axle shall be considered one axle when not equipped with dual wheels on either end of either shaft of such tandem axle.
(10) TOUR BUS. Any motor vehicle used for hire for transportation of persons and their personal property on a charter which originates within or without the boundaries of the State of Alabama, the itinerary of which is not of an established, repetitively scheduled nature utilizing routes and time schedules approved by the Public Service Commission.
(Acts 1939, No. 664, p. 1050, §1; Code 1940, T. 48, §301(33); Acts 1992, 2nd Ex. Sess., No. 92-710, p. 205, §3.)
(a) The mileage tax required under the provisions of this chapter to be paid by the contract carriers and common carriers, subject to the provisions of this chapter, to the state as compensation for use of the public highways of the state shall be paid to the Department of Revenue as required under this chapter. All said mileage taxes, fees, and penalties collected by the Department of Revenue shall be paid into the Treasury upon receipt thereof and shall be kept separate and apart by the Treasurer in said fund, to be known as the Motor Carrier Fund.
(b) All tour buses are exempt from the tax imposed by this chapter.
(c) All vehicles used as a “chartered party” vehicle and used in support of a “charter party” contract in compliance with International Registration Plan (IRP), requirements shall be exempt from the tax imposed by this chapter when used in support of a charter party contract.
(Acts 1935, No. 194, p. 256; Acts 1936-37, Ex. Sess., No. 168, p. 191; Code 1940, T. 51, §715; Acts 1951, No. 841, p. 1472, §1; Acts 1992, 2nd Ex. Sess., No. 92-710, p. 205, §4.)
Every motor carrier of persons for hire traversing the highways of the state, subject to the provisions of an act known as the Alabama Motor Carrier Act of 1939 [Chapter 3 of Title 37], shall pay to the State of Alabama into the fund of the state Department of Revenue as contribution to the maintenance, repair, and policing of public highways for each mile actually operated within the state on such public highways, whether such vehicle is loaded or empty, a mileage tax of one-fourth cent per mile on all passenger vehicles with a seating capacity of not less than nine nor more than 16 passengers; a mileage tax of one-half cent per mile on all passenger vehicles with a seating capacity of not less than 17 nor more than 21 passengers; a mileage tax of three-fourths cent per mile on all passenger vehicles with a seating capacity of not less than 22 nor more than 25 passengers; and a mileage tax of one cent per mile on all passenger vehicles with a seating capacity exceeding 25 passengers. “Seating capacity,” for the purpose of this chapter, means the actual number of regular passenger-carrying seats in a motor vehicle; and “regular passenger-carrying seat,” as used in this chapter means a seat ordinarily and customarily used by one passenger but does not include folding or collapsible emergency aisle seats; provided, that the number of such folding or collapsible aisle seats shall not be greater in number than 25 percent of the regular seats in such vehicle; and provided further, that, where any seats in the vehicle are not distinguished by separate cushions or backs, one seat shall be counted for each 18 inches of space on any such seat. The taxes imposed by this chapter shall be increased 50 percent if the annual license tax prescribed by the laws of this state on like vehicles is not paid. Such mileage tax shall be paid by such motor carrier in addition to all property, franchise, license or other taxes, fees and charges now or hereafter provided by law. The tax levied shall constitute a debt due the State of Alabama and may be collected by civil action in addition to the methods provided in this chapter.
(Acts 1939, No. 664, p. 1050, §2; Code 1940, T. 48, §301(34); Acts 1961, No. 673, p. 923.)
The taxes levied under the provisions of this chapter shall be due and payable in monthly installments on or before the fifteenth day of the month next succeeding the month in which the tax accrues. On or before the fifteenth day of each month, every motor carrier on whom the taxes levied by this chapter are imposed shall render to the Department of Revenue on a form prescribed by the department a true and correct statement showing: The mileage traveled on the highways of this state for the preceding month, or portion thereof and the number, kind, motor number and make of the motor vehicle so operated, together with such other information as the department may demand and require, and, at the time of making such monthly report, such person shall compute the taxes due and shall pay to the Department of Revenue the amount of taxes shown to be due. The Department of Revenue, for good cause, may extend the time for making any return required under the provisions of this chapter, but the time for filing any such return shall not be extended for a period greater than 60 days from the date such return is due to be made.
(Acts 1939, No. 664, p. 1050, §3; Code 1940, T. 48, §301(35).)
(a) It shall be the duty of every motor carrier subject to the tax imposed by this chapter to keep and preserve suitable records of the mileage traveled by every vehicle subject hereto and such other books or accounts as may be necessary to determine the amount of tax for which such motor carrier is liable under the provisions of this chapter, showing the number, make, motor number or vehicle identification number in lieu of the motor and the serial numbers of the motor vehicle so operated, and all such books and records shall be open for examination at any time by the department or its duly authorized agent. The department is given full power and authority to prescribe records to be kept and reports to be made by such companies to facilitate collection of mileage tax imposed by this chapter.
(b) Any person subject to the provisions of this chapter who shall fail to make the reports or any of them as required in this chapter or who shall fail to keep the records as required in this chapter shall be guilty of a misdemeanor and, upon conviction, shall be punished as is provided in case of conviction for a misdemeanor for each offense. Each month of such failure shall constitute a separate offense.
(Acts 1939, No. 664, p. 1050, §§4, 5; Code 1940, T. 48, §§301(36), 301(37).)
The Department of Revenue is empowered to enter into reciprocal agreements or contracts with other states constituting a fair exchange of rights or privileges in regard to the use of the highways of this state by motor vehicles operated for hire under the provisions of this chapter. The said reciprocal agreement or contract can be annulled on notice issued to either party by the other party thereto within 30 days thereafter.
(Acts 1939, No. 664, p. 1050, §14; Code 1940, T. 48, §301(46).)
When any motor carrier shall be delinquent in paying the mileage tax as provided in this chapter for a period of 60 days, the Department of Revenue shall notify the Alabama Public Service Commission of such default in writing, and the Alabama Public Service Commission may suspend or may revoke, after public hearing, any and all certificates of public convenience and necessity or permits that are in force and effect of said motor carrier which is in default of the payment of said mileage tax.
(Acts 1939, No. 664, p. 1050; Code 1940, T. 48, §301(47).)
The Department of Revenue is empowered and directed to collect all of the mileage taxes under this chapter. In order to ascertain the mileage traveled in this state by motor vehicles subject to the provisions of this chapter, the Department of Revenue shall prescribe the records to be kept and reports to be made by said contract carriers and common carriers subject to said section; and, on or before the fifteenth day of each month, each such carrier shall file with the Department of Revenue, in accordance with its requirements, a statement verified under oath by the carrier, or by a person having knowledge of the facts and duly designated therefor by the carrier, showing the mileage traveled in this state by each motor vehicle subject to the provisions of this chapter, operated by such carrier during the preceding calendar month, and shall, at the time of filing of such report, pay to the Department of Revenue the mileage tax reflected by it.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §716.)
Every motor carrier and every officer, agent, or employee of any such motor carrier and every other person who violates or causes or aids or abets any violation of any provision of this chapter or order, rule, or regulation of the Department of Revenue or of the Alabama Public Service Commission under the provisions of this chapter, or who knowingly makes any false or erroneous statement, report, or representation to the Alabama Public Service Commission or to the Department of Revenue, with respect to any matter placed under the jurisdiction of the Alabama Public Service Commission or the Department of Revenue by this chapter, or who shall knowingly make any false entry in the accounts or records required to be kept pursuant to the authority granted by this chapter, or who shall knowingly fail to keep, or who shall knowingly destroy or mutilate any such accounts or records shall be punished by a fine not to exceed $500 or by imprisonment in the county jail for not exceeding one year, or both such fine and imprisonment. Prosecutions may be had in the circuit court of any county of which the offense or any part thereof shall have occurred. All fines and forfeitures collected under the provisions of this chapter shall be paid into the Treasury of the State of Alabama and placed to the credit of the Alabama Department of Public Safety.
(Acts 1939, No. 664, p. 1050, §16; Code 1940, T. 48, §301(48).)
The Department of Revenue is empowered to employ such agents or employees as are necessary for the collection of said mileage tax.
(Acts 1939, No. 664, p. 1050, §17; Code 1940, T. 48, §301(49).)
Every such motor carrier shall file with the Department of Revenue a bond in the sum not to exceed $1,000, made payable to the State of Alabama to insure the collection of such mileage tax. Such bond to be approved by the Commissioner of the Department of Revenue; provided, that the Commissioner of the Department of Revenue may accept bonds issued by the State of Alabama or other adequate security in lieu of such bond.
(Acts 1939, No. 664, p. 1050, §18; Code 1940, T. 48, §301(50).)
All such mileage tax, penalties, fees and amounts collected under this chapter shall be paid into the Treasury within 30 days after their receipt and shall be kept separate and apart from all other funds by the Treasurer in a fund to be known as the Motor Carrier Fund.
The Motor Carrier Fund shall be used as follows:
(1) Such amount of money as shall be appropriated for each fiscal year by the Legislature to the Department of Revenue with which to pay the salaries, the cost of operation and the management of the said department shall be deducted, as a first charge thereon, from the taxes collected under and pursuant to this chapter; provided, that the expenditure of said sum so appropriated shall be budgeted and allotted pursuant to Article 4 of Chapter 4 of Title 41, and limited to the amount appropriated to defray the expenses of operating said department for each fiscal year.
(2) For the payment of all necessary expenses, as approved by the Governor, of the Public Service Commission incurred in the discharge of its duties under Chapter 3 of Title 37; provided, that the amount of expense, including salary, travel, equipment, and all items of cost necessary for the enforcement of the provisions of this chapter shall be limited to the amounts appropriated therefor by the Legislature in the general appropriation bill and shall be budgeted, allotted and expended pursuant to Article 4 of Chapter 4 of Title 41. The remainder of said Motor Carrier Fund shall be paid at the end of each fiscal year, or quarterly as determined by the Governor, into the State Highway Fund, to be used for the maintenance and construction of public highways in the state.
(Acts 1935, No. 194, p. 256; Acts 1939, No. 664, p. 1050, §19; Code 1940, T. 48, §301(51); Code 1940, T. 51, §717; Acts 1951, No. 841, p. 1472, §2.)
For the purpose of this article, the following terms shall have the respective meanings ascribed by this section:
(1) DEPARTMENT. The state Department of Revenue.
(2) ANNUAL. The calendar year or the taxpayer’s fiscal year, when permission is obtained from the department to use a fiscal year as a tax period in lieu of a calendar year.
(3) VALUE. The sale price or market value at the mouth of the well. If the oil or gas is exchanged for something other than cash, if there is no sale at the time of severance or if the relation between the buyer and the seller is such that the consideration paid, if any, is not indicative of the true value or market price, then the department shall determine the value of the oil or gas subject to the tax hereinafter provided for, considering the sale price for cash of oil or gas of like quality.
(4) OIL. Crude petroleum oil and other hydrocarbons regardless of gravity which are produced at the well in liquid form by ordinary production methods and which are not the result of condensation of gas after it leaves the well.
(5) GAS. All natural gas, including casinghead gas, and all other hydrocarbons not defined as oil in subdivision (4) above.
(6) SEVERED. The extraction or withdrawing from the soil or water or from below the surface of the soil or water of any oil or gas, whether such extraction or withdrawal shall be by natural flow, mechanically enforced flow, pumping, or any other means employed to get the oil or gas from the soil or water or from below the surface of the soil or water.
(7) PERSON. Any natural person, firm, copartnership, joint venture, association, corporation, estate, trust, and any other group or combination acting as a unit, and the plural as well as the singular number.
(8) PRODUCER. Any person engaging or continuing in the business of oil or gas production, which, for the purpose of this article, includes the owning, controlling, managing, or leasing of any oil or gas property or oil or gas well, and producing in any manner any oil or gas by taking it from the soil or waters, or from beneath the soil or waters, of the State of Alabama, and further includes receiving money or other valuable consideration as royalty or rental for oil or gas produced or because of oil or gas produced, whether produced by him or by some other person on his behalf, either by lease, contract or otherwise, and whether the royalty consists of a portion of the oil or gas produced being run to his account or a payment in money or other valuable consideration.
(9) SUBMERGED LANDS. All lands within the territorial jurisdiction of the State of Alabama that are continuously or intermittently covered by marine or marine influenced waters and are below the mean high tide mark on all islands and land adjacent to the Mississippi Sound, Mobile Bay, Bon Secour Bay, Wolf Bay, Arnica Bay, Bay La Launch, and Perdido Bay; and excludes all areas upstream of the confluence of the Mississippi Sound, Mobile Bay, Wolf Bay and Perdido Bay with their natural tributaries.
(10) OFFSHORE DRILLING OR PRODUCTION FACILITIES. Barges, platforms or other drilling or production facilities located on submerged lands to drill or to produce oil or gas.
(11) OFFSHORE PRODUCTION. Gas or oil produced from offshore drilling or production facilities from wells located on submerged lands within the territorial jurisdiction of the State of Alabama.
(12) DISCOVERY WELL. Any well capable of producing oil and/or gas from a single pool in which a well has not been previously completed as a well capable of producing.
(13) DEVELOPMENT WELLS. All oil and/or gas producing wells other than discovery wells and replacement wells.
(14) ONSHORE WELL. Any oil or gas well that is drilled in an area other than submerged lands as defined herein.
(15) REPLACEMENT WELLS. A well drilled on a drilling and/or production unit to replace another well which is drilled in the same unit and completed in the same pool.
(16) COMMENCED. A well shall be deemed to have commenced when the well is spudded.
(17) COMPLETION. A well shall be deemed to be completed for purposes of this article when drilling and logging operations have ceased.
(18) POOL. As used herein, pool shall mean a single underground reservoir containing a common accumulation of oil or gas or both. Each zone of a general structure which is completely separated from any other zone in the structure is a single pool as that term is used herein.
(19) ENHANCED RECOVERY PROJECT. An oil or gas recovery project which is approved by the State Oil and Gas Board of Alabama employing one or more of the following methods:
a. Recycling, injecting or flooding a pool, or pools, or portion thereof, with air, gas, water, hydrocarbons, carbon dioxide (CO2), or any other substance, or any combination or combinations thereof; or
b. The use of polymers, steam flooding or fire flooding.
(20) SUPPLEMENTAL ENHANCED RECOVERY PROJECT. An enhanced recovery project in which injection of substances into a unitized area was initiated prior to January 1, 1985, and thereafter is improved by expanding or otherwise changing the unit operations associated with the project as approved by the State Oil and Gas Board of Alabama for the purpose of increasing the ultimate recovery of hydrocarbons.
(21) INCREMENTAL OIL OR GAS PRODUCTION. The amount of oil or gas which will be produced as a result of a qualified enhanced recovery project and which is in excess of the amount of oil or gas which could have been produced economically and efficiently from a pool or pools or portion thereof by production methods being utilized prior to said qualified enhanced recovery project being approved by the State Oil and Gas Board of Alabama.
(22) QUALIFIED ENHANCED RECOVERY PROJECT. A qualified enhanced recovery project shall mean an enhanced recovery project or supplemental enhanced recovery project that meets all of the following criteria:
a. That the area where the enhanced recovery project or supplemental enhanced recovery project is employed has been unitized in accordance with the provisions of Article 3, Chapter 17 of Title 9, as amended.
b. That injection of substances associated with the enhanced recovery project or supplemental enhanced recovery project has been or will be implemented as an integral part of the operations of the unitized area.
c. That the enhanced recovery project or supplemental enhanced recovery project be certified by the State Oil and Gas Board of Alabama as capable of incremental oil or gas production.
d. That the enhanced recovery project or supplemental enhanced recovery project be implemented on or after January 1, 1985.
(Acts 1945, No. 2, p. 20, §1; Acts 1983, 4th Ex. Sess., No. 83-889, §1; Acts 1984, No. 84-328, p. 749, §1; Acts 1985, 2nd Ex. Sess., No. 85-911, p. 182, §1.)
(a)(1) There is hereby levied, to be collected hereafter, as herein provided, annual privilege taxes upon every person engaging or continuing to engage within the State of Alabama in the business of producing or severing oil or gas, as defined herein, from the soil or the waters, or from beneath the soil or the waters, of the state for sale, transport, storage, profit, or for use. The amount of such tax shall be measured at the rate of eight percent of the gross value of the oil or gas at the point of production except as provided in subsequent subdivisions of this subsection. Provided, however, that the tax on offshore production, produced from depths greater than 8,000 feet below mean sea level, shall not be computed as a percentage of gross value at the point of production, as provided in this article, but shall be computed as a percentage of gross proceeds, as provided in Article 1A of this chapter.
(2) Effective May 1, 1985, and thereafter, the incremental oil or gas production produced during a given year resulting from a qualified enhanced recovery project shall be taxed at the rate of four percent of gross value at the point of production of the incremental oil or gas production. The State Oil and Gas Board of Alabama shall approve the qualified enhanced recovery project and the determination of the projected annual oil or gas production that could have otherwise been produced without the benefit of the initiation of the qualified enhanced recovery project at a hearing held pursuant to Section 9-17-7, as amended, and shall notify the Alabama Department of Revenue thereof.
(3) All wells producing 25 barrels or less of oil per day or producing 200,000 cubic feet or less of gas per day shall be taxed at the rate of four percent of gross value of the oil or gas at the point of production.
(4) All oil and gas produced from onshore discovery wells, all oil and gas produced from onshore development wells on which drilling commenced within four years of the completion date of the discovery well and producing from a depth of 6,000 feet or greater, and all oil and gas produced from onshore development wells on which drilling commenced within two years of the completion date of the discovery well and producing from a depth less than 6,000 feet shall be taxed at a rate of six percent of the gross value of the oil and gas at the point of production for a period of five years from the date production begins from the discovery and development wells, provided, that all production to receive a six percent tax rate, which is produced from discovery wells, must be from discovery wells permitted by the State Oil and Gas Board of Alabama after July 1, 1984, and that all production to receive a six percent tax rate from development wells on which drilling commenced within the required time of completion of a discovery well, which was permitted after July 1, 1984, and the development well must also have been permitted after July 1, 1984; provided however, that the six percent tax rate applicable to a discovery well or development well shall be applicable to any replacement well drilled to replace the discovery well or the development well during the six percent five-year, tax rate period for only the remainder of the tax rate period.
(5) For any well for which the initial permit issued by the Oil and Gas Board is dated on or after July 1, 1988, except a replacement well for a well for which the initial permit issued by the Oil and Gas Board is dated before July 1, 1988, the rate provided in subdivision (1) of this subsection shall be reduced by 2 percent.
(6) For any well for which the initial permit issued by the Oil and Gas Board is dated on or after July 1, 1996, and before July 1, 2002, except a replacement well for a well for which the initial permit issued by the Oil and Gas Board is dated before July 1, 1996, the applicable rate shall be reduced by 50 percent for a period of five years commencing with commercial production after which subdivision (5) shall apply.
(b) The tax is hereby levied upon the basis of the entire production in this state, including what is known as the royalty interest, on which production the amount of such tax shall be a lien, regardless of the place of sale or to whom sold, or by whom used, or the fact that the delivery may be made to points outside the state; and the tax shall accrue at the time such oil or gas is severed from the soil or the waters, or from beneath the soil or the waters, and in its natural, unrefined or unmanufactured condition. Provided, however, that natural gas lawfully injected into oil or gas pools or reservoirs in the soil or beneath the soil or waters of the State of Alabama is exempt from this tax. Provided, further, that natural gas lawfully injected into the earth for the purpose of lifting oil or gas in the State of Alabama is exempt from this tax. However, if any gas so injected into the earth is sold for such purposes or injected into underground storage facilities as defined in Section 9-17-150 et seq., then the gas so sold or injected shall not be exempt from this tax. Natural gas lawfully vented or flared in connection with the production, treatment, or processing of oil or gas is exempt from this tax.
(c) A county, city, town, or municipality of the State of Alabama shall not establish, levy, impose, or collect, as a condition of doing business or otherwise, any tax, fee, license, or charge whatsoever, directly or indirectly, on or with respect to the production, treating, processing, ownership, sale, storage, purchase, marketing, or transportation on any oil or gas produced in the State of Alabama and on which severance taxes have been paid to the State of Alabama, or upon the business of producing, treating, processing, owning, selling, buying, storing, marketing, or transporting such oil or gas, or upon the ownership, operation, or maintenance of plants, facilities, machinery, pipelines, gathering lines, or any equipment whatsoever, which are, or may be, necessary or convenient to the production, treating, processing, ownership, storage, sale, purchase, marketing, or transportation of such oil or gas; provided, that nothing herein shall be construed to prohibit, limit or restrict a county, city, town, or municipality from imposing and collecting ad valorem taxes on any property, real or personal, not otherwise now exempted by law; further, the limitation herein imposed upon counties, cities, towns, and municipalities shall not apply to any county, city, town, or municipality which does not receive a share of the severance tax levied upon production other than offshore production as defined in Section 40-20-1 under the provisions of this article. The limitation herein imposed upon counties, cities, towns, and municipalities shall remain in full force and effect in regard to offshore production as defined in Section 40-20-1.
(d) Nothing contained herein shall be deemed to limit or to enlarge the authority of a county, city, town, or municipality to levy taxes or licenses on oil refining facilities located therein or on the suppliers of services or goods not including oil or gas to those persons engaging in the business of producing, treating, processing, owning, selling, buying, storing, marketing, or transporting such oil or gas. Provided, however, no such taxes or licenses shall be levied on offshore drilling or production facilities as defined in Section 40-20-1.
(e) In all cases of production of oil from unit operations as authorized and approved by the State Oil and Gas Board of Alabama, for purposes of computing the per well production, the aggregate production of oil from the entire unit shall be divided by the number of wells within the unit, including injection, disposal, and other wells utilized in unit operations, and the quotient thereof shall be deemed and declared to be the number of barrels of oil produced from each well in such unit regardless of the actual amount of oil per day produced from the well, if any.
(Acts 1945, No. 2, p. 20, §2; Acts 1971, No. 2057, p. 3317, §1; Acts 1979, No. 79-434, p. 687, §1; Acts 1980, No. 80-708, p. 1438; Acts 1983, 1st Ex. Sess., No. 83-39, p. 39, §1; Acts 1983, 4th Ex. Sess., No. 83-889, p. 116, §2; Acts 1984, No. 84-328, p. 749, §2; Acts 1984, No. 84-660, p. 1323; Acts 1984, No. 84-672, p. 5; Acts 1985, 2nd Ex. Sess., No. 85-911, p. 182, §1; Acts 1988, No. 88-601, p. 935, §2; Acts 1994, No. 94-367, p. 615, §1; Acts 1996, 2nd Ex. Sess., No. 96-877, p. 1688, §1; Act 99-584, p. 1332, §1; Act 2009-147, p. 284, §3.)
(a) The privilege tax hereby imposed is levied upon the producers of such oil or gas in the proportion of their ownership at the time of severance, but, except as otherwise herein provided, the tax shall be paid by the person in charge of the production operations, who is hereby authorized, empowered, and required to deduct from any amount due to producers of such production at the time of severance the proportionate amount of the tax herein levied before making payments to such producers. The tax shall become due and payable as provided by this article and such tax shall constitute a first lien upon any of the oil or gas so produced when in the possession of the original producer or any purchaser of such oil or gas in its unmanufactured state or condition. In the event the person in charge of production operations or the purchaser fails to pay the tax, then the department shall proceed against the producer or the purchaser to collect the tax in the manner hereinafter provided by this article.
(b) When any person in charge of production operations shall sell the oil or gas produced by him, the purchaser shall account for the tax.
(c) When any person in charge of production operations shall use or dispose of the oil or gas for fuel or any other purpose, he shall withhold the tax imposed by this article; and, if he is required to pay other interest holders, he is hereby authorized, empowered, and required to deduct from any amounts due them the amount of tax levied and due under the provisions of this article before making payment to them.
(d) Every person in charge of production operations by which oil or gas is severed from the soil or waters, or from beneath the soil or waters, of the State of Alabama who fails to deduct and withhold, as required herein, the amount of tax from sale or purchase price, when such oil or gas is sold or purchased under contract or agreement, or on the open market, or otherwise, shall be liable to the state for the full amount of taxes, interest and penalties due the state; and the department shall proceed to collect the tax from the person in charge of production operations, under the provisions of this article, as if he were the producer of the oil or gas.
(Acts 1945, No. 2, p. 20, §3; Acts 1953, No. 454, p. 559.)
(a) The department is hereby authorized and directed to administer and enforce the provisions of this article and to collect all of the taxes levied under the provisions hereof. Every person producing or in charge of production of oil and gas shall file a return with the department by the 15th day of the second calendar month following the month of production, on forms the department prescribes which must contain a printed declaration that the information being reported is made under the penalty of perjury, and which must be subscribed by the person who completes such forms, showing the location of each producing property operated or controlled by such producer during the reporting period; the number and kind of wells thereon; the kind of oil or gas produced; the gross quantity thereof produced; the actual cash value thereof at the time and place of production; including any and all premiums received from the sale thereof; the amount of tax due on the total gross production; the portion of gross production payable as royalty and such other information as the department may require.
(b) All persons engaged in the business of severing oil or gas are hereby required to keep full and complete records showing the nature, character, and volume of all such oil or gas severed, the value of such oil or gas at the point of production, the manner in which such oil or gas was disposed of, the prices or the consideration received for the sale thereof and the quantity or volume of such oil or gas stored anywhere within or without the State of Alabama; and such records shall at all reasonable times be open for inspection by representatives or agents of the department.
(c) The department or its duly authorized representative or agent shall have the power and authority to inspect all records required to be kept under the provisions of this article, to conduct hearings and to compel the attendance of witnesses for the purpose of determining the amount of taxes due under the terms and provisions of this article.
(d) The Department of Revenue is hereby authorized to promulgate reasonable rules and regulations relating to the administration and enforcement of this chapter, provided, however, that no rule or regulation adopted or promulgated by the department shall alter, limit, extend or be out of harmony with any of the provisions of this chapter.
(Acts 1945, No. 2, p. 20, §4; Acts 1991, 1st Ex. Sess., No. 91-798, p. 193, §1.)
All reports required under the provisions of this article shall be filed with the department on or before the fifteenth day of the second calendar month following the month of production and shall cover the second preceding calendar month. All producers are hereby required to pay to the department all taxes accruing under the provisions of this article for the period of time covered by the report herein required, and such payment shall accompany the required report.
(Acts 1945, No. 2, p. 20, §5; Acts 1981, No. 81-704, p. 1181; Acts 1991, 1st Ex. Sess., No. 91-798, §2; Acts 1992, No. 92-186, p. 349, §59.)
Such amount of money as shall be appropriated for each fiscal year by the Legislature to the Department of Revenue with which to pay the salaries, the cost of operation and the management of the said department shall be deducted, as a first charge thereon, from the taxes collected under and pursuant to this article; provided, that the expenditure of said sum so appropriated shall be budgeted and allotted pursuant to Article 4 of Chapter 4 of Title 41, and limited to the amount appropriated to defray the expenses of operating said department for each fiscal year. The net remainder shall remain in the State Treasury for distribution as hereinafter provided.
(Acts 1945, No. 2, p. 20, §7; Acts 1951, No. 838, p. 1469.)
(a) Ninety percent of the net amount of all taxes herein levied and collected by the department on oil or gas produced from submerged lands as herein defined shall be deposited to the State General Fund. The remaining 10 percent of such net amount shall be allocated and distributed by the Comptroller to the county in which the oil or gas was produced for county purposes or to be expended at the discretion of the county governing body.
(b) Twenty-five percent of the net amount of all taxes herein levied and collected by the department, except as provided herein in subsection (a), shall be deposited by the department to the General Fund of the state.
(c) Sixty-six and two-thirds percent of the remaining 75 percent of all taxes herein levied and collected by the department, after the same has been certified into the State Treasury, shall be allocated and distributed by the Comptroller to the credit of the General Fund of the state and to the county in which the oil or gas was produced and to the municipalities therein in the proportion set out in the following schedule:
(1) Twenty-five percent of all taxes herein levied and collected on oil and gas produced from oil or gas wells located within any county, shall be allocated and distributed to each such county for county purposes or to be expended at the discretion of the county governing body. In all counties having a population of not less than 34,875 nor more than 36,000, according to the 1970 Federal Decennial Census, such funds shall be allocated and distributed by the counties to the boards of education of the public schools in such counties on a pro rata basis as established by the number of children in net enrollment in the public schools during the prior school attendance year. In all counties having a population of not less than 16,000 nor more than 16,250, according to the 1970 Federal Decennial Census, such funds shall be allocated and distributed by the counties as follows: Each year the first $150,000 shall be paid to the custodian of the county school funds, and after the payment of said $150,000 each year, the balance of the funds shall be divided and paid one-third to the custodian of the county school funds and two-thirds to the county general funds.
(2) Ten percent of all taxes herein levied and collected on oil and gas produced from oil or gas wells located within the corporate limits or the police jurisdiction of any municipality shall be allocated and distributed to each such municipality; except that all wells within the corporate limits of police jurisdiction of any municipality where taxes are levied and collected at a rate of four percent, 10 percent of all the four percent taxes shall be distributed to each such municipality.
(3) Fifty percent of the first $150,000 remaining, or any part thereof, collected per year under the provisions of this article, shall be allocated and distributed to the state, 42 1/2 percent to the county, and seven and one-half percent to municipalities therein on a population basis.
(4) Eighty-four percent of all remaining sums collected per year under the provisions of this article shall be allocated and distributed to the state, 14 percent to the county and two percent to municipalities therein on a population basis.
(d) Sixteen and two-thirds percent of the remaining 75 percent of all taxes herein levied and collected by the department shall be certified into the State Treasury to the credit of the State General Fund.
(e) Sixteen and two-thirds percent of the remaining 75 percent of all taxes herein levied and collected by the department on oil and gas produced from oil or gas wells located within any county shall be allocated and distributed to each such county for county purposes, to be expended at the discretion of the county governing body.
(f) For the purposes of this section, when part of the property within the drilling or production unit or within the unit area for any producing well(s) consists of submerged lands and part consists of lands other than submerged lands (herein called onshore lands), the following shall apply:
(1) Only that portion of production (oil or gas or both) from the well(s) allocated (under or pursuant to an order of the State Oil and Gas Board) to the submerged lands shall be deemed to have been produced from submerged lands, regardless of where the actual well(s) from which the production was obtained is (are) located;
(2) The portion of the production allocated (under or pursuant to an order of the State Oil and Gas Board) to the onshore lands shall be deemed to have been produced from a well located on the onshore lands to which such production is allocated, and the portion of the production allocated (under or pursuant to such an order) to any onshore lands located within the police jurisdiction or the corporate limits of any municipality shall be deemed to have been produced from a well located within the corporate limits or police jurisdiction;
(3) If, because of common ownership or otherwise, no specific portion of the production from the well(s) has been separately allocated (under or pursuant to an order of the State Oil and Gas Board) to any or all of the onshore lands located within the drilling or production unit or within a designated tract in the unit area, then, for the purposes of this section, a portion of the production shall be deemed to have been allocated (under or pursuant to such an order) to the onshore lands in question, such portion to be in the proportion that the acreage of the onshore land to which no specific portion of the production has been separately allocated bears to the total acreage included within the unit or designated tract (whichever is applicable); and
(4) Any production not allocated to or deemed to have been allocated to the onshore lands shall be deemed to have been allocated (under or pursuant to an order of the State Oil and Gas Board) to the submerged lands.
(g) Anything herein to the contrary notwithstanding, onshore lands shall mean all lands that are not submerged lands (as elsewhere herein defined); provided, however, if any submerged lands are located within the police jurisdiction or corporate limits of any municipality, those submerged lands shall, for the purposes of this section, be defined as, and deemed to be, onshore lands and not submerged lands.
(h) The provisions of this section shall apply only to the allocation and distribution of taxes and shall not apply to the levy and collection of taxes; and nothing contained in this section shall be construed to affect in any way the provisions of Section 40-20-2 or Section 40-20-21.
(i) A final determination establishing the allocation base shall be made within 90 days of April 23, 1990.
(Acts 1945, No. 2, p. 20, §8; Acts 1971, No. 2057, p. 3317, §1; Acts 1979, No. 79-434, p. 687, §2; Acts 1983, 1st Ex. Sess., No. 83-39, p. 39, §2; Acts 1983, 4th Ex. Sess., No. 83-889, p. 116, §3; Acts 1984, No. 84-662, p. 1326; Acts 1990, No. 90-652, p. 1249; Act 2009-147, p. 284, §3.)
All reports required to be filed under the provisions of this article shall be made on blanks, furnished by the department, which shall contain the following certificate: “I hereby certify under oath that I am duly authorized to make this tax return; that the information herein contained is true and correct and same is shown by the records of the identified producer; and that the amount of taxes accompanying this return is the true and correct amount of taxes due the State of Alabama by this producer.” The same must be duly verified.
(Acts 1945, No. 2, p. 20, §9.)
If it is brought to the attention of the department that any producer is guilty of violating any of the provisions of this article, the department is hereby authorized and required, through lawfully authorized counsel, to proceed in the courts of the state to obtain a writ of injunction, which writ shall be granted by the court when applied for in the manner prescribed by law. The department, however, is hereby relieved of the requirement to furnish bond of any character.
(Acts 1945, No. 2, p. 20, §11.)
(a) All oil or gas produced, all leases in production, including mineral rights in producing properties, and all oil or gas under the ground on producing properties within the State of Alabama shall be exempt from all ad valorem taxes now levied or hereafter levied by the State of Alabama or by any county or municipality. No additional assessment shall be added to the surface value of such lands by the presence of oil or gas thereunder or its production therefrom.
(b) For the purpose of this article, the area of a lease or leases, including oil and gas rights considered to be in production, or the area of any other producing property considered to be in production, shall include an oil or gas drilling unit as established by the State Oil and Gas Board of Alabama and shall be exempt from ad valorem taxation because of production from any one well.
(Acts 1945, No. 2, p. 20, §12; Acts 1957, No. 600, p. 859.)
If the department is authorized by any other law to collect any further or additional taxes from producers, as herein defined, such taxes shall be collected in the same manner as the taxes herein provided, and the return of such taxes shall be included in the report for the taxes herein levied and provided. Such further or additional taxes shall be disbursed as authorized by such other law.
(Acts 1945, No. 2, p. 20, §13.)
[Repealed]
Repealed by Act 2015-70 effective April 21, 2015.
(Act 98-285, p. 463, §§1, 2, 5.)
In addition to the definitions contained in Section 40-20-1, which shall apply for purposes of this article, except to the extent there is a conflict with the definitions contained herein, the following definitions shall apply for the purposes of this article.
(1) Gross Proceeds. The gross proceeds for a month shall be the sum of the month’s market proceeds and non-market proceeds. No adjustments or deductions may be taken from the market proceeds or the non-market proceeds in computing gross proceeds.
(2) Market Proceeds. The market proceeds for a month shall be the sum of the amounts due under all market sales transactions during the month. The amount due under each market sales transaction shall be determined by multiplying the unit sales price by the volume of severed oil or gas sold in each transaction.
(3) Market Sales Transaction. An agreement or contract for the sale of offshore production produced from depths greater than 8,000 feet below mean sea level that has been entered into by or on behalf of a producer or its related party and an unrelated party, regardless of the place of sale, regardless of any interim sales to parties that are not unrelated, and regardless of any processing, treating, or transportation done prior to the point of sale.
(4) Non-Market Proceeds. The non-market proceeds for a month shall be the cash and other consideration that would have been due if all non-market taxable volumes for the month had been sold for the same unit sales price due under the market sales transactions occurring during that month, using weighted averages if two or more market sales transactions occurred during the month; provided, however, that if less than 10% by volume of the total taxable offshore production produced during a month is sold in market sales transactions, then the non-market proceeds shall be deemed to be the cash and other consideration, as reasonably determined by the department, that would have been generated if the non-market taxable volumes had been sold in a market sale transaction, considering the unit sales price for offshore production of like quality if such data is available; otherwise, considering published data from recognized market centers for trading oil and/or gas, in both cases adjusted for location and quality to the point at which the first market sale would likely have occurred. Taxpayers seeking to use the published selling prices in calculating their monthly non-market proceeds may request a determination from the department approving the market center data and the manner of making the calculations. The calculations must be consistent from month to month, except as approved by the department.
(5) Non-Market Taxable Volumes. The non-market taxable volumes for a month shall be the total volumes of offshore production not disposed of pursuant to a market sales transaction, excluding volumes taken in-kind by other producers in accordance with Section 40-20-22(g). The total volumes include all offshore production used or consumed in operations, but do not include natural gas lawfully vented or flared in connection with the production, treatment, or processing of oil or gas in the State of Alabama, or natural gas lawfully injected into the earth for the purpose of lifting oil or gas in the State of Alabama. Provided, however, that if any gas so injected into the earth is sold for such purposes or injected into underground storage facilities as defined in Section 9-17-150 et seq., then the gas so sold or injected shall be included in the total non-market taxable volumes for the month.
(6) Transportation Charges. The actual cash amount paid to an unrelated party by a producer or seller of severed gas for transporting pipeline quality gas to the point of a market sales transaction. Transportation charges may include amounts paid to a related party if the related party is a regulated entity operating an open access natural gas pipeline. The transportation charges are limited to the lesser of the actual fees paid or the maximum allowable firm transportation tariff amount approved by the Federal Energy Regulatory Commission, or other appropriate governmental authority.
(7) Unit Sales Price. The total cash or other consideration due for each unit of offshore production, sold under the terms of a market sales transaction, including any and all premiums, bonuses, or other amounts received. If allowable actual transportation charges were paid by the producer or seller for transporting pipeline quality gas to the point of sale, the unit sales price may be adjusted to remove the transportation charge. No other adjustments or deductions may be taken from the actual amounts due in determining the unit sales price.
(8) Unrelated Party. A person or entity with opposing economic interests to the producer or seller of severed oil or gas. No producer’s parent company, subsidiary company, sister company, or other company affiliated through common ownership of greater than 5% or control will be considered an unrelated party. In addition, no producer’s principal owners, management, members of their immediate families, or companies owned or controlled by any of them will be considered unrelated parties.
(Act 2009-147, p. 284, §4.)
The privilege tax levied by this chapter as it applies to offshore production from depths greater than 8,000 feet below mean sea level shall not be computed as a percentage of gross value at the point of production, as provided in Article 1, but shall be computed as a percentage of gross proceeds. The amount of the tax shall be computed at the rate of three and sixty-five one hundredths percent (3.65%) of the gross proceeds attributable to the offshore production.
(Act 2009-147, p. 284, §4.)
(a) The tax levied by this chapter and computed pursuant to Section 40-20-21 applies to all offshore production produced from depths greater than 8,000 feet below mean sea level, regardless of the method or place or timing of delivery or sale, or the manner or place of processing, or to whom sold, or by whom used, or the fact that the delivery, sale, or storage may be made at points outside the state, or the fact that processing or other preparation for sale, storage, or use occurs outside the state. It is the intent of this chapter that the tax is to be computed on the production of all offshore oil or gas in this state from depths greater than 8,000 feet below mean sea level, however the tax shall be computed only once on any given volume of such offshore production.
(b) Natural gas produced by offshore production in the State of Alabama that is lawfully injected into oil or gas pools or reservoirs in the soil or beneath the soil or waters of the State of Alabama for the purpose of lifting oil or gas in the State of Alabama is exempt from this tax. However, if any such gas so injected into the earth is sold for such purposes or injected into underground storage facilities as defined in Section 9-17-150 et seq., then the gas so sold or injected shall not be exempt from this tax. Natural gas lawfully vented or flared in connection with the production, treatment, or processing of oil or gas in the State of Alabama is exempt from this tax.
(c) The tax levied by this chapter and computed pursuant to Section 40-20-21 applies to the producers of offshore production in the proportion of their ownership at the time of severance, including what is known as the royalty interest. The tax shall be paid by the person in charge of the production operations, who is hereby authorized, empowered, and required to deduct from any amount due to producers of offshore production the proportionate amount of the tax levied by this chapter before making payments to the producers.
(d) When any person in charge of production operations shall use or dispose of the offshore production for fuel or any other purpose, he or she shall withhold the tax imposed by this chapter. If he or she is required to pay other interest holders, he or she is authorized, empowered, and required to deduct from any amounts due them the amount of tax levied and due under this chapter before making any payment to them.
(e) Every person in charge of production operations by which offshore production is severed from the soil or waters, or from beneath the soil or waters, of the State of Alabama who fails to deduct and withhold, as required by this section, the amount of tax from the sale or purchase price, when the offshore production is sold or purchased under contract or agreement, or on the open market, or otherwise, shall be liable to the state for the full amount of taxes, interest, and penalties due the state. The department shall proceed to collect the tax from the person in charge of production operations, under this chapter, as if he or she were the producer of the offshore production.
(f) The person in charge of the production operations shall report to the department the total monthly volumes and gross proceeds attributable to all offshore production produced during the month, including amounts attributable to royalty interests. If any gross proceeds are attributable to a producer who is exempt from tax, the operator shall be entitled to list the gross proceeds attributable to the exempt producer on his or her monthly tax return and subtract the exempt producer’s gross proceeds from the total gross proceeds in calculating the gross proceeds for which he or she is liable for the tax. A producer claiming an exemption from the tax shall apply to the department for the exemption in such manner as the department may reasonably require, and the department shall inform the producer and the person in charge of production operations of its determination.
(g) A person in charge of the production operations who delivers offshore production to a producer for marketing or otherwise disposing of its own oil or gas may report to the department the total monthly volumes delivered to each take-in-kind producer. The operator shall then be entitled to exclude the take-in-kind producer’s volumes from its calculation of the total non-market taxable volumes and from the calculation of the monthly gross proceeds for which he or she is liable for the tax. The operator shall report any other information about the take-in-kind producer as the department may reasonably require. The take-in-kind producer shall be responsible for reporting and remitting the tax levied by this chapter on the take-in-kind volumes.
(h) The tax computed under this article shall become due and payable in the same manner as the tax computed under Article 1 of this chapter and the tax shall constitute a first lien upon the offshore production so produced when in the possession of the producer or any purchaser of the oil or gas. In the event the person in charge of production operations fails to pay the tax, then the department may proceed against the producer or the purchaser to collect the tax.
(Act 2009-147, p. 284, §4.)
(a) Ninety percent (90%) of the net amount of taxes collected by the department on oil or gas produced from submerged lands which are not deemed to be onshore lands for allocation and distribution purposes pursuant to subsections (d) or (e) shall be deposited to the State General Fund. The remaining ten percent (10%) of the taxes collected on oil or gas produced from submerged lands which are not deemed to be onshore lands for allocation and distribution purposes shall be allocated and distributed by the Comptroller to the county in which the oil or gas was produced for county purposes to be expended at the discretion of the county governing body.
(b) The net amount of taxes collected by the department pursuant to this article on oil or gas produced from submerged lands which are deemed to be onshore lands for allocation and distribution purposes pursuant to subsections (d) or (e) shall be allocated and distributed pursuant to Section 40-20-8, as if it was collected pursuant to Article 1 of this chapter on oil or gas produced from onshore lands.
(c) Of the taxes herein levied and collected by the department on oil or gas produced from submerged lands which are deemed to be onshore lands for allocation and distribution purposes pursuant to subsections (d) or (e), sixty-five percent (65%) of the net amount of the taxes collected shall be allocated and distributed as if the taxes were levied and collected at the rate of four percent (4%), for purposes of the allocations and distributions required under Section 40-20-8. The remaining thirty-five percent (35%) of the taxes collected on oil or gas produced from submerged lands which are deemed to be onshore lands for allocation and distribution purposes shall be allocated and distributed pursuant to Section 40-20-8, as if the taxes were levied and collected at a rate other than four percent (4%).
(d) For the purposes of this section, when part of the property within the drilling or production unit or within the unit area for any producing wells consists of submerged lands and part consists of lands other than submerged lands (herein called onshore lands), all of the following shall apply:
(1) Only that portion of production of oil or gas or both from the wells allocated under or pursuant to an order of the State Oil and Gas Board to the submerged lands shall be deemed to have been produced from submerged lands, regardless of where the actual wells from which the production was obtained are located.
(2) The portion of production allocated under or pursuant to an order of the State Oil and Gas Board to the onshore lands shall be deemed to have been produced from a well located on the onshore lands to which the production is allocated, and the portion of production allocated under or pursuant to an order of the State Oil and Gas Board to any onshore lands located within the police jurisdiction or the corporate limits of any municipality shall be deemed to have been produced from a well located within the corporate limits or police jurisdiction.
(3) If, because of common ownership or otherwise, no specific portion of the production from the wells has been separately allocated under or pursuant to an order of the State Oil and Gas Board to any or all of the onshore lands located within the drilling or production unit or within a designated tract in the unit area, then, for the purposes of this section, a portion of the production shall be deemed to have been allocated under or pursuant to an order of the State Oil and Gas Board to the onshore lands in question, such portion to be in the proportion that the acreage of the onshore land to which no specific portion of the production has been separately allocated bears to the total acreage included within the unit or designated tract, whichever is applicable.
(4) Any production not allocated to or deemed to have been allocated to the onshore lands shall be deemed to have been allocated under or pursuant to an order of the State Oil and Gas Board to the submerged lands.
(e) Anything in this section to the contrary notwithstanding, onshore lands shall mean all lands that are not submerged lands as defined in this chapter. Provided, however, if any submerged lands are located within the police jurisdiction or corporate limits of any municipality, those submerged lands shall, for the purposes of this section, be defined as, and deemed to be, onshore lands and not submerged lands.
(f) This section shall apply only to the allocation and distribution of taxes and shall not apply to the levy and collection of taxes. Nothing contained in this section shall be construed to affect in any way Section 40-20-2 or Section 40-20-21.
(Act 2009-147, p. 284, §4.)
For the purpose of this article, the following terms shall have the respective meanings ascribed by this section:
(1) OIL, GAS AND OTHER MINERALS. Oil, gas, petroleum, hydrocarbons, distillate, condensate, casing-head gas, other petroleum derivatives and all other similar minerals of commercial value which are usually produced by the drilling, boring or sinking of wells.
(2) MINERAL ACRE and ROYALTY ACRE. The number of acres obtained by multiplying the aggregate acreage described in the instrument involved by the fractional interest leased or conveyed thereby.
(3) PRIMARY TERM. In connection with any instrument affected by this article shall mean the period of time that the estate created by such instrument shall endure under the terms thereof in the absence of production of oil, gas or other minerals in paying quantities, the carrying on of drilling or reworking operations for the production of such oil, gas or other minerals, force majeure or laws, rules or regulations, federal or state, preventing such drilling operations.
(Acts 1957, No. 261, p. 332, §1.)
There is hereby levied and shall be paid and collected as herein set forth a documentary or transfer tax, to be known as the mineral documentary tax, upon the filing and recording of every lease and other writing hereafter executed whereby there is created a leasehold interest in and to any nonproducing oil, gas or other minerals in, on or under or that may be produced from any lands situated within the State of Alabama, or whereby any such interest is assigned or is extended beyond the primary term fixed by the original instrument, and upon every deed, instrument, transfer, evidence of sale or other writing whereby there is hereafter conveyed to a grantee or purchaser, or excepted or reserved to a grantor separately and apart from the surface, any interest in or right to receive royalty from any nonproducing oil, gas or other minerals in, on or under or that may be produced from any lands within the State of Alabama; provided, that the tax shall not apply to any mortgage or instrument creating a lien upon such interest, nor to the sale under foreclosure thereof.
(Acts 1957, No. 261, p. 332, §2.)
Such tax shall be a lien upon the interest leased, assigned, conveyed, reserved, excepted or transferred, and the amount to be paid shall be determined as follows; provided, that the minimum tax shall be $1:
(1) Upon the filing and recording of each instrument creating, assigning or transferring a leasehold, or interest therein or any portion thereof, or conveying, transferring, excepting or reserving a mineral or royalty interest as above described, the primary term of which shall expire 10 years or less from the date of execution of the instrument, the tax shall be a sum equal to $.05 per mineral or royalty acre conveyed, leased, assigned, excepted, reserved or transferred therein.
(2) Such tax shall be $.10 per mineral or royalty acre if the primary term of such interest shall expire more than 10 years and not exceeding 20 years from the date of the execution of such instrument.
(3) Such tax shall be $.15 per mineral or royalty acre if the primary term of such interest may or shall extend more than 20 years from the date of the execution of such instrument.
(Acts 1957, No. 261, p. 332, §3.)
Such tax shall be payable by the grantee or grantees named or the beneficiary or real party in interest under such lease, deed, conveyance, transfer, assignment or other writing; except, that as to any exception or reservation creating any such interest the same shall be payable by the grantor or grantors in such instrument. Said tax shall be due and payable upon the filing of such instrument for record. Any probate judge who accepts or records such an instrument upon which the tax is not paid to him in the amount required herein shall be liable to the county for the amount of tax shown to have been due upon the instrument. The amount shall likewise constitute a lien upon the interest so conveyed, reserved or accepted by such instrument, collectible as are other delinquent taxes due the county. If an insufficient amount is paid by such tax, the filing and recording of the instrument shall nevertheless be good and valid for all purposes as now provided by statute and shall be a valid exemption from ad valorem taxes.
The probate judge shall collect the said tax, shall duly record the instrument and make the hereinafter required notation of tax payment.
(Acts 1957, No. 261, p. 332, §4; Acts 1961, No. 864, p. 1346, §1.)
Such tax shall be paid to the probate judge of the county in which the land affected by the sale, lease or reservation or other instrument of such oil, gas or other minerals is situated, and the said judge shall stamp or write the name of the county and the amount of tax paid on the face of the instrument when filed for recording and shall show upon the face or margin of the record thereof the amount of tax paid.
(Acts 1957, No. 261, p. 332, §5; Acts 1961, No. 864, p. 1346, §1.)
The mineral documentary tax levied above shall be in lieu of all ad valorem taxes and all nonproducing leasehold interests upon all oil, gas and other minerals in, on or under lands lying within the State of Alabama, created or assigned after October 12, 1957, and also all nonproducing interests in such oil, gas and other minerals, including royalty interests therein, hereafter conveyed to a grantee or purchaser or excepted or reserved to a grantor separately and apart from the surface shall be exempt from all ad valorem taxes levied on or after October 1, 1957, by the State of Alabama, or any county, municipality, school district, or other taxing district within the state or becoming a lien on or after said date. Any sale for taxes of the surface or of the remainder of the fee shall not in any manner whatsoever affect the interest or interests hereby exempted.
For the same purpose and with like effect there is hereby likewise exempted from such ad valorem taxation all such interests created prior to October 12, 1957, which are owned separately and apart from the surface; provided, that as a condition precedent to obtaining such exemption upon existing interests the then owner or owners thereof shall make application for exemption of the interest then owned by him or them as hereinafter provided and pay a sum equivalent to the tax herein levied by this article on instruments hereafter executed creating, transferring or reserving corresponding or similar interests. As to any existing interests, if any such sum is paid after October 1, 1957, then such exemption shall apply only to taxes becoming a lien after such sum is thus paid. The number of years remaining before the expiration of the primary term of such previously created mineral interest shall be considered as the primary term of such interest for the purpose of determining the amount of such tax.
(Acts 1957, No. 261, p. 332, §6; Acts 1961, No. 864, p. 1346, §1.)
Application for such exemption upon existing interests shall be made to the probate judge of the county wherein the land lies in which such interest is owned, by filing application in triplicate with the said judge, which shall contain the following information:
(1) Name of applicant;
(2) Address of applicant;
(3) Complete description of land affected, including aggregate acreage;
(4) Fractional interest for which exemption is applied and nature of such interest;
(5) Recording data concerning the instrument creating the interest including grantor or lessor, grantee or lessee, date of instrument, book and page of record, and date of filing;
(6) Length of primary term;
(7) Recording data on instruments divesting original party of any interest, including subsequent assignments thereof in a portion of original interest therein conveyed;
(8) Number of mineral, royalty or lease acres on which exemption sought; and
(9) Amount tendered therewith.
Upon receipt of such application, accompanied by the sum shown therein, the probate judge shall give it a serial number and mark it filed, showing the date received. The judge shall make a notation on the face of the application and on the record of the instrument described in the application showing the date of payment, amount of tax paid and the serial number of the application. After such notation is made, the original application shall be returned to the applicant by mailing it to him at the address shown on the application or delivered otherwise to the applicant; the first copy of the application shall be retained by the judge as his permanent record, and the second copy of the application, together with a certificate of the amount of taxes paid thereon, shall be sent by the judge to the tax assessor of the county.
If it later is ascertained that an insufficient amount was paid with the application for the exemption provided herein, such exemption shall not be thereby rendered void, but the additional amount which should have been paid, together with a penalty of 25 percent and one percent interest per month thereon from the date of the application until paid shall be a lien on the interest exempted and a personal debt of the applicant collectible by civil action for appropriate personal judgment and to enforce the lien, which may be maintained by the county to which such sum should have been paid.
(Acts 1957, No. 261, p. 332, §7; Acts 1961, No. 864, p. 1346, §1.)
From the taxes levied and collected under this article, there shall be paid into the county general fund, or to the judge of probate if he is on a fee basis, five percent as a cost of collection thereof. The remainder shall be distributed as follows: 35 percent to the county general fund; 35 percent to the county public school fund and 30 percent to the State General Fund. Such payment shall be made on or before the fifteenth day of the month next succeeding that in which collection may be made.
(Acts 1957, No. 261, p. 332, §8.)
Any laws or parts of laws to the contrary notwithstanding, any annual privilege tax levied upon persons engaging in the business of producing or severing oil or gas or other hydrocarbons from the soil or waters of this state measured by the gross value of such oil or gas or other hydrocarbons and which tax is applicable only in a particular county and under which collections were being made on January 1, 1987, or which shall hereafter be levied pursuant to legislative act, shall be continued and collected only as herein prescribed:
(1) All revenues collected from such local severance taxes shall, beginning the first day of the month following August 3, 1987, be paid into the general fund of the county exclusively for transfer and deposit into a trust fund hereby established until the total sum of $15,000,000 in severance tax revenues of the type described in this section, excluding any interest income on amounts deposited therein from such total sum, has been deposited into such trust fund. Upon the deposit into said trust fund of a county of a total of $15,000,000 in such severance tax revenues, any local law authorizing or levying such tax, including, without limitation, Act No. 2120, H. 2450, Regular Session 1971 (Acts 1971, Vol. V, p. 3399), shall stand repealed and no further taxes shall be levied thereunder. Any such local oil and gas severance tax revenues in excess of such $15,000,000 amount collected in any county after the time the total of such tax proceeds paid into such trust fund established hereby for such county shall reach $15,000,000, shall be refunded as promptly as shall be reasonably practicable to the payers thereof. The county governing body shall not be authorized to make any expenditure from any monies composing the corpus of said trust fund so long as it shall remain in existence. Said trust fund shall be designated in each county as the “county oil and gas severance tax trust fund,” and is hereinafter referred to as the “trust fund.”
(2) Commencing with the first year in which any trust fund provided for in this section shall receive deposits as required hereunder, and in each year thereafter, the county governing body shall take steps to ensure that the trust fund shall retain the total severance tax revenues paid therein plus ten percent of any net income or interest generated by the investment of such severance tax revenues, which sum shall be and become a part of the corpus of the trust fund. A sum, not to exceed 90 percent of the net income or interest thereby generated from said investments, shall be distributed quarterly, semiannually or annually, as designated by the trustees of the trust, to the general fund of the county for which a trust fund is established pursuant to this section.
(3) The county governing body shall constitute the trustees of the trust, provided, however, that the said governing body may in its discretion appoint one or more trustees or escrow agents for the trust, which trustees or escrow agents shall be trust companies or national or state banks having powers of a trust company within or without the State of Alabama. The trustees shall invest the corpus of the trust only in direct general obligations of, or obligations the payment of the principal of an interest on which are unconditionally and irrevocably guaranteed by, the United States of America. Provided, however, that notwithstanding any legal limitation that might otherwise be applicable, the trustees shall further have the authority in their discretion to invest such trust fund in certificates of deposit of any savings and loan associations or banks, whether federally or state chartered, whose principal office is located in this state, provided that such funds so invested are fully secured by pledges of securities of the type described in the immediately preceding sentence hereof.
(4) Upon the deposit into a trust fund established pursuant to this section of the total sum of $15,000,000 in severance tax revenues of the type described in this section, excluding any interest as income in such total sum, and the consequent repeal of the local law authorizing or levying such tax, the county governing body of a county for which a trust fund established hereunder shall be in existence shall be thereafter prohibited from levying or collecting, directly or indirectly, any local county severance tax of the type described in this section that was in existence prior to January 1, 1987, or that may be established hereafter, and any act authorizing such county oil and gas severance tax shall thereafter stand repealed.
(Acts 1987, No. 87-629, p. 1128, §1.)
It shall be the duty of the Department of Revenue to assess for taxation all property of all railroad companies, street and suburban railroad companies or persons or companies operating railroad or street railroads, or suburban railroads or sleeping cars in this state; all express companies, including railroad companies doing an express business and all telephone and long distance telephone and all telegraph companies, person or persons doing an express, telephone or telegraph business; all persons, firms, or corporations doing a gas business, transporting gas or furnishing gas, natural, manufactured or by-product, in or through pipes or in drums, tubes, cylinders, or by any other method; all water, electric light or power, hydroelectric power companies, steam heat, refrigerated air, dockage or cranage, toll roads, toll ferries, railroad equipment, pipelines for transporting or furnishing natural, manufactured, or by-product gas, water, oil, gasoline, or other commodities of commerce, and the property of all public service or public utility corporations, and all property not required by law to be listed for taxation with the county tax assessor; and the owner, president, general manager, agent, trustee, receiver, or other person or persons having control of the company’s affairs in this state shall make returns of all property of said company located in this state to the Department of Revenue.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §142; Acts 1995, No. 95-515, p. 1037, §1.)
Between January 1 and March 1 in each year, every company, corporation, association, and individual embraced within the provisions of Section 40-21-1, or coming otherwise within its scope and intent, shall make out and deliver to the Department of Revenue of Alabama a statement containing the information hereinafter prescribed, which statement shall be duly verified by the affidavit of one of the officers of the company, corporation or association or by the individual in whose behalf it is made.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §143.)
Every person, firm, or corporation whose property is required by this title to be assessed for taxation by the Department of Revenue and not herein otherwise specifically required to make reports to the said department shall, on or before March 1 of each year, make a report of all its property of every nature and character whatsoever and such other and further information upon such forms and in such manner as may be required by the Department of Revenue.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §144.)
Each such report shall show the following items and particulars as the same stood on the next preceding October 1, together with any other facts or information that may be called for by said Department of Revenue:
(1) The name and principal place of business of the company, corporation, association, or individual in whose behalf the statement is made and the character of the business engaged in;
(2) If a company, association or corporation, the state, or government under the laws of which it was incorporated or authorized to do business, the date of original organization, the date of reorganization, consolidation, or merger and the purpose of its incorporation as expressed in its charter or articles of association;
(3) The place where all books, papers, and accounts are kept, and the names and post-office addresses of the president, secretary, treasurer, superintendent, general manager, general counsel, directors, and all other general officers thereof;
(4) The location of its principal office, the total amount and any kind of business done by it in this state and the total gross receipts derived from its business in this state, including a due proportion of its interstate business, if it has done any business of that character, and its total gross receipts from business done everywhere;
(5) Its total authorized capital stock showing the number of shares of common stock authorized, issued, and outstanding in the hands of the public and in the company’s treasury, separate from its preferred stock, and the par or face value of each of such shares;
(6) Its total authorized preferred stock, showing each issue separately and setting out each issue to show the number of shares authorized, issued, and outstanding in the hands of the public and in the company treasury and the rate of interest each issue bears;
(7) The par value and the market or actual value of each issue of common stock and the dividends paid and the par value and market or actual value of each issue separately of preferred stock and interest paid on each issue. If the common or preferred stock is issued without par value, then the number of shares authorized, issued, and outstanding in the hands of the public and in the company treasury must be shown giving the number of shares of each class separately and showing the amount received for the common stock and the market or actual value thereof, and the amount received for each issue of preferred stock and the market or actual value of each such issue and in addition thereto must be shown for each of the issues separately the average market or actual value during the next preceding 12 months. If 25 percent or more of the common stock is held by any one person, firm, or corporation, the number of shares, name, address, relation, and percent of control of the person, firm, or corporation holding such stock must be given. If 25 percent or more of the total number of shares of the several issues of preferred stock is held by one person, firm, or corporation, the number of shares, name, address, and relation of the person, firm, or corporation holding such stock must be given;
(8) A statement of each and every lien, mortgage, and other charge upon the whole or any part of the property of said company, corporation, or association, or individual, and a detailed statement of all series of bonds, debentures, and other securities forming a part of its funded debt, with date of issue, maturity, and rate of interest, together with a statement of the property encumbered or charged thereby, and of the total amount of unpaid debts secured by each mortgage, lien, or charge, and of the interest charged thereon, and to what extent interest has been paid, and the true and fair value of every such debt. A statement of the gross income and earnings for the preceding fiscal year of the person, firm, corporation, or association, including therein all interests on investments and all rents, profits, revenues, and receipts from every source whatsoever, and a statement of the income used for repairs and for betterments and the amount used for extension in this state; the amount of income paid in dividends on common stock and amount paid as interest specifying the amount of interest paid on each issue of preferred stock and upon each issue of bonds, or other forms of indebtedness, the amount set aside for depreciation, for obsolescence, for retirements, and the amount passed to surplus;
(9) A statement of the expense for the preceding fiscal year of the person, firm, corporation, or association, giving in detail the expense or other information of the different units, departments or subdivisions, taxes paid, itemized according to assessments, levies, or charges by the state, its counties, municipal corporations, school districts, or other taxing districts and to other states and to the federal government, on forms furnished by or in the manner required by the department;
(10) If a person, firm, or corporation by this title required to make return to the Department of Revenue keeps its records on a calendar year basis or on a fiscal year basis other than from October 1 to September 30, it may make return of its financial matters required by this title on the basis of the calendar year or on the basis of its fiscal year that ends nearest to October 1, stating in each case the period covered; and
(11) If the person, firm, or corporation does business in other states, then, in addition to the items called for in this chapter with respect to this state, the same items shall also be shown for the business or system as a whole. If any item called for in this section is prorated or allocated to this state, the reason for such proration or allocation and the method so used shall be given.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §145.)
Whenever any person or association of persons, not being a corporation and having no capital stock, shall engage in this state in any character of business embraced within the provisions of this chapter, the capital and property, or the certificate or other evidence of the rights or interest of the person engaged in such business shall be deemed and treated as the capital stock of such persons or association of persons for the purpose of taxation and for all purposes under this title and shall be estimated and valued, and the intangible property values thereof, when ascertained, shall be apportioned and distributed and assessed and taxed under the provisions hereof in like manner as if such person or association of persons were a corporation, and each such person or association of persons shall annually, within the time and the manner provided in this chapter, make the statements and reports and give the information required by this chapter of the aforesaid corporations, companies and associations and shall be subject to all the penalties and to all the terms and provisions of this chapter.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §146.)
Insofar as the other evidence and information adduced before said department does not make it appear to said department improper or unjust for it to do so, the said department shall, in fixing the true value of the entire property, tangible and intangible, of any company, corporation, association or individual embraced within the provisions of this title, consider as a factor the average net earnings, averaged over a period of five years, and also take as a basis therefor the aggregate average market value or true value for the preceding year of all its shares of stock and add thereto the average market or true value for the preceding year of its entire indebtedness secured by any mortgage, lien or other charge upon its property and assets, and the sum or sums so produced shall be treated and considered a factor in ascertaining the true value of said entire property, tangible and intangible, for purpose of ad valorem taxation. The department may likewise consider the value of the individual units and items of property and the sum of the values of such units or items.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §147.)
On or before March 1 of each year, the president, secretary, or auditor of any railroad company whose track or roadbed or any part thereof is in this state or, if such railroad is in the hands of a receiver or trustee, such receiver or trustee shall, under oath, make to the Department of Revenue a return in writing of the total length of such railroad, including the right-of-way, roadbed, side tracks and main tracks in this state, specifying the total length in this state and in each county, city or incorporated town, school district, or other tax district in this state in which a special school tax or other tax is levied; and also of the number of locomotive engines or other units of motive power, and passenger, freight, construction, and other cars of such company for the entire system and the number of each allocated to this state, stating the method used in so allocating, and the location and a description of all other property owned by such company in the State of Alabama, and of the average amount of merchandise and supplies kept or carried on trains for sale or other disposition for profit by such companies to employees or other persons in this state for the year next preceding the return.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §148.)
The president, secretary, auditor, or managing agent in this state of every telegraph or telephone company, whose line or any part thereof is located within this state, must annually, on or before March 1 of each year, make under oath to the Department of Revenue a return, in such reasonable detail as may be prescribed by such department, on all the property belonging to such company in this state and connected with the business, specifying the several counties in which such property is situated and the items of property situated in each of such counties, towns and school districts.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §149.)
Every electric power, hydroelectric power, every telegraph, telephone, or long distance telephone company shall include in each return made by it the following particulars:
(1) The number of miles of right-of-way in the state belonging to such company and the number of miles of right-of-way along public roads or on government land or on or along the streets of incorporated cities and towns used by such company, showing the number of miles of each class separately and by what authority such use is granted;
(2) The total length of all transmission lines or telephone or telegraph lines, stated by the number of miles of poles and the number of miles of towers, whether poles are treated or untreated, and description of towers as to size and height, the number of miles of wire, of each material constructed, stated according to the number of miles of each class and size of wire, the number of miles of conduit or of cable, stated according to the number of pairs of wire or other capacity, and the voltage capacity of each electric transmission line shall be stated;
(3) The total length of all lines of said company, whether within or outside of the state; and
(4) The total length of so much of said lines as are within this state and the length of its lines in each of the counties, cities, towns, school districts, or other tax districts of this state into or through which its lines extend, stated according to the number of miles of towers, the number of miles of poles, the number of miles of each class of wire, and the number of miles of each size of conduit or cable. Electric transmission lines shall, in addition to the foregoing state their mileage according to the voltage capacity of each line.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §150.)
Every water company, gas company and every pipeline company shall show in each statement made by them the following particulars, which are in addition to the foregoing requirements:
(1) The total length of all lines of said company, whether within or outside of the state, the total length of each size pipe and of what material each is constructed;
(2) The total length of so much of each of said lines as are within this state;
(3) The length of each size and kind of lines in each of the counties, cities, towns, school districts, or other tax districts of this state into or through which each size and kind of lines extend, or in which its distribution system, holders, reservoirs, standpipes, drums, tubes, cylinders, meters, services, or other means of storage or distribution are located or used; and
(4) The number of miles of right-of-way in the state belonging to such company and the number of miles of right-of-way along public roads or on government land or on or along the streets of incorporated cities and towns used by such company, showing the number of miles of each class separately and by what authority such use is granted.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §151.)
Every sleeping car company, parlor or palace car company, dining car company, chair car company, or equipment company operating cars of any kind for carrying passengers or serving meals over any railroad in this state shall also, in addition to the said foregoing requirements, show by each of its statements:
(1) The total mileage traveled by the cars of said company during the next preceding 12 months, whether within this state or beyond its borders, and
(2) The total mileage traveled by such cars within the state during the same period.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §152.)
All railroad, electric, hydroelectric, telephone and telegraph companies, and all water, gas, street, and interurban railroad companies and all docks, terminals, toll road, toll bridge, and ferry companies and all other public utility companies must make return of each item of real estate describing by metes and bounds and giving number of acres in each tract or by lot and block number, if in incorporated cities or towns, and of the improvements thereon, and all the buildings and structures, stating material of which constructed, and all machinery, fixtures, and appliances, and all other tangible property and assets owned and assessed, or liable to assessment for the same year, within this state, and the location and assessed value thereof, and the county, city, town, or school district, or other tax district wherein the same are assessed for taxation for state, county, municipal, school, or other tax district purposes, or are liable to assessment, and whether or not they are specifically used in business of the company making the return.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §153.)
Every railroad company shall, in addition to the foregoing requirements, show in each statement made by it the total length of all lines of said company, whether within or outside of this state.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §154.)
The statement of every public utility shall include a brief description of each tract of land and the improvements thereon, and of the buildings, structures, machinery, fixtures, and appliances and all other tangible property and assets having a fixed situs outside of the state, and the location of each item of such property, the purpose for which it is used, whether or not it is specifically used in the business of the company, corporation or association, or individual in whose behalf the report is made, its true and fair value, the sum of the value at which it is assessed for taxation and the locality in which it is assessed.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §155.)
Every express company shall also, in addition to the foregoing requirements, show:
(1) Its total gross receipts from all business done under its charter, whether within this state or outside thereof, during the next preceding 12 months;
(2) Its total gross receipts within this state for the same kind of business done during the same period, including a due proportion of receipts from interstate business; and
(3) Its total gross receipts in each county or town in this state for the same kind of business done during the same period.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §156.)
The Department of Revenue of Alabama shall receive all such statements offered to it under the provisions of this chapter, shall endorse upon each the date upon which it was received and sign the endorsement officially. It shall examine the statements as soon as may be practicable; and, if any of them are found to be insufficient or if said department shall believe other or further information to be necessary, it shall at once demand such additional statements and information as it may think proper.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §157.)
The department shall proceed forthwith to examine the returns made by all persons, firms, and corporations required by law to make the same and also such information as the department may have obtained in addition thereto, shall determine the valuation of the different items of property required to be returned to it and shall assess such property for taxation at 30 percent of its reasonable value; and, in case no return has been made by or on behalf of such person, firm, or corporation on or before March 1 in each year, the department may add to the assessment which it makes against such person, firm, or corporation a penalty not exceeding 10 percent of the assessment as made therefor. The assessment herein required to be made shall be completed on or before July 1, or as soon thereafter as practicable, and reported to the tax assessor of every county in which any part of said tangible personal property is taxable under the provisions of this title. The report to the tax assessor shall contain a description of all property included in the assessment, the assessed value thereof, and an apportionment of the assessed value of such property to the county, to each municipality, to each special school district, and other districts levying a district tax within said county, with the name and residence or place of business of the owner thereof and all other information necessary to enable the tax assessor to set up such tax assessment upon the assessment books.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §158; Acts 1945, No. 403, p. 642; Acts 1992, No. 92-186, p. 349, §60.)
The Department of Revenue shall carefully examine and consider said statements and information and shall hear evidence and secure further and additional information as far as may be in its power, whenever it may deem it necessary to do so, to show the true value of properties of such corporations, associations, companies, and individuals and the true value of that portion thereof which is situated within this state and within the respective counties, cities, towns, or other tax districts in this state; and each interested company, corporation, association, or individual may appear before said department and introduce material and relevant testimony before the same touching the true value of said property within this state and the apportionment thereof. From these statements, evidence and information adduced before it, the Department of Revenue shall ascertain, fix, and determine the true value of such property and of the portion thereof which is situated within this state and the respective value of the several portions within the different counties and cities, towns and school districts, or other tax districts having a special assessment in this state, in which such portions are taxable; and for that purpose said department may require and compel by subpoenas to be issued by it any person or persons, or the officers and agents, or any of them, of any company, corporation, or association embraced by the provisions of this title to appear before it with such books, papers, documents, and information as the department may require and to submit themselves to examination by said department, and it shall have all the powers with respect thereto conferred upon it by this title.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §159.)
If at any time after March 1 of any year the Department of Revenue shall not have in its possession satisfactory data upon which to base an estimate of the value of the property with the assessment of which it is charged or from any other cause it is not able to make or complete any assessment, it shall have power to call upon any officer or agent of any person, firm, or corporation, or upon any receiver or trustee in charge of the property of any person, firm, or corporation for any records, books, or documents of any description pertaining to the business of any such person, firm, or corporation for the answers to any interrogatories which it may deem necessary to an intelligent discharge of its duties; and it shall also have power to require the attendance of any officer of any corporation or any other person where the testimony of such officer or person may to it seem material.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §160.)
In arriving at the value of such taxable property, whenever used in this chapter or whenever required, the Department of Revenue, the tax assessors, deputy tax assessors, board of equalization, or other assessing authorities and the courts shall be authorized to consider and may consider original costs, reproduction cost new less depreciation, recent sales of contiguous or similar property, the nature of the property, its location, whether in town, city or county, whether it is vacant or occupied, its proximity to local advantages, its use, its fitness for the use to which employed, or its fitness for other uses, the quality of soil, its growth of timber, its mines, minerals, coal beds, oil or gas deposits, the amount and character of improvements thereon, the amount of insurance carried on each item of property, the gross and net income received therefrom during the year or years preceding the date of assessment, the market value of its shares of stock or bonds, or both, if sold in the open market, or if not quoted in the open market, the value thereof, the amount of any bonded indebtedness, loans or mortgages upon it and any and all evidence and information that may be adduced before the assessing authorities or which he or it may procure, shedding light on the value of such property. In assessing any property where such information is obtainable and has or may have any bearing on the values of such property, the tax assessing authorities shall consider the average market or actual value of the stock and bonds of such companies during the preceding year and also shall take into consideration the estimated investment as returned by the duly authorized officer or employee of such company to the Public Service Commission or to the Interstate Commerce Commission, Tennessee Valley Authority, Reconstruction Finance Corporation or Railroad Credit Corporation, or other similar commissions, agencies, or associations of the United States or this state, or value stated in folders, schedules, or prospecti. Any valuation made for rate-making or other purposes of the Public Service Commission of the state, the Interstate Commerce Commission, or other state or governmental bodies shall also be considered.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §161.)
There shall be subject to taxation in this state the franchises or intangible property and assets of each and every corporation, whether organized under the laws of this state or of any other state or government, and of each and every individual, association, or partnership, or company engaged as a common carrier, wholly or partly in this state, in the business of transporting freight of any description or passengers, or both, over any railroad, including street railroads, or of operating any cars of any kind over any railroads for the transportation of passengers or of property of any kind for others or for the public, including sleeping cars, parlor or palace cars, chair cars, equipment cars of any kind, or engaged in the business of maintaining or operating for gain any telegraph or telephone lines, plant or business, or any plant or business for the production, transportation, piping, distribution, or sale of natural gas, manufacture, distribution, or sale of gas, by or through pipes, drums, tubes, cylinders, or other containers or conveyances, or for manufacture, distribution, or sale of electricity, electric light, electric power, water, steam heat, and refrigerated air, or other similar substance, including the piping of oil or gasoline, by means of wires, pipes, or conduits constructed, operated, or maintained on, over, under, or through any territory or any street, alley, or highway in this state, or in the business of operating for gain any dockage, wharfage, canal, freight, or passenger depots, boats, barges, station, or terminals, toll bridges, and toll ferries, or engaged in any business which may be dependent upon the grant of public powers or privileges, or which may involve the operation of any public utility; and of each and every individual, association, partnership, company, or corporation which has and exercises, under authority granted by charter, statute, or other provision of law, whether of this state or any political subdivision thereof, or of any other state or government, any special or exclusive privilege, franchise, or function which is or may be dependent upon the grant of public power or privilege, or which involves the operation of any public utility.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §162.)
Where the person, association, company, or corporation operates a water system, express business, electric property, toll bridge, toll ferry, street, or interurban railroad or railroad or car line of any kind, telegraph or telephone line, pipeline, gas line, or gas distributing system of any kind, docks or terminal companies or other public utilities, the lines or properties of which extend beyond the state, there shall also be deducted from the true value of the entire property, tangible and intangible, ascertained as above provided, the market or true value ascertained from the information furnished by said statements, if the value thereof is given in said statements, of all real and personal property of said person, association, company, or corporation not specifically used in its business, and the remainder shall be treated as the true value of all its property, tangible and intangible, actually used in its business. The Department of Revenue shall then ascertain and fix the value of the total property, tangible and intangible, in this state by taking such proportion of the value of the entire property, tangible and intangible, of such persons, association, company, or corporation which is specifically used in its business, ascertained as provided by this chapter, as its total lines or business within this state bear to the total lines or business both inside and outside this state, or as its total receipts from within this state bear to its total receipts from both within and without the state. From the entire value of the property within this state, tangible and intangible, when ascertained as above provided, there shall be deducted the total value of the entire real and personal property of said person, association, company, or corporation in this state, and 30 percent of the residue and remainder of value shall be by the said Department of Revenue fixed and determined as the true value for taxation of the franchise or intangible property of such person, association, company, or corporation so operating said water system, express business, electric property, toll bridge, toll ferry, street or interurban railway, railroad, car line, telegraph line, telephone line, pipeline, gas line, or gas distributing properties, docks or terminal companies, or other public utilities made subject to taxation by the provisions of this title.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §163.)
After computing the valuation of the tangible and intangible property of a public utility taxpayer, the Department of Revenue shall notify the taxpayer and assess such value in accordance with the procedures set forth in Chapter 2A of this Title 40.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §164; Acts 1992, No. 92-186, p. 349, §61.)
From 30 percent of the value of said entire property, tangible and intangible, thus ascertained, there shall be deducted the assessed value of the entire tangible real and personal property of such persons, association, company, or corporation, and the remainder of the true value shall by said Department of Revenue be fixed and determined as the true value for taxation of the franchise, or intangible properties owned and held by said persons, association, company, or corporation and made subject to taxation by the provisions of this title, where the business and property of such persons, association, company or corporation is within this state.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §166.)
Every individual, association, partnership, company, and corporation engaged in any business embraced or set out in the preceding sections shall, in addition to the ad valorem taxes on the tangible property which are now imposed upon them by law, annually pay to the state a tax for each year on their franchises or intangible property and assets and shall pay local taxes thereon to each county and municipal corporation, school district and other tax district in which their business is or shall hereafter be carried on. Said tax shall be at the same rate as the tax on tangible property, shall be and become due and delinquent at the same time as the taxes on tangible property, shall be payable and collected in the same manner and shall be assessed and levied in the manner herein provided. The place or places where such local taxes on such property are to be paid and the manner of the apportionment of the same in cases where more than one jurisdiction is entitled to a share of such tax shall be determined and the valuation of such property for taxation shall be ascertained in accordance with the provisions of this title.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §167.)
The Department of Revenue shall apportion the value of such franchise or intangible property thus ascertained as in this title provided among and between the counties and cities, towns, school districts, or other tax districts having a special assessment, in which such person, association, company, or corporation does business, in proportion to the amount of business done in and receipts derived from each locality, except in case of a railroad or railway company, which apportionment shall be on single track main line basis, telephone or telegraph companies and electric power companies on pole or wire mileage, pipelines and car companies other than express companies on mileage basis.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §168.)
The said property shall thereupon be entered by the county tax assessor and the local authorities of such city or town for taxation in like manner as other property and shall be taxed, and the taxes thereon shall be collected as in the case of other property.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §169.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date, see the Code Commissioner’s Notes in the code supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §170.)
In any assessment by a state, county, or municipal authority of the franchise or intangible property of any person, association, company, or corporation subject to the provisions of this title, it shall be sufficient to describe the franchise or intangible property herein made subject to taxation on the assessment books or rolls as intangible property in (here give name of county, city, town, school district or other tax district) of the franchise or intangible tax of (here give name of owner of such franchise or intangible property).
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §171.)
If any person, association, company or corporation embraced within the provisions of this chapter shall fail to make the returns and statements, or any of them, required by the provisions of this chapter, or to furnish any other information lawfully required of it within the time limited, the Department of Revenue must procure the necessary information from some other sources upon which to base an ascertainment of the values of the tangible and intangible property or franchise of such person, association of persons, company, or corporation, and shall proceed to ascertain the value of such property.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §173.)
If the property of any person, association, company, or corporation shall be in the hands of any receiver, assignee, trustee in bankruptcy or other person holding under any court, or for the benefit of any creditor or creditors, then the statements, reports, information, books, and papers aforesaid shall be furnished by said receiver, assignee, trustee or other person, or by some officer or agent acting under him, in the same manner and to the same extent as is hereinbefore provided in cases where the individual or the corporation, company or association is in possession.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §174.)
(a) The Department of Revenue, after having first determined and fixed the true value of any property within this state of individuals, companies, corporations, and associations embraced within and in accordance with the provisions of this chapter, shall annually on or before July 1, or as soon thereafter as practicable, report to the tax assessor of every county and to the proper local authorities of each municipality in this state in which any part of said property is taxable hereunder, giving a general description of the property, the value of such property apportioned to said county and to said municipality, school district, or other district having a special assessment and the name and residence or place of business of the owner and all other necessary particulars.
(b) The assessor must enter in the book of assessments, in addition to the assessment of other real estate or personal property to be assessed as other taxable property owned by private citizens of his county, the property with description and value as reported to him by the Department of Revenue.
(c) The Department of Revenue shall also send to the owner or operator of such property so assessed a copy of its notification to the tax assessor touching assessment.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §175.)
For each person operating a public utility, such as a street railroad or interurban railroad operated by electricity or other motive power, waterworks, gas company, pipeline company for transporting or carrying gas, oil, gasoline, water or other commodities, gas distributing companies, whether by means of pipeline or by tanks, drums, tubes, cylinders or otherwise, heating companies or other public utility, except electric, hydroelectric, telephone or telegraph companies, railroad or sleeping car companies and express companies which are otherwise licensed, shall pay to the state a license tax equal to two and two-tenths percent on each $1 of gross receipts of such public utility in this state for the preceding year. For the first year’s business, where an existing public utility is taken over, such license tax payable to the state shall be equal to two and two-tenths percent on each $1 of the gross receipts for the preceding year of the public utility taken over, less whatever sum the prior operators have paid as such license tax on the gross receipts for that year. Where no existing public utility is taken over, such license tax for the first year, as well as for the second year, shall be based on the first year’s business, but shall in no event be less than $100 for the first year’s business; provided, that where business is started after April 1 the payment shall be not less than $50. Any person establishing a new public utility shall pay to the state the sum of $100 where operation is begun between October 1 and April 1 and $50 when operation is begun after April 1 and shall also at the same time execute a bond, payable to the State of Alabama, to insure payment of whatever sum, in addition to the $100 or $50, which may be due when, at the end of the first year or if operation began after April 1, the amount of the gross receipts is ascertainable. Such license tax shall be paid to the Department of Revenue by check made payable to the treasurer and shall be paid quarterly, one fourth on October 1, one fourth on January 1, one fourth on April 1 and one fourth on July 1 and shall become delinquent on the fifteenth day of each said month, based upon gross receipts for the preceding year, or half year if operations began after April 1. The payment of such license shall be accompanied by a sworn statement made on forms furnished by the Department of Revenue by the president, manager or operating officer of the public utility, or by the owner, receiver, or trustee thereof, giving the name of the person, firm, or corporation owning and operating said public utility and the principal place of business thereof, showing the gross receipts of such public utility for the preceding year. The books of every person operating a public utility shall be at all times open to the inspection of the Department of Revenue. Any person failing to make such sworn statement or willfully making a false statement of the gross receipts of such public utility shall be guilty of a misdemeanor and upon conviction shall be fined not exceeding $500 and shall also forfeit to the state three times the amount of the license on said utility, but no license under this schedule shall be paid to the county or counties.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §177; Acts 1971, No. 1417, p. 2420, §1.)
All revenues collected under the provisions of Section 40-21-50 shall, after deduction of the cost of collection, be distributed in the following manner:
(1) Eighty-five percent of the balance remaining after deduction of the cost of collection shall be deposited in the Special Mental Health Fund to be used for mental health purposes; and
(2) Fifteen percent of the balance remaining after deduction of the cost of collection shall be deposited in the State General Fund.
(Acts 1971, No. 1417, p. 2420, §2.)
Any person, firm, joint-stock association, or corporation, wherever organized or incorporated, engaged in the business of operating, renting, leasing, or furnishing cars not otherwise listed for taxation in this state for the transportation of freight, whether such freight is owned by such company or any other person, firm, joint-stock association, or corporation, over any railroad or railway line or lines in whole or in part within this state, such line or lines not being owned, leased, or operated by such person, firm, joint-stock association, or corporation, whether such cars are termed box, flat, coal, ore, tank, stock, gondola, furniture, automobile, refrigerator, or some other name, shall be deemed to be a freight line or equipment company. Each freight line or equipment company doing business, owning, operating, renting, leasing, or furnishing cars which are operated in this state shall, on or before March 1 each year, make and file with the Department of Revenue on a form or forms prescribed by the Department of Revenue a statement under oath by its president, secretary, treasurer, superintendent, manager, receiver, trustee, or owner, showing the number of miles run by all its cars over the line or lines of each separate railroad or railway in this state, naming each separate railroad or railway, and the total number of miles run by all of its cars over all line or lines of all railroads or railways in this state, and the total number of miles run by its cars over line or lines or railroads or railways everywhere outside of this state, such mileage to be shown as made for the 12-month period preceding October 1 of each year. There shall be shown on the statement the principal place of business, together with the street address of each freight line or equipment company, together with the names and addresses of persons to whom correspondence or tax notice should be sent. It shall be the duty of the Department of Revenue to examine the statement of each freight line or equipment company, and the reports of each railroad or railway company over whose lines such freight line or equipment moved, and from such statements and reports to compute the average number of cars within the state of each freight line or equipment company for the 12 months preceding October 1 of each year; for the average number of cars found to be in the state for such 12-month period, the reasonable value of such cars shall be computed, and the sum total value of the average number of cars shall be reduced to 30 percent thereof. There is hereby levied and it shall be the duty of the Department of Revenue to assess a license tax of three and one-half percent of the 30 percent value of the average number of cars within the state for the period of 12 months preceding October 1 of each year. Such tax shall be assessed pursuant to the procedures for assessment of tax as set out in Chapter 2A of this title.
The tax shall become due on the date of entry of the preliminary assessment and shall be delinquent 30 days after the due date. The tax shall be paid to the Department of Revenue, by check made payable to the Treasurer, and the license tax so paid shall be placed to the credit of the State General Fund. Each railroad or railway company in this state shall also, annually before March 1 of each year, make and file with the Department of Revenue, under oath of some executive officer of the company and on forms prescribed by the Department of Revenue, a report containing as to all its lines in Alabama all the data required of freight line or equipment companies and any additional information deemed necessary by the Department of Revenue. Any person, firm, corporation, or association operating, renting, leasing, or otherwise furnishing cars as above mentioned, except a regularly organized and operated railroad, is deemed to be a freight line equipment company.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §176; Acts 1971, No. 1413, p. 2408; Acts 1992, No. 92-186, p. 349, §62.)
(a) Each person, firm, or corporation, including any corporations operating an electric or hydroelectric public utility; or a gas public utility; or any privately owned and operated wastewater system as defined in Section 22-25B-1 which is required by Chapter 25B of Title 22, to be operated and maintained by a wastewater management entity certified by the Public Service Commission; or any other public or municipal utility now paying the two and two-tenths percent shall be subject to the provisions of this section and shall pay to the state a license tax equal to two and two-tenths percent on each $1 of gross receipts of such public utility for the preceding year; except, that gross receipts from the sale of electricity for resale by such electric or hydroelectric public utilities and gross receipts from the sale of electricity to the persons identified in subsection (b) of this section shall be deducted in computing the amount of tax due hereunder. For the first year’s business, where an existing electric public utility is taken over, such license tax payable to the state shall be equal to two and two-tenths percent on each $1 of gross receipts for the preceding year of the electric utility taken over, after deduction of gross receipts derived from sales of electricity for resale and gross receipts from the sale of electricity to the persons identified in subsection (b) of this section and less whatever sum the prior operators shall have paid as such license tax on the gross receipts for that year. Where no existing electric public utility is taken over, the license tax for the first year upon such utility shall be based upon the first year’s business, computed as provided hereinabove, but shall in no event be less than $100 for the first year’s business. Any person, firm, or corporation establishing a new electric public utility shall pay to the state the sum of $100 and shall also at the same time execute a bond payable to the State of Alabama to insure payment of whatever sum in addition to such $100 may be due when, at the end of the first year the amount of gross receipts for the year is ascertainable. Such license tax shall be paid to the Department of Revenue by check made payable to the Treasurer and shall be paid quarterly, one fourth on October 1, one fourth on January 1, one fourth on April 1 and one fourth on July 1 and shall become delinquent on the fifteenth day of each of said months. Payment shall be accompanied by a statement made by the president or other officer of the public utility or by the owner thereof, giving the name of the person, firm, or corporation owning and operating such public utility and the principal place of business thereof, together with a statement under oath of the amount of gross receipts of such public utility for the preceding year. The books of every person, firm, or corporation operating such public utility shall be at all times open to the inspection of the Department of Revenue. Any person failing to make such sworn statement or willfully making a false statement of the gross receipts of such public utility shall be guilty of a misdemeanor and, upon conviction thereof, shall be fined not exceeding $500 and shall also forfeit to the state three times the amount of the license for such public utility, but no license under this schedule shall be paid to the county or counties.
(b)(1) On or after October 1, 1981 any person who is 62 years of age or older or totally and permanently disabled and such person is head of a household and does not share his or her residence with more than one other adult person who is less than 62 years of age and who receives electricity at such residence from a utility which is subject to the 2.2 percent license tax levied in subsection (a) of this section shall be entitled to qualify, in accordance with the provisions of subdivision (2) of this subsection, for a credit on his or her monthly electric bill in the amount of the exemption from the 2.2 percent license tax with respect to sales of electricity to such person provided in subsection (a) of this section; provided that the combined gross incomes of all persons who live at the residence of such person 62 years of age or older or such totally and permanently disabled person shall not exceed $12,000 annually. Eligibility for this credit applies only to the extent and amount that it is billed to the customers as a normal requirement under its rates.
(2) Any person who seeks to qualify for the credit provided in subdivision (1) of this subsection shall make application to the Department of Human Resources in accordance with the rules promulgated by the Department of Human Resources for the implementation and enforcement of this section. The Department of Human Resources shall periodically notify, in writing, each electric utility in the state which is subject to payment of the 2.2 percent license tax levied in subsection (a) of this section regarding those customers who are entitled to receive the monthly credit. Within 45 days after receipt of notification for such monthly credit the electric utility shall commence providing such credit for gross receipts license tax that otherwise would be billed.
(3) Any person who wrongfully qualifies for such exemption by giving false information shall be guilty of a misdemeanor and upon conviction may be fined not to exceed $500.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §178; Acts 1971, No. 1412, p. 2406, §1; Acts 1981, No. 81-867, p. 1659; Act 2009-773, p. 2388, §3.)
The provisions of any state, county or municipal ordinance or law to the contrary notwithstanding, the tax levied and collectible pursuant to Section 40-21-53 shall be deductible from and shall not constitute a part of gross receipts for purposes of computing the amount due under any state, county or municipal tax, excise, license, or fee which is based upon or measured by the gross receipts of any person, firm, municipality, or corporation operating an electric or hydroelectric public utility subject to the tax levied by said section.
(Acts 1971, No. 1412, p. 2406, §2.)
All revenues collected under the provisions of Section 40-21-53 shall, after deduction of the cost of collection, be distributed in the following manner:
(1) Eighty-five percent of the balance remaining after deduction of the cost of collection shall be deposited in the Special Mental Health Fund to be used for mental health purposes; and
(2) Fifteen percent of the balance remaining after deduction of the cost of collection shall be deposited in the General Fund.
(Acts 1971, No. 1412, p. 2406, §3.)
In addition to all other taxes of every kind now imposed by law or otherwise imposed by this title, there is hereby levied a license or privilege tax upon each person, firm, corporation, agent or officer engaged in the business of manufacturing and selling hydroelectric power in the State of Alabama for the privilege of engaging in such business; said license or privilege tax shall be due and payable in advance, on or before September 25 of each year, and shall be in sum equal to two fifths of a mill upon each kilowatt hour of hydroelectric power manufactured and sold during the preceding calendar year.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §179; Acts 1957, No. 551, p. 772.)
In addition to all other taxes of every kind imposed by this title, there is hereby levied a license or privilege tax upon each person engaged in the business of operating an express company in the State of Alabama for the privilege of engaging in such business; said license or privilege tax shall be due and payable to the Department of Revenue by check made payable to the Treasurer annually in advance, on or before October 1 of each year, and shall be in a sum equal to two and one-half percent of the gross receipts of such express company from all the intrastate business within the State of Alabama during the preceding calendar year.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §184.)
There shall be levied and collected from every person doing an express business between points wholly within this state and without reference to its interstate business, whether incorporated under the laws of this state or any other state or whether incorporated at all, a license or privilege tax of $4,000, which shall be paid to the Department of Revenue by check made payable to the Treasury by said company on or before the expiration of the fifteenth day of each fiscal year; provided, that any express company which operates on less than 50 miles of railroad, street railway, motor line, or boat line shall pay an annual tax of $250; and provided, that any express company which operated on 50 miles of railroad, street railway, motor line, or boat line, and less than 200 miles of railroad, street railway, motor line or boat line, shall pay an annual license of $500; and provided further, that all express companies that operate on 200 and not over 500 miles shall pay an annual tax of $2,500. It is not intended that the taxpayer under this section and Section 40-21-60 shall pay both the taxes therein mentioned, but that the taxpayer shall pay the larger of the two. The tax levied by this section and Section 40-21-60 shall not apply to bus lines which pay a license and mileage tax under Chapter 19 of this title and which carry express as a regular part of their business of hauling passengers.
(Acts 1935, No. 432, p. 910; Code 1940, T. 51, §185.)
In all cases where a public utility is required under this title to pay a privilege or license tax on gross receipts, such public utility shall make report to the Department of Revenue of such gross receipts to which such tax is applicable in a manner and form which will show the correct and true amount of such gross receipts upon which the tax is computed.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §181.)
The Department of Revenue shall, upon receipt of any amount of money due for tax on gross receipts of any public utility, mail to such utility paying the tax a receipt therefor. Such a receipt shall state specifically the section of this title levying the tax for which such receipt is given.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §187.)
No county shall levy a privilege or license tax on any business or occupation on which a privilege or license tax is levied by this article or on any telephone or telegraph utility business.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §188; Acts 1992, No. 92-623, p. 1466, §13.)
(a) For the purpose of this article, the following terms shall have the respective meanings ascribed by this section:
(1) DEPARTMENT. The Department of Revenue of the State of Alabama.
(2) DOMESTIC WATER. All water except water that is sold to persons for use or consumption in industrial processes and not primarily for human consumption.
(3) GROSS RECEIPTS. The value proceeding or accruing from the furnishing of utility services, all receipts actual and accrued, without any deduction on account of the cost of the utility services sold, the cost of the materials used, labor or service cost, interest paid, or any other expenses whatever, and without any deductions on account of losses.
(4) GROSS SALES. The value proceeding or accruing from the furnishing of utility services, and including the proceeds from the sale of any utility services handled on consignment by the taxpayer, without any deduction on account of the cost of the utility services sold, the cost of the materials used, labor or service cost, interest paid, or any other expenses whatever, and without any deductions on account of losses.
(5) PERSON. An individual, firm, copartnership, association, trust, receiver, corporation, or other entity, and shall specifically include the State of Alabama, every county in the State of Alabama, every municipal corporation in the State of Alabama, the United States of America and its agencies, and every public corporation or entity organized under the laws of the United States of America or under the laws of any state of the United States of America and operating in the State of Alabama, as well as every private or nonpublic entity.
(6) RETAIL SALE. All sales except those defined herein as wholesale sales.
(7) TAXPAYER. Any person liable for taxes under the provisions of this article.
(8) UTILITY. Every person regularly engaged in furnishing utility services to another person in the State of Alabama.
(9) UTILITY SERVICES. Electricity, domestic water, natural gas, telegraph services, and telephone services; provided, however, that “utility services” shall not mean electricity, domestic water, natural gas, telephone services, or telegraph services stored, used, or consumed by a utility regularly engaged in furnishing the same such service to the public.
(10) WHOLESALE SALE. A sale or exchange of utility services by a utility to any person or any other utility engaged in the resale of such utility services in the regular course of business.
(11) TELEPHONE SERVICES. Local telephone service, interstate telephone service which originates or terminates within this state but does not both originate and terminate in this state and is charged to a service address in this state, and intrastate toll telephone service, private communications service, teletypewriter, and computer exchange service. The term “telephone services” includes transmission by or through any media such as wires, cables, microwaves, light waves, or any combination of those or similar media. It includes, but is not limited to, telephone services sold by motels and hotels to their customers or to others, telephone services sold by colleges and universities to their students or to others, and telephone services sold by hospitals to their patients or to others. The term “telephone services” shall not include:
(i) Telephone services provided through any pay telephone;
(ii) Any excise, franchise, or similar tax or like fee or assessment levied by the United States, by the State of Alabama, or by any political subdivision, upon the purchase, sale, use, or consumption of any telephone services, which tax, fee, or assessment is collected by the seller from the purchaser;
(iii) The furnishing of any telephone services for resale, including access charges paid by an interexchange carrier, provided that any utility making a sale of telephone services for resale shall obtain a certificate from the purchaser of such services certifying that such services are purchased for the purpose of resale, the form of the certification to be determined by rules and regulations to be promulgated by the department;
(iv) Charges for customer premises equipment, including such equipment that is leased or rented by the customer from any source;
(v) Cable television service, paging services, specialized mobile radio, or mobile telecommunications service; or
(vi) Services which are ancillary to the provision of telephone service but are not directly related to the transmission of voice, data, or information such as directory advertising and installation and repair of equipment and inside wiring.
The term “local telephone service” means the access to a local telephone system, and the privilege of telephonic-quality communication with substantially all persons having telephone stations constituting a part of such local telephone system.
The term “toll telephone service” means (A) a telephonic-quality communication for which there is a toll charge which varies in amount according to the distance and elapsed transmission time of each individual communication, or (B) a service that entitles the subscriber or user, upon the payment of a periodic charge that is determined as a flat amount or upon some basis of total elapsed transmission time, or upon some combination thereof, to the privilege of an unlimited number of telephonic communications to or from all or a substantial portion of the persons having telephone or radio telephone stations in a specified area which is outside the local telephone system area in which the station provided with this service is located. The term “toll telephone service” includes wide-area telephone service charges.
The term “private communications service” means a communication service that entitles the subscriber or user to exclusive or priority use of a communication channel or group of channels, regardless of whether such channel or group of channels may be connected through switching with a service described in this subparagraph.
The terms “teletypewriter” and “computer exchange service” mean the access from a teletypewriter, telephone, computer, or other data station of which such station is a part, and the privilege of intercommunication by such station with substantially all persons having teletypewriter, telephone, computer, or other data stations constituting a part of the same teletypewriter or computer exchange system. The terms “teletypewriter” and “computer exchange service” do not include the storage of data or information for subsequent retrieval, the retrieval of data or information, or the processing, or reception and processing, of data or information intended to change its form or content, and the term “computer exchange service” shall not include access to the Internet.
The term “intrastate,” as applied to telephone services, includes only those services originating and terminating wholly in this state.
The term “call-by-call basis” means any method of charging for telephone service where the price is measured by individual calls.
The term “communications channel” means a physical or virtual path of communications over which signals are transmitted between or among customer channel termination points.
The term “customer” means the person or entity that contracts with the seller of telephone services. If the end user of the telephone services is not the contracting party, the end user of the telephone service is the customer of the telephone service, but this sentence only applies for the purpose of sourcing sales of telecommunications under Section 40-21-81. “Customer” does not include a reseller of telephone service.
The term “customer channel termination point” means the locations where the customer either inputs or receives the communications.
The term “end user” means the person who utilizes the telephone service. In the case of the entity, “end user” means the individual who utilizes the service on behalf of the entity.
The term “post-paid calling service” means the telephone service obtained by making a payment on a call-by-call basis either through the use of a credit card or payment mechanism such as a bank card, travel card, credit card, or debit card, or by charge made to a telephone number which is not associated with the origination or termination of the telephone service. A post-paid calling service includes a telephone service that would be a prepaid calling service except it is not exclusively a telephone service.
The term “place of primary use” means the street address representative of where the customer’s use of the telephone service primarily occurs, which must be the residential street address or the primary business street address of the customer.
The term “service address” means:
(A) The location of the telecommunications equipment to which a customer’s call is charged and from which the call originates or terminates, regardless of where the call is billed or paid.
(B) If the location in (A) is not known, service address means the origination point of the signal of the telephone services first identified by either the seller’s telephone system or in information received by the seller from its service provider, where the system used to transport such signals is not that of the seller.
(C) If the location in (A) and (B) are not known, the service address means the location of the customer’s place of primary use.
(b) “Herein,” “hereby,” “hereunder,” “hereof,” and other such words of reference shall refer to this article as a whole, and not solely to the particular section or portion of this article in which any such word may be used.
(c) The definitions set forth in this section shall be deemed applicable whether the words defined are used in the singular or the plural.
(Acts 1969, Ex. Sess., No. 21, p. 46, §§1, 2; Acts 1969, No. 239, p. 569; Acts 1969, No. 993, p. 1757, §1; Acts 1976, No. 387, p. 491, §1; Acts 1992, No. 92-623, p. 1466, §1; Act 98-654, p. 1431, §1; Act 2001-1090, 4th Sp. Sess., p. 1120, §1; Act 2006-292, p. 584, §1.)
It is the intention of the Legislature of Alabama that the tax herein levied shall apply to all utilities, as defined herein, in the State of Alabama. With respect to every tax exemption which may be enacted into law subsequent to the enactment of this article, there shall be a presumption that such exemption does not apply to the tax herein levied unless the statute containing such exemption shall make a specific reference to this article and shall clearly show a legislative intention to make such exemption applicable to the tax herein levied.
(Acts 1969, Ex. Sess., No. 21, p. 46, §3; Acts 1992, No. 92-623, p. 1466, §2.)
(a) There is hereby levied, in addition to all other taxes of every kind now imposed by law, and shall be collected as herein provided, a privilege or license tax against every utility furnishing electricity, domestic water, or natural gas in the State of Alabama. The amount of the tax shall be determined by the application of rates against gross sales or gross receipts, as the case may be, from the furnishing of such services in the State of Alabama. The tax shall be computed monthly with respect to each person to whom such services are furnished, in accordance with the following table:
| If monthly gross sales or gross receipts respecting a person are: | The tax is: | | --- | --- | | Not over $40,000 | 4% of such gross sales or gross receipts | | Over $40,000 but not over $60,000 | $1,600 plus 3% of excess over $40,000 | | Over $60,000 | $2,200 plus 2% of excess over $60,000 |
(b) There is hereby levied a privilege or license tax against every utility furnishing telegraph or telephone services in the State of Alabama. The amount of the tax shall be determined by the application of rates against gross sales or gross receipts, as the case may be, from the furnishing of such services in the State of Alabama. The tax shall be applied to interstate telephone service beginning with bills dated on and after February 1, 2002, regardless of when the services being billed were provided. The tax shall be computed monthly with respect to each person to whom such services are furnished, in accordance with the following table:
| If monthly gross sales or gross receipts respecting a person are: | The tax is: | | --- | --- | | Not over $60,000 | 6.7% of such gross sales or gross receipts | | Over $60,000 | $4,020 plus 3.7% of excess over $60,000 |
Beginning with bills dated on or after April 1, 2002, the tax shall be computed at the rate of six percent on all gross sales or gross receipts. The utility furnishing such telegraph or telephone services shall be entitled to deduct and retain from the gross amount of tax billed by the utility nine-tenths of one percent of the amount of such tax billed on or after February 1, 2002, in consideration of the costs incurred by the utility in collecting and remitting the tax levied by this subsection; provided, however, that on and following October 1, 2002, the amount deducted and retained by such utility shall be one-fourth of one percent of the gross amount of such tax billed.
(c) If charges for a nontaxable service are aggregated with and not separately stated from charges for telephone or telegraph service that are subject to taxation, then the charges for the nontaxable service are subject to taxation unless the utility can reasonably identify the charges not subject to taxation from its books and records that are kept in the regular course of business.
(d) The provisions of subsection (c) do not create any customer right to require that, for purposes of determining the amount of tax applicable to a transaction, either the utility or the department allocate or attribute the bundled charge to the different portions of the transaction in order to minimize the amount of tax charged to the customer.
(e) Gross sales or gross receipts from the furnishing of telegraph or telephone services shall be sourced as follows:
(1) Except for the defined telegraph or telephone services in subdivisions (3) and (4), the sale of telephone service sold on a call-by-call basis shall be sourced to a. each level of taxing jurisdiction where the call originates and terminates in that jurisdiction or b. each level of taxing jurisdiction where the call either originates or terminates and in which the service address is also located.
(2) Except for the defined telegraph or telephone services in subdivisions (3) and (4), the sale of telephone service sold on a basis other than a call-by-call basis is sourced to the customer’s place of primary use.
(3) The sale of post-paid calling service is sourced to the origination point of the telecommunications signal as first identified by either a. the seller’s telecommunication system, or b. information received by the seller from its service provider, where the system used to transport such signal is not that of the seller.
(4) A sale of private communication service is sourced as follows:
a. Service for a separate charge related to a customer channel termination point is sourced to each level of jurisdiction in which such customer channel termination point is located.
b. Service where all customer channel termination points are located entirely within one jurisdiction is sourced to the jurisdiction in which the customer channel termination points are located.
c. Service for segments of a channel between two customer channel termination points located in different jurisdictions and which segments of channel are separately charged is sourced 50 percent in each level of jurisdiction in which the customer channel termination points are located.
d. Service for segments of a channel located in more than one jurisdiction or levels of jurisdiction and which segments are not separately billed is sourced in each jurisdiction based on the percentage determined by dividing the number of customer channel termination points in such jurisdiction by the total number of customer channel termination points.
(Acts 1969, Ex. Sess., No. 21, p. 46, §4; Acts 1971, 1st Ex. Sess., No. 98, p. 172; Acts 1992, No. 92-623, p. 1466, §3; Acts 1993, No. 93-614, p. 1006, §2(4); Act 2001-1090, 4th Sp. Sess., p. 1120, §1; Act 2004-397, p. 668, §1; Act 2006-292, p. 584, §1.)
(a) Smith’s Water Authority in Lee County, Alabama, is exempt from all taxes levied under Section 40-21-82.
(b) The Northeast Crenshaw Water and Fire Protection Authority in Crenshaw and Montgomery Counties, Alabama, is exempt from all taxes levied under Section 40-21-82.
(c) The Bakerhill Water Authority in Barbour County, Alabama, is exempt from all taxes levied under Section 40-21-82.
(d) The Russell County Water Authority is exempt from all taxes levied under Section 40-21-82.
(e) The Chambers County E911 Authority is exempt from all taxes levied under Section 40-21-82.
(Acts 1978, No. 534, p. 588; Acts 1978, No. 854, p. 1280; Acts 1994, No. 94-594, p. 1101, §1.)
AMENDED BY ACT 2026-595, EFFECTIVE SEPTEMBER 1, 20276. SEE ACT FOR REVISED LANGUAGE.
There are specifically excluded from the gross receipts or gross sales of a utility, all revenues derived from any of the following:
(1) The furnishing of utility services which the State of Alabama is prohibited from taxing under the Constitution or laws of the United States of America or the Constitution of the State of Alabama.
(2) The furnishing of utility services which are otherwise taxed under Sections 40-23-1 to 40-23-36, inclusive.
(3) Wholesale sales.
(4) The furnishing of electricity, natural gas, or domestic water for use or consumption by, in, or for the direct production, generation, processing, storage, delivery, or transmission of electricity, natural gas, or domestic water.
(5) The furnishing of electricity to a manufacturer or compounder for use in an electrolytic or electrothermal manufacturing or compounding process.
(6) The furnishing of natural gas to a manufacturer or compounder as a chemical raw material in the manufacturing or compounding of tangible personal property, but not as fuel or energy.
(7) The furnishing of natural gas to be used by a manufacturer or compounder to chemically convert raw materials prior to the use of the converted raw materials in an electrolytic or electrothermal manufacturing or compounding process.
(8) The use or consumption of electricity by an incorporated municipality, a board, or corporation organized under the authority of any incorporated municipality in furnishing or providing street lighting or traffic-control systems; the use or consumption of telephone services by an incorporated municipality in providing fire alarm systems; and the use or consumption of domestic water by an incorporated municipality in extinguishing fires, explosions, or conflagrations.
(9) The furnishing of natural gas or electricity for use or consumption as fuel or energy in and for the heating of poultry houses.
(10) The furnishing of utility services through the use of a prepaid telephone calling card.
(Acts 1969, Ex. Sess., No. 21, p. 46, §5; Acts 1969, No. 993, p. 1757; Acts 1975, No. 1198, p. 2374, §1; Acts 1976, No. 387, p. 491, §2; Acts 1992, No. 92-623, p. 1466, §4; Acts 1995, No. 95-742, p. 1687, §1; Acts 1997, No. 97-867, 1st Ex. Sess., p. 208, §1.)
Any person regularly engaging in any business for which a privilege tax is imposed by Section 40-21-82 shall apply for and obtain from the department a license to engage in and to conduct the business of furnishing utility services for the then current tax year. Such license shall be granted upon the condition that the applicant must pay all taxes accruing to the State of Alabama under the provisions of this article; provided, however, that no such license shall be issued to any person who has not complied with the provisions of this article. No provision of this article shall be construed as relieving any person from the payment of any license or privilege tax now or hereafter imposed by law.
(Acts 1969, Ex. Sess., No. 21, p. 46, §6; Acts 1992, No. 92-623, p. 1466, §5.)
(a) The provisions of this article shall be administered and the tax herein levied shall be collected in accordance with the uniform procedures set forth in this title, along with the procedures set forth in Division 1 of Article 1 of Chapter 23 of this title, for administering and collecting the tax therein levied, and for such purposes there are hereby incorporated into this article by reference the provisions of Sections 40-23-8 through 40-23-12, 40-23-25 and 40-23-27 through 40-23-31, together with the definitions applicable to said sections contained in Section 40-23-1; provided, that in the event of the repeal of such division, such repeal shall not operate to eliminate the tax collection procedures contained therein to the extent they are incorporated in this article by reference, unless the legislation providing for such repeal shall clearly indicate such a result.
The taxes herein levied shall be due and payable as follows:
(1) Any taxpayer liable for taxes under the provisions of this subdivision whose average monthly tax liability was less than $10,000 during the preceding calendar year shall remit such taxes in accordance with Section 40-23-7.
(2) Any taxpayer liable for taxes under the provisions of this subdivision whose average monthly tax liability was $10,000 or greater during the preceding calendar year shall make estimated payments to the Revenue Department on or before the twentieth day of the month in which the liability occurred.
(b) The amounts of the payment shall be at least equal to the taxpayer’s actual tax liability for the same calendar month of the preceding year.
(c) Any outstanding credit or deficit arising from the taxpayer’s overpayment or underpayment of its final liability shall be applied to either increase or reduce, as the case may be, that month’s final tax liability which shall be reported and paid not later than the twentieth of the month next succeeding the month in which the tax accrues. The provisions of Section 40-23-7 shall apply to the filing of the monthly tax liability report.
(d) In those instances where a taxpayer due to divestiture compliance with a lawful order of a court of competent jurisdiction, or the sale of a portion of the business on which said tax is applicable, where such divestiture compliance or sale reduces the gross revenues of the taxpayer, the Commissioner of Revenue shall determine for a period of 12 months following such divestiture compliance or sale the monthly estimated tax liability and shall consider among others, the financial historical data and the percentage of divestiture or sale of said business of the taxpayer. Following the 12-month period, taxes shall be remitted in accordance with subsection (c) of this section.
(e) In those instances where there is no preceding calendar year for purposes of determining the tax liability of any taxpayer, the Commissioner of Revenue shall determine for a period of 12 months the monthly estimated tax liability for the taxpayer. Following the 12-month period, taxes shall be remitted in accordance with subsection (c) of this section.
(Acts 1969, Ex. Sess., No. 21, p. 46, §7; Acts 1983, No. 83-739, p. 1207; Acts 1992, No. 92-186, p. 349, §63.)
Every person engaged in the State of Alabama in the furnishing of utility services shall add to the price or charge for such utility services to every purchaser thereof an amount equal to the prescribed percentage of the gross price or gross charge therefor and shall collect said amount from every purchaser of such utility services. It shall be unlawful for any person furnishing utility services to fail or refuse to collect from the purchaser the amount required by this section to be collected, and it shall likewise be unlawful to refund or offer to refund all or any part of the amount collected or to absorb or advertise directly or indirectly the absorption or refund of said amount or any portion thereof. The provisions of this section that the tax herein levied shall be collected from the purchaser shall in no way relieve any utility of the tax herein levied; nor shall the inability, impracticability, refusal, or failure so to collect from such purchaser the amounts provided herein relieve such utility of the tax herein levied. All taxes paid in pursuance of this article shall be conclusively presumed to be a direct tax on the purchaser precollected for the purpose of convenience and facility only.
(Acts 1969, Ex. Sess., No. 21, p. 46, §7A; Acts 1992, No. 92-623, p. 1466, §6.)
All taxes or other funds received or collected by the Department of Revenue of the State of Alabama under the provisions of this article remaining after the application of any exemptions, exclusions, deductions, or credits applicable thereto, and after the payment of the expenses of administration and enforcement of this article shall be without delay deposited into the State Treasury to the credit of Education Trust Fund except that, beginning the fiscal year ending September 30, 1993, $14,600,000 annually shall be deposited to the Special Mental Health Trust Fund, of which one-fourth is to be deposited quarterly.
(Acts 1969, Ex. Sess., No. 21, p. 46, §8; Acts 1992, No. 92-623, p. 1466, §14; Act 2015-27, §4.)
Any law to the contrary notwithstanding, any retailer, who relies in good faith on any state utility gross receipts tax exemption number that has been authorized by the Department of Revenue and the exemption claim has been made on a form provided or approved for use by the Department of Revenue, when a state tax exemption number holder violates the tax exempt privileges or uses the number illegally, shall not be liable to the Department of Revenue or others for the utility gross receipts tax on sales to the purchaser.
(Act 99-399, p. 663, §2.)
(a) For the purpose of this article, the following terms shall have the respective meanings ascribed by this section:
(1) BUSINESS. All activities relating to the furnishing of utility services.
(2) DEPARTMENT. The Department of Revenue of the State of Alabama.
(3) DOMESTIC WATER. All water except water that is sold to persons for use or consumption in industrial processes and not primarily for human consumption.
(4) GROSS RECEIPTS. The value proceeding or accruing from the furnishing of utility services, all receipts actual and accrued, without any deduction on account of the cost of the utility services sold, the cost of the materials used, labor or service cost, interest paid, or any other expense whatever, and without any deductions on account of losses.
(5) GROSS SALES. The value proceeding or accruing from the furnishing of utility services, and including the proceeds from the sale of any utility services handled on consignment by the taxpayer, without any deduction on account of the cost of the utility services sold, the cost of the materials used, labor or service cost, interest paid, or any other expenses whatever and without any deductions on account of losses.
(6) PERSON. An individual, firm, copartnership, association, trustee, receiver, corporation, or other entity, and shall specifically include the State of Alabama, every county in the State of Alabama, every municipal corporation in the State of Alabama, the United States of America and its agencies, and every public corporation or entity organized under the laws of the United States of America or under the laws of any state of the United States of America and operating in the State of Alabama, as well as every private or nonpublic entity.
(7) PURCHASE. Utility services which are acquired, with or without consideration, whether such acquisition is effected by a transfer of title or of possession, or of both, or a license to use or consume, whether such transfer is absolute or conditional, and by whatsoever means the same shall have been effected.
(8) RETAIL SALE. All sales except those defined herein as wholesale sales.
(9) SALES PRICE. The total amount for which utility services shall have been sold, or, if not sold or sold for only a nominal amount, the fair market value thereof, valued in money, whether paid in money or otherwise, and includes any amount for which credit is given to the purchaser by the seller, without any deduction therefrom on account of the cost of the utility services sold, the cost of the materials used, labor or service cost, interest charged, losses, or any other expenses whatever; provided, that cash discounts allowed and taken shall not be included.
(10) STORAGE. Any keeping or retention in the State of Alabama of utility services for any purpose, except sale in the regular course of business or subsequent use solely outside the State of Alabama.
(11) TAXPAYER. Any person liable for taxes under the provisions of this article.
(12) USE. The exercise of any right or power over utility services or the disposition thereof incident to a proprietary or possessory interest therein, except that it shall not include the sale of utility services in the regular course of business.
(13) UTILITY. Every person regularly engaged in furnishing utility services to another person in the State of Alabama.
(14) UTILITY GROSS RECEIPTS TAX. The tax levied by Article 3 of this chapter.
(15) UTILITY SERVICES. Electricity, domestic water, natural gas, telegraph services, and telephone services; provided, however, that “utility services” shall not mean electricity, domestic water, natural gas, telephone services, or telegraph services stored, used, or consumed by a utility regularly engaged in furnishing the same such services to the public, other than by a municipality or other municipal entities organized by a municipality.
(16) WHOLESALE SALE. A sale or exchange of utility services by a utility to any person or any other utility engaged in the resale of such utility services in the regular course of business.
(17) TELEPHONE SERVICES. Local telephone service, interstate telephone service which originates or terminates within this state but does not both originate and terminate in this state and is charged to a service address in this state, and intrastate toll telephone service, private communications service, teletypewriter, and computer exchange service. The term “telephone services” includes transmission by or through any media such as wires, cables, microwaves, light waves, or any combination of those or similar media. It includes, but is not limited to, telephone services sold by motels and hotels to their customers or to others, telephone services sold by colleges and universities to their students or to others, and telephone services sold by hospitals to their patients or to others. The term “telephone services” shall not include:
(i) Telephone services provided through any pay telephone;
(ii) Any excise, franchise, or similar tax or like fee or assessment levied by the United States, by the State of Alabama, or by any political subdivision, upon the purchase, sale, use, or consumption of any telephone services, which tax, fee, or assessment is collected by the seller from the purchaser;
(iii) The furnishing of any telephone services for resale, including access charges paid by an interexchange carrier, provided that any utility making a sale of telephone services for resale shall obtain a certificate from the purchaser of such services certifying that such services are purchased for the purpose of resale, the form of the certification to be determined by rules and regulations to be promulgated by the department;
(iv) Charges for customer premises equipment, including such equipment that is leased or rented by the customer from any source;
(v) Cable television service, paging services, specialized mobile radio, or mobile telecommunications service; or
(vi) Services which are ancillary to the provision of telephone service but are not directly related to the transmission of voice, data, or information such as directory advertising and installation and repair of equipment and inside wiring.
The term “local telephone service” means the access to a local telephone system, and the privilege of telephonic-quality communication with substantially all persons having telephone stations constituting a part of such local telephone system.
The term “toll telephone service” means (A) a telephonic-quality communication for which there is a toll charge which varies in amount according to the distance and elapsed transmission time of each individual communication, or (B) a service that entitles the subscriber or user, upon the payment of a periodic charge that is determined as a flat amount or upon some basis of total elapsed transmission time, or upon some combination thereof, to the privilege of an unlimited number of telephonic communications to or from all or a substantial portion of the persons having telephone or radio telephone stations in a specified area which is outside the local telephone system area in which the station provided with this service is located. The term “toll telephone service” includes wide-area telephone service charges.
The term “private communications service” means a communication service that entitles the subscriber or user to exclusive or priority use of a communication channel or group of channels, regardless of whether such channel or group of channels may be connected through switching with a service described in this subparagraph.
The terms “teletypewriter” and “computer exchange service” mean the access from a teletypewriter, telephone, computer, or other data station of which such station is a part, and the privilege of intercommunication by such station with substantially all persons having teletypewriter, telephone, computer, or other data stations constituting a part of the same teletypewriter or computer exchange system. The terms “teletypewriter” and “computer exchange service” do not include the storage of data or information for subsequent retrieval, the retrieval of data or information, or the processing, or reception and processing, of data or information intended to change its form or content, and the term “computer exchange service” does not include the Internet nor access thereto.
The term “intrastate,” as applied to telephone services, includes only those services originating and terminating wholly in this state.
The term “call-by-call basis” means any method of charging for telephone service where the price is measured by individual calls.
The term “communications channel” means a physical or virtual path of communications over which signals are transmitted between or among customer channel termination points.
The term “customer” means the person or entity that contracts with the seller of telephone services. If the end user of the telephone services is not the contracting party, the end user of the telephone service is the customer of the telephone service, but this sentence only applies for the purpose of sourcing sales of telecommunications under Section 40-21-81. “Customer” does not include a reseller of telephone service.
The term “customer channel termination point” means the locations where the customer either inputs or receives the communications.
The term “end user” means the person who utilizes the telephone service. In the case of the entity, “end user” means the individual who utilizes the service on behalf of the entity.
The term “post-paid calling service” means the telephone service obtained by making a payment on a call-by-call basis either through the use of a credit card or payment mechanism such as a bank card, travel card, credit card, or debit card, or by charge made to a telephone number which is not associated with the origination or termination of the telephone service. A post-paid calling service includes a telephone service that would be a prepaid calling service except it is not exclusively a telephone service.
The term “place of primary use” means the street address representative of where the customer’s use of the telephone service primarily occurs, which must be the residential street address or the primary business street address of the customer.
The term “service address” means:
(A) The location of the telecommunications equipment to which a customer’s call is charged and from which the call originates or terminates, regardless of where the call is billed or paid.
(B) If the location in (A) is not known, service address means the origination point of the signal of the telephone services first identified by either the seller’s telephone system or in information received by the seller from its service provider, where the system used to transport such signals is not that of the seller.
(C) If the location in (A) and (B) are not known, the service address means the location of the customer’s place of primary use.
(b) “Herein,” “hereby,” “hereunder,” “hereof” and other such words of reference shall refer to this article as a whole, and not solely to the particular section or portion of this article in which any such word may be used.
(c) The definitions set forth in this section shall be deemed applicable whether the words defined are used in the singular or the plural.
(Acts 1969, Ex. Sess., No. 37, p. 88, §§1, 2; Acts 1969, No. 240, p. 571; Acts 1992, No. 92-623, p. 1466, §7; Act 98-654, p. 1431, §1; Act 2001-1090, 4th Sp. Sess., p. 1120, §1; Act 2006-292, p. 584, §1.)
It is the intention of the Legislature of Alabama that the tax herein levied shall be supplemental to and complementary with the utility gross receipts tax so as to prevent discrimination in the effect of the utility gross receipts tax upon either intrastate or interstate commerce. It is the intention of the Legislature of Alabama that the tax herein levied shall apply to purchases of utility services from any utility. With respect to every tax exemption which may be enacted into law subsequent to the enactment of this article, there shall be a presumption that such exemption does not apply to the tax herein levied unless the statute containing such exemption shall make specific reference to this article and shall clearly show a legislative intention to make such exemption applicable to the tax herein levied.
(Acts 1969, Ex. Sess., No. 37, p. 88, §3; Acts 1992, No. 92-623, p. 1466, §8.)
(a) There is hereby levied, in addition to all other taxes of every kind now imposed by law, and shall be collected as herein provided, an excise tax on the storage, use, or other consumption of electricity, domestic water, and natural gas in the State of Alabama. The amount of the tax shall be determined by the application of rates against the sales price of such services in the State of Alabama. The tax shall be computed monthly in accordance with the following table: If the total sales price of the utility services furnished by a utility and stored, used, or otherwise consumed by a person in one month is:The tax with respect to the utility service is:Not over $40,000.004% of the sales priceOver $40,000.00 but not over $60,000.00$1,600.00 plus 3% of excess over $40,000.00Over $60,000.00$2,200.00 plus 2% of excess over $60,000.00
(b) There is hereby levied an excise tax on the storage, use, or other consumption of telegraph services or telephone services in the State of Alabama. The amount of the tax shall be determined by the application of rates against the sales price of such services in the State of Alabama. The tax shall be applied to interstate telephone service beginning with bills dated on or after February 1, 2002, regardless of when the services being billed were provided. The amount of the tax shall be computed monthly, in accordance with the following table: If the total sales price of the utility services furnished by a utility and stored, used, or otherwise consumed by a person in one month is:The tax with respect to the utility service is:Not over $60,000.006.7% of the sales priceOver $60,000.00$4,020.00 plus 3.7% of excess over $60,000.00
Beginning with bills dated on or after April 1, 2002, the tax shall be computed at the rate of six percent. The utility furnishing such telegraph or telephone services shall be entitled to deduct and retain from the gross amount of tax billed by the utility nine-tenths of one percent of the amount of such tax billed on or after February 1, 2002, in consideration of the costs incurred by the utility in collecting and remitting the tax levied by this subsection; provided, however, that on and following October 1, 2002, the amount deducted and retained by such utility shall be one-fourth of one percent of the gross amount of such tax billed.
(c) Every person storing, using, or otherwise consuming utility services in the State of Alabama shall be liable for the tax imposed herein. Such liability shall not be extinguished until the tax has been paid to the State of Alabama.
(d) If charges for a nontaxable service are aggregated with and not separately stated from charges for telephone or telegraph service that are subject to taxation, then the charges for the nontaxable service are subject to taxation unless the utility can reasonably identify the charges not subject to taxation from its books and records that are kept in the regular course of business.
(e) The provisions of subsection (d) do not create any customer right to require that, for purposes of determining the amount of tax applicable to a transaction, either the utility or the department allocate or attribute the bundled charge to the different portions of the transaction in order to minimize the amount of tax charged to the customer.
(f) The total sales price from the storage, use, or other consumption of telegraph service or telephone service is sourced as follows:
(1) Except for the defined telegraph or telephone services in subdivisions (3) and (4), the storage, use, or consumption of telephone service sold on a call-by-call basis shall be sourced to a. each level of taxing jurisdiction where the call originates and terminates in that jurisdiction or b. each level of taxing jurisdiction where the call either originates or terminates and in which the service address is also located.
(2) Except for the defined telegraph or telephone services in subdivisions (3) and (4), the storage, use, or consumption of telephone service sold on a basis other than a call-by-call basis is sourced to the customer’s place of primary use.
(3) The storage, use, or consumption of post-paid calling service is sourced to the origination point of the telecommunications signal as first identified by either a. the seller’s telecommunication system, or b. information received by the seller from its service provider, where the system used to transport such signal is not that of the seller.
(4) The storage, use, or consumption of private communication service is sourced as follows:
a. Service for a separate charge related to a customer channel termination point is sourced to each level of jurisdiction in which such customer channel termination point is located.
b. Service where all customer channel termination points are located entirely within one jurisdiction is sourced to the jurisdiction in which the customer channel termination points are located.
c. Service for segments of a channel between two customer channel termination points located in different jurisdictions and which segments of channel are separately charged is sourced 50 percent in each level of jurisdiction in which the customer channel termination points are located.
d. Service for segments of a channel located in more than one jurisdiction or levels of jurisdiction and which segments are not separately billed is sourced in each jurisdiction based on the percentage determined by dividing the number of customer channel termination points in such jurisdiction by the total number of customer channel termination points.
(Acts 1969, Ex. Sess., No. 37, p. 88, §4; Acts 1971, 1st Ex. Sess., No. 99, p. 173; Acts 1992, No. 92-623, p. 1466, §9; Act 2001-1090, 4th Sp. Sess., p. 1120, §1; Act 2004-397, p. 668, §1; Act 2006-292, p. 584, §1.)
AMENDED BY ACT 2026-595, EFFECTIVE SEPTEMBER 1, 20276. SEE ACT FOR REVISED LANGUAGE.
The storage, use, or other consumption of utility services in the State of Alabama is hereby specifically excluded from the tax herein levied:
(1) Whenever the State of Alabama is prohibited from taxing such storage, use, or consumption under the Constitution or laws of the United States of America or the Constitution of the State of Alabama;
(2) Whenever any tax relating to the sale, use, storage, or consumption of said utility services shall be levied under the provisions of Article 2 of Chapter 23 of this title, or under the provisions of Sections 40-23-1 through 40-23-36 or the Alabama Transaction Tax Act of 1992 if enacted into law;
(3) Whenever the purchase of said utility services shall have been at a wholesale sale;
(4) Whenever electricity, natural gas, or domestic water shall have been used or consumed directly in or for the production, generation, processing, storage, delivery, or transmission of electricity, natural gas, or domestic water;
(5) Whenever electricity purchased for storage, use, or other consumption is used or consumed by a manufacturer or compounder in an electrolytic or electrothermal manufacturing or compounding process;
(6) Whenever natural gas purchased for storage, use, or other consumption is used or consumed by a manufacturer or compounder as a chemical raw material in the manufacturing or compounding of tangible personal property, but not as fuel or energy;
(7) Whenever natural gas purchased for storage, use, or other consumption is used by a manufacturer or compounder to chemically convert raw materials prior to the use of such converted raw materials in an electrolytic or electrothermal manufacturing or compounding process;
(8) Whenever the sales price of said utility services shall be included as a part of the gross receipts or gross sales of a utility subject to the utility gross receipts tax for the purpose of calculating the utility gross receipts tax payable by said utility;
(9) Whenever electricity purchased for storage, use, or other consumption is used or consumed in a process for the isotopic enrichment of uranium and when said electricity is purchased from a subsidiary corporation of the corporation engaged in the isotopic enrichment of uranium; and
(10) Whenever utility services are furnished through the use of a prepaid telephone calling card.
(Acts 1969, Ex. Sess., No. 37, p. 88; Acts 1975, No. 1193, p. 2340, §1; Acts 1992, No. 92-623, p. 1466, §10; Act 97-867, 1st Ex. Sess., p. 208, §2.)
Every utility, except as hereinafter provided, engaged in making retail sales of utility services for storage, use, or other consumption in the State of Alabama shall register with the department and give the name and address of its officers and directors, the location of each of its offices in the State of Alabama, the names and addresses of all persons with whom said utility has contracts for furnishing utility services by said utility, the names and addresses of all persons who have purchased utility services from said utility during the then next preceding 12 months, the amounts of the sales prices of all utility services furnished by said utility and such other information as the department may require with respect to matters pertinent to the enforcement of this article; provided, that this section of this article shall not apply to persons holding a license under the provisions of the utility gross receipts tax; provided further, that this section of this article shall not apply to the United States of America or to any agency or department of the United States of America or to any corporation exempted from so registering with the department under the Constitution or laws of the United States of America.
(Acts 1969, Ex. Sess., No. 37, p. 88, §6; Acts 1992, No. 92-623, p. 1466, §11.)
Every seller making sales of utility services for storage, use, or other consumption in this state, not exempted under the provisions of Section 40-21-103, shall at the time of making such sales or, if the storage, use, or other consumption of the utility services is not then taxable hereunder, at the time such storage, use or other consumption becomes taxable hereunder, collect the tax imposed by this article from the purchaser and give to the purchaser a receipt therefor in the manner and form prescribed by the department. The tax required to be collected by the seller from the purchaser shall be displayed separately from the list, advertised in the premises, marked or other price on the sales check or other proof of sales. It shall be unlawful for any such seller to advertise or hold out or state to the public or to any customer, directly or indirectly, that the tax or any part thereof imposed by this article will be assumed or absorbed by the seller or that it will not be added to the selling price of the property sold or, if added, that it or any part thereof will be refunded. Any person violating any of the provisions of this section shall be guilty of a misdemeanor. The tax herein required to be collected by the seller shall constitute a debt owed by the seller to this state.
In the event that a seller making sales of utility services for storage, use or other consumption in this state, not exempted under the provisions of Section 40-21-103, is exempted from collection of the tax herein levied by any provisions of the Constitution or laws of the United States of America, then the purchaser of such utility services shall pay the said tax directly to the department each month pursuant to such regulations as the department may prescribe from time to time.
(Acts 1969, Ex. Sess., No. 37, p. 88, §7.)
The tax herein levied shall be administered and collected in accordance with the uniform procedures set forth in this title, along with the procedures set forth for collecting the use tax described in Article 2 of Chapter 23 of this title, and for that purpose there are hereby incorporated into this article by reference the provisions of Sections 40-23-68, 40-23-74, 40-23-75, and 40-23-77, 40-23-82, 40-23-83, and 40-23-88; provided, that wherever in said provisions the words “this article” shall appear, the same for the purposes of this article shall be construed to mean “this article”; provided further, that wherever in said provisions reference shall be made to March 1, 1939, the same for the purposes of this article shall be construed to mean September 1, 1969; provided further, that wherever in said provisions reference shall be made to June 30, 1939, the same shall for the purposes of this article mean that certain day one calendar month subsequent to September 1, 1969; provided further, that none of the said provisions shall apply to the United States of America or to any agency or department of the United States of America; provided further, that the tax herein levied shall be collected monthly, and all reports and records respecting the said tax herein levied shall be made on a monthly basis; and, to that end, wherever in said provisions the word “quarterly” shall appear, the same for the purpose of this article shall be construed to mean “monthly”; and wherever in said provisions the words “three months” shall appear, the same for the purposes of this article shall be construed to mean “one month”.
(Acts 1969, Ex. Sess., No. 37, p. 88, §8; Acts 1992, No. 92-186, p. 349, §64.)
All taxes or other funds received or collected by the Department of Revenue of the State of Alabama under the provisions of this article remaining after the application of any exemptions, exclusions, deductions, or credits applicable thereto, and after the payment of the expenses of administration and enforcement of this article shall be without delay deposited into the State Treasury to the credit of Alabama Education Trust Fund.
(Acts 1969, Ex. Sess., No. 37, p. 88, §9; Act 2015-27, §4.)
As used in this article, the following words and phrases shall have the following meanings respectively ascribed to them unless the context clearly indicates otherwise:
(1)a. CUSTOMER. The person or entity that contracts with the home service provider for mobile telecommunications service or, for the purposes of determining the place of primary use, if the end user of the mobile telecommunications service is not the contracting party, the end user of the mobile telecommunications service. The term does not include a reseller of mobile telecommunications service or a serving carrier under an arrangement to serve the customer outside the home service provider’s licensed service area.
b. HOME SERVICE PROVIDER. The facilities-based carrier or reseller with which the customer contracts for the provision of mobile telecommunications service.
c. LICENSED SERVICE AREA. The geographic area in which the home service provider is authorized by law or contract to provide mobile telecommunications service.
d. MOBILE TELECOMMUNICATIONS SERVICE. Commercial mobile radio service, as defined in Section 20.3 of Title 47 of the Code of Federal Regulations as in effect on June 1, 1999.
e. MONTHLY CHARGES. The monthly recurring access charges and local airtime charges only. However, effective for customer bills dated on or after February 1, 2002, monthly charges shall be the monthly recurring access charges and all airtime charges, regardless of when the services being billed were provided.
f. PLACE OF PRIMARY USE. The street address representative of where the customer’s use of the mobile telecommunications service primarily occurs, which must be the residential street address or the primary business street address of the customer and within the licensed service area of the home service provider.
g. RESELLER. A provider who purchases telecommunications services from another telecommunications service provider and then resells, uses as a component part of, or integrates the purchased services into a mobile telecommunications service. This term does not include a serving carrier with which a home service provider arranges for the services to its customers outside the home service provider’s licensed service area.
h. SERVING CARRIER. A facilities-based carrier providing mobile telecommunications service to a customer outside a home service provider’s or reseller’s licensed service area.
i. TAXING JURISDICTION. This state or any political subdivision within this state, including those operating under a home rule charter, with the authority to impose a tax, charge, or fee.
(2) Mobile telecommunications service and providers are not included in and are excluded from the coverage and application of, and are not subject to, the provisions of Title 37, and the levy of taxes and assessment of property under Articles 1 to 4, inclusive, of Chapter 21 of this title.
(Acts 1990, No. 90-97, p. 104, §1; Act 99-399, p. 663, §1; Act 2001-1090, 4th Sp. Sess., p. 1120, §1.)
(a) There is hereby levied, in addition to all other taxes of every kind now imposed by law, and shall be collected as provided herein, a privilege or license tax against every home service provider doing business in the State of Alabama on account of the furnishing of mobile telecommunications service to a customer with a place of primary use in the State of Alabama by said home service provider. The amount of the tax shall be determined by the application of the rates against gross sales or gross receipts, as the case may be, from the monthly charges from the furnishing of mobile telecommunications service to a customer with a place of primary use in the State of Alabama and shall be computed monthly with respect to each person to whom services are furnished at the rate of four percent on bills dated prior to February 1, 2002, and at the rate of six percent on bills dated on or after February 1, 2002, regardless of when the services being billed were provided. The home service provider furnishing such mobile telecommunications services shall be entitled to deduct and retain from the gross amount of tax billed by the home service provider nine-tenths of one percent of the amount of such tax billed on or after February 1, 2002, in consideration of the costs incurred by the home service provider in collecting and remitting the tax levied by this article; provided, however, that on and following October 1, 2002, the amount deducted and retained by such provider shall be one-fourth of one percent of the gross amount of such tax billed.
(b) Every home service provider subject to the tax herein levied in subsection (a) shall add to the price or charge for such services and collect from every customer thereof an amount equal to the prescribed percentage of gross price or gross charge therefor. It shall be unlawful for any home service provider to fail or refuse to collect from the customer the amount required by this section to be collected, to refund or offer to refund all or any part of the amount collected, or to absorb or advertise directly or indirectly the absorption or refund of the amount or any portion thereof. The provisions of this subsection that the tax herein levied shall be collected from the customer shall in no way relieve any home service provider of the tax herein levied. Nor shall the inability, impracticality, refusal, or failure so to collect from such customer the amounts provided herein relieve such provider of the tax herein levied. All taxes paid in pursuance of this section shall be conclusively presumed to be a direct tax on the customer precollected for the purpose of convenience and facility only.
(c) Monthly charges for mobile telecommunications service provided to a customer and billed by or for the customer’s home service provider are deemed to be provided at the customer’s place of primary use. Such monthly charges are subject to the tax imposed by this chapter if the customer’s place of primary use is located in this state.
(d) If nontaxable charges for mobile telecommunications service are aggregated with and not separately stated from charges that are subject to taxation, then the charges for nontaxable mobile telecommunications service may be subject to taxation unless the home service provider can reasonably identify charges not subject to taxation from its books and records that are kept in the regular course of business.
(e) If charges for mobile telecommunications service are not subject to taxation, a customer may not rely upon the nontaxability of charges for mobile telecommunications service unless the customer’s home service provider separately states the charges for nontaxable mobile telecommunications service from taxable charges or the home service provider elects, after receiving a written request from the customer in the form required by the provider, to provide verifiable data based upon the home service provider’s books and records that are kept in the regular course of business that reasonably identifies the nontaxable charges.
(f)(1) A home service provider is to be held harmless from any tax, charge, or fee liability in this state that otherwise would be due solely as a result of an assignment of a street address to an incorrect taxing jurisdiction if, subject to subsection (i), the home service provider employs an enhanced zip code to assign each street address to a specific taxing jurisdiction for each level of taxing jurisdiction and exercises due diligence at each level of taxing jurisdiction to ensure that each street address is assigned to the correct taxing jurisdiction. If an enhanced zip code overlaps boundaries of taxing jurisdictions of the same level, the home service provider must designate one specific jurisdiction within the enhanced zip code for use in taxing the activity for the enhanced zip code for each level of taxing jurisdiction. Any enhanced zip code assignment changed in accordance with subsection (i) is in compliance with this subsection. For purposes of this subsection, there is a rebuttable presumption that a home service provider has exercised due diligence if the home service provider demonstrates that it has all of the following:
a. Expended reasonable resources to implement and maintain an appropriately detailed electronic database of street address assignments to taxing jurisdictions.
b. Implemented and maintained reasonable internal controls to promptly correct misassignments of street addresses to taxing jurisdictions.
c. Used all reasonably obtainable and usable data pertaining to municipal annexations, incorporations, reorganizations, and any other changes in jurisdictional boundaries that materially affect the accuracy of the database.
(2)a. The department may elect to provide an electronic database that satisfies the requirements of 4 U.S.C. § 119. If the department provides such database, a home service provider using the data contained in such database shall be held harmless from any liability, including tax, interest, and penalties, which would otherwise be due solely as a result of an assignment of a place of primary use to an incorrect local jurisdiction.
b. Paragraph a. shall apply to a home service provider who is in compliance with the terms of such subdivision until the later of (i) 18 months after the approval described in 4 U.S.C. § 119(a), or (ii) 6 months after the department provides an electronic database that satisfies the requirements of 4 U.S.C. § 119.
(g) A home service provider is responsible for obtaining and maintaining the customer’s place of primary use. Subject to subsection (i) and if the home service provider’s reliance on information provided by its customer is in good faith, a taxing jurisdiction shall allow a home service provider to rely on the applicable residential or business street address supplied by the home service provider’s customer and not hold a home service provider liable for any additional taxes, charges, or fees based on a different determination of the place of primary use for taxes, charges, or fees that are customarily passed on to the customer as a separate itemized charge.
(h) Except as provided in subsection (i), a taxing jurisdiction shall allow a home service provider to treat the address used by the home service provider for tax purposes for any customer under a service contract or agreement in effect on or before July 28, 2002, as that customer’s place of primary use for the remaining term of the service contract or agreement, excluding any extension or renewal of the service contract or agreement, for purposes of determining the taxing jurisdictions to which taxes, charges, or fees on charges for mobile telecommunications service are remitted.
(i) A taxing jurisdiction or the state on behalf of any taxing jurisdiction may:
(1) Determine that the address used for purposes of determining the taxing jurisdictions to which taxes, charges, or fees for mobile telecommunications service are remitted does not meet the definition of place of primary use and give binding notice to the home service provider to change the place of primary use on a prospective basis from the date of notice of determination if the taxing jurisdiction making the determination is not the state, the taxing jurisdiction obtains the consent of all affected taxing jurisdictions within this state before giving the notice of determination, and before the taxing jurisdiction gives the notice of determination, the customer is given an opportunity to demonstrate in accordance with applicable state or local tax, charge, or fee administrative procedures that the address is the customer’s place of primary use.
(2) Determine that the assignment of a taxing jurisdiction by a home service provider under subdivision (1) does not reflect the correct taxing jurisdiction and give binding notice to the home service provider to change the assignment on a prospective basis from the date of notice of determination if the taxing jurisdiction making the determination is not the state, the taxing jurisdiction obtains the consent of all affected taxing jurisdictions within the state before giving the notice of determination, and the home service provider is given an opportunity to demonstrate in accordance with applicable state or local tax, charge, or fee administrative procedures that the assignment reflects the correct taxing jurisdiction.
(j) Nothing in this section modifies, impairs, supersedes, or authorizes the modification, impairment, or supersession of any law allowing a taxing jurisdiction to collect a tax, charge, or fee from a customer that has failed to provide its place of primary use.
(k) If a customer believes that an amount of tax, charge, or fee or an assignment of place of primary use or taxing jurisdiction included on a billing is erroneous, the customer shall notify the home service provider in writing. The customer shall include in this written notification the street address for the customer’s place of primary use, the account name and number for which a customer seeks a correction, a description of the error asserted by the customer, and any other information that the home service provider reasonably requires to process the request. Within 60 days of receiving a notice under this section, the home service provider shall review its records to determine the customer’s taxing jurisdiction. If this review shows that the amount of tax, charge, or fee or assignment of place of primary use or taxing jurisdiction is in error, the home service provider shall correct the error and refund or credit the amount of tax, charge, or fee erroneously collected from the customer for a period of up to two years. If this review shows that the amount of tax, charge, or fee or assignment of place of primary use or taxing jurisdiction is correct, the home service provider shall provide a written explanation to the customer. The procedures in this section shall be the first course of remedy available to customers seeking correction of assignment of place of primary use or taxing jurisdiction, or a refund of or other compensation for taxes, charges, and/or fees erroneously collected by the home service provider, and no cause of action based upon a dispute arising from such taxes, charges, or fees shall accrue until a customer has reasonably exercised the rights and procedures set forth in this section.
(Acts 1990, No. 90-97, p. 104, §2(a), (b); Acts 1992, No. 92-623, p. 1466, §12; Act 99-399, p. 663, §1; Act 2001-1090, 4th Sp. Sess., p. 1120, §1.)
There are hereby specifically excluded from the gross receipts or gross sales of a cellular provider, upon which the tax herein levied is calculated, all portions thereof derived from the following:
(1) The furnishings of cellular services which the State of Alabama is prohibited from taxing under the Constitution or laws of the United States of America or the Constitution of Alabama of 1901;
(2) The furnishing of cellular services which are otherwise taxed under the provisions of Sections 40-23-1 through 40-23-36;
(3) Wholesale sales; and
(4) The furnishing of cellular telecommunications service through the use of a prepaid telephone calling card, a prepaid authorization number, or both.
(Acts 1990, No. 90-97, p. 104, §2(c); Act 97-867, 1st Sp. Sess., p. 208, §3; Act 99-399, p. 663, §1.)
The tax herein levied shall be collected and administered in accordance with the procedure set forth in Section 40-21-85, and for those purposes the provisions of Section 40-21-85 are hereby incorporated into this section by reference. All tax revenue and other funds received or collected under subsection (a) of Section 40-21-121 shall be deposited into the State Treasury and used for the following purposes:
(1) So much thereof as necessary is hereby appropriated to be used by the State Treasurer to pay at their respective maturities the principal and interest due in the fiscal year on the outstanding bonds issued by the Alabama Revolving Loan Fund Authority.
(2) Beginning in March of 2002, one-third of the remaining proceeds, plus $1 million in the fiscal year ending September 30, 2002, and $1.5 million each fiscal year thereafter, shall be credited to the Education Trust Fund.
(3) The residual balance thereof remaining shall be credited to the State General Fund.
(Acts 1990, No. 90-97, p. 104, §2(d); Act 98-195, p. 338, §10; Act 2001-1090, 4th Sp. Sess., p. 1120, §1.)
The tax herein levied shall be collected and administered in accordance with the procedure set forth in Section 40-21-85, and for those purposes the provisions of Section 40-21-85 are hereby incorporated into this section by reference. All tax revenue and other funds received or collected under subsection (a) of Section 40-21-121 shall be deposited into the State Treasury and used for the following purposes:
(1) So much thereof as necessary is hereby appropriated to be used by the State Treasurer to pay at their respective maturities the principal and interest due in the fiscal year on the outstanding bonds issued by the Alabama Revolving Loan Fund Authority.
(2) The residual balance thereof remaining shall be credited to the State General Fund.
(Acts 1990, No. 90-97, p. 104, §2(d); Act 98-195, §10.)
If any person after February 1, 1990 shall engage in or continue in any business for which a tax is imposed by this article, as a condition precedent to engaging or continuing in such business, the person shall apply for and obtain from the Department of Revenue of the State of Alabama a license to engage in and to conduct the business of furnishing cellular telecommunication services for the then current tax year upon the condition that he or she shall pay the taxes accruing to the State of Alabama under the provisions of this article. No license shall be issued under the provisions of this article to any person who shall not have complied with the provisions of this article, and no provision of this article shall be construed as relieving any person from the payment of any license or privilege tax now or hereafter imposed by law.
(Acts 1990, No. 90-97, p. 104, §2(e); Act 99-399, p. 663, §1.)
Any law to the contrary notwithstanding, any cellular telecommunication services provider, who accepts in good faith from a purchaser a cellular telecommunication services tax exemption form provided or approved for use by the Department of Revenue, shall not subsequently be liable to the Department of Revenue or others for the cellular telecommunication services tax on sales to that purchaser.
(Act 99-399, p. 663, §2.)
There is hereby levied a tax on mobile radio communication services as defined in Section 20.3 of Title 47 of the Code of Federal Regulations as in effect on June 1, 1999, at the same rate as the tax levied in Section 40-21-121, effective February 1, 2002. The Department of Revenue shall exercise its rulemaking authority to ensure that the application of this tax complies with all applicable federal laws and regulations.
(Act 2001-1090, 4th Sp. Sess., p. 1120, §2.)
(a) Except as set out in subsection (b), no deed, bill of sale, or other instrument of like character which conveys any real or personal property within this state or which conveys any interest in any such property shall be received for record unless the privilege or license tax is paid prior to the instrument being offered for record as provided in subsection (c).
(b) No privilege or license tax shall be required for any of the following:
(1) The transfer of mortgages on real or personal property within this state upon which the mortgage tax has been paid.
(2) Deeds or instruments executed for a nominal consideration for the purpose of perfecting the title to real estate.
(3) The re-recordation of corrected mortgages, deeds, or instruments executed for the purpose of perfecting the title to real or personal property, specifically, but not limited to, corrections of maturity dates thereof, and deeds and other instruments or conveyances, executed prior to October 1, 1923.
(c) Except as provided in subsection (b), the privilege or license tax on all instruments which are executed to convey real or personal property situated in this state of the value of $500 or less shall be $.50, and upon all such instruments executed to convey real or personal property situated in this state of more than $500 in value there shall be paid the sum of $.50 for each $500 or fraction thereof in value of property conveyed by such instrument; provided, that only the value in excess of any mortgages or vendor’s lien upon any property within this state on which the mortgage tax has been paid shall be taxable under this section; and provided further, that where several deeds or instruments are executed by tenants in common for the same consideration, only one of such instruments shall be taxable under this section. Except for instruments which convey only leaseholds easements, or licenses or the recordation of copies of instruments evidencing original transfers of title to land by the United States or the State of Alabama, any instrument presented for record pursuant to this section shall be accompanied by proof of the actual purchase price paid for the property or if the property has not been sold, proof of the actual value of the real or personal property which is the subject of the instrument being recorded. The Department of Revenue shall develop a form which shall be used for attesting to the actual value or actual purchase price of the property, which form shall include only information related to the actual value or actual purchase price of the property. Any person utilizing the form developed by the department pursuant to this section shall attest to the accuracy of the information being provided on the form, but shall not be required to provide any further documentation or proof of the actual purchase price or actual value of the property.
(d) Upon the presentation of any instrument for record, the judge of probate shall calculate the amount of tax due based upon the actual purchase price paid or the actual value of the property as required in subsection (c). If no proof is provided at the time the instrument is presented for recording, the amount of the tax due shall be based upon the value of the property as determined by the most recent assessment of property conducted pursuant to Title 40, Chapter 7, and the judge of probate shall assess penalties as set out in subsection (h) to be paid in addition to the tax due.
(e) The instrument shall be recorded upon the payment of the amount of such tax and recording fee, and where assessed, any penalties as set out in subsection (h); provided, however, that upon the presentation for record of any instrument which conveys property situated in two or more counties of this state, the judge of probate shall so certify receipt of the instrument together with a description of the property conveyed by the instrument to the Department of Revenue, which after hearing evidence as may be offered or as it may secure, shall fix and determine the value of the property as located in each county and shall certify its determination thereof to the judge of probate, showing the value of the property in each county separately; and, upon the payment to the judge of probate of the tax due on the value of all property in this state conveyed by the instrument as so determined, the judge of probate shall accept the instrument for record. The person presenting any instrument conveying property in two or more counties of this state may secure immediate filing of the instrument for record by depositing with the judge of probate an amount which in the judgment of the judge of probate will cover the tax herein provided for, and after the value of the property conveyed thereby is determined by the Department of Revenue, as provided herein, any excess of the deposit over the amount of tax found to be due on the instrument shall be refunded to the person offering the instrument for record. The determination by the judge of probate and of the Department of Revenue of the amount of tax due on any instrument is hereby declared to be a ministerial act and shall not preclude the subsequent collection of the correct amount of tax if the value of the property thereby conveyed is not fully disclosed to the judge of probate or the Department of Revenue when the instrument is offered for record. Upon the filing for record of any instrument coming within the terms of this section, the judge of probate shall certify thereon the fact that the tax has been paid, showing the amount of the tax, and thereafter the instrument shall be received for record in any county of this state without the payment of any further tax, except the fee of the judge of probate for recording such instrument, which certificate shall be recorded with and as part of the instrument.
(f) Upon the filing for record of any instrument which has been exempted by law from the payment of the tax provided for in this section, the judge of probate shall certify thereon that no tax has been paid and shall stamp in bold letters on the face of the instruments the words “No Tax Collected,” and the certificate shall be recorded with and as a part of the instrument, and thereafter such instrument shall be received for record in any county in this state without the payment of any further tax, when submitted by the same tax exempt institution or another tax exempt institution, but if submitted by or transferred to an institution or person not exempt from the payment of the tax levied under this section, the judge of probate shall collect the tax levied by this section, together with the fee of the judge of probate for recording such instrument, before it will be admitted to record.
(g) Of the tax collected by the judge of probate under the provisions of this section, there shall be paid into the State Treasury two thirds of the amount so collected, and the remaining one third shall be paid into the county treasury; provided, that the counties’ share of the tax collected on any instrument conveying property in more than one county shall be paid into the county treasuries of the counties in which such property is situated in proportion to the value of such property as determined by the Department of Revenue as herein provided. If the judge of probate is paid on fees and commissions, he or she shall receive two and one-half percent of the amount collected under the provisions of this section as his or her commission for collecting the money, which shall be deducted from the total amount collected and retained by him or her when making settlement of his or her collections as required by law; provided, that this section shall not be so construed or enforced as to require the payment of privilege tax herein provided on mortgages, deeds of trust, or other instruments in the nature of a mortgage or deeds or other instruments with a vendor’s lien except as to that part of the purchase price which is paid in cash or other articles of value and which pay no other privilege tax for recording. In counties where the probate judges are paid salaries, the fee or commission collected or retained for collecting the tax herein provided for shall be paid into the treasuries of their respective counties.
(h) Any person who submits an instrument for recording pursuant to this section and intentionally fails to submit proof of the value of the property or the actual purchase price paid for the property as required in subsection (c) following a specific request for such proof from the probate office or who presents false proof of same, in addition to payment of the tax due as calculated on the actual value of the property, shall pay a penalty of one hundred dollars ($100) or 25 percent of the privilege or license tax actually due, whichever is greater. No person submitting the form required under subsection (c) above shall be deemed to have presented false proof or be otherwise subject to liability where such form was submitted and attested to in good faith.
(i) No failure or falsity of proof of the actual purchase price or value shall in any way affect the instrument recordation or the notice provided by such recordation.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §618; Acts 1953, No. 769, p. 1029; Acts 1987, No. 87-816, p. 1630, §1; Act 2012-494, p. 1444, §1.)
No mortgage, deed of trust, contract of conditional sale, or other instrument of like character which is given to secure the payment of any debt which conveys any real or personal property situated within this state or any interest therein or any security agreement or financing statement provided for by the Uniform Commercial Code, except a security agreement or a financing statement relating solely to security interests in accounts, contract rights, or general intangibles, as such terms are defined in the Uniform Commercial Code, and except for the re-recordation of corrected mortgages, deeds, or instruments executed for the purpose of perfecting the title to real or personal property, specifically, but not limited to, corrections of maturity dates thereof, shall be received for record or for filing in the office of any probate judge of this state unless the following privilege or license taxes shall have been paid upon such instrument before the same shall be received for record or for filing:
(1)a. Upon all such instruments which are executed to secure or to evidence the securing of an initial indebtedness which shall not exceed $100, there shall be paid the sum of $.15, and upon all instruments which shall be executed to secure or to evidence the securing of an initial indebtedness of more than $100, there shall be paid the sum of $.15 for each $100 of such initial indebtedness or fraction thereof.
b. Upon all such instruments which are executed to secure or to evidence the securing of an open end or revolving indebtedness with any interest in property, at the option of the person offering the instrument for record or for filing, (i) there shall be paid the sum of $.15 for each $100 of such initial indebtedness or fraction thereof and the procedures set forth in paragraphs a, b, and c of subdivision (2) of this section shall be applicable; or, in lieu thereof, (ii) there shall be paid the sum of $.15 for each $100 of maximum principal indebtedness, or fraction thereof, to be secured by such instrument at any one time as stated in the instrument or any amendment thereto. In any event, the privilege or license tax to be paid upon such instruments securing or evidencing the securing of open end or revolving indebtedness with any interest in property shall not exceed the amount of $.15 for each $100 of maximum principal indebtedness, or fraction thereof, to be secured by such instrument at any one time as stated in the instrument or any amendment thereto, irrespective of the cumulative amount advanced from time to time thereunder.
(2)a. If subdivision (1)b.(i) applies and any part of the indebtedness which the mortgagor or debtor in any instrument conveying any real property situated within this state, or any interest therein, other than fixtures under the Uniform Commercial Code, is authorized to incur under the terms of the instrument has not been or will not be presently incurred at the time such instrument is offered for record, the tax shall be paid on the amount of indebtedness presently incurred, and the Department of Revenue, upon the petition of the owner of any such instrument or upon the petition of the agent or attorney of such owner, shall ascertain to its own satisfaction the amount then taxable and the amount to be incurred thereafter and determine the amount upon which the tax shall be paid at the time such instrument is offered and shall endorse its findings on such instrument. Upon the presentation of such instrument with such endorsement thereon, the probate judge of any county in which the instrument is offered, upon the payment of the tax upon the amount so ascertained by the Department of Revenue and the recording fees of the probate judge, shall accept the same for record. The Department of Revenue shall also require the owner of such instrument to execute a bond in an amount sufficient to secure to the state the privilege tax to become due and payable under this section upon the amount of the indebtedness to be incurred thereafter, such bond to be approved by the Department of Revenue and payable to the State of Alabama and conditioned that the owner of such instrument will promptly report to said Department of Revenue and to the probate judge of the county where said instrument is first filed for record, whenever such owner or his successor in interest incurs any additional indebtedness thereunder, and the amount so incurred; and that the said owner of such instrument will pay or cause to be paid to the probate judge of the county in which said instrument is first filed the privilege or license tax required under this section upon the accrual of any additional indebtedness, and the said owner of such instrument will report to the said probate judge and the Department of Revenue during the month of September of each year the amount of all indebtedness and all bonds, debentures, notes or other forms of indebtedness incurred or certified and delivered under said instrument to such date, and the amount so certified and delivered during the preceding 12 months, and the aggregate of all such evidence of indebtedness certified and delivered under such instrument prior to such year. The bond executed to secure payment of the tax herein required shall cover a term of five years; and, after the expiration of said term of five years, the owner of the instrument offered for record shall execute such further bond as may be required by the Department of Revenue covering the succeeding term of five years, and thereafter every term of five years, in the same manner so long as any of the indebtedness authorized to be incurred by such instrument has not been incurred with like condition and in such sum as the said department may prescribe.
b. Notwithstanding the provisions of paragraph a. of this subdivision, any bank, savings and loan association, insurance company, or other financial institution organized and established under the laws of the State of Alabama or the United States which is the owner of such instrument, in lieu of the foregoing procedures, may certify the amount of indebtedness presently incurred, and the probate judge of any county in which the instrument is offered, upon payment of the tax upon the amount so certified and the recording fees of the probate judge, shall accept the instrument for record. During the month of September of each year, any such bank, savings and loan association, insurance company, or other financial institution which has recorded such instruments as described hereinabove shall report to the appropriate probate judge the amount of additional indebtedness incurred under the instrument and pay any tax required upon the additional indebtedness.
c. Each probate judge will forward to the State Banking Department by the end of October a statement showing the amounts certified to him or her by each forenamed organization. The State Banking Department will then have the authority to make unannounced audits on any organization electing to use this system of reporting indebtedness. Any organization which is found to have willfully certified less than the true amount it should have certified shall be required to pay a fine equal to three times the amount of tax due on the amount of indebtedness not certified to the probate judge. This fine shall be paid into the General Fund of Alabama. In addition, any organization so fined must pay an auditing fee in accordance with established Banking Department audit fees into the funds of the State Banking Department.
(3) When any deed is filed for record which recites that part of the purchase money is unpaid, such deed to the extent of such unpaid balance shall be held and treated as a mortgage, and the mortgage tax shall be collected by the probate judge in addition to the tax for recording the instrument as a deed before recording the same, unless the balance of purchase money shall be secured by mortgage or deed of trust which has already been filed for record, and the tax thereon paid, and the fact of such prior payment shall be endorsed on the deed. When any such deed is recorded and the tax thereon is paid, and thereafter a mortgage securing the debt is filed for record, the same shall be admitted to record without the payment of the mortgage tax and the fact of such prior payment shall be endorsed on the deed.
(4) The privilege taxes herein imposed shall not be required on or for the filing of any such instrument, providing additional or substitute security for any indebtedness secured by, or the securing of which is evidenced by, an instrument previously filed, upon the filing of which the taxes provided by law have been paid or which was filed at a time when no such privilege taxes were required by law; provided, that the secured indebtedness remains unchanged in amount and in time of maturity.
(5) Upon the filing for record of such instrument and upon the payment of the tax thereon, the probate judge or his or her clerk shall certify on the instrument the fact that the said tax has been paid, and when so certified by the probate judge or his or her clerk, such instrument shall be admitted to record in any county wherein any of the property mentioned in the instrument is situated without the payment of any further tax thereon, except the fee to the probate judge for recording such instrument, and such certificate of the probate judge shall be recorded by such probate judge when such instrument is recorded. Upon the filing for record of any instrument which has been exempted by law from the payment of the tax provided for in this section, the probate judge shall certify thereon that no tax has been paid and shall stamp in bold letters on the face of said instrument “No Tax Collected,” and the certificate shall be recorded with and as a part of such instrument, and thereafter such instrument shall be received for record in any county in this state without the payment of any further tax thereon, when submitted by a tax-exempt institution, but if submitted by or transferred to an institution or person not exempt from the payment of the tax levied under this section, the probate judge shall collect the tax levied by this section upon the then unpaid balance of the secured debt together with the fee of the probate judge for recording such instrument before it will be admitted to record. The tax herein provided for shall be paid upon all contracts for the sale of real or personal property, whether the same are in the nature of a conditional sale or a bond for title, and no such contract shall be received for record until such tax shall have been paid.
(6) When the time for the payment of the indebtedness secured by, or the securing of which is evidenced by, any such instrument is extended or renewed, and the extension or renewal contract is offered for filing or for record, the tax required in this section shall be paid on the amount of indebtedness so extended or renewed; and the same shall be governed in all respects by the provisions of this article. No state, county, or municipal ad valorem tax shall be payable on any such instrument upon which the tax prescribed by this section shall have been paid, on the debt secured or evidenced thereby or on the security agreement evidenced thereby.
(7) Of the taxes collected by the probate judge under this section there shall be paid to the county treasurer of the county in which such taxes are collected one-third of the amount collected, to be accounted for by the judge of probate, and the remaining two-thirds of the amount collected to the State Treasury. The probate judge shall receive five percent of the amount collected as compensation for services in collecting the money and certifying the instrument, the five percent to be retained by the judge of probate out of the money collected under this section; but when the property described in the instrument is situated within different counties within this state, then the probate judge who collects the taxes shall pay over to the county treasurer of each of the different counties in which the property is situated an amount of the taxes that would be in proportion to the value of the property therein as compared to the whole property within this state described in the instrument.
(8) If any part of the property embraced or described in any instrument which is required under this section to pay a record privilege tax is located without this state, the indebtedness upon which the tax shall be paid for the privilege of recording such instrument shall be that proportion of the indebtedness secured by the instrument which the value of the property located in this state bears to the whole property described in the instrument. The Department of Revenue may ascertain the value of the whole property and of that part of it which is located within this state for the purpose of ascertaining the amount of the indebtedness upon which the tax shall be paid, and the value of that part of the property located within this state and the amount of the indebtedness upon which such tax shall be paid shall be ascertained in the following manner: First, the owner of any such instrument or his or her agent or attorney may petition the Department of Revenue to ascertain the value of the whole property and of that part of which is located within this state and the amount of the indebtedness upon which such tax shall be paid, and the Department of Revenue, after hearing such evidence as may be offered or as may be before it, shall fix and determine the value of that part of the property located within this state and the amount of the indebtedness upon which the tax shall be paid and shall endorse its findings on such instrument, and upon the presentation of the instrument, with such endorsements to the probate judge of the county in which any part of the property is located, such instrument shall be accepted for record upon the payment of the tax upon the amount of such indebtedness as so ascertained by the Department of Revenue and of the recording fees of the probate judge; or, second, the owner of any such instrument or his or her agent or attorney may have such instrument recorded by paying to the probate judge of the county in which the instrument is offered for record the privilege tax on the entire amount of the indebtedness secured by such instrument, and may thereupon present a petition to the Department of Revenue within 30 days after such instrument is recorded, and it shall be the duty of the Department of Revenue to ascertain the value of the whole property and of that part of it located within this state, and to fix and determine the amount of the indebtedness upon which the tax shall be paid, and the department shall thereupon ascertain such valuation and fix and determine such indebtedness and shall order the probate judge to refund the excess of privilege tax collected , and the probate judge shall comply with such order; and the tax paid upon the entire amount of such indebtedness shall be held by the probate judge until the Department of Revenue determines the amount of the indebtedness upon which such tax shall be paid.
(9) Any probate judge who shall file for record or shall receive any such instrument for record or for filing, without collecting the recording or registration tax provided for the filing, recording, or registration of such instrument, or who shall fail to certify the fact that such tax has been paid before filing such instrument shall be guilty of a misdemeanor and, upon conviction, shall be fined not less than $10 nor more than $1,000.
(10) Every petition filed with the Department of Revenue to ascertain the amount of the mortgage tax due to be paid under this section shall, when the property conveyed in the instrument offered for record is located in more than one county of the state, show the value of the property conveyed in each county in which the instrument is to be recorded.
(11) Any probate judge who fails to keep the abstract of mortgages or other instruments intended to secure the payment of moneys which are filed in his or her office for filing or for record, as he or she is required by law to keep, shall be guilty of a misdemeanor and, upon conviction, shall be fined not less than $10 nor more than $500.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §619; Acts 1953, No. 770, p. 1031; Acts 1965, No. 549, p. 811; Acts 1977, No. 671, p. 1152; Acts 1981, No. 81-662, p. 1078; Acts 1987, No. 87-816, p. 1630, §1; Act 2004-490, §1.)
The term “bank” as used in this section shall be held to mean a corporation holding a charter issued by the Comptroller of the United States or the banking authorities of the State of Alabama and duly authorized to receive funds on deposit, to be repaid on demand, and to carry on the general business of banking and subject to all the laws of the state applicable to corporations carrying on the business of banking.
No tax as levied by the state in the recording of mortgages of whatever kind filed for record in the probate court in any county in the state shall be levied upon or collected from any bank in this state unless the said tax shall be applicable to and collected from all banks and banking institutions doing business in the State of Alabama.
(Acts 1947, No. 181, p. 66.)
No tax levied upon the recordation of mortgages, deeds of trust, and instruments of like character shall be levied upon or collected from any corporation or association organized pursuant to Subchapter IV of Chapter 7, Title 12, United States Code Annotated, with respect to any instrument executed to secure a loan made by it to one of its members for general agricultural purposes, the provisions of any other law to the contrary notwithstanding.
(Acts 1951, No. 540, p. 953.)
No tax levied upon the recordation of mortgages, deeds of trust, and instruments of like character shall be levied upon or collected from any corporation or association engaged exclusively in making farm or crop loans, with respect to any instrument executed to secure a loan made by it to one of its stockholders or members for general agricultural purposes, the provisions of any other law to the contrary notwithstanding. The exemption provided herein shall apply to all deeds, mortgages, and instruments of like character executed to those corporations and associations created and chartered under the provisions of that act of Congress known as the Federal Farm Loan Act, as amended by the Farm Credit Act of 1933.
(Acts 1953, No. 841, p. 1131; Acts 1969, No. 503, p. 960.)
No tax under Section 40-22-1 shall be levied upon the recordation of any deed, bill of sale, or any similar instrument or conveyances of like character which conveys title to or any interest in any real or personal property within this state and which is executed and delivered for the purpose of carrying out the division of any church, congregation, parish, religious congregation, religious assembly, diocese, or other religious organization into two or more similar organizations or for the purpose of carrying out a merger or consolidation of any two or more such religious organizations into a single organization. This exemption shall apply to such recording regardless of the date on which the division, merger, or consolidation occurred.
(Acts 1976, No. 274, p. 304.)
If any mortgage, deed of trust, contract of conditional sale, or other instrument of like character heretofore or hereafter filed for record in any probate office of this state which was or shall be given to secure the payment of any debt incurred to a corporation, organization, or institution now or hereafter exempt by law from the payment of the recording privilege tax imposed by Section 40-22-2 and upon which such recording privilege tax has not been previously paid has been heretofore or be hereafter transferred to a person, corporation, organization, or institution not exempt from payment of such tax and such transfer is presented for record within this state, such transfer shall be received for record upon payment of the privilege tax imposed by said section upon the then unpaid balance of the secured debt and the recording fees of the probate judge.
(Acts 1951, No. 816, p. 1449, §1.)
Upon the filing for record of a transfer under Section 40-22-6 and upon payment of such tax and recording fees, the probate judge or his clerk shall certify on such transfer the fact that the said tax has been paid; and, when so certified by the probate judge or his clerk, such transfer and all subsequent transfers thereof shall be admitted to record in any county wherein any of the property mentioned in the mortgage, deed of trust, contract of conditional sale, or other instrument of like character so transferred is situated without the payment of any further tax thereon, except the fee to the probate judge for recording such transfer.
(Acts 1951, No. 816, p. 1449, §2.)
No transfer under Section 40-22-6 hereafter filed for record shall be subject to the recording privilege tax imposed by Section 40-22-1.
(Acts 1951, No. 816, p. 1449, §3.)
If the recording privilege tax imposed by Sections 40-22-6 through 40-22-11 of this title or by Section 40-22-2 is paid, the debt secured by the instrument so transferred shall thereafter be exempt from any ad valorem tax, either state, county, or municipal.
(Acts 1951, No. 816, p. 1449, §4.)
If any transfer of any such mortgage, deed of trust, contract of conditional sale, or other instrument of like character described in Section 40-22-6 has heretofore been filed for record in any probate office of this state and the recording privilege tax imposed by Section 40-22-1 or Section 40-22-2 has been paid thereon, the debt secured by the instrument so transferred shall be exempt from any ad valorem tax, either state, county, or municipal.
(Acts 1951, No. 816, p. 1449, §5.)
Any corporation, organization, or institution now or hereafter exempt from the recording privilege tax imposed by Section 40-22-2 may, at the time of presenting for record any mortgage, deed of trust, contract of conditional sale or other instrument of like character executed to it, waive its exemption from payment of such recording privilege tax with respect to such instrument and pay the tax imposed by said section at the time such instrument is presented to the judge of probate for filing, and no transfer of the indebtedness thereby secured, thereafter presented for recording, shall be subject to any recording privilege tax, but shall be filed for record by the judge of probate upon the payment of the recording fees to the judge of probate.
(Acts 1951, No. 816, p. 1449, §6.)
Sections 40-22-6 through 40-22-11 are remedial and shall be liberally construed. If any section or provision of such sections is held to be void or unconstitutional, such holding shall not affect the validity of any other provisions of such sections.
(Acts 1951, No. 816, p. 1449, §7.)
(a) For the purpose of this division, the following terms have the respective meanings ascribed by this section:
(1) PERSON or COMPANY. Used interchangeably, includes any individual, firm, copartnership, association, corporation, receiver, trustee, or any other group or combination acting as a unit and the plural as well as the singular number, unless the intention to give a more limited meaning is disclosed by the context.
(2) DEPARTMENT. The Department of Revenue of the State of Alabama.
(3) COMMISSIONER. The Commissioner of Revenue of the State of Alabama.
(4) TAX YEAR or TAXABLE YEAR. The calendar year.
(5) SALE or SALES. Installment and credit sales and the exchange of properties as well as the sale thereof for money, every closed transaction constituting a sale. Provided, however, a transaction shall not be closed or a sale completed until the time and place when and where title is transferred by the seller or seller’s agent to the purchaser or purchaser’s agent, and for the purpose of determining transfer of title, a common carrier or the U.S. Postal Service shall be deemed to be the agent of the seller, regardless of any F.O.B. point and regardless of who selects the method of transportation, and regardless of by whom or the method by which freight, postage, or other transportation charge is paid. Provided further that, where billed as a separate item to and paid by the purchaser, the freight, postage, or other transportation charge paid to a common carrier or the U.S. Postal Service is not a part of the selling price.
(6) GROSS PROCEEDS OF SALES. The value proceeding or accruing from the sale of tangible personal property, and including the proceeds from the sale of any property handled on consignment by the taxpayer, including merchandise of any kind and character without any deduction on account of the cost of the property sold, the cost of the materials used, labor or service cost, interest paid, any consumer excise taxes that may be included within the sales price of the property sold, or any other expenses whatsoever, and without any deductions on account of losses; provided, that cash discounts allowed and taken on sales shall not be included, and “gross proceeds of sales” shall not include the sale price of property returned by customers when the full sales price thereof is refunded either in cash or by credit. The term “gross proceeds of sale” shall also mean and include the reasonable and fair market value of any tangible personal property previously purchased at wholesale which is withdrawn or used from the business or stock and used or consumed in connection with a business, and shall also mean and include the reasonable and fair market value of any tangible personal property previously purchased at wholesale which is withdrawn from the business or stock and used or consumed by any person so withdrawing the same, except property that has been previously withdrawn from business or stock and so used or consumed with respect to which property the tax has been paid because of previous withdrawal, use, or consumption, except property that enters into and becomes an ingredient or component part of tangible personal property or products manufactured or compounded for sale and not for the personal and private use or consumption of any person so withdrawing, using, or consuming the same, and except refinery, residue, or fuel gas, whether in a liquid or gaseous state, that has been generated by, or is otherwise a by-product of, a petroleum-refining process, which gas is then utilized in the process to generate heat or is otherwise utilized in the distillation or refining of petroleum products.
In the case of the retail sale of equipment, accessories, fixtures, and other similar tangible personal property used in connection with the sale of commercial mobile services as defined herein, or in connection with satellite television services, at a price below cost, “gross proceeds of sale” shall only include the stated sales price thereof and shall not include any sales commission or rebate received by the seller as a result of the sale. As used herein, the term “commercial mobile services” shall have the same meaning as that term has in 47 U.S.C. §§ 153(n) and 332(d), as in effect from time to time.
(7) TAXPAYER. Any person liable for taxes hereunder.
(8) GROSS RECEIPTS. The value proceeding or accruing from the sale of tangible personal property, including merchandise and commodities of any kind and character, all receipts actual and accrued, by reason of any business engaged in, not including, however, interest, discounts, rentals of real estate, or royalties, and without any deduction on account of the cost of the property sold, the cost of the materials used, labor or service cost, interest paid, any consumer excise taxes that may be included in the sales price of the property sold, or any other expenses whatsoever and without any deductions on account of losses. The term “gross receipts” shall also mean and include the reasonable and fair market value of any tangible personal property previously purchased at wholesale which is withdrawn or used from the business or stock and used or consumed in connection with a business, and shall also mean and include the reasonable and fair market value of any tangible personal property previously purchased at wholesale which is withdrawn from the business or stock and used or consumed by any person so withdrawing the same, except property which has been previously withdrawn from business or stock and so used or consumed and with respect to which property the tax has been paid because of previous withdrawal, use, or consumption, except property which enters into and becomes an ingredient or component part of tangible personal property or products manufactured or compounded for sale as provided in subdivision (9) and not for the personal and private use or consumption of any person so withdrawing, using, or consuming the same, and except refinery, residue, or fuel gas, whether in a liquid or gaseous state, that has been generated by, or is otherwise a by-product of, a petroleum-refining process, which gas is then utilized in the process to generate heat or is otherwise utilized in the distillation or refining of petroleum products.
(9) WHOLESALE SALE or SALE AT WHOLESALE. Any one of the following:
a. A sale of tangible personal property by wholesalers to licensed retail merchants, jobbers, dealers, or other wholesalers for resale and does not include a sale by wholesalers to users or consumers, not for resale.
b. A sale of tangible personal property or products, including iron ore, and including the furnished container and label of the property or products, to a manufacturer or compounder which enter into and become an ingredient or component part of the tangible personal property or products that the manufacturer or compounder manufactures or compounds for sale, whether or not the tangible personal property or product used in manufacturing or compounding a finished product is used with the intent that it becomes a component of the finished product; provided, however, that it is the intent of this section that no sale of capital equipment, machinery, tools, or product shall be included in the term “wholesale sale.” The term “capital equipment, machinery, tools, or product” shall mean property that is subject to depreciation allowances for Alabama income tax purposes.
c. A sale of containers intended for one-time use only, and the labels thereof, when containers are sold without contents to persons who sell or furnish containers along with the contents placed therein for sale by persons.
d. A sale of pallets intended for one-time use only when pallets are sold without contents to persons who sell or furnish pallets along with the contents placed thereon for sale by persons.
e. A sale to a manufacturer or compounder, of crowns, caps, and tops intended for one-time use employed and used upon the containers in which a manufacturer or compounder markets his products.
f. A sale of containers to persons engaged in selling or otherwise supplying or furnishing baby chicks to growers thereof where containers are used for the delivery of chicks or a sale of containers for use in the delivery of eggs by the producer thereof to the distributor or packer of eggs even though containers used for delivery of baby chicks or eggs may be recovered for reuse.
g. A sale of bagging and ties used in preparing cotton for market.
h. A sale to meat packers, manufacturers, compounders, or processors of meat products of all casings used in molding or forming wieners and Vienna sausages even though casings may be recovered for reuse.
i. A sale of commercial fish feed including concentrates, supplements, and other feed ingredients when substances are used as ingredients in mixing and preparing feed for fish raised to be sold on a commercial basis.
j. A sale of bait used to capture or attempt to capture fish or other seafood in the process of commercial fishing by a holder of a commercial license issued pursuant to Chapter 12 of Title 9.
k. A sale of tangible personal property to any person engaging in the business of leasing or renting tangible personal property to others, if tangible personal property is purchased for the purpose of leasing or renting it to others under a transaction subject to the privilege or license tax levied in Article 4 of Chapter 12 of this title against any person engaging in the business of leasing or renting tangible personal property to others.
l. A purchase or withdrawal of parts or materials from stock by any person licensed under this division where parts or materials are used in repairing or reconditioning the tangible personal property of a licensed person, which tangible personal property is a part of the stock of goods of a licensed person, offered for sale by him or her, and not for use or consumption of a licensed person.
(10) SALE AT RETAIL or RETAIL SALE. All sales of tangible personal property except those defined as wholesale sales. The quantities of goods sold or prices at which sold are immaterial in determining whether or not a sale is at retail. Sales of building materials to contractors, builders, or landowners for resale or use in the form of real estate are retail sales in whatever quantity sold. Sales of building materials, fixtures, or other equipment to a manufacturer or builder of modular buildings for use in manufacturing, building, or equipping a modular building ultimately becoming a part of real estate situated in the State of Alabama are retail sales, and the use, sale, or resale of building shall not be subject to the tax. Sales of tangible personal property to undertakers and morticians are retail sales and subject to the tax at the time of purchase, but are not subject to the tax on resale to the consumer. Sales of tangible personal property or products to manufacturers, quarry operators, mine operators, or compounders, which are used or consumed by them in manufacturing, mining, quarrying, or compounding and do not become an ingredient or component part of the tangible personal property manufactured or compounded as provided in subdivision (9) are retail sales. The term “sale at retail” or “retail sale” shall also mean and include the withdrawal, use, or consumption of any tangible personal property by any one who purchases same at wholesale, except property that has been previously withdrawn from the business or stock and so used or consumed and with respect to which property tax has been paid because of previous withdrawal, use, or consumption, except property that enters into and becomes an ingredient or component part of tangible personal property or products manufactured or compounded for sale as provided in subdivision (9) and not for the personal and private use or consumption of any person so withdrawing, using, or consuming the same; and wholesale purchaser shall report and pay the taxes thereon. In the case of the sale of equipment, accessories, fixtures, and other similar tangible personal property used in connection with the sale of commercial mobile services as defined in subdivision (6), or in connection with satellite television services, at a price below cost, the term “sale at retail” and “retail sale” shall include those sales, and those sales shall not also be taxable as a withdrawal, use, or consumption of such tangible personal property.
(11) BUSINESS. All activities engaged in, or caused to be engaged in, with the object of gain, profit, benefit, or advantage, either direct or indirect, and not excepting subactivities producing marketable commodities used or consumed in the main business activity, each of which subactivities shall be considered business engaged in, taxable in the class in which it falls.
(12) AUTOMOTIVE VEHICLE. A power shovel, dragline, crawler, crawler crane, ditcher, or any similar machine that is self-propelled, in addition to self-propelled machines that are used primarily as instruments of conveyance.
(13) PREPAID TELEPHONE CALLING CARD. A sale of a prepaid telephone calling card or a prepaid authorization number, or both, shall be deemed the sale of tangible personal property subject to the tax imposed on the sale of tangible personal property pursuant to this chapter. For purposes of this subdivision, the sale of prepaid wireless service that is evidenced by a physical card constitutes the sale of a prepaid telephone calling card, and the sale of prepaid wireless service that is not evidenced by a physical card constitutes the sale of a prepaid authorization number.
(14) PREPAID WIRELESS SERVICE. The right to use mobile telecommunications service, which must be paid for in advance and that is sold in predetermined units or dollars of which the number declines with use in a known amount, and which may include rights to use non-telecommunications services or to download digital products or digital content. For purposes of this subdivision, mobile telecommunications service has the meaning ascribed by Section 40-21-120.
(15) CONSUMABLE VAPOR PRODUCT. Any nicotine liquid solution or other material containing nicotine that is depleted when used as a vapor product.
(16) VAPOR PRODUCTS. Any non-lighted, noncombustible product that employs a mechanical heating element, battery, or electronic circuit regardless of shape or size and that can be used to produce vapor from nicotine in a solution. The term includes any vapor cartridge or other container of nicotine in a solution or other form that is intended to be used with or in an electronic cigarette, electronic cigar, electronic cigarillo, electronic pipe, or similar product or device. The term does not include any product regulated by the United States Food and Drug Administration under Chapter V of the Federal Food, Drug, and Cosmetic Act.
(17) PRODUCER VALUE ADDED AGRICULTURAL PRODUCTS. Fruits or other agricultural products that have undergone some degree of further processing by the original producer of the agricultural product, including, but not limited to, whole cuts of meat, bound cut flowers, jams, jellies, or boiled or roasted peanuts.
(18) COMMERCIAL FISHING. The activity of catching or processing fish or other seafood regularly and exclusively as a means of livelihood by a holder of a commercial license issued pursuant to Chapter 12 of Title 9. The term includes shellfish farmers, shrimpers, oysterers, lobsterers, and crabbers.
(19) COMMERCIAL FISHING VESSEL. Any vessel whose masters and owners are regularly and exclusively engaged in commercial fishing as their means of livelihood.
(20) FOOD. Food as defined in 7 U.S.C. § 2012, for the purposes of the federal Supplemental Nutrition Assistance Program regardless of where or by what means food is sold. In the event that the federal Supplemental Nutrition Assistance Program definition no longer exists, the Legislature shall provide a new definition of “food” by general law.
(b) The use within this state of tangible personal property by the manufacturer thereof, as building materials in the performance of a construction contract, for the purposes of this division, shall be considered as a retail sale thereof by the manufacturer, who shall also be construed as the ultimate consumer of materials or property, and who shall be required to report transaction and pay the sales tax thereon, based upon the reasonable and fair market price thereof at the time and place where same are used or consumed by the manufacturer. Where the contractor is the manufacturer or compounder of ready-mix concrete or asphalt plant mix used in the performance of a contract, whether the ready-mix concrete or asphalt plant mix is manufactured or compounded at the job site or at a fixed or permanent plant location, the tax applies only to the cost of the ingredients that become a component part of the ready-mix concrete or the asphalt plant mix. The provisions of this subsection shall not apply to any tangible personal property that is specifically exempted from the tax levied in this division.
(c) The sale of lumber by a lumber manufacturer to a trucker for resale is a sale at wholesale as sales are defined herein where the trucker is either a licensed dealer in lumber or, if a resident of Alabama, has registered with the Department of Revenue, and has received therefrom a certificate of registration or, if a nonresident of this state purchasing lumber for resale outside the State of Alabama, has furnished to the lumber manufacturer his or her name, address, and the vehicle license number of the truck in which the lumber is to be transported, which name, address, and vehicle license number shall be shown on the sales invoice rendered by the lumber manufacturer. The certificate provided for herein shall be valid for the calendar year of its issuance and may be renewed from year to year on application to the Department of Revenue on or before January 31 of each succeeding year; provided, that if not renewed the certificate shall become invalid for the purpose of this division on February 1.
(d) The dispensing or transferring of ophthalmic materials, including lenses, frames, eyeglasses, contact lenses, and other therapeutic optic devices, to a patient by a licensed ophthalmologist, as a part of his or her professional service, for purposes of this division, shall constitute a sale, subject to the state sales tax. The licensed ophthalmologist or licensed optometrist shall collect the state sales tax. In no event shall the providing of professional services in connection with the dispensing or transferring of ophthalmic materials, including dispensing fees or fitting fees, by a licensed ophthalmologist or licensed optometrist be considered a sale subject to the state sales tax. When the ophthalmic materials are purchased by a consumer covered by a third party benefit plan, including Medicare, the sales tax shall be applicable to the amount that the ophthalmologist, optometrist, or optician is reimbursed by the third party benefit plan plus the amount that the consumer pays to the ophthalmologist, optometrist, or optician at the time of the sale. All transfers of ophthalmic materials by opticians or optometrists shall be considered retail sales subject to the state sales tax. The term “supplier” shall include but not be limited to optical laboratories, ophthalmic material wholesalers, or anyone selling ophthalmic materials to ophthalmologists.
(e) Notwithstanding the above, the withdrawal, use, or consumption of a manufactured product by the manufacturer thereof in quality control testing performed by employees or independent contractors of the taxpayer, for purposes of this division, shall not be deemed or considered to constitute a transaction subject to sales tax, nor shall a gift by the manufacturer of a manufactured product, withdrawn from the manufacturer’s inventory, to an entity listed in 26 U.S.C. §§ 170(b) or (c), be considered a transaction subject to sales tax.
(f) Notwithstanding the foregoing, a gift by a retailer of a product or products where the aggregate retail value of any single gift is equal to or less than ten thousand dollars ($10,000), withdrawn from the retailer’s inventory, to an entity listed in 26 U.S.C. §§ 170(b) or (c) shall not be deemed or considered to constitute a transaction subject to sales and use tax.
(Acts 1959, 2nd Ex. Sess., No. 100, p. 298, §1; Acts 1963, No. 292, p. 750; Acts 1965, No. 577, p. 1074; Acts 1965, No. 692, p. 1285; Acts 1965, No. 791, p. 1477; Acts 1966, Ex. Sess., No. 409, p. 554; Acts 1971, 1st Ex. Sess., No. 100, p. 174; Acts 1971, No. 2398, p. 3829; Acts 1981, No. 81-596, p. 987, §1; Acts 1982, No. 82-402, p. 608; Acts 1983, No. 83-720, p. 1167; Acts 1986, No. 86-536, p. 1039; Acts 1986, Ex. Sess., No. 86-689, p. 87; Acts 1992, No. 92-343, p. 720, §3; Acts 1995, No. 95-513, p. 1028, §1; Acts 1995, No. 95-608, p. 1298, §1; Acts 1996, 2nd Ex. Sess., No. 96-887, p. 1713, §1; Acts 1997, No. 97-648, p. 1201, §1; Act 97-867 1st Sp. Sess., p. 208, §4; Act 99-570, p. 1122, §1; Act 2006-583, p. 1537, §2; Act 2013-333, p. 1165, §1; Act 2014-336, p. 1240, §1; Act 2015-535, 2nd Sp. Sess., p. 1901, §1; Act 2022-291, §2; Act 2022-199, §1; Act 2023-554, §1.)
(a) Notwithstanding any other provision of this chapter to the contrary, no exemption provided by existing law in this chapter shall be extended, expanded, or modified by a Joint Resolution of the Legislature. Any Joint Resolution passed in violation of this provision shall be null and void.
(b) The Department of Revenue may adopt rules for the implementation and administration of Act 2022-199.
(Act 2022-293, §2; Act 2022-199, §2.)
There is levied, in addition to all other taxes of every kind now imposed by law, and shall be collected as herein provided, a privilege or license tax against the person on account of the business activities and in the amount to be determined by the application of rates against gross sales, or gross receipts, as the case may be, as follows:
(1) Upon every person, firm, or corporation, (including the State of Alabama and its Alcoholic Beverage Control Board in the sale of alcoholic beverages of all kinds, The University of Alabama, Auburn University, and all other institutions of higher learning in the state, whether the institutions be denominational, state, county, or municipal institutions, any association or other agency or instrumentality of the institutions) engaged or continuing within this state, in the business of selling at retail any tangible personal property whatsoever, including merchandise and commodities of every kind and character, (not including, however, bonds or other evidences of debts or stocks, nor sales of material and supplies to any person for use in fulfilling a contract for the painting, repair, or reconditioning of vessels, barges, ships, other watercraft, and commercial fishing vessels of over five tons load displacement as registered with the U.S. Coast Guard and licensed by the State of Alabama Department of Conservation and Natural Resources) an amount equal to four percent of the gross proceeds of sales of the business except where a different amount is expressly provided herein. Provided, however, that any person engaging or continuing in business as a retailer and wholesaler or jobber shall pay the tax required on the gross proceeds of retail sales of the business at the rates specified, when his or her books are kept so as to show separately the gross proceeds of sales of each business, and when his or her books are not kept he or she shall pay the tax as a retailer, on the gross sales of the business.
Where any used part including tires of an automotive vehicle or a truck trailer, semitrailer, or house trailer is taken in trade, or in a series of trades, as a credit or part payment on the sale of a new or rebuilt part or tire, the tax levied herein shall be paid on the net difference, that is, the price of the new or used part or tire sold less the credit for the used part or tire taken in trade, provided, however, this provision shall not be construed to include batteries.
(2) Upon every person, firm, or corporation engaged or continuing within this state in the business of conducting or operating places of amusement or entertainment, billiard and pool rooms, bowling alleys, amusement devices, musical devices, theaters, opera houses, moving picture shows, vaudevilles, amusement parks, athletic contests, including wrestling matches, prize fights, boxing and wrestling exhibitions, football and baseball games, (including athletic contests, conducted by or under the auspices of any educational institution within this state, or any athletic association thereof, or other association whether the institution or association be a denominational, a state, or county, or a municipal institution, or association or a state, county, or city school, or other institution, association or school) skating rinks, race tracks, golf courses, or any other place at which any exhibition, display, amusement, or entertainment is offered to the public or place or places where an admission fee is charged, including public bathing places and public dance halls of every kind and description within the State of Alabama, an amount equal to four percent of the gross receipts of any such business. Provided, however, notwithstanding any language to the contrary in the prior portion of this subdivision, the tax provisions so specified shall not apply to any athletic event conducted by a public or nonpublic primary or secondary school or any athletic event conducted by or under the auspices of the Alabama High School Athletic Association. The tax amount that would have been collected pursuant to this subdivision shall continue to be collected by the public or nonpublic primary or secondary school, but shall be retained by the school that collected it and shall be used by the school for school purposes.
(3) Upon every person, firm, or corporation engaged or continuing within this state in the business of selling at retail machines used in mining, quarrying, compounding, processing, and manufacturing of tangible personal property an amount equal to one and one-half percent of the gross proceeds of the sale of the machines. The term “machine,” as herein used, shall include machinery that is used for mining, quarrying, compounding, processing, or manufacturing tangible personal property, and the parts of the machines, attachments, and replacements therefor, that are made or manufactured for use on or in the operation of the machines and that are necessary to the operation of the machines and are customarily so used.
(4) Upon every person, firm, or corporation engaged or continuing within this state in the business of selling at retail any automotive vehicle or truck trailer, semitrailer, or house trailer, or mobile home set-up materials and supplies including, but not limited to, steps, blocks, anchoring, cable pipes, and any other materials pertaining thereto, an amount equal to two percent of the gross proceeds of sale of the automotive vehicle or truck trailer, semitrailer, or house trailer, or mobile home set-up materials and supplies provided, however, where a person subject to the tax provided for in this subdivision withdraws from his or her stock in trade any automotive vehicle or truck trailer, semitrailer, or house trailer for use by him or her or by his or her employee or agent in the operation of the business, there shall be paid, in lieu of the tax levied in this subdivision, a fee of five dollars ($5) per year or part thereof during which the automotive vehicle, truck trailer, semitrailer, or house trailer shall remain the property of the person. Each year or part thereof shall begin with the day or anniversary date, as the case may be, of such withdrawal and shall run for the 12 succeeding months or part thereof during which the automotive vehicle, truck trailer, semitrailer, or house trailer shall remain the property of the person.
Where any used automotive vehicle or truck trailer, semitrailer, or house trailer is taken in trade or in a series of trades, as a credit or part payment on the sale of a new or used vehicle, the tax levied in this subdivision shall be paid on the net difference, that is, the price of the new or used vehicle sold less the credit for the used vehicle taken in trade.
Sales of automobiles, motorcycles, trucks, truck trailers, travel trailers, campers, housecars, or semitrailers that will be registered or titled outside Alabama and that are exported or removed from Alabama within 72 hours by the purchaser or his or her agent for first use outside Alabama are subject to Alabama sales tax in an amount equal to only the state automotive sales tax rate, unless the sales tax laws of the state in which the purchaser will title or register the vehicle allows an Alabama resident to purchase a motor vehicle for first titling and registering in Alabama without the payment of tax to that state. However, in no case shall the amount of Alabama state sales tax due on a motor vehicle that will be registered or titled for use in another state exceed the amount of sales tax that would otherwise have been due in the state where the vehicle will be registered or titled for first use. In order to qualify as a travel trailer, camper, or housecar that will be registered or titled for use in another state, the purchaser must provide documentation to the seller that the purchaser is not a resident of Alabama as required by the Department of Revenue. No such proof is required in the sale of an automobile, motorcycle, truck, truck trailer, or semitrailer, excluding a travel trailer, camper, or housecar. The tax collected under this export provision shall be Alabama sales tax and shall exclude county and municipal sales tax. On January 1, 2016, and each January 1 thereafter, the Alabama Department of Revenue shall publish to the state’s website a list of states that do not allow drive out provisions to Alabama residents. Should the list, required by this subdivision and relied upon by the taxpayer, be incorrect, the taxpayer shall be relieved from the liability concerning the miscollection of the state automotive sales tax. Sales of all other vehicles such as mobile homes, motor bikes, all terrain vehicles, and boats do not qualify for the export exemption provision and are taxable unless the dealer can provide factual evidence that the vehicle was delivered outside of Alabama or to a common carrier for transportation outside Alabama. In order for the sale to be exempt from Alabama tax, the information relative to the exempt sale shall be documented on forms approved by the Revenue Department.
Of the total two-cent ($.02) tax on each dollar of sale provided in this subdivision, 58 percent of the total tax generated by this subdivision shall be deposited to the credit of the Education Trust Fund and 42 percent of the total tax generated by this subdivision shall be deposited to the credit of the State General Fund.
(5) Upon every person, firm, or corporation engaged or continuing within this state in the business of selling through coin-operated dispensing machines, food and food products for human consumption, not including beverages other than coffee, milk, milk products, and substitutes therefor, there is levied a tax equal to three percent of the cost of the food, food products, and beverages sold through the machines, which cost for the purpose of this subdivision shall be the gross proceeds of sales of the business.
(6) Upon every person, firm, or corporation engaged or continuing within this state in the business of selling food as defined in Section 40-23-1, there is a tax levied equal to three percent of the gross proceeds of the sale of food. On September 1, 2025, the tax rate shall be reduced to two percent.
(Acts 1959, 2nd Ex. Sess., No. 100, p. 298, §3; Acts 1959, No. 309, p. 882; Acts 1961, No. 172, p. 215; Acts 1963, 2nd Ex. Sess., No. 106, p. 286, §1; Acts 1963, No. 464, p. 1016; Acts 1973, No. 1136, p. 1918; Acts 1977, No. 592, p. 788; Acts 1980, No. 80-477, p. 745; Acts 1981, No. 81-665, p. 1086, §12; Acts 1981, 3rd Ex. Sess., No. 81-1135, p. 406; Acts 1988, 1st Ex. Sess., No. 88-867, p. 372, §1; Acts 1989, No. 89-920, p. 1823, §1; Acts 1991, No. 91-546, p. 988, §1; Acts 1991, No. 91-623, p. 1162, §1; Acts 1994, No. 94-529, p. 960, §1; Act 99-650, 2nd Sp. Sess., p. 96, §1; Act 2004-638, p. 1461, §3; Act 2006-602, p. 1653, §1; Act 2015-503, 1st Sp. Sess., p. 1816, §1; Act 2015-551, 2nd Sp. Sess., p. 2068, §3; Act 2022-346, §1; Act 2023-554, §1; Act 2025-305, §1.)
(a) If a sales tax, gross receipts tax in the nature of a sales tax, as defined in Section 40-2A-3(8), use tax, or rental tax levied by or on behalf of an Alabama municipality is paid under a requirement of law, the property which is the subject of such tax, when imported for use, storage, or consumption into another Alabama municipality, is not subject to the sales tax, use tax, or rental tax regardless of rate, which is required by the second municipality under any municipal ordinance or any act of the Legislature. The collecting agency shall require such proof of payment of tax to another municipality as is deemed necessary and proper.
(b) If a sales tax, gross receipts tax in the nature of a sales tax, use tax, or rental tax levied by or on behalf of an Alabama county is paid under a requirement of law, the property which is the subject of such tax, when imported for use, storage, or consumption into another Alabama county, is not subject to the sales, use, or rental tax, regardless of rate, which is required by the second county under any county ordinance, resolution, or any act of the Legislature. The collecting agency shall require such proof of payment of the tax to another Alabama county as is deemed necessary and proper.
(c) This section applies to all municipalities in Alabama levying or administering a sales tax, gross receipts tax in the nature of a sales tax, use tax, or rental tax and all counties in Alabama levying or administering a sales tax, gross receipts tax in the nature of a sales tax, use tax, or rental tax. It is the intent of this section that only one municipal sales, use, rental, or gross receipts tax in the nature of a sales tax, and only one county sales, use, rental, or gross receipts tax in the nature of a sales tax be collected or paid on the same sale or rental transaction. To that end, if a sales tax, gross receipts tax in the nature of a sales tax, use tax, or rental tax owed to one municipality or county, hereinafter referred to as the “proper locality,” is erroneously paid to a different municipality or county in good faith, based on a reasonable interpretation of the enabling ordinance, resolution, or act levying or authorizing the tax, but not under a requirement of law, the municipality or county receiving the erroneous payment shall refund the overpaid tax, without interest, to the taxpayer within 60 days of the taxpayer’s compliance with the applicable refund procedures. In order to avoid the accrual of interest and any otherwise applicable penalties on the tax due the proper locality, the taxpayer making the erroneous payment must comply with the applicable refund procedures within 60 days of receiving notice from a county, municipality, or its agent of the erroneous payment. If the taxpayer complies with the refund procedure in a timely manner, the proper locality shall not assess or attempt to assess the tax, or any related interest or otherwise applicable penalty thereon, and no interest or penalty thereon shall accrue, until the date of receipt of the overpayment by the taxpayer or the taxpayer’s agent. However, the taxpayer’s failure to comply with the refund procedures within the requisite 60-day period shall cause interest and any applicable penalties to accrue on the tax to which the proper locality is entitled from the sixty-first day and until such time as the tax is paid. The taxpayer shall remit the disputed tax to the proper localities within 15 days after receipt. Provided, that if the applicable rate of sales tax or gross receipts tax in the nature of a sales tax imposed by the municipality or county receiving an erroneous payment of the sales or gross receipts tax exceeds the rate of sales or gross receipts tax imposed by the proper locality under a requirement of law, the municipality or county that erroneously received the tax shall not be obligated to refund the difference unless the taxpayer properly files the applicable petition for refund.
(Acts 1987, No. 87-579, p. 926, §§1-3; Act 98-192, p. 310, §9.)
Municipal privilege license taxes which are levied and collected by the application of a flat percentage rate of gross sales, or gross receipts from sales, and which are passed on directly by the licensee-seller to the purchaser-consumer shall be excluded from gross sales, or gross receipts, as the case may be, in the computation of the sales tax levied by this state, under the provisions of this division.
(Acts 1961, No. 652, p. 790; Acts 1962, Ex. Sess., No. 140, p. 181.)
(a) There are exempted from the provisions of this division and from the computation of the amount of the tax levied, assessed, or payable under this division the following:
(1) The gross proceeds of the sales of lubricating oil and gasoline as defined in Sections 40-17-30 and 40-17-170 and the gross proceeds from those sales of lubricating oil destined for out-of-state use which are transacted in a manner whereby an out-of-state purchaser takes delivery of such oil at a distributor’s plant within this state and transports it out-of-state, which are otherwise taxed.
(2) The gross proceeds of the sale, or sales, of fertilizer when used for agricultural purposes. The word “fertilizer” shall not be construed to include cottonseed meal, when not in combination with other materials.
(3) The gross proceeds of the sale, or sales, of seeds for planting purposes and baby chicks and poults. Nothing herein shall be construed to exempt or exclude from the computation of the tax levied, assessed, or payable, the gross proceeds of the sale or sales of plants, seedlings, nursery stock, or floral products.
(4) The gross proceeds of sales of insecticides and fungicides when used for agricultural purposes or when used by persons properly permitted by the Department of Agriculture and Industries or any applicable local or state governmental authority for structural pest control work and feed for livestock and poultry, but not including prepared food for dogs and cats.
(5) The gross proceeds of sales of all livestock by whomsoever sold, and also the gross proceeds of poultry and other products of the farm, dairy, grove, or garden, when in the original state of production or condition of preparation for sale, when such sale or sales are made by the producer or members of the producer’s immediate family or for the producer by those employed by the producer to assist in the production thereof. Nothing herein shall be construed to exempt or exclude from the measure or computation of the tax levied, assessed, or payable hereunder, the gross proceeds of sales of poultry or poultry products when not products of the farm.
(6) Cottonseed meal exchanged for cottonseed at or by cotton gins.
(7) The gross receipts from the business on which, or for engaging in which, a license or privilege tax is levied by or under Sections 40-21-50, 40-21-53, and 40-21-56 through 40-21-60; provided, that nothing contained in this subdivision shall be construed to exempt or relieve the person or persons operating the business enumerated in these sections from the payments of the tax levied by this division upon or measured by the gross proceeds of sales of any tangible personal property, except gas and water, the gross receipts from the sale of which are the measure of the tax levied by Section 40-21-50, merchandise or other tangible commodities sold at retail by the persons, unless the gross proceeds of sale thereof are otherwise specifically exempted by this division.
(8) The gross proceeds of sales or gross receipts of or by any person, firm, or corporation, from the sale of transportation, gas, water, or electricity, of the kinds and natures, the rates and charges for which, when sold by public utilities, are customarily fixed and determined by the Public Service Commission of Alabama or like regulatory bodies.
(9) The gross proceeds of the sale, or sales of wood residue, coal, or coke to manufacturers, electric power companies, and transportation companies for use or consumption in the production of by-products, or the generation of heat or power used in manufacturing tangible personal property for sale, for the generation of electric power or energy for use in manufacturing tangible personal property for sale or for resale, or for the generation of motive power for transportation.
(10) The gross proceeds from the sale or sales of fuel and supplies for use or consumption aboard ships, vessels, towing vessels, or barges, or drilling ships, rigs or barges, or seismic or geophysical vessels, or other watercraft (herein for purposes of this exemption being referred to as “vessels”) engaged in foreign or international commerce or in interstate commerce; provided, that nothing in this division shall be construed to exempt or exclude from the measure of the tax herein levied the gross proceeds of sale or sales of material and supplies to any person for use in fulfilling a contract for the painting, repair, or reconditioning of vessels, barges, ships, other watercraft, and commercial fishing vessels of over five tons load displacement as registered with the U.S. Coast Guard and licensed by the State of Alabama Department of Conservation and Natural Resources.
For purposes of this subdivision, it shall be presumed that vessels engaged in the transportation of cargo between ports in the State of Alabama and ports in foreign countries or possessions or territories of the United States or between ports in the State of Alabama and ports in other states are engaged in foreign or international commerce or interstate commerce, as the case may be. For the purposes of this subdivision, the engaging in foreign or international commerce or interstate commerce shall not require that the vessel involved deliver cargo to or receive cargo from a port in the State of Alabama. For purposes of this subdivision, vessels carrying passengers for hire, and no cargo, between ports in the State of Alabama and ports in foreign countries or possessions or territories of the United States or between ports in the State of Alabama and ports in other states shall be engaged in foreign or international commerce or interstate commerce, as the case may be, if, and only if, both of the following conditions are met: (i) The vessel in question is a vessel of at least 100 gross tons; and (ii) the vessel in question has an unexpired certificate of inspection issued by the United States Coast Guard or by the proper authority of a foreign country for a foreign vessel, which certificate is recognized as acceptable under the laws of the United States. Vessels that are engaged in foreign or international commerce or interstate commerce shall be deemed for the purposes of this subdivision to remain in such commerce while awaiting or under repair in a port of the State of Alabama if the vessel returns after such repairs are completed to engaging in foreign or international commerce or interstate commerce. For purposes of this subdivision, seismic or geophysical vessels which are engaged either in seismic or geophysical tests or evaluations exclusively in offshore federal waters or in traveling to or from conducting such tests or evaluations shall be deemed to be engaged in international or foreign commerce. For purposes of this subdivision, proof that fuel and supplies purchased are for use or consumption aboard vessels engaged in foreign or international commerce or in interstate commerce may be accomplished by the merchant or seller securing the duly signed certificate of the vessel owner, operator, or captain or such person’s respective agent, on a form prescribed by the department, that the fuel and supplies purchased are for use or consumption aboard vessels engaged in foreign or international commerce or in interstate commerce. Any person filing a false certificate shall be guilty of a misdemeanor and upon conviction shall be fined not less than twenty-five dollars ($25) nor more than five hundred dollars ($500) for each offense. Each false certificate filed shall constitute a separate offense. Any person filing a false certificate shall be liable to the department for all taxes imposed by this division upon the merchant or seller, together with any interest or penalties thereon, by reason of the sale or sales of fuel and supplies applicable to the false certificate. If a merchant or seller of fuel and supplies secures the certificate herein mentioned, properly completed, the merchant or seller shall not be liable for the taxes imposed by this division, if the merchant or seller had no knowledge that the certificate was false when it was filed with the merchant or seller.
(11) The gross proceeds of sales of tangible personal property to the State of Alabama, to the counties within the state and to incorporated municipalities of the State of Alabama.
(12) The gross proceeds of the sale or sales of railroad cars, vessels, barges, and commercial fishing vessels of over five tons load displacement as registered with the U.S. Coast Guard and licensed by the State of Alabama Department of Conservation and Natural Resources, when sold by the manufacturers or builders thereof.
(13) The gross proceeds of the sale or sales of materials, equipment, and machinery that, at any time, enter into and become a component part of ships, vessels, towing vessels or barges, or drilling ships, rigs or barges, or seismic or geophysical vessels, other watercraft and commercial fishing vessels of over five tons load displacement as registered with the U.S. Coast Guard and licensed by the State of Alabama Department of Conservation and Natural Resources. Additionally, the gross proceeds from the sale or sales of lifeboats, personal flotation devices, ring life buoys, survival craft equipment, distress signals, EPIRB’s, fire extinguishers, injury placards, waste management plans and logs, marine sanitation devices, navigation rulebooks, navigation lights, sound signals, navigation day shapes, oil placard cards, garbage placards, FCC SSL, stability instructions, first aid equipment, compasses, anchor and radar reflectors, general alarm systems, bilge pumps, piping, and discharge and electronic position fixing devices which are used on the aforementioned watercraft.
(14) The gross proceeds of the sale or sales of fuel oil purchased as fuel for kiln use in manufacturing establishments.
(15) The gross proceeds of the sale or sales of tangible personal property to county and city school boards within the State of Alabama, independent school boards within the State of Alabama, all educational institutions and agencies of the State of Alabama, the counties within the state, or any incorporated municipalities of the State of Alabama, and private educational institutions operating within the State of Alabama offering conventional and traditional courses of study, such as those offered by public schools, colleges, or universities within the State of Alabama; but not including nurseries, day care centers, and home schools.
(16) The gross proceeds from the sale of all devices or facilities, and all identifiable components thereof, or materials for use therein, acquired primarily for the control, reduction, or elimination of air or water pollution and the gross proceeds from the sale of all identifiable components of, or materials used or intended for use in, structures built primarily for the control, reduction, or elimination of air and water pollution.
(17) The gross proceeds of sales of tangible personal property or the gross receipts of any business which the state is prohibited from taxing under the Constitution or laws of the United States or under the constitution of this state.
(18) When dealers or distributors use parts taken from stocks owned by them in making repairs without charge for the parts to the owner of the property repaired pursuant to warranty agreements entered into by manufacturers, such use shall not constitute taxable sales to the manufacturers, distributors, or to the dealers, under this division or under any county sales tax law.
(19) The gross proceeds received from the sale or furnishing of food, including potato chips, candy, fruit and similar items, soft drinks, tobacco products, and stationery and other similar or related articles by hospital canteens operated by Alabama state hospitals at Bryce Hospital and Partlow State School for Mental Deficients at Tuscaloosa, Alabama, and Searcy Hospital at Mt. Vernon, Alabama, for the benefit of the patients therein.
(20) The gross proceeds of the sale, or sales, of wrapping paper and other wrapping materials when used in preparing poultry or poultry products for delivery, shipment, or sale by the producer, processor, packer, or seller of such poultry or poultry products, including pallets used in shipping poultry and egg products, paper or other materials used for lining boxes or other containers in which poultry or poultry products are packed together with any other materials placed in such containers for the delivery, shipment, or sale of poultry or poultry products.
(21) The gross proceeds of the sales of all antibiotics, hormones and hormone preparations, drugs, medicines or medications, vitamins, minerals or other nutrients, and all other feed ingredients including concentrates, supplements, and other feed ingredients when such substances are used as ingredients in mixing and preparing feed for fish raised to be sold on a commercial basis, livestock, and poultry. Such exemption herein granted shall be in addition to exemptions now provided by law for feed for fish raised to be sold on a commercial basis, livestock, and poultry, but not including prepared foods for dogs or cats.
(22) The gross proceeds of the sale, or sales, of seedlings, plants, shoots, and slips which are to be used for planting vegetable gardens or truck farms and other agricultural purposes. Nothing herein shall be construed to exempt, or exclude from the computation of the tax levied, assessed, or payable, the gross proceeds of the sale, or the use of plants, seedlings, shoots, slips, nursery stock, and floral products, except as hereinabove exempted.
(23) The gross proceeds of the sale, or sales, of fabricated steel tube sections, when produced and fabricated in this state by any person, firm, or corporation for any vehicular tunnel for highway vehicular traffic, when sold by the manufacturer or fabricator thereof, and also the gross proceeds of the sale, or sales, of steel which enters into and becomes a component part of such fabricated steel tube sections of the tunnel.
(24) The gross proceeds from sales of admissions to any theatrical production, symphonic or other orchestral concert, ballet, or opera production when the concert or production is presented by any society, association, guild, or workshop group, organized within this state, whose members or some of whose members regularly and actively participate in the concerts or productions for the purposes of providing a creative outlet for the cultural and educational interests of its members, and of promoting such interests for the betterment of the community by presenting the productions to the general public for an admission charge. The employment of a paid director or conductor to assist in any such presentation described in this subdivision shall not be construed to prohibit the exemptions herein provided.
(25) The gross proceeds of sales of “herbicides” for agricultural uses by whomsoever sold. The term herbicides, as used in this subdivision, means any substance or mixture of substances intended to prevent, destroy, repel, or retard the growth of weeds or plants. The term includes preemergence herbicides, postemergence herbicides, lay-by herbicides, pasture herbicides, defoliant herbicides, and desiccant herbicides.
(26) The Alabama Chapter of the Cystic Fibrosis Research Foundation and the Jefferson Tuberculosis Sanatorium and any of their departments or agencies, heretofore or hereafter organized and existing in good faith in the State of Alabama for purposes other than for pecuniary gain and not for individual profit, shall be exempted from the computation of the tax on the gross proceeds of all sales levied, assessed, or payable.
(27) The gross proceeds from the sale or sales of fuel for use or consumption aboard commercial fishing vessels are exempt from the computation of all sales taxes levied, assessed, or payable under this division or levied under any county or municipal sales tax law.
(28) The gross proceeds from the sales of rope, fishing nets, tools, or any substitute used directly in the process of commercial fishing by a holder of a commercial license issued pursuant to Chapter 12 of Title 9.
(29) The gross proceeds of sales of sawdust, wood shavings, wood chips, and other like materials sold for use as chicken litter by poultry producers and poultry processors.
(30) The gross proceeds of the sales of all antibiotics, hormones and hormone preparations, drugs, medicines, and other medications including serums and vaccines, vitamins, minerals, or other nutrients for use in the production and growing of fish, livestock, and poultry by whomsoever sold. The exemption herein granted shall be in addition to the exemption provided by law for feed for fish, livestock, and poultry, and in addition to the exemptions provided by law for the above-enumerated substances and products when mixed and used as ingredients in fish, livestock, and poultry feed.
(31) The gross proceeds of the sale or sales of all medicines prescribed by physicians for persons who are 65 years of age or older, and when the prescriptions are filled by licensed pharmacists, shall be exempted under this division or under any county or municipal sales tax law. The exemption provided in this section shall not apply to any medicine purchased in any manner other than as is herein provided.
For the purposes of this subdivision, proof of age may be accomplished by filing with the dispensing pharmacist any one or more of the following documents:
a. The name and claim number as shown on a Medicare card issued by the United States Social Security Administration.
b. A certificate executed by any adult person having knowledge of the fact that the person for whom the medicine was prescribed is not less than 65 years of age.
c. An affidavit executed by any adult person having knowledge of the fact that the person for whom the medicine was prescribed is not less than 65 years of age.
For the purposes of this subdivision, any person filing a false proof of age shall be guilty of a misdemeanor and upon conviction thereof shall be punished by a fine of one hundred dollars ($100).
(32) There shall be exempted from the tax levied by this division the gross receipts of sales of grass sod of all kinds and character when in the original state of production or condition of preparation for sale, when the sales are made by the producer or members of the producer’s family or for the producer by those employed by the producer to assist in the production thereof; provided, that nothing herein shall be construed to exempt sales of sod by a person engaged in the business of selling plants, seedlings, nursery stock, or floral products.
(33) The gross receipts of sales of the following items or materials that are necessary in the farm-to-market production of tomatoes when such items or materials are used by the producer or members of the producer’s family or for the producer by those employed by the producer to assist in the production thereof: Twine for tying tomatoes, tomato stakes, field boxes (wooden boxes used to take tomatoes from the fields to shed), and tomato boxes used in shipments to customers.
(34) The gross proceeds from the sale of liquefied petroleum gas or natural gas sold to be used for agricultural purposes.
(35) The gross receipts of sales from state nurseries of forest tree seedlings.
(36) The gross receipts of sales of forest tree seed by the state.
(37) The gross receipts of sales of Lespedeza bicolor and other species of perennial plant seed and seedlings sold for wildlife and game food production purposes by the state.
(38) The gross receipts of any aircraft manufactured, sold, and delivered in this state if the aircraft are not permanently domiciled in Alabama and are removed to another state.
(39) The gross proceeds from the sale or sales of all diesel fuel used for off-highway agricultural purposes.
(40) The gross proceeds from sales of admissions to any sporting event that:
a. Takes place in the State of Alabama on or after January 1, 1984, regardless of when such sales occur; and
b. Is hosted by a not-for-profit corporation organized and existing under the laws of the State of Alabama; and
c. Determines a national championship of a national organization, including, but not limited to, the Professional Golfers Association of America, the Tournament Players Association, the United States Golf Association, the United States Tennis Association, and the National Collegiate Athletic Association; and
d. Has not been held in the State of Alabama on more than one prior occasion, provided, however, that for such purpose the Professional Golfers Association Championship, the United States Open Golf Championship, the United States Amateur Golf Championship of the United States Golf Association, and the United States Open Tennis Championship shall each be treated as a separate event.
(41) The gross receipts from the sale of any aircraft and replacement parts, components, systems, supplies, and sundries affixed or used on the aircraft and 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 words “hub operation within this state” shall be construed to have both 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.
(42) The gross receipts from the sale of hot or cold food and beverage products sold 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 words “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.
(43) The gross receipts from the sale of any aviation jet fuel to a certificated or licensed air carrier purchased for use in scheduled all-cargo operations being conducted on international flights or in international commerce. For purposes of this subdivision, the following words or terms shall be defined and interpreted as follows:
a. Air Carrier. Any person, firm, corporation, or entity undertaking by any means, directly or indirectly, to provide air transportation.
b. All-Cargo Operations. Any flight conducted by an air carrier for compensation or hire other than a passenger carrying flight, except passengers as specified in 14 C.F.R. § 121.583(a) or 14 C.F.R. § 135.85, as amended.
c. International Commerce. Any air carrier engaged in all-cargo operations transporting goods for compensation or hire on international flights.
d. International Flights. Any air carrier conducting scheduled all-cargo operations between any point within the 50 states of the United States and the District of Columbia and any point outside the 50 states of the United States and the District of Columbia, including any interim stops within the United States so long as the ultimate origin or destination of the aircraft is outside the United States and the District of Columbia.
(44) The gross proceeds of the sale or sales of the following:
a. Drill pipe, casing, tubing, and other pipe used for the exploration for or production of oil, gas, sulphur, or other minerals in offshore federal waters.
b. Tangible personal property exclusively used for the exploration for or production of oil, gas, sulphur, or other minerals in offshore federal waters.
c. Fuel and supplies for use or consumption aboard boats, ships, aircraft, and towing vessels when used exclusively in transporting persons or property between a point in Alabama and a point or points in offshore federal waters for the exploration for or production of oil, gas, sulphur, or other minerals in offshore federal waters.
d. Drilling equipment that is used for the exploration for or production of oil, gas, sulphur, or other minerals, that is built for exclusive use outside this state and that is, on completion, removed forthwith from this state.
The delivery of items exempted by this subdivision to the purchaser or lessee in this state does not disqualify the purchaser or lessee from the exemption if the property is removed from the state by any means, including by the use of the purchaser’s or lessee’s own facilities.
The shipment to a place in this state of equipment exempted by this subdivision for further assembly or fabrication does not disqualify the purchaser or lessee from the exemption if on completion of the further assembly or fabrication the equipment is removed forthwith from this state. This subdivision applies to a sale that may occur when the equipment exempted is further assembled or fabricated if on completion the equipment is removed forthwith from this state.
(45) The gross receipts derived from all bingo games and operations that are conducted in compliance with validly enacted legislation authorizing the conduct of such games and operations, and which comply with the distribution requirements of the applicable local laws; provided that the exemption from sales taxation granted by this subdivision shall apply only to gross receipts taxable under subdivision (2) of Section 40-23-2. It is further provided that this exemption shall not apply to any gross receipts from the sale of tangible personal property, such as concessions, novelties, food, beverages, etc. The exemption provided for in this section shall be limited to those games and operations by organizations that have qualified for exemption under the provisions of 26 U.S.C. § 501 (c)(3), (4), (7), (8), (10), or (19), or which are defined in 26 U.S.C. § 501(d).
(46) The gross receipts derived from the sale or sales of fruit or other agricultural products by the person or company, as defined in Section 40-23-1, that planted or cultivated and harvested the fruit or agricultural product, when the land is owned or leased by the seller.
(47) The gross receipts derived from the sale or sales of all domestically mined or produced coal, coke, and coke by-products used in cogeneration plants.
(48) The gross receipts from the sale or sales of metal, other than gold or silver, when such metal is purchased for the purpose of transferring such metal to an investment trust in exchange for shares or other units, each of which are both publicly traded and represent fractional undivided beneficial interests in the trust’s net assets, including metal stored in warehouses located in this state, as well as the gross proceeds from the sale or other transfer of such metal to or from the investment trust in exchange for shares or other units that are publicly traded and represent fractional undivided beneficial interests in the trust’s net assets but not to the extent that metal is transferred to or from the investment trust in exchange for consideration other than such publicly traded shares or other units. For purposes of this subdivision, the term “metals” includes, but is not limited to, copper, aluminum, nickel, zinc, tin, lead, and other similar metals typically used in commercial and industrial applications.
(49)a. For the period commencing on October 1, 2012, and ending May 30, 2027, the gross receipts from the sale of parts, components, and systems that become a part of a fixed or rotary wing military aircraft or certified transport category aircraft that undergoes conversion, reconfiguration, or general maintenance so long as the address of the aircraft for FAA registration is not in the state; provided, however, that this exemption shall not apply to a local sales tax unless previously exempted by local law or approved by resolution of the local governing body.
b. The exemption authorized by this subdivision shall not be available for sales of parts, components, or systems for new contracts or projects entered into after May 30, 2027, unless the Legislature enacts legislation to continue or reinstate the exemption for new contracts or projects after that date. No action or inaction on the part of the Legislature shall reduce, suspend, or disqualify sales of parts, components, or systems from the exemption in any past year or future years until May 30, 2030, with respect to contracts or projects entered into on or before May 30, 2027; it being the sole intent that failure of the Legislature to enact legislation to reinstate the exemption for new contracts or projects after May 30, 2027, shall affect only the availability of the exemption to new contracts and projects after that date and shall not affect availability of the exemption for contracts or projects entered into on or before May 30, 2027, for which the exemption shall be available until May 30, 2030.
(50) The gross proceeds from the sale or sales within school buildings of lunches to pupils of kindergarten, grammar, and high schools, either public or private, that are not sold for profit.
(51) The gross proceeds of services provided by photographers, including, but not limited to, sitting fees and consultation fees, even when provided as part of a transaction ultimately involving the sale of one or more photographs, so long as the exempt services are separately stated to the customer on a bill of sale, invoice, or like memorialization of the transaction. For transactions occurring before October 1, 2017, neither the Department of Revenue nor local tax officials may seek payment for sales tax not collected. With regard to such transactions in which sales tax was collected and remitted on services provided by photographers, neither the taxpayer nor the entity remitting sales tax shall have the right to seek refund of such tax.
(52) a. For the period commencing on June 1, 2018, and ending 10 years thereafter, unless extended by an act of the Legislature, the gross proceeds of sales of bullion or money, as defined in Section 40-1-1(7).
b. For purposes of this subdivision, the following words or terms shall be defined and interpreted as follows:
Bullion. Gold, silver, platinum, palladium, or a combination of each precious metal, that has gone through a refining process and for which the item’s value depends on its mass and purity, and not on its form, numismatic value, or other value. The term includes bullion in the form of bars, ingots, rounds, or coins that meet the requirements set forth above. Qualifying bullion may contain other metals or substances, provided that the other substances are minimal in value compared with the value of the gold, silver, platinum, or palladium and the other substances do not add value to the item. For purposes of this subparagraph, “gold, silver, platinum, or palladium” does not include jewelry or works of art.
Mass. An item’s mass is its weight in precious metal.
Numismatic Value. An external value above and beyond the base value of the underlying precious metal, due to the item’s rarity, condition, age, or other external factor.
Purity. An item’s purity is the proportion of precious metal contained within.
c. In order for bullion to qualify for the sales tax exemption, gold, silver, platinum, and palladium items must meet all of the following requirements:
Must be refined.
Must contain at least 80 percent gold, silver, platinum, or palladium or some combination of these metals.
The sales price of the item must fluctuate with and depend on the market price of the underlying precious metal, and not on the item’s rarity, condition, age, or other external factor.
(53) a. The gross proceeds of the initial retail sales of adaptive equipment that is permanently affixed to a motor vehicle.
b. For the purposes of this subdivision, the following words or terms shall be defined and interpreted as follows:
Adaptive Equipment. Equipment not generally used by persons with normal mobility that is appropriate for use in a motor vehicle and that is not normally provided by a motor vehicle manufacturer.
Motor Vehicle. A vehicle as defined in Section 40-12-240.
Motor Vehicle Manufacturer. Every person engaged in the business of constructing or assembling vehicles or manufactured homes.
c. In order to qualify for the exemption provided for herein, the adaptive equipment must be separately stated to the customer on a bill of sale, invoice, or like memorialization of the transaction.
(54) For the period commencing on October 1, 2022, and ending September 30, 2027, unless extended by an act of the Legislature, the gross receipts derived from the sale of producer value added agricultural products when the sale is made by the producer or by the producer’s immediate family, or for the producer by the producer’s employees.
(55) For the period commencing on October 1, 2024, and ending September 30, 2029, unless extended by an act of the Legislature, the gross proceeds of the sale or sales of hearing instruments as defined in Section 34-14-1, including hearing aids. The exemption provided in this subdivision shall not apply to county or municipal sales taxes unless approved by resolution or ordinance adopted by the local governing body.
(b) Any violation of any provision of this section shall be punishable in a court of competent jurisdiction by a fine of not less than five hundred dollars ($500) and no more than two thousand dollars ($2,000) and imprisonment of not less than six months nor more than one year in the county jail.
(Acts 1959, 2nd Ex. Sess., No. 100, p. 298, §§3, 33; Acts 1959, No. 367, p. 958; Acts 1959, No. 371, p. 962; Acts 1961, No. 743, p. 1060; Acts 1961, No. 812, p. 1188; Acts 1963, No. 423, p. 930; Acts 1963, No. 425, p. 943; Acts 1963, No. 571, p. 1193; Acts 1965, 1st Ex. Sess., No. 227, p. 307; Acts 1965, 1st Ex. Sess., No. 245, p. 361; Acts 1965, No. 375, p. 511; Acts 1965, 2nd Ex. Sess., No. 54, p. 80, §§1, 2; Acts 1965, 2nd Ex. Sess., No. 57, p. 83; Acts 1965, 2nd Ex. Sess., No. 123, p. 171; Acts 1966, Ex. Sess., No. 419, p. 564; Acts 1969, No. 1139, p. 2128; Acts 1970, Ex. Sess., No. 16, p. 2616; Acts 1970, Ex. Sess., No. 18, p. 2617; Acts 1971, 3rd Ex. Sess., No. 176, p. 4435, §§1-3; Acts 1973, No. 1169, p. 1966; Acts 1975, No. 1123, p. 2212, §1; Acts 1976, No. 500, p. 627; Acts 1976, No. 505, p. 632; Acts 1977, No. 593, p. 1359; Acts 1980, No. 80-625, p. 1071; Acts 1980, No. 80-626, p. 1077; Acts 1981, No. 81-596, p. 987, §1; Acts 1981, No. 81-677, p. 1102, §1; Acts 1983, No. 83-576, p. 895, §1; Acts 1984, No. 84-315, p. 727; Acts 1985, No. 85-574, p. 880, §1; Acts 1986, No. 86-214, p. 282, §8; Acts 1987, No. 87-742, p. 1439, §1; Acts 1990, No. 90-671, p. 1291; Acts 1991, No. 91-546, p. 988, §1; Acts 1992, No. 92-343, p. 720, §3; Acts 1993, No. 93-305, p. 720, §1; Acts 1994, No. 94-720, p. 1409, §1; Acts 1996, No. 96-544, p. 762, §1; Act 2001-975, 3rd Sp. Sess., p. 908, §6; Act 2009-144, p. 268, §12; Act 2010-514, p. 848, §1; Act 2012-185, p. 298, §1; Act 2012-395, p. 1056, §1; Act 2013-200, p. 391, §1; Act 2014-325, p. 1189, §1; Act 2017-397, §1; Act 2018-562, §1; Act 2018-164, §1; Act 2019-444, §1; Act 2022-291, §2; Act 2022-293, §1; Act 2022-373, §1; Act 2022-199, §1; Act 2024-400, §1.)
(a) Notwithstanding any other laws to the contrary, any law that enacts or amends a sales and use tax exemption shall apply only to state sales and use taxes and shall not apply to county or municipal sales and use taxes, unless all of the following are satisfied:
(1) The law provides for exemption of county or municipal sales and use tax.
(2) The exemption is approved by resolution or ordinance of the county or municipality. The resolution or ordinance must include all of the following provisions:
a. An effective date of September 1 of a given year for the exemption.
b. The duration of the exemption, which must be in fiscal year increments or in perpetuity.
(3) The county commission or municipality provides notice of the resolution or ordinance to the Alabama Department of Revenue by July 1 prior to the effective date of the exemption.
(b) A county or municipality may rescind a county or municipal sales and use tax exemption by resolution or ordinance provided both of the following conditions are met:
(1) The rescission is effective beginning on September 1 of a given fiscal year.
(2) The county commission or municipality provides notice of the resolution or ordinance to the Alabama Department of Revenue by July 1 prior to the effective date of the rescission.
(c)(1) This section does not amend, repeal, or supersede any general law enacted prior to May 6, 2025, that provides an exemption from county or municipal sales and use taxes, if the law does not require adoption of a resolution or ordinance by the county or municipality for the county or municipal sales and use tax exemption to become effective.
(2) Notwithstanding any other law to the contrary, a county or municipality may not adopt a resolution or ordinance providing a county or municipal sales or use tax exemption pursuant to a general law enacted prior to May 6, 2025, unless the county or municipality complies with subdivisions (a)(2) and (a)(3).
(3) Notwithstanding any other law to the contrary, any county or municipal sales or use tax exemption adopted by a county or municipality pursuant to a general law enacted prior to May 6, 2025, shall cease to be effective beginning September 1, 2025, unless the county or municipality complies with subdivisions (a)(2) and (a)(3).
(d) The department shall publish and maintain a listing of county and municipal sales and use tax exemptions adopted as provided by this section.
(e) The department may adopt rules to administer and implement this section.
(f) This section shall not be construed to modify or supersede the process by which certificates of exemption from state and local sales and use taxes are issued pursuant to Section 40-9-14.1.
(Act 2025-280, §1.)
(a) The term “drugs” shall include any medicine prescribed by physicians when the prescription is filled by a licensed pharmacist, or sold to the patient by the physician, for human consumption or intake.
(b) In addition to any and all items exempt from gross sales tax, certain drugs, as defined in subsection (a) of this section, shall be exempt from state gross sales taxes as defined in Section 40-23-2.
(Acts 1981, No. 81-663, p. 1084.)
(a) As used in this section the following terms shall have the following meanings:
(1) FOOD STAMPS. The stamps provided by the United States Department of Agriculture for issuance to qualified recipients under the federal Food Stamp Act, 7 U.S.C. §2011 et seq.
(2) FOOD STAMP SALES TAX AMENDMENT. Section 1505 of the Food Security Act of 1985 (Public Law 99-198) which amended 7 U.S.C. §2013(a) and provides that a state may not participate in the food stamp program if state or local taxes are collected on purchases of food made with food stamps.
(b) It is hereby declared by the Legislature that this exemption is enacted in response to the coercive threat of Congress contained in the Food Stamp Sales Tax Amendment in order to insure that all eligible citizens within the State of Alabama will continue to receive food stamp benefits; that the State of Alabama has challenged the constitutionality of the Food Stamp Sales Tax Amendment and the case is currently pending in the federal courts; and that it is intended that this exemption shall remain in effect only so long as federal law requires such exemption in order for Alabama citizens to be entitled to receive food stamp benefits.
(c) All purchases made with food stamps shall be exempt from state, county and municipal sales and use taxes.
(d) If, at any time after the passage of this section, the Food Stamp Sales Tax Amendment is either ruled unconstitutional or unenforceable by a federal court, or is repealed by Congress, then the provisions of this section shall immediately become inoperative, null and void and automatically repealed.
(Acts 1987, No. 87-580, p. 927, §§1-4.)
In connection with the purchases of tangible personal property described in subdivisions (2), (4), and (22) of subsection (a) of Section 40-23-4, and therefore exempt from taxation as therein provided, the filing by the purchaser at retail of such property with the seller of a certificate in substantially the following form shall relieve the seller of any obligation to collect tax under Chapter 23 of this title with respect to the sales described therein:Exemption Certification RespectingFertilizers, Insecticides, Fungicides, and SeedlingsThe undersigned__________________________________ (name) (address)___, hereby certifies that the items of(SCS Farm number, if available)tangible personal property purchased by the undersigned on this date from (itemized receipt attached) will be used (name of retailer)for the purposes described in subdivisions (2), (4), or (22) of subsection (a) of Section 40-23-4, in such manner as will render the aforesaid purchase(s) exempt from sales or use taxation under the laws of Alabama. The undersigned is aware that liability to pay any such tax ultimately determined to be applicable with respect to the items so purchased will be the exclusive responsibility of the undersigned.
_________________________________________(Signature)(Date)
The seller shall furnish a copy of said certificate, with receipt attached, to the purchaser and must retain the original thereof for examination by the Department of Revenue for a period of not less than one year from the date thereof.
(Acts 1992, No. 92-343, p. 720, §4.)
In connection with the purchase of material, equipment, or machinery for commercial fishing vessels described in subdivision (13) of subsection (a) of Section 40-23-4, and therefore exempt from taxation under that section, the filing by the purchaser at retail of the material, equipment, or machinery with the seller of a certificate in substantially the following form shall relieve the seller of any obligation to collect tax under Chapter 23 of this title with respect to the sales described in that chapter:
Exemption certification respecting material, equipment, or machinery which, at any time, enters into and becomes a component part of commercial fishing vessels of over five tons load displacement as registered with the U.S. Coast Guard and licensed by the State of Alabama Department of Conservation and Natural Resources.
The undersigned __________________________, (name) (address) hereby certifies that the items of tangible personal property purchased by the undersigned on this date from _________________ (name of retailer) (itemized receipt attached) will be used for the purposes described in subdivision (13) of Section 40-23-4, Code of Alabama 1975, for commercial fishing vessels in a manner that shall render the aforesaid purchase exempt from sales or use taxation under the laws of Alabama. The undersigned is aware that liability to pay any tax ultimately determined to be applicable with respect to the items so purchased will be the exclusive responsibility of the undersigned.
(Signature) (Date)
The seller shall furnish a copy of the certificate, with receipt attached, to the purchaser, and retain the original certificate for examination by the Department of Revenue for a period of not less than one year from the date of the certificate.
(Act 2010-511, p. 844, §1.)
The producer value added agricultural product exemption provided in Section 40-23-1 and 40-23-4, shall not apply to products processed or produced under Chapter 2A of Title 20.
(Act 2023-541, §1.)
(a) For a period commencing October 1, 2024, and ending September 30, 2029, up to twenty-five thousand dollars ($25,000) of the gross proceeds from the sale of fencing materials such as t-posts, wood posts, barbed wire, net wire, smooth wire, standard metal gates, and other like materials used for the purpose of fencing in agriculture livestock applications are exempt from the sales and use tax as provided for in Section 40-23-2 and 40-23-61. The exemption provided in this subsection shall not apply to county or municipal sales and use taxes unless approved by resolution or ordinance adopted by the local governing body.
(b) To qualify for the exemption, a retail purchaser shall provide to a seller an affidavit confirming the purchased material is strictly for an agriculture livestock application. The affidavit shall relieve the seller of the obligation to collect the tax under Chapter 23 of Title 40, with respect to the sale of such materials. The Department of Revenue shall make the affidavit available to sellers.
(Act 2024-169, §1.)
(a) For the period commencing October 1, 2024, and ending September 30, 2029, unless extended by an act of the Legislature, the gross proceeds from the sale of honeybees, including honeybee inputs and honeybee byproducts, are exempt from the state sales and use tax as provided for in Section 40-23-2.
(b) For purposes of this section, the term “honeybee byproducts” means the various substances and materials produced by honeybees during their life cycle and hive activities, including, but not limited to, propolis, royal jelly, beeswax, honeycombs, bee venom, and honeybee pollen. For the purposes of this section, the term “honeybee byproducts” does not include honey.
(c) The exemption provided in this section shall not apply to county or municipal sales or use taxes unless approved by resolution or ordinance adopted by the local governing body.
(Act 2024-448, §1.)
(a) The gross receipts from the sale of aircraft replacement parts, components, systems, sundries, and supplies affixed to, used on, or that became part of, aircraft brought into the state and used, or to be used, by a certified or licensed air carrier to undergo conversion, reconfiguration, or general maintenance while temporarily within this state are exempt from the state sales and use taxes provided for in Sections 40-23-2 and 40-23-61.
(1) Under this section, an aircraft shall be considered not permanently domiciled in Alabama if either of the following non-exclusive conditions are true:
a. The hanger, airstrip, or other housing unit in which the aircraft is primarily based, departs from, and returns to in its normal operation is located outside of Alabama; or
b. The purchaser’s headquarters are not in Alabama on the date of purchase and the aircraft will be operated by either: (i) a certificated air carrier holding a certificate of public convenience under 49 U.S.C. § 40102; or (ii) a foreign air carrier or intrastate air carrier, as defined by 49 U.S.C. § 40102.
(b) The exemption provided in this section shall not apply to county or municipal sales or use taxes unless approved by resolution or ordinance adopted by the local governing body.
(c) The exemption provided pursuant to this section shall be available from September 1, 2025, to August 31, 2030.
(Act 2025-240, §1.)
(a) The gross receipts from the sale of aircraft delivered in this state and used, or to be used, by certified or licensed air carriers, so long as the aircraft will not be hubbed in Alabama, are exempt from the state sales and use taxes provided for in Sections 40-23-2 and 40-23-61.
(1) Under this section, an aircraft shall be considered not permanently domiciled in Alabama if either of the following non-exclusive conditions are true:
a. The hanger, airstrip, or other housing unit in which the aircraft is primarily based, departs from, and returns to in its normal operation is located outside of Alabama; or
b. The purchaser’s headquarters are not in Alabama on the date of purchase and the aircraft will be operated by either: (i) a certificated air carrier holding a certificate of public convenience under 49 U.S.C. § 40102; or (ii) a foreign air carrier or intrastate air carrier, as defined by 49 U.S.C. § 40102.
(b) The exemption provided in this section shall not apply to county or municipal sales or use taxes unless approved by resolution or ordinance adopted by the local governing body.
(c) The exemption provided pursuant to this section shall be available from September 1, 2025, to August 31, 2030.
(Act 2025-240, §2.)
(a)(1) For the period commencing on September 1, 2025, and ending August 31, 2028, the gross receipts from the sale or sales of baby formula, baby bottles, baby wipes, breast milk pumping product, breast pump, diapers, maternity clothing, and menstrual hygiene products for personal use are exempt from the state portion only of the sales and use taxes levied pursuant to Articles 1 and 2 of Chapter 23, Title 40.
(2) The exemption provided in this section shall not apply to county or municipal sales or use taxes unless approved by resolution or ordinance adopted by the local governing body.
(b) For the purpose of this section, the following words and phrases have the following meanings:
(1) BABY BOTTLE. Any bottle fitted with a nipple for giving milk and other drinks to a young child.
(2) BABY FORMULA. Any food which purports to be or is represented for special dietary use solely as a food for infants by reason of its simulation of human milk or its suitability as a complete or partial substitute for human milk.
(3) BABY WIPE. Any moistened and disposable tissue or towel intended for cleansing the skin of a young child.
(4) BREAST MILK PUMPING PRODUCT. Any breast pump, breast milk storage bag, nursing pad, nursing bra, or other similar tangible personal property sold for the principal purpose of pumping and storing breast milk.
(5) BREAST PUMP. Any electrically or manually controlled device designed or marketed to be used to express milk from a human breast during lactation. The term includes any battery, AC adapter, or other power supply unit packaged and sold with the device to power the device.
(6) DIAPER. Any absorbent diaper or undergarment designed to be worn by an individual who cannot control bladder or bowel movements.
(7) MATERNITY CLOTHING. Any clothing intended for a woman to wear during pregnancy and the postpartum period that is designed to accommodate the changes in body size and shape that occur as a result of a pregnancy.
(8) MENSTRUAL HYGIENE PRODUCT. Tampons, menstrual pads, sanitary napkins, panty liners, menstrual sponges, and menstrual cups, including disposable and washable versions of these items.
(c) The Alabama Department of Revenue shall adopt rules and develop any tax forms, directions, and worksheets as necessary to effectuate the intent of this section.
(Act 2025-304, §§1, 2.)
(a) The Diabetes Trust Fund, Inc., and any of its branches or agencies, heretofore or hereafter organized and existing in good faith in the State of Alabama for purposes other than for pecuniary gain and not for individual profit, are exempted from paying any state, county, or municipal sales or use taxes.
(b) The Chilton County Rescue Squad is exempted from paying any sales or use taxes.
(c) The state headquarters only of the American Legion, the American Veterans of World War II, Korea, and Vietnam, also known as AMVETS, the Disabled American Veterans, the Veterans of Foreign Wars, also known as VFW, Alabama Goodwill Industries, and the Alabama Sight Conservation Association are exempted from paying any state, county, or municipal sales or use taxes.
(d) The Grand Chapter of all Orders of the Eastern Star and the South Alabama State Fair Association Southeastern Livestock Exposition of the State of Alabama and any of its agencies, heretofore or hereafter organized and existing in good faith in the State of Alabama for purposes other than for pecuniary gain and not for individual profit, are exempted from paying any state, county, or municipal sales and use taxes.
(e) The Alabama Goodwill Industries, Inc., of Birmingham is exempted from paying any state, municipal, or county sales and use taxes.
(f) The Alabama Federation of Women’s Clubs is exempted from paying any state, county, or municipal sales or use taxes.
(g) The National Conference of State Legislatures and the Council of State Governments are exempted from paying any state, county, or municipal sales or use taxes.
(h) All blind vendors associated with the Business Enterprise Program of the Department of Rehabilitation Services are exempted from paying any state, county, or municipal sales or use taxes.
(i) All vendors who are blind as defined by Section 1-1-3, and who are certified by the Department of Rehabilitation Services, are exempted from paying any state, county, or municipal sales or use taxes.
(j) The Elks Club, B.P.O.E., No. 1887, a corporation, is exempted from paying any state, county, or municipal sales or use taxes. Provided, however, that the exemption provided by this subsection shall not extend to any bar or dining room operation conducted by the Elks Club.
(k) The King’s Ranch, Inc., is exempted from paying any state, county, or municipal sales or use taxes.
(l) The Eye Foundation, Inc., and any of its branches or agencies, heretofore, or hereafter organized and existing in good faith in the State of Alabama for purposes other than for pecuniary gain and not for individual profit, are exempted from paying any state, county, or municipal sales or use taxes.
(m) Any county public hospital association or any Alabama nonprofit membership corporation if one or more of its members is a county public hospital association, and any of its, or their, branches, agencies, lessees, or successors organized pursuant to Section 10-3A-1 et seq., and which operates or maintains hospitals for purposes other than for pecuniary gain and not for individual profit, is exempted from paying any state, county, or municipal sales and use tax of any nature whatsoever. Any of the taxes which were or may be assessed or collected subsequent to December 31, 1993, against any Alabama nonprofit membership corporation or any lessee of any county public hospital association organized as herein stated, pursuant to a lease in writing, will be remitted to the entity which paid them; and no action or proceeding against the association or nonprofit corporation may be instituted after the date by the State of Alabama or any county or municipality thereof or any agent or person acting on behalf thereof for the collection or enforcement of any sales or use tax of any nature whatsoever.
(n) There is exempted from all state, county, and municipal sales taxes the sale of food pursuant to the food distribution program conducted by Christian Service Mission, Inc., an Alabama not-for-profit corporation, in cooperation with World Share, Inc., to enable needy persons to purchase food at substantially discounted prices and in consideration of the performance of charitable or community work by such persons.
(o) Rescue service organizations operating within the State of Alabama which are exempt from federal income taxes under the Internal Revenue Code of 1986, § 501(c)(3) and which are members of the Alabama Rescue Services Association, Incorporated, are exempted from any state, county, and municipal sales and use taxes.
(p) Alabama Goodwill Industries, Inc., Goodwill Industries of Mobile Area, Inc., and Goodwill Industries of Central Alabama, Inc., are exempted from paying any state, county, and municipal sales or use taxes.
(q) The gross receipts from the sale of admissions to a sporting event conducted by the Senior Professional Golfers Association are exempted from any state, county, and municipal sales taxes.
(r) Volunteer, non-profit rescue units operating within the state which do not meet the criteria in subsection (o) but are licensed by the State Board of Health are exempt from any state, county, and municipal sales and use taxes.
(s)(1) The Birmingham Zoo, Inc., is exempt from paying any state, county, and municipal sales and use taxes associated with any and all capital expenditures but shall continue to collect and remit all other taxes to the appropriate taxing authorities.
(2) The exemption provided pursuant to subdivision (1) shall be available until September 30, 2027.
(3) The Birmingham Zoo, Inc., shall report annually to the Department of Revenue on the sales for which the exemption is granted. The Department of Revenue shall prescribe the format of such annual report.
(t)(1) The Zoo Foundation, Inc., operating as the Alabama Gulf Coast Zoo, or any successor entity, is exempt from paying any state, county, and municipal sales and use taxes associated with any and all capital expenditures; provided, however, that any exemption of county sales and use taxes must first be authorized by resolution of the county commission. The Zoo Foundation, Inc., shall continue to collect and remit all other taxes to the appropriate taxing authorities.
(2) The exemption provided pursuant to subdivision (1) shall be available until September 30, 2022.
(3) The Zoo Foundation, Inc., shall report annually to the Department of Revenue on the sales for which the exemption is granted. The Department of Revenue shall prescribe the format of the annual report.
(u) The Josh Willingham Foundation is exempted from paying any state, county, and municipal sales and use taxes.
(v) The Alabama Wildlife Center is exempt from paying any state, county, and municipal sales and use taxes until September 30, 2024.
(Acts 1975, 3rd Ex. Sess., No. 154, p. 400; Acts 1975, 4th Ex. Sess., No. 149, p. 2892; Acts 1978, No. 670, p. 966; Acts 1978, 2nd Ex. Sess., No. 77, p. 1766; Acts 1981, No. 81-790, p. 1388, §1; Acts 1981, No. 81-812, p. 1452; Acts 1984, No. 84-406, p. 954; Acts 1985, No. 85-574, §1; Acts 1985, 2nd Ex. Sess., No. 915; Acts 1985, 2nd Ex. Sess., No. 85-1000, p. 378; Acts 1987, No. 87-549, p. 842; Acts 1988, No. 88-543, p. 842; Acts 1989, No. 89-749, p. 1516; Acts 1989, No. 89-829, p. 1660; Acts 1991, No. 91-324, p. 643, §1; Acts 1993, No. 93-484, p. 777, §1; Acts 1993, No. 93-757, p. 1511, §1; Acts 1994, No. 94-596, p. 1103, §1; Acts 1995, No. 95-692, p. 1507, §1; Act 2015-384, p. 1170, §§1-3; Act 2018-568, §1; Act 2019-488, §1; Act 2023-309, §1.)
(a) If any person shall engage in or continue in any business for which a privilege tax is imposed by Section 40-23-2 as a condition precedent to engaging or continuing in such business, the person shall apply for and obtain from the Department of Revenue a license to engage in and to conduct such business for the current tax year upon the condition that the person shall pay the taxes accruing to the State of Alabama under this division; provided, that no license shall be issued under this division to any person who has not complied with this division, and this division shall not be construed as relieving any person from the payment of any license or privilege tax now or hereafter imposed by law.
(b)(1) Any person applying for an initial license or the renewal of an expired or cancelled license on or after January 1, 2020, who is in the business of selling at retail products that may be purchased from a seller, as defined in Section 40-23-260, shall be required to purchase and maintain a one-time surety bond for a two-year period, executed by the applicant as principal and by a corporate surety company qualified to do business in this state as surety, in the amount of twenty-five thousand dollars ($25,000). The bond shall be in a form to be approved by the commissioner and shall be conditioned upon the licensee collecting and remitting sales tax pursuant to this chapter and any rules adopted thereunder. The bond shall be payable to the commissioner and to his or her successors in office.
(2) Any person required to purchase and maintain a one-time surety bond as provided for in subdivision (1), in lieu of purchasing the surety bond, may deposit with the department certified funds equivalent to the amount of the surety bond.
(3) The department shall provide a waiver for the surety bond as required pursuant to subdivision (1) where the person applying for an initial license or the renewal of an expired or cancelled license and a current licensee are related parties as defined in Section 40-23-190(c), or members of a controlled group of corporations as defined in 26 U.S.C. § 1563, or with respect to any other business, whether or not incorporated, which would be members of a controlled group if similar rules applied to the business, and the related party’s current licensee has been compliant over the previous two-year period.
(c)(1) Any licensee who becomes non-compliant in the collection and remittance of sales tax during any period occurring on or after January 1, 2020, shall be required to purchase and maintain a one-time surety bond for a two-year period in the amount of the actual sales tax liability for the three months immediately preceding the non-compliant period; provided, however, the surety bond shall not be less than the amount as prescribed in subdivision (b)(1). For the purpose of this section, a licensee shall be deemed non-compliant when a final assessment that has been entered against the licensee is no longer subject to appeal and the licensee has not paid or otherwise satisfied the liability associated with the final assessment within 30 days from the date on which the final assessment was no longer subject to appeal. The surety bond shall be in a form to be approved by the commissioner and shall be conditioned upon the licensee collecting and remitting sales tax pursuant to this chapter and any rules adopted thereunder. The bond shall be payable to the commissioner and to his or her successors in office.
(2) Any licensee required to purchase and maintain a one-time surety bond as provided for in subdivision (1), in lieu of purchasing the surety bond, may deposit with the department certified funds equivalent to the amount of the surety bond.
(3) The department shall notify a licensee at his or her last known address by first class U.S. mail or by certified mail, return receipt requested, when a bond is being required pursuant to subdivision (1). The licensee, within 30 days from the date the notice is mailed by the department, shall file the bond or make a deposit of certified funds as requested by the department or file a notice of appeal with the Alabama Tax Tribunal as allowed under Section 40-2A-8(a). The department may immediately cancel a license upon the expiration of the 30-day period set out above if the licensee fails to either provide the required surety bond, make a deposit of certified funds, or timely appeal to the Alabama Tax Tribunal. Furthermore, a cancelled license shall not be renewed until the licensee provides the required surety bond or deposit of certified funds.
(d) After two years of continuous compliance, a licensee shall be exempt from the surety bond requirement so long as the licensee collects and timely remits sales tax pursuant to this chapter and any rules adopted thereunder.
(Acts 1959, 2nd Ex. Sess., No. 100, p. 298, §4; Act 2018-508, §1; Act 2022-53, §5.)
(a) The commissioner, subject to the appeal provisions allowed in Chapter 2A, may suspend or revoke a license, or deny a license application or renewal, issued under Section 40-12-221, 40-23-6, or 40-23-66 for reasonable cause including the following:
(1) Fraud practiced or any material misstatement in the license application.
(2) Changes of conditions in ownership or business structure after a license is granted or the failure to engage in or continue to engage in business for which the license is issued.
(3) Failure to comply with Chapter 12 and this chapter, or any rule adopted thereunder.
(4) Failure to provide or maintain a surety bond or in lieu of purchasing the surety bond, deposit with the department certified funds equivalent to the amount of the surety bond, as required in Section 40-23-6.
(b) The Department of Revenue may adopt rules to administer this section.
(Act 2019-253, §2; Act 2022-53, §5.)
(a) The taxes levied under this division, except as otherwise provided in subsection (d), shall be due and payable in monthly installments on or before the 20th day of the month next succeeding the month in which the tax accrues.
(b) Except as otherwise provided in subsection (d), on or before the 20th day of each month, every person on whom the taxes levied by this division are imposed shall report to the department, on a form prescribed by the department, a true and correct statement showing such information as the department may require, and shall pay to the department the amount of taxes shown to be due.
(c) Any taxpayer liable for taxes under this division whose average monthly state sales tax liability was twenty thousand dollars ($20,000) or greater during the preceding calendar year shall make estimated payments to the department on or before the 20th day of the month in which the liability occurs as follows:
(1) The amount of the first estimated payment shall be 66 2/3 percent of the taxpayer’s actual tax liability for the month of October 1983; thereafter the amounts of the payment shall be the lesser of 66 2/3 percent of the taxpayer’s actual tax liability for the same calendar month of the preceding year or 66 2/3 percent of the current month’s estimated liability.
(2) Any outstanding credit or deficit arising from the taxpayer’s overpayment or underpayment of his or her final liability shall be applied to either increase or reduce that month’s final tax liability which shall be reported and paid not later than the 20th day of the month next succeeding the month in which the tax accrues.
(3) This subsection shall not apply to Sections 11-51-180, 11-51-200, 40-12-4, nor to any municipal or county taxes levied by past or future special or local acts of the Legislature.
(d) Taxpayers meeting the criteria set forth in this subsection may elect to file quarterly, semi-annually, or annually. Any election to file quarterly, semi-annually, or annually shall be made in writing no later than February 20 of each year and shall be filed with the department in the manner prescribed by the department. Qualifying taxpayers electing to file quarterly, semi-annually, or annually, shall report to the department, on a form prescribed by the department, a true and correct statement showing such information as the department may require. Qualifying taxpayers shall pay to the department the amount of tax shown to be due on or before the applicable deadlines, under any rules as may be prescribed, as follows:
(1) When the total state sales tax for which any person is liable under this division is less than two thousand four hundred dollars ($2,400) during the preceding calendar year, the person may elect to file quarterly returns. Quarterly returns and payments of the amount of tax shown to be due shall be due on or before the 20th day of the month next succeeding the end of the quarter for which the tax is due.
(2) When the total state sales tax for which any person is liable under this division is less than one thousand two hundred dollars ($1,200) during the preceding calendar year, or the person liable for the tax has made retail sales in this state during no more than two, 30 consecutive day periods during the preceding calendar year, the person may file semi-annual returns. The semi-annual returns and payment of the amount of the tax shown to be due shall be due on or before July 20 and January 20 following the end of the six-month period for which the tax is due.
(3) When the total state sales tax for which any person is liable under this division during the preceding calendar year is less than six hundred dollars ($600), or the person liable for the tax has made retail sales in this state during no more than one, 30 consecutive day period during the preceding calendar year, the person may elect to file an annual return. The annual return and payment of the tax shown to be due shall be due on or before January 20 following the end of the annual period for which the tax is due.
(e) The department, for good cause, may extend the time for making any state or state-administered return required under this division, but the time for filing any such return shall not be extended for a period greater than 30 days from the date such return is due to be made.
(Acts 1959, 2nd Ex. Sess., No. 100, p. 298, §5; Acts 1984, No. 84-248, p. 391; Act 98-192, p. 310, §9; Act 2014-316, p. 1120, §2; Act 2019-253, §1; Act 2022-53, §5; Act 2023-422, §1.)
Any person taxable under this division, having cash and credit sales, may report such cash sales, and the taxpayer shall thereafter include in each monthly report all credit collections made during the month preceding, and shall pay the taxes due thereon at the time of filing such report, but in no event shall the gross proceeds of credit sales be included in the measure of the tax to be paid until collections of such credit sales shall have been made.
(Acts 1959, 2nd Ex. Sess., No. 100, p. 298, §6.)
It shall be the duty of every person engaging or continuing in this state in any business for which a privilege tax is imposed by this division, to keep and preserve suitable records of the gross sales, gross proceeds of sales, and gross receipts or gross receipts of sales of such business and such other books or accounts as may be necessary to determine the amount of tax for which he is liable, under the provisions of this division. It shall be the duty of every person to keep and preserve all invoices of goods, wares, and merchandise purchased, for resale or otherwise, and all such books, invoices, and other records shall be open for examination by the Department of Revenue or its duly authorized agent. Any person selling both at wholesale and retail shall keep his books so as to show separately the gross proceeds of wholesale sales and the gross proceeds of retail sales. All sales shall be subject to tax in the absence of such separate records.
(Acts 1959, 2nd Ex. Sess., No. 100, p. 298, §7; Acts 1992, No. 92-186, p. 349, §65.)
The monthly reports herein required to be made are not required to be made on oath, but wherever in this division any report is required to be sworn to, the same shall be sworn to by the taxpayer or his agent before some officer authorized to administer oaths, and any false statement to a material fact made with intent to defraud shall constitute perjury, and upon conviction thereof, the person so convicted shall be punished as provided by law.
(Acts 1959, 2nd Ex. Sess., No. 100, p. 298, §8.)
Any person subject to the provisions of this division who shall fail to make the reports or any of them, as herein required, or who shall fail to keep the records as herein required, shall be guilty of a misdemeanor, and upon conviction shall be fined not less than $25 nor more than $500 for each offense. Each month of such failure shall constitute a separate offense.
(Acts 1959, 2nd Ex. Sess., No. 100, p. 298, §9.)
Any person subject to the provisions of this division willfully refusing to make the reports herein required, or who shall refuse to permit the examination of his records by the Department of Revenue, or its duly authorized agents, shall be guilty of a misdemeanor, and upon conviction shall be fined not less than $50 nor more than $500 for each offense, and in addition may be imprisoned in the county jail for a period not to exceed six months. Each month of failure to make such reports shall constitute a separate offense, and each refusal of a written demand of the department to examine, inspect or audit such records shall constitute a separate offense.
(Acts 1959, 2nd Ex. Sess., No. 100, p. 298, §10.)
For the purpose of securing the payment of any tax, penalties or interest due or which may become due under the provisions of this division, every itinerant vendor engaged in the business of selling tangible personal property at retail in this state is required to file a bond with the Department of Revenue, conditioned upon the payment of any tax, penalty or interest due or to become due under this division and upon faithful observance of the provisions of the division. Such bond shall be effective for a period of one year from date of issuance and shall be fixed by the department in an amount equal to the tax estimated due or to become due under the provisions of this division, but not less than $100 nor more than $1,000, and shall have a surety or sureties satisfactory to the department. It shall be filed with the department within 10 days after notice in writing has been issued by the commissioner or any person designated by him in writing for this purpose, and sent by registered or certified mail to the last known address of any itinerant vendor or has been personally served upon him by a duly accredited representative of the department. If such itinerant vendor fails to make any return due under this division or to pay any taxes or penalties due under this division or to keep books and records as required by this division or fails to perform any other duty or obligation imposed on him under this division, such bond shall thereupon be forfeited, and the department shall institute an action upon such bond in the name of the State of Alabama for the entire amount of said bond and costs.
(Acts 1959, 2nd Ex. Sess., No. 100, p. 298, §22.)
Any person subject to the provisions hereof who shall sell out his business or stock of goods, or shall quit business, shall be required to make out the return provided for under Section 40-23-7 within 30 days after the date he sold out his business or stock of goods, or quit business, and his successor in business shall be required to withhold sufficient of the purchase money to cover the amount of said taxes due and unpaid until such time as the former owner shall produce a receipt from the Department of Revenue showing that the taxes have been paid, or a certificate that no taxes are due. If the purchaser of a business or stock of goods shall fail to withhold purchase money as above provided the taxes shall be due and unpaid after the 30-day period allowed, he shall be personally liable for the payment of the taxes accrued and unpaid on account of the operation of the business by the former owner. If in such cases the department deems it necessary in order to collect the taxes due the state, it may make a jeopardy assessment as provided in Chapter 29 of this title.
(Acts 1959, 2nd Ex. Sess., No. 100, p. 298, §23; Acts 1992, No. 92-186, p. 349, §66.)
(a) Every person, firm, corporation, association or copartnership engaged in or continuing within this state in the business for which a license or privilege tax is required by this division shall add to the sales price and collect from the purchaser on all sales upon the gross receipts or gross proceeds of which there is levied by this division a sales tax at the rate of four percent, $.04 tax for each whole dollar of sales price; provided, that on that part of the sales price which is a fractional part of a dollar, in addition to whole dollars, and on sales of less than a dollar there shall be collected in addition to the tax collected on whole dollars, no tax on $.01 to and including $.10 of sales price, $.01 tax on $.11 to and including $.30 of sales price, $.02 tax on $.31 to and including $.54 of sales price, $.03 tax on $.55 to and including $.73 of sales price, and $.04 tax on $.74 to and including $.99 of sales price. Upon sales the gross receipts or gross proceeds of which are taxed by this division at a rate less than four percent, there shall be added to the sales price and collected from the purchaser by such person, firm, corporation, association or copartnership described in this section an amount equal to the prescribed percentage of such sales price.
(b) It shall be unlawful for any person, firm, corporation, association or copartnership described in this section to fail or refuse to add to the sales price and collect from the purchaser the amount required by this section to be so added to the sales price and collected from the purchaser; and it shall likewise be unlawful to refund or offer to refund all or any part of the amount collected, or to absorb or advertise directly or indirectly the absorption or refund of the amount required to be added to the sales price and collected from the purchaser, or any portion of such amount. Any person, firm, corporation, association or copartnership violating any of the provisions of this section shall be guilty of a misdemeanor, and upon conviction shall be fined in a sum of not less than $50 nor more than $100, or may be imprisoned in the county jail for not more than six months, or may be punished by both such fine and imprisonment, and each act in violation of the provisions of this division shall constitute a separate offense. The provisions of this section that there shall be added to the sale price and collected from the purchaser the amounts provided herein shall in no way relieve the person, firm, corporation, association or copartnership described in this section of the tax levied by this article; nor shall the inability, impracticability, refusal or failure to add to the sales price and collect from the purchaser the amounts provided herein relieve such person, firm, corporation, association or copartnership from the tax levied by this division.
(c) All taxes paid in pursuance to this division or any other statute enacted in this connection shall conclusively be presumed to be a direct tax on the retail consumer, precollected for the purpose of convenience and facility only.
(d) In the event that any sum is collected from a consumer that purports to be collected because of this section, whether or not the amount is actually provided for hereunder, then any such sum, except such as is collected solely because of rounding the correct amount of tax upward to the nearest cent, shall be paid to the Department of Revenue for the purposes provided in Section 40-23-35.
(Acts 1959, 2nd Ex. Sess., No. 100, p. 298, §24; Acts 1963, 2nd Ex. Sess., No. 106, p. 286, §2; Acts 1987, No. 87-662, p. 1170.)
(a) The amount of an in-person cash transaction may be rounded to the nearest five cents using the following methodology:
(1) If the final digit of the amount in the transaction is one or two, the final digit must be rounded down to zero.
(2) If the final digit is three or four, the final digit must be rounded up to five.
(3) If the final digit is six or seven, the final digit must be rounded down to five.
(4) If the final digit is eight or nine, the final digit must be rounded up to zero.
(5) If the final digit is five or zero, the final digit must not be rounded.
(b) Subsection (a) does not alter the sales price, the amount of tax collected under Section 40-23-26, or any other authority providing for the collection of sales tax, or any surcharges, assessments, or fees imposed on the sale.
(c)(1) Subsection (a) may apply to the amount of the transaction or to the amount of change tendered to the purchaser.
(2) Subsection (a) shall not apply to any transaction for which payment is made by a method other than cash, including electronic funds transfer, check, gift card, money order, or credit card. If the transaction is made using both cash and another form of payment, subsection (a) shall apply to the portion of the transaction amount which is paid for using cash.
(3) Subsection (a) shall not alter or affect any payment amount authorized, cleared, or settled through any payment system that does not use cash.
(4) Subsection (a) shall not apply to any transaction where payment is made to a governmental entity. For purposes of this subdivision, “governmental entity” means any state or local agency or instrumentality thereof located in the state.
(d) The Department of Revenue shall post a notice on the department’s website stating the authorization to begin rounding transactions pursuant to this section.
(Act 2026-548, §1.)
(a) As used in this section, the following terms have the following meanings:
(1) CREDIT CARD. Any card, plate, coupon book, or other credit device existing for the purpose of obtaining money, property, labor, or services on credit. The term shall also mean any card or other payment code or device issued or approved for use through a payment card network to debit an asset account, regardless of the purpose for which the account is established, whether authorization is based on signature, personal identification number, or other means. The term includes a general-use prepaid card, as defined in 15 U.S.C. § 16931-1(a)(2)(A). The term does not include paper checks.
(2) ELECTRONIC PAYMENT TRANSACTION. A transaction in which a person uses a debit card, credit card, or other payment code or device issued or approved through a payment card network to debit a deposit account or use a line of credit, whether authorization is based on a signature, personal identification number, or other means.
(3) CREDIT CARD TRANSACTION FEE. A fee assessed on purchases made by debit or credit card to offset interchange fees charged to a merchant or seller.
(b) The amount of any credit card transaction fee charged for an electronic payment transaction shall be excluded from the amount on which basis sales and use tax is assessed for that electronic payment transaction.
(c) The Department of Revenue shall establish rules to administer the provisions of this section.
(Act 2026-587, §1.)
Any taxpayer who shall violate any of the provisions of this division may be restrained from continuing in business, and the proper prosecution shall be instituted in the name of the State of Alabama by its Attorney General, by the counsel of the Department of Revenue or under their direction by any district attorney of the state until such person shall have complied with the provisions of this division.
(Acts 1959, 2nd Ex. Sess., No. 100, p. 298, §25.)
The tax imposed by this division shall be in addition to all other licenses and taxes levied by law as a condition precedent to engaging in any business taxable hereunder, except as in this division otherwise specifically provided.
(Acts 1959, 2nd Ex. Sess., No. 100, p. 298, §26.)
The administration of this division is vested in and shall be exercised by the Department of Revenue, except as otherwise herein provided, and the enforcement of any of the provisions of this division in any of the courts of the state shall be under the jurisdiction and supervision of the department, and the department may require the assistance of, and act through the district attorney and the Attorney General of the state, and any legal counsel of the Department of Revenue.
The department shall appoint as needed such agents, clerks and stenographers as may be necessary to enforce provisions of this division under the provisions of the merit system, who shall perform such duties as may be required, and such duly appointed and qualified agents are authorized to act for the department as it may direct and as is authorized by law.
Before entering upon the duties of their office, all agents of the department for the administration of the sales tax shall execute to the State of Alabama a bond, to be approved by the Governor, in the amount of $5,000, for the faithful performance of their duties.
(Acts 1943, No. 122, p. 123; Acts 1959, 2nd Ex. Sess., No. 100, p. 298, §28; Acts 1961, Ex. Sess., No. 208, p. 2190.)
The Department of Revenue shall from time to time promulgate such rules and regulations for making returns and for ascertainment, assessment and collection of the tax imposed hereunder as it may be deemed necessary to enforce its provisions; and upon request shall furnish any taxpayer with a copy of such rules and regulations. The department may adopt rules and regulations providing for the issuance of permits to manufacturers to purchase tangible personal property without the payment to the vendor of the sales tax, and providing for such manufacturer to report and pay such tax directly to the department, in instances where the department determines that it is practically impossible at the time of purchase for such manufacturer or his vendors to determine with any degree of certainty the applicability of such tax, and that such provisions will facilitate and expedite the collection of the tax which may be due from such consumer; and such provisions may also be made applicable to persons engaged in the business of mining, quarrying, compounding or processing tangible personal property, railroads, transportation companies and others.
(Acts 1959, 2nd Ex. Sess., No. 100, p. 298, §29.)
All taxes or other funds received or collected by the Department of Revenue under the provisions of this division shall be without delay deposited in the Treasury.
(Acts 1959, 2nd Ex. Sess., No. 100, p. 298, §31.)
(a) Such amount of money as shall be appropriated for each fiscal year by the Legislature to the Department of Revenue with which to pay the salaries, the cost of operation and management of the department shall be deducted, as a first charge thereon, from the taxes collected under the provisions of this division; provided, that the expenditure of the sum so appropriated shall be budgeted and allotted pursuant to Article 4 of Chapter 4 of Title 41 and limited to the amount appropriated to defray the expenses of operating the department for each fiscal year. After the payment of the expenses, so much of the amount remaining as may be necessary, after first applying all sums of money received by reason of the application of the surplus in the income tax as provided by Section 40-18-58, for the replacement in the public school fund of the three-mill constitutional levy for schools and in the General Fund of the one-mill levy for soldiers’ relief and the two and one-half mills for general purposes lost by exemption of homestead provided for in this division shall be first charges against the proceeds of the licenses, taxes, or receipts levied or collected under this division. The Comptroller, with the approval of the Governor, is hereby directed to draw his or her warrants payable out of the total proceeds of the licenses, taxes, or receipts levied or collected under this division as herein provided in such sum as shall be found necessary to take care of and replace the three-mill constitutional school levy, the one-mill soldiers’ relief levy, and the two and one-half mill levy for general purposes of the state ad valorem taxes lost as above set forth.
(b) Of the amounts of such collections in any fiscal year remaining after the payment of the expenses of administration and replacement of the amounts in the several funds as herein provided, there shall be paid into the State Treasury sums to be credited as follows:
(1) To the credit of the 67 counties of the state, to be divided and distributed as hereinafter provided, three hundred seventy-eight thousand dollars ($378,000);
(2) To the Department of Human Resources, one million three hundred twenty-two thousand dollars ($1,322,000); and
(3) Beginning June 1, 2000, to the Department of Conservation and Natural Resources for capital outlay for acquisition of land contiguous to existing state parks and land acquired for lakes and or water reservoirs, provision, construction, improvement, renovation, equipping, and maintenance of the state parks system only and not for use by the Department of Conservation and Natural Resources for personnel or administrative use, the sum equal to the increase in receipts accruing to the State of Alabama due to the cap on discounts per license holder in Section 40-23-36(b), which increase shall be equal to the difference between the discount rate or amount allowed under Section 40-23-36(b) and the maximum discount rate allowable under Section 40-23-36(a); provided, however, if at any time any bonds of the Alabama State Parks System Improvement Corporation, or the Alabama Public Historical Sites and Parks Improvement Corporation, are outstanding (excluding bonds that have been refunded by the establishment of an escrow trust for the payment thereof consisting solely of bonds or other obligations which as to principal and interest constitute direct obligations of, or are unconditionally guaranteed by, the United States of America) there shall first be paid into the State General Fund from such collections an amount equal to the debt service (principal, interest, and premium, if any) payable on such bonds in the then current fiscal year of the state. Provided, however, that one million dollars ($1,000,000) of such increase in receipts per fiscal year shall be credited to the Department of Human Resources beginning October 1, 1996, until September 30, 2002, and shall be expended for the foster children program.
(4)a. On October 1, 2002, to the Department of Conservation and Natural Resources for capital outlay, repairs and maintenance of the state parks system only, the minimum sum of five million dollars ($5,000,000) from the increase in receipts accruing to the State of Alabama due to the cap on discounts per license holder in Section 40-23-36(b) as calculated in Section 40-23-35(b)(3). Beginning October 1, 2003, through September 30, 2021, annually, to the Department of Conservation and Natural Resources for capital outlay, repairs, and maintenance of the state parks system only, the sum calculated by a fraction, the numerator of which is five million dollars ($5,000,000) and the denominator of which is equal to the increase in receipts as calculated in subdivision (3) for fiscal year 2002 accruing to the State of Alabama multiplied by the increase in receipts as calculated in subdivision (3) for the then current fiscal year, or the sum of five million dollars ($5,000,000), whichever is greater. Notwithstanding the previous sentence, for the fiscal years ending September 30, 2012, and September 30, 2013, only, the five million dollars ($5,000,000) shall be transferred to the State General Fund.
b. Beginning October 1, 2021, annually, to the Department of Conservation and Natural Resources for capital outlay, repairs, and maintenance of the state parks system only, seven million dollars ($7,000,000). Beginning with the fiscal year that starts October 1, 2022, the State Treasurer shall annually adjust the dollar amount in this paragraph to reflect the cumulative change in the Consumer Price Index for All Urban Consumers (CPI-U), as published by the Bureau of Labor Statistics of the United States Department of Labor, or a successor index, for the annual period ending on the December 31 preceding the adjustment date and rounded to the nearest one thousand dollars ($1,000).
c. Beginning October 1, 2002, to the credit of the State General Fund, the balance of the sum equal to the increase in receipts accruing to the State of Alabama due to the cap on discounts per license holder in Section 40-23-36(b).
(c) One-half of the amount deposited to the credit of the 67 counties as above provided shall be divided and distributed proportionately among the 67 counties of the state according to the population of the counties as shown by the last federal census as proclaimed, published, or certified by the Director of the Bureau of the Census; and one-half of the proceeds shall be divided or distributed equally among 67 counties; provided, that the funds divided and distributed to the several counties of the state as hereinabove provided for shall be used exclusively for full-time health service in cooperation with the Alabama Department of Public Health or the federal government, and for extension services in cooperation with the Alabama Agriculture Extension Service or the federal government, at the discretion of the county commissions of the several counties of the state.
(d) The amounts provided in subsection (b) for the Department of Human Resources shall be used for general welfare purposes. For purposes of this division, “general welfare purposes” means:
(1) The administration of public assistance as set out in Sections 38-2-5 and 38-4-1;
(2) Services, including supplementation and supplementary services under the federal Social Security Act, to or on behalf of persons to whom such public assistance may be given under Section 38-4-1;
(3) Services to and on behalf of dependent, neglected, or delinquent children; and
(4) Investigative and referral services to and on behalf of needy persons.
(e) In addition, there shall be paid, commencing on January 1, 1978, and on the first day of each fiscal quarter thereafter, to the Department of Human Resources for a statewide, state-administered food stamp program, as authorized by the Food Stamp Act of 1964, Public Law 88-525, 88th Congress, and amendments thereto, an amount equal to five percent of the value of food stamp benefits issued statewide in excess of the amount paid by recipients (bonus or free stamps) during the immediate prior fiscal quarter, which sum so appropriated shall be paid quarterly to the Department of Human Resources Trust Fund for administration of the food stamp program in conformity with rules and regulations adopted by the United States Department of Agriculture and in conformity with Sections 38-1-1 through 38-6-9. The administrative funds shall be limited to and based on fiscal year 1976-77 administrative costs, normal inflationary increases, and mandated administration requirements of the Alabama Legislature and the United States Department of Agriculture. The Department of Human Resources will not staff any county food stamp office at a level that exceeds the average staff-to-recipient ratios that existed in Alabama during fiscal year 1976-77. This restriction will apply in coordination with those provided hereinabove and, should conflict occur, the lesser amount of expenditure shall be required. At the end of each fiscal year, an accounting shall be made of the sum so that any unexpended and unencumbered balance of funds may be determined for the purpose of paying such balance to the Education Trust Fund.
(f) The amount of the proceeds of all taxes levied by this division remaining after the payment of the expenses of administration and enforcement and the replacement in the several funds of the amount lost by any homestead exemptions and the distribution as provided in subsections (b) and (d), shall be paid into the Education Trust Fund except as provided in Section 40-23-2(4) and Section 40-23-61(c), and except those collected on consumable vapor products as defined in Section 40-23-1(a)(15), and, beginning January 1, 2027, those collected on construction related transaction taxes on building materials, building fixtures, structural components, real property improvements, power infrastructure for transformation, distribution, or management of electricity, backup power generation systems, and battery systems for data processing centers under Section 40-9B-4(c)(2), which shall be distributed to the State General Fund.
(Acts 1959, 2nd Ex. Sess., No. 100, p. 298, §32; Acts 1973, No. 823, p. 1289; Acts 1973, No. 1135, p. 1916; Acts 1978, No. 359, p. 300, §1; Acts 1988, 1st Ex. Sess., No. 88-867, p. 372, §2; Acts 1996, No. 96-785, p. 1459, §1; Act 2000-731, p. 1578, §2; Act 2011-642, p. 1633, §1; Act 2015-535, 2nd Sp. Sess., p. 1901, §1; Act 2021-445, §1; Act 2026-573, §1.)
(a) The Governor may, by executive order, authorize the Department of Revenue to provide by proper rules and regulations for the allowance of a discount, not to exceed five percent of the first $100 of taxes levied and two percent of the taxes levied over $100 by this division and due and payable to the state by any person licensed under the provisions hereof; provided, that no discount shall be authorized or allowed upon any taxes which are not paid before delinquency, as in this division provided.
(b) For any taxes collected by the license holder on or after June 1, 1996, the Governor may, by executive order, authorize the Department of Revenue to provide by proper rules and regulations for a maximum discount amount or rate to any license holder and shall be limited to that amount or rate for each retail license holder regardless of the number of retail locations of that license holder within the state.
(Acts 1959, 2nd Ex. Sess., No. 100, p. 298, §34; Acts 1996, No. 96-785, p. 1459, §2; Act 2000-731, p. 1578, §2.)
There is hereby levied, in lieu of the state sales tax levied by Section 40-23-2, a privilege or license tax against the person on account of the business activities engaged in and in the amount to be determined by the application of rates against gross sales, or gross receipts, as the case may be as follows:
Upon every person, firm, or corporation engaged or continuing within this state in the business of selling at retail any machine, machinery, vessel, or equipment that is used in planting, cultivating, and harvesting farm products used in the capture, attempted capture, or processing of fish or other seafood by means of commercial fishing by a holder of a commercial license issued pursuant to Chapter 12 of Title 9; or used in connection with the production of agricultural produce or products, livestock or poultry on farms, and the parts of such machines, machinery, vessel, or equipment, attachments and replacements therefor which are made or manufactured for use on or in the operation of such machine, machinery, vessel, or equipment, and which are necessary to and customarily used in the operation of such machine, machinery, vessel, or equipment, an amount equal to one and one-half percent of the gross proceeds of the sale thereof; provided, that the one and one-half percent rate herein prescribed with respect to parts, attachments and replacements shall not apply to any automotive vehicle or trailer designed primarily for public highway use, except farm trailers used primarily in the production and harvesting of agricultural commodities.
Where any used machine, machinery, vessel, or equipment that is used in planting, cultivating and harvesting farm products, or used in connection with the production of agricultural produce or products, livestock, and poultry on farms is taken in trade or in a series of trades as a credit or part payment on a sale of a new or used machine, machinery, vessel, or equipment, the tax levied herein shall be paid on the net difference, that is, the price of the new or used machine, machinery, vessel, or equipment sold, less the credit for the used machine, machinery, vessel, or equipment taken in trade.
(Acts 1965, No. 383, p. 516, §1; Acts 1966, Ex. Sess., No. 405, p. 550; Acts 1973, No. 1072, p. 1826; Act 2022-199, §1.)
Section 40-23-37 shall be enforced by the Commissioner of Revenue and the Department of Revenue in the same way, and subject to the same rules and regulations as the state sales tax is enforced as provided in this division, and the administrative and enforcement provisions of this division shall be applicable to the enforcement of Section 40-23-37 to the same extent as in the collection and enforcement of the state sales tax.
(Acts 1965, No. 383, p. 516, §2.)
(a) Notwithstanding any other provision of law, the purchaser of tangible property purchased in the state, with the intent that the property is to be retained in the state only temporarily and is solely for export to a foreign country, shall be entitled to a refund from the Department of Revenue against the total amount of all sales taxes paid if the purchaser’s records reflect that it was the intent of the purchaser to use the property in a foreign country at the time of purchase and that, in fact, the property was exported from Alabama, and that when ocean transportation is required and scheduled service to the desired port overseas is available through the Port of Mobile, the Port of Mobile is used for shipment. This subsection shall apply to purchases made and stockpiled after July 1, 1996.
(b) Notwithstanding subsection (a) or any other provision of law, the purchase of a new passenger vehicle or new truck with a gross weight not exceeding 8,000 pounds:
shall be exempt from all state sales and use taxes levied under this chapter and all municipal and county sales and use taxes.
(c) This section shall be read in pari materia with all other vehicle registration laws, specifically, Section 32-6-210.
(Acts 1996, No. 96-698, p. 1168, §1; Act 97-919, p. 310, §§ 3, 4; Act 97-936, p. 504, §§3, 4.)
(a) On June 15, 2023, the definition of “food” in Sections 40-23-1 and 40-23-60 shall apply to county and municipal sales and use taxes. For purposes of county and municipal sales and use taxes, the sales tax rate on food shall be established as the general or retail sales tax rate in effect in the county or municipality on June 15, 2023, unless otherwise provided by law. An act of the Legislature or an ordinance or resolution adopted by a county or municipal governing body levying a county or municipal sales and use tax inclusive of food passed or enacted on or before June 15, 2023, shall remain operative, but no additional county or municipal sales and use taxes on food may be levied.
(b) Any county or municipal governing body, by resolution or ordinance, may reduce the general or retail sales tax rate on food for local sales and use taxes. The ordinance or resolution must be adopted at least 60 days prior to becoming effective and shall take effect on October 1 following adoption.
(c) A county or municipal governing body that reduces its general or retail sales tax rate on food for local sales and use taxes pursuant to this section may subsequently increase the rate on food not to exceed the rate in effect in the county or municipality on June 15, 2023, unless otherwise provided by law.
(Act 2023-554, §2; Act 2025-305, §1.)
(a) There is hereby levied, in addition to all other taxes of every kind now imposed by law, and shall be collected, as herein provided, a privilege or license tax against the person on account of the business activities engaged in and in the amount to be determined by the application of rates against gross receipts, as follows:
Upon every person, firm or corporation engaged or continuing within this state in the business of contracting to construct, reconstruct or build any public highway, road, bridge, or street, an amount equal to five percent of the gross receipts derived from performance of such contracts. The term “gross receipts” is herein defined to include only those amounts derived and received by the contractor from the performance of such contracts.
(b) The proceeds of the taxes levied by this section, after deduction of the cost of administration and collection of such taxes, shall be distributed as follows:
(1) Fifteen percent of the residue remaining after deduction of the cost of administration and collection shall be paid into the State Treasury and shall be credited to the Pensions and Security Trust Fund to be used for general welfare purposes, and
(2) Eighty-five percent of the residue remaining after deduction of the cost of administration and collection shall be paid into the State Treasury and shall be credited to the Alabama Special Mental Health Fund to be used for mental health purposes.
(c) The taxes imposed pursuant to this section shall constitute a debt due the state and may be collected by civil action, in addition to all other methods provided by law and in this section. The said taxes, together with interest and penalties with respect thereto, shall constitute and be secured by a lien upon the property of any person from whom said taxes are due or who is required to pay said taxes. All provisions of the revenue laws of this state which apply to the enforcement of liens for license taxes due the state shall apply fully to the collection of the taxes levied herein, and the Department of Revenue shall collect such taxes and enforce this section and shall have and exercise for such collection and enforcement all rights and remedies that this state or the department has for collection of the state sales tax. All provisions of the state sales tax, with respect to definitions, except the definition of “gross receipts” contained therein, payment and assessment of the state sales tax, making of reports and keeping and preserving records with respect thereto, interest after the due date of tax, penalties for failure to pay tax or otherwise complying with the state sales tax statutes, the promulgation of rules and regulations and the administration and enforcement of the state sales tax statutes, which are not inconsistent with the provisions of this section when applied to the tax levied pursuant to subsection (a) of this section, shall apply to the tax levied herein. The Commissioner of Revenue and the state Department of Revenue shall have and exercise the same powers, duties and obligations with respect to the taxes levied herein as are imposed on the commissioner and the department by the state sales tax statutes. All provisions of the state sales tax statutes that are made applicable in this section to the taxes levied herein and to the administration of this section are incorporated herein by reference and made a part hereof as if fully set forth herein; provided, that the provisions of the state sales tax with respect to the collection by the taxpayer of the tax levied therein shall not apply, the taxes levied herein being levied against the person required to pay the tax to the state.
(d) The taxes levied herein shall not apply with respect to contracts made by the contractor with any county or incorporated city or town, except that contracts in which the State of Alabama is a joint party with the city, town or county shall be subject to the tax, nor to that portion of the gross receipts received by the contractor constituting additional amounts paid to the contractor under contractual escalation provisions allowing for an increase in the contract price for escalations in the cost of fuels, materials, and/or labor.
(Acts 1963, No. 308, p. 787; Acts 1971, No. 1517, p. 2635; Acts 1981, No. 81-682, p. 1151; Acts 1983, No. 83-723, p. 1177.)
For the purpose of this article, the following terms have the respective meanings ascribed to them in this section:
(1) PERSON or COMPANY. Any individual, firm, company, partnership, association, corporation, receiver or trustee, or any other group or combination acting as a unit, and the plural as well as the singular number, unless the intention to give a more limited meaning is disclosed by the context.
(2) DEPARTMENT. The Department of Revenue of the State of Alabama.
(3) COMMISSIONER. The Commissioner of Revenue of the State of Alabama.
(4) WHOLESALE SALE or SALE AT WHOLESALE. Any one of the following:
a. A sale of tangible personal property by wholesaler to licensed retail merchants, jobbers, dealers, or other wholesalers for resale and does not include a sale by wholesalers to users or consumers, not for resale.
b. A sale of tangible personal property or products, including iron ore, and including the furnished container and label of such property or products, to a manufacturer or compounder which enter into and become an ingredient or component part of the tangible personal property or products which the manufacturer or compounder manufactures or compounds for sale, whether or not such tangible personal property or product used in manufacturing or compounding a finished product is used with the intent that it become a component of the finished product; provided, however, that it is the intent of this section that no sale of capital equipment, machinery, tools, or product shall be included in the term “wholesale sale.” The term “capital equipment, machinery, tools, or product” shall mean property that is subject to depreciation allowances for Alabama income tax purposes.
c. A sale of containers intended for one-time use only, and the labels thereof, when the containers are sold without contents to persons who sell or furnish the containers along with the contents placed therein for sale by such persons.
d. A sale of pallets intended for one-time use only when the pallets are sold without contents to persons who sell or furnish the pallets along with the contents placed thereon for sale by such persons.
e. A sale to a manufacturer or compounder of crowns, caps, and tops intended for one-time use employed and used upon the containers in which the manufacturer or compounder markets the manufacturer’s or compounder’s products.
f. A sale of containers to persons engaged in selling or otherwise supplying or furnishing baby chicks to growers thereof where the containers are used for the delivery of the chicks or a sale of containers for use in the delivery of eggs by the producer thereof to the distributor or packer of the eggs even though the containers used for delivery of baby chicks or eggs may be recovered for reuse.
g. A sale of bagging and ties used in preparing cotton for market.
h. A sale of commercial fish feed including concentrates, supplements, and other feed ingredients when such substances are used as ingredients in mixing and preparing feed for fish raised to be sold on a commercial basis.
i. A sale of bait used to capture or attempt to capture fish or other seafood in the process of commercial fishing, as defined in Section 40-23-1, by a holder of a commercial license issued pursuant to Chapter 12 of Title 9.
j. A sale of tangible personal property to any person engaging in the business of leasing or renting such tangible personal property to others, if the tangible personal property is purchased for the purpose of leasing or renting it to others under a transaction subject to the privilege or license tax levied in Article 4 of Chapter 12 against any person engaging in the business of leasing or renting tangible personal property to others.
k. A purchase or withdrawal of parts or materials from stock by any person licensed under this article where the parts or materials are used in repairing or reconditioning the tangible personal property of the licensed person which tangible personal property is a part of the stock of goods of the licensed person, offered for sale by the licensed person and not for use or consumption of the licensed person.
l. A sale to meat packers, manufacturers, compounders, or processors of meat products of all casings used in moulding or forming wieners and Vienna sausages, even though the casings may be recovered for reuse.
(5) SALE AT RETAIL or RETAIL SALE. All sales of tangible personal property except those above defined as wholesale sales. The quantities of goods sold or prices at which sold are immaterial in determining whether or not a sale is at retail. Sales of building materials to contractors, builders, or landowners for resale or use in the form of real estate are retail sales in whatever quantity sold. Sales of building materials, fixtures, or other equipment to a manufacturer or builder of modular buildings for use in manufacturing, building, or equipping a modular building ultimately becoming a part of real estate situated in the State of Alabama are retail sales, and the use, sale, or resale of such building shall not be subject to the tax. Sales of tangible personal property to undertakers and morticians are retail sales and subject to the tax at the time of purchase, but are not subject to the tax on resale to the consumer. Sales of tangible personal property or products to manufacturers, quarry operators, mine operators, or compounders, which are used or consumed by them in manufacturing, mining, quarrying, or compounding and do not become an ingredient or component part of the tangible personal property manufactured or compounded as provided in subdivision (4) are retail sales. The term “sale at retail” or “retail sale” shall also mean and include the withdrawal, use, or consumption of any tangible personal property by anyone who purchases same at wholesale, except property that has been previously withdrawn from the business or stock and so used or consumed and with respect to which property the tax has been paid because of such previous withdrawal, use, or consumption, except property that enters into and becomes an ingredient or component part of tangible personal property or products manufactured or compounded for sale as provided in subdivision (4); and not for the personal and private use or consumption of any person so withdrawing, using, or consuming the same, and such wholesale purchaser shall report and pay the taxes thereon; and except refinery, residue, or fuel gas, whether in a liquid or gaseous state, that has been generated by, or is otherwise a by-product of, a petroleum-refining process, which gas is then utilized in the process to generate heat or is otherwise utilized in the distillation or refining of petroleum products. The term “retail sale” or “sale at retail” shall also mean and include the sale of tangible personal property previously purchased at wholesale for the purpose of leasing or renting under a transaction subject to the privilege or license tax levied in Article 4 of Chapter 12, regardless of whether the sale is to the person who theretofore leased or rented the tangible personal property or to some other person.
(6) BUSINESS. All activities engaged in, or caused to be engaged in, with the object of gain, profit, benefit, or advantage, either direct or indirect, and not excepting subactivities producing marketable commodities used or consumed in the main business activity, each of which subactivities shall be considered business engaged in, taxable in the class in which it falls.
(7) STORAGE. Any keeping or retention in this state for any purpose except sale in the regular course of business or subsequent use solely outside this state of tangible personal property purchased at retail.
(8) USE. The exercise of any right or power over tangible personal property incident to the ownership of that property, or by any transaction where possession is given, except that it shall not include the sale of that property in the regular course of business.
(9) PURCHASE. Acquired for a consideration, whether such acquisition was effected by a transfer of title, or of possession or of both, or a license to use or consume; whether such transfer shall have been absolute or conditional, and by whatsoever means the same shall have been effected; and whether such consideration be a price or rental in money, or by way of exchange or barter.
(10) SALES PRICE. The total amount for which tangible personal property is sold, including any services, including transportation, that are a part of the sale, valued in money, whether paid in money or otherwise, and includes any amount for which credit is given to the purchaser by the seller, without any deduction therefrom on account of the cost of the property sold, the cost of the materials used, labor or service cost, interest charged, losses, or any other expenses whatsoever; provided, that cash discounts allowed and taken on sales shall not be included and sales price shall not include the amount charged for property returned by customers when the entire amount charged therefor is refunded either in cash or by credit.
(11) IN THIS STATE or IN THE STATE. Within the exterior limits of the State of Alabama, and includes all territory within such limits owned by or ceded to the United States of America.
(12) AUTOMOTIVE VEHICLE. A power shovel, dragline, crawler, crawler crane, ditcher or any similar machine which is self-propelled, in addition to self-propelled machines which are used primarily as instruments of conveyance.
(13) PREPAID TELEPHONE CALLING CARD. A sale of a prepaid telephone calling card or a prepaid authorization number, or both, shall be deemed the sale of tangible personal property subject to the tax imposed pursuant to this chapter. For purposes of this subdivision, the sale of prepaid wireless service that is evidenced by a physical card constitutes the sale of a prepaid telephone calling card, and the sale of prepaid wireless service that is not evidenced by a physical card constitutes the sale of a prepaid authorization number.
(14) PREPAID WIRELESS SERVICE. The right to use mobile telecommunications service, which must be paid for in advance and that is sold in predetermined units or dollars of which the number declines with use or the expiration of time in a known amount, and which may include rights to use non-telecommunications services or to download digital products or digital content. For purposes of this subdivision, mobile telecommunications service has the meaning ascribed by Section 40-21-120.
(15) REMOTE USE TAX. Amounts collected from out of state vendors who, on October 1, 2012, were or would have been remote sellers as defined in Section 40-23-171; and amounts remitted by consumers on the individual tax return.
(16) FOOD. Food as defined in 7 U.S.C. § 2012 for the purposes of the federal Supplemental Nutrition Assistance Program regardless of where or by what means food is sold. In the event that the federal Supplemental Nutrition Assistance Program definition no longer exists, the Legislature shall provide a new definition of “food” by general law.
(Acts 1939, No. 67, p. 96; Code 1940, T. 51, §787; Acts 1956, 2nd Ex. Sess., No. 106, p. 431; Acts 1959, 2nd Ex. Sess., No. 83, p. 267; Acts 1959, No. 111, p. 632; Acts 1963, No. 291, p. 747; Acts 1965, No. 699, p. 1301; Acts 1965, No. 792, p. 1482; Acts 1971, 1st Ex. Sess., No. 101, p. 179; Acts 1971, No. 2397, p. 3828; Acts 1983, No. 83-721, p. 1173; Acts 1986, Ex. Sess., No. 86-690, p. 93; Acts 1997, No. 97-648, p. 1201, §2; Act 97-867, 1st Sp. Sess., p. 208, §5; Act 99-570, p. 1255, §1; Act 2012-599, 1st Sp. Sess., p. 1924, §1; Act 2014-336, p. 1240, §2; Act 2022-199, §1; Act 2023-554, §1.)
(a) An excise tax is hereby imposed on the storage, use, or other consumption in this state of tangible personal property, not including, however, materials and supplies bought for use in fulfilling a contract for the painting, repairing, or reconditioning of vessels, barges, ships, other watercraft, and commercial fishing vessels of over five tons load displacement as registered with the U.S. Coast Guard and licensed by the State of Alabama Department of Conservation and Natural Resources, purchased at retail on or after October 1, 1965, for storage, use, or other consumption in this state at the rate of four percent of the sales price of the property or the amount of tax collected by the seller, whichever is greater; provided, however, when the seller follows the Department of Revenue’s suggested use tax brackets and his or her records prove that his or her following the brackets resulted in a net undercollection of tax for the month, he or she may report the tax due or tax collected, whichever is less, except as provided in subsections (b), (c), and (d).
(b) An excise tax is hereby imposed on the storage, use, or other consumption in this state of any machines used in mining, quarrying, compounding, processing, and manufacturing of tangible personal property, purchased at retail on or after October 1, 1965, at the rate of one and one-half percent of the sales price of any such machine or the amount of tax collected by the seller, whichever is greater; provided, however, when the seller follows the Department of Revenue’s suggested use tax brackets and his or her records prove that his or her following the brackets resulted in a net undercollection of tax for the month, he or she may report the tax due or tax collected, whichever is less. The term “machine,” as used in this subsection, shall include machinery that is used for mining, quarrying, compounding, processing, or manufacturing tangible personal property, and the parts of such machines, attachments, and replacements therefor, which are made or manufactured for use on or in the operation of such machines and which are necessary to the operation of such machines, and are customarily so used.
(c)(1) An excise tax is hereby imposed on the storage, use, or other consumption in this state of any automotive vehicle or truck trailer, semitrailer or house trailer, and mobile home set-up materials and supplies, including, but not limited to, steps, blocks, anchoring, cable pipes, and any other materials pertaining thereto, purchased at retail on or after October 1, 1965, for storage, use, or other consumption in this state at the rate of two percent of the sales price of such automotive vehicle, truck trailer, semitrailer or house trailer, and mobile home set-up materials and supplies as specified above, or the amount of tax collected by the seller, whichever is greater; provided, however, when the seller follows the Department of Revenue’s suggested use tax brackets and his or her records prove that his or her following the brackets resulted in a net undercollection of tax for the month, he or she may report the tax due or tax collected, whichever is less. Where any used automotive vehicle or truck trailer, semitrailer, or house trailer is taken in trade, or in a series of trades, as a credit or part payment on the sale of a new or used vehicle, the tax levied herein shall be paid on the net difference, that is, the price of the new or used vehicle sold less the credit for the used vehicle taken in trade.
(2) Of the total two cent ($.02) tax on each dollar of sale provided in this subsection, 58 percent of the total tax generated by this subsection shall be deposited to the credit of the Education Trust Fund and 42 percent of the total tax generated by this subsection shall be deposited to the credit of the State General Fund.
(d) An excise tax is hereby imposed on the storage, use, or other consumption in this state of food as defined in Section 40-23-60, at the rate of three percent of the sales price of such food. On September 1, 2025, the tax rate shall be reduced to two percent.
(e) Every person storing, using, or otherwise consuming in this state tangible personal property purchased at retail shall be liable for the tax imposed by this article, and the liability shall not be extinguished until the tax has been paid to this state; provided, that a receipt from a retailer maintaining a place of business in this state or a retailer authorized by the department, under such rules as it may prescribe, to collect the tax imposed hereby and who shall for the purpose of this article be regarded as a retailer maintaining a place of business in this state, given to the purchaser in accordance with Section 40-23-67, shall be sufficient to relieve the purchaser from further liability for tax to which the receipt may refer.
(f) An excise tax is hereby imposed on the classes of tangible personal property, and at the rates imposed on such classes, specified in subsections (a), (b), (c), and (d) on the storage, use, or other consumption in the performance of a contract in this state of any such tangible personal property, new or used, the tax to be measured by the sales price or the fair and reasonable market value of the tangible personal property when put into use in this state, whichever is less; provided, that the tax imposed by this subsection shall not apply where the taxes imposed by subsection (a), (b), (c), or (d) apply.
(Acts 1939, No. 67, p. 96; Code 1940, T. 51, §788; Acts 1945, No. 428, p. 671, §1; Acts 1951, No. 209, p. 472; Acts 1959, 2nd Ex. Sess., No. 99, p. 295, §1; Acts 1961, No. 169, p. 212; Acts 1963, 2nd Ex. Sess., No. 105, p. 284, §1; Acts 1963, No. 67, p. 444, §1; Acts 1965, 2nd Ex. Sess., No. 76, p. 101; Acts 1987, No. 87-647, p. 1151, §1; Acts 1988, 1st Ex. Sess., No. 88-867, p. 372, §3; Acts 1989, No. 89-920, p. 1823, §2; Acts 1991, No. 91-546, p. 988, §1; Act 99-650, 2nd Sp. Sess., p. 96, §1; Act 2023-554, §1; Act 2025-305, §1.)
The storage, use, or other consumption in this state of the following tangible personal property is hereby specifically exempted from the tax imposed by this article:
(1) Property, on which the sales tax imposed by Article 1 of this chapter is paid by the consumer to a person licensed under Article 1 of this chapter.
(2) Tangible personal property, not to be used in the performance of a contract, brought into this state by a nonresident for his or her own storage, use, or consumption while temporarily within this state.
(3) In addition to the exemptions provided in subdivisions (1) and (2), all exemptions enumerated in Division 1 of Article 1 of this chapter are incorporated by reference in this section.
(4) The storage, use, or other consumption in this state of religious magazines and publications. For the purpose of this subdivision the words “religious magazines and publications” shall be construed to mean printed or illustrated lessons, notes, and explanations distributed by churches or other religious organizations free of charge to pupils or students in Sunday schools, Bible classes, or other educational facilities established and maintained by churches or similar religious organizations in this state.
(Acts 1939, No. 67, p. 96; Acts 1939, No. 127, p. 170; Acts 1939, No. 155, p. 228; Code 1940, T. 51, §789; Acts 1943, No. 475, p. 439; Acts 1947, No. 304, p. 158; Acts 1949, No. 210, p. 300; Acts 1959, 2nd Ex. Sess., No. 99, p. 295, §1; Acts 1961, No. 743, p. 1060; Acts 1961, No. 818, p. 1205; Acts 1963, No. 423, p. 930; Acts 1963, No. 571, p. 1193; Acts 1965, 1st Ex. Sess., No. 227, p. 307; Acts 1965, 1st Ex. Sess., No. 245, p. 361; Acts 1965, No. 375, p. 511; Acts 1965, 2nd Ex. Sess., No. 57, p. 83; Acts 1965, 2nd Ex. Sess., No. 123, p. 171; Acts 1966, Ex. Sess., No. 419, p. 564; Acts 1969, No. 1141, p. 2134; Acts 1970, Ex. Sess., No. 16, p. 2616; Acts 1970, Ex. Sess., No. 18, p. 2617; Acts 1971, 3rd Ex. Sess., No. 176, p. 4435, §§1-3; Acts 1973, No. 1171, p. 1976; Acts 1976, No. 505, p. 632; Acts 1983, No. 83-576, p. 895, §2; Acts 1986, No. 86-214, p. 282, §8; Acts 1987, No. 87-742, p. 1439, §1; Acts 1991, No. 91-546, p. 988, §1; Acts 1996, No. 96-544, p. 762, §1; Acts 1997, No. 97-301, p. 522, §1; Act 2001-975, 3rd Sp. Sess., p. 908, §6; Act 2009-144, p. 268, §12; Act 2010-514, p. 848, §1; Act 2012-395, p. 1056, §1; Act 2013-196, p. 376, §2; Act 2013-200, p. 391, §1; Act 2014-325, p. 1189, §1; Act 2017-397, p. 1288, §1; Act 2018-562, §1; Act 2018-164, §1; Act 2025-305, §1.)
There is hereby levied and imposed an excise tax on the storage, use, or other consumption in this state of any machine, machinery, vessel, or equipment which is used in planting, cultivating, and harvesting farm products; used in the capture, attempted capture, or processing fish or other seafood by means of commercial fishing, as defined in Section 40-23-1, by a holder of a commercial license issued pursuant to Chapter 12 of Title 9; or used in connection with the production of agricultural produce or products, livestock or poultry on farms, and the parts of such machines, machinery, vessels, or equipment, attachments, and replacements therefor which are made or manufactured for use on or in the operation of such machine, machinery, vessel, or equipment, and which are necessary to and customarily used in the operation of such machine, machinery, vessel, or equipment, which is purchased at retail after October 1, 1966, for storage, use, or other consumption in this state, at the rate of one and one-half percent of the sales price of such property or the amount of tax collected by the seller, whichever is greater, provided, however, when the seller follows the Department of Revenue’s suggested use tax brackets and the records of the seller prove that following the brackets resulted in a net undercollection of tax for the month, the seller may report the tax due or tax collected whichever is less, regardless of whether the retailer is or is not engaged in business in this state. The tax herein levied and imposed shall be in lieu of the excise tax levied and imposed by Section 40-23-61; provided, that the one and one-half percent rate herein prescribed with respect to parts, attachments and replacements shall not apply to any automotive vehicle or trailer designed primarily for public highway use except farm trailers used primarily in the production and harvesting of agricultural commodities.
Every person storing, using, or otherwise consuming in this state such tangible personal property purchased at retail shall be liable for the tax imposed by this article, and the liability shall not be extinguished until the tax has been paid to this state; provided, that a receipt from a retailer maintaining a place of business in this state or a retailer authorized by the Department of Revenue under the rules as the Commissioner of Revenue may prescribe, to collect the tax imposed hereby and who shall for the purpose of this article be regarded as a retailer maintaining a place of business in this state, given to the purchaser in accordance with the provisions of Section 40-23-67, shall be sufficient to relieve the purchaser from further liability for a tax to which such receipt may refer.
(Acts 1965, No. 384, p. 518, §1; Acts 1965, 2nd Ex. Sess., No. 58, p. 83, §1; Acts 1966, Ex. Sess., No. 412, p. 557; Acts 1973, No. 1076, p. 1830; Acts 1987, No. 87-647, p. 1151, §2; Act 2022-199, §1.)
Section 40-23-63 shall be enforced by the Commissioner of Revenue and state Department of Revenue in the same way, and subject to the same rules and regulations as the state use tax is enforced as provided in this article; and the administrative and enforcement provisions of this article shall be applicable to the enforcement of Section 40-23-63 to the same extent as in the collection and enforcement of the state use tax.
(Acts 1965, No. 384, p. 518, §2; Acts 1965, 2nd Ex. Sess., No. 58, p. 83, §2.)
If a sales or use tax equal to or greater than the amount of the Alabama tax is paid to another state under a requirement of law, the property which is the subject of such tax when imported for use or consumption in Alabama is not subject to the use tax, which is required to be paid by Section 40-23-61. If the amount of tax paid to the other state is less than the Alabama tax, then the difference between the out-of-state tax and the Alabama tax must be paid. No credit will be allowed for taxes paid on tangible personal property in any state which does not give credit for taxes paid on similar property in Alabama. The Commissioner of Revenue shall require such proof of payment of tax to another state as he deems to be necessary and proper.
The Commissioner of Revenue shall adopt such rules and regulations as he deems necessary for the proper administration of this section.
(Acts 1965, No. 761, p. 1371.)
Every seller engaged in making retail sales of tangible personal property for storage, use or other consumption in this state, who:
shall register with the department and give the name and address of each agent operating in this state, the location of any and all distribution or sales houses or offices or other places of business in this state, the number of persons in Alabama to whom catalogs are delivered, by mail or otherwise, the number of persons in Alabama from whom orders are received, by mail or otherwise, together with the amount of the purchase price charged and received and such other information as the department may require with respect to matters pertinent to the enforcement of this article; provided, that this section shall not apply to a seller, holding a license obtained pursuant to the provisions of Division 1 of Article 1 of this chapter.
(Acts 1939, No. 67, p. 96; Code 1940, T. 51, §790; Acts 1945, No. 428, p. 671, §2.)
Every such seller making sales of tangible personal property for storage, use or other consumption in this state, not exempted under the provisions of Section 40-23-62, shall at the time of making such sales or, if the storage, use or other consumption of the tangible personal property is not then taxable hereunder, at the time such storage, use or other consumption becomes taxable hereunder, collect the tax imposed by this article from the purchaser, and give to the purchaser a receipt therefor in the manner and form prescribed by the department. The tax required to be collected by the seller from the purchaser shall be displayed separately from the list, advertised in the premises, marked or other price on the sales check or other proof of sales. It shall be unlawful for any such seller to advertise or hold out or state to the public or to any customer, directly or indirectly, that the tax or any part thereof imposed by this article will be assumed or absorbed by the seller or that it will not be added to the selling price of the property sold, or if added that it or any part thereof will be refunded. Any person violating any of the provisions of this section shall be guilty of a misdemeanor. The tax herein required to be collected by the seller shall constitute a debt owned by the seller to this state.
(Acts 1939, No. 67, p. 96; Code 1940, T. 51, §791.)
(a) Except as otherwise provided in subsection (f), the tax imposed by this article shall be due and payable to the department monthly on or before the 20th day of the month next succeeding each month during which the storage, use, or other consumption of tangible personal property became taxable hereunder.
(b) Every seller or person engaged in making retail sales of tangible personal property for storage, use, or other consumption in this state, who alternatively:
(1) Maintains, occupies, or uses, permanently or temporarily, directly or indirectly, or through a subsidiary, or agent by whatever name called, an office, place of distribution, sales, or sample room or place, warehouse or storage place, or other place of business;
(2) Qualifies to do business or registers with the state to collect the tax levied by this chapter;
(3) Employs or retains under contract any representative, agent, salesman, canvasser, solicitor, or installer operating in this state under the authority of the person or its subsidiary for the purpose of selling, delivering, or the taking of orders for the sale of tangible personal property or any services taxable under this chapter or otherwise solicits and receives purchases or orders by any agent or salesman;
(4) Solicits, pursuant to a contract with a broadcaster or publisher located in this state, orders for tangible personal property by means of advertising which is disseminated primarily to consumers located in this state and only secondarily to bordering jurisdictions;
(5) Solicits orders for tangible personal property by mail if the solicitations are substantial and recurring and if the retailer benefits from any banking, financing, debt collection, telecommunication, or marketing activities occurring in this state or benefits from the location in this state of authorized installation, servicing, or repair facilities. Notwithstanding the previous sentence, a seller who contracts with a provider of call center services shall not be deemed to benefit from telecommunication activities occurring in this state or from the location in this state of authorized installation, servicing, or repair facilities merely as a result of contracting for and receiving only call center services from a call center located in this state. The preceding sentence shall only apply for call centers, as authorized or specified in Division 3 of Article 17 of Chapter 10 of Title 41, and placed in service in this state on or before October 1, 2003;
(6) Has, under a franchise or licensing arrangement or contract, a franchisee or licensee operating under its trade name;
(7) Solicits, pursuant to a contract with a cable television operator located in this state, orders for tangible personal property by means of advertising which is transmitted or distributed over a cable television system in this state;
(8) Solicits orders for tangible personal property by means of a telecommunication or television shopping system which is intended by the person to be broadcast by cable television or other means of broadcasting, to consumers located in this state;
(9) Maintains any other contact with this state that would allow this state to require the seller to collect and remit the tax due under the provisions of the Constitution and laws of the United States; or
(10) Distributes catalogs or other advertising matter and by reason thereof receives and accepts orders from residents, within the State of Alabama, shall be subject to all the provisions of this chapter and, except as otherwise provided in subsection (f), on or before the 20th day of the month following the close of each month, shall file with the department a return for the preceding month in such form as may be prescribed by the department showing the total sales price of the tangible personal property sold by such seller, the storage, use, or consumption of which became subject to the tax imposed by this article during the preceding month and such other information as the department may deem necessary for the proper administration of this article.
(c) The return shall be accompanied by a remittance of the amount of tax herein required to be collected by the seller during the period covered by the return. Returns shall be signed by the seller or his or her duly authorized agent but need not be verified by oath.
(d) Except as otherwise provided in subsection (f), every person purchasing tangible personal property, the storage, use, or other consumption of which is subject to the tax imposed by this article, and who has not paid the tax due with respect thereto to a seller required or authorized hereunder to collect the tax, on or before the 20th day of the month following the close of each month, shall file with the department a return for the preceding month in such form as may be prescribed by the department showing the total sales price of the tangible personal property purchased by such person, the storage, use, or other consumption of which became subject to the tax imposed by this article during the preceding month and with respect to which the tax was not paid to a seller required or authorized hereunder to collect the tax, and such other information as the department may deem necessary for the proper administration of this article. The return shall be accompanied by a remittance of the amount of tax herein imposed and not paid to a seller required or authorized hereunder to collect the tax during the period covered by the return. Returns shall be signed by the person liable for the tax or his duly authorized agent, but need not be verified by oath.
(e) For the purpose of the proper administration of this article and to prevent evasion of the tax and the duty to collect the same herein imposed, it shall be presumed that tangible personal property sold by any person for delivery in this state is sold for storage, use, or other consumption in this state unless the person selling such property has taken from the purchaser a certificate signed by and bearing the name and address of the purchaser to the effect that the property was purchased for resale, and it shall be further presumed that tangible personal property shipped to this state by the purchaser thereof was purchased from a retailer on and after March 1, 1939, for storage, use, or other consumption in this state. Except as otherwise provided in subsection (f), any seller making cash and credit sales for storage, use, or other consumption in Alabama may report such cash sales and shall thereafter include in each monthly report all credit collections made during the preceding month, and shall pay the taxes due thereon at the time of filing such report, but in no event shall the gross proceeds of credit sales be included in the measure of the tax to be paid until collections of such credit sales shall have been made.
(f) Taxpayers meeting the criteria set forth in this subsection may elect to file quarterly, semi-annually, or annually. Any election to file quarterly, semi-annually, or annually shall be made in writing no later than February 20 of each year and shall be filed with the department in the manner prescribed by the department. The department, for good cause, may extend the time for making any return required under this chapter, but the time for filing any such return shall not be extended for a period greater than 30 days from the date such return is due to be made. Qualifying taxpayers electing to file quarterly, semi-annually, or annually shall report to the department, on a form prescribed by the department, a true and correct statement showing such information as the department may require. Qualifying taxpayers shall pay to the department the amount of tax shown to be due on or before the applicable deadlines, under any rules as may be prescribed, as follows:
(1) When the total state use tax for which any person is liable under this article is less than two thousand four hundred dollars ($2,400) during the preceding calendar year, the person may elect to file quarterly returns. Quarterly returns and payment of the amount of tax shown to be due shall be due on or before the 20th day of the month next succeeding the end of the quarter for which the tax is due under such rules as may be prescribed by the department.
(2) When the total state use tax for which any person is liable under this article is less than one thousand two hundred dollars ($1,200) for the preceding calendar year or the person liable for the tax has made no more than two transactions subject to use tax during the preceding calendar year, the person may elect to file semi-annual returns. The semi-annual returns and payment of the tax shown to be due shall be due on or before July 20 and January 20 following the end of the six-month period for which the tax is due.
(3) When the total state use tax for which any person is liable under this article during the preceding calendar year is less than six hundred dollars ($600) or the person liable for the tax has made no more than one transaction subject to use tax during the preceding calendar year, the person may elect to file an annual return. The annual return and payment of the tax shown to be due shall be due on or before January 20 following the end of the annual period for which the tax is due.
(Acts 1939, No. 67, p. 96; Code 1940, T. 51, §792; Acts 1945, No. 428, p. 671, §3; Acts 1991, No. 91-576, p. 1060, §1; Acts 1991, No. 91-624, p. 1165, §1; Act 98-192, p. 310, §9; Act 2002-418, p. 1068, §6; Act 2002-525, p. 1371, §1; Act 2019-253, §1.)
The department for good cause may extend for not to exceed 30 days the time for making any return required under the provisions of this article.
(Acts 1939, No. 67, p. 96; Code 1940, T. 51, §798.)
The department, whenever it deems it necessary to insure compliance with the provisions of this article, may require any person subject thereto to deposit with it such security as the department may determine. The same may be sold by the department at public auction if it becomes necessary so to do in order to recover any tax, or any amount herein required to be collected, interest or penalty due. Notice of such sale may be served upon the person who deposited such security personally or by certified or registered mail; if by mail, service shall be made by certified or registered notice, return receipt requested, addressed to the person at his address as the same appears in the records of the department. Upon any such sale, the surplus, if any, above the amounts due under this article shall be returned to the person who deposited the security.
(Acts 1939, No. 67, p. 96; Code 1940, T. 51, §799.)
A discount of three percent of the taxes levied by this article due and payable to the state shall be allowed to the seller or vendor; provided, that the taxes due by such seller are paid before same becomes delinquent, as in this article provided.
Effective June 1, 2001, the Governor may, by executive order, authorize the Department of Revenue to provide by proper rules and regulations for the allowance of a discount, not to exceed three percent (3%) of the taxes levied by this article due and payable to the state by the seller or vendor; provided that the taxes due by such seller are paid before same becomes delinquent, as in this article provided.
For any taxes collected by the seller or vendor on or after June 1, 2001, the Governor may, by executive order, authorize the Department of Revenue to provide by proper rules and regulations for a maximum discount amount or rate for each seller or vendor regardless of the number of locations of that seller or vendor within the state.
Beginning June 1, 2001, until September 30, 2002, the balance of the sum equal to the increase in receipts due to any maximum discount amount or rate as provided herein shall first be credited to the Department of Conservation and Natural Resources for (1) the sum equal to the interest the Game and Fish Fund and the Seafood Fund would have earned on the sale of hunting and/or fishing licenses, which is required to be credited to the funds by Federal Regulation 50 CFR 80.4a(3), and (2) a sum equal to one million dollars ($1,000,000) for the Coastal Programs; and any remaining balance shall be credited to the State General Fund.
Beginning October 1, 2002, and each fiscal year thereafter the lesser of five hundred thousand dollars ($500,000) or the entire amount of the sum equal to the increase in receipts due to any maximum discount amount or rate as provided herein shall be credited to the Department of Human Resources and expended for the foster children program. Any remaining balance shall first be credited to the Department of Conservation and Natural Resources to be allocated in whole or in part to the following: (1) To the Game and Fish Fund and the Seafood Fund in an amount at least equal to the interest that each fund would have earned on the sale of hunting and/or fishing licenses which is required to be credited to the funds by the Federal Regulation 50 CFR 80.4a(3), and (2) to the Coastal Programs, a sum equal to one million dollars ($1,000,000); and any remaining balance shall be credited to the State General Fund. Notwithstanding the foregoing, for the fiscal years ending September 30, 2012, and September 30, 2013, only, the one million dollars ($1,000,000) that would otherwise be distributed to the Coastal Programs shall instead be distributed to the State General Fund.
(Acts 1939, No. 67, p. 96; Code 1940, T. 51, §801; Acts 1943, No. 278, p. 239; Acts 1992, No. 92-186, p. 349, §67; Act 2001-669, p. 1402, §1; Act 2011-642, p. 1633, §2.)
If any retailer liable for an amount of tax herein required to be collected shall sell out his business or stock of goods or shall quit the business, he shall make a final return and payment within 15 days after the date of selling or quitting business. His successor, successors or assigns, if any, shall be required to withhold sufficient of the purchase money to cover the amount of such taxes herein required to be collected and interest or penalties due and unpaid until such time as the former owner shall produce a receipt from the department showing that they have been paid, or a certificate stating that no amount is due. If the purchaser of a business or stock of goods shall fail to withhold purchase money as above provided, he shall be personally liable for the payment of the amount of taxes herein required to be collected by the former owner, interest and penalties accrued and unpaid by any former owner, owners or assignors.
(Acts 1939, No. 67, p. 96; Code 1940, T. 51, §805.)
Every seller and every person storing, using or otherwise consuming in this state tangible personal property purchased from a retailer shall keep such records, receipts, invoices and other pertinent papers in such form as the department may require. The department or any person authorized in writing by it is hereby authorized to examine the books, papers, records and equipment of any person selling tangible personal property and any person liable for the tax imposed by this article and to investigate the character of the business of any such person in order to verify the accuracy of any return made, or if no return was made by such person, to ascertain and determine the amount required to be paid hereunder.
The department is hereby charged with the enforcement of the provisions of this article and is hereby authorized and empowered to prescribe, adopt and enforce rules and regulations relating to the administration and enforcement of the provisions of this article and to employ such accountants, auditors, investigators, assistants and clerks as may be determined to be necessary for the efficient administration of this article, under the provision of the merit system.
(Acts 1939, No. 67, p. 96; Code 1940, T. 51, §806.)
AMENDED BY ACTS 2026-392 AND ACT 2026-514, EFFECTIVE SEPTEMBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
All taxes, fees, interest, or penalties imposed and all amounts of tax herein required to be paid to the state under this article must be paid to the Department of Revenue at Montgomery, Alabama, with remittance payable to the Treasurer of Alabama. Such amount of money as shall be appropriated for each fiscal year by the Legislature to the Department of Revenue with which to pay the salaries, the cost of operation and the management of the department shall be deducted, as a first charge thereon, from the taxes collected under and pursuant to Section 40-23-61; provided, that the expenditure of the sum so appropriated shall be budgeted and allotted pursuant to Article 4 of Chapter 4 of Title 41, and limited to the amount appropriated to defray the expenses of operating the department for each fiscal year. After the distributions provided herein and the distributions of use tax on automobiles to the General Fund as provided in Section 40-23-61(c), the balance of the tax collected under and pursuant to Section 40-23-61 shall be distributed as follows: (1) remote use tax amounts, seventy-five percent (75%) to the General Fund and twenty-five percent (25%) to the Education Trust Fund, and (2) any remaining amounts, forty-seven percent (47%) to the Education Trust Fund and fifty-three percent (53%) to the General Fund. An amount sufficient to fund the Children’s Health Insurance Program (CHIP) shall be distributed annually as a first charge against the amounts allocated to the General Fund under this section. It is the legislative intent that all amounts collected on transactions involving a seller located outside the State of Alabama when the property is shipped or transported from outside the state shall be considered use tax for the purpose of this distribution, regardless of whether the taxes may be considered sales taxes for other purposes.
(Acts 1939, No. 67, p. 96; Acts 1939, No. 376, p. 502; Code 1940, T. 51, §808; Acts 1951, No. 840, p. 1471; Act 2012-599, p. 1924, 1st Sp. Sess., §1; Act 2015-539, 2nd Sp. Sess., §1.)
Any seller or other person failing or refusing to furnish any return hereby required to be made, or failing or refusing to furnish a supplemental return or other data required by the department, or rendering a false or fraudulent return, shall be guilty of a misdemeanor and subject to a fine of not exceeding $500 for each such offense. Any person required to make, render, sign or verify any report as aforesaid who makes any false or fraudulent return, with intent to defeat or evade the determination of an amount due required by law to be made shall be guilty of a misdemeanor, and shall for each such offense be fined not less than $300 and not more than $5,000 or be imprisoned not exceeding one year in the county jail or be subject to both said fine and imprisonment in the discretion of the court. Any violation of the provisions of this article, except as otherwise herein provided, shall be a misdemeanor and punishable as such.
(Acts 1939, No. 67, p. 96; Code 1940, T. 51, §811.)
As used in this article, unless the context otherwise requires, the following terms shall have the following meanings:
(1) JUDGE OF PROBATE. The judge of probate or other licensing authority in a county.
(2) LICENSING OFFICIAL. The county official required by law to issue licenses for any automotive vehicle, motorboat, truck trailer, trailer, semitrailer, or travel trailer taxed under this article.
(3) MOTOR BOAT. A boat with one or more built-in motors or a boat with an outboard type motor or motors attached thereto by attachments intended to be permanent rather than readily removable and which motor or motors are controlled with remote controls built on or into the hull of the boat.
(Acts 1981, No. 81-665, p. 1086, §1; Acts 1994, No. 94-622, p. 1162, §1.)
(a) There is hereby levied and shall be collected as herein provided a sales tax upon every person, firm, or corporation purchasing within this state, other than at wholesale, any automotive vehicle, motorboat, truck trailer, trailer, semitrailer, or travel trailer required to be registered or licensed with the judge of probate of any county in this state from any person, firm or corporation that is not a licensed dealer engaged in selling automotive vehicles, motorboats, truck trailers, trailers, semitrailers, or travel trailers in an amount equal to two percent of the purchase price.
(b) Commencing October 1, 1989, there is hereby levied and shall be collected, as provided for under the provisions of subsection (e) of Section 40-23-104, a sales tax in the amount equal to two percent of the purchase price on the sale of any manufactured home as defined in subsection (n) of Section 40-12-255, purchased other than at wholesale in this state from any person, firm, or corporation which is not a licensed dealer engaged in selling manufactured homes.
(c) In addition to the two percent state sales tax, there shall also be collected any applicable municipal gross receipts or sales taxes and county sales taxes on the vehicles listed in subsection (a) of this section authorized by general or local law for the local taxing jurisdiction in which the purchaser resides or, if a business, the business location. Penalties for falsifying or misrepresenting the correct taxing jurisdictions shall be as provided in subsection (b) of Section 40-29-115.
(Acts 1981, No. 81-665, p. 1086, §2; Acts 1988, 1st Ex. Sess., No. 88-867, p. 265, §4; Acts 1989, No. 89-691, p. 1358, §4; Acts 1989, No. 89-752, p. 1526, §1; Acts 1994, No. 94-622, p. 1162, §2.)
(a) There is hereby levied and shall be collected as herein provided, in lieu of the excise tax levied by subsection (c) of Section 40-23-61, an excise or use tax upon every person, firm, or corporation purchasing outside the state, other than at wholesale, any automotive vehicle, motorboat, truck trailer, trailers, semitrailer, or travel trailer, required to be registered or licensed with the judge of probate of any county in this state for use, storage, or other consumption within this state a tax in an amount equal to two percent of the purchase price.
(b) Commencing October 1, 1989, there is hereby levied and shall be collected, as provided for under the provisions of subsection (e) of Section 40-23-104, an excise or use tax in the amount equal to two percent of the purchase price on the storage, use, or other consumption in the state of any manufactured home as defined in subsection (n) of Section 40-12-255 purchased other than at wholesale outside the state on or after October 1, 1989, for storage, use, or other consumption in this state.
(c) In addition to the two percent state use tax, there shall also be collected any applicable municipal and county use tax authorized by general or local law for the local taxing jurisdiction in which the purchaser resides, or, if a business, the business location on any automotive vehicle, motorboat, truck trailer, trailer, semitrailer, or travel trailer purchased from dealers doing business outside the State of Alabama and from licensed Alabama dealers where municipal and county sales taxes were not collected at the time of purchase. Penalties for falsifying or misrepresenting the correct taxing jurisdiction shall be as provided in subsection (b) of Section 40-29-115.
(Acts 1981, No. 81-665, p. 1086, §3; Acts 1988, 1st Ex. Sess., No. 88-867, p. 265, §5; Acts 1989, No. 89-691, p. 1358, §5; Acts 1989, No. 89-752, p. 1526, §2; Acts 1994, No. 94-622, p. 1162, §3.)
Where any used automotive vehicle, motorboat, truck trailer, semitrailer, or house trailer is taken in trade or in a series of trades as a credit or part payment on the sale of a new or used automotive vehicle, motorboat, truck trailer, semitrailer, or house trailer, the tax levied in this article shall be paid on the net difference, that is, the price of the new or used vehicle, motorboat, or trailer sold less the credit for the used vehicle, motorboat, or trailer taken in trade.
(Acts 1981, No. 81-665, p. 1086, §4; Acts 1994, No. 94-622, p. 1162, §4.)
(a) The licensing official shall collect all of the following:
(1) The taxes levied by this article.
(2) The municipal gross receipts or sales taxes and county sales taxes authorized by general or local law on sales made by a person or firm other than a licensed dealer.
(3) The municipal and county use taxes authorized by general or local law on sales made by dealers doing business outside the State of Alabama and on sales made by licensed Alabama dealers where municipal and county sales taxes were not collected at the time of purchase.
(4) The state use tax on any such automotive vehicle, motorboat, truck trailer, trailer, semitrailer, or travel trailer required to be registered or licensed by the judge of probate.
(b) The licensing official shall require, as proof of the purchase price of the automotive vehicle, motorboat, truck trailer, trailer, semitrailer, or travel trailer to be taxed, when purchased from a licensed dealer in this state, documentation of the price upon which any state, county, or municipal sales tax was paid and which reflects the amount of such state, county, or municipal sales tax paid and any other evidence of the purchase price as shall be prescribed by the Department of Revenue. All licensed dealers in this state shall furnish to the purchaser of any of the vehicles documentation showing the amount and rate of sales or gross receipts tax collected at the time of purchase for the state and for the municipality and county where the sale was made.
(c) The licensing official shall require, as proof of the purchase price of any other automotive vehicle, motorboat, truck trailer, trailer, semitrailer, or travel trailer to be taxed, the presentment of a sworn report by the purchaser reflecting such purchase price on a form to be provided by the Department of Revenue accompanied by a properly executed bill of sale or other satisfactory evidence prescribed by the Department of Revenue.
(d) In lieu of the requirements contained in subsection (c) of this section, the purchaser may stipulate to the licensing official that the purchase price of the automotive vehicle, motorboat, truck trailer, trailer, semitrailer, or travel trailer to be taxed is equivalent to a standard value for the year, make, and model established by the Department of Revenue for the taxable item. The purchase price so stipulated shall be conclusively presumed to be the purchase price of the item for all purposes under this article.
(e) Before the registration of or licensing of any such automotive vehicle, motorboat, truck trailer, trailer, semitrailer, or travel trailer, the licensing official shall require proof of payment of the tax levied under this article deemed necessary and proper.
(f) Before the decal, which is provided for by Section 40-7-1, is issued to evidence payment of the ad valorem tax due on a manufactured home in this state, and before any homestead exemption is granted for a manufactured home, payment of the tax levied either under Section 40-23-101(b) or Section 40-23-102(b) shall be made to the licensing official of the county in which the manufactured home will be initially sited as evidenced by a properly executed bill of sale. If, however, the sales or use tax specified in either Sections 40-23-101(b) or 40-23-102(b) has been paid prior to the due date of the ad valorem tax on the manufactured home, then proof of payment for the sales or use taxes will be evidenced by a receipt and shall be deemed acceptable by the licensing official.
(g) Any law to the contrary notwithstanding, the licensing official shall remit all county and municipal sales, gross receipts, and use taxes collected directly to the appropriate county or municipal tax recipient as otherwise provided by law, within 20 days following the last day of the month in which those taxes were collected. In addition to all other penalties, the penalty for failure to comply with this section shall be as provided in Chapter 29, Article 6.
(Acts 1981, No. 81-665, p. 1086, §5; Acts 1989, No. 89-691, p. 1358, §6; Acts 1989, No. 89-752, p. 1526, §3; Acts 1994, No. 94-622, p. 1162, §5.)
Except as herein otherwise provided, the tax herein shall be subject to all definitions, exceptions, exemptions, proceedings, requirements, rules, regulations, provisions, penalties, fines, punishments, deductions, and discounts in accordance with the provisions of Sections 40-23-1 through 40-23-36 and the assessment and refund procedures set out in Chapter 2A of this title.
(Acts 1981, No. 81-665, p. 1086, §6; Acts 1992, No. 92-186, p. 349, §68.)
If a sales or use tax equal to or in excess of the amount of the tax imposed by this article is paid to another state under a requirement of the law of that state, the automotive vehicle, motorboat, truck trailer, semitrailer, or house trailer which is the subject of the tax when it is imported for use, storage, or consumption in this state shall not be subject to the use tax imposed by this article. If the amount of the tax paid to another state is less than that imposed by this article, then the difference shall be paid. However, no credit shall be allowed for taxes paid on any automotive vehicles, motorboats, truck trailers, semitrailers, or house trailers in any other state which does not extend credit for taxes paid on similar property in Alabama. The licensing official shall require proof of payment of tax in another state deemed necessary and proper.
(Acts 1981, No. 81-665, p. 1086, §7; Acts 1994, No. 94-622, p. 1162, §6.)
For making the collection of taxes levied under authority of this article, the licensing official shall be entitled to a fee in an amount equal to five percent of all revenue collected under this article each month. The fee shall be for the use of the licensing official. The fee shall be deducted from the tax collections each month and the remainder of the collections shall be remitted to the Department of Revenue. Notwithstanding the foregoing, the fee shall be disallowed unless the collections are remitted to the Department of Revenue within the time allowed by law. In all counties where the licensing official is paid on a salary instead of a fee basis, all fees allowed under the terms of this section to be paid to the licensing official shall be paid, by the licensing official, into the county treasury, or to the official performing the duties of county treasurer.
(Acts 1981, No. 81-665, p. 1086, §8; Acts 1994, No. 94-622, p. 1162, §7.)
The licensing official shall, after the deduction of the fee as provided in Section 40-23-107, remit the revenue collected hereunder to the Department of Revenue for deposit as follows:
Of the total two cents ($.02) tax on each dollar of sale, 58% of the total tax generated shall be deposited to the credit of the Education Trust Fund; and 42% of the total tax generated shall be deposited to the credit of the State General Fund. Provided, however, of the total of those funds derived from the state sales and use taxes collected on motorboats, 50 percent shall be paid to the State General Fund and 50 percent to the Education Trust Fund.
(Acts 1981, No. 81-665, p. 1086, §9; Acts 1988, 1st Ex. Sess., No. 88-867, p. 265, §6; Acts 1994, No. 94-622, p. 1162, §8; Act 99-650, 2nd Sp. Sess., p. 96, §1.)
Any person failing to pay the tax levied under the provisions of this article shall be guilty of a Class C misdemeanor and upon conviction thereof, be punished as prescribed by law for such offense.
(Acts 1981, No. 81-665, p. 1086, §11.)
The Department of Revenue is authorized to adopt, promulgate, and enforce reasonable rules and regulations relating to the administration and enforcement of Article 3, commencing with Section 40-23-100, Chapter 23, Title 40, not in conflict with the specific provisions hereof.
(Acts 1994, No. 94-622, p. 1162, §10.)
Any law to the contrary notwithstanding, any retailer, who relies in good faith on any state sales tax exemption number that has been authorized by the state Revenue Department and the exemption claim has been made on a form provided or approved for use by the Revenue Department, when a state tax exemption number holder violates the tax exempt privilege or uses such number illegally, shall not subsequently be liable to the state Revenue Department or others for the sales tax on purchases.
(Acts 1989, No. 89-690, p. 1357, §1.)
The state Revenue Department is authorized to use its powers and responsibilities, in accord with the general laws of this state, to collect or recover any sales taxes due on purchases made illegally with state tax exempt numbers from the party or parties using such number and the person or persons who benefited from such illegal use of the tax exempt number, if the retailers acted in good faith and reasonably believe the purchase was legal.
(Acts 1989, No. 89-690, p. 1357, §2.)
Any gross receipts tax imposed by a municipality or county on the sale of gasoline and motor fuel shall be based on the gross receipts from the sale of gasoline and motor fuel minus any taxes imposed on the sale of gasoline and motor fuel by the state, federal, or local governments.
(Acts 1994, 1st Ex. Sess., No. 94-792, p. 98, §1.)
[Repealed]
Repealed by Act 2012-599, 1st Sp. Sess., §2, effective October 1, 2012.
(Act 2001-1122, 4th Sp. Sess., p. 1190, §§1-3.)
The Legislature finds that the State of Alabama should participate in negotiations with other states to simplify and modernize tax administration in order to substantially reduce the burden of tax compliance for all sellers, to reduce the costs of the administration, and to provide a means by which sales and use taxes may be levied and collected from those remote sellers located outside of this state which deliver inside this state items sold through catalogs, Internet, and other means.
(Act 2002-418, p. 1068, §1.)
As used in this division, the following terms shall have the following meanings:
(1) AGREEMENT. An interstate agreement for simplification and uniformity of taxation among member states in order to reduce the burden of tax compliance for sellers and for all types of commerce and to provide a means by which sales and use taxes may be collected from remote sellers.
(2) REMOTE SELLER. An individual, trust, estate, fiduciary, partnership, limited liability company, limited liability partnership, corporation, or other similar legal entity that sells tangible personal property or a service, but does not have nexus in this state.
(3) SALES AND USE TAXES. Sales and use taxes and gross receipts taxes in the nature of a sales tax imposed pursuant to Alabama law.
(4) STATE. A state of the United States and the District of Columbia.
(Act 2002-418, p. 1068, §2.)
(a) There is created a delegation to participate in multistate discussions regarding the simplification and modernization of tax administration. Delegates shall be appointed as follows:
(1) One representative of municipal government appointed by the Alabama League of Municipalities.
(2) One representative of county government appointed by the Association of County Commissions of Alabama.
(3) The Commissioner of the Alabama Department of Revenue or his or her designee.
(4) One representative of the retail community appointed by the Alabama Retail Association.
(5) One representative of the accounting profession appointed by the Alabama Society of Certified Public Accountants.
(b) Delegates shall serve at the pleasure of the appointing authority. Delegates shall be reimbursed by the State of Alabama for all reasonable and necessary expenses in the discharge of their duties.
(c) Delegates shall, by majority vote of the membership, make recommendations to the Legislature and to the Governor.
(d) The delegation shall reflect the racial and ethnic diversity of the state.
(Act 2002-418, p. 1068, §3.)
(a) Delegates shall enter into multistate discussions on behalf of the State of Alabama to consider whether the state should enter into an agreement with one or more states to do the following:
(1) Simplify and modernize tax administration in order to substantially reduce the burden of tax compliance for sellers and for all types of commerce and to provide a means by which sales and use taxes may be collected from remote sellers.
(2) Establish requirements for multistate sellers.
(b) The agreement may provide a mechanism among the member states to establish and maintain a cooperative, simplified system for the application and administration of sales and use taxes from remote sellers under the duly adopted law of each state. No law of this state, nor the application thereof, may be declared invalid as to any person or circumstance on the ground that the provision or application is inconsistent with the agreement. No provision of this division, in whole or in part, invalidates or amends any provision of law in Alabama. Implementation of any condition of any agreement, whether adopted before, at, or after membership of this state in the agreement, must be made by law enacted by the Legislature of this state.
(Act 2002-418, p. 1068, §4.)
(a) Should the enactment of a national agreement for the collection of sales and use taxes from remote sellers establish a single national tax rate on such remote sales or should the agreement provide for the State of Alabama to establish a single statewide rate on such remote sales, the proceeds shall be distributed as follows:
(1) One-half of such proceeds shall be distributed to the State of Alabama of which 75% shall be deposited into the General Fund, and 25% shall be deposited into the Education Trust Fund.
(2) One-quarter shall be distributed to the governing body of the municipality in which the delivery is made, if the delivery is made into a municipality.
(3) The remainder shall be distributed to the county governing body in the county in which the delivery is made.
(b) The tax proceeds distributed to a municipality or county shall be expended by the governing body of the municipality or county as required and provided by law for other sales and use tax proceeds levied and collected by the county or municipality including any bonded indebtedness.
(Act 2002-418, p. 1068, §5; Act 2012-599, p. 1924, 1st Sp. Sess., §1.)
(a) An out-of-state vendor has substantial nexus with this state for the collection of both state and local use tax if:
(1) The out-of-state vendor and an in-state business maintaining one or more locations within this state are related parties; and
(2) The out-of-state vendor and the in-state business use an identical or substantially similar name, tradename, trademark, or goodwill, to develop, promote, or maintain sales, or the in-state business and the out-of-state vendor pay for each other’s services in whole or in part contingent upon the volume or value of sales, or the in-state business and the out-of-state vendor share a common business plan or substantially coordinate their business plans, or the in-state business provides services to, or that inure to the benefit of, the out-of-state business related to developing, promoting, or maintaining the in-state market.
(b) An out-of-state vendor that is an eligible seller participating in the Simplified Sellers Use Tax Remittance Program, as these terms are defined in Section 40-23-191, that establishes a substantial nexus in this state only through the acquisition of an in-state business and thereafter meets the provisions of subsection (a) may elect to satisfy the requirements to collect and remit tax for the out-of-state vendor’s Alabama sales by continued participation in the Simplified Sellers Use Tax Remittance Program.
(c) Two entities are related parties under this section if one of the entities meets at least one of the following tests with respect to the other entity:
(1) One or both entities is a corporation, and one entity and any party related to that entity in a manner that would require an attribution of stock from the corporation to the party or from the party to the corporation under the attribution rules of Section 318 of the Internal Revenue Code owns directly, indirectly, beneficially, or constructively at least 50 percent of the value of the corporation’s outstanding stock;
(2) One or both entities is a limited liability company, partnership, estate, or trust and any member, partner, or beneficiary, and the limited liability company, partnership, estate, or trust and its members, partners, or beneficiaries own directly, indirectly, beneficially, or constructively, in the aggregate, at least 50 percent of the profits, or capital, or stock, or value of the other entity or both entities; or
(3) An individual stockholder and the members of the stockholder’s family, as defined in Section 318 of the Internal Revenue Code, owns directly, indirectly, beneficially, or constructively, in the aggregate, at least 50 percent of the value of both entities’ outstanding stock.
(Act 2003-390, §1; Act 2018-539, §1.)
(a) This part shall be titled The Simplified Seller Use Tax Remittance Act.
(b) For the purpose of this part, the following terms shall have the respective meanings ascribed to them in this section:
(1) DEPARTMENT. The Alabama Department of Revenue.
(2) ELIGIBLE SELLER. A seller that sells tangible personal property or a service, but does not have a physical presence in this state or is not otherwise required to collect and remit state and local sales or use tax for sales delivered into the state. The seller shall remain eligible for participation in the Simplified Use Tax Remittance Program unless the seller establishes a presence through a physical business address for the purpose of making in-state retail sales within the State of Alabama or becomes otherwise required to collect and remit sales or use tax pursuant to Section 40-23-190 through an affiliate making retail sales at a physical business address in Alabama. The term also includes a marketplace facilitator as defined in Section 40-23-199.2(a)(2) for all sales made through the marketplace facilitator’s marketplace by or on behalf of a marketplace seller.
(3) LOCALITY. A county, municipality, or other local governmental taxing authority which levies a local sales and/or use tax.
(4) SELLER. An individual, trust, estate, fiduciary, partnership, limited liability company, limited liability partnership, corporation, or other legal entity.
(5) SIMPLIFIED SELLERS USE TAX. The tax to be collected, reported, and remitted by eligible sellers who are participating in the program pursuant to requirements and procedures established pursuant to this part.
(6) SIMPLIFIED USE TAX REMITTANCE PROGRAM or PROGRAM. The program established in this part to provide a mechanism for eligible sellers to collect, report, and remit the simplified sellers use tax established pursuant to this part.
(7) STATE. The State of Alabama.
(Act 2015-448, p. 1443, §1; Act 2016-110, §1; Act 2017-82, §2; Act 2018-539, §1.)
(a) There is hereby established The Simplified Sellers Use Tax Remittance Program designed to allow an eligible seller who participates in the program to collect, report, and remit the simplified sellers use tax authorized herein in lieu of the sales or use taxes otherwise due by or on behalf of Alabama customers who have purchased items from the eligible seller that were shipped or otherwise delivered into Alabama by the eligible seller. Participation in the program shall be by election of the eligible seller and only those eligible sellers accepted into the program as set out herein shall collect and remit the simplified sellers use tax. Participation in the program shall not be construed as subjecting an eligible seller to franchise, income, occupation, or any other type of taxes or licensing requirements levied or imposed by the state of Alabama or any locality.
(b) The program shall be administered by the department, which pursuant to this part, shall develop and make available to the eligible seller an easily accessible, online system in which to collect, report, and remit the simplified sellers use tax. Participants in the program shall be required to collect, report, and remit the simplified sellers use tax for all sales delivered into the state as long as remaining a participant in the program. Eligible sellers may continue in the program as long as they comply with all provisions of this part and procedures adopted by the department for participation in the program.
(c) In order to participate in the program, an eligible seller shall make application with the department on a form designed by the department for that purpose. The application shall require, at a minimum, that the eligible seller:
(1) Certifies that he or she is an eligible seller as defined herein.
(2) Agrees to collect, report, and remit the simplified sellers use tax for all sales delivered into the state as long as he or she remains a participant in the program.
(3) Agrees to provide the department with information related to sales to Alabama customers as required by this part or requested by the department.
(4) Agrees to comply with all program reporting requirements established under program procedures.
Any applicant who falsely certifies on his or her application that he or she is an eligible seller with the State of Alabama shall be subject to the negligence and/or fraud penalties under procedures found in Section 40-2A-11.
(d) The department shall review all applications for participation, and where an applicant is determined to satisfy requirements to participate in the program, shall establish a simplified sellers use tax account for the eligible seller which will allow the eligible seller to report and remit all simplified sellers use tax collected pursuant to this part.
(e) A participating eligible seller shall be removed from the program if:
(1) He or she substantially fails to collect, report, and remit simplified sellers use taxes.
(2) He or she fails to submit required reports on a timely basis.
(3) Upon a determination that the seller is no longer an eligible seller, as defined by this part.
(4) There is any other finding by the department that the participant is not in compliance with the terms authorizing participation in the program.
Any participant who fails to report that he or she is no longer eligible for participation in the program or falsely certifies on any report that he or she is eligible shall be subject to the negligence and/or fraud penalties under procedures found in Section 40-2A-11. Removal from the program or assessment of the fraud or negligence penalty shall be subject to appeal rights and procedures established in this title.
(Act 2015-448, §1.)
(a) The simplified sellers use tax due under the program is eight percent of the sales price on any tangible personal property sold or delivered into Alabama by an eligible seller participating in the program. The collection and remittance of simplified sellers use tax relieves the eligible seller and the purchaser from any additional state or local sales and use taxes on the transaction.
(b) The simplified sellers use tax collected by the eligible seller, at the rate of eight percent, shall be electronically reported in the manner prescribed by the department on or before the 20th day of the month next succeeding the month in which the tax accrues. The eligible seller shall remit the tax at the required rate or the amount of the tax collected, whichever is greater. The required monthly reporting from the eligible seller shall only include statewide totals of the simplified sellers use taxes collected and remitted, and shall not require information related to the location of purchasers or amount of sales into a specific locality. The department may not require an eligible seller to report and remit the simplified sellers use tax more frequently than is required for other sellers.
(c) No eligible seller shall be required to collect the tax at a rate greater than eight percent, regardless of the combined actual tax rates that may otherwise be applicable. Additionally, no sales for which the simplified sellers use tax is collected shall be subject to any additional sales or use tax from any locality levying a sales or use tax with respect to the purchase or use of the property, regardless of the actual tax rate that might have otherwise been applicable.
(d) The participating eligible seller shall collect the tax on all purchases delivered into Alabama unless the purchaser furnishes the eligible seller with a valid exemption certificate, sales tax license, or direct pay permit issued by the department. The eligible seller shall retain all exemption certificates, sales tax licenses, or direct pay permits in its files, or in such other manner as directed by the department.
(e) The eligible seller shall provide the purchaser with a statement or invoice showing that the simplified sellers use tax was collected and is to be remitted on the purchaser’s behalf. The statement shall be in a manner prescribed by the department.
(f) The simplified sellers use tax levied under this section shall not be collected and remitted in lieu of the sales and use tax collected by a licensing official pursuant to Section 40-23-104.
(Act 2015-448, p. 1443, §1; Act 2017-82, §2; Act 2019-382, §2.)
Eligible sellers may deduct and retain a discount equal to two percent of the simplified sellers use tax properly collected and then remitted to the department in a timely manner, provided that for tax periods beginning on or after January 1, 2019, the allowance for discount shall not apply to any taxes collected and then remitted which are in excess of four hundred thousand dollars ($400,000). The department is authorized to prescribe rules for administering the discount. No discount shall be allowed for any taxes which are not timely reported and remitted to the department pursuant to program procedures.
(Act 2015-448, p. 1443, §1; Act 2018-539, §1.)
(a) The department may adopt, promulgate, and enforce reasonable rules and regulations related to the implementation, administration, and participation in the program. The department shall have exclusive responsibility for reviewing and accepting applications for participation and for the administration, return processing, and review of the eligibility of sellers participating in the program. Eligible sellers participating in the program shall not be subject to audit or review by any Alabama locality. Eligible sellers shall maintain records of all sales delivered into Alabama, including copies of invoices showing the purchaser, address, purchase amount, and simplified sellers use tax collected. Such records shall be made available for review and inspection upon request by the department.
(b) The department may disclose the name of eligible sellers, the effective date the eligible seller began participating in the program and, if applicable, the cease date the eligible seller ceased to participate in the program.
(Act 2015-448, p. 1443, §1; Act 2017-82, §2.)
(a) Any taxpayer who pays a simplified sellers use tax through this program that is higher than the actual state and local sales or use tax levied in the locality where the sale was delivered may file for a refund or credit of the excess amount paid to the eligible seller participating in the program. A business taxpayer who has a registered consumer use tax account with the department may claim credit for the overpayment of simplified use tax on their consumer use tax return in a manner prescribed by the department. All other taxpayers may file a petition for refund in the manner prescribed by the department. The petition for refund may only be filed once per year. In the event the amount due to be refunded in a year is less than twenty-five ($25.00) dollars, payment of the refund may be deferred by the department and combined with amounts due to be paid pursuant to subsequent annual refund petitions for a period of up to three years.
(b) Any taxpayer seeking a refund or credit of excess taxes paid to an eligible seller participating in the program shall maintain records documenting the amount of simplified sellers use tax paid. Refund or credit requests shall require proper documentation of amounts paid by the taxpayer and shall be submitted to the department with the petition for refund.
(c) Notwithstanding any other provision of law, interest due on any refund of taxes paid directly to the department under this division shall be paid beginning 90 days after the receipt date of the properly documented refund petition with interest accruing beginning on the 91st day.
(Act 2015-448, §1.)
(a) The proceeds of simplified sellers use tax paid pursuant to this part shall be appropriated to the department, which shall retain the amount necessary to fund the administrative costs of implementing and operating the program and to cover the amounts paid for refunds authorized in Section 40-23-196. The balance of the amounts collected shall be distributed as follows:
(1) Fifty percent to the State Treasury and allocated 75 percent to the General Fund and 25 percent to the Education Trust Fund.
(2) Twenty-five percent to each county in the state on a prorated basis according to population as determined in the most recent federal census prior to the distribution.
(3) Twenty-five percent of funds to be distributed to each municipality in the state on a prorated basis according to population as determined in the most recent federal census prior to the distribution.
(b) Effective for tax periods beginning on or after January 1, 2019, the net proceeds after the distribution provided in subdivision (1) of subsection (a) shall be distributed 60 percent to each municipality in the state on a basis of the ratio of the population of each municipality to the total population of all municipalities in the state as determined in the most recent federal census prior to distribution and 40 percent to each county in the state, and deposited into the general fund of the respective county commission, on a basis of the ratio of the population of each county to the total population of all counties in the state as determined in the most recent federal census prior to the distribution.
(c) The distribution of the proceeds from the simplified sellers use tax paid to counties and municipalities shall occur quarterly in a manner prescribed by the department.
(Act 2015-448, p. 1443, §1; Act 2018-539, §1.)
Notwithstanding the provisions of Section 40-23-197, the department may initiate monthly distributions of the proceeds from the simplified sellers use tax paid to counties and municipalities.
(Act 2017-82, §1.)
In the event that the enactment of federal legislation removes current federal limitations on states’ ability to enforce their sales and use tax jurisdiction against businesses that lack an instate physical presence, the provisions of this part shall be inapplicable as to any eligible seller who is not registered with the department as a participant in the program at least six months prior to the date of such change in law. In such event, the provisions of this part will continue to apply to any eligible seller who has been approved by the department as a participant in the program at least six months prior to the change in law and to any taxpayer who has paid or pays the simplified sellers use tax authorized under this part provided the eligible seller continues to collect, report, and remit the simplified sellers use tax and otherwise complies with all procedures and requirements of the program. Eligible sellers participating in the program pursuant to this subsection may continue to receive a discount of two percent (2%) on all simplified sellers use taxes properly remitted under the provisions of this part and shall continue to report sales under the conditions set out in Section 40-23-193.
(Act 2015-448, §1; Act 2016-110, §1.)
(a) Subject to the limitations set out in this section, an eligible seller participating in the program shall be granted amnesty for any uncollected remote use tax that may have been due on sales made to purchasers in the state for all periods preceding October 1, 2019.
(1) The amnesty precludes assessment for uncollected simplified sellers use tax together with any penalty or interest for sales made during a period prior to October 1, 2019.
(2) The amnesty provided in this section shall be granted to any eligible seller who applies to participate in the program following acceptance into the program by the department.
(3) Amnesty is not available to an eligible seller with respect to any matter or matters for which the eligible seller has received notice of the commencement of an audit and the audit is not yet finally resolved, including any related administrative and judicial processes.
(4) Amnesty is not available for any simplified sellers use tax already paid or remitted to the state or for taxes collected by the eligible seller.
(5) Amnesty is fully effective, absent the eligible seller’s fraud or intentional misrepresentation of a material fact, as long as the eligible seller continues his or her participation in the program and continues to collect, report, and remit applicable simplified sellers use tax for a period of at least 36 months.
(6) Amnesty is applicable only to simplified sellers use tax due from an eligible seller in his or her capacity as an eligible seller and not to remote use taxes due from a seller in his or her capacity as a buyer.
(b) No class action may be brought against an eligible seller in any court of this state on behalf of customers for an overpayment of simplified sellers use tax collected and remitted on sales made by the eligible seller.
(Act 2015-448, p. 1443, §1; Act 2019-382, §1.)
The Simplified Sellers Use Tax Remittance Program may not be used to report sales tax obligations subject to the sales tax imposed by Chapter 23 of this title or any local law or municipal ordinance or any county ordinance enacted pursuant to Section 40-12-4 imposing a sales tax for those sales of tangible personal property which are sold at a retail location in this state.
(Act 2018-539, §2.)
(a) For the purpose of Act 2018-539, the following terms shall have the respective meanings ascribed to them:
(1) DEPARTMENT. The Alabama Department of Revenue.
(2) MARKETPLACE FACILITATOR. A person that contracts with marketplace sellers to facilitate for a consideration, regardless of whether deducted as fees from the transaction, the sale of the marketplace seller’s products through a physical or electronic marketplace operated by a person, and engages:
a. Either directly or indirectly, through one or more affiliated persons in any of the following:
Transmitting or otherwise communicating the offer or acceptance between the purchaser and marketplace seller;
Owning or operating the infrastructure, electronic or physical, or technology that brings purchasers and marketplace sellers together;
Providing a virtual currency that purchasers are allowed or required to use to purchase products from the marketplace seller; or
Software development or research and development activities related to any of the activities described in paragraph b. if such activities are directly related to a physical or electronic marketplace operated by a person or an affiliated person, and
b. In any of the following activities with respect to the marketplace seller’s products:
Payment processing services;
Fulfillment or storage services;
Listing products for sale;
Setting prices;
Branding sales as those of the marketplace facilitator;
Order taking;
Advertising or promotion; or
Providing customer service or accepting or assisting with returns or exchanges.
(3) MARKETPLACE SELLER. A seller that is not a related party, as prescribed in Section 40-23-190(c), to a marketplace facilitator and that makes sales through any physical or electronic marketplaces operated by a marketplace facilitator.
(4) PERSON. As defined in Section 40-23-1 (a)(1).
(5) PURCHASER. A person who purchases or contracts to purchase tangible personal property as defined in Section 40-12-220.
(6) QUALIFYING AMOUNT. Two hundred and fifty thousand dollars ($250,000) or an amount as otherwise prescribed by the department.
(7) RETAIL SALE. As defined in Section 40-23-1(a)(10), other than sales of motor vehicles as defined in Section 40-12-240.
(8) SELLER. An individual, trust, estate, fiduciary, partnership, limited liability company, limited liability partnership, corporation, or other legal entity.
(9) SIMPLIFIED SELLERS USE TAX. The tax as levied under Section 40-23-193.
(10) STATE. The State of Alabama.
(b) By no later than January 1, 2019, marketplace facilitators must either register with the department to collect and remit simplified sellers use tax on retail sales made through the marketplace facilitator’s marketplace by or on behalf of a marketplace seller that are delivered in Alabama, whether by the marketplace facilitator or another person, or report such retail sales and provide customer notifications pursuant to subsection (m). This subsection shall apply to any marketplace facilitator that has more than the qualifying amount in retail sales in Alabama for the preceding 12 months. Such retail sales shall include those made directly by the marketplace facilitator and shall also include those retail sales made by marketplace sellers through the marketplace facilitator’s marketplace. The collection and reporting requirements of this subsection shall not apply to retail sales other than those made through a marketplace facilitator’s marketplace.
(c) Marketplace facilitators that collect simplified sellers use tax under this section shall report and remit the tax in accordance with the provisions of Section 40-23-193 and shall maintain records of all sales delivered to a location in Alabama, including copies of invoices showing the purchaser, address, purchase amount, and simplified sellers use tax collected. Such records shall be made available for review and inspection upon request by the department.
(d) Marketplace facilitators who properly collect and then remit to the department in a timely manner simplified sellers use tax on sales in accordance with the provisions of this section by or on behalf of marketplace sellers shall be eligible for the discount provided under Section 40-23-194.
(e) The collection and remittance of simplified sellers use tax relieves the marketplace facilitator, the marketplace seller, and the purchaser from any additional state or local sales and use taxes on the transactions for which simplified sellers use tax was collected and remitted.
(f) Marketplace facilitators that collect simplified sellers use tax shall not be subject to audit or review by any Alabama locality for simplified sellers use tax. Sales by marketplace sellers for which simplified sellers use tax has been collected shall not be subject to audit or review by an Alabama locality for simplified sellers use tax. This exclusion shall not preclude an Alabama locality from auditing or reviewing any other sales by a marketplace seller for which sales or use tax would be due.
(g) Marketplace sellers for whom marketplace facilitators collect and remit simplified sellers use tax in accordance with the provisions of this section on all sales made by or on behalf of the marketplace seller that are delivered in Alabama shall be granted the continued participation and amnesty protections provided for eligible sellers under Sections 40-23-198 and 40-23-199.
(h) The marketplace facilitator shall provide the purchaser with a statement or invoice showing that the simplified sellers use tax was collected and shall be remitted on the purchaser’s behalf. The statement shall be in a manner prescribed by the department.
(i) No class action may be brought against a marketplace facilitator in any court of this state on behalf of customers for an overpayment of simplified sellers use tax collected and remitted on sales facilitated by the marketplace facilitator.
(j) Any taxpayer who remits simplified sellers use tax pursuant to this section shall be entitled to refunds or credits to the same extent and in the same manner provided for in Section 40-23-196 for taxes collected and remitted through the Simplified Sellers Use Tax Remittance Program.
(k) Marketplace facilitators shall be subject to the penalty provisions and procedures of Section 40-2A-11 and reporting requirements of Section 40-2-11(7)(b).
(l) The distribution of simplified sellers use tax remitted by marketplace facilitators shall be made in accordance with Sections 40-23-197 and 40-23-197.1.
(m) Effective January 1, 2019, any marketplace facilitator who does not collect and remit sales, use, or simplified sellers use tax on Alabama retail sale transactions of qualifying amounts shall be required to report such retail sales and provide customer notifications, within constitutional limitations, pursuant to Section 40-2-11(7)(b) and rules promulgated thereunder.
(n) The department may adopt, promulgate, and enforce reasonable rules and regulations for the administration and enforcement of Act 2018-539.
(Act 2018-539, §3.)
By no later than January 1, 2019, the department shall initiate an online application process to simplify refunds requested pursuant to Section 40-23-196.
(Act 2018-539, §4.)
For purposes of this division, the following words or phrases shall have the following meanings:
(1) AGREEMENT. The Streamlined Sales and Use Tax Agreement.
(2) COMMISSION. The Alabama Streamlined Sales and Use Tax Commission created in this division to develop, implement, and administer programs necessary to come into compliance with the provisions of the Streamlined Sales and Use Tax Agreement.
(3) COMMISSIONER. The Commissioner of the Department of Revenue.
(4) DEPARTMENT. The Department of Revenue.
(5) SINGLE ENTITY ADMINISTRATION. A program to provide state-level administration of state and local jurisdiction sales and use tax in compliance with the provisions of the Streamlined Sales and Use Tax Agreement.
(6) STREAMLINED SALES AND USE TAX AGREEMENT. The multi-state agreement by that name or any subsequent name the purpose of which is to simplify and modernize sales and use tax administration in member states in order to reduce the burden of tax compliance, as in effect from time to time.
(Act 2011-563, p. 1071, §1.)
(a) There is hereby established the Alabama Streamlined Sales and Use Tax Commission, created to identify, develop, implement, and administer the procedures and programs the State of Alabama would need to come into compliance with the Streamlined Sales and Use Tax Agreement in the event that federal legislation implementing the agreement or the general concepts of the agreement, which includes a requirement that remote sellers collect and remit sales and use taxes to member states, becomes law. The recommendations of the commission, if ratified by the Legislature pursuant to this division, shall not be implemented until and unless federal legislation adopting the Streamlined Sales and Use Tax Agreement becomes law.
(b) The commission shall be composed of 10 members, appointed as follows:
(1) Two representatives of municipal government, who shall be municipal employees or officials, appointed by the Alabama League of Municipalities.
(2) Two representatives of county government, who shall be county employees or officials, appointed by the Association of County Commissions of Alabama.
(3) Four employees of the Department of Revenue appointed by the Commissioner of the Department of Revenue.
(4) One representative of the retail community, appointed by the Alabama Retail Association.
(5) One representative of the business community, appointed by the Business Council of Alabama.
(c) All appointments to the commission shall be made before August 8, 2011, and each member of the commission shall serve at the pleasure of his or her appointing authority. Commission members shall receive no additional compensation for service on the commission, but shall be reimbursed by the State of Alabama for expenses in accordance with state law and travel policy regarding reimbursement for state employees’ travel related to their official work duties. The department shall provide administrative support necessary for the commission to carry out its duties.
(d) The commission, in all respects, shall be subject to the Alabama Open Meetings Act, Title 36, Chapter 25A. The organizational meeting of the commission shall take place by September 7, 2011. The commissioner of the department or his or her designee shall call the organizational meeting and serve as chair until the election of a chair as provided in this division. At the organizational meeting, the commission shall elect a chair and vice chair, who shall serve at the pleasure of the commission. The vice chair shall serve as acting chair whenever the chair is unable to preside at a meeting of the commission. A quorum for all meetings of the commission shall consist of seven members. If a quorum is not present at the beginning of any meeting, the members present shall have the authority to establish an alternate meeting date. A minimum of seven affirmative votes of the members of the commission shall be required for approval of any matter considered by the commission.
(e) The membership of the commission shall be inclusive and reflect the racial, gender, geographic, urban/rural, and economic diversity of the state.
(Act 2011-563, p. 1071, §2.)
The duties of the commission shall include identification and development of each of the following as necessary for compliance with the Streamlined Sales and Use Tax Agreement:
(1) The development of a system for single entity administration of state and local tax collection and distribution.
(2) The development of a system designed to provide proper notice of changes in state or local sales and use taxes or rates to taxpayers and the single entity administrator.
(3) The development of a system designed to provide proper implementation of changes in state or local sales and use taxes or rates.
(4) The development of a system providing for taxpayer audits by persons or entities other than the single entity administrator as authorized by the agreement.
(5) The development of a database of all state and local sales and use tax rates.
(6) Any other systems, programs, or policies the commission determines are required for compliance with the agreement.
(Act 2011-563, p. 1071, §3.)
(a) The commission shall make a preliminary written report of its recommended implementation plan regarding necessary systems and programs within three months of the initial meeting of the commission. The preliminary report approved by the commission shall be distributed for comment to the department, all Alabama counties and municipalities, the Business Council of Alabama, and the Alabama Retail Association. The report shall also be posted on the website of the Department of Revenue at all times during the comment period with information about how persons or entities can provide comment to the commission. Any comments from persons, entities, and organizations shall be submitted in writing to the commission within 45 days of the date distributed and posted. The commission shall review all written comments and make changes to its preliminary report as it deems appropriate.
(b) The commission shall make and file with the Legislature a final written report of its recommended implementation and administrative supervision of needed systems, programs, and procedures necessary to bring the state into compliance with the agreement no later than the fifth legislative day of the 2012 Regular Session of the Legislature. The report shall include proposed plans and estimated costs for implementation of the systems identified and developed pursuant to Section 40-23-202.
(c) If ratified and approved by the Legislative Council, the recommendations of the commission shall be implemented and administered only in the event that federal legislation adopting the Streamline Sales and Use Tax Agreement or the general concepts of the agreement which include a requirement that remote sellers collect and remit sales and use taxes to member states, becomes law.
(Act 2011-563, p. 1071, §4.)
(a) In addition to the duties set out in Section 40-23-202, the commission shall research Alabama’s existing tax laws to identify what changes in existing law will be necessary in order to bring Alabama in compliance with the agreement in the event that federal legislation adopting the agreement becomes law. The commissioner of the department, or his or her designee, shall assist the commission as necessary in carrying out this function, and once the commission’s research is completed, shall assist the commission in drafting legislation proposing the changes it identifies as necessary to bring the state into compliance with the agreement.
(b) The commission shall make preliminary recommendations regarding necessary changes in Alabama’s existing tax laws within six months of filing the written report required in subsection (b) of Section 40-23-203. The preliminary recommendations approved by the commission shall be distributed for comment to the department, the Association of County Commissions of Alabama, the Alabama League of Municipalities, the Business Council of Alabama, and the Alabama Retail Association. The report shall also be posted on the website of the department at all times during the comment period with information about how persons or entities can provide comment to the commission. Any comments from persons, entities, and organizations shall be submitted in writing to the commission within 45 days of the date distributed and posted. The commission shall review all written comments and make changes to its preliminary recommendations as it deems appropriate and shall submit a written report of its final recommendations to the Legislature by the third legislative day of the first regular session following the enactment of federal legislation implementing the agreement or the general concepts of the agreement, which includes a requirement that remote sellers collect and remit sales and use taxes to member states, becomes law.
(Act 2011-563, p. 1071, §5.)
The Legislature shall appropriate such funds from the general funds of the State of Alabama as necessary for the reasonable and necessary expenses of the commission, including the implementation and administration of programs developed pursuant to this division.
(Act 2011-563, p. 1071, §6.)
(a) As used in this article, the term “covered items” means the following:
(1) Articles of clothing with a sales price of one hundred dollars ($100), or less, per article of clothing.
a. “Clothing” means all human wearing apparel suitable for general use including sandals, shoes, and sneakers. “Clothing” shall not include the following:
Belt buckles sold separately.
Costume masks sold separately.
Patches and emblems sold separately.
Sewing equipment and supplies including, but not limited to, knitting needles, patterns, pins, scissors, sewing machines, sewing needles, tape measures, and thimbles.
Sewing materials that become part of “clothing” including, but not limited to, buttons, fabric, lace, thread, yarn, and zippers.
b. In addition, the term does not include clothing accessories or equipment, protective equipment, or sport or recreational equipment.
(i) Briefcases.
(ii) Cosmetics.
(iii) Hair notions, including, but not limited to, barrettes, hair bows, and hair nets.
(iv) Handbags.
(v) Handkerchiefs.
(vi) Jewelry.
(vii) Sun glasses, non-prescription.
(viii) Umbrellas.
(ix) Wallets.
(x) Watches.
(xi) Wigs and hair pieces.
(i) Breathing masks.
(ii) Clean room apparel and equipment.
(iii) Ear and hearing protectors.
(iv) Face shields.
(v) Hard hats.
(vi) Helmets.
(vii) Paint or dust respirators.
(viii) Protective gloves.
(ix) Safety glasses and goggles.
(x) Safety belts.
(xi) Tool belts.
(xii) Welders gloves and masks.
(i) Ballet and tap shoes.
(ii) Cleated or spiked athletic shoes.
(iii) Gloves, including, but not limited to, baseball, bowling, boxing, hockey, and golf.
(iv) Goggles.
(v) Hand and elbow guards.
(vi) Life preservers and vests.
(vii) Mouth guards.
(viii) Roller and ice skates.
(ix) Shin guards.
(x) Shoulder pads.
(xi) Ski boots.
(xii) Waders.
(xiii) Wetsuits and fins.
(2) A single purchase, with a sales price of seven hundred fifty dollars ($750), or less, of computers, computer software, and school computer supplies.
a. A “computer” means an electronic device that accepts information in digital or similar form and manipulates it for a result based on a sequence of instructions.
b. “Computer software” means a set of coded instructions designed to cause a “computer” or automatic data processing equipment to perform a task.
c. A “school computer supply” means an item commonly used by a student in a course of study in which a computer is used. The following is an all-inclusive list of school computer supplies:
Computer storage media; diskettes, and compact disks.
Handheld electronic schedulers, except devices that are cellular phones.
Personal digital assistants, except devices that are cellular phones.
Computer printers.
Printer supplies for computers; printer paper, printer ink.
d. “Computer,” “computer software,” and “school computer supplies” shall not include furniture and any systems, devices, software, peripherals designed or intended primarily for recreational use, or video games of a noneducational nature.
(3) Noncommercial purchases of school supplies, school art supplies, and school instructional material, up to a sales price of fifty dollars ($50) per item.
a. “School supply” is an item commonly used by a student in a course of study. The following is an all-inclusive list:
Binders.
Book bags.
Calculators.
Cellophane tape.
Blackboard chalk.
Compasses.
Composition books.
Crayons.
Erasers.
Folders; expandable, pocket, plastic, and manila.
Glue, paste, and paste sticks.
Highlighters.
Index cards.
Index card boxes.
Legal pads.
Lunch boxes.
Markers.
Notebooks.
Paper; loose leaf ruled notebook paper, copy paper, graph paper, tracing paper, manila paper, colored paper, poster board, and construction paper.
Pencil boxes and other school supply boxes.
Pencil sharpeners.
Pencils.
Pens.
Protractors.
Rulers.
Scissors.
Writing tablets.
b. “School art supply” is an item commonly used by a student in a course of study for artwork. The following is an all-inclusive list:
Clay and glazes.
Paints; acrylic, tempora, and oil.
Paintbrushes for artwork.
Sketch and drawing pads.
Watercolors.
c. “School instructional material” is written material commonly used by a student in a course of study as a reference and to learn the subject being taught. The following is an all-inclusive list:
Reference maps and globes.
Required textbooks on an official school book list with a sales price of more than thirty dollars ($30) and less than fifty dollars ($50).
(4) Noncommercial purchases of books with a sales price of not more than thirty dollars ($30) per book. The term “book” shall mean a set of printed sheets bound together and published in a volume with an ISBN number, but does not include magazines, newspapers, periodicals, or any other document printed or offered for sale in a non-bound form.
(b)(1) For calendar year 2026, the Department of Revenue, by rule, shall adjust the dollar amounts provided in subsection (a) by the percentage change in the Consumer Price Index for all urban consumers as published by the U.S. Department of Labor, Bureau of Labor Statistics, from December 2006 to December 2024, rounded to the nearest whole dollar.
(2) The department shall repeat the adjustment provided in subdivision (1) every five calendar years using the Consumer Price Index for all urban consumers as published by the U.S. Department of Labor, Bureau of Labor Statistics, for the previous five years forward.
(Act 2006-574, p. 1507, §1; Act 2025-309, §1.)
Covered items, as defined herein, are exempted from paying the state sales and use tax during the period from 12:01 a.m. on the third Friday in July of each year and ending at 12 midnight the following Sunday. Items normally sold in pairs shall not be separated to qualify for the exemption provided for in this article.
(Act 2006-574, p. 1507, §2; Act 2017-120, §1.)
The Commissioner of the Department of Revenue shall promulgate any rules necessary to implement and administer this article including, but not limited to, a list of those articles and items qualifying for the exemption pursuant to this article, that do not conflict with the streamlined sales and use tax agreement.
(Act 2006-574, p. 1507, §3.)
Any county or municipality, by resolution or ordinance adopted at least 90 days prior to the third full weekend of July, may provide for the exemption of covered items from county or municipal sales and use taxes during a period commencing at 12:01 a.m. on the third Friday in July of each year and ending at 12 midnight the following Sunday under the same terms, conditions, and definitions as provided for the state sales tax holiday. Notwithstanding the foregoing, a county or municipality is prohibited from providing such an exemption during any other period of the year.
(Act 2006-574, p. 1507, §4; Act 2017-120, p. 161, §1; Act 2025-309, §3.)
(a) As used in this article, the term “covered items” includes the following selling for sixty dollars ($60) or less per item:
(1) Any package of AAA-cell, AA-cell, C-cell, D-cell, 6-volt, or 9-volt batteries, excluding coin batteries and automobile and boat batteries.
(2) Any cellular phone battery or cellular phone charger.
(3) Any portable self-powered or battery-powered radio, two-way radio, weatherband radio, or NOAA weather radio.
(4) Any portable self-powered light source, including battery-powered flashlights, lanterns, or emergency glow sticks.
(5) Any tarpaulin, plastic sheeting, plastic drop cloths, or other flexible, waterproof sheeting.
(6) Any ground anchor system, such as bungee cords or rope, or tie-down kit.
(7) Any duct tape.
(8) Any plywood, window film, or other materials specifically designed to protect window openings.
(9) Any non-electric food storage cooler or water storage container.
(10) Any non-electric can opener.
(11) Any artificial ice, blue ice, ice packs, or reusable ice.
(12) Any self-contained first aid kit.
(13) Any fire extinguisher, smoke detector, or carbon monoxide detector.
(14) Any gas or diesel fuel tank or container.
(b) The term “covered items” also includes any portable generator and power cords used to provide light or communications or preserve food in the event of a power outage selling for one thousand dollars ($1,000) or less per item.
(c)(1) For calendar year 2026, the Department of Revenue, by rule, shall adjust the dollar amounts provided in subsection (a) and (b) by the percentage change in the Consumer Price Index for all urban consumers as published by the U.S. Department of Labor, Bureau of Labor Statistics, from December 2006 to December 2024, rounded to the nearest whole dollar.
(2) The department shall repeat the adjustment provided in subdivision (1) every five calendar years using the Consumer Price Index for all urban consumers as published by the U.S. Department of Labor, Bureau of Labor Statistics, for the previous five years forward.
(Act 2012-256, p. 492, §1; Act 2025-309, §2.)
Purchases of covered items, as defined herein, are exempted from the state sales and use tax during the period from 12:01 a.m. on the first Friday in July in 2012 and ending at twelve midnight the following Sunday. In subsequent years, purchases of covered items are exempted from state sales and use tax during the period from 12:01 a.m. on Friday of the last full weekend in February and ending at twelve midnight the following Sunday. Items normally sold in pairs or packages shall not be separated to qualify for the exemption provided for in this article.
(Act 2012-256, p. 492, §2.)
The Commissioner of the Department of Revenue shall promulgate any rules necessary to implement and administer this article including, but not limited to, a list of those articles and items qualifying for the exemption pursuant to this article, that do not conflict with the Streamlined Sales and Use Tax Agreement.
(Act 2012-256, p. 492, §3.)
Any county or municipality, by resolution or ordinance adopted at least 14 days prior to the first full weekend of July in 2012 and at least 90 days prior to the last full weekend of February in subsequent years, may provide for the exemption of covered items from county or municipal sales and use taxes during a period commencing at 12:01 a.m. on the first Friday in July in 2012, and the Friday of the last full weekend of February in subsequent years, and ending at 12:00 midnight the following Sunday under the same terms, conditions, and definitions as provided for the state sales tax holiday. Notwithstanding the foregoing, a county or municipality is prohibited from providing such an exemption during any other period of the year that is not designated as a sales tax holiday.
(Act 2012-256, p. 492, §4; Act 2025-309, §4.)
(a) No later than September 30, 2013, the Department of Revenue shall develop and make available a system which allows any taxpayer required to file and remit a state, county, or municipal sales or use tax or a state, county, or municipal leasing or rental tax or a state, county, or municipal lodgings tax the ability to file and remit such sales and use tax or leasing or rental tax or lodgings tax returns and payments through an electronic single point of filing program. The system shall be known as the Optional Network Election for Single Point Online Transactions or “ONE SPOT.” The system shall be available for use by any taxpayer for tax periods after September 30, 2013, provided the taxpayer complies with this article and any rules promulgated by the department for the administration of the system. The ONE SPOT system shall allow for sales and use tax or leasing or rental tax or lodgings tax return filing and tax remittance only and may not provide for the administration or enforcement of local sales and use taxes and rental or leasing and lodgings tax.
(b) There shall be no charge to local taxing jurisdictions for utilization of the ONE SPOT system by taxpayers or the local taxing jurisdiction or its designee. Beginning no later than January 2013, the department shall provide financial assistance of up to one million dollars ($1,000,000) for three years to assist local taxing jurisdictions as necessary to ensure that their local system is capable of effectively interfacing with the ONE SPOT system.
(c) The system developed and implemented pursuant to subsection (a) shall have the capability to allow a taxpayer to file an electronic tax return for state sales and use taxes and leasing or rental taxes and lodgings tax and for each local taxing jurisdiction in which the taxpayer is required to file and remit a sales or use tax or leasing or rental tax or lodgings tax. The electronic tax return shall contain all information included in the standard multiple jurisdictional tax returns developed pursuant to Section 11-51-210, and all information included in the electronic tax return shall be electronically available to each appropriate local taxing jurisdiction without delay. The department shall consult with the State and Local Advisory Committee established in Section 40-23-242 regarding development and implementation of the ONE SPOT system.
(d) As required in Section 11-51-210, every local taxing jurisdiction levying or administering a sales or use tax or leasing or rental tax or lodgings tax shall submit to the department a list of the sales and use taxes and leasing or rental taxes and lodgings taxes levied or administered by that local taxing jurisdiction including current rates and shall submit to the department written notification of any new or amended sales or use tax or leasing or rental tax or lodgings tax. Failure to notify the department may not invalidate the levy of the tax unless otherwise provided for by law; except that the department may not be required to program new sales or use taxes and leasing or rental taxes or lodgings taxes or tax rates in the system until such time as notice is provided as required in this article and pursuant to Section 11-51-210.
(Act 2012-279, p. 563, §1; Act 2015-52, §1.)
(a) All Alabama taxing jurisdictions shall authorize utilization of the ONE SPOT system for any taxpayer required to file a state or local sales or use tax or leasing or rental tax or lodgings tax return or remit the tax payments; provided, however, that any taxpayer utilizing the ONE SPOT system for filing an electronic tax return for a local taxing jurisdiction shall be required to simultaneously remit payment through the system or through another electronic method of payment accepted by the local taxing jurisdiction or its designee for which payment is being made. A local taxing jurisdiction may not accept a tax return from a taxpayer without payment through the system unless the taxpayer has prior approval from the local taxing jurisdiction to utilize a different approved electronic method of payment.
(b) No later than June 30, 2013, each local taxing jurisdiction shall provide the department with necessary information to allow all sales and use tax or leasing or rental tax or lodgings tax payments to be remitted directly to the bank account or other account designated by the local taxing jurisdiction. Each non-state administered local taxing jurisdiction shall set up their accounts to allow dishonored payments to be reversed. All tax payments made through the ONE SPOT system for non-state administered local taxing jurisdictions shall be remitted directly from the taxpayer to the designated bank account or other account of the local taxing jurisdiction with the ONE SPOT system serving as a conduit only.
(c) No taxpayer shall be required to use the ONE SPOT system for tax return filing and remittance of local sales and use taxes and leasing or rental taxes or lodgings taxes; provided, however, that any taxpayer utilizing the system shall comply with this article and any rules promulgated by the department for the administration of this article. Additionally, any taxpayer utilizing the system shall comply with any rules of the local taxing jurisdiction regarding the administration of the local sales or use tax or leasing or rental tax or lodgings tax.
(d) All penalties and interest shall be assessed according to state law and the rules of the department. Additionally, the state discount rate shall be applied except that a local taxing jurisdiction discount rate shall be applied if the local taxing jurisdiction notifies the department of such election in a manner prescribed by the department. A taxpayer who desires a waiver of any penalty assessed in relation to a return filed for a local taxing jurisdiction shall apply directly to that local taxing jurisdiction for the waiver.
(Act 2012-279, p. 563, §2; Act 2015-52, p. 189, §1; Act 2017-415, §1.)
(a)(1) To ensure that local taxing jurisdictions have meaningful input into the development and operation of ONE SPOT, a State and Local Advisory Committee is hereby established to review the design and operation of the system and to make recommendations regarding system requirements and functionality to the Commissioner of Revenue.
(2) The committee shall consist of the following individuals:
a. Three representatives of county government, appointed by the Association of County Commissions of Alabama.
b. Three representatives of municipal government, appointed by the Alabama League of Municipalities.
c. One representative of the business community, appointed by the Business Council of Alabama.
d. One representative of the retail community, appointed by the Alabama Retail Association.
e. One representative of a county or municipality which levies a lease or rental tax appointed by the Speaker of the House of Representatives who shall be a nonvoting member.
f. One representative of the business community appointed by the President Pro Tempore of the Senate who shall be a nonvoting member.
(3) The committee members shall receive no compensation or reimbursement of expenses from the state for serving on the committee.
(b) The committee shall meet with the Commissioner of Revenue and with other employees of the department as the commissioner deems appropriate. The initial meeting shall be at a time and place to be determined by the commissioner and shall be held no later than September 30, 2012. At the initial meeting, the committee shall organize itself and shall determine the timing and frequency of subsequent meetings.
(c) The role of the committee shall be limited to providing input and recommendations on the development and functionality of the ONE SPOT system with relation to the filing of sales and use tax or leasing or rental tax returns and remittance of payments utilizing the ONE SPOT system. The committee shall make no review of the department’s administration of state taxes, of state-administered local taxes, nor of any other department matter beyond the ONE SPOT system.
(d) If the commissioner fails to act on recommendations made by the committee regarding ONE SPOT, the committee, by majority vote, may appeal to the Legislative Council for a determination on whether the committee’s recommendations shall be implemented. The determination of the Legislative Council shall be final.
(Act 2012-279, p. 563, §3.)
Nothing in this article shall be construed to authorize the Department of Revenue to impose fees on the local taxing jurisdictions or their designees for the maintenance or operation of the ONE SPOT system.
(Act 2012-279, p. 563, §4.)
Notwithstanding any other provisions of law, the due date for any taxes which are eligible to be filed through the ONE SPOT system set out in this article shall be the same due date as the corresponding state tax whether or not payment is made through the ONE SPOT system.
(Act 2015-52, §2.)
(a) This article shall establish the Wholesale to Retail Accountability Program or “WRAP”.
(b) For the purpose of this article, the following words shall have the following meanings:
(1) DEPARTMENT. The State Department of Revenue.
(2) LICENSED BEER OR WINE DISTRIBUTOR. A distributor, as licensed by the Alabama Alcoholic Beverage Control Board, selling or distributing beer or wine in this state.
(3) PERSON. Any individual, firm, partnership, association, corporation, limited liability company, receiver, trustee, or any other entity.
(4) RETAILER. A person or group of persons that have a relationship with each other as defined in Section 267(b) of the federal Internal Revenue Code whose primary business is the sale of tangible personal property at retail, including supporting operations such as warehousing, shipping, and storage of product, and who holds a license pursuant to Section 40-23-6 or 40-23-66.
(5) SELLER. A manufacturer, wholesaler, or distributor of beer, wine, or tobacco products who sells to a retailer in this state. The term also includes a wholesale club or warehouse club that sells tobacco under a membership.
(c) For the purpose of enforcing the collection of taxes levied by this chapter, on the sale of tangible personal property, every seller of tobacco products making sales within this state on which sales or use tax was not collected at the time of the sale and every beer or wine distributor, shall file informational reports with the department pursuant to subsection (d) as follows:
(1) Each licensed beer or wine distributor shall report sales of any beer or wine made to licensees for which an exemption from sales or use tax collection was claimed at the time of the sale. A licensed beer or wine distributor who donates beer or wine in the same manner as a retailer making a gift pursuant to Section 40-23-1(f) shall not be required to report such transaction under this article and is subject to the same exemption as a retailer making a gift pursuant to Section 40-23-1(f).
(2) Each seller of tobacco products, selling or distributing to retailers in this state, shall report sales of tobacco products for which exemptions from sales or use tax were claimed at the time of the sale.
(d) The informational report shall be filed in the following manner as provided by the department:
(1) The information provided in the report from each seller or distributor required in subdivision (1) of subsection (c) shall include seller’s legal name, seller’s address, seller’s beverage license number, if applicable, retailer’s name, retailer’s address, total dollar amount sold for the reporting period, invoice period, invoice date and applicable Alabama Alcoholic Beverage Control Board license number provided by the retailer.
(2) The information provided in the report from each seller or distributor required in subdivision (2) of subsection (c) shall include the seller’s legal name, seller’s address, retailer’s name, retailer’s address, total dollar amount sold for the reporting period, and applicable sales tax number provided by the retailer. The department shall allow the seller to file a consolidated report to meet the requirements of Section 40-25-16.1 and this article.
(3) The department shall provide an electronic filing mechanism for submission of the informational report to the department.
(4) The informational report shall be due on or before the 20th day of the month next succeeding the month in which a sale occurs. The first informational report due shall be for sales occurring on or after July 1, 2018.
(e) If a seller fails to properly file the required informational report in good faith with the department on or before the prescribed date, the following penalties shall apply on or after January 1, 2019, and each reporting period thereafter:
(1) The first violation of this section shall result in a written notice from the department. The notice shall advise the seller of the non-compliance and the penalty for future non-compliance if the required informational reports are not filed within 30 days from the written notice as provided herein.
(2) The second violation of this section shall result in a penalty not to exceed five hundred dollars ($500).
(3) The third and each subsequent violation of this section shall result in a penalty not to exceed one thousand dollars ($1,000).
(f) The department shall not initiate an automated assessment or automated audit based solely on data provided to the department in the informational reports.
(g) The informational report filed with the department shall be subject to the exchange of information provisions set forth in Section 40-2A-10 for municipal and county government agencies in this state. Effective January 1, 2022, the department shall be the sole source for municipal and county government agencies to obtain sales information that is required to be provided under this article to the department.
(h)(1) To ensure that taxpayers and industry have meaningful input into the informational reports, a Wholesale and Distributor Reporting Advisory Group is hereby established to make recommendations regarding the reporting of the informational reports required herein.
(2) The advisory group shall consist of the following individuals:
a. One representative from the Alabama Department of Revenue as designated by the Commissioner who shall serve as chair of the group.
b. One representative of county government, appointed by the Association of County Commissions of Alabama.
c. One representative of municipal government, appointed by the Alabama League of Municipalities.
d. One representative of the industry community, appointed by the Alabama Wholesale Beer Association.
e. One representative of the tobacco industry community, appointed by the Alabama Wholesale Distributors Association.
f. One representative of the retail community, appointed by the Alabama Retail Association.
g. One representative from the Alabama Alcoholic Beverage Control Board as designated by the Administrator.
h. One representative of the industry community, appointed by the Alabama Beer Association.
i. One representative of the industry community, appointed by the Alabama Grocers Association.
j. One representative of the industry community, appointed by the Petroleum and Convenience Marketers of Alabama.
k. One representative of the industry community, appointed by the Cigar Association of America, Inc.
l. Three additional industry representatives as designated by the Commissioner of Revenue.
(3) The designating and appointing authorities shall coordinate their designations and appointments to assure the advisory group is inclusive and reflects the racial, gender, geographic, urban, rural, and economic diversity of the state.
(4) a. The advisory group shall receive no compensation or reimbursement of expense from the state for serving on the committee.
b. The advisory group shall meet with the designee of the Commissioner of Revenue and with other employees of the department as the commissioner deems appropriate. The meeting times and place will be determined by the designee of the commissioner.
c. The role of the advisory group shall be limited to providing industry input and recommendations towards the filing of required informational reports. The group shall make no review of any other department matter beyond the recommendation of required reporting by this article.
(i) By no later than January 15, 2020, the department shall submit a report regarding the implementation, administration, achievements, and suggested improvements related to the WRAP Program to the Chairs of the House Ways and Means General Fund and Education Trust Fund Committees and the Senate Finance and Taxation General Fund and Education Trust Fund Committees and the Legislative Service Agency, Fiscal Division.
(Act 2017-294, §1.)
(a) The department is authorized to require that every payment settlement entity, third party settlement organization, electronic payment facilitator, or other third party acting on behalf of a payment settlement entity, all as defined in Section 6050W of the Internal Revenue Code and referred to herein as a reporting entity, required to file information reports pursuant to that section , within 30 days of the filing due date, shall file with the department in such form and manner as prescribed by the department either a duplicate of all such information returns or a duplicate of such information returns related to taxpayers or participating payees, as defined in Section 6050W of the Internal Revenue Code, with an Alabama address. The department may require that such duplicate information returns be filed electronically.
(b) The information received by the department on a duplicate information return filed pursuant to this section shall be used only for taxes administered by the department.
(c) Any reporting entity failing to file a duplicate information return with the department on or before the prescribed date shall be subject to the following penalties:
(1) The first violation shall result in a written notice from the department. The notice shall advise the reporting entity of the non-compliance and the penalty for future non-compliance if the required duplicate information return is not filed within 30 days from the written notice as provided herein.
(2) The subsequent violation(s) shall result in a penalty not to exceed one-thousand dollars ($1,000) for each month or fraction of a month during which each failure continues.
(Act 2017-294, §2.)
(a) Information on all municipal business privilege license applications for new licenses and renewals issued on or after October 1, 2019, shall be electronically transmitted to the department by the licensing official or agent in the same manner as privilege licenses issued pursuant to Chapter 12.
(b) The department may adopt rules to administer and implement this section.
(Act 2017-294, §3.)
Section 40-23-260 is limited to the reporting of certain information to the Department of Revenue and shall not be construed as limiting or changing the existing record keeping requirements as provided in Section 40-23-9.
(Act 2017-294, §4.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date, see the Code Commissioner’s Notes in the code supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §365.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date, see the Code Commissioner’s Notes in the code supplement.
(Acts 1935, No. 194, p. 256; Acts 1936-37, Ex. Sess., No. 88, p. 105; Code 1940, T. 51, §366.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date, see the Code Commissioner’s Notes in the code supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §367.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date, see the Code Commissioner’s Notes in the code supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §368.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date, see the Code Commissioner’s Notes in the code supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §369.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date, see the Code Commissioner’s Notes in the code supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §370.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date, see the Code Commissioner’s Notes in the code supplement.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §371.)
[Repealed]
Repealed by Act 99-665, 2nd Sp. Sess., § 9. As to effective date, see the Code Commissioner’s Notes in the code supplement.
(Acts 1935, No. 194, p. 256; Acts 1936-37, Ex. Sess., No. 88, p. 105; Code 1940, T. 51, §372.)
AMENDED BY ACT 2026-50, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
For the purposes of this article, the following terms shall have the respective meanings ascribed by this section:
(1) WHOLESALE DEALER AND JOBBER. Persons, firms, or corporations who buy tobacco products direct from the manufacturer or an affiliate of the manufacturer and sell at wholesale only, any one or more of the articles taxed herein to licensed wholesale dealers, jobbers, semijobbers, and retail dealers for the purpose of resale only.
(2) RETAIL DEALER. Every person, firm, or corporation, other than a wholesale dealer or jobber, who sells or offers for sale any one or more of the articles taxed herein, irrespective of quantity or amount, or the number of sales; and all persons operating under a retail dealer’s license.
(3) SEMIJOBBER. Persons, firms, or corporations who buy tobacco products from permitted wholesalers or obtain tobacco from any other source and sell at wholesale any one or more of the articles taxed herein to licensed retail dealers for the purpose of resale only.
(4) STAMPS. The stamp or stamps by the use of which the tax levied under this article is paid and shall be designated Alabama Revenue Stamps.
(5) CIGARS, CHEROOTS, STOGIES, ETC. A roll for smoking that is of any size or shape and that is made wholly or in part of tobacco or any substitute therefor, irrespective of whether the tobacco is pure or flavored, adulterated or mixed with any other ingredient, if the roll has a wrapper made wholly or in part of tobacco.
(6) HEATED TOBACCO PRODUCT. A product other than a cigarette intended to be heated, containing tobacco that produces an inhalable aerosol by heating the tobacco by means of a device without combustion of the tobacco or by heat generated from a combustion source that only or primarily heats rather than burns the tobacco.
(7) CIGARETTE or CIGARETTES. The same meaning as defined in Section 6-12-2 and includes cigarette or cigarettes intended to be heated.
(8) CIGARETTE OR CIGARETTES INTENDED TO BE HEATED. A cigarette containing tobacco that produces an inhalable aerosol: (i) by heating the tobacco by means of an electronic device without combustion of the tobacco; or (ii) by heat generated from a combustion source that only or primarily heats rather than burns the tobacco.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §730; Act 2014-262, p. 827, §1; Act 2025-448, §1.)
(a) In addition to all other taxes of every kind now imposed by law, every person, firm, corporation, club, or association, within the State of Alabama, who sells or stores or receives for the purpose of distribution to any person, firm, corporation, club, or association within the State of Alabama, cigars, cheroots, stogies, cigarettes, smoking tobacco, chewing tobacco, snuff, heated tobacco products, or any substitute therefor, either or all, shall pay to the State of Alabama for state purposes only a license or privilege tax which shall be measured by and graduated in accordance with the volume of sales of such person, firm, corporation, club, or association in Alabama. There is hereby levied license or privilege taxes on articles containing tobacco enumerated in this article in the following amounts:
(1) LITTLE CIGARS. Upon cigars of all descriptions, including filtered cigars, made of tobacco, or any substitute therefor, and weighing not more than three pounds per 1,000, $.04 for each ten cigars, or fractional part thereof.
(2) FILTERED CIGARS. Upon filtered cigars that have a cellulose acetate or similar integrated filter, made of tobacco, or any substitute therefor, and weighing more than three pounds per 1,000, $0.015 for each filtered cigar.
(3) CHEROOTS, STOGIES, CIGARS, ETC. Upon all other cigars of any descriptions made of tobacco, or any substitute therefor, $40.50 per thousand cigars, or $0.0405 each.
(4) CIGARETTES. Upon all cigarettes made of tobacco, or any substitute therefor, other than cigarettes intended to be heated, 33.75 mills on each such cigarette.
(5) SMOKING TOBACCO. Upon all smoking tobacco, including granulated, plug cut, crimp cut, ready rubbed, and other kinds and forms of tobacco prepared in a manner as to be suitable for smoking in a pipe or cigarette, upon each package: Weighing not more than one and one-eighth ounces, tax $.04; over one and one-eighth ounces, not exceeding two ounces, tax $.10; over two ounces, not exceeding three ounces, tax $.16; over three ounces, not exceeding four ounces, tax $.21; $.06 additional tax for each ounce or fractional part thereof over four ounces.
(6) CHEWING TOBACCO. Upon all chewing tobacco prepared in a manner as to be suitable for chewing only and not suitable for smoking as described and taxed in subdivision (5) of this subsection: $.015 per ounce or fractional part thereof.
(7) SNUFF. Upon each can or package of snuff weighing not more than five-eighths ounces, one cent tax; over five-eighths ounces and not exceeding one and five-eighths ounces, $.02 tax; over one and five-eighths ounces and not exceeding two and one-half ounces, $.04 tax; over two and one-half ounces and not exceeding five ounces (cans, packages, gullets), $.06 tax; over three ounces and not exceeding five ounces (glasses, tumblers, bottles), seven cents tax; over five ounces and not exceeding six ounces, $.08 tax; weighing over six ounces, an additional $.12 for each ounce or fractional part thereof.
(8) HEATED TOBACCO PRODUCTS. Beginning November 1, 2025, upon all heated tobacco products, the tax on a single-use consumable unit shall be $0.017 per single-use consumable unit.
(9) CIGARETTES INTENDED TO BE HEATED. Beginning November 1, 2025, upon all cigarettes intended to be heated the tax of $0.017 on each cigarette intended to be heated.
(b) Whenever in this article reference is made to any manufactured tobacco products on which the tax is based on weight, the weight as shown by the manufacturer or the federal internal revenue stamp shall apply.
(c) When any articles or commodities subject to tax in this article are given as prizes on punch boards, shooting galleries, premiums, etc., the tax shall be based on the tax rates in subsection (a) of such articles.
(d) The tax herein levied, except for the taxes levied by subsections (i) and (j), shall be paid to the state through the use of stamps as herein provided. However, every wholesaler, distributor, jobber, semijobber, or retail dealer shall add the amount of the tax levied herein to the price of the tobacco or tobacco products sold, it being the purpose and intent of this provision that the tax levied is in fact a levy on the ultimate consumer or user with the wholesaler, distributor, jobber, semijobber, or retail dealer acting merely as an agent of the state for the collection and payment of the tax to the state. Therefore, notwithstanding any exemptions from taxes which any such seller may now or hereafter enjoy under the Constitution or laws of this or any other state, or of the United States, he or she shall collect the tax imposed hereunder from the purchaser or consumer, and the amount of the tax shall constitute a debt from the purchaser or consumer to the seller until paid. It shall be unlawful for any person, firm, corporation, association, or copartnership to fail or refuse to add to the sales price and collect from the purchaser the amount of the tax to be added to the sales price and collected from the purchaser hereunder. Stamps in denominations to the amount of the tax or in denominations specified pursuant to subsection (e) of this section shall be affixed to the box or other container from or in which tobacco products taxed by this section are normally sold at retail. The stamps shall be affixed in such a manner that their removal will require continued application of water, steam, or heat; and in case of cigars, cheroots, chewing tobacco and like manufactured tobacco products, where sales are made from the original container, the stamps shall be affixed to the box or container in such a way that the stamps shall be torn in two or mutilated when such containers or boxes are opened for the sale of the tobacco products. In the case of cigarettes, smoking tobacco, snuff, heated tobacco products, and like products sold at retail in packages, the required amount of stamps to cover the tax shall be affixed to each individual package or container. All taxable tobaccos herein enumerated, when offered for sale, either at wholesale or retail, without having stamps affixed in the manner set out by this article, or without payment of the tax by return by the wholesaler, jobber, semijobber, or registered retailer, shall be subject to confiscation, in the manner provided for contraband goods as set out in this article.
(e) The Commissioner of Revenue shall prepare and issue stamps in denominations for the amount of the tax imposed by this article, provided that if the commissioner determines that it is not economical for the state to have a stamp prepared and issued for one or more particular types of packages of tobacco products, then the commissioner may by rule prescribe the use of a stamp in a denomination other than for the amount of the tax imposed with the difference between the amount of tax actually imposed and the amount of tax denominated by the stamp paid with the use of a monthly report; or may require a monthly report without use of a stamp to report the amount of taxes due.
(f) The increases levied by this section shall be exclusive and shall be in lieu of any other or additional local taxes and/or license fees, county or municipal, imposed on the sale or use of cigarettes, heated tobacco products, and/or other tobacco products. Notwithstanding the foregoing, an act of the Legislature or an ordinance or resolution by a taxing authority passed or enacted on or before May 18, 2004, imposing a local tax and/or license fee shall remain operative, but no additional local tax and/or license fee may thereafter be levied on the sale of cigarettes, heated tobacco products, and/or other tobacco products.
(g) Local taxes and/or license fees, county or municipal, imposed on the sale or use of cigarettes shall be paid to the local government through the use of stamps affixed to the product as provided herein for the state tax. Provided, however, this requirement shall not be interpreted to require the Department of Revenue to prepare all stamps or to collect all local taxes. Local governments may contract with another entity to collect their local cigarette tax but all local taxes must be collected as provided herein.
(h) Notwithstanding any other provision of this chapter, revenue from the additional tax in subsection (a)(4) imposed by Act 2015-535 shall be deposited into the State General Fund for the Medicaid Program.
(i) In the counties that have a local tobacco tax, there is hereby levied an additional county license or privilege tax on heated tobacco products and cigarettes intended to be heated, which shall equal half of the state tax rate as provided in subdivision (a)(8) and shall be paid to the county in which the heated tobacco products or cigarettes intended to be heated were sold to the purchaser. Notwithstanding any other provision of this chapter, the taxes imposed by subdivision (a)(8) and this subsection shall be collected by the wholesaler, jobber, semijobber, or registered retailer from the purchaser at the time of purchase.
(j) In the municipalities that have a local tobacco tax, there is hereby levied an additional municipal license or privilege tax on heated tobacco products and cigarettes intended to be heated, which shall equal half of the local municipal tax or license fee as applied to the sale of cigarettes and shall be paid to the municipality in which the heated tobacco products or cigarettes intended to be heated were sold to the purchaser. Notwithstanding any other provision of this chapter, the taxes imposed by subdivision (a)(8) and this subsection shall be collected by the wholesaler, jobber, semijobber, or registered retailer from the purchaser at the time of purchase.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §718; Acts 1945, No. 326, p. 528; Acts 1947, No. 288, p. 143; Acts 1955, 2nd Ex. Sess., No. 73, p. 188, §1; Acts 1959, No. 637, p. 1550; Acts 1959, 2nd Ex. Sess., No. 101, p. 318, §1; Acts 1959, 2nd Ex. Sess., No. 129, p. 380, §1; Acts 1965, No. 654, p. 1177, §1; Acts 1967, No. 275, p. 784, §1; Acts 1967, No. 309, p. 850, §1; Acts 1969, No. 551, p. 1034, §1; Acts 1984, No. 84-309, p. 684, §1; Acts 1984, 2nd Ex. Sess., No. 85-45; Act 2004-545, p. 1157, §1; Act 2014-262, p. 827, §1; Act 2015-535, 2nd Sp. Sess., §§1, 4; Act 2025-448, §1.)
(a) For the purposes of this section, the following terms shall have the respective meanings ascribed to them by this section:
(1) CIGAR WRAP. An individual tobacco wrapper that is made wholly or in part from tobacco, including reconstituted tobacco, whether in the form of tobacco leaf, sheet, or tube, if the wrap is designed to be offered to or purchased by a consumer.
(2) COMMISSIONER. The Commissioner of the Department of Revenue of the State of Alabama.
(3) DEPARTMENT. The Department of Revenue of the State of Alabama.
(4) NET TAX PROCEEDS. The entire proceeds from the tax herein levied less costs of collection, refunds, grants, and credits as may be authorized by law.
(5) PERSON. Individuals, firms, corporations, partnerships, companies, or other agencies, associations, incorporated or otherwise, singular or plural.
(6) STATE. The State of Alabama.
(7) WHOLESALE SALE. A sale of tangible personal property by wholesalers to licensed retail merchants, jobbers, dealers, or other wholesalers for resale and shall not include a sale by wholesalers to users or consumers, not for resale.
(b) There is hereby levied a tax upon all cigar wrappers manufactured using tobacco sold at wholesale in this state or imported into this state for use, consumption, or sale at retail. The tax shall be levied upon each package in the following amounts: Weighing not more than one and one-eighth ounces, four cents ($.04); over one and one-eighth ounces, not exceeding two ounces, ten cents ($.10); over two ounces, not exceeding three ounces, sixteen cents ($.16); over three ounces, not exceeding four ounces, twenty-one cents ($.21); and six cents ($.06) additional tax for each ounce or fractional part thereof over four ounces.
(c) Notwithstanding subsection (b), nothing in this section shall be construed to apply to a cigar manufacturer using wrappers made from tobacco applying those wrappers on a finished cigar for sale at retail.
(d) Before any person engages in the business of selling any of the items on which the tax levied by this section has not been paid to the department, the person shall make application to the department upon forms prepared by the department for a license. The license shall be a condition precedent to engaging or continuing in the business of selling the items taxed under this chapter.
(e) On or before the 20th day of each month, each person on whom the tax levied by this chapter is imposed shall render to the department on forms prescribed by the department a true and correct statement showing the amounts utilized in the measurement of the tax and all other information as the department may require and shall pay to the department the amount of tax shown due.
(f) Any person subject to this section who shall fail to make any report required of them by the department or shall fail to keep any of the records required herein shall be guilty of a Class B misdemeanor. Each month of such failure shall constitute a separate offense.
(g) The tax imposed by this section shall be in addition to all other licenses and taxes levied by law as a condition precedent to engaging in any business taxable hereunder.
(h) Any taxpayer who shall violate this section may be restrained from continuing in business, and the proper prosecution shall be instituted in the name of the State of Alabama by its Attorney General or by the counsel of the department until such person shall have complied with this chapter.
(i) The department shall enforce this section and may prescribe, adopt, promulgate, and enforce rules relating to any matter or thing pertaining to the administration and enforcement of this section and the collection of taxes, penalties, and interest imposed by this section.
(j) The department for good cause may grant up to a 30-day extension for the time for making any return required under this section.
(k) All revenue collected under the provisions of this section shall be paid to the department and shall be distributed as is provided for the distribution of funds received from tobacco products other than cigarettes in Section 40-25-23(3).
(l) The amount of money as shall be appropriated for each fiscal year by the Legislature to the department with which to pay the salaries and the cost of operation and management of the department shall be deducted, as a first charge thereon, from the taxes collected under the provisions of this section; provided, however, that the expenditure of such sum so appropriated shall be budgeted and allotted pursuant to Sections 41-4-80 to 41-4-96, inclusive, and limited to the amount appropriated to defray the expenses of operating the department for each fiscal year.
(Act 2012-425, §1.)
(a) There is hereby imposed a floor-stock tax on tobacco products owned by any permitted wholesaler as of the effective date of any tax increase regarding any tobacco products enumerated in Sections 40-25-2 and 40-25-2.1.
(b) For the purpose of tax revaluation, at the close of business on the day before the effective date of the tobacco tax rate increase, each permitted wholesaler shall take a physical inventory of tax-paid tobacco products, stamped cigarettes and unaffixed revenue stamps currently owned which are affected by the tax increase. Each person subject to the tax increase shall:
(1) File a report on forms prescribed by the Department of Revenue, setting forth the additional tax due for each product type and stamp subject to the increase; and
(2) Pay the additional tax imposed under Sections 40-25-2 and 40-25-2.1, along with the above report, to the Department of Revenue no later than 30 days following the effective date of the tax increase.
Any permitted wholesaler owning tobacco products and revenue stamps as of the effective date of the tax increase shall be liable for the tax, and it shall be paid in the manner prescribed by the Department of Revenue.
(c) Notwithstanding any other provision of this chapter, revenue from the additional tax in subsection (a) imposed by Act 2015-535 shall be deposited into the State General Fund for the Medicaid Program.
(Act 2015-535, 2nd Sp. Sess., §§2, 4.)
The Department of Revenue shall design the form and kind of stamps to be used and shall duly adopt and promulgate such form of stamps. Such stamps so adopted and promulgated shall be known and termed as “Alabama Revenue Stamp,” and in any information or indictment, it shall be sufficient to describe the stamps as “Alabama Revenue Stamps.”
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §730.)
The license taxes imposed by this article shall be paid by affixing stamps in the manner and at the time herein set forth. In the case of cigars, stogies, cheroots, chewing tobacco, and like products, the stamps shall be affixed to the box or container in which or from which normally sold at retail. In the case of cigarettes, smoking tobacco, heated tobacco products, and snuff, the stamps shall be affixed to each individual package. Time allowed for affixing stamps shall be as follows: Every wholesale or retail dealer in this state, except wholesalers who are issued a permit by the Department of Revenue, shall immediately after receipt of any unstamped cigars, stogies, cheroots, chewing tobacco, cigarettes, smoking tobacco, heated tobacco products, or snuff, unless sooner offered for sale, cause the same to have the requisite denominations and amount of stamp or stamps to represent the tax affixed as stated herein. The stamping of the cigars, stogies, cheroots, chewing tobacco, cigarettes, smoking tobacco, heated tobacco products, and snuff shall actually begin within one hour after receipt of the cigars, stogies, cheroots, chewing tobacco, cigarettes, smoking tobacco, heated tobacco products, and snuff in the premises of the wholesale or retail dealer, except wholesalers who are issued a permit by the Department of Revenue, and the stamping shall be continued with reasonable diligence by the wholesale or retail dealer until all of the unstamped cigars, stogies, cheroots, chewing tobacco, cigarettes, smoking tobacco, heated tobacco products, and snuff have been stamped. Wholesalers who have been issued a permit by the department shall affix the required stamps prior to any sale. Every wholesale dealer shall at the time of shipping or delivering any tobacco products as enumerated herein make a true duplicate invoice of the same which shall show full and complete details of the sale or delivery of the taxable article, shall state the tobacco tax separately from the price of the tobacco products, and shall retain the same subject to the use and inspection of the Department of Revenue, or its duly authorized agents for a period of three years. Wholesaler invoices must be computer or machine generated and the seller’s or supplier’s name must be on the invoice. Handwritten invoices may not be considered legitimate documentations to substantiate proof of sale. Wholesale and retail dealers shall also keep a record of purchases of all tobacco products enumerated and defined in this article and hold all books, records, and memoranda pertaining to the purchase and sale of those tobacco products open to the inspection of the Department of Revenue or its duly authorized agents at any and all times. Every wholesale dealer shall furnish to the Department of Revenue a monthly report, between the first and twentieth of each month for the preceding month, of all orders for tobacco products purchased through the wholesale dealer from without this state on a drop shipment and consigned direct to the person, firm, corporation, or association of persons ordering the tobacco products from without this state through the wholesale dealer. If, upon examination of invoices of any tobacco product sold by a wholesaler or purchased or received, or both, by a retail dealer, he or she is unable to furnish evidence to the Department of Revenue of sufficient stamp purchases to cover the unstamped tobaccos purchased, the prima facie presumption shall arise that the tobacco products were sold without the proper stamps affixed thereto. Any wholesaler or retailer who fails or refuses to comply with any or all of the above provisions shall be deemed a violator of this section and, upon conviction, punished by a fine of not less than $500 nor more than $1,000, or imprisonment in the county jail for a period of six months, either or both, at the discretion of the court.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §719; Acts 1951, No. 296, p. 590, §1; Acts 1993, No. 93-324, p. 493, §1; Act 2014-262, p. 827, §1; Act 2025-448, §1.)
AMENDED BY ACT 2026-50, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
(a) Notwithstanding any other laws, the only persons or businesses who may be licensed to buy and affix the tax stamps of the Alabama Department of Revenue required by law to packages of tobacco products are wholesalers and distributors who buy the tobacco products direct from the manufacturer, or an affiliate of the manufacturer, except that the manufacturer of the product may be allowed to affix the stamps to a tobacco product for the following purposes:
(1) Trademark registration.
(2) Promotions of the product.
(3) Test-marketing the product.
(b) In order for a manufacturer to affix tax stamps to a tobacco product for a purpose described in subsection (a), the manufacturer shall give at least four weeks written notice to the Commissioner of the Department of Revenue of such intention along with full details of the exceptional event, including, but not limited to:
(1) The nature of the promotion.
(2) The location and length of the promotion.
(3) The estimated number of tobacco products to be offered for sale during the promotion.
(c) The Department of Revenue shall notify all self-administered counties and municipalities of the manufacturer’s request within seven days of receiving notice from the manufacturer by forwarding to each self-administered county and municipality a copy of the written notice, including the full details of the exceptional event as set out above.
(d) Any person who violates this section shall be guilty of a Class A misdemeanor and, upon conviction thereof, shall be punished as prescribed by law.
(Act 99-587, p. 1342, §§1, 2.)
The Department of Revenue is hereby authorized and directed to have prepared and distributed stamps suitable for denoting the tax on all articles enumerated herein. Any person, firm, corporation, or association of persons, other than the Department of Revenue, who sells tobacco tax stamps not affixed to tobacco sold and delivered by them, whether the stamps be genuine or counterfeit, shall be guilty of a felony and punishable as set out in Section 40-25-6. When wholesalers or jobbers have qualified as such with the Department of Revenue, as provided in Section 40-25-16, and desire to purchase stamps as prescribed herein for use on taxable tobaccos sold and delivered by them, the Department of Revenue shall allow on such sales of tobacco tax stamps a discount of 4.75 percent on the entire amount of the sale. Where wholesalers or jobbers are entitled to purchase stamps at a discount as herein provided, instead of the Department of Revenue selling such stamps to such jobbers or wholesalers for cash, it may consign such stamps, if and when such wholesaler or jobber shall give to the Department of Revenue a good and sufficient bond executed by some surety company authorized to do business in this state, conditioned to secure the payment for the stamps so consigned when and as they are used on manufactured tobacco products by such wholesaler or jobber. Every wholesaler or jobber purchasing stamps on consignment as described herein, shall be required to make a full and complete accounting and remittance on or before the twentieth of each month for all stamps used on taxable tobaccos during the preceding month. Every wholesaler or jobber refusing or failing to comply with this section shall forfeit the commission or discount on stamps used which he failed or refused to account or remit for in the time allowed, and in addition shall be charged interest on such delinquent amount for each day delinquent at the rate of eight percent per annum.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §728; Acts 1951, No. 296, p. 590, §3; Acts 1955, No. 532, p. 1181; Act 2015-535, 2nd Sp. Sess., §1.)
Whoever removes or otherwise prepares any Alabama Revenue Stamps with intent to use, or cause the same to be used, after it has already been used, or buys, sells, offers for sale or gives away any such washed, removed, or restored stamps to any person for using or who used the same, or has in his possession any washed, restored, removed, or altered stamp which has been removed from the article to which it has been previously affixed, or whoever for the purpose of indicating the payment of any tax hereunder reuses any stamp which has heretofore been used for the purpose of paying any tax provided in this article, or whoever except the Department of Revenue sells any Alabama Revenue Stamps not affixed to taxable tobaccos as provided herein, is guilty of a felony and, upon conviction, shall be punished by imprisonment in the penitentiary for not less than a year and a day, nor more than five years, and in addition may be fined not less than $1,000 nor more than $5,000.
Whoever manufactures, buys, sells, offers for sale or has in his or its possession any reproduction or counterfeit of the Alabama Revenue Stamps provided for in this article is guilty of a felony and, upon conviction, shall be punished by imprisonment in the penitentiary for not less than a year and a day, nor more than 10 years, and in addition, may be fined not less than $2,000 nor more than $10,000.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §734.)
Any retail dealer or semijobber of tobacco products enumerated and defined in this article purchasing, or receiving such commodities from without the state, whether the same shall have been ordered or purchased through a wholesaler or jobber in this state, or by drop shipment or otherwise, shall within 12 hours of receipt of such tobacco products, provide electronically, a true duplicate invoice of all such purchases or receipts to the Department of Revenue, the invoice carrying the name of the person or firm from whom or through whom such purchases or shipments of the tobacco products so received, showing kinds and quantities. Any retail dealer or semijobber failing or refusing to furnish duplicate invoices, in both the manner and time allowed, may be subject to a department imposed penalty of not less than one thousand dollars ($1,000) nor more than five thousand dollars ($5,000), to be multiplied by the sum of the current violation plus prior violations of this subsection. Tobacco products imported by retail dealers and semijobbers in which a true and duplicate invoice has not been received by the department are considered contraband and subject to confiscation as provided for in this chapter.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §720; Act 2014-262, p. 827, §1.)
AMENDED BY ACT 2026-50, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
Any cigarettes, smoking tobacco, heated tobacco products, cigars, stogies, cheroots, chewing tobacco, snuff, or other products taxable under this article found at any point within the State of Alabama, which the cigarettes, smoking tobacco, heated tobacco products, cigars, stogies, cheroots, chewing tobacco, snuff, or other products taxable under this article shall have been within the State of Alabama for a period of two hours, or longer, in possession of any retailer or semijobber not having affixed to the package the stamps as provided in this article, or in the case of products not requiring a stamp to be affixed where purchase invoices do not itemize the applicable tobacco taxes, are declared to be contraband goods and may be seized by the Department of Revenue, or its agents or by any peace officer of the State of Alabama, without a warrant and the goods shall be delivered to the Department of Revenue for destruction. Any of the goods, wares, or merchandise when offered for sale, either at wholesale or retail without the stamps having been first affixed, or in the case of products not requiring a stamp to be affixed where purchase invoices do not itemize the applicable tobacco taxes, shall be subject to confiscation as hereinabove provided. Any untaxed cigarettes, smoking tobacco, heated tobacco products, cigars, stogies, cheroots, chewing tobacco, snuff, or other products taxable under this article found at any location within the State of Alabama, other than the primary location of the permitted wholesaler or jobber, registered semijobber, registered retailer or tobacco products manufacturer who stores tobacco products at a bonded warehouse in this state for resale, are declared to be contraband goods, and those goods may be seized by the Department of Revenue, or its agents or by any peace officer of the State of Alabama, without a warrant and the goods shall be delivered to the Department of Revenue for destruction. Any vehicle, not a common carrier, used for the transportation for the purpose of sale of unstamped articles as hereinabove enumerated shall likewise be subject to confiscation and sale at public auction to the highest bidder after due advertisement and notice to the title owner of the vehicle. The proceeds of sale for any vehicle sold hereunder shall be deposited into the State Treasury by the Department of Revenue to be credited in the same manner as the tax otherwise due on the tobacco products being transported. The cost of confiscation and sale shall be paid out of the proceeds derived from the sale before making remittance to the Treasurer. Should any unstamped tobaccos be found in any vehicle that is engaged in the sale, distribution, or delivery of taxable tobaccos, the same shall be prima facie evidence that it was there for sale.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §721; Acts 1993, No. 93-324, p. 493, §1; Act 2014-262, p. 827, §1; Act 2025-448, §1.)
AMENDED BY ACT 2026-50, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
(a) Each person, firm, corporation, club, or association that transports products required to be stamped as provided in Section 40-25-8, which are not stamped or on which tax has not been paid in accordance with this chapter and Chapter 25A, upon the public highways, roads, or streets of this state is required to have an active tobacco permit or transporters permit under this chapter. Failure to obtain a permit prior to transporting the products is a violation of this section. A violation of this section may result in the products being declared contraband goods that may be seized without warrant by any law enforcement officer in this state. The contraband goods may be disposed of or destroyed by the law enforcement officer in accordance with this chapter. In addition, a vehicle used in the transportation of confiscated products may be subject to confiscation by the law enforcement officer and sold at public auction to the highest bidder after due advertisement pursuant to Chapter 13 of Title 32.
(b) The owner or driver, or both, of a vehicle used in a violation of this section is guilty of a Class A misdemeanor unless the tobacco products being transported exceeds any of the following quantities: 25,000 cigars, 50,000 filtered cigars, 50,000 little cigars, 50,000 cigarettes, 50,000 heated tobacco products, 25,000 cigar wraps, or 2,500 individual containers of loose or smokeless tobacco, in which case the owner or driver is guilty of a Class C felony. Any person convicted of a second or subsequent offense for a violation of this section is guilty of a Class C felony, regardless of the amount of tobacco products involved in the violation.
(c) This section shall not apply to individuals transporting tobacco for personal consumption as provided in Section 40-25-25.
(Act 2022-352, §2; Act 2025-448, §1.)
(a) Proof of the destination of tobacco products being transported shall be provided upon request of any law enforcement officer in this state. The proof shall be verifiable by the law enforcement officer.
(b) This section shall not apply to tobacco products transported upon the public highways, roads, and streets of this state if the tobacco products are being transported in interstate commerce.
(c) A person failing to present documentation required by this section may be subject to the following civil penalties to be assessed by the department:
(1) On the first violation of this section, the owner or driver shall be assessed a civil penalty of one hundred dollars ($100).
(2) On a second or subsequent violation within a three-year period, a civil penalty of one hundred dollars ($100) multiplied by the total number of violations within the three-year period shall be assessed.
(3) A person transporting tobacco products without possession of proper documentation shall be guilty of a Class A misdemeanor. Any person who has been convicted under this section shall be guilty of a Class C felony for a second or subsequent violation of this section, regardless of the amount of tobacco products involved in the violation.
(d) This section shall not apply to individuals transporting tobacco for personal consumption as provided in Section 40-25-25.
(Act 2022-352, §2.)
In all cases of seizure of any goods, wares, merchandise, or other property hereafter made as being subject to forfeiture under provisions of this article:
(1) The officer or person making the seizure shall cause a list containing a particular description of the goods, wares, merchandise or other property seized to be prepared in duplicate. The list shall be properly attested by the officer.
(2) The Department of Revenue shall then proceed to post a notice for three weeks on its web site describing the articles and stating the time and place and cause of their seizure and requiring any person claiming them to appear and make such claim in writing within 30 days from the date of the first posting of such notice.
(3) Any person claiming the goods, wares or merchandise or other property so seized as contraband within the time specified in the notice may file with the Department of Revenue a claim in writing, stating the person’s interest in the articles seized and may execute a bond to the Department of Revenue in a penal sum equal to double the value of the goods so seized, but in no case shall the bond be less than the sum of $200, with sureties to be approved by the clerk of the circuit court in the county in which the goods are seized, conditioned that in the case of condemnation of the articles so seized, the obligors shall pay to the Department of Revenue the full value of the goods so seized and all costs and expenses of the proceedings to obtain such condemnation, including a reasonable attorney’s fee. And upon the delivery of such bond to the Department of Revenue, it shall transmit the same with the duplicate list or description of the goods seized to the district attorney of the circuit in which such seizure was made, and the district attorney shall file a complaint in the circuit court of the county where the seizure was made to secure the forfeiture of the goods, wares, merchandise or other property. Upon the filing of the bond, the goods shall be delivered to the claimant pending the outcome of the case; provided, that the claimant must purchase the proper stamps to be affixed to each article of tobacco before the goods are delivered to the claimant by the Department of Revenue.
(4) If no claim is interposed and no bond given within the time above specified, such goods, wares, merchandise or other property shall be forfeited without further proceedings and the same shall be destroyed, if tobacco goods, or sold at auction, if a vehicle. The proceeds of sale when received by the Department of Revenue shall be turned in to the Treasury as other revenues are required by law to be turned in. The proceedings against goods, merchandise or other property pursuant to the provisions of this article shall be considered as proceedings in rem unless otherwise provided. Should the Department of Revenue have to resort to the courts for collection of the tax due and assessed, no advertisement shall be made and the confiscated tobaccos may be held as evidence pending the results of court action.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §722; Act 2014-262, p. 827, §1.)
The Department of Revenue may in its discretion return any goods confiscated under this article or any part thereof when it is shown that there was no intention to violate the provisions of this article. When any goods, merchandise or other property are confiscated under the provisions of this article, the Department of Revenue may, in its discretion, return such goods to the parties from whom they are confiscated if and when such parties shall pay to the Department of Revenue, or its duly authorized representative, an amount equal to the tax due under this article on the goods confiscated, and in such cases no advertisement shall be made or notices posted in connection with said confiscation.
The Department of Revenue may promulgate rules and regulations governing the stamping of any articles or commodities enumerated herein handled by persons, firms or corporations operating on interstate common carriers. Any rules or regulations of the Department of Revenue, when duly made and promulgated shall have the full force and effect of law. Any person violating such rule when duly made and promulgated, shall be guilty of a misdemeanor and shall upon conviction be fined not less than $50 nor more than $100 for each offense.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §723.)
AMENDED BY ACT 2026-50, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
All common carriers, contract carriers, buses and trucks transporting tobacco products may be required under regulations to be prescribed by the Department of Revenue to transmit to the Department of Revenue a periodic statement of such consignments or deliveries of tobacco products showing date, point of origin, point of delivery and to whom delivered, and time of delivery, and all common carriers, buses or trucks shall permit examination by the Department of Revenue or its agents of their records relating to shipment or receipt of tobacco products. The common carriers, buses and trucks shall permit the examination and investigation of their records of shipment or receipts relating to tobacco products, when and wherever it is deemed advisable and necessary by the Department of Revenue or its agents in the enforcement of this article. Inspectors, stamp deputies and other duly authorized agents of the Department of Revenue, on proper identification from and authorization by the Department of Revenue, shall make such examination. Any person, firm, corporation, partnership or association of persons who refuses to transmit to the Department of Revenue the statements hereinabove provided for, or who refuses to permit the examination of his records by the Department of Revenue or its duly authorized agent, shall be guilty of a misdemeanor and upon conviction shall be punished by a fine of not less than $100 nor more than $500 for each such offense.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §724.)
It shall be provided by regulations of the Department of Revenue the methods of breaking packages, forms and kinds of containers and methods of affixing stamps that shall be employed by persons, firms or corporations subject to the tax imposed by this article which will make possible the enforcement of payment by inspection and any person, firm or corporation subject to this tax, engaging in or permitting such practices as are prohibited by regulations of the Department of Revenue or in any other practice which makes it difficult to enforce the provisions of this article by inspection, or if any person, firm, or corporation, agent or officer thereof, who shall upon demand of the Department of Revenue, any officer or agent of the Department of Revenue, refuses to allow full inspection of the premises or any part thereof, or who shall hinder or in anywise delay or prevent such inspection when demand is made therefor, or in any way interferes with any agent of the Department of Revenue in the performance of his duties in enforcing this article, confiscation of tobaccos deemed by agent of the Department of Revenue to be contraband is hereby declared to be one of the duties of an agent of the Department of Revenue, shall be deemed to be guilty of a misdemeanor and shall, upon conviction, be fined not less than $100 nor more than $200 for each offense, or imprisonment in the county jail for a period not exceeding 90 days, or both, in the discretion of the court.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §725.)
It shall be the duty of every person, firm, corporation, club, or association of persons, receiving, storing, selling, or handling tobacco products enumerated herein in any manner whatsoever to keep and preserve all invoices, books, papers, cancelled checks, or other memoranda touching the purchase, sale, exchange, or receipt of any and all tobacco products enumerated herein. All such invoices, books, papers, cancelled checks, or other memoranda shall be subject to audit and inspection by any duly authorized representative of the Department of Revenue at any and all times. Each operator of a retail outlet shall receive, examine, and retain the purchase invoice from the source of the tobacco products for every purchase of tobacco products for a period of 90 days at the retail location. At the end of the 90 days, the purchase records shall be maintained with the required books and records for a period of three years from the date of purchase. Invoices received by the retailer dealer must be computer or machine generated and must show the seller’s or supplier’s name. Invoices cannot be handwritten. Failure to acquire appropriate invoices, substantiate tax payment or retain invoices in the above manner may result in confiscation of the tobacco products in accordance with the procedures of this chapter. Any person, firm, corporation, club, or association of persons who fails or refuses to keep and preserve the records as herein required, or who upon request by a duly authorized agent of the Department of Revenue fails or refuses to allow an audit or inspection of records as hereinabove provided may be subject to a department imposed penalty of not less than five hundred dollars ($500) nor more than one thousand dollars ($1,000). This penalty is multiplied by the number of violations of this subsection.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §726; Acts 1992, No. 92-186, p. 349, §69; Act 2014-262, p. 827, §1.)
Each and every wholesaler or jobber qualifying as such with the Department of Revenue shall be required to file a report between the first and twentieth of each month, covering the purchase or receipt by them of all tobacco products enumerated and defined herein during the preceding month. The report shall give in detail the different kinds and quantities of tobacco products so purchased or received by them during the preceding month. The Department of Revenue shall furnish any person seeking to bring an action under Section 8-19-10 with information permitting the identification of a distributor which has affixed a stamp to a package of cigarettes or heated tobacco products in accordance with this section. In addition, between the first and twentieth of each month, each person licensed to affix the state tax stamp to cigarettes or heated tobacco products shall file with the Department of Revenue, for all cigarettes or heated tobacco products imported into the United States to which such person has affixed the Alabama revenue stamp in the preceding month, copies of the customs certificates with respect to such cigarettes or heated tobacco products required to be submitted by 19 U.S.C. § 1681a(c). Any wholesaler or jobber failing or refusing to file the above report in the manner and time allowed shall be deemed a violator of this section and upon conviction shall be fined not less than $100 nor more than $500 for each offense.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §727; Acts 1951, No. 296, p. 590, §2; Act 2002-496, p. 1276, §1; Act 2025-448, §1.)
(a) A wholesaler or jobber, as defined in Section 40-25-1 and who is duly qualified as such wholesaler or jobber under Section 40-25-16, may sell tobacco products enumerated herein without the Alabama Revenue Stamps affixed thereto; provided, that: Such products are sold and shipped or delivered in interstate commerce to a person outside of this state, and such wholesaler or jobber shall have on file, for a period of three years, subject to inspection by the department, a record of such sale, and also the original purchase order, and a copy of the invoice therefor, and a receipt from a common carrier, contract carrier or post office showing shipment for delivery in such other state, or, if delivered by such dealer to the purchaser at a point outside of the State of Alabama, a receipt showing such delivery in addition to the record, original purchase order and copy of the invoice relating to such sale.
(b) Such duly qualified wholesaler or jobber may sell tobacco products enumerated herein without the Alabama Revenue Stamps affixed thereto; provided, that:
and such wholesaler or jobber shall have on file, for a period of three years, subject to inspection by the department, a record of such sale, the original purchase order and copy of invoice therefor, a receipt from such purchase showing that such purchase was made exclusively for resale in such other state, and a record showing the purchase and use of such revenue stamps of such other state.
(c) Tobacco products enumerated herein may be sold by such duly qualified wholesalers or jobbers, without revenue stamps affixed thereto, when sold to the United States or to any instrumentality thereof for resale to or for use or consumption by members of the Armed Services of the United States; provided, that the books and records, including original purchase orders and copy of invoices showing such sales are kept on file for a period of three years, subject to inspection by the department.
(d) Tobacco products enumerated herein may be sold by such duly qualified wholesalers or jobbers, without revenue stamps affixed thereto, when sold and delivered to ships regularly engaged in foreign commerce or coastwise shipping between points in this state and points outside of this state for resale to or for use or consumption upon such ship or in foreign commerce.
(e) The department is authorized to adopt rules and regulations with respect to the enforcement of the provisions of this section, to prevent any evasion of the tax herein imposed.
(f) A failure to comply with any provision of this section with respect to any sale of unstamped tobacco products shall subject the wholesaler or jobber to the payment of the tax thereon imposed by this article. Any person, including any firm, corporation or association of persons, who violates any of the provisions of this section shall be guilty of a misdemeanor, and upon conviction shall be punished by a fine of not less than $100 nor more than $500, or by imprisonment in the county jail for a period not to exceed six months, either or both, at the discretion of the court.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §729; Acts 1943, No. 484, p. 446.)
(a) Before an interstate warehouser may ship tobacco products into this state, the interstate warehouser must possess a current interstate warehouser permit.
(b)(1) The annual application for an interstate warehouser permit must include the following items and any other information required by the department:
a. A copy of the current wholesale license or permit, or its equivalent, issued by at least four states other than Alabama.
b. A current Certificate of Authority issued by the Alabama Secretary of State if the applicant is not registered in Alabama as a domestic entity.
c. The name and address of each permitted wholesaler within this state to whom the applicant will be delivering tobacco products.
d. A copy of any contracts between the applicant and the permitted wholesalers in Alabama regarding the potential sale of tobacco products within this state.
e. A copy of the most recent audited financial statements from a certified public accountant or a firm regularly engaged in the auditing of financial records.
f. A permit fee of two thousand dollars ($2,000) for the initial application.
(2) An annual permit renewal fee of five hundred dollars ($500) shall be due on October 1 of each following year with the annual renewal application. Failure to submit the required renewal application and fee by October 1 shall constitute a voluntary dismissal of the interstate warehouser permit.
(3) Permit fees may be retained and used by the department for the enforcement of this chapter.
(c) An interstate warehouser permit is non-transferable, and the annual fees paid are non-refundable.
(d) The department may refuse to issue a permit to an applicant under this section if any of the following conditions exist:
(1) The application is incomplete or contains inaccurate information.
(2) The applicant has been convicted of any criminal offense involving fraud or misrepresentation.
(3) The applicant’s wholesale license, permit, or equivalent, has been revoked by any other state.
(4) The applicant or its predecessor in business previously held an interstate warehouser permit that was revoked by Alabama and was not pending reinstatement by the Alabama Tax Tribunal within the past 12 months.
(5) The applicant has failed to file or pay any tax administered by the department.
(6) The application is denied for other good cause which shall be detailed in a written response to the applicant by the department .
(e) The department may revoke the permit if the interstate warehouser has violated this chapter or any rules of the department adopted under authority of this article.
(f) An interstate warehouser with the required permit may sell cigarettes and tobacco products without applying the taxes imposed by this article or attaching the state or county revenue stamps, provided that the products are sold to a wholesale dealer who is licensed by the State of Alabama. Additionally, the interstate warehouser must keep in its possession a record of the sale, the original purchase order, a copy of the invoice, a receipt from a common carrier or contract carrier showing shipment for delivery, or, if the interstate warehouser delivers directly to the qualified wholesale dealer, a receipt showing delivery along with the record, original purchase order, and invoice copy related to the sale.
(g) Any person who violates this section shall be subject to a penalty of one thousand dollars ($1,000) multiplied by the total number of violations. This penalty is in addition to any other penalties that may be imposed under this chapter.
(h) Any unstamped tobacco product brought into the state other than by an interstate warehouser, a manufacturer, or an affiliate of a manufacturer for wholesale or retail sale shall be deemed contraband and subject to confiscation and applicable penalties.
(i) The department may adopt rules to implement and administer this section.
(Act 2026-50, §2.)
No person, firm, corporation, association, or copartnership operating more than one retail store or mercantile establishment within this state under the same ownership, supervision, or management, or operating a wholesale and retail business under the same roof, shall be included within the meaning of the words “wholesaler or jobber,” as the same are used in this article. This provision is made in the exercise of the police power of the state, as well as for the purpose of raising revenue.
Every wholesaler or jobber who desires to qualify as such with the Department of Revenue, shall make application to the Department of Revenue on blanks prescribed for this purpose, which shall be supplied upon request. Said application blanks will require such information relative to the nature of business engaged in by said wholesaler or jobber as the Department of Revenue deems necessary to the qualifying of said wholesaler or jobber. When the application is received by the Department of Revenue and it believes said wholesaler or jobber to be qualified, it shall issue to said wholesaler or jobber a permit qualifying him as a wholesaler or jobber, as defined in this article, and he shall be allowed the discount on purchases of stamps as set out herein for wholesalers or jobbers purchasing stamps for their individual use. The Department of Revenue shall not sell any stamps or allow any discount on any sale of stamps to any wholesaler or jobber until said wholesaler or jobber shall have complied with all of the provisions of this section. The Department of Revenue may at any time revoke the permit issued to any wholesaler, pursuant to the applicable notice and appeal procedures set forth in Chapter 2A of this title, if the wholesaler has violated any of the provisions of this chapter, or any of the rules of the Department of Revenue adopted and promulgated under authority of this article, and refuse to sell any wholesaler or jobber, any stamps until such time as his permit shall be restored.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §730; Acts 1992, No. 92-186, p. 349, §70.)
AMENDED BY ACT 2026-50, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
(a) Each wholesaler, jobber, semijobber, registered retailer, importer, or any other person selling, receiving, or distributing tobacco products in this state for resale shall file a report of its activity with the Department of Revenue between the first and twentieth of each month. The information shall include, but not be limited to, the customer’s name, address, invoice number, invoice date, a description of the tobacco products, the itemized tax, and any other information required by the department.
(1) This subsection is enacted to aid the Department of Revenue in the enforcement of Section 40-23-260, which requires a seller of tobacco products selling or distributing to retailers in this state to report the sale of tobacco products if an exemption from the sales or use tax is claimed at the time of sale.
(2) Any sale of tobacco products to a purchaser using a sales tax number to purchase the products is declared to be a purchase for resale, and the seller is required to obtain a tobacco account and report the sale on the monthly tobacco sales for resale report.
(3) If a non-registered seller fails to obtain a tobacco account as required, the department may assess the following penalties:
a. On the first violation, the non-registered seller shall be issued a written warning notice from the department. The notice shall advise the non-registered seller of the penalty due if the seller continues to fail to comply with this section.
b. On a second violation of this section, the non-registered seller shall be assessed a civil penalty of one hundred dollars ($100).
c. On a third or subsequent violation, the non-registered seller shall be assessed a civil penalty of one hundred dollars ($100) multiplied by the total number of violations that have been imposed under this section.
(b) The commissioner shall establish a web site for listing each wholesaler, jobber, semijobber, retailer, importer, or distributor of tobacco products that has qualified or registered with the Department of Revenue. Purchases of tobacco products made from an entity other than the above permitted or registered entities appearing on the department website listing shall be subject to confiscation, as provided for in this chapter.
(Act 2014-262, p. 827, §2; Act 2022-352, §1.)
Every wholesale dealer in this state shall before shipping, delivering or sending out any one or more articles taxed herein, to any dealer in this state or for sale in this state, cause the same to have the requisite denominations and amount of stamp, or stamps, to represent the tax affixed as stated herein and cause the same to be cancelled by writing or stamping across the face thereof the number of such wholesale dealer, said number to be supplied by the Department of Revenue, and every other wholesale dealer shall at the time of shipping or delivering any one or more articles taxed herein make a true duplicate invoice of the same showing the date, amount and value of each class of articles shipped or delivered and retain a duplicate thereof, subject to the audit and inspection of the Department of Revenue, its authorized agents and representatives, for three years. Wholesale dealers in this state who ship, deliver or send any one or more articles taxed herein to the United States government for sale or distribution to any military, naval or marine reservation owned by the United States government within this state shall be required to carry out the provisions set out in this article for such sales or deliveries.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §731.)
AMENDED BY ACT 2026-50, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
(a) Persons failing to properly affix the required stamps to any cigars, cheroots, stogies, cigarettes, smoking tobacco, heated tobacco products, chewing tobacco, and snuff shall be required to pay, as part of the tax imposed hereunder, a penalty of not less than twenty-five dollars ($25) nor more than five hundred dollars ($500). Each article or commodity not having proper stamps affixed thereto as herein required shall be deemed a separate offense. Any cigars, cheroots, stogies, cigarettes, smoking tobacco, heated tobacco products, chewing tobacco, and snuff in the place of business of any person required by this article to stamp the same shall be prima facie evidence that they are intended for sale. The Department of Revenue, upon good cause shown, may waive or remit any penalty or any part thereof provided for in this section. Any person, firm, corporation, club, or association of persons who has been found guilty of violating this article and who, after being punished by fine, penalty, assessment, or imprisonment, is found guilty of a second or subsequent violation of this article shall have his or her license, as provided in Sections 40-12-72 and 40-12-73, revoked by the department, and no further license or permit shall be issued or granted to that person, firm, corporation, club, or association of persons for a period of one year from the date their license or permit has been revoked. Notice of the revocation shall be mailed to the probate judge and license inspector of the county in which the revocation was made.
(b) In addition to the penalty levied by the department pursuant to subsection (a), the county license inspector, license commissioner, revenue commissioner, tax assessor, or tax collector of the county in which the untaxed tobacco product is located may assess a penalty against any person failing to affix the required stamps to any cigars, cheroots, stogies, cigarettes, smoking tobacco, heated tobacco products and snuff. The amount of the additional penalty shall be not less than one hundred dollars ($100) nor more than five hundred dollars ($500).
(c) The department and local taxing official may assess the tax levied by this chapter pursuant to the assessment procedures set out in Chapter 2A of this title.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §732; Acts 1953, No. 738, p. 1001; Acts 1992, No. 92-186, p. 349, §71; Acts 1994, No. 94-685, p. 1318, §1; Act 2025-448, §1.)
Each and every person, firm, corporation, club, or association transporting and distributing in any manner whatsoever any tobacco products as enumerated and defined herein within the State of Alabama who has not a privilege license as prescribed in Sections 40-12-72 and 40-12-73 shall before transporting or distributing any of such tobacco products as enumerated and defined herein secure a permit from the Department of Revenue. The Department of Revenue shall, before issuing such permit, charge and collect annually a fee of $50 from each such person, firm, corporation, club, or association for transporting or distributing in any manner whatsoever any tobacco products as enumerated and defined herein. Each person, firm, corporation, club, or association securing a permit as hereinbefore provided for, shall be allowed for each such permit so secured one vehicle for the purpose of transporting or distributing such tobacco products as enumerated herein, and said permit and fee is required of such person, firm, corporation, club, or association for each vehicle which is so operated. Said permit shall be transferable as to person or vehicle under rules and regulations promulgated by the Department of Revenue. The permit provided herein shall be conspicuously displayed on each vehicle so used or operated. Failure to properly display the permit as hereinbefore required shall be deemed a violation of this section. Any person, firm, corporation, club, or association having been issued a permit who engages in any practices which are deemed by the Department of Revenue to obstruct or prevent in any way the collection of the tax provided herein, may have their permit revoked by the Department of Revenue and no further permit shall be issued for six months and not then unless the Department of Revenue deems it advisable and expedient to do so. Duplicate permit cards will be issued to replace permits lost or damaged upon application and the payment of a fee of $1. Any person, firm, corporation, club, or association found transporting or distributing any tobacco products defined herein, without first securing a permit as provided above, shall be deemed a violator of this section and upon conviction shall be punishable by a fine of not more than $1,000 for each such offense.
(Acts 1935, No. 194, p. 256; Acts 1939, No. 665, p. 1058, §1; Code 1940, T. 51, §733; Acts 1951, No. 983, p. 1658.)
Any person, firm, corporation, club, or association of persons, who shall reuse or refill with any tobacco products enumerated herein any box, package or container from which tobacco products theretofore tax-paid have been removed, or who otherwise violates any provision of this chapter, may be subject to a department imposed penalty of not less than five hundred dollars ($500) nor more than one thousand dollars ($1,000). This penalty is multiplied by the number of violations of this section.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §737; Act 2014-262, p. 827, §1.)
Should the collection of any taxes under this article be prevented by the operation of the provisions of the Constitution of the United States relating to interstate or foreign commerce, the Legislature hereby declares that should the Congress of the United States pass any legislation authorizing the taxation by the states of interstate or foreign commerce, sales, shipments or receipts, or commodities transported therein, or receipts of sales therein, then the provisions of this article shall apply to such sales, shipments or receipts as fully and completely as provided herein as to intrastate sales, shipments and receipts, to the extent that such act or acts of Congress authorizes and permits.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §740.)
All revenues collected under the provisions of this article, except as otherwise provided, shall be paid to the Department of Revenue by check or draft made payable to the Treasurer of Alabama, and shall be distributed in the following manner:
(1) All of the revenue derived from the tax levied upon cigarettes by Sections 40-25-2 and 40-25-41 shall be deposited in the State Treasury and 38.82 percent of such revenue shall be divided as follows:
a. Six and six one-hundredths percent to the credit of the State Public Welfare Trust Fund, which is hereby appropriated for general welfare purposes. In this section, “general welfare purposes” means:
The administration of public assistance as set out in Sections 38-2-5 and 38-4-1;
Services, including supplementation and supplementary services under the federal Social Security Act, to or on behalf of persons to whom such public assistance may be given under Section 38-4-1;
Services to and on behalf of dependent, neglected, or delinquent children; and
Investigative and referral services to and on behalf of needy persons.
b. Nine and nine one-hundredths percent shall be set apart and used for the following purposes only and in the following order:
(i) Acts 1967, No. 231;
(ii) Acts 1971, No. 1420;
(iii) Acts 1973, No. 1039;
(iv) Acts 1975, No. 1217;
(v) Acts 1978, 2nd Ex. Sess., No. 99;
(vi) Acts 1981, No. 81-843;
(vii) Acts 1983, No. 83-925; and
(viii) Acts 1987, No. 87-550.
(i) Thirty-six percent of the said balance shall be expended by the State Health Officer, with the approval of the state Board of Health, for salaries, other expenses and equipment purchases, incident to general health work;
(ii) Fifty-eight percent of the said balance shall be paid to the Department of Mental Health created in Chapter 50 of Subtitle 2 of Title 22, to be expended by the said department for such purposes as it may designate for the provision of mental health services; and
(iii) Six percent of said balance shall be paid to the Alabama Mental Health Board to be expended by said board for such purposes as it may designate for the provision of services to people with an intellectual disability.
c. Twelve and twelve one-hundredths percent shall be set apart and used for the following purposes only and in the following order:
(i) Any bonds of the state that may be issued for acquisition and construction of mental health facilities under Amendment 266 of the Constitution of Alabama; or
(ii) Any bonds that may be issued by the Alabama Mental Health Finance Authority under the provisions of Acts 1988, Act No. 88-475.
(i) Thirty percent of said balance shall be expended by the State Health Officer, with the approval of the state Board of Health, for salaries, other expenses, and equipment purchases incident to general health work; and
(ii) Seventy percent of the said balance shall be paid to the Department of Mental Health created in Chapter 50 of Subtitle 2 of Title 22, and shall be used by the said department for mental health purposes in the state.
d. Six and six one-hundredths percent shall be set apart and used for the following purposes only and in the following order:
So much thereof as may be necessary for such purposes is hereby appropriated and shall be used by the State Treasurer to pay, at their respective maturities, the principal and interest that will mature during the then current fiscal year on all bonds that may be issued by the State Parks Development Authority under the provisions of Acts 1967, No. 272, which provided for the creation of said authority and also provided for the submission of a constitutional amendment to authorize the issuance of general obligation bonds by said authority.
The balance thereafter remaining during each fiscal year shall be deposited into a special fund in the State Treasury to be designated the “State Parks Fund” and is hereby appropriated and shall be distributed as follows: Said fund may be expended by the State Director of Conservation at his discretion and with the approval of the Governor for salaries, other expenses, land acquisitions, equipment purchases, capital additions or improvements, or other lawful expenses relating to the state division of parks, monuments, and historical sites.
e. Sixty-six and sixty-seven one-hundredths percent to the credit of the General Fund.
(2) The remaining 61.18 percent of the revenue derived from the tax levied on cigarettes by Sections 40-25-2 and 40-25-41 shall be deposited into the State Treasury and allocated as follows:
a. Up to $2 million received annually shall be allocated to the various counties of the state levying a cigarette tax to offset the administrative expenses of obtaining local stamps to affix to cigarettes sold in their jurisdiction for the purpose of collecting their local cigarette tax and to provide a discount to wholesalers and jobbers for affixing such stamps. These funds shall be distributed by the Comptroller pro rata based on the actual administrative expenses reported to the Comptroller by the counties at the conclusion of each quarter of the fiscal year. The Comptroller shall insure that such funds are distributed as soon as possible following the receipt of such reports. Failure of any county to submit such a report shall not prohibit the Comptroller from distributing funds to the remaining counties.
b. Remaining revenues to the General Fund to be used for Medicaid services.
(3) All of the revenue derived from the tax levied by Sections 40-25-2 and 40-25-41 upon tobacco products other than cigarettes shall be deposited in the State Treasury to the credit of the State General Fund.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §741; Acts 1955, 2nd Ex. Sess., No. 73, p. 188, §2; Acts 1959, 2nd Ex. Sess., No. 101, p. 318, §3; Acts 1965, No. 654, p. 1177, §3; Acts 1967, No. 230, p. 599; Acts 1967, No. 275, p. 784, §3; Acts 1967, No. 309, p. 850, §3; Acts 1969, No. 168, p. 453; Acts 1969, No. 551, p. 1034, §3; Acts 1971, No. 1402, p. 2362; Acts 1973, No. 819, p. 1285; Acts 1973, No. 1021, p. 1558; Acts 1975, No. 1175, p. 2306; Acts 1978, 2nd Ex. Sess., No. 100, p. 1813; Acts 1981, 3rd Ex. Sess., No. 81-1141, p. 419; Acts 1983, 4th Ex. Sess., No. 83-922, p. 202; Acts 1984, No. 84-309, p. 684, §2; Acts 1987, No. 87-554, p. 857; Acts 1988, No. 88-78, p. 79; Acts 1988, No. 88-476, p. 749; Act 99-650, 2nd Sp. Sess., p. 96, §1; Act 2004-545, p. 1157, §1.)
It shall be unlawful for any person, firm, or corporation, except as otherwise provided by law, to sell, purchase, transport, receive, or possess any of the articles taxed under the provisions of this article unless the same has been stamped in the manner required by this article, for the purpose of evading the payment of the taxes on such products. Any person, firm, or corporation violating the provisions of this section shall be guilty of a misdemeanor and upon conviction shall be fined not less than $25 to which a jail sentence of not less than 30 nor more than 60 days may be added.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §742; Acts 1945, No. 368, p. 593, §1.)
AMENDED BY ACT 2026-50, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
If any person, firm, or corporation who is not a regularly licensed dealer in tobacco products shall have in his or her possession within the state more than 30 packages of unstamped cigarettes or heated tobacco products or more than one box of unstamped cigars, such possession shall be presumed to be for the purpose of evading the payment of the taxes due thereon.
(Acts 1945, No. 368, p. 593, §2; Act 2025-448, §1.)
The Department of Revenue shall administer and enforce the taxes imposed by this article. It shall have the power to enter upon the premises of any taxpayer and to examine, or cause to be examined, by any agent or representative designated by it for that purpose, any books, papers, records, or memoranda, etc., bearing upon the amount of taxes payable, and to secure other information directly or indirectly concerned in the enforcement of this article.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §735.)
The Department of Revenue may adopt rules to implement and administer this chapter.
(Act 2022-352, §2.)
There shall be provided for the use of the Department of Revenue “revenue stamps,” and such blanks, forms, reports, receipts and any and all other things which may be necessary for the proper administration of this article.
Such amount of money as shall be appropriated for each fiscal year by the Legislature to the Department of Revenue with which to pay the salaries, the cost of operation and the management of the said department shall be deducted, as a first charge thereon, from the taxes collected under and pursuant to Section 40-25-2; provided, that the expenditure of said sum so appropriated shall be budgeted and allotted pursuant to Article 4 of Chapter 4 of Title 41, and limited to the amount appropriated to defray the expenses of operating said department for each fiscal year.
(Acts 1951, No. 844, p. 1475.)
Nothing in this article shall be construed as affecting Sections 40-12-72 and 40-12-73.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §743.)
Any excise, license, privilege, or other tax levied on the sale of cigarettes or heated tobacco products by any county or municipal government within the State of Alabama shall be levied on the basis of a millage rate per cigarette or per single-use consumable unit of heated tobacco product, in a manner similar to the method of specifying the tax levied on cigarettes or heated tobacco products by Section 40-25-2(a), except where such taxing authority has levied a per package tax on cigarettes without any distinction as to the amount of cigarettes or heated tobacco products per package. This provision does not specify or limit the rate or amount of tax which may be levied on cigarettes or heated tobacco products by such county or municipal government. This provision is not to be construed as limiting or extending the taxing authority of any county or municipal government but rather this section specifies the manner in which such taxing authority may be exercised by the county or municipal government for the protection of the tax revenues accruing to the state and said county or municipal government, and for the protection of the public welfare, health, peace and morals of the people of this state.
(Acts 1984, No. 84-309, p. 684, §3; Act 2025-448, §1.)
For the purpose of this article, the following terms shall have the respective meanings ascribed to them in this section:
(1) PERSON. Any individual, firm, company, partnership, association, corporation, receiver or trustee, or any other group or combination acting as a unit, and the plural as well as the singular number.
(2) DEPARTMENT. The Department of Revenue of the State of Alabama.
(3) COMMISSIONER. The Commissioner of Revenue of the State of Alabama.
(4) STORAGE. Any keeping or retention in this state for any purpose except sale in the regular course of business or subsequent use solely outside this state of the commodities subject to the provisions of this article.
(5) USE. The exercise of any right or power over the commodities subject to the provisions of this article, incident to the ownership of those commodities or by any transaction where possession is given; except, that it shall not include the sale of those commodities in the regular course of business.
(6) IN THIS STATE. Within the exterior limits of the State of Alabama, and includes all territory within such limits owned by or ceded to the United States of America.
(7) TOBACCO PRODUCT. Cigars, cheroots, stogies, cigarettes, smoking tobacco, chewing tobacco, snuff or tobacco in any form or condition or any substitute therefor.
(8) RETAIL SALE or SALE AT RETAIL. All sales except sales by wholesalers to licensed retail dealers or other wholesalers for resale.
(9) REGISTERED TAXPAYER. Any person who purchases tobacco products subject to the tax imposed by this article and who has been registered by the department as a responsible taxpayer.
(Acts 1939, No. 409, p. 538; Code 1940, T. 51, §744; Acts 1953, No. 747, p. 1009.)
An excise tax is hereby imposed on the storage, use or other consumption in this state of tobacco products purchased at retail in an amount equal to that set out in Section 40-25-2 or to any additional amount or amounts of tobacco sales tax as may be otherwise levied or provided by law.
Every person storing, using, or otherwise consuming in this state tobacco products purchased at retail shall be liable for the tax imposed by this article, and the liability shall not be extinguished until the tax has been paid to this state; provided, that if said tobacco products have attached thereto the stamps provided in said Section 40-25-2 as aforesaid, or as otherwise provided by law, or if said tax imposed by said Section 40-25-2 as aforesaid, or to any additional amount or amounts of tobacco sales tax as may be otherwise levied or provided by law has been paid by the seller of such tobacco products, then the tax imposed by this article shall not be due. Every person who shall purchase tobacco products subject to the tax imposed by this article shall register with the Department of Revenue as a responsible taxpayer subject to the obligation of maintaining records and making returns, and shall furnish his name and address and the address at which tobacco products are received if that address is different from his permanent address and shall furnish such other information as the commissioner shall deem appropriate for the administration of this article.
All tobacco products subject to the tax imposed by this article and with respect to which the tax has not been paid are declared to be contraband and may be seized without warrant by the commissioner or his agents or employees or by any peace officer of this state, and confiscated as provided in Section 40-25-8, and in such case the tax shall become immediately due; except, that tobacco products in the possession of a registered taxpayer, as defined in this article, shall not be deemed contraband and subject to seizure and confiscation unless the time for making the report required by Section 40-25-42 has expired.
Every person subject to the tax imposed by this article who fails to register with the Department of Revenue as a responsible taxpayer; or every person owning or possessing tobacco products declared to be contraband under this section shall be deemed a violator of this article and may be required to pay a penalty of not less than $25 nor more than $500.
(Acts 1939, No. 409, p. 538; Code 1940, T. 51, §745; Acts 1953, No. 748, p. 1010; 1959, 2nd Ex. Sess., No. 129, p. 380, §1; Acts 1992, No. 92-186, p. 349, §72.)
Every person owning or having in his possession or custody tobacco products, the storage, use or other consumption of which is subject to the tax imposed by this article, shall on or before the tenth day of the month following file with the department a return for the preceding month in such form as may be prescribed by the department showing the tobacco products purchased by such person, and such other information as the department may deem necessary for the proper administration of this article. The return shall be accompanied by a remittance of the amount of tax herein imposed.
(Acts 1939, No. 409, p. 538; Code 1940, T. 51, §746.)
The tax herein levied shall constitute a debt due the State of Alabama and may be collected by civil suit in addition to the methods herein provided. The tax herein shall be secured by a lien, superior to all other liens except the liens for state, county and city ad valorem taxes upon the personal property of any person subject to the provisions hereof.
(Acts 1939, No. 409, p. 538; Code 1940, T. 51, §749.)
It shall be the duty of every person storing, using or otherwise consuming in this state tobacco products subject to the provisions of this article to keep and preserve all invoices, books, papers, cancelled checks, or other memoranda touching the purchase, sale, exchange, receipt, ownership, storage, use, or other consumption of such tobacco products. All such invoices, books, papers, cancelled checks, or other memoranda shall be subject to audit and inspection by any duly authorized representative of the Department of Revenue at any and all reasonable times. Any person who fails or refuses to keep and preserve the records as herein required or who upon request by a duly authorized agent of the Department of Revenue fails or refuses to allow an audit or inspection of the records as herein provided shall be guilty of a misdemeanor and upon conviction therefor be punished as in case of conviction for a misdemeanor.
(Acts 1939, No. 409, p. 538; Code 1940, T. 51, §750; Acts 1992, No. 92-186, p. 349, §73.)
All revenue collected under the provisions of this article shall be paid to the Department of Revenue, and shall be distributed as is provided for the distribution of funds in Section 40-25-23.
(Acts 1939, No. 409, p. 538; Code 1940, T. 51, §751; Acts 1955, 2nd Ex. Sess., No. 73, p. 188, §3.)
(a) For the purpose of this article, the following terms shall have the respective meanings ascribed by this section:
(1) DEPARTMENT. The Alabama Department of Revenue.
(2) FEDERALLY RECOGNIZED INDIAN TRIBE. A tribe that is acknowledged by the U.S. Department of Interior, Bureau of Indian Affairs as being an Indian Nation or Tribe.
(3) OTHER TOBACCO PRODUCTS. Smoking tobacco, cigars, stogies, cheroots, chewing tobacco, snuff, and other products taxable under this chapter excluding cigarettes.
(4) RESERVATION. a. All land within the limits of any Indian reservation under the jurisdiction of the United States Government, notwithstanding the issuance of any patent, and, including rights-of-way running through the reservation; b. all dependent Indian communities within the borders of the United States whether within the original or subsequently acquired territory thereof, and whether within or without the limits of a state; and c. all Indian allotments, the Indian titles to which have not been extinguished, including rights-of-way running through the same.
(5) RESERVATION TOBACCO VENDOR. A seller of tobacco products which is an Indian nation or tribe, one or more members of such tribe, or an entity wholly owned by either or both, which sells cigarettes or other tobacco products, or both, within the boundaries of a qualified reservation.
(6) TRIBAL MEMBER. A person duly enrolled on the tribal rolls of a federally recognized Indian tribe located within the State of Alabama.
(b) A permitted wholesaler is required to stamp all packages of cigarettes and pay the applicable other tobacco product taxes on the monthly tax return for tobacco product sold to a reservation tobacco vendor in this state. A reservation tobacco vendor is eligible for a refund of the tobacco taxes paid on cigarettes or other tobacco products, or both, when these tobacco products are sold to tribal members of legal smoking age as specified in Chapter 11 of Title 28. The reservation tobacco vendor may submit a monthly refund petition with supporting documentation to the department. The documentation must include the reservation tobacco vendor’s name, address, number of tribal members of legal smoking age, permitted wholesaler’s name, date purchased, quantity purchased, quantity sold, brand of cigarettes or description of other tobacco products, or both.
(1) Refunds will be allowed to reservation tobacco vendors for tobacco products purchased on or after October 1, 2015, upon submission of properly completed refund petitions and supporting documentation. The reservation tobacco vendor shall have two years from the date of sale of tobacco products to apply to the department for the refund.
(2) The number of cigarettes subject to refund in any fiscal year purchased by tribal members within the boundaries of a federally recognized Indian tribe shall not exceed 14,600 cigarettes annually or prorated monthly for each tribal member of legal smoking age.
(3) No refund is allowed to tribal members for tobacco products purchased at other retailers located off the reservation.
(Act 2015-535, 2nd Sp. Sess., §3.)
For the purposes of this article, the following terms have the respective meanings ascribed to them by this section:
(1) CONSUMABLE VAPOR PRODUCT. The same meaning as the term defined in Section 40-23-1.
(2) DEPARTMENT. The Department of Revenue.
(3) PERSON. Any individual, corporation, partnership, limited liability company, association, limited liability partnership, or other organization that engages in any for-profit or not-for-profit activities.
(Act 2025-377, §1.)
(a) Beginning October 1, 2026, there is levied an excise tax upon all consumable vapor products sold at wholesale in this state or imported into this state for use, consumption, or sale at retail. The tax shall be ten cents ($0.10) per milliliter of a consumable vapor product. The tax shall not apply to sales between licensed wholesalers, it being the purpose and intent of this provision that the tax levied is a levy on the ultimate consumer or user of consumable vapor products with the wholesaler acting merely as an agent of the state for the collection and payment of the tax to the state.
(b)(1) Except as provided in subdivision (2), the tax shall be in addition to all other licenses and taxes levied by law.
(2) The tax levied in subsection (a) shall be in lieu of any business license fee measured by the volume of sale for selling consumable vapor products. Any act of the Legislature or resolution by a county commission passed or enacted on or before October 1, 2025, imposing a business license fee on engaging in the business of selling consumable vapor products, is void. Nothing in this section shall be construed to restrict a municipality’s authority to issue a business license pursuant to Article 2 of Chapter 51 of Title 11 on the privilege of doing business as a consumable vapor products wholesaler, importer, or retailer. Any business license issued pursuant to Article 2 of Chapter 51 of Title 11 shall not be measured by the volume of sale for selling consumable vapor products.
(3) Notwithstanding any other provision of this article, an act of the Legislature or an ordinance or resolution by a taxing authority passed or enacted on or before October 1, 2025, imposing or providing for the levy of a local tax or license fee shall remain operative; however, no additional local tax or license fee may be levied on the sale of consumable vapor products after October 1, 2025.
(c) The tax shall not apply to any consumable vapor product exported from this state for which proof of export is available in the form of a bill of lading, shipping document, or invoice.
(Act 2025-377, §2.)
(a) The proceeds from the tax levied in Section 40-25-81 and the penalties collected under this article shall be remitted to the department, which shall retain the amount necessary to fund the administrative costs of collecting the tax. Except as provided in subsection (b), the balance of the proceeds collected shall be distributed quarterly as follows:
(1) Fifty percent to the State Treasury to the State General Fund.
(2) Twenty-five percent to the counties in the state on the basis of the ratio of the population of each county to the total population of all counties in the state, as determined in the most recent federal census prior to the distribution.
(3) Twenty-five percent to the municipalities in the state on the basis of the ratio of the population of each municipality to the total population of all municipalities in the state, as determined in the most recent federal census prior to distribution.
(b) Notwithstanding subdivisions (a)(2) and (a)(3), no county or municipality that levies a local tax on the sale of consumable vapor products, or substantially similar products, at wholesale or retail may receive a distribution of proceeds pursuant to this section.
(Act 2025-377, §3.)
(a)(1) Before any person engages in the business of selling consumable vapor products on which the tax levied in Section 40-25-81 has not been paid to the department, the person shall apply for a license in a manner provided by rule of the department. The license shall be a condition precedent to engaging or continuing in the business of selling consumable vapor products. Failure to submit a properly completed license application may result in a delay in processing the application or denial of the license.
(2) The department shall assess the penalties under Section 40-25-16.1 on any person who engages in the business of selling any consumable vapor product for which a license is required by this article without having first obtained and subsequently retained a valid license.
(b) On or before the 20th day of each month, each person on whom the tax is imposed shall submit a statement to the department showing the amounts utilized in the measurement of the tax and all other information required by the department and shall pay to the department the amount of tax shown due.
(c) A licensee who timely files a return with the payment due may deduct from the amount of tax payable with the return a discount of 4.75 percent of the amount of tax payable to the state. If the person does not remit the full amount listed as due on the tax return, any discount claimed by the person is disallowed.
(d) It is the duty of every person receiving, storing, selling, or handling consumable vapor products subject to the tax to keep and preserve all documents relating to the purchase, sale, exchange, or receipt of all consumable vapor products subject to the tax. Any authorized representative of the department may audit and inspect this documentation during normal business hours of the seller. The purchaser shall retain all purchase invoices from the source for every purchase of consumable vapor products received for a period of 90 days at the purchaser’s location. At the end of the 90 days, the purchase records shall be maintained with the required books and records for a period of three years from the date of purchase.
(Act 2025-377, §4.)
(a) Any person subject to this article who fails to make any report required of them by the department or who fails to keep any of the records required by this article shall be guilty of a Class B misdemeanor. Each month of such failure shall constitute a separate offense. Consumable vapor products shall be included in the informational report for tobacco products filed with the department pursuant to and subject to the penalties of Section 40-23-260.
(b) Any taxpayer who violates this section may be restrained from continuing in business, and the proper prosecution shall be instituted in the name of the State of Alabama by the Attorney General or by the counsel of the department until the person complies with this article.
(Act 2025-377, §5.)
(a) The Alabama Alcoholic Beverage Control Board or any law enforcement officer may confiscate any consumable vapor product in the possession of a person selling or offering for sale consumable vapor products that does not hold the permit required pursuant to Sections 28-11-7 or 28-11-7.1.
(b) Any product confiscated pursuant to this section shall be contraband and destroyed in a manner provided by the board.
(Act 2025-377, §6.)
For the purposes of this chapter, the following terms shall have the respective meanings ascribed to them by this section:
(1) PERSON. Individuals, firms, corporations, partnerships, companies, or other agencies, associations, incorporated or otherwise, singular or plural.
(2) WHOLESALE SALE. A sale of tangible personal property by wholesalers to licensed retail merchants, jobbers, dealers, or other wholesalers for resale and does not include a sale by wholesalers to users or consumers, not for resale.
(3) NET TAX PROCEEDS. The entire proceeds from the tax herein levied less cost of collection, refunds, grants and credits as may be authorized by law.
(4) STATE. The State of Alabama.
(5) DEPARTMENT. The Department of Revenue of the State of Alabama.
(6) COMMISSIONER. The Commissioner of the Department of Revenue of the State of Alabama.
(Acts 1980, No. 80-700, p. 1406, §1.)
There is hereby levied a tax of $.25 per package on all gummed cigarette papers sold at wholesale in this state or imported into this state for use, consumption, or sale at retail.
(Acts 1980, No. 80-700, p. 1406, §2.)
Before any person engages in the business of selling any of these items on which the tax levied by this chapter has not been paid to the Department of Revenue, such person shall make application to the Department of Revenue upon forms prepared by the department for a license. Said license shall be a condition precedent to engaging or continuing in the business of selling those items taxed under this chapter.
(Acts 1980, No. 80-700, p. 1406, §3.)
On or before the twentieth day of each month each person on whom the tax levied by this chapter is imposed shall render to the Department of Revenue on forms prescribed by the department a true and correct statement showing the amounts utilized in the measurement of the tax and such other information as the department may require and shall pay to the department the amount of tax shown due.
(Acts 1980, No. 80-700, p. 1406, §4.)
Any person subject to this chapter who shall fail to make any report required of them by the Department of Revenue or shall fail to keep any of the records required herein shall be guilty of a Class B misdemeanor. Each month of such failure shall constitute a separate offense.
(Acts 1980, No. 80-700, p. 1406, §6.)
The tax imposed by this chapter shall be in addition to all other licenses and taxes levied by law as a condition precedent to engaging in any business taxable hereunder.
(Acts 1980, No. 80-700, p. 1406, §12.)
Any taxpayer who shall violate any of the provisions of this chapter may be restrained from continuing in business, and the proper prosecution shall be instituted in the name of the State of Alabama by its Attorney General, by the counsel of the department or under their direction by any circuit solicitor of the state until such person shall have complied with the provisions of this chapter.
(Acts 1980, No. 80-700, p. 1406, §15.)
The Department of Revenue is hereby charged with the enforcement of the provisions of this chapter and is hereby authorized and empowered to prescribe, adopt, promulgate and enforce, rules and regulations, relating to any matter or thing pertaining to the administration and enforcement of the provisions of this chapter, and the collection of taxes, penalties and interest imposed by this chapter.
(Acts 1980, No. 80-700, p. 1406, §16.)
The department for good cause may grant up to a 30 day extension for the time for making any return required under the provisions of this chapter.
(Acts 1980, No. 80-700, p. 1406, §17.)
All taxes or other funds received or collected by the department under the provisions of this chapter shall be deposited in the Treasury without delay.
(Acts 1980, No. 80-700, p. 1406, §19.)
Such amount of money as shall be appropriated for each fiscal year by the Legislature to the Department of Revenue with which to pay the salaries, the cost of operation and management of said department shall be deducted, as a first charge thereon, from the taxes collected under the provisions of this chapter; provided, however, that the expenditure of said sum so appropriated shall be budgeted and allotted pursuant to Sections 41-4-80 through 41-4-96, and limited to the amount appropriated to defray the expenses of operating said department for each fiscal year.
(Acts 1980, No. 80-700, p. 1406, §20.)
(a) There is levied and imposed, in addition to all other taxes of every kind now imposed by law, a privilege or license tax upon every person, firm, or corporation engaging in the business of renting or furnishing any room or rooms, lodging, or accommodations to transients in any hotel, motel, inn, tourist camp, tourist cabin, marine slip, place or space for tent camping, place or space provided for a motor home, travel trailer, self-propelled camper or house car, truck camper, or similar recreational vehicle commonly known as a R.V., or any other place in which rooms, lodgings, or accommodations are regularly furnished to transients for a consideration, in any county which is located in the geographic region comprising the Alabama mountain lakes area, those being Blount, Cherokee, Colbert, Cullman, DeKalb, Etowah, Franklin, Jackson, Lauderdale, Lawrence, Limestone, Madison, Marion, Marshall, Morgan, and Winston, in an amount to be determined by the application of the rate of five percent of the charge for such room, rooms, lodgings, or accommodations, including the charge for use or rental of personal property and services furnished in such room, and the rate of four percent of the charge in every other county. There is exempted from the tax levied under this chapter any rentals or services taxed under Division 1 of Article 1 of Chapter 23 of this title.
(b) The tax shall not apply to rooms, lodgings, or accommodations supplied: (i) For a period of 180 continuous days or more in any place; (ii) by camps, conference centers, or similar facilities operated by nonprofit organizations primarily for the benefit of, and in connection with, recreational or educational programs for children, students, or members or guests of other nonprofit organizations during any calendar year; or (iii) by privately operated camps, conference centers, or similar facilities that provide lodging and recreational or educational programs exclusively for the benefit of children, students, or members or guests of nonprofit organizations during any calendar year.
(c) For purposes of subsection (b): “Children” means individuals under age 21; “student” is defined in accordance with 26 U.S.C. § 151(c)(4), as in effect from time to time or by any successor law; “nonprofit organization” is an organization exempt from federal income tax under 26 U.S.C. § 501(c)(3), as in effect from time to time or any successor law; and “privately operated” refers to any camp, conference center, or similar facility other than those operated by a nonprofit organization as herein defined.
(d) For transactions entered into on or after October 1, 2019, the tax shall not apply to marine slips, places or spaces for tent camping, or places or spaces provided for motor homes, travel trailers, self-propelled campers or house cars, truck campers, or similar recreational vehicles commonly known as R.V.s, which are supplied for a period of 90 continuous days or more in any place.
(e)(1) Charges made for the rental of a ballroom, dining room, club room, sample room, conference room, wedding chapel, or similar room or space that is not intended nor suitable for overnight sleeping purposes and that is not used for overnight sleeping purposes is not subject to the tax levied pursuant to this chapter if the charges for the rental are separately stated by the facility and the room or space is used exclusively as a room or space for a meeting, conference, seminar, club meeting, private party, or similar activity.
(2) The exclusion provided in subdivision (1) applies solely to the transient occupancy tax levied under this chapter and does not apply to any other taxes, licenses, or fees except a separately stated rental charge for a meeting room or other space excluded pursuant to subdivision (1) is also excluded from the tax levied by Chapter 23 of Title 40.
(Acts 1955, No. 248, p. 586, §1; Acts 1963, No. 269, p. 715, §1; Acts 1979, No. 79-604, p. 1068, §1; Acts 1996, No. 96-498, p. 629, §1; Act 2001-968, 3rd Sp. Sess., p. 865, §1; Act 2001-975, 3rd Sp. Sess., p. 908, §6; Act 2009-144, p. 268, §12; Act 2019-387, §1; Act 2019-487, §1.)
(a) This section shall be known and cited as the Alabama Tourism Tax Protection Act of 2024.
(b) For the purposes of this section, the following terms have the following meanings:
(1) ACCOMMODATIONS INTERMEDIARY. Any person, firm, or corporation, other than an accommodations provider, that facilitates renting, furnishing, lodging, or accommodation transactions subject to the tax levied under Section 40-26-1 and charges a room fee or an accommodations fee to the customer, which it retains as compensation for the facilitation. Facilitating transactions include brokering, coordinating, or in any other way arranging for the purchase of the right to use accommodations via a transaction directly, including via one or more payment processors, between a customer and an accommodations provider.
(2) ACCOMMODATIONS PROVIDER. Any person, firm, or corporation engaging in the business of transactions subject to the tax levied under Section 40-26-1 that has an active lodgings tax account with the department and collects and remits lodgings tax on the accommodations that are rented directly by the owner of the accommodation.
(3) HOTEL. Any public lodging establishment that is owned by a single entity or person; contains 15 or more individual sleeping room accommodations; offers rental units with daily or weekly rates; has a central office on the property with specified hours of operation; has a bathroom for each rental unit; is recognized as a hotel in the community in which it is situated; and possesses a permit from the Alabama Department of Public Health to operate as a hotel.
(4) MERCHANT OF RECORD. The legally authorized and responsible entity that processes customer payments for the sale of goods or services within this state.
(5) PROFESSIONAL PROPERTY MANAGEMENT COMPANY. A licensed real estate brokerage firm with a physical storefront location authorized and licensed under Section 34-27-30 to engage in the business of property management services on behalf of property owners.
(6) ROOM CHARGE. The full retail price paid by the guest for an accommodation, including any accommodations fee and any other fees or charges. This includes the charge for use or rental of personal property and services furnished in the room or accommodation.
(c) Except as provided for in subsection (d), the accommodations intermediary shall collect and remit the tax imposed pursuant to this chapter for the facilitation of lodgings transactions subject to the tax levied under Section 40-26-1, and parallel local levies, for transactions occurring on or after January 1, 2025. The tax shall be imposed on the room charge as defined in this section.
(d) When an accommodations intermediary facilitates the transaction on behalf of an accommodations provider as defined in this section, the taxes collected may be remitted to the accommodations provider when there is an executed written agreement or contract specifying the responsible party for remitting the taxes.
(e) An accommodations intermediary collecting and remitting taxes pursuant to subsection (d) shall not be liable for taxes not remitted by the accommodations provider to the Department of Revenue.
(f) In any accommodation in which an accommodations intermediary facilitates the sale of the accommodation, the accommodations intermediary shall separately state the amount of the tax on the bill, invoice, or similar documentation and shall add the tax to the room charge; thereafter, the tax shall be a debt from the customer to the accommodations intermediary.
(g) Every accommodations intermediary and accommodations provider shall annually submit a report prescribed by the Department of Revenue that includes the physical address of each accommodation that was rented or furnished greater than 14 days during the previous year. The report is confidential taxpayer information protected under this section.
(h) The following entities shall be exempt from the provisions of Section 1 of this act:
(1) Professional property management companies that either collect and remit the tax levied pursuant Section 40-26-1, or manage properties leased for a month or more as the principal residence of the tenant.
(2) Hotels that collect and remit the tax levied pursuant to Section 40-26-1.
(3) A destination marketing organization whose primary purpose is the promotion of tourism and receives funding from taxes collected and remitted pursuant to Section 40-26-1.
(4) Providers of accommodations defined under subsection (d) of 40-26-1, that collect and remit the tax levied pursuant to Section 40-26-1.
(i) For any accommodations transactions, subject to the tax levied in Section 40-26-1, through an accommodations intermediary where the accommodations provider has hired a professional property management company to oversee, the professional property management company shall be the merchant of record for the transactions.
(j) The Department of Revenue shall adopt rules for the implementation and administration of this section.
(Act 2024-334, §§1-3.)
Municipal privilege license taxes which are levied and collected by the application of a flat percentage rate on gross sales or gross receipts from sales, and which are passed on directly by the licensee-seller to the purchaser-consumer or user shall be excluded from gross sales or gross receipts, as the case may be, in the computation of the state lodgings tax levied and imposed by this chapter.
(Acts 1965, No. 788, p. 1475.)
(a) The taxes levied under this chapter, except as otherwise provided in subsection (b), shall be due and payable in monthly installments on or before the twentieth day of the month next succeeding the month in which the tax accrues. On or before the twentieth day of each month after this chapter has taken effect, every person, firm, or corporation on whom the taxes levied by this chapter are imposed shall render to the Department of Revenue, hereinafter referred to as the department, on a form prescribed by the department, a true and correct statement showing the gross proceeds of the business for the next preceding month, together with such other information as the department may demand and require, and at the time of making such monthly report the taxpayer shall compute the taxes due and shall pay to the department the amount of taxes shown to be due.
(b) Taxpayers meeting the criteria set forth in this subsection may elect to file quarterly, semi-annually, or annually. Any such election to file quarterly, semi-annually, or annually shall be made in writing no later than February 20 of each year and shall be filed with the department in the manner prescribed by the department. The department, for good cause, may extend the time for making any return required under this chapter, but the time for filing any such return shall not be extended for a period greater than 30 days from the date such return is due to be made. Qualifying taxpayers electing to file quarterly, semi-annually, or annually, shall report to the department, on a form prescribed by the department, a true and correct statement showing such information as the department may require. Qualifying taxpayers shall pay to the department the amount of tax shown to be due on or before the applicable deadlines, under any rules as may be prescribed, as follows:
(1) When the total state transient occupancy tax for which any person is liable under this chapter is less than two thousand four hundred dollars ($2,400) during the preceding calendar year, the person may elect to file quarterly returns. Quarterly returns and the amount of tax shown to be due shall be due on or before the 20th day of the month next succeeding the end of the quarter for which the tax is due.
(2) When the total state transient occupancy tax for which any person is liable under this chapter is less than one thousand two hundred dollars ($1,200) during the preceding calendar year or the person liable for the tax has provided accommodations during no more than two, 30 consecutive day periods during the preceding calendar year, the person may elect to file semi-annual returns. The semi-annual returns and payment of the tax shown to be due shall be due on or before July 20 and January 20 following the end of the six-month period for which the tax is due.
(3) When the total state transient occupancy tax for which any person is liable under this chapter is less than six hundred dollars ($600) for the preceding calendar year or the person liable for the tax provides accommodations during no more than one, 30 consecutive day period during the preceding calendar year, the person may elect to file an annual return. The annual return and payment of the tax shown to be due shall be due on or before January 20 following the end of the annual period for which the tax is due.
(Acts 1955, No. 248, p. 586, §2; Act 2019-253, §1.)
Any person, firm or corporation taxable under this chapter having a cash and credit business may report such cash business and the taxpayer shall thereafter include in each monthly report all credit collections made during the month preceding and shall pay the taxes due thereon at the time of filing such report, but in no event shall the gross proceeds of such credit business be included in the measure of the tax to be paid until collections of such credit business shall have been made.
(Acts 1955, No. 248, p. 586, §3.)
On or before 30 days after the end of the tax year, each person, firm or corporation liable for the payment of a privilege tax as levied by this chapter shall make a return showing the gross proceeds of business done and compute the amount of tax chargeable against him or it in accordance with the provisions of this chapter and deduct the amount of monthly payments as hereinbefore provided, if any have been made, and transmit with this report a remittance in the form required by this chapter covering the residue of the tax chargeable against him, to the office of the department, and such report shall be verified by oath.
(Acts 1955, No. 248, p. 586, §4.)
The monthly reports herein required to be made are not required to be made on oath, but wherever in this chapter any report is required to be sworn to, the same shall be sworn to by the taxpayer or his agent before some officer authorized to administer oaths; and any false statement of a material fact made with intent to defraud shall constitute perjury, and upon conviction thereof the person so convicted shall be punishable as provided by law.
(Acts 1955, No. 248, p. 586, §6.)
Any person, firm or corporation subject to the provisions of this chapter who fails to make the reports or any of them as herein required, or who fails to keep the records as herein required, shall be guilty of a misdemeanor and upon conviction shall be fined not less than $25 nor more than $500 for each offense. Each month of such failure shall constitute a separate offense.
(Acts 1955, No. 248, p. 586, §7.)
Any person, firm or corporation subject to the provisions of this chapter willfully refusing to make the reports herein required, or who shall refuse to permit the examination of his or its records by the Department of Revenue, or its duly authorized agents, shall be guilty of a misdemeanor, and upon conviction shall be fined not less than $50 nor more than $500 for each offense, and in addition may be imprisoned in the county jail for a period not to exceed six months. Each month of failure to make such report shall constitute a separate offense and each refusal of a written demand of the department to examine, inspect or audit such records shall constitute a separate offense.
(Acts 1955, No. 248, p. 586, §8.)
It shall be unlawful for any person, firm or corporation engaged in or continuing within this state in any business for which a license or privilege tax is required by this chapter to fail or refuse to add to the price of the service rendered the amount due by the taxpayer on account of the tax levied by this chapter. Nor shall any person refund or offer to refund all or any part of the amount collected as tax under this chapter or to absorb such tax or to advertise directly or indirectly the absorption or refund of such tax or any portion of the same. Any person, firm or corporation violating any of the provisions of this section shall be guilty of a misdemeanor and upon conviction shall be fined in a sum not less than $50 nor more than $100, or may be imprisoned in the county jail for not more than six months, or by both such fine and imprisonment, and each act or violation of the provisions of this chapter shall constitute a separate offense.
(Acts 1955, No. 248, p. 586, §15.)
Any taxpayer who shall violate any of the provisions of this chapter may be restrained from continuing in business, and the proper prosecution shall be instituted in the name of the State of Alabama by its Attorney General, by the counsel of the department or under their direction by any district attorney of the state until such person shall have complied with the provisions of this chapter.
(Acts 1955, No. 248, p. 586, §16.)
The administration of this chapter is vested in and shall be exercised by the Department of Revenue, except as otherwise herein provided, and the enforcement of any of the provisions of this chapter in any of the courts of the state shall be under the jurisdiction and supervision of the department, and the department may require the assistance of, and act through the district attorney of any county and the Attorney General of the state and any legal counsel of the Department of Revenue. The department shall appoint as needed such agents, clerks and stenographers as may be necessary to enforce the provisions of this chapter under the provisions of the merit system who shall perform such duties as may be required, and such duly appointed and qualified agents are authorized to act for the department as it may direct and as is authorized by law.
(Acts 1955, No. 248, p. 586, §17.)
The department shall from time to time promulgate such rules and regulations for making returns and for ascertainment, assessment and collection of the tax imposed hereunder as it may deem necessary to enforce the provisions of this chapter, and upon request shall furnish to the taxpayer a copy of such rules and regulations.
(Acts 1955, No. 248, p. 586, §18.)
One-fifth of the proceeds of the tax levied by this chapter in counties which are members of the Alabama Mountain Lakes Association, after deduction of an agreed upon cost of collection between the counties involved and the state Department of Revenue, such cost of collection not to exceed five percent, shall be appropriated in the following manner: Fifty percent of said portion shall be appropriated to the Alabama Mountain Lakes Association to be used for promotion of tourism and travel. The remaining fifty percent of said portion shall be paid to the respective counties to be used for the promotion of tourism, recreation and conventions. Said money shall be controlled by the county commission unless local law provides otherwise. The balance of all taxes or other funds received or collected by the department under the provisions of this chapter shall be without delay deposited in the State Treasury. Three-fourths of said balance of the revenue derived under this chapter shall be deposited into the State General Fund, and the remaining one-fourth shall be used exclusively for state travel advertising and travel promotion by the State Bureau of Tourism and Travel from the appropriation made by the Legislature.
(Acts 1955, No. 248, p. 586, §19; Acts 1963, No. 269, p. 715, §2; Acts 1979, No. 79-604, p. 1068, §2; Acts 1988, 2nd Ex. Sess., No. 88-956, p. 681.)
The Governor may, by executive order, authorize the state Department of Revenue to provide by proper rules and regulations for the allowance of a discount of taxes due and payable to the state by persons subject to the lodgings tax levied by this chapter, in the same manner and to the same extent as the discount allowed persons licensed under the provisions of Division 1 of Article 1 of Chapter 23 of this title. The discount provided for herein shall not exceed five percent of the first $100 of taxes levied and two percent of the taxes levied over $100 and due and payable to the state by persons subject to this chapter. It is provided, however, that the discount provided for herein shall be authorized or allowed only upon taxes which are paid before delinquency.
(Acts 1956, 1st Ex. Sess., No. 96, p. 142.)
For the purpose of this chapter, the following terms shall have the respective meanings ascribed to them by this section except where the context clearly indicates a different meaning:
(1) COMMISSIONER. The Commissioner of the Department of Revenue of the State of Alabama.
(2) DEPARTMENT. The Alabama Department of Revenue.
(3) PARI-MUTUEL. A system of betting on races whereby the winners divide the total amount bet, after deducting authorized taxes, fees and management expenses, in proportion to the sums wagered individually.
(4) PARI-MUTUEL POOL. The total amount wagered under the pari-mutuel betting system in any particular race.
(Acts 1988, 2nd Ex. Sess., No. 88-952, p. 575, §1.)
(a) In addition to any and all other taxes imposed by law, there is hereby levied, upon every person engaged in the business of operating a dog race track in the State of Alabama, a privilege tax of one percent of the pari-mutuel pool on all pari-mutuel races.
(b) In addition to the tax levied by subsection (a) and in addition to any and all other taxes imposed by law, there is hereby levied, upon every person engaged in the business of operating a dog race track in the State of Alabama, a privilege tax of one percent of the pari-mutuel pool on all pari-mutuel races requiring the selection of three or more racers; provided that the commission received by said operator, after deducting local taxes in effect on September 28, 1988, shall not be reduced below the amount that said operator received prior to the imposition of this tax.
(c) Notwithstanding the provisions of any local or general act to the contrary, any dog race track licensee authorized to conduct pari-mutuel racing shall be entitled to retain as a commission from the pari-mutuel pool (the “take out”) an amount equal to 19 percent of all pari-mutuel pools where a bettor is required to select two or less racers and an amount equal to 21 percent where a bettor is required to select three or more racers. The tax levied in this section is not imposed to the extent that it would require a licensee to increase the commissions above said amounts in order to receive such tax from the pari-mutuel pool.
(Acts 1988, 2nd Ex. Sess., No. 88-952, p. 575, §2; Acts 1989, No. 89-696, p. 1376.)
On or before the twentieth day of each month, every person on whom the taxes levied by this chapter are imposed shall render to the Department of Revenue, on a form prescribed by the department, a true and correct statement showing the pari-mutuel pool gross receipts of his race track operation for the next preceding month, together with such other information as the department may demand and require. At the time of making such monthly report such person shall compute and pay the amount of taxes shown to be due.
(Acts 1988, 2nd Ex. Sess., No. 88-952, p. 575, §3.)
Any person subject to this chapter who shall fail to make any report required of him by the Department of Revenue or shall fail to keep any of the records required herein shall be guilty of a Class B misdemeanor. Each month of such failure shall constitute a separate offense.
(Acts 1988, 2nd Ex. Sess., No. 88-952, p. 575, §5.)
The taxes imposed by this chapter shall be in addition to all other licenses and taxes levied by law as a condition precedent to engaging in any business taxable hereunder.
(Acts 1988, 2nd Ex. Sess., No. 88-952, p. 575, §11.)
Any taxpayer who shall violate any of the provisions of this chapter may be restrained from continuing in business, and the proper prosecution shall be instituted in the name of the State of Alabama by its Attorney General, by the counsel of the department or, under their direction, by any circuit solicitor of the state until such person shall have complied with the provisions of this chapter.
(Acts 1988, 2nd Ex. Sess., No. 88-952, p. 575, §14.)
If it is brought to the attention of the department that any taxpayer subject to this chapter is guilty of violating any of the provisions of this chapter, the department is hereby authorized and required, through lawfully authorized counsel, to proceed in the courts of the state to obtain a writ of injunction, which writ shall be granted by the court when applied for in the manner prescribed by law. The department, however, is hereby relieved of the requirement to furnish bond of any character.
(Acts 1988, 2nd Ex. Sess., No. 88-952, p. 575, §15.)
The Department of Revenue is hereby charged with the enforcement of the provisions of this chapter and is hereby authorized and empowered to prescribe, adopt, promulgate and enforce, rules and regulations, relating to any matter or thing pertaining to the administration and enforcement of the provisions of this chapter, and the collection of taxes, penalties and interest imposed by this chapter.
(Acts 1988, 2nd Ex. Sess., No. 88-952, p. 575, §16.)
(a) Such amount of money as shall be appropriated for each fiscal year by the Legislature to the Department of Revenue with which to pay the salaries, and the cost of operation and management of said department, pertaining to the administration and enforcement of the provisions of this chapter, shall be deducted, as a first charge thereon, from the taxes collected under the provisions of this chapter; provided, however, that the expenditure of said sum so appropriated shall be budgeted and allotted pursuant to Sections 41-4-80 through 41-4-96, and limited to the amount appropriated to defray the expenses of operating said department for each fiscal year.
(b) After payment of the aforesaid expenses, the balance of the taxes collected under the provisions of this chapter shall be deposited in the State Treasury to the credit of the State General Fund.
(Acts 1988, 2nd Ex. Sess., No. 88-952, p. 575, §17.)
The following words, terms and phrases, when used in this article shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:
(1) DEPARTMENT. The Department of Revenue of the State of Alabama.
(2) FISCAL YEAR. An accounting period of 12 months beginning on the first day of the first month of the state fiscal year.
(3) MEDICAID PROGRAM. The medical assistance program as established in Title XIX of the Social Security Act and as administered in the State of Alabama by the Alabama Medicaid Agency pursuant to executive order and Title 560 of the Alabama Administrative Code.
(4) PHARMACEUTICAL PROVIDER. A provider of drugs, medicines, chemicals and poisons which, pursuant to a valid prescription, are offered for sale, compounded or dispensed to citizens of Alabama. This term shall include all places whose title may imply the sale, offering for sale, compounding or dispensing, of drugs, medicines, chemicals or poisons.
(5) PRESCRIPTION. Any order for drugs, biologicals or insulin syringes, written or signed or transmitted by word of mouth, telephone, telegraph, closed circuit television, or other means of communication by a legally competent practitioner, licensed by law to prescribe and administer such drugs, biologicals or insulin syringes intended to be filled, compounded or dispensed by a pharmacist.
(Acts 1991, No. 91-124, p. 148, §1.)
To provide further for the availability of indigent health care, the operation of the Medicaid Program and the maintenance and expansion of medical services thereunder, there is hereby levied and shall be collected as provided in this article a privilege tax on the business activities of every provider of pharmaceutical services to the citizens of Alabama, except for a pharmacy, or portion thereof, serving hospital inpatients or pharmacies owned or operated by the State of Alabama or an agency thereof. The privilege tax imposed by this article is in addition to all other taxes of any kind now imposed by law, and shall be at the rate of 10 cents for each prescription filled or refilled for a citizen of Alabama.
(Acts 1991, No. 91-124, p. 148, §2; Act 2002-414, p. 1058, §1.)
(a) The taxes imposed by this article shall be due and payable to the department on or before the twentieth day of the month next succeeding the month in which the tax accrues, and shall, when collected, be paid by the department into the State Treasury. Payment by United States mail will be timely if mailed in accordance with Section 40-1-45. When paid into the State Treasury, all such taxes shall be deposited to the credit of the Alabama Health Care Trust Fund.
(b) The receipts from the tax levied in this article shall be solely available for appropriation by the Alabama Legislature to the Alabama Medicaid Agency for use by said agency in accomplishing the purposes of this article. Provided, however, for the first fiscal year in which this article is effective, to defray its expenses, including salaries and costs of operation incident to the collection of this tax, there is hereby appropriated to the department and shall be deducted as a first charge thereon, an amount not to exceed one percent of the revenues collected pursuant to this article. Such amount of money as shall be appropriated for each succeeding fiscal year by the Legislature to the department with which to pay the salaries, the cost of operation and the management of the department shall be deducted, as a first charge thereon, from the taxes collected under and pursuant to this article. Provided, however, the expenditure of said sum so appropriated shall be budgeted and allotted pursuant to Article 4 of Chapter 4 of Title 41, and limited to the amount appropriated to defray the expenses of operating the department for each fiscal year, incident to the collection of this tax.
(Acts 1991, No. 91-124, p. 148, §3.)
(a) On or before the twentieth of each month, beginning with November 1991, every pharmaceutical provider subject to this article shall file with the department a statement under penalty of perjury on forms prescribed by the department, showing the total number of prescriptions filled or refilled by said provider for the previous month, the taxes due under this article and such other reasonable and necessary information as the department, after consultation with the Alabama Medicaid Agency and adoption of appropriate rules or regulations, may require for the proper enforcement of the provisions of this article. At the time of filing such monthly statement such provider shall pay to the department the amount of taxes shown to be due.
When the total tax for which any pharmaceutical provider liable under this article does not exceed $10 for any month, a quarterly return and remittance in lieu of the monthly returns may be made on or before the twentieth day of the month next succeeding the end of the quarter for which the tax is due when specially authorized by the department and under such rules and regulations as may be prescribed.
(b) Any pharmaceutical provider that fails to pay the taxes levied by this article within the time required by this article shall pay, in addition to the tax, a penalty of 10 percent of the amount of tax due, together with interest thereon at the rate prescribed by Section 40-1-44, such penalty and interest to be assessed and collected as part of the taxes. Provided, however, the department, if a good and sufficient reason is shown, may waive or remit the penalty of 10 percent or a portion thereof. If payment is not received by the last day of the month, the department shall notify the Alabama Medicaid Agency which shall determine whether the pharmaceutical provider is a Medicaid provider, and if so, shall withhold the payment, interest and penalty due from any reimbursement due said provider under the Medicaid Program. The taxes levied by this article shall constitute a debt due the State of Alabama and may be collected by civil action in addition to the methods provided in this article. The department is empowered to assess, file tax liens and collect the taxes levied by this article, as prescribed in this title.
(Acts 1991, No. 91-124, p. 148, §4(a)(b); Act 2002-414, p. 1058, §1.)
(a) It shall be the duty of each pharmaceutical provider subject to this article to keep and preserve such suitable books and records as may be necessary to determine the amount of taxes for which it is liable under the provisions of this article. Said books and records shall be kept and preserved for a period of not less than three years, and all such books and records shall be open for examination during business hours by the department or its duly authorized agents.
(b) All information secured pursuant to this article by the department shall be confidential, as prescribed by Section 40-2A-10, except that the department may provide such information to the Alabama Medicaid Agency as necessary for the proper administration of the Medicaid Program, or for the department’s proper administration of the tax levied by this article.
(c) The department shall from time to time, as it deems desirable, promulgate such reasonable rules and regulations as necessary to provide for the orderly and efficient administration of the tax levied by this article.
(Acts 1991, No. 91-124, p. 148, §4(c)-(e).)
(a) The Alabama Medicaid Agency shall use the revenues from the tax levied by this article in furtherance of the purposes of this article, provided that any such uses shall be limited to those for which federal financial participation under Title XIX of the Social Security Act is available.
(b) Any reimbursement due a pharmaceutical provider under the Medicaid Program shall be paid in a timely fashion. If the amount payable is not in dispute and is not paid by the Alabama Medicaid Agency within 30 days of the due date, interest on the amount due shall be charged. The interest shall be the legal amount currently charged by the state.
(Acts 1991, No. 91-124, p. 148, §5.)
No revenues resulting from the tax established by this article and applied to increases in covered services or reimbursement levels or other enhancements of the Medicaid Program adopted by the Alabama Medicaid Agency as a result of revenues made available under the tax levied by this article shall be subject to reduction or elimination while said tax is in effect.
(Acts 1991, No. 91-124, p. 148, §6.)
This article shall be of no effect if federal financial participation under Title XIX of the Social Security Act is not available to the Alabama Medicaid Program for the purposes of this article at the approved federal medical assistance percentage, established under Section 1905 of the Social Security Act, for the applicable fiscal year.
(Acts 1991, No. 91-124, p. 148, §7.)
(a) Each pharmaceutical service provider that collected and remitted the supplemental privilege tax on pharmaceutical services pursuant to Article 1A, as it read prior to August 30, 2016, shall be entitled to a refund of the taxes collected in the form of a credit against any future taxes levied pursuant to the privilege tax on pharmaceutical services provided for in this article, due after August 30, 2016. Beginning October 1, 2016, monthly credits shall be allowed to the pharmaceutical service providers that remitted the supplemental privilege tax through September 20, 2018.
(b) On or after October 1, 2018, a pharmaceutical service provider who is entitled to a credit under subsection (a) and has unused credit remaining shall be entitled to a refund of the remaining credit owed to the provider, without interest, upon petition to the department. The petition shall be made no later than October 1, 2020. The department shall establish procedures to implement this subsection.
(Act 2016-452, 1st Sp Sess., p. 1233, §1; Act 2018-95, §1.)
[Repealed]
REPEALED IN THE 2016 FIRST SPECIAL SESSION BY ACT 2016-452 EFFECTIVE AUGUST 1, 2016. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.
(Act 2015-537, 2nd Sp. Sess., §1.)
[Repealed]
REPEALED IN THE 2016 FIRST SPECIAL SESSION BY ACT 2016-452 EFFECTIVE AUGUST 1, 2016. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.
(Act 2015-537, 2nd Sp. Sess., §2.)
[Repealed]
REPEALED IN THE 2016 FIRST SPECIAL SESSION BY ACT 2016-452 EFFECTIVE AUGUST 1, 2016. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.
(Act 2015-537, 2nd Sp. Sess., §3.)
[Repealed]
REPEALED IN THE 2016 FIRST SPECIAL SESSION BY ACT 2016-452 EFFECTIVE AUGUST 1, 2016. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.
(Act 2015-537, 2nd Sp. Sess., §4.)
[Repealed]
REPEALED IN THE 2016 FIRST SPECIAL SESSION BY ACT 2016-452 EFFECTIVE AUGUST 1, 2016. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.
(Act 2015-537, 2nd Sp. Sess., §5.)
The following words, terms, and phrases shall have the following meanings:
(1) BED. Any bed that is licensed by the Alabama Department of Health and its successor agency to provide nursing home care which is in a nursing facility.
(2) DEPARTMENT. The Department of Revenue of the State of Alabama.
(3) FISCAL YEAR. An accounting period of 12 months beginning on the first day of the first month of the state fiscal year.
(4) MEDICAID PROGRAM. The medical assistance program as established in Title XIX of the Social Security Act and as administered in the State of Alabama by the Alabama Medicaid Agency pursuant to executive order and Title 560 of the Alabama Administrative Code.
(5) NURSING FACILITY. An institution which is licensed under the laws of the State of Alabama as a skilled nursing facility or an intermediate nursing facility.
Nursing facility shall not include any facility owned or operated by, or operating under an exclusive contract with, the State of Alabama or any agency thereof, or any nursing facility/institution for the developmentally disabled (NF/IDD).
(6) NURSING FACILITY/INSTITUTION FOR THE DEVELOPMENTALLY DISABLED. A nursing facility that provides care only to physically and mentally disabled residents who are 18 years of age or less.
(Acts 1991, No. 91-126, p. 153, §1; Acts 1992, No. 92-440, p. 871, §1; Act 97-901, 1st Ex. Sess., p. 277, §1.)
To provide further for the availability of indigent health care, the operation of the Medicaid program, and the maintenance and expansion of medical services:
(a) There is levied and shall be collected a privilege assessment on the business activities of every nursing facility in the State of Alabama. The privilege assessment imposed is in addition to all other taxes and assessments, and shall be at the annual rate of one thousand eight hundred ninety-nine dollars and ninety-six cents ($1,899.96) for each bed in the nursing facility. Beginning September 1, 2020, the privilege assessment shall be increased from one thousand eight hundred ninety-nine dollars and ninety-six cents ($1,899.96) for each bed in the nursing facility, by an addition to the privilege assessment equal to three hundred twenty-seven dollars and forty-eight cents ($327.48) per annum. The addition to the privilege assessment shall be paid in equal monthly installments and shall merge into and be a part of the privilege assessment described in this subsection. The payment to nursing facilities of the determined allowable costs in respect to the addition to the privilege assessment described in this subsection shall be included in Medicaid per diem rates for services provided commencing as of October 1, 2020, and shall continue to be included in such Medicaid per diem rates in the same manner that reimbursement for the privilege assessment is included in Medicaid per diem rates. For each Medicaid nursing facility, in determining the October 1, 2020 adjustment to the Medicaid per diem for the allowable costs associated with the addition to the privilege assessment, the Medicaid Agency shall divide the total addition to the privilege assessment by the total of all incurred resident days, regardless of payor class, reported by each nursing facility in its Medicaid cost report filed for the period then ending June 30, 2019. Notwithstanding the foregoing, in the event that the June 30, 2019 cost report is for a period of less than one year, the resident days reported shall be annualized. After the October 1, 2020 adjustment under this subsection, the addition to the privilege assessment shall be fully merged into the privilege assessment and reimbursed in accordance with the method set forth for calculating the reimbursement for the privilege assessment. In the event that any portion of the privilege assessment paid by a facility cannot be included in the computation of Medicaid per diem rate because of the effect of any cost ceiling provision of the reimbursement methodology, the cost ceiling shall be adjusted to ensure continued treatment of the total privilege assessments as an allowable cost.
(b)(1) Beginning September 1, 2010, there is levied and shall be collected a supplemental privilege assessment on the business activities of every nursing facility in the State of Alabama. The supplemental privilege assessment imposed is in addition to all other taxes and assessments, including, without limitation, the privilege taxes provided for under this article, and from September 1, 2010, through August 31, 2011, shall be at the annual rate of one thousand sixty-three dollars and eight cents ($1,063.08) for each bed in the nursing facility, and one thousand six hundred three dollars and eight cents ($1,603.08) for the periods beginning September 1, 2011, through May 19, 2012. Beginning with the monthly payment for the supplemental privilege assessment due beginning May 20, 2012, there shall be a monthly surcharge due with each monthly payment of the supplemental privilege assessment. The initial monthly surcharge shall be one hundred thirty-one dollars and twenty-five cents ($131.25) per licensed bed. Beginning with the monthly payment of the supplemental privilege assessment due on September 20, 2012, the monthly surcharge shall be reduced to forty-three dollars and seventy-five cents ($43.75) per bed, per month.
(2) Beginning October 1, 2015, there shall be collected a secondary supplemental privilege assessment on the business activities of every nursing facility in the State of Alabama. The secondary supplemental privilege assessment imposed in this subdivision is contingent upon the minimum appropriation provided in Section 2 of Act 2015-536, and is in addition to all other taxes and assessments, including, without limitation, the privilege taxes provided for under this article, and beginning October 1, 2015, shall be at the annual rate of four hundred one dollars and twenty-eight cents ($401.28) for each bed in the nursing facility, payable monthly.
(c) The total privilege assessment and the addition to the privilege assessment, supplemental privilege assessment, secondary privilege assessment, privilege assessments and surcharge paid by a nursing facility pursuant to this article shall be considered an allowable cost, as that term is defined in the reimbursement methodology for nursing facilities contained in Title 560 of the Alabama Administrative Code, and, to the extent permitted under applicable federal law governing the Alabama Medicaid nursing home program, the total privilege assessments paid must be included in the computation of the Medicaid per diem rate determined under the reimbursement methodology for nursing facilities contained in Title 560 of the Alabama Administrative Code. The payment to nursing facilities of the determined allowable costs in respect to the supplemental privilege assessment described in subsection (b) shall be included in Medicaid per diem rates for services provided commencing as of January 1, 2011, and shall continue to be included in Medicaid per diem rates for a period equal to the number of months during which the supplemental assessments have been in effect. For each Medicaid nursing facility, in determining the adjustment to the Medicaid per diem for the allowable costs associated with the supplemental assessment, the Medicaid Agency shall divide the total supplemental assessment due under subsection (b) by the total of all incurred resident days, regardless of payor class, reported by the nursing facility in its Medicaid cost report filed for the period then ending June 30, 2010. To accommodate the increase in the supplemental assessment and the surcharge described in subsection (b), the agency shall use the mechanism described in this subsection to adjust each nursing facility’s rate effective as of October 1, 2011, regarding the privilege assessment, and May 1, 2012, regarding the surcharge. Notwithstanding the foregoing, in the event that a cost report shall be for a period less than one year, the resident days reported shall be annualized. In the event that any portion of the privilege assessment paid by a facility cannot be included in the computation of the Medicaid per diem rate because of the effect of any cost ceiling provision of the reimbursement methodology, the cost ceiling must be adjusted to ensure continued treatment of the total privilege assessments as an allowable cost.
(d) The privilege assessment rate or the supplemental privilege assessment rate or the surcharge rate shall be reduced by the department upon the advice of the Medicaid Agency if, but only if, the reduction is required to ensure that the total revenues to the State of Alabama produced by this privilege assessment or, if the supplemental privilege assessment and surcharge are in effect, the aggregate of the supplemental privilege assessment and surcharge and the privilege assessment, during any state fiscal year are less than or equal to six percent of the total revenues received by the nursing facilities in the state subject to the assessment during that same fiscal year. In the event that the supplemental privilege assessment or surcharge are reduced as provided in the preceding sentence, then for each Medicaid nursing facility a corresponding reduction shall be made to the Medicaid per diem adjustment described in subsection (c) to ensure that only the amount of supplemental privilege assessment or surcharge actually paid is used in computing that Medicaid nursing facility’s allowable costs.
(e) The Medicaid nursing facility program shall continue to be administered directly by the Medicaid Agency during the period in which the provider assessment provided by this section is levied and collected.
(Acts 1991, No. 91-126, p. 153, §2; Acts 1992, No. 92-440, p. 871, §1; Act 97-901, 1st Ex. Sess., p. 277, §1; Act 99-409, p. 729, §1; Act 2004-532, p. 1120, §1; Act 2010-520, p. 879, §1; Act 2011-614, p. 1376, §1; Act 2012-536, p. 1589, §1; Act 2013-240, p. 577, §1; Act 2015-458, p. 1498, §1; Act 2015-536, 2nd Sp. Sess., p. 1919, §1; Act 2017-381, §1; Act 2018-542, §1; Act 2019-279, §1; Act 2020-147, §1; Act 2022-126, §1; Act 2025-299, §1; Act 2026-389, §1.)
(a) The privilege assessments imposed by this article shall be due and payable in monthly installments to the department on or before the twentieth day of the month next succeeding the month in which the assessment accrues, and shall, when collected, be paid by the department into the State Treasury. Payment by United States mail will be timely if mailed in accordance with Section 40-1-45. When so paid into the State Treasury, all such privilege assessments shall be deposited to the credit of the Alabama Health Care Trust Fund or any successor fund administered by or on behalf of the Alabama Medicaid Agency.
(b) The receipts from the privilege assessments levied in this article shall be solely available for appropriation by the Alabama Legislature to the Alabama Medicaid Agency for use by the agency in accomplishing the purposes of this article. Provided, however, for the first fiscal year in which this article is effective, to defray its expenses including salaries and costs of operation incident to the collection of this privilege assessment, there is hereby appropriated to the department and shall be deducted as a first charge thereon, an amount not to exceed one percent of the revenues collected pursuant to this article. Such amount of money as shall be appropriated for each succeeding fiscal year by the Legislature to the department with which to pay the salaries, the cost of operation and the management of the department shall be deducted, as a first charge thereon, from the privilege assessments collected under and pursuant to this article. Provided, however, the expenditure of the sum so appropriated shall be budgeted and allotted pursuant to Article 4 of Chapter 4 of Title 41, and limited to the amount appropriated to defray the expenses of operating the department for each fiscal year, incident to the collection of this privilege assessment.
(Acts 1991, No. 91-126, p. 153, §3; Act 97-901, 1st Ex. Sess., p. 277, §1; Act 2011-614, p. 1376, §1; Act 2012-536, 1589, §1.)
(a) On or before the twentieth of each month, beginning October 1991, each nursing facility subject to this article shall file with the department a statement under penalty of perjury on forms prescribed by the department, showing the total number of beds as of the last day of the previous month, the privilege assessment due under this article, and such other reasonable and necessary information as the department, after consultation with the Alabama Medicaid Agency and adoption of appropriate rules and regulations, may require for the proper enforcement of the provisions of this article. At the time of filing such statement the nursing facility shall pay to the department the amount of privilege assessments shown to be due.
(b) The annual privilege assessments levied by this article shall be prorated on a month by month basis for any beds added to or subtracted from the nursing facility during the fiscal year except that, for any nursing facility which adds licensed beds after July 1, 1991, and has a monthly total occupancy rate of less than 85 percent according to Medicaid program methodology, the amount due for each such month shall be determined by prorating the annual privilege assessments due per bed on a daily basis and multiplying the amount times the total number of patient days furnished in such month by the facility. This exception shall cease as of the first month that the occupancy rate of the nursing facility equals or exceeds 85 percent.
(c) Any nursing facility that fails to pay the privilege assessments levied by this article within the time required by this article shall pay, in addition to the privilege assessments, a penalty of 10 percent of the amount of privilege assessments due, together with interest thereon at the rate prescribed by Section 40-1-44, such penalty and interest to be assessed and collected as part of the privilege assessments. Provided, however, the department, if a good and sufficient reason is shown, may waive or remit the penalty of 10 percent or a portion thereof. If payment is not received by the last day of the month, the department shall notify the Alabama Medicaid Agency, which shall withhold the payment, interest and penalty owed from any reimbursement due to the nursing facility under the Medicaid program. The privilege assessment levied by this article shall constitute a debt due the State of Alabama and may be collected by civil action in addition to the methods provided in this article. The department is empowered to assess, file tax liens, and collect the privilege assessments levied by this article, as prescribed in this title.
(Acts 1991, No. 91-126, p. 153, §4(a)-(c); Act 97-901, 1st Ex. Sess., p. 277, §1; Act 2011-614, p. 1376, §1.)
(a) It shall be the duty of each nursing facility subject to this article to keep and preserve such suitable books and records as may be necessary to determine the amount of privilege assessments for which it is liable under the provisions of this article. The books and records shall be kept and preserved for a period of not less than three years, and all such books and records shall be open for examination during business hours by the department or its duly authorized agents.
(b) All information secured pursuant to this article by the department shall be confidential, as prescribed by Section 40-2A-10, except that the department may provide such information to the Alabama Medicaid Agency as necessary for the proper administration of the Medicaid program, or for the department’s proper administration of the privilege assessments levied by this article.
(c) The department shall from time to time, as it deems desirable, and after consultation with the Alabama Medicaid Agency, promulgate such reasonable rules and regulations as necessary to provide for the orderly and efficient administration of the privilege assessment levied by this article.
(Acts 1991, No. 91-126, p. 153, §4(d)-(f); Act 97-901, 1st Ex. Sess., p. 277, §1; Act 2011-614, p. 1376, §1.)
(a) The Alabama Medicaid Agency shall use the revenues from the privilege assessment in furtherance of the purposes of this article, provided that any uses shall be limited to those for which federal financial participation under Title XIX of the Social Security Act is available.
(b) Any reimbursement due a nursing facility under the Medicaid program shall be paid in a timely fashion. If the amount payable is not in dispute and is not paid by the Alabama Medicaid Agency within 30 days of the due date, interest on the amount due shall be charged. The interest rate shall be the legal amount currently charged by the state.
Acts 1991, No. 91-126, p. 153, §5; Acts 1992, No. 92-440, p. 871, §1; Act 97-901, 1st Ex. Sess., p. 277, §1; Act 2011-614, p. 1376, §1.)
(a) No revenues resulting from the privilege assessment established by this article and applied to increases in covered services or reimbursement levels or other enhancements of the Medicaid program shall be subject to reduction or elimination while the privilege assessment is in effect.
(b) Every nursing facility participating in the Medicaid program in the State of Alabama shall be reimbursed according to the reimbursement methodology contained in Chapter 560-X-22 of the Alabama Administrative Code, as it is in effect as of May 1, 2026, which methodology is incorporated by reference herein, except that the following shall apply:
(1) The ceiling for the operating cost center described in Rule 560-X-22-.06(2)(a) of the Alabama Administrative Code shall be computed at the median plus five percent.
(2) The ceiling for the direct patient care cost center described in Rule 560-X-22-.06(2)(b) of the Alabama Administrative Code shall be computed at the median plus 10 percent, and the provider’s actual allowable reported cost per patient day plus 11 percent, or the established ceiling plus 11 percent, whichever is less, will be used for each provider’s rate computation.
(3) The Medicaid Inflation Index described in Rule 560-X-22-.07 of the Alabama Administrative Code shall be computed without regard to the trend factor variance described in Rule 560-X-22-.07(4) of the Alabama Administrative Code.
(4) In calculating the ceiling for the operating cost center, the direct patient care cost center or the indirect patient care cost center, any increase in that ceiling over the ceiling set in the year next preceding, shall not exceed an amount equal to the product of the ceiling for the previous year times the sum of the Medicaid Inflation Index, described in Rule 560-X-22-.07 of the Alabama Administrative Code, plus four percent.
(5) In determining the reimbursement in any fiscal year to a nursing facility for certain specialized medical equipment as described in Rule 560-X-22-.14(19) of the Alabama Administrative Code, there shall be added to the daily Medicaid per diem rate computed for that fiscal year, without regard to the cost of the specialized medical equipment, an amount equal to the actual cost of the specialized medical equipment utilized for Medicaid residents during the fiscal year next preceding and divided by the actual number of Medicaid patient days incurred during that preceding fiscal year. For the purpose of this subdivision, the terms “Medicaid patient days,” “Medicaid per diem rate,” and “fiscal year” shall have the meanings assigned to them in Chapter 560-X-22 of the Alabama Administrative Code.
(6) For the period that the federal financial participation under Title XIX of the Social Security Act for certain intergovernmental transfers is available to the Alabama Medicaid program, the commissioner of the agency may pay an enhancement, not to exceed the upper limits for Medicare nursing facility payments, to rural hospital connected nursing facilities under governmental authority or control. Notwithstanding the foregoing, the enhancement shall not be limited by the provisions of Chapter 560-X-22 of the Alabama Administrative Code.
(7) Notwithstanding subdivision (3), from October 1, 2011, through September 30, 2014, in applying the inflation factor, zero percent shall be used to compute overall rates.
(8) Beginning with the setting of Medicaid nursing facility rates based on the cost reporting period ending June 30, 2020, the current asset value, as described in Rule 560-X-22-.14(11) of the Alabama Administrative Code, for each nursing facility, after applying the July 1, 2020, rebasing as provided under Rule 560-X-22-.14(11) of the Alabama Administrative Code, used to calculate nursing facility rates, shall be recalculated by adding to each respective nursing facility’s current asset value an amount equal to the product derived by multiplying the June 30, 2020, rebasing as provided under Rule 560-X-22-.14(11) of the Alabama Administrative Code by 41.03 percent. The current asset value as adjusted in this subdivision, shall be rebased each subsequent year in accordance with Rule 560-X-22.14 of the Alabama Administrative Code, and applied to calculate Medicaid nursing facility rates each subsequent cost reporting year. Notwithstanding anything to the contrary in the foregoing, for the purposes of applying the recalculated current asset value to calculate a nursing facility’s Medicaid rate for the cost reporting year beginning July 1, 2020, any resulting rate increase shall be effective for services provided on or after October 1, 2020. No nursing facility Medicaid rate increase for the recalculation of current asset value described in this subdivision shall be effective for services provided prior to October 1, 2020.
(9) For purposes of revising or adjusting the ceiling under Rule 560-X-22-.06(3) of the Alabama Administrative Code, once the ceiling has been established for a fiscal year, it shall be final and not subject to revision or adjustment during that year, except as provided in this subdivision. At the discretion of the agency, the ceiling may be revised or adjusted upon either the discovery of a material error or upon a determination by the commissioner that it is necessary to increase one or more of the ceilings in the event nursing facilities are unable to be reimbursed for increases in allowable costs that were required to be expended by nursing facilities to meet a nationwide or statewide public health emergency or because of a new federal or state law or regulation or a statewide uncontrollable catastrophic event affecting a majority of nursing facilities, and the resulting increase in allowable costs would not be reimbursed due to the annual ceiling increase limitation set forth in Rule 560-X-22-.06(2) of the Alabama Administrative Code. Because the ceiling rate is based on information provided in the cost reports, it is to the benefit of each provider to ensure that the provider’s information is correct and accurate. If obvious errors are detected during the desk audit process, providers shall be given an opportunity to submit corrected data to the agency.
(c) Payments by the Medicaid program to each nursing facility for nursing home services shall be sufficient to cover the costs determined by cost reporting principles incurred by each such nursing facility in providing care in an economical and efficient manner and which is adequate to permit the provision of care and services necessary to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident eligible for Alabama Medicaid nursing home benefits in conformity with applicable state and federal laws, rules, and regulations and quality and safety standards.
(d) Notwithstanding subsection (b), Medicaid shall be empowered to create a special reimbursement model to accommodate enhanced reimbursed care provided in dedicated ventilator units in nursing facilities that meet special physical plant requirements such as dedicated emergency power generation, through-the-wall medical gases and suction, 24-hour per day staffing with trained licensed respiratory therapists, and medical direction through contract with or employment of an Alabama licensed physician who is a board certified pulmonologist.
(e)(1) Notwithstanding subsection (b), the Alabama Medicaid Agency may create a quality incentive program for nursing facilities that meet certain quality measures during the scoring year. For the purpose of this subsection, the scoring year for any year is the cost reporting year beginning July 1 and ending June 30. The first scoring period shall be July 1, 2020, through June 30, 2021. The quality incentive shall be paid to nursing facilities in a lump sum on or before February 1, following the scoring period ending the prior June 30. For each scoring year, the Alabama Medicaid Agency shall establish a quality incentive fund of not less than five-million dollars ($5,000,000), from which quality incentive awards will be awarded and paid to those nursing facilities qualifying for a quality incentive award. Quality incentive scoring for each scoring period shall be determined from certain measures selected by the Alabama Medicaid Agency from both of the following:
a. Five of the MDS Quality Measures compiled by the Centers for Medicare and Medicaid Services (CMS), Department of Health and Human Services.
b. Three of the customer satisfaction survey categories that are independently gathered and prepared by NRC Health, or another nationally recognized satisfaction survey company with experience in the long-term care field.
(2) The Alabama Medicaid Agency shall determine the manner that scoring points are awarded, provided that to be eligible to earn points for any category, a nursing facility must do either of the following:
a. Show improvement in that category during the current scoring period over the most recent prior scoring period.
b. Rank for that category at or above the established national average.
(Acts 1991, No. 91-126, p. 153, §6; Act 97-901, 1st Ex. Sess., p. 277, §1; Act 99-409, p. 729, §1; Act 2004-532, p. 1120, §1; Act 2011-614, p. 1376, §1; Act 2012-536, p. 1589, §1; Act 2020-147, §1; Act 2023-338, §1; Act 2026-389, §2.)
THIS SECTION WAS AMENDED BY ACT 2020-147 IN THE 2020 REGULAR SESSION, EFFECTIVE MAY 18, 2020. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.
This article is intended to be severable. If federal financial participation under Title XIX of the Social Security Act is not available to the Alabama Medicaid program for the purposes of any section, subsection, paragraph, or subparagraph of this article at the approved federal medical assistance percentage, established under Section 1905 of the Social Security Act, for the applicable fiscal year then, the section, subsection, paragraph, or subparagraph of this article for which the approved federal financial participation at the approved federal medical assistance percentage, established under Section 1905 of the Social Security Act shall be of no effect. All other sections, subsections, paragraphs, and subparagraphs of this article eligible for federal financial participation shall remain in effect.
(Acts 1991, No. 91-126, p. 153, §7; Act 97-901, 1st Ex. Sess., p. 277, §1; Act 2020-147, §1.)
(a) For the purposes of this article the following words have the following meanings unless the context clearly indicates otherwise:
(1) DISPROPORTIONATE SHARE HOSPITAL. A hospital meeting the requirements of Section 1923 of the Social Security Act and other criteria adopted by the Alabama Medicaid Agency in its state plan for medical assistance under Title XIX of the Social Security Act.
(2) FISCAL YEAR. An accounting period of 12 months beginning on the first day of the first month of the state fiscal year.
(3) HOSPITAL. A facility, which is licensed as a hospital under the laws of the State of Alabama, provides 24-hour nursing services, and is primarily engaged in providing, by or under the supervision of doctors of medicine or osteopathy, inpatient services for the diagnosis, treatment, and care or rehabilitation of persons who are sick, injured, or disabled.
(4) PUBLICLY-OWNED HOSPITAL. A hospital created and operating under the authority of a governmental unit which has been established as a public corporation pursuant to Chapter 21 of Title 22 or Chapter 95 of Title 11, or a hospital otherwise owned and operated by a unit of local government.
(Acts 1993, No. 93-314, p. 471, §3(a).)
Any disproportionate share payment due a hospital shall be paid in a timely fashion. If the amount payable is not in dispute and is not paid by the Alabama Medicaid Agency within 30 days of the due date, interest on the amount due shall be charged. The interest rate shall be the legal amount currently charged by the state.
(Acts 1993, No. 93-314, p. 471, §3(b).)
In meeting its requirements under the Social Security Act that payments to hospitals will take into account the situation of disproportionate share hospitals, the agency shall, not later than the beginning of each fiscal year, promulgate regulations establishing the total amount of funds to be appropriated for each fiscal year by the agency for reimbursement, in accordance with its approved methodology, to disproportionate share hospitals other than state-owned teaching hospitals. In no event shall the total amount of funds appropriated for reimbursement to disproportionate share hospitals in accordance with and subject to the approved methodology be less than the disproportionate cap established by the Health Care Financing Administration.
(Acts 1993, No. 93-314, p. 471, §3(c).)
For purposes of this article, the following terms have the following meanings:
(1) ACCESS PAYMENT. A payment by the Medicaid program to an eligible hospital for inpatient or outpatient hospital care, or both, provided to a Medicaid recipient.
(2) ALTERNATE CARE PROVIDER. A contractor, other than a regional care organization, which agrees to provide a comprehensive package of Medicaid benefits to Medicaid beneficiaries in a defined region of the state pursuant to a risk contract.
(3) CERTIFIED PUBLIC EXPENDITURE (CPE). A certification in writing of the cost of providing medical care to Medicaid beneficiaries by publicly owned hospitals and hospitals owned by a state agency or a state university plus the amount of uncompensated care provided by publicly owned hospitals and hospitals owned by an agency of state government or a state university.
(4) DEPARTMENT. The Department of Revenue of the State of Alabama.
(5) HOSPITAL. A facility that is licensed as a hospital under the laws of the State of Alabama, provides 24-hour nursing services, and is primarily engaged in providing, by or under the supervision of doctors of medicine or osteopathy, inpatient services for the diagnosis, treatment, and care or rehabilitation of persons who are sick, injured, or disabled.
(6) HOSPITAL PAYMENT. Any payments received by a hospital for providing inpatient care or outpatient care to Medicaid patients or for uncompensated care, including, but not limited to, base payments, access payments, incentive payments, capitated payments, disproportionate share payments, etc. The term excludes payments not directly related to patient care, such as Integrated Provider System Payments.
(7) HOSPITAL SERVICES AND REIMBURSEMENT PANEL. A group of individuals appointed to review and approve any state plan amendments to be submitted to the Centers for Medicare and Medicaid Services which involve hospital services or reimbursement.
(8) INTERGOVERNMENTAL TRANSFER (IGT). A transfer of funds made by a publicly or state-owned hospital to the Alabama Medicaid Agency, which will be used by the agency to obtain federal matching funds for all hospital payments to public and state-owned hospitals.
(9) MEDICAID PROGRAM. The medical assistance program as established in Title XIX of the Social Security Act and as administered in the State of Alabama by the Alabama Medicaid Agency pursuant to executive order, Chapter 6 of Title 22, commencing with Section 22-6-1, and Title 560 of the Alabama Administrative Code.
(10) MEDICARE COST REPORT. CMS-2552-10, the Cost Report for Electronic Filing of Hospitals.
(11) NET PATIENT REVENUE. The amount calculated in accordance with generally accepted accounting principles for privately operated hospitals which is reported on Worksheet G-3, Column 1, Line 3, of the Medicare Cost Report, adjusted to exclude nonhospital revenue.
(12) OUTPATIENT PROSPECTIVE PAYMENT SYSTEM (OPPS). An outpatient visit-based patient classification system used to organize and pay services with similar resource consumption across multiple settings.
(13) PRIVATELY OPERATED HOSPITAL. A hospital in Alabama other than:
a. Any hospital that is owned and operated by the federal government;
b. Any state-owned hospital;
c. Any publicly owned hospital;
d. A hospital that limits services to patients primarily to rehabilitation services; or
e. A hospital granted a certificate of need as a long term acute care hospital.
(14) PUBLICLY OWNED HOSPITAL. A hospital created and operating under the authority of a governmental unit which has been established as a public corporation pursuant to Chapter 21 of Title 22, Chapter 95 of Title 11, or Chapter 51 of Title 22, or a hospital otherwise owned and operated by a unit of local government.
(15) STATE-OWNED HOSPITAL. A hospital that is a state agency or unit of government, including, without limitation, an authority or a hospital owned by a state agency or a state university or a hospital created pursuant to Chapter 17A of Title 16.
(16) STATE PLAN AMENDMENT. A change or update to the state Medicaid plan which is approved by the Centers for Medicare and Medicaid Services.
(17) UPPER PAYMENT LIMIT. The maximum ceiling imposed by federal regulation on Medicaid reimbursement for inpatient hospital services under 42 C.F.R. § 447.272 and outpatient hospital services under 42 C.F.R. § 447.321.
a. The upper payment limit shall be calculated separately for hospital inpatient and outpatient services.
b. Medicaid disproportionate share payments shall be excluded from the calculation of the upper payment limit.
(18) UNCOMPENSATED CARE SURVEY. A survey of hospitals conducted by the Medicaid program to determine the amount of uncompensated care provided by a particular hospital in a particular fiscal year.
(Act 2009-549, p. 1454, §2; Act 2013-246, p. 595, §1; Act 2016-299, p. 749, §1; Act 2017-382, p. 1224, §1; Act 2025-371, §1.)
AMENDED BY ACT 2026-391, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
(a) For state fiscal years 2026, 2027, and 2028, an assessment is imposed on each privately operated hospital in the amount of 6.00 percent of net patient revenue in fiscal year 2023, which shall be reviewed and hospital cost reports updated annually, subject to limitations in this article on the use of funds in the Hospital Assessment Account. The assessment is a cost of doing business as a privately operated hospital in the State of Alabama. Annually, the Medicaid Agency shall make a determination of whether changes in federal law or regulation have adversely affected hospital Medicaid reimbursement during the most recently completed fiscal year, or a reduction in payment rates has occurred. If the agency determines that adverse impact to hospital Medicaid reimbursement has occurred, or will occur, the agency shall report its findings to the Chair of the House Ways and Means General Fund Committee who shall propose an amendment to this article during any legislative session prior to the start of the upcoming fiscal year from the year the report was made, to address the adverse impact. The assessment imposed on each private hospital under this section shall be reduced pro rata, if the total disproportionate share allotment for all hospitals is reduced before or during the 2028 fiscal year, as a result of any action by the Medicaid Agency or the Centers for Medicare and Medicaid Services, and only to the extent that the Hospital Assessment Account is more than necessary to fund some or all hospital payments under this article.
(b)(1) For state fiscal years 2026, 2027, and 2028, net patient revenue shall be determined using the data from each private hospital’s fiscal year ending 2023, 2024, or 2025 Medicare Cost Report contained in the Centers for Medicare and Medicaid Services’ Healthcare Cost Report Information System, which shall be reviewed and the hospital cost reports updated annually subject to limitations in this article on the use of funds in the Hospital Assessment Account. The Medicare Cost Report for 2023, 2024, and 2025 for each private hospital, which shall be reviewed and updated annually, shall be used for fiscal years 2026, 2027, and 2028, respectively. If the Medicare Cost Report is not available in the Centers for Medicare and Medicaid Services’ Healthcare Cost Report Information System, the hospital shall submit a copy to the department to determine the hospital’s net patient revenue for the most recent fiscal year.
(2) If a privately operated hospital commenced operations after the due date for a 2023 Medicare Cost Report, the hospital shall submit its most recent Medicare Cost Report to the department in order to allow the department to determine the hospital’s net patient revenue.
(c) This article does not authorize a unit of county or local government to license for revenue or impose a tax or assessment upon hospitals or a tax or assessment measured by the income or earnings of a hospital.
(Act 2009-549, p. 1454, §2; Act 2011-615, p. 1383, §1; Act 2013-246, p. 595, §1; Act 2016-299, p. 749, §1; Act 2017-382, p. 1224, §1; Act 2018-543, §1; Act 2019-278, §1; Act 2022-127, §1; Act 2025-371, §1.)
(a) The commissioner of the department shall administer the assessment program created in this article.
(b)(1) The department shall adopt rules pursuant to the Alabama Administrative Procedure Act to implement this article.
(2) Unless otherwise provided in this article, the rules adopted under subdivision (1) shall not grant any exceptions to or exemptions from the hospital assessment imposed.
(3) The rules adopted under this article shall include forms for:
a. The proper imposition and collection of the assessment imposed; and
b. Enforcement of this article, including without limitation letters of caution or sanctions; and
c. Reporting of net patient revenue.
(c) To the extent practicable, the department shall administer and enforce this article and collect the assessments, interest, and penalty assessments imposed under this article using procedures generally employed in the administration of the department’s other powers, duties, and functions.
(Act 2009-549, p. 1454, §2.)
AMENDED BY ACT 2026-391, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
(a)(1) There is created within the Health Care Trust Fund referenced in Article 3 of Chapter 6 of Title 22 a designated account known as the Hospital Assessment Account.
(2) The hospital assessments imposed under this article shall be deposited into the Hospital Assessment Account.
(b) Monies in the Hospital Assessment Account shall consist of:
(1) All monies collected or received by the department from privately operated hospital assessments imposed under this article;
(2) Any interest or penalties levied in conjunction with the administration of this article; and
(3) Any appropriations, transfers, donations, gifts, or monies from other sources, as applicable.
(c) The Hospital Assessment Account shall be separate and distinct from the State General Fund and shall be supplementary to the Health Care Trust Fund.
(d) Monies in the Hospital Assessment Account shall not be used to replace other general revenues appropriated and funded by the Legislature or other revenues used to support Medicaid.
(e) The Hospital Assessment Account shall be exempt from budgetary cuts, reductions, or eliminations caused by a deficiency of State General Fund revenues to the extent permissible under Section 213 of the Constitution of Alabama of 2022.
(f)(1) Except as necessary to reimburse any funds borrowed to supplement funds in the Hospital Assessment Account, the monies in the Hospital Assessment Account shall be used only as follows:
a. To make public, private, and state inpatient and outpatient hospital payments.
b. To reimburse monies collected by the department from hospitals through error or mistake or under this article.
(2)a. The Hospital Assessment Account shall retain account balances remaining each fiscal year.
b. On September 30, 2014, and each year thereafter, any positive balance remaining in the Hospital Assessment Account which was not used by the Medicaid Agency to obtain federal matching funds and paid out for hospital payments, shall be factored into the calculation of any new assessment rate by reducing the amount of hospital assessment funds that must be generated during the next fiscal year. The Medicaid Agency may carry over a balance of unspent assessment funds not considered in the previous sentence and not to exceed one-third of the total current year’s assessment, through fiscal year 2028 to account for future variations in hospital expenses and federal match rates in the upcoming fiscal year. If there is no new assessment beginning October 1, 2028, the funds remaining shall be refunded to the hospital that paid the assessment or made an intergovernmental transfer in proportion to the amount remaining.
(3) A privately operated hospital shall not be guaranteed that its inpatient and outpatient hospital payments will equal or exceed the amount of its hospital assessment.
(Act 2009-549, p. 1454, §2; Act 2011-615, p. 1383, §1; Act 2013-246, p. 595, §1; Act 2016-299, p. 749, §1; Act 2017-382, p. 1224, §1; Act 2018-543, §1; Act 2019-278, §1; Act 2022-127, §1; Act 2025-371, §1.)
(a) Privately operated hospitals shall pay the assessment imposed under this article.
(b) If any exemption from the assessment is adjudged to be unconstitutional or otherwise invalid, this article shall be automatically repealed by the finding of unconstitutionality or invalidity.
(Act 2009-549, p. 1454, §2.)
(a)(1) The annual assessment imposed under this article shall be due and payable on a quarterly basis during the first 15 business days of each quarter.
(2) Notwithstanding subdivision (1), the installment payment of an assessment imposed by this article shall not be due and payable until:
a. The department issues the written notice required by this article stating that the payment methodologies to privately operated hospitals required under this article have been approved by the Centers for Medicare and Medicaid Services and the waiver under 42 C.F.R. §433.68 for the assessment imposed by this article, if necessary, has been granted by the Centers for Medicare and Medicaid Services, or if approval for the State Plan Amendment and the waiver under 42 CFR §433.68 for the assessment imposed by this article, if necessary, is delayed for any reason, the payment shall be recalulated by Medicaid upon actual approval; and
b. The 30-day verification period required by this article has expired; and
c. Medicaid has made all disproportionate share payments for the quarter, consistent with the effective date of the approved state plan amendment and waiver.
(3) After the initial installment has been paid under this section, each subsequent quarterly installment payment of an assessment imposed by this article shall be due and payable during the first 15 business days of the quarter, or if approval for the State Plan Amendment and the waiver under 42 CFR §433.68 for the assessment imposed by this article, if necessary, is delayed for any reason, the payment shall be recalculated by Medicaid upon actual approval.
(b) The payment by a privately operated hospital of the assessment created in this article shall be reported as an allowable cost for Medicaid reimbursement purposes.
(c)(1) If a privately operated hospital fails to pay the full amount of a quarterly assessment by the fifteenth business day of the quarter, the department shall add to the assessment:
a. A penalty assessment equal to five percent of the quarterly amount not paid on or before the due date; and
b. On the last day of each quarter after the due date until the assessed amount and the penalty imposed under this section are paid in full, an additional five percent penalty assessment on any unpaid quarterly and unpaid penalty assessment amounts.
(2) Payments shall be credited first to unpaid quarterly amounts, rather than to penalty or interest amounts, beginning with the most delinquent installment.
(Act 2009-549, p. 1454, §2; Act 2011-615, p. 1383, §1; Act 2017-382, §1.)
(a)(1) The department shall send a notice of assessment to each privately operated hospital informing the hospital of the assessment rate, the hospital’s net patient revenue calculation, and the estimated assessment amount owed by the hospital for the applicable fiscal year.
(2) Annual notices of assessment shall be sent at least 30 days before the due date for the first quarterly assessment payment of each fiscal year.
(b)(1) The privately operated hospital shall have 30 days from the date of its receipt of a notice of assessment to review and verify the assessment rate, the hospital’s net patient revenue calculation, and the estimated assessment amount.
(2) If a privately operated hospital disputes the hospital’s net patient revenue calculation and the estimated assessment amount, the hospital shall notify the department of the disputed amounts within 15 business days of notification of the assessment by the department. The hospital and the department shall attempt to resolve the dispute on an informal basis initially. If the hospital and department cannot informally resolve the dispute, the dispute resolution process described in Chapter 2A of this title, the Alabama Taxpayer’s Bill of Rights and Uniform Revenue Procedures Act and any subsequent amendatory acts shall be followed to resolve the dispute.
(c)(1) If a hospital provider operates, conducts, or maintains more than one privately operated hospital in the state, the hospital provider shall pay the assessment for each hospital separately.
(2) However, if the hospital provider operates more than one privately operated hospital under one Medicaid provider number, the hospital provider may pay the assessment for the hospitals in the aggregate.
(d) The total annual assessment amount for all private hospitals shall not exceed the amount of funds necessary to obtain federal funds needed to pay private hospital payments.
(e) (1) For a privately operated hospital subject to the assessment imposed under this article that ceases to conduct hospital operations or maintain its state license or did not conduct hospital operations throughout a state fiscal year, the assessment for the state fiscal year in which the cessation occurs shall be adjusted by multiplying the annual assessment computed under this article by a fraction, the numerator of which is the number of days during the year that the hospital operated and the denominator of which is 365.
(2)a. Immediately prior to ceasing operations, the hospital shall pay the adjusted assessment for that state fiscal year to the extent not previously paid.
b. The hospital also shall receive payments from Medicaid under this article, which shall be adjusted by the same fraction as its annual assessment.
(f) A privately operated hospital subject to an assessment under this article that has not been previously licensed as a hospital in Alabama and that commences hospital operations during a state fiscal year shall pay the required assessment computed under this article and shall be eligible for hospital access payments under this article on the date specified in rules promulgated by Medicaid under the Alabama Administrative Procedure Act.
(g) A hospital that is exempt from payment of the assessment under this article at the beginning of a state fiscal year, but during the state fiscal year experiences a change in status so that it becomes subject to the assessment shall pay the required assessment computed under this article and shall be eligible for hospital access payments under this article on the date specified in rules promulgated by Medicaid under the Alabama Administrative Procedure Act.
(h) A privately operated hospital that is subject to payment of the assessment computed under this article at the beginning of a state fiscal year, but during the state fiscal year experiences a change in status so that it becomes exempted from payment under this article shall be relieved of its obligation to pay the hospital assessment on the date specified in rules promulgated by Medicaid under the Alabama Administrative Procedure Act.
(Act 2009-549, p. 1454, §2; Act 2011-615, p. 1383, §1; Act 2017-382, §1.)
[Repealed]
Repealed by Act 2016-299, §2, effective October 1, 2016.
(Act 2009-549, p. 1454, §2; Act 2011-615, p. 1383, §1; Act 2013-246, p. 595, §1.)
AMENDED BY ACT 2026-391, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
(a) Beginning on October 1, 2016, and ending on September 30, 2028, publicly owned and state-owned hospitals shall begin making intergovernmental transfers to the Alabama Medicaid Agency. Total IGTs for the total intergovernmental transfers shall equal the amount of state funds necessary for the agency to obtain only those federal matching funds necessary to pay publicly owned and state-owned hospitals for hospital payments.
(b) These intergovernmental transfers shall be made in compliance with 42 U.S.C. § 1396b(w).
(c) If a publicly or state-owned hospital commences operations after October 1, 2013, the hospital shall commence making intergovernmental transfers to the Alabama Medicaid Agency in the first full month of operation of the hospital after October 1, 2013.
(Act 2013-246, p. 595, §2; Act 2016-299, p. 749, §1; Act 2017-382, §1; Act 2018-543, §1; Act 2019-278, §1; Act 2022-127, §1; Act 2025-371, §1.)
(a) Medicaid shall account for those federal funds derived from certified public expenditures by publicly and state-owned hospitals as those funds are received by Medicaid from the federal government.
(b) The certified public expenditure accounting shall be separate and distinct from the state General Fund appropriation accounting.
(c) Federal moneys accounted for shall not be used to replace other state General Fund revenues appropriated and funded by the Legislature or other revenues used to support Medicaid.
(d) The moneys obtained by Medicaid from hospital certified public expenditure certifications shall be used only as follows:
(1) To make disproportionate share hospital payments under this article;
(2) To reimburse moneys collected by the department through error or mistake under this article; or
(3) For any other permissible purpose allowed under Title XIX of the Social Security Act.
(Act 2009-549, p. 1454, §2; Act 2013-246, p. 595, §1.)
AMENDED BY ACT 2026-391, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
The agency shall pay hospitals, as a base amount for fiscal years 2026, 2027, and 2028, the greater of a hospital’s current per diem as published for fiscal year 2022 or 68 percent of total inpatient payments made by the agency during state fiscal year 2019, divided by the total patient days paid in state fiscal year 2019, multiplied by patient days paid during fiscal years 2026, 2027, and 2028. A hospital may request to have their per diem reviewed and revised at the sole discretion of the Medicaid Agency. This payment to be paid using the agency’s published check write table is in addition to any hospital access payments the agency may elect to pay hospitals as inpatient payments other than per diems and access payments, if the agency does not make payments pursuant to Article 9 of Chapter 6 of Title 22 in fiscal year 2019, or fiscal years 2026, 2027, and 2028, only if the Hospital Services and Reimbursement Panel approves the change in hospital payments.
(Act 2009-549, p. 1454, §2; Act 2011-615, p. 1383, §1; Act 2013-246, p. 595, §1; Act 2016-299, p. 749, §1; Act 2017-382, p. 1224, §1; Act 2018-543, §1; Act 2019-278, §1; Act 2022-127, §1; Act 2025-371, §1.)
AMENDED BY ACT 2026-391, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
If the Alabama Medicaid Agency implements OPPS, the total amount budgeted (total base rate) for OPPS shall not be less than the total outpatient UPL.
The agency shall pay hospitals as a base amount for fiscal years 2026, 2027, and 2028 for outpatient services, based upon an outpatient fee schedule in existence on September 30, 2018. Medicaid may update the outpatient fee schedule with approval of the Hospital Services and Reimbursement Panel. Hospital outpatient base payments shall be in addition to any hospital access payments or other payments described in this article.
(Act 2009-549, p. 1454, §2; Act 2011-615, p. 1383, §1; Act 2013-246, p. 595, §1; Act 2016-299, p. 749, §1; Act 2017-382, §1; Act 2018-543, §1; Act 2019-278, §1; Act 2022-127, §1; Act 2025-371, §1.)
AMENDED BY ACT 2026-391, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
(a) The agency shall consider the published inpatient and outpatient rates as defined in Sections 40-26B-79 and 40-26B-80 as the minimum payment allowed.
(b) The aggregate hospital access payment amount is an amount equal to the upper payment limit, less total hospital base payments determined under this article. All publicly, state-owned, and privately operated hospitals shall be eligible for inpatient and outpatient hospital access payments for fiscal years 2026, 2027, and 2028, as set forth in this article.
(1) In addition to any other funds paid to hospitals for inpatient hospital services to Medicaid patients, each eligible hospital shall receive inpatient hospital access payments each state fiscal year. Publicly and state-owned hospitals shall receive total payments, including hospital base payments, that, in the aggregate, equal the upper payment limit for publicly and state-owned hospitals, until the Hospital Assessment Account is exhausted. Privately operated hospitals shall receive total payments, including hospital base payments that, in the aggregate, equal the upper payment limit for privately operated hospitals, until the Hospital Assessment Account is exhausted. Any intergovernmental transfers and hospital provider taxes shall be used only as monies paid to hospitals.
(2) Inpatient hospital access payments shall be made on a quarterly basis.
(3) In addition to any other funds paid to hospitals for outpatient hospital services to Medicaid patients, each eligible hospital shall receive outpatient hospital access payments each state fiscal year. Publicly and state-owned hospitals shall receive payments, including hospital base payments, that, in the aggregate, equal the upper payment limit for publicly and state-owned hospitals, until the Hospital Assessment Account is exhausted. Privately operated hospitals shall receive payments, including hospital base payments, that, in the aggregate, equal the upper payment limit for privately operated hospitals, until the Hospital Assessment Account is exhausted.
(4) Outpatient hospital access payments shall be made on a quarterly basis.
(c) A hospital access payment shall not be used to offset any other payment by the Medicaid Agency for hospital inpatient or outpatient services to Medicaid beneficiaries, including, without limitation, any fee-for-service, per diem, private or public hospital inpatient adjustment, or hospital cost settlement payment.
(d) The specific hospital payments for publicly, state-owned, and privately operated hospitals shall be described in the state plan amendment to be submitted to and approved by the Centers for Medicare and Medicaid Services.
(Act 2009-549, p. 1454, §2; Act 2011-615, p. 1383, §1; Act 2013-246, p. 595, §1; Act 2016-299, p. 749, §1; Act 2017-382, §1; Act 2018-543, §1; Act 2019-278, §1; Act 2022-127, §1; Act 2025-371, §1.)
AMENDED BY ACT 2026-391, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
(a) The assessment imposed under this article shall not take effect or shall cease to be imposed and any monies remaining in the Hospital Assessment Account in the Alabama Medicaid Program Trust Fund shall be refunded to hospitals in proportion to the amounts paid by them if any of the following occur:
(1) Expenditures for hospital inpatient and outpatient services paid for by the Alabama Medicaid Program for fiscal years 2026, 2027, and 2028 are less than the amount paid during fiscal year 2017 or reimbursement rates under this article for fiscal years 2026, 2027, and 2028 are less than the rates approved by CMS in Sections 40-26B-79 and 40-26B-80.
(2) The Alabama Medicaid Agency makes changes in rules that reduce hospital inpatient payment rates, outpatient payment rates, or adjustment payments, including any cost settlement protocol, which were in effect on September 30, 2025.
(3) The inpatient or outpatient hospital access payments required under this article are changed or the assessments imposed or certified public expenditures or intergovernmental transfers recognized under this article are not eligible for federal matching funds under Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq., or 42 U.S.C. § 1397aa et seq.
(4) The Alabama Medicaid Agency contracts with an alternate care provider in a Medicaid region under any terms other than the following:
a. The agency may contract with an alternate care provider only if, in the judgment of the agency, care of Medicaid enrollees would be better, more efficient, and less costly than under the then existing care delivery system. The agency may contract with more than one alternate care provider in a Medicaid region.
b. If the agency were to contract with an alternate care provider under the terms of this subdivision, that provider would have to pay reimbursements for hospital inpatient or outpatient care at rates at least equal to the most recent published rates pursuant to Sections 40-26B-79 and 40-26B-80.
c. If more than a year had elapsed since the agency directly paid reimbursements to hospitals, the minimum reimbursement rates paid by the alternate care provider would have to be changed to reflect any percentage increase in the national medical consumer price index minus 100 basis points.
(b)(1) The assessment imposed under this article shall not take effect or shall cease to be imposed if the assessment is determined to be an impermissible tax under Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq.
(2) Monies in the Hospital Assessment Account in the Alabama Medicaid Program Trust Fund derived from assessments imposed before the determination described in subdivision (1) shall be disbursed under this article to the extent federal matching is not reduced due to the impermissibility of the assessments, and any remaining monies shall be refunded to hospitals in proportion to the amounts paid by them.
(Act 2009-549, p. 1454, §2; Act 2011-615, p. 1383, §1; Act 2013-246, p. 595, §1; Act 2016-299, p. 749, §1; Act 2017-382, §1; Act 2018-543, §1; Act 2019-278, §1; Act 2022-127, §1; Act 2025-371, §1.)
(a) There is established the Hospital Services and Reimbursement Panel to advise in the development of and approve any state plan amendment which involves hospital services or reimbursement to be submitted to the Centers for Medicare and Medicaid Services.
(1) The panel shall consist of six members and be constituted in the following manner:
a. The Commissioner of the Alabama Medicaid Agency.
b. Three members to be appointed by the Governor from a list of 10 names submitted by the Alabama Hospital Association. The hospital members appointed shall represent the diverse ownership type of hospitals in the state.
c. Two members to be appointed by the Governor.
(2) All panel members shall be residents of Alabama and the composition of the board shall reflect the racial, gender, geographic, urban/rural, and economic diversity of the state. The panel shall meet within 30 days subsequent to May 15, 2009, to elect a chair and establish procedures necessary to carry out the business of the panel. A quorum shall be a majority of the members appointed to the panel. The sole purpose of the panel is to approve any amendments to the state plan to be submitted to the Centers for Medicare and Medicaid Services which involve hospital services or reimbursement. Amendments to the state plan must be approved by a majority of the members attending a meeting called for the purpose of reviewing and approving, amending, or disapproving the proposed state plan amendment.
(b) Medicaid shall file with the Centers for Medicare and Medicaid Services a state plan amendment approved by the Hospital Services and Reimbursement Panel to implement the requirements of this article, including the payment of hospital access payments under this article no later than 45 days after the effective date of this article.
(c) If the state plan amendment is not approved by the Centers for Medicare and Medicaid Services, the department shall:
(1) Not implement the assessment imposed under this article; and
(2) Return any assessment fees to the hospitals that paid the fees if assessment fees have been collected.
(Act 2009-549, p. 1454, §2.)
AMENDED BY ACT 2026-391, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
This article shall be of no effect if federal financial participation under Title XIX of the Social Security Act is not available to the Medicaid Agency at the approved federal medical assistance percentage, established under Section 1905 of the Social Security Act, now appearing as U.S.C. § 1369d, for the state fiscal years 2026, 2027, and 2028.
(Act 2009-549, p. 1454, §2; Act 2011-615, p. 1383, §1; Act 2013-246, p. 595, §1; Act 2016-299, p. 749, §1; Act 2017-382, p. 1224, §1; Act 2018-543, §1; Act 2019-278, §1; Act 2022-127, §1; Act 2025-371, §1.)
Except for Medicaid expansion under the Affordable Care Act, as amended, if the Medicaid Agency elects to liberalize the eligibility criteria for individuals who apply for Medicaid services or to expand or increase the medical assistance benefits as defined in Title XIX of the Social Security Act which it currently provides to Medicaid beneficiaries, the state share of such funds necessary to increase medical assistance benefits or allow more persons to become eligible for Medicaid shall only be appropriated from the state General Fund and not from any funds produced or segregated for hospital payments under this article.
(Act 2009-549, p. 1454, §2; Act 2019-278, §1.)
The Social Security Act provides for additional payments to hospitals qualifying as disproportionate share hospitals under Section 1923(d) of that act. Payments to disproportionate share hospitals shall be made to all hospitals qualifying for disproportionate share hospital payments under Section 1923(d) of that act, in addition to any other payments by Medicaid. Medicaid shall fully expend the allotment to hospitals under Section 1923(f)(3) of the Social Security Act. Medicaid shall not restrict the qualifications for disproportionate share hospital payments to anything less than what the act sets out as disproportionate share hospital qualifications. The disproportionate share hospital payment to each hospital shall be made quarterly during the first month of each quarter for the state fiscal year. Medicaid shall mandate an uncompensated care survey be completed annually and returned to Medicaid by each hospital affected by this article beginning with the state fiscal year ending September 30, 2009, and thereafter for each state fiscal year. The survey shall be conducted in a manner that complies with federal rules related to auditing and reporting of disproportionate share hospital payments, as described in 42 C.F.R. §§447 and 455.
(Act 2009-549, p. 1454, §2; Act 2016-299, §1.)
The Commissioner of the Alabama Medicaid Agency is hereby directed to specifically exclude from the Plan Amendment submitted to the Centers for Medicare and Medicaid Services regarding the Hospital Assessment Program any language or calculations that would incur liability to the State General Fund.
(Act 2009-549, p. 1454, §3.)
[Repealed]
THIS SECTION WAS REPEALED BY ACT 2026-391, EFFECTIVE OCTOBER 1, 2026.
This article shall automatically terminate and become null by its own terms on September 30, 2028, unless a later act is enacted extending the article to future state fiscal years.
(Act 2009-549, p. 1454, §2; Act 2011-615, p. 1383, §1; Act 2016-299, p. 749, §1; Act 2017-382, p. 1224, §1; Act 2018-543, §1; Act 2019-278, §1; Act 2022-127, §1; Act 2025-371, §1.)
The following words, terms, and phrases, when used in this article have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:
(1) ASSESSMENT POOL. The total assessments collected pursuant to this article as of a date determined by the Commissioner of Alabama Medicaid, which date shall be no later than the 60th day of a fiscal quarter, that have not been expended for the purposes of this article, net of the amounts specified in Section 40-26B-93(c)(1), plus any Medicaid federal financial participation.
(2) ASSESSMENT RATE. A monetary amount per emergency medical transport applied to calculate emergency medical transport assessments pursuant to this article.
(3) DEPARTMENT. The Department of Revenue of the State of Alabama.
(4) EMERGENCY MEDICAL TRANSPORT. The act of transporting an individual from any point of origin to the nearest medical facility capable of meeting the emergency medical needs of the patient by an ambulance licensed, operated, and equipped in accordance with applicable state or local statutes, ordinances, or regulations. This term shall only include services that are billable utilizing Healthcare Common Procedure Coding System (HCPCS) emergency transport codes A0429 BLS Emergency, A0427 ALS Emergency (Level 1), A0433 ALS Emergency (Level 2), A0434 Specialty Care Transport, and A0225 Neonatal Emergency Transport. In consultation with the Alabama Medicaid Agency, the department may include additional HCPCS Codes when approved by the federal government. This term shall not include transportation of beneficiaries by passenger cars, taxicabs, litter vans, wheelchair vans, or other forms of public or private conveyances, nor shall it include transportation by an air ambulance provider or a transport not paid by any payor.
(5) EMERGENCY MEDICAL TRANSPORT ENHANCEMENT. An additional Medicaid payment to emergency medical transport providers authorized by Section 40-26B-95.
(6) EMERGENCY MEDICAL TRANSPORT PROVIDER. A provider of emergency medical transports licensed by the Alabama Department of Public Health’s Office of Emergency Medical Services as a transport provider. The term includes both public and private providers.
(7) FISCAL QUARTER. A state fiscal quarter within a state fiscal year.
(8) FISCAL YEAR. An accounting period of 12 months beginning on the first day of the first month of the state fiscal year.
(9) GROSS RECEIPTS. Gross payments received as patient care revenue for emergency medical transports, determined on a cash basis of accounting.
(10) MEDICAID PROGRAM. The medical assistance program as established in Title XIX of the Social Security Act and as administered in the State of Alabama by the Alabama Medicaid Agency pursuant to executive order and Title 560 of the Alabama Administrative Code.
(11) TRANSPORT ENHANCEMENT RATE. An additional Medicaid payment per emergency medical transport authorized pursuant to this article.
(Act 2022-128, §1; Act 2025-370, §1.)
AMENDED BY ACT 2026-390, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
To provide further for the availability of indigent health care, the operation of the Medicaid Program, and the maintenance and expansion of emergency medical transport services:
(1) Commencing no later than the fiscal quarter starting April 1, 2023, and through and including the fiscal quarter starting July 1, 2028, an assessment is imposed on each emergency medical transport provider based on the number of emergency medical transports. The quarterly assessment for each emergency medical transport provider shall be calculated based on the product of the assessment rate and the total revenue received from emergency medical transports rendered by the emergency medical transport provider from the previous fiscal quarter.
(2) In consultation with the Alabama Medicaid Agency, the department shall set an assessment rate each fiscal quarter. The assessment rate shall be a maximum of 5.3 percent, subject to Section 40-26B-98(b). In consultation with the Alabama Medicaid Agency, the department may change the assessment rate each quarter to reduce the amount of surplus assessments. Any surplus assessment from a previous quarter may be used to reduce the assessment rate.
(3) The assessment imposed by this article is in addition to all other taxes and assessments of any kind now imposed by law.
(Act 2022-128, §1; Act 2024-214, §1; Act 2025-370, §1.)
The department shall notify, or make available to, each emergency medical transport provider, in accordance with notification procedures determined by the department, the assessment rate, and the estimated assessment amount owed by the provider for the applicable fiscal quarter.
(Act 2022-128, §1.)
(a) The assessment imposed by this article shall be due and payable to the department on a date determined by the department, which date shall not be later than the 15th day of the month following the close of the fiscal quarter for which the assessment is assessed, except that Section 40-26B-97 shall apply to any fiscal quarter for which federal approval has not been obtained as of the first day of the fiscal quarter. Any payment not received by the 15th day of the month following the close of the fiscal quarter shall be considered delinquent. When collected, the assessment imposed by the article shall be deposited to the Alabama Health Care Trust Fund.
(b) Any emergency medical transport provider that fails to pay the assessment levied by this article by the 15th day of the month following the close of the fiscal quarter for which the assessment is assessed shall pay, in addition to the assessment, a penalty of 10 percent of the amount of the assessment due, together with interest thereon at the rate prescribed by Section 40-1-44, such penalty and interest to be assessed and collected as part of the assessment. Provided, however, the department, if a good and sufficient reason is shown, may waive or remit the penalty of 10 percent or a portion thereof. If the delinquent payment is not received by the 45th day of the quarter in which the assessment was due, the department shall notify the Alabama Medicaid Agency which shall determine whether the emergency medical transport provider is a Medicaid provider, and if so, shall withhold the payment, interest, and penalty due from any reimbursement due the provider under the Medicaid Program, including any emergency medical transport enhancements authorized by Section 40-26B-95. Any emergency medical transport provider who cures the delinquency within 15 days of the date of delinquency shall be eligible for medical transport enhancements authorized by Section 40-26B-95 during that quarter. Any emergency medical transport provider who does not cure the delinquency within 15 days of the date of delinquency shall not be eligible for medical transport enhancements authorized by Section 40-26B-95 during that quarter. Delinquent payments received more than 15 days after the date of delinquency shall be considered a part of the surplus assessment to be utilized in accordance with Section 40-26B-91. The assessments levied by this article shall constitute a debt due the State of Alabama and may be collected by civil action in addition to the methods provided in this article.
(c) Revenues generated by this assessment shall be made available exclusively and are continuously appropriated for the following purposes:
(1) To pay for the state’s administrative costs of this article, the department shall receive one percent of the assessment per quarter and Medicaid shall receive funding for expenses and enhancements to health care services with emphasis on non-emergency transportation in an amount of one hundred seventy-five thousand dollars ($175,000) per fiscal quarter, subject to Section 40-26B-98(d).
(2) To pay emergency medical transport enhancements to emergency transport providers pursuant to Section 40-26B-95.
(Act 2022-128, §1; Act 2025-370, §1.)
AMENDED BY ACT 2026-390, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
(a) Commencing no later than the fiscal quarter starting April 1, 2023, and through and including the fiscal quarter starting July 1, 2028, on or before the 15th day after the close of each fiscal quarter, every emergency medical transport provider shall file with the department a statement under penalty of perjury on forms prescribed by the department, showing the total number of emergency medical transports, the total amount of gross receipts for the subject fiscal quarter, and other reasonable and necessary information as the department, after consultation with the Alabama Medicaid Agency and adoption of appropriate rules, may require for the proper enforcement of this article.
(b) It shall be the duty of each emergency medical transport provider to keep and preserve suitable books and records as may be necessary to determine the amount of assessments for which it is liable under this article. The books and records shall be kept and preserved for a period of not less than three years, and all such books and records shall be open for examination during business hours by the department or its duly authorized agents.
(c) All information secured pursuant to this article by the department shall be confidential, as prescribed by Section 40-2A-10, except that the department may provide such information to the Alabama Medicaid Agency as necessary for the proper administration of the Medicaid Program, or for the department’s proper administration of the assessment levied by this article.
(d) The department from time to time, as it deems desirable, shall adopt reasonable rules as necessary to provide for the orderly and efficient administration of the assessment levied by this article.
(Act 2022-128, §1; Act 2024-214, §1; Act 2025-370, §1.)
AMENDED BY ACT 2026-390, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.
(a) Commencing no later than the fiscal quarter starting April 1, 2023, and through and including the fiscal quarter starting July 1, 2028, the Alabama Medicaid Agency shall pay an emergency medical transport enhancement each fiscal quarter to emergency medical transport providers as set forth in this section on or before the last day of the quarter, except that Section 40-26B-97 shall apply to any fiscal quarter for which federal approval has not been obtained as of the first day of the fiscal quarter. The emergency medical transport enhancement shall be paid in addition to any other amounts payable to emergency medical transport providers with respect to those services and shall not affect any other payments to emergency medical transport providers.
(b) For each fiscal quarter, the emergency medical transport enhancement to each emergency medical transport provider shall be calculated as the total number of emergency medical transports reimbursed by the Alabama Medicaid Agency as the primary payor in accordance with Chapter 8 of the Medicaid Provider Manual to the emergency medical transport provider in the preceding fiscal quarter multiplied by the transport enhancement rate. The total emergency medical transport enhancement to all providers shall not be greater than the assessment pool.
(c) For each fiscal quarter, the Alabama Medicaid Agency shall establish the transport enhancement rate based on the difference between the Medicaid rate for each emergency medical transport and the average rate paid by commercial insurers.
(Act 2022-128, §1; Act 2024-214, §1; Act 2025-370, §1.)
(a) The proceeds of the assessment set forth in Section 40-26B-91 and the matching amount provided by the federal government shall be used to supplement existing Medicaid funding for emergency medical transports provided by emergency medical transport providers and not to supplant this funding.
(b) The state shall continue its maintenance of effort for the level of state funding not derived from the assessment on emergency medical transport providers for each fiscal quarter commencing on or after October 1, 2022, in an amount not less than the amount that the state would have paid for the same number of emergency medical transports under the rate methodology that was in effect on January 1, 2022.
(Act 2022-128, §1.)
If there is a delay in the implementation of this article for any reason, including a delay in any required approval by the federal Centers for Medicare and Medicaid Services, both of the following shall apply:
(1) An emergency medical transport provider may only be required to pay the assessment pursuant to this article for fiscal quarters for which the federal Centers for Medicare and Medicaid Services has approved the enhanced payments pursuant to Section 40-26B-95. The department may not collect assessments pursuant to this article until the Alabama Medicaid Agency has received federal approval of the enhanced payments pursuant to Section 40-26B-95. Upon federal approval of the enhanced payments pursuant to Section 40-26B-95, the department shall establish a schedule for payment of assessments in consultation with emergency medical transport providers.
(2) The Alabama Medicaid Agency may retroactively implement the emergency medical transport enhancements described in Section 40-26B-95 to the extent authorized by the federal Centers for Medicare and Medicaid Services.
(Act 2022-128, §1.)
(a)(1) The Alabama Medicaid Agency shall request any approval from the federal Centers for Medicare and Medicaid Services it deems necessary for the use of assessments pursuant to this article and for the purpose of receiving associated federal matching funds.
(2) This article shall be implemented only to the extent that any necessary federal approvals are obtained and federal financial participation is available.
(b) The Alabama Medicaid Agency may modify or make adjustments to any methodology, assessment amount, or other provision specified in this article to the extent necessary to meet the requirements of federal law or regulations or to obtain federal approval, but only if subsection (c) of Section 40-26B-93 and subsection (b) of Section 40-26B-96 remain in full force and effect. To the extent that the Alabama Medicaid Agency reduces the emergency medical transport enhancement in order to meet the requirements of federal law or regulations or to obtain federal approval, it must reduce the assessment rate such that the amount of assessment collected does not exceed the amounts needed for the uses described in subsection (c) of Section 40-26B-93.
(c) The Commissioner of Alabama Medicaid may exempt categories of emergency medical transport providers from the assessment if necessary to obtain federal approval.
(d) To the extent that the Alabama Medicaid Agency reduces the total assessment collected pursuant to this article pursuant to subsections (b) or (c), the amount described in subdivision (c)(1) of Section 40-26B-93 shall be reduced in proportion to the amount of the reduced total assessments.
(Act 2022-128, §1.)
(a) This article shall cease to be operative on the first day of the fiscal quarter beginning on or after the date one or more of the following conditions is satisfied:
(1) Federal financial participation under Title XIX of the Social Security Act is not available to the Alabama Medicaid Program for the purposes of this article at the approved federal medical assistance percentage, established under Section 1905 of the Social Security Act, 42 U.S.C. § 1396d, for the applicable fiscal quarter.
(2) The state ceases to meet its obligation for the level of state funding not derived from the assessment established by this article as described in Section 40-26B-96(b).
(b) Upon the earlier of the occurrence of one or more of the conditions listed in subsection (a) is satisfied, on December 1 of each year, the department shall refund any remaining assessment pool to each provider of ground emergency medical transport services in proportion to the amount paid by the respective provider during the most recently completed quarterly payment period.
(Act 2022-128, §1; Act 2024-214, §1; Act 2025-370, §1.)
The following Multistate Tax Compact is hereby approved, adopted, and enacted into law by the State of Alabama:
Multistate Tax Compact Article I. Purposes.
The purposes of this compact are to:
Facilitate proper determination of state and local tax liability of multistate taxpayers, including the equitable apportionment of tax bases and settlement of apportionment disputes.
Promote uniformity or compatibility in significant components of tax systems.
Facilitate taxpayer convenience and compliance in the filing of tax returns and in other phases of tax administration.
Avoid duplicative taxation.
Article II. Definitions.
As used in this compact:
“State” means a state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any territory or possession of the United States.
“Subdivision” means any governmental unit or special district of a state.
“Taxpayer” means any corporation, partnership, firm, association, governmental unit or agency, or other person acting as a business entity in more than one state, but does not include any individual.
“Income tax” means a tax imposed on or measured by net income including any tax imposed on or measured by an amount arrived at by deducting expenses from gross income, one or more forms of which expenses are not specifically and directly related to particular transactions.
“Capital stock tax” means a tax measured in any way by the capital of a corporation considered in its entirety.
“Gross receipts tax” means a tax, other than a sales tax, which is imposed on or measured by the gross volume of business, in terms of gross receipts or in other terms, and in the determination of which no deduction is allowed which would constitute the tax an income tax.
“Sales tax” means a tax imposed with respect to the transfer for a consideration of ownership, possession or custody of tangible personal property, or the rendering of services measured by the price of the tangible personal property transferred or services rendered and which is required by state or local law to be separately stated from the sales price by the seller, or which is customarily separately stated from the sales price, but does not include a tax imposed exclusively on the sale of a specifically identified commodity or article or class of commodities or articles.
“Use tax” means a nonrecurring tax, other than a sales tax, which (a) is imposed on or with respect to the exercise or enjoyment of any right or power over tangible personal property incident to the ownership, possession, or custody of that property or the leasing of that property from another including any consumption, keeping, retention, or other use of tangible personal property and (b) is complementary to a sales tax.
“Tax” means an income tax, capital stock tax, gross receipts tax, sales tax, use tax, and any other tax which has a multistate impact, except that the provisions of articles III, IV, and V of this compact shall apply only to the taxes specifically designated therein and the provisions of article IX of this compact shall apply only in respect to determinations pursuant to article IV.
Article III. Elements of Income Tax Laws. Taxpayer Option, State and Local Taxes.
Taxpayer Option, Short Form.
Coverage.
Article IV. Division of Income.
(a) “Business income” means income arising from transactions and activity in the regular course of the taxpayer’s trade or business and includes income from tangible and intangible property if the acquisition, management, and disposition of the property constitute integral parts of the taxpayer’s regular trade or business operations.
(b) “Commercial domicile” means the principal place from which the trade or business of the taxpayer is directed or managed.
(c) “Compensation” means wages, salaries, commissions, and any other form of remuneration paid to employees for personal services.
(d) “Financial organization” means any bank, trust company, savings bank, industrial bank, land bank, safe deposit company, private banker, savings and loan association, credit union, cooperative bank, small loan company, sales finance company, investment company, or any type of insurance company.
(e) “Nonbusiness income” means all income other than business income.
(f) “Public utility” means any business entity (1) which owns or operates any plant, equipment, property, franchise, or license for the transmission of communications, transportation of goods or persons, except by pipeline, or the production, transmission, sale, delivery, or furnishing of electricity, water, or steam; and (2) whose rates of charges for goods or services have been established or approved by a federal, state or local government, or governmental agency.
(g) “Sales” means all gross receipts of the taxpayer not allocated under paragraphs of this article.
(h) “State” means any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, and any foreign country or political subdivision thereof.
(i) “This state” means the state in which the relevant tax return is filed or, in the case of application of this article to the apportionment and allocation of income for local tax purposes, the subdivision or local taxing district in which the relevant tax return is filed.
Any taxpayer having income from business activity which is taxable both within and without this state, other than activity as a financial organization or public utility or an individual, shall allocate and apportion his or her or its net income as provided in this article. If a taxpayer has income from business activity as a public utility but derives the greater percentage of his or her or its income from activities subject to this article, the taxpayer may elect to allocate and apportion his or her or its entire net income as provided in this article.
For purposes of allocation and apportionment of income under this article, a taxpayer is taxable in another state if: (1) in that state he or she or it is subject to a net income tax, a franchise tax measured by net income, a franchise tax for the privilege of doing business, or a corporate stock tax, or (2) that state has jurisdiction to subject the taxpayer to a net income tax regardless of whether, in fact, the state does or does not.
Rents and royalties from real or tangible personal property, capital gains, interest, dividends, or patent or copyright royalties, to the extent that they constitute nonbusiness income, shall be allocated as provided in paragraphs 5 through 8 of this article.
(a) Net rents and royalties from real property located in this state are allocable to this state.
(b) Net rents and royalties from tangible personal property are allocable to this state: (1) if and to the extent that the property is utilized in this state, or (2) in their entirety if the taxpayer’s commercial domicile is in this state and the taxpayer is not organized under the laws of or taxable in the state in which the property is utilized.
(c) The extent of utilization of tangible personal property in a state is determined by multiplying the rents and royalties by a fraction, the numerator of which is the number of days of physical location of the property in the state during the rental or royalty period in the taxable year and the denominator of which is the number of days of physical location of the property everywhere during all rental or royalty periods in the taxable year. If the physical location of the property during the rental or royalty period is unknown or unascertainable by the taxpayer, tangible personal property is utilized in the state in which the property was located at the time the rental or royalty payer obtained possession.
(b) Capital gains and losses from sales of tangible personal property are allocable to this state if (1) the property had a situs in this state at the time of the sale, or (2) the taxpayer’s commercial domicile is in this state and the taxpayer is not taxable in the state in which the property had a situs.
(c) Capital gains and losses from sales of intangible personal property are allocable to this state if the taxpayer’s commercial domicile is in this state.
Interest and dividends are allocable to this state if the taxpayer’s commercial domicile is in this state.
(a) Patent and copyright royalties are allocable to this state: (1) if and to the extent that the patent or copyright is utilized by the payer in this state, or (2) if and to the extent that the patent copyright is utilized by the payer in a state in which the taxpayer is not taxable and the taxpayer’s commercial domicile is in this state.
(b) A patent is utilized in a state to the extent that it is employed in production, fabrication, manufacturing, or other processing in the state or to the extent that a patented product is produced in the state. If the basis of receipts from patent royalties does not permit allocation to states or if the accounting procedures do not reflect states of utilization, the patent is utilized in the state in which the taxpayer’s commercial domicile is located.
(c) A copyright is utilized in a state to the extent that printing or other publication originates in the state. If the basis of receipts from copyright royalties does not permit allocation to states or if the accounting procedures do not reflect states of utilization, the copyright is utilized in the state in which the taxpayer’s commercial domicile is located.
All business income shall be apportioned to this state by multiplying the income by the sales factor.
The sales factor is a fraction, the numerator of which is the total sales of the taxpayer in this state during the tax period, and the denominator of which is the total sales of the taxpayer everywhere during the tax period.
Sales of tangible personal property are in this state if the property is delivered or shipped to a purchaser, other than the United States government, within this state regardless of the f.o.b. point or other conditions of the sale.
Sales, other than sales described in Section 11, are in this state if the taxpayer’s market for the sale is in this state.
(a) The taxpayer’s market for a sale is in this state:
(1) In the case of sale, rental, lease, or license of real property, if and to the extent the property is located in this state;
(2) In the case of rental, lease, or license of tangible personal property, if and to the extent the property is located in this state;
(3) In the case of sale of a service, if and to the extent the service is delivered to a location in this state;
(4) In the case of lease or license of intangible property; or sale or other exchange of intangible property if the receipts from the sale or exchange derive from payments that are contingent on the productivity, use, or disposition of the property, if and to the extent the intangible property is used in this state; provided that intangible property used in marketing a good or service to a consumer is used in this state if the good or service that is marketed using the intangible property is purchased by a consumer who is in this state; and
(5) In the case of sale of intangible property other than that referenced in subdivision (4) above; where the property sold is a contract right, government license, or similar intangible property that authorizes the holder to conduct a business activity in a specific geographic area; if and to the extent the intangible property is used in or otherwise associated with this state, provided that any sale of intangible property not otherwise described in this subdivision or subdivision (4) above shall be excluded from the numerator and the denominator of the sales factor.
(b) If the state of assignment cannot be determined under subsection (a), it shall be reasonably approximated.
(c) If the taxpayer is not taxable in a state to which a sale is assigned under subsection (a), or if the state of assignment cannot be determined under subsection (a) or reasonably approximated under subsection (b), the sale shall be excluded from the denominator of the sales factor.
(a) Separate accounting;
(b) The exclusion of any one or more of the factors;
(c) The inclusion of one or more additional factors which will fairly represent the taxpayer’s business activity in this state; or
(d) The employment of any other method to effectuate an equitable allocation and apportionment of the taxpayer’s income.
Article V. Elements of Sales and Use Tax Laws. Tax Credit.
Exemption Certificates, Vendors May Rely.
Article VI. The Commission. Organization and Management.
(b) Each party state shall provide by law for the selection of representatives from its subdivisions affected by this compact to consult with the commission member from that state.
(c) Each member shall be entitled to one vote. The commission shall not act unless a majority of the members are present, and no action shall be binding unless approved by a majority of the total number of members.
(d) The commission shall adopt an official seal to be used as it may provide.
(e) The commission shall hold an annual meeting and such other regular meetings as its bylaws may provide and such special meetings as its executive committee may determine. The commission bylaws shall specify the dates of the annual and any other regular meetings, and shall provide for the giving of notice of annual, regular, and special meetings. Notices of special meetings shall include the reasons therefor and an agenda of the items to be considered.
(f) The commission shall elect annually, from among its members, a chair, a vice-chair, and a treasurer. The commission shall appoint an executive director who shall serve at its pleasure, and it shall fix his or her duties and compensation. The executive director shall be secretary of the commission. The commission shall make provision for the bonding of such of its officers and employees as it may deem appropriate.
(g) Irrespective of the civil service, personnel, or other merit system laws of any party state, the executive director shall appoint or discharge such personnel as may be necessary for the performance of the functions of the commission and shall fix their duties and compensation. The commission bylaws shall provide for personnel policies and programs.
(h) The commission may borrow, accept, or contract for the services of personnel from any state, the United States, or any other governmental entity.
(i) The commission may accept for any of its purposes and functions any and all donations and grants of money, equipment, supplies, materials, and services, conditional or otherwise, from any governmental entity, and may utilize and dispose of the same.
(j) The commission may establish one or more offices for the transacting of its business.
(k) The commission shall adopt bylaws for the conduct of its business. The commission shall publish its bylaws in convenient form, and shall file a copy of the bylaws and any amendments thereto with the appropriate agency or officer in each of the party states.
(l) The commission annually shall make to the Governor and Legislature of each party state a report covering its activities for the preceding year. Any donation or grant accepted by the commission or services borrowed shall be reported in the annual report of the commission, and shall include the nature, amount, and conditions, if any, of the donation, gift, or grant accepted or services borrowed and the identity of the donor or lender. The commission may make additional reports as it may deem desirable.
Committees.
(b) The commission may establish advisory and technical committees, membership on which may include private persons and public officials, in furthering any of its activities. Such committees may consider any matter of concern to the commission, including problems of special interest to any party state and problems dealing with particular types of taxes.
(c) The commission may establish such additional committees as its bylaws may provide.
Powers.
(a) Study state and local tax systems and particular types of state and local taxes.
(b) Develop and recommend proposals for an increase in uniformity or compatibility of state and local tax laws with a view toward encouraging the simplification and improvement of state and local tax law and administration.
(c) Compile and publish information as in its judgment would assist the party states in implementation of the compact and taxpayers in complying with state and local tax laws.
(d) Do all things necessary and incidental to the administration of its functions pursuant to this compact.
Finance.
(b) Each of the commission’s budgets of estimated expenditures shall contain specific recommendations of the amounts to be appropriated by each of the party states. The total amount of appropriations requested under any such budget shall be apportioned among the party states as follows: one tenth in equal shares; and the remainder in proportion to the amount of revenue collected by each party state and its subdivisions from income taxes, capital stock taxes, gross receipts taxes, and sales and use taxes. In determining such amounts, the commission shall employ such available public sources of information as, in its judgment, present the most equitable and accurate comparisons among the party states. Each of the commission’s budgets of estimated expenditures and requests for appropriations shall indicate the sources used in obtaining information employed in applying the formula contained in this paragraph.
(c) The commission shall not pledge the credit of any party state. The commission may meet any of its obligations in whole or in part with funds available to it under paragraph 1(i) of this article: Provided that the commission takes specific action setting aside such funds prior to incurring any obligation to be met in whole or in part in such manner. Except where the commission makes use of funds available to it under paragraph 1(i), the commission shall not incur any obligation prior to the allotment of funds by the party states adequate to meet the same.
(d) The commission shall keep accurate accounts of all receipts and disbursements. The receipts and disbursements of the commission shall be subject to the audit and accounting procedures established under its bylaws. All receipts and disbursements of funds handled by the commission shall be audited yearly by a certified or licensed public accountant and the report of the audit shall be included in and become part of the annual report of the commission.
(e) The accounts of the commission shall be open at any reasonable time for inspection by duly constituted officers of the party states and by any persons authorized by the commission.
(f) Nothing contained in this article shall be construed to prevent commission compliance with laws relating to audit or inspection of accounts by or on behalf of any government contributing to the support of the commission.
Article VII. Uniform Regulations and Forms.
Whenever any two or more party states, or subdivisions of party states, have uniform or similar provisions of law relating to an income tax, capital stock tax, gross receipts tax, or sales or use tax, the commission may adopt uniform regulations for any phase of the administration of such law, including assertion of jurisdiction to tax, or prescribing uniform tax forms. The commission may also act with respect to the provisions of article IV of this compact.
Prior to the adoption of any regulation, the commission shall:
(a) As provided in its bylaws, hold at least one public hearing on due notice to all affected party states and subdivisions thereof and to all taxpayers and other persons who have made timely request of the commission for advance notice of its regulation-making proceedings.
(b) Afford all affected party states and subdivisions and interested persons an opportunity to submit relevant written data and views, which shall be considered fully by the commission.
Article VIII. Interstate Audits.
This article shall be in force only in those party states that specifically provide therefor by statute.
Any party state or subdivision thereof desiring to make or participate in an audit of any accounts, books, papers, records, or other documents may request the commission to perform the audit on its behalf. In responding to the request, the commission shall have access to and may examine, at any reasonable time, such accounts, books, papers, records, and other documents, and any relevant property or stock of merchandise. The commission may enter into agreements with party states or their subdivisions for assistance in performance of the audit. The commission shall make charges, to be paid by the state or local government or governments for which it performs the service, for any audits performed by it in order to reimburse itself for the actual costs incurred in making the audit.
The commission may require the attendance of any person within the state where it is conducting an audit or part thereof at a time and place fixed by it within such state for the purpose of giving testimony with respect to any account, book, paper, document, other record, property, or stock of merchandise being examined in connection with the audit. If the person is not within the jurisdiction, he or she may be required to attend for such purpose at any time and place fixed by the commission within the state of which he or she is a resident: Provided that such state has adopted this article.
The commission may apply to any court having power to issue compulsory process for orders in aid of its powers and responsibilities pursuant to this article and any and all such courts shall have jurisdiction to issue such orders. Failure of any person to obey any such order shall be punishable as contempt of the issuing court. If the party or subject matter on account of which the commission seeks an order is within the jurisdiction of the court to which application is made, such application may be to a court in the state or subdivision on behalf of which the audit is being made or a court in the state in which the object of the order being sought is situated. The provisions of this paragraph apply only to courts in a state that has adopted this article.
The commission may decline to perform any audit requested if it finds that its available personnel or other resources are insufficient for the purpose or that, in the terms requested, the audit is impracticable of satisfactory performance. If the commission, on the basis of its experience, has reason to believe that an audit of a particular taxpayer, either at a particular time or on a particular schedule, would be of interest to a number of party states or their subdivisions, it may offer to make the audit or audits, the offer to be contingent on sufficient participation therein as determined by the commission.
Information obtained by an audit pursuant to this article shall be confidential and available only for tax purposes to party states, their subdivisions, or the United States. Availability of information shall be in accordance with the laws of the states or subdivisions on whose account the commission performs the audit, and only through the appropriate agencies or officers of such states or subdivisions. Nothing in this article shall be construed to require any taxpayer to keep records for any period not otherwise required by law.
Other arrangements made or authorized pursuant to law for cooperative audit by or on behalf of the party states or any of their subdivisions are not superseded or invalidated by this article.
In no event shall the commission make any charge against a taxpayer for an audit.
As used in this article, “tax,” in addition to the meaning ascribed to it in article II, means any tax or license fee imposed in whole or in part for revenue purposes.
Article IX. Arbitration.
Whenever the commission finds a need for settling disputes concerning apportionments and allocations by arbitration, it may adopt a regulation placing this article in effect, notwithstanding the provisions of article VII.
The commission shall select and maintain an arbitration panel composed of officers and employees of state and local governments and private persons who shall be knowledgeable and experienced in matters of tax law and administration.
Whenever a taxpayer who has elected to employ article IV, or whenever the laws of the party state or subdivision thereof are substantially identical with the relevant provisions of article IV, the taxpayer, by written notice to the commission and to each party state or subdivision thereof that would be affected, may secure arbitration of an apportionment or allocation, if he or she is dissatisfied with the final administrative determination of the tax agency of the state or subdivision with respect thereto on the ground that it would subject him or her to double or multiple taxation by two or more party states or subdivisions thereof. Each party state and subdivision thereof hereby consents to the arbitration as provided herein, and agrees to be bound thereby.
The arbitration board shall be composed of one person selected by the taxpayer, one by the agency or agencies involved, and one member of the commission’s arbitration panel. If the agencies involved are unable to agree on the person to be selected by them, such person shall be selected by lot from the total membership of the arbitration panel. The two persons selected for the board in the manner provided by the foregoing provisions of this paragraph shall jointly select the third member of the board. If they are unable to agree on the selection, the third member shall be selected by lot from among the total membership of the arbitration panel. No member of a board selected by lot shall be qualified to serve if he or she is an officer or employee or is otherwise affiliated with any party to the arbitration proceeding. Residence within the jurisdiction of a party to the arbitration proceeding shall not constitute affiliation within the meaning of this paragraph.
The board may sit in any state or subdivision party to the proceeding, in the state of the taxpayer’s incorporation, residence, or domicile, in any state where the taxpayer does business, or in any place that it finds most appropriate for gaining access to evidence relevant to the matter before it.
The board shall give due notice of the times and places of its hearings. The parties shall be entitled to be heard, to present evidence, and to examine and cross-examine witnesses. The board shall act by majority vote.
The board shall have power to administer oaths, take testimony, subpoena and require the attendance of witnesses and the production of accounts, books, papers, records, and other documents, and issue commissions to take testimony. Subpoenas may be signed by any member of the board. In case of failure to obey a subpoena, and upon application by the board, any judge of a court of competent jurisdiction of the state in which the board is sitting or in which the person to whom the subpoena is directed may be found may make an order requiring compliance with the subpoena, and the court may punish failure to obey the order as a contempt. The provisions of this paragraph apply only in states that have adopted this article.
Unless the parties otherwise agree, the expenses and other costs of the arbitration shall be assessed and allocated among the parties by the board in such manner as it may determine. The commission shall fix a schedule of compensation for members of arbitration boards and of other allowable expenses and costs. No officer or employee of a state or local government who serves as a member of a board shall be entitled to compensation therefor unless he or she is required on account of his or her service to forego the regular compensation attaching to his or her public employment, but any such board member shall be entitled to expenses.
The board shall determine the disputed apportionment or allocation and any matters necessary thereto. The determinations of the board shall be final for purposes of making the apportionment or allocation, but for no other purpose.
The board shall file with the commission and with each tax agency represented in the proceeding: the determination of the board; the board’s written statement of its reasons therefor; the record of the board’s proceedings; and any other documents required by the arbitration rules of the commission to be filed.
The commission shall publish the determinations of boards together with the statements of the reasons therefor.
The commission shall adopt and publish rules of procedure and practice and shall file a copy of such rules and of any amendment thereto with the appropriate agency or officer in each of the party states.
Nothing contained herein shall prevent at any time a written compromise of any matter or matters in dispute, if otherwise lawful, by the parties to the arbitration proceeding.
Article X. Entry Into Force and Withdrawal.
This compact shall enter into force when enacted into law by any seven states. Thereafter, this compact shall become effective as to any other state upon its enactment thereof. The commission shall arrange for notification of all party states whenever there is a new enactment of the compact.
Any party state may withdraw from this compact by enacting a statute repealing the same. No withdrawal shall affect any liability already incurred by or chargeable to a party state prior to the time of such withdrawal.
No proceeding commenced before an arbitration board prior to the withdrawal of a state and to which the withdrawing state or any subdivision thereof is a party shall be discontinued or terminated by the withdrawal, nor shall the board thereby lose jurisdiction over any of the parties to the proceeding necessary to make a binding determination therein.
Article XI. Effect on Other Laws and Jurisdiction.
Nothing in this compact shall be construed to:
(a) Affect the power of any state or subdivision thereof to fix rates of taxation, except that a party state shall be obligated to implement article III 2. of this compact.
(b) Apply to any tax or fixed fee imposed for the registration of a motor vehicle or any tax on motor fuel, other than a sales tax: Provided that the definition of “tax” in article VIII 9. may apply for the purposes of that article and the commission’s powers of study and recommendation pursuant to article VI 3. may apply.
(c) Withdraw or limit the jurisdiction of any state or local court or administrative officer or body with respect to any person, corporation, or other entity, or subject matter, except to the extent that such jurisdiction is expressly conferred by or pursuant to this compact upon another agency or body.
(d) Supersede or limit the jurisdiction of any court of the United States.
Article XII. Construction and Severability.
This compact shall be liberally construed so as to effectuate the purposes thereof. The provisions of this compact shall be severable and if any phrase, clause, sentence, or provision of this compact is declared to be contrary to the constitution of any state or of the United States or the applicability thereof to any government, agency, person, or circumstance is held invalid, the validity of the remainder of this compact and the applicability thereof to any government, agency, person, or circumstance shall not be affected thereby. If this compact shall be held contrary to the constitution of any state participating therein, the compact shall remain in full force and effect as to the remaining party states and in full force and effect as to the state affected as to all severable matters.
(Acts 1967, No. 395, p. 982, §1; Acts 1997, No. 97-625, p. 1048, §3; Act 2011-616, p. 1394, §1; Act 2021-1, §6.)
Notwithstanding any other provision of law to the contrary and specifically, Section 40-27-1, for purposes of Article IV of the Multistate Tax Compact, the term “business income” means income arising from transactions or activity in the course of the taxpayer’s trade or business; or income from tangible or intangible property if the acquisition, management, or disposition of the property constitute integral parts of the taxpayer’s trade or business operations; or gain or loss resulting from the sale, exchange, or other disposition of real property or of tangible or intangible personal property, if the property while owned by the taxpayer was operationally related to the taxpayer’s trade or business carried on in Alabama or operationally related to sources within Alabama, or the property was operationally related to sources outside this state and to the taxpayer’s trade or business carried on in Alabama; or gain or loss resulting from the sale, exchange, or other disposition of stock in another corporation if the activities of the other corporation were operationally related to the taxpayer’s trade or business carried on in Alabama while the stock was owned by the taxpayer. A taxpayer may have more than one trade or business in determining whether income is business income.
(Act 2001-1113, 4th Sp. Sess., p. 1178, §1.)
The Commissioner of Revenue, State of Alabama, shall represent this state on the Multistate Tax Commission.
(Acts 1967, No. 395, p. 982, §2.)
The member representing this state on the Multistate Tax Commission may be represented thereon by an alternate designated by him. Any such alternate shall be a principal assistant of the member of the commission in the agency which the member heads.
(Acts 1967, No. 395, p. 982, §3.)
The counsel, state Department of Revenue, State of Alabama, or an assistant counsel of said department designated by him, shall serve as counsel for the member representing this state on the Multistate Tax Commission.
(Acts 1967, No. 395, p. 982, §4.)
The Governor, after consultation with representatives of local governments, shall appoint three persons who are representatives of subdivisions affected or likely to be affected by the Multistate Tax Compact. The member of the commission representing this state, and any alternate designated by him, shall consult regularly with these appointees in accordance with article VI 1 (b) of the compact.
(Acts 1967, No. 395, p. 982, §5.)
Article VIII of the Multistate Tax Compact relating to interstate audits shall be in force in and with respect to the State of Alabama.
(Acts 1967, No. 395, p. 982, §6.)
The following words, terms and phrases, where used in this chapter, shall have the following respective meanings, except where the context clearly indicates a different meaning:
(1) T.V.A. The Tennessee Valley Authority.
(2) A.B.C. The Alcoholic Beverage Control Board.
(3) A.B.C. PAYMENTS. Any moneys which are distributed by law to the several local governments from the taxes and/or profits of the Alcoholic Beverage Control Board.
(4) BOOK VALUE. The value that T.V.A. carries on its books for its property.
(5) INDUSTRIAL POWER SALES. That power which is sold by T.V.A. directly to individual concerns as reported and determined by T.V.A.
(6) IN-LIEU-OF-TAXES PAYMENTS. Those payments made directly to the state of Alabama and not to local governments or distributors under federal statute (16 USC, §831) by T.V.A. which are in lieu of all taxes to all levels of government in Alabama.
(7) PROPERTY. The property of T.V.A. allocated to or associated with the power program of T.V.A. as reported by T.V.A.
(8) SERVED or T.V.A.-SERVED. Provided power that is produced by T.V.A. and sold through municipal or cooperative distributors or T.V.A. as reported by T.V.A.
(9) WET. The local governments in areas which permit the sale of alcoholic beverages.
(10) DRY. The local governments in areas which prohibit the sale of alcoholic beverages.
(Acts 1979, No. 79-786, p. 1425, §1.)
(a) Beginning in the fiscal year ending September 30, 1980, the State of Alabama will annually transfer to the counties in Alabama served by T.V.A. a portion of the in-lieu-of-taxes payments made by T.V.A. to the State of Alabama. Such transfer of funds shall be according to the following schedule:
| For the Fiscal Year: | Percentage of In-Lieu-of-Taxes | | --- | --- | | | Payments Transferred to | | | T.V.A.-Served Counties by the State | | | Shall Be: | | 1979-80 | 20% | | 1980-81 | 30% | | 1981-82 | 40% | | 1982-83 | 50% | | 1983-84 | 60% | | 1984-85 | 70% | | 1985-86 through 2004-05 | 75% | | 2005-2006 and each fiscal year thereafter | 78% |
(b) The state shall distribute the in-lieu-of-taxes payments each fiscal year to each of the counties served by T.V.A., and the three percent increases after September 30, 2005, generated by the amendments to this section at the 2006 Regular Session of the Legislature shall be allocated by local legislation.
(c)(1) In addition to the distribution provided for in subsection (a) of this section, the state shall distribute each fiscal year five percent of the in-lieu-of-taxes payments to the dry counties and municipalities therein which are not served by T.V.A. Said five percent shall be distributed on the same proportionate basis that each such county received in fiscal year 1978-79 from A.B.C. payments as compared to the total A.B.C. payments received by all dry counties not served by T.V.A. during the same fiscal year. The distribution of such in-lieu-of-taxes payments between each dry non-T.V.A.-served county and the municipalities located therein shall be made pro rata on the basis of A.B.C. payments received by each such jurisdiction in the fiscal year 1979 to the total A.B.C. payments to the county and all municipalities in such county in the fiscal year 1979. Such distribution to the municipalities will be administered by the county governing body.
Beginning in the fiscal year ending September 30, 2010, the distribution provided in this subsection to the dry counties and municipalities that are not served by T.V.A. shall be reduced by an amount equal to the funds allocated to those dry counties and municipalities from liquor tax revenues pursuant to Section 40-28-5 until the aggregate annual amount of revenue received by those dry counties and municipalities from the provisions of Section 40-28-5 is equal to the amount of T.V.A. payments distributed to the dry counties and municipalities therein pursuant to this subdivision for the fiscal year ending September 30, 2009. Until the aggregate annual amount of liquor tax distributions to the dry counties and municipalities not served by T.V.A. provided in Section 40-28-5 is equal to the amount of T.V.A. payments distributed to the dry counties and municipalities therein pursuant to this subdivision for the fiscal year ending September 30, 2009, the annual amount by which any payments to such counties and municipalities are reduced by liquor tax revenues pursuant to Section 40-28-5 shall be distributed to the counties served by T.V.A. Thereafter, all payments distributed pursuant to this subsection shall be distributed to the counties served by T.V.A. The distribution to the counties served by T.V.A. provided in this subsection is to be allocated in the same manner as the increase generated by the amendment to this section made during the 2006 Regular Session of the Legislature that now appears as subsection (b).
Notwithstanding the foregoing, the distributions to Limestone County, to Madison County, to Marshall County, and to Morgan County provided in this subsection shall be allocated by local law.
The additional distributions to the above listed counties pursuant to Act 2010-135 shall be held by the respective county separate and apart from other T.V.A. distributions and shall not be expended by the county until the effective date of the local law providing for the allocation of such funds.
(2) Effective for transfers after July 1, 2006, the distribution to the State General Fund shall remain at the level received on July 1, 2006, until the level received attains the amount of seventeen million eight hundred forty thousand two hundred thirty-three dollars ($17,840,233) and thereafter the state shall receive 17 percent of the total amount of the in-lieu-of-taxes payments.
(d) Any T.V.A.-served dry county which is eligible to receive funds under Section 40-28-3 shall receive from that portion of the in-lieu-of-taxes payments not less than that amount which the county received in A.B.C. payments in the fiscal year 1978-79.
(Acts 1978, 2nd Ex. Sess., No. 92, p. 1786, §1; Acts 1979, No. 79-306, p. 458; Acts 1979, No. 79-786, p. 1425, §2; Act 2006-655, p. 1792, §1; Act 2010-135, p. 190, §1.)
(a) Distribution of the in-lieu-of-taxes payments of T.V.A. by the state to the served counties shall be made to the governing bodies of served counties. Any county receiving a share of said payments that has within its boundaries a municipality or part thereof that is served in whole or in part by T.V.A. shall share in the county’s payments with said municipality receiving the same amount as the ratio of T.V.A.-served population of the municipality bears to the T.V.A.-served population of the entire county. However, the Legislature may, by general or local laws, prescribe other distribution within such counties to local governments and/or public agencies therein.
(b) The in-lieu-of-taxes payments distributed each year to the served counties shall be as follows:
(1) Eighty percent of the amount of such distribution to the served counties shall be distributed among the counties in the same proportion that the amount of T.V.A. power sales revenue generated in that county less industrial power sales bears to the total amount of T.V.A. power sales revenue generated in all counties less industrial power sales in all served counties.
(2) Ten percent of the amount of such distribution to the served counties shall be distributed among the counties in the same proportion that the book value amount of the T.V.A.‘s property in each county bears to the total book value of all T.V.A.‘s property in all counties served by the T.V.A.
(3) Ten percent of the amount of such percentage of payments shall be distributed among the counties in the same proportion that the T.V.A.‘s industrial power sales in each county bears to the total amount of T.V.A.’s industrial power sales in all served counties of the state.
(Acts 1978, 2nd Ex. Sess., No. 92, p. 1786, §2; Acts 1979, No. 79-786, p. 1425, §3.)
Payments by the state to the counties pursuant to this chapter will be made within 30 days after the state Department of Revenue receives each payment from T.V.A., and such payments shall be made by warrants drawn by the Comptroller upon said T.V.A. funds in the State Treasury and in such amounts as certified by the Department of Revenue.
(Acts 1978, 2nd Ex. Sess., No. 92, p. 1786, §3; Acts 1979, No. 79-786, p. 1425, §4.)
(a) Beginning with the fiscal year ending September 30, 2010, the Public Welfare Trust Fund, the Special Mental Health Fund, and the State General Fund shall annually receive the same amount of revenue from the state taxes on spirituous and vinous liquors pursuant to Sections 28-3-201, 28-3-202, 28-3-203, 28-3-204, and 28-3-205, respectively, that such entities received for the fiscal year ending September 30, 2009, until the annual growth in such receipts above this amount equals the amount of T.V.A. payments distributed to the dry counties and municipalities therein pursuant to subsection (c)(1) of Section 40-28-2, for the fiscal year ending September 30, 2009. Thereafter, in addition to the above amounts, the Public Welfare Trust Fund, the Special Mental Health Fund, and the State General Fund shall annually receive the amount of growth in those liquor tax receipts that exceeds the amount of T.V.A. payments distributed to the dry counties and municipalities therein pursuant to subsection (c)(1) of Section 40-28-2, for the fiscal year ending September 30, 2009.
(b) Beginning with the fiscal year ending September 30, 2010, an amount up to the amount of T.V.A. payments distributed to the dry counties and municipalities therein pursuant to subsection (c)(1) of Section 40-28-2, for the fiscal year ending September 30, 2009, of the growth in state taxes on spirituous and vinous liquors provided in subsection (a) above shall be distributed to the dry counties and municipalities therein that are not served by T.V.A. and that receive T.V.A. in-lieu-of-taxes payments pursuant to subsection (c)(1) of Section 40-28-2. Notwithstanding subsection (a), in addition to the distributions provided for in this subsection, the state shall distribute to the dry counties and dry municipalities therein each fiscal year from the state taxes on spirituous and vinous liquors an amount equal to the percentage growth in T.V.A. in-lieu-of-taxes payments received by the state.
(c) In addition to the above distribution, for the fiscal year ending September 30, 2011, there shall be an adjustment to increase or decrease the amount of state taxes on spirituous liquors distributed to the non-served T.V.A. counties as necessary to make the total amount paid to such counties for the fiscal year ending September 30, 2011, equal to the amount of T.V.A. payments such counties would have received prior to the amended distribution provided in Act 2010-135.
(Act 2010-135, p. 190, §2.)
In any county where an agricultural authority has been incorporated prior to September 1, 2017, under Article 3, commencing with Section 11-20-70 of Chapter 20, Title 11, for the purpose of constructing and operating facilities to promote agricultural business and economic development, 70 percent of the payments made to the county commission of the county pursuant to Section 40-28-2 shall be distributed by the county, upon approval of a majority vote of the local legislative delegation residing in the county, to the agricultural authority to be used for the purposes of the authority, notwithstanding any other general or local law to the contrary.
(Act 2023-254, §1.)
This chapter shall be known and may be cited as the “Tax Enforcement and Compliance Act” or “TECA.”
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §1.)
The provisions of this chapter shall apply to every public tax, license or fee, and/or any penalty or interest payable thereon, levied under the provisions of any existing or hereafter enacted law which is codified in this title or any other title and is collectible by the Commissioner of Revenue.
The purpose of this chapter is to supplement and clarify existing provisions of the general law relating to the enforcement and collection of taxes. The provisions of this chapter shall be complementary and in addition to all other provisions of law. In the event of any conflict between the provisions of this chapter and those of any other specific statutory provisions contained in other chapters of this title, or of any other title, it is hereby declared to be the legislative intent that, to the extent such other specific provisions are inconsistent with or different from the provisions of this chapter, the provisions of this chapter shall prevail. It is the intent of the Legislature that no part of this chapter shall be construed so as to supersede any due process requirements presently in effect under this title.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §2.)
If any person liable to pay any tax, other than ad valorem tax, neglects or refuses to pay the same, the amount (including any interest, additional amount, addition to tax, or assessable penalty together with any costs that may accrue in addition thereto) shall be a lien in favor of the State of Alabama upon all property and rights to property, whether real or personal, tangible or intangible, belonging to such person. The Department of Revenue shall give notice of lien to the taxpayer.
If the taxpayer shall file with the Department of Revenue a bond in double the amount of the lien filed, with surety or sureties to be either a surety company authorized to do business in Alabama or such individual property owners, not less than three in number, as are recommended by the judge of probate of the county in which the notice of lien is recorded, conditioned to pay all such tax, interest penalty, additional amount or addition to such tax, together with any costs which may occur in addition thereto as may be assessed against the taxpayer, principal in said bond, the Commissioner of Revenue or his delegate, shall withdraw and release said lien filed under the provisions of this section, and upon a determination that the said taxpayer owes any of said taxes to the state, the assessment (judgment) therefor shall be entered against said taxpayer and the surety or sureties on said bond; and, if not paid within 30 days from the date of said final assessment (judgment), then execution shall issue therefor against said principal and the surety or sureties on said bond. If the bond hereinabove provided for is not given and approved by the said commission, and a final assessment (judgment) is entered against said taxpayer and he duly and legally appeals therefrom within the time and in the manner provided for by this title, and the clerk or register of the court to which the appeal has been taken duly and legally approves the bond required for an appeal or the said taxpayer against whom the said assessment was entered by the Department of Revenue shall, within 30 days from the date of the assessment, pay the amount thereof to the state, then, in either of said events, the Commissioner of Revenue shall cancel or release from record said lien.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §3; Acts 1992, No. 92-186, p. 349, §74.)
(a) Notwithstanding Section 40-29-20, or any other law to the contrary, a private auditing or collecting firm may not recover any of the following costs from a taxpayer:
(1) Professional service fees to include, but not be limited to, attorney fees and charges for accountant services.
(2) Travel costs.
(3) Salary or personnel-related expenses of the firm.
(4) Auditing or collecting related costs.
(b) For purposes of this section, a private auditing or collecting firm has the same definition as provided in Section 40-2A-3.
(Act 2020-31, §1.)
Unless another date is specifically fixed by law, the lien imposed by Section 40-29-20 shall arise at the time the assessment list, return therefor or the payment thereof, whichever is prior, was due to have been filed with or made to the Department of Revenue, and shall continue until the liability for the amount so assessed (or a judgment against the taxpayer arising out of such liability) is satisfied or becomes unenforceable by reason of lapse of time.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §4.)
(a) Purchasers, holders of security interests, mechanic’s lienors, and judgment lien creditors. The lien imposed by Section 40-29-20 shall not be valid as against any purchaser, holder of a security interest, mechanic’s lienor, or judgment lien creditor until notice thereof which meets the requirements of subsection (f) has been filed by the Commissioner of Revenue or his delegate, and shall not be perfected as against any purchaser, holder of a security interest, mechanic’s lienor, or judgment lien creditor until the date such notice is filed.
(b) Protection for certain interest even though notice filed. Even though notice of a lien imposed by Section 40-29-20 has been filed, such lien shall not be valid:
(1) SECURITIES. With respect to a security (as defined in subsection (g)(4)):
a. As against a purchaser of such security who at the time of purchase did not have actual notice or knowledge of the existence of such lien; and
b. As against a holder of a security interest in such security who, at the time such interest came into existence, did not have actual notice or knowledge of the existence of such lien.
(2) MOTOR VEHICLES. With respect to a motor vehicle (as defined in subsection (g)(3)), as against a purchaser of such motor vehicle, if:
a. At the time of the purchase such purchaser did not have actual notice or knowledge of the existence of such lien; and
b. Before the purchaser obtains such notice or knowledge, he has acquired possession of such motor vehicle and has not thereafter relinquished possession of such motor vehicle to the seller or his agent.
(3) PERSONAL PROPERTY PURCHASED AT RETAIL. With respect to tangible personal property purchased at retail, as against a purchaser in the ordinary course of the seller’s trade or business, unless at the time of such purchase such purchaser intends such purchase to (or knows such purchase will) hinder, evade, or defeat the collection of any tax under this title.
(4) PERSONAL PROPERTY PURCHASED IN CASUAL SALE. With respect to household goods, personal effects, or other tangible personal property purchased (not for resale) in a casual sale for less than $250, as against the purchaser, but only if such purchaser does not have actual notice or knowledge (A) of the existence of such lien, or (B) that this sale is one of a series of sales.
(5) PERSONAL PROPERTY SUBJECT TO POSSESSORY LIEN. With respect to tangible personal property subject to a lien securing the reasonable price of the repair or improvement of such property, as against a holder of such a lien, if such holder is, and has been, continuously in possession of such property from the time such lien arose.
(6) REAL PROPERTY TAX. With respect to real property, as against a holder of a lien upon such property, if such lien is entitled to priority over security interests in such property which are prior in time, and such lien secures payment of ad valorem tax.
(7) REAL PROPERTY SUBJECT TO A MECHANIC’S LIEN FOR CERTAIN REPAIRS AND IMPROVEMENTS. With respect to real property subject to a lien for repair or improvement as against a mechanic’s lienor but not to exceed $5,000.
(8) ATTORNEYS’ LIENS. With respect to a judgment or other amount in settlement of a claim or of a cause of action, as against an attorney who holds a lien upon or a contract enforceable against such judgment or amount, to the extent of his reasonable compensation for obtaining such judgment or procuring such settlement.
(9) CERTAIN INSURANCE CONTRACTS. With respect to a life insurance, endowment, or annuity contract, as against the organization which is the insurer under such contract, at any time:
a. Before such organization had actual notice or knowledge of the existence of such lien; or
b. After such organization had such notice or knowledge, with respect to advances required to be made automatically to maintain such contract in force under an agreement entered into before such organization had such notice or knowledge.
(c) Protection for certain commercial transactions financing agreements, etc.
(1) IN GENERAL. To the extent provided in this subsection, even though notice of a lien imposed by Section 40-29-20 has been filed, such lien shall not be valid with respect to a security interest which came into existence after tax lien filing but which:
a. Is in qualified property covered by the terms of a written agreement entered into before tax lien filing and constituting:
A commercial transactions financing agreement;
A real property construction or improvement financing agreement; or
An obligatory disbursement agreement; and
b. Is protected against a judgment lien arising, as of the time of tax lien filing, out of an unsecured obligation.
(2) COMMERCIAL TRANSACTIONS FINANCING AGREEMENT. For purposes of this subsection:
a. Definition. The term “commercial transactions financing agreement” means an agreement (entered into by a person in the course of his trade or business):
but such an agreement shall be treated as coming within the term only to the extent that such loan or purchase is made before the forty-sixth day after the date of tax lien filing or (if earlier) before the lender or purchaser had actual notice or knowledge of such tax lien filing.
b. Limitation on qualified property. The term “qualified property,” when used with respect to a commercial transactions financing agreement, includes only commercial financing security acquired by the taxpayer before the forty-sixth day after the date of tax lien filing.
c. Commercial financing security defined. The term “commercial financing security” means (i) paper of a kind ordinarily arising in commercial transactions, (ii) accounts receivable, (iii) mortgages on real property, and (iv) inventory.
d. Purchaser treated as acquiring security interest. A person who satisfies paragraph a. by reason of clause (ii) thereof shall be treated as having acquired a security interest in commercial financing security.
(3) REAL PROPERTY CONSTRUCTION OR IMPROVEMENT FINANCING AGREEMENT. For purposes of this subsection:
a. Definition. The term “real property construction or improvement financing agreement” means an agreement to make cash disbursements to finance:
For purposes of subparagraph 3, the furnishing of goods and services shall be treated as the disbursement of cash.
b. Limitation on qualified property. The term “qualified property,” when used with respect to a real property construction or improvement financing agreement, includes only:
In the case of subparagraph a1, the real property with respect to which the construction or improvement has been or is to be made;
In the case of subparagraph a2, the proceeds of the contract described therein; and
In the case of subparagraph a3, property subject to the lien imposed by Section 40-29-20 at the time of tax lien filing and the crop or the livestock or other animals referred to in subparagraph a3.
(4) OBLIGATORY DISBURSEMENT AGREEMENT. For purposes of this subsection:
a. Definition. The term “obligatory disbursement agreement” means an agreement (entered into by a person in the course of his trade or business) to make disbursements, but such an agreement shall be treated as coming within the term only to the extent of disbursements which are required to be made by reason of the intervention of the rights of a person other than the taxpayer.
b. Limitation on qualified property. The term “qualified property,” when used with respect to an obligatory disbursement agreement, means property subject to the lien imposed by Section 40-29-20 at the time of tax lien filing and (to the extent that the acquisition is directly traceable to the disbursements referred to in paragraph a) property acquired by the taxpayer after tax lien filing.
c. Special rules for surety agreements. Where the obligatory disbursement agreement is an agreement ensuring the performance of a contract between the taxpayer and another person:
The term “qualified property” shall be treated as also including the proceeds of the contract the performance of which was ensured; and
If the contract the performance of which was ensured was a contract to construct or improve real property, to produce goods, or to furnish services, the term “qualified property” shall be treated as also including any tangible personal property used by the taxpayer in the performance of such ensured contract.
(d) Forty-five day period for making disbursement. Even though notice of a lien imposed by Section 40-29-20 has been filed, such lien shall not be valid with respect to a security interest which came into existence after tax lien filing by reason of disbursements made before the forty-sixth day after the date of tax lien filing, or (if earlier) before the person making such disbursements had actual notice or knowledge of tax lien filing, but only if such security interest:
(1) Is in property (A) subject at the time of tax lien filing, to the lien imposed by Section 40-29-20, and (B) covered by the terms of a written agreement entered into before tax lien filing; and
(2) Is protected against a judgment lien arising, as of the time of tax lien filing, out of an unsecured obligation.
(e) Priority of interest and expenses. If the lien imposed by Section 40-29-20 is not valid as against a lien or security interest, the priority of such lien or security interest shall extend to:
(1) Any interest or carrying charges upon the obligation secured;
(2) The reasonable charges and expenses of an indenture trustee or agent holding the security interest for the benefit of the holder of the security interest;
(3) The reasonable expenses, including reasonable compensation for attorneys, actually incurred in collecting or enforcing the obligation secured;
(4) The reasonable costs of insuring, preserving, or repairing the property to which the lien or security interest relates;
(5) The reasonable costs of insuring payment of the obligation secured; and
(6) Amounts paid to satisfy any lien on the property to which the lien or security interest relates, but only if the lien so satisfied is entitled to priority over the lien imposed by Section 40-29-20, to the extent that any such item has the same priority as the lien or security interest to which it relates.
(f) Place for filing; form.
(1) PLACE FOR FILING. The notice referred to in subsection (a) shall be filed:
a. Real property. In the case of real property, in the probate office of the county in which the property subject to the lien is situated; and
b. Personal property. In the case of personal property, whether tangible or intangible, in the office (i) in which a financing statement would be filed to perfect a security interest with respect to such property pursuant to the Alabama Uniform Commercial Code, or (ii) of the Secretary of State, if a financing statement would not be required to be filed to perfect a security interest with respect to such property; provided, however, if the property is a motor vehicle (as defined under subdivision (g)(3) of this section), the tax lien shall be perfected in the same manner as a security interest is required to be perfected with respect to such motor vehicle. Such notice shall be effective as to any third party only when properly included by name in the index of such financing statements available for public inspection, and shall not be effective against a third party who relies upon a certification of such filings obtained in the manner provided in Section 7-9A-523 if such notice is omitted from the certification. Each filing officer shall reflect such notices in any certificate provided pursuant to Section 7-9A-523.
(2) FORM. The form and content of the notice referred to in subsection (a) shall be prescribed by the Commissioner of Revenue or his delegate. Such notice shall be valid notwithstanding any other provision of law regarding the form or content of a notice of lien.
(g) Definitions. For purposes of this section, the following terms shall have the following meanings, respectively, unless the context clearly indicates otherwise:
(1) SECURITY INTEREST. Any interest in property acquired by contract for the purpose of securing payment or performance of an obligation or indemnifying against loss or liability. A security interest exists at any time (A) if, at such time, the property is in existence and the interest has become protected against a subsequent judgment lien arising out of an unsecured obligation, and (B) to the extent that, at such time, the holder has parted with money or money’s worth.
(2) MECHANIC’S LIENOR. Any person who has a lien on real property (or on the proceeds of a contract relating to real property) for services, labor, or materials furnished in connection with the construction or improvement of such property. For purposes of the preceding sentence, a person has a lien on the earliest date such lien becomes valid against subsequent purchasers without actual notice, but not before he begins to furnish the services, labor, or materials.
(3) MOTOR VEHICLE. A self-propelled vehicle which is registered for highway use under the laws of any state or foreign country.
(4) SECURITY. Any bond, debenture, note, or certificate or other evidence of indebtedness, issued by a corporation or a government or political subdivision thereof, with interest coupons or in registered form, share of stock, voting trust certificate, or any certificate of interest or participation in, certificate of deposit or receipt for, temporary or interim certificate for, or warrant or right to subscribe to or purchase, any of the foregoing; negotiable instrument; or money.
(5) TAX LIEN FILING. The filing of notice (referred to in subsection (a)) of the lien imposed by Section 40-29-20.
(6) PURCHASER. A person who, for adequate and full consideration in money or money’s worth, acquires an interest (other than a lien or security interest) in property which is valid against subsequent purchasers without actual notice. In applying the preceding sentence for purposes of subsection (a) of this section:
a. A lease of property;
b. A written executory contract to purchase or lease property;
c. An option to purchase or lease property or any interest therein; or
d. An option to renew or extend a lease of property, which is not a lien or security interest shall be treated as an interest in property.
(h) Special rules.
(1) ACTUAL NOTICE OR KNOWLEDGE. For purposes of this article, an organization shall be deemed for purposes of a particular transaction to have actual notice or knowledge of any fact from the time such fact is brought to the attention of the individual conducting such transaction, and in any event for the time such fact would have been brought to such individual’s attention if the organization had exercised due diligence. An organization exercises due diligence if it maintains reasonable routines for communicating significant information to the person conducting the transaction and there is reasonable compliance with the routine. Due diligence does not require an individual acting for the organization to communicate information unless such communication is part of his regular duties or unless he has reason to know of the transaction and that the transaction would be materially affected by the information.
(2) SUBROGATION. Where one person is subrogated to the rights of another with respect to a lien or interest, such person shall be subrogated to such rights for purposes of any lien imposed by Section 40-29-20.
(3) DISCLOSURE OF AMOUNT OF OUTSTANDING LIEN. If a notice of lien has been filed pursuant to subsection (f), the commissioner or his delegate is authorized to provide by regulations the extent to which, and the conditions under which, information as to the amount of the outstanding obligation secured by the lien may be disclosed.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §5; Act 2001-481, p. 64, §2.)
(a) Authority of commissioner or delegate. If any person liable to pay any final assessment of tax neglects or refuses to pay the same or fails to appeal such final assessment within 30 days, it shall be lawful for the commissioner to collect such tax (and such further sum as shall be sufficient to cover the expenses of the levy) as herein provided or as otherwise provided by law. The commissioner may levy upon all property and rights for property belonging to such person or on which there is a lien as provided in this chapter for the payment of such tax. If the Commissioner of Revenue or his delegate makes a finding that the collection of such tax is in jeopardy, notice and demand for immediate payment of such tax may be made and, upon failure or refusal to pay such tax, collection thereof by levy shall be lawful without regard to the 30-day period provided in this chapter.
(b) Seizure and sale of property. The term “levy” as used in this chapter includes the power of distraint and seizure by any lawful means. Except as otherwise provided in subdivision (d)(3), a levy shall extend only to property possessed and obligations existing at the time thereof. In any case in which the Commissioner of Revenue may levy upon property or rights to property, he may seize and sell such property or rights to property (whether real or personal, tangible or intangible), as prescribed by law. The Department of Revenue may become the purchaser of any property seized by bidding up to the amount of the final assessment and accrued interest plus any costs associated with such sale. The amount of any successful bid by the department, less costs, shall be credited to the amount owing on the unpaid final assessments. If the department shall become the purchaser of any property at such sale, then the department may resell the property by either public auction or public sale under sealed bids.
(c) Successive seizures. Whenever any property or right to property upon which levy has been made by virtue of subsection (a) is not sufficient to satisfy the claim of the State of Alabama for which levy is made, the Commissioner of Revenue or his delegate may, thereafter, and as often as may be necessary, proceed to levy in like manner upon any other property liable to levy of the person against whom such claim exists, until the amount due from him, together with all expenses, is fully paid.
(d) Requirement of notice before levy.
(1) IN GENERAL. Levy may be made under subsection (a) upon the salary or wages or other property of any person with respect to any unpaid tax only after the Commissioner of Revenue has notified such person in writing of his intention to make such levy.
(2) THIRTY-DAY REQUIREMENT. The notice required under subdivision (1) shall be served in any one of the following methods:
a. Given in person;
b. Left at the dwelling or usual place of business of such person; or
c. Sent by certified or registered mail to such person’s last known address; no less than 30 days before the day of the levy.
(3) JEOPARDY. Subdivision (1) shall not apply to a levy if the Commissioner of Revenue has made a finding under the last sentence of subsection (a) that the collection of tax is in jeopardy.
(e) Continuing levy on salary and wages.
(1) EFFECT OF LEVY. The effect of a levy on salary or wages payable to or received by a taxpayer shall be continuous from the date such levy is first made until the liability out of which such levy arose is satisfied; provided, however, that no such levy made shall be more than 25 percent of the total wages or salary due the taxpayer.
(2) RELEASE AND NOTICE OF RELEASE. With respect to a levy described in subdivision (1), the Commissioner of Revenue shall within 10 days release the levy when the liability out of which such levy arose is satisfied and shall promptly notify the person upon whom such levy was made that such levy has been released.
(f) Special rule for levies on banks. Any financial institution (as defined in Section 40-16-1) shall be allowed 21 days following the date of service to comply with a levy served by or on behalf of the department.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §6; Acts 1992, No. 92-186, p. 349, §75.)
(a) For purposes of this section the following terms shall have the following meanings:
(1) ACCOUNT. A demand deposit account, checking account, negotiable withdrawal order account, savings account, time deposit account, or money-market mutual fund account.
(2) ACCOUNT HOLDER. A person or persons authorized to perform transactions on behalf of an account.
(3) DELINQUENT TAXPAYER. A taxpayer with an outstanding tax liability for which a final assessment has been entered that is no longer subject to appeal under the Alabama Taxpayer’s Bill of Rights, so that the assessment is final, due, and owing, and for whom both of the following conditions are true:
a. The tax liability remains unpaid after 10 days from the issuance of a final notice before seizure by the department.
b. The person is not making current timely installment payments on the tax liability under agreement with the department.
(4) DEPARTMENT. The Alabama Department of Revenue.
(5) DESIGNATED DATA PROCESSING AGENT. A person authorized by a financial institution and approved by the department to receive information necessary to implement the financial data match program established under this section.
(6) FINAL ASSESSMENT. Has the same meaning as in Section 40-2A-3.
(7) FINANCIAL INSTITUTION. Includes depository institutions, as defined in Section 3(c) of the Federal Deposit Insurance Act, 12 U.S.C. §1813(c) and as amended from time to time; institution-affiliated parties, as defined in Section 3(u) of 12 U.S.C. §1813(u) and as amended from time to time; any federal credit union or state credit union, as defined in Section 101 of the Federal Credit Union Act, 12 U.S.C. §1752 and as amended from time to time, including an institution-affiliated party of a credit union, as defined in Section 206(r) of the Federal Credit Union Act, 12 U.S.C. § 1786(r) and as amended from time to time; and any benefit association, insurance company, safe deposit company, money market mutual fund, or similar entity doing business or authorized to do business in the state.
(8) PERSON. As defined in Section 40-1-1.
(9) TAXPAYER. As defined in Section 40-2A-3.
(b) The department and a financial institution doing business or authorized to do business in Alabama, or its designated data processing agent, may enter into an agreement to develop and operate a financial institution data match (FIDM) program utilizing automated data exchanges to the maximum extent feasible, to provide the following identifying information, to the extent available for each delinquent taxpayer who maintains an account with the financial institution, to the department on a calendar quarter basis:
(1) Name.
(2) Record address.
(3) Social Security number.
(4) Federal employer identification number.
(5) Other tax identification number.
(6) Other identifying information that may be a part of the records of the financial institution.
(c) No penalty shall be assessed or enforced, nor shall the department take any adverse action, against a financial institution based on its decision not to enter into an FIDM agreement with the department.
(d) The department may pay a reasonable fee to a financial institution for conducting a data match, in accordance with the terms of the parties’ voluntary agreement, not to exceed the actual costs incurred by the financial institution.
(e)(1) Unless otherwise required by law, a financial institution furnishing a report or providing information to the department pursuant to this section shall not disclose to an account holder that any identifying information of that delinquent taxpayer has been received from or furnished to the department.
(2) A financial institution may disclose to its depositors or account holders that the department has the authority to request certain identifying information on certain depositors or account holders under the financial institution data match system for state tax collection purposes.
(f) A financial institution shall not incur any obligation or liability to an account holder or any person arising from any of the following activities:
(1) Furnishing information as required by this section and applicable rules.
(2) Failing to disclose to a delinquent taxpayer who is an account holder that any identifying information of the delinquent taxpayer was included in the data exchange with the department as required by this section.
(3) Any other action taken in good faith to comply with the requirements of this section.
(g) All information provided by a financial institution under this section is confidential and is available to the department or its agents for use only to the extent necessary for the proper administration of matters administered by the department.
(h) The first data exchange for purposes of matching delinquent taxpayer records to financial institution account holder records shall occur no earlier than January 1, 2020.
(i) This section is not intended to and does not alter or abrogate statutory procedures and due process protections pursuant to which the department executes a garnishment against the property of a delinquent taxpayer in the possession or control of a financial institution, including the requirement of notice of garnishment to the taxpayer and the institution, and related due process requirements and protections.
(j) The department shall adopt rules for the implementation and administration of this section.
(Act 2019-285, §1.)
(a) Requirement. Except as otherwise provided in subsection (b), any person in possession of (or obligated with respect to) property or rights to property subject to levy upon which a levy has been made shall, upon demand of the Commissioner of Revenue or his delegate, surrender such property or rights (or discharge such obligation) to the Commissioner of Revenue or his delegate, except such part of the property or rights as is, at the time of such demand, subject to an attachment or execution under any judicial process.
(b) Enforcement of levy.
(1) EXTENT OF PERSONAL LIABILITY. Any person who fails or refuses to surrender any property or rights to property, subject to levy, upon demand by the Commissioner of Revenue, shall be liable in his own person and estate to the State of Alabama in a sum equal to the value of the property or rights not so surrendered, but not exceeding the amount of taxes for the collection of which such levy has been made, together with costs and interest on such sum at an annual rate established by law from the date of such levy (or, in the case of a levy described in subdivision (3) of subsection (d) of Section 40-29-23, from the date such person would otherwise have been obligated to pay over such amounts to the taxpayer). Any amount (other than costs and the 10 percent penalty provided in subdivision (2) below) recovered under this subdivision shall be credited against the tax liability for the collection of which such levy was made.
(2) PENALTY FOR VIOLATION. In addition to the personal liability imposed by subdivision (1), if any person required to surrender property or rights to property fails or refuses to surrender such property or rights to property without reasonable cause, such person shall be liable for a penalty equal to 10 percent of the amount recoverable from the property under his control. No part of such penalty shall be credited against the tax liability for the collection of which such levy was made.
(c) Effect of honoring levy. Any person in possession of (or obligated with respect to) property or rights to property subject to levy upon which a levy has been made who, upon demand by the Commissioner of Revenue or his delegate, surrenders such property or rights to property (or discharges such obligation) to the Commissioner of Revenue or his delegate, or who pays a liability under subdivision (b)(1), shall be discharged from any obligation or liability to the delinquent taxpayer with respect to such property or rights to property arising from such surrender or payment.
(d) “Person” defined. The term “person” as used in subsection (a) includes an officer of a corporation or a member of a partnership, who as such officer or member is under a duty to surrender the property or rights to property, or to discharge the obligation.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §7.)
If a levy has been made on any property, or right to property, any person having custody or control of any books or records containing evidence or statements relating to the property or rights to property subject to levy, shall, upon demand of the Commissioner of Revenue or his delegate, exhibit such books or records to the Commissioner of Revenue or his delegate.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §8.)
(a) Notice of seizure. As soon as practicable after seizure of property, notice in writing shall be given by the Commissioner of Revenue or his delegate to the owner of the property (or, in the case of personal property, the possessor thereof), or shall be left at his usual place of abode or business. If the owner cannot be readily located, or has no dwelling or place of business within the state, the notice may be mailed to his last known address. Such notice shall specify the sum demanded and shall contain, in the case of real property, a description with reasonable certainty of the property seized.
(b) Notice of sale. The commissioner or his delegate shall as soon as practicable after the seizure of the property give notice to the owner, in the manner prescribed in subsection (a), and shall cause a notification to be published in some newspaper published or generally circulated within the county wherein such seizure is made, or if there be no newspaper published or generally circulated in such county, shall post such notice at the post office nearest the place where the seizure is made, and in not less than two other public places. Such notice shall specify the property to be sold, including both a legal description and a readily understandable layman’s description, and the time, place, manner, and conditions of the sale thereof.
(c) Sale of indivisible property. If any property liable to levy is not divisible, so as to enable the commissioner or his delegate by sale of a part thereof to raise the whole amount of the tax and expenses, the whole of such property shall be sold. Such indivisible property shall include only property in which the taxpayer has at least 50 percent interest.
(d) Time and place of sale. All sales shall be held between the hours of 9:00 A.M. and 5:00 P.M. In sale of personal property, the notice and advertisement of sale must be published at least 14 days prior to sale, but only one publication shall be necessary. In sales of real property, the publication in the newspaper must be once a week for three successive weeks prior to the sale.
(e) Manner and conditions of sale.
(1) MINIMUM PRICE. Before the sale the commissioner or his delegate may determine a minimum price for which the property shall be sold, and if such minimum price is determined, and if no person offers for such property at the sale the amount of the minimum price, the property shall be declared to be purchased at such price for the State of Alabama; otherwise the property shall be declared to be sold to the highest bidder.
(2) ADDITIONAL RULES APPLICABLE TO SALE. The commissioner or his delegate shall by regulations prescribe the manner and other conditions of the sale of property seized by levy. If one or more alternative methods or conditions are permitted by regulations, the commissioner or his delegate shall select the alternatives applicable to the sale. Such regulations shall provide:
a. That the sale shall not be conducted in any manner other than:
By public auction; or
By public sale under sealed bids.
b. In the case of the seizure of several items of property, whether such items shall be offered separately, in groups, or in the aggregate; and whether such property shall be offered both separately (or in groups) and in the aggregate, and sold under whichever method produces the highest aggregate amount.
c. Whether the announcement of the minimum price determined by the commissioner or his delegate may be delayed until the receipt of the highest bid.
d. Whether payment in full shall be required at the time of acceptance of a bid, or whether a part of such payment may be deferred for such period (not to exceed one month) as may be determined by the commissioner or his delegate to be appropriate.
e. The extent to which methods (including advertising) in addition to those prescribed in subsection (b) may be used in giving notice of the sale.
f. Under what circumstances the commissioner or his delegate may adjourn the sale from time to time (but such adjournments shall not be for a period to exceed in all one month).
(3) PAYMENT OF AMOUNT BID. If payment in full is required at the time of acceptance of a bid and is not then and there paid, the commissioner or his delegate shall forthwith proceed to again sell the property in the manner provided in this subsection. If the conditions of the sale permit part of the payment to be deferred, and if such part is not paid within the prescribed period, suit may be instituted against the purchaser for the purchase price or such part thereof as has not been paid, together with interest at the rate applicable to liabilities due the Department of Revenue from the date of the sale; or, in the discretion of the commissioner or his delegate, the sale may be declared to be null and void for failure to make full payment of the purchase price and the property may again be advertised and sold as provided in subsections (b) and (c) of this section. In the event of such readvertisement and sale any new purchaser shall receive such property or rights to property free and clear of any claim or right of the former defaulting purchaser, of any nature whatsoever, and the amount paid upon the bid price by such defaulting purchaser shall be forfeited.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §9; Acts 1992, No. 92-186, p. 349, §76.)
If the commissioner or his delegate determines that any property seized is liable to perish or become greatly reduced in price or value by keeping, or that such property cannot be kept without great expense, he shall appraise the value of such property and:
(a) Return to owner. If the owner of the property can be readily found, the commissioner or his delegate shall give him notice of such determination of the appraised value of the property. The property shall be returned to the owner if, within such time as may be specified in the notice, the owner:
(1) Pays to the commissioner or his delegate an amount equal to the appraised value; or
(2) Gives bond in such form, with such sureties, and in such amount as the commissioner or his delegate shall prescribe, to pay the appraised amount at such time as the commissioner or his delegate determines to be appropriate in the circumstances.
(b) Immediate sale. If the owner does not pay such amount or furnish such bond in accordance with this section, the commissioner or his delegate may as soon as practicable make public sale of the property in accordance with such regulations or in such manner as may be prescribed by the commissioner or his delegate.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §10.)
(a) Before sale. Any person whose property has been levied upon hereunder or subject to execution under Section 40-2-11 shall have the right to pay the amount due, together with the expenses of the proceeding, if any, to the commissioner or his delegate at any time prior to the sale thereof, and upon such payment the commissioner or his delegate shall restore such property to him, and all further proceedings in connection with the levy on such property shall cease from the time of such payment.
(b) Redemption of real estate after sale.
(1) PERIOD. The owners of any real property sold as provided in Section 40-29-26, their heirs, executors, or administrators, or any person having any interest therein, or a lien thereon, or any person in their behalf, shall be permitted to redeem the property sold, or any particular tract of such property, at any time within one year after the sale thereof. Real property purchased by the state at said sale may be redeemed from the state at any time within one year after the sale thereof.
(2) PRICE. Such property or tract of property shall be permitted to be redeemed upon payment to the purchaser, or in case he cannot be found in the county in which the property to be redeemed is situated, then to the commissioner or his delegate, for the use of the purchaser, his heirs, or assigns, the amount paid by such purchaser and interest thereon at the current rate of interest per annum as last published and charged on delinquent taxes by the Internal Revenue Service. Where the state was purchaser, the tax liability must be paid in full in addition to the costs, penalties and interest in order to redeem.
(c) Record. When any lands sold are redeemed as provided in this section, the commissioner or his delegate shall cause entry of the fact to be made upon the record mentioned in Section 40-29-31, and such entry shall be evidence of such redemption.
(d) There may be no redemption of personal property.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §11.)
(a) Certificate of sale. In the case of personal property sold as provided in Section 40-29-26, the commissioner or his delegate shall give to the purchaser a certificate of sale upon payment in full of the purchase price.
(b) Deed to real property. In the case of any real property sold as provided in Section 40-29-26 and not redeemed in the manner and within the time provided in Section 40-29-28, the commissioner or his delegate shall execute to the purchaser of such real property at such sale, upon his surrender of the certificate of sale, a deed of the real property so purchased by him, reciting the facts set forth in the certificate.
(c) Real property purchased by State of Alabama. If real property is declared purchased by the State of Alabama at a sale pursuant to Section 40-29-26, the commissioner or his delegate shall at the proper time execute a deed therefor, and without delay cause such deed to be duly recorded in the probate office of the county in which the property is located.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §12.)
(a) Certificate of sale of property other than real property. In all cases of a sale of property (other than real property) pursuant to Section 40-29-26, the certificate of such sale:
(1) AS EVIDENCE. Shall be prima facie evidence of the right of the officer to make such sale, and conclusive evidence of the regularity of his proceedings in making the sale; and
(2) AS CONVEYANCES. Shall transfer to the purchaser all right, title, and interest of the party delinquent in and to the property sold; and
(3) AS AUTHORITY FOR TRANSFER OF CORPORATE STOCK. If such property consists of stocks, shall be notice when received, to any corporation, company, or association of such transfer, and shall be authority to such corporation, company, or association to record the transfer on its books and records in the same manner as if the stocks were transferred or assigned by the party holding the same, in lieu of any original or prior certificate, which shall be void, whether canceled or not; and
(4) AS RECEIPTS. If the subject of sale is securities or other evidences of debt, shall be a good and valid receipt to the person holding the same, as against any person holding or claiming to hold possession of such securities or other evidences of debt; and
(5) AS AUTHORITY FOR TRANSFER OF TITLE TO MOTOR VEHICLE. If such property consists of a motor vehicle, shall be notice, when received, to any public official charged with the registration of title to motor vehicles, of such transfer and shall be authority to such official to record the transfer on his books and records in the same manner as if the certificate of title to such motor vehicle were transferred or assigned by the party holding the same, in lieu of any original or prior certificate, which shall be void, whether canceled or not.
(b) Deed of real property. In the case of the sale of real property pursuant to Section 40-29-26:
(1) DEED AS EVIDENCE. The deed of sale given pursuant to Section 40-29-29 shall be prima facie evidence of the facts therein stated; and
(2) DEED AS CONVEYANCE OF TITLE. If the proceedings of the commissioner or his delegate as set forth have been substantially in accordance with the provisions of law, such deed shall be considered and operate as a conveyance of all the right, title, and interest the party delinquent had in and to the real property thus sold at the time the lien of the State of Alabama attached thereto.
(c) Effect of junior encumbrances. A certificate of sale of personal property given or a deed to real property executed pursuant to Section 40-29-29 shall discharge such property from all liens, encumbrances, and titles over which the lien of the State of Alabama with respect to which the levy was made had priority.
(d) Effect of senior encumbrances. A certificate of sale of personal property given or a deed to real property does not discharge such property from liens, encumbrances, and titles senior to the lien of the State of Alabama.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §13.)
The commissioner or his delegate shall keep a record of all sales of real property sold under Section 40-29-26 and of redemptions of such property. The record shall set forth the tax for which the sale was made, the dates of seizure and sale, the amount of the expenses, the name of purchaser and the date of the deed. A deed to the State of Alabama by virtue of its purchase at the sale shall be promptly recorded in the probate office of the county or counties where the property is located.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §14.)
The commissioner or his delegate shall determine the expenses to be allowed in all cases of levy and sale, which expenses shall be actual expenses directly related to the sale. The fee for a professional auctioneer that may be employed at the discretion of the commissioner or his delegate shall be considered an expense of the levy and sale.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §15.)
(a) Collection of liability. Any money realized by proceedings under this article (whether by seizure, by surrender under Section 40-29-24, except pursuant to subsection (b)(2) thereof, or by sale of seized property) or by sale of property redeemed by the State of Alabama (if the interest of the State of Alabama in such property was a lien arising under the provisions of this title) shall be applied as follows:
(1) EXPENSE OF LEVY AND SALE. First, against the expenses of the proceedings;
(2) SPECIFIC TAX LIABILITY ON SEIZED PROPERTY. If the property seized and sold is subject to a tax imposed under this title which has not been paid, the amount remaining after applying subdivision (1) shall then be applied against such tax liability, including any penalty and interest, (and, if such tax was not previously assessed, it shall then be assessed);
(3) LIABILITY OF DELINQUENT TAXPAYER. The amount, if any, remaining after applying subdivisions (1) and (2) shall then be applied against the liability in respect of which the levy was made or the sale was conducted.
(b) Surplus proceeds. Any surplus proceeds remaining after the application of subsection (a) shall be refunded by the commissioner or his delegate to the person or persons legally entitled thereto.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §16.)
(a) Release of levy. It shall be lawful for the commissioner or his delegate to release the levy, and any liens, upon all or part of the property or rights to property levied upon, where the commissioner or his delegate, within their discretion, determines that such action will facilitate the collection of the liability or for other good reason that the levy should be released, but such release shall not operate to prevent any subsequent levy.
(b) Return of property. If the commissioner determines that property has been wrongfully levied upon, it shall be lawful for the commissioner to return:
(1) The specific property levied upon;
(2) An amount of money equal to the amount of money levied upon; or
(3) An amount of money equal to the fair market value of the property levied upon and the reasonable cost of a judicial determination of the existence of a wrongful levy.
(c) Interest. Interest shall be allowed and paid at an annual rate established by law:
(1) In a case described in subsection (b)(2), from the date the commissioner receives the money to a date (to be determined by the commissioner) preceding the date of return by not more than 30 days; or
(2) In a case described in subsection (b)(3), from the date of the sale of the property to a date (to be determined by the commissioner) preceding the date of return by not more than 30 days.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §17.)
(a) Length of period. Where the assessment of any tax imposed by this title has been begun or made within the period of limitation properly applicable thereto, such tax may be collected by levy or by a proceeding in court, but only if the levy is made or the proceeding begun:
The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon. The period provided by this subsection during which a tax may be collected by levy shall not be extended or curtailed by reason of a judgment against the taxpayer.
(b) Date when levy is considered made. The date on which a levy on property or rights to property is made shall be the date on which the notice of seizure provided in Section 40-29-26 is given.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §19.)
(a) General rule. The running of the period of limitations provided in this title for collecting any tax shall be suspended for the period during which the commissioner is prohibited from collecting by levy or a proceeding in court and for 60 days thereafter.
(b) Assets of taxpayer in control or custody of court. The period of limitations on collection prescribed in this title shall be suspended for the period the assets of the taxpayer are in the control or custody of the court in any proceeding before any court of the State of Alabama, and for six months thereafter.
(c) Taxpayer outside State of Alabama. The running of the period of limitations on collection prescribed in this title shall be suspended for the period during which the taxpayer is outside the State of Alabama if such period or absence is for a continuous period of at least six months. If the preceding sentence applies and at the time of the taxpayer’s return to the State of Alabama the period of limitations on collection after assessment prescribed in Section 40-29-51 would expire before the expiration of six months from the date of his return, such period shall not expire before the expiration of such six months.
(d) Case under Title 11 of the United States Code (Bankruptcy). The running of the period of limitations provided in Section 40-29-51 for collection shall, in a case under Title 11 of the United States Code (Bankruptcy), be suspended for the period during which the commissioner is prohibited by reason of such case from collecting said tax and for six months thereafter.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §20; Acts 1992, No. 92-186, p. 349, §77.)
If any check, money order, or electronic funds in payment of any amount receivable for payment of taxes under any provision of law is not duly paid, in addition to any other penalties provided by law, there shall be paid as a penalty by the person who tendered such check, money order, or electronic funds, upon notice and demand by the commissioner, or his or her delegate, or other taxing authority, in the same manner as tax, an amount equal to 10 percent of the amount of such check, money order, or electronic funds, except that if the amount of such check, money order, or electronic funds is less than five hundred dollars ($500), the penalty under this section shall be ten dollars ($10) or the amount of such check, money order, or electronic funds, whichever is the lesser. This section shall not apply if the person tendered such check, money order, or electronic funds in good faith and with reasonable cause to believe that it would be duly paid, and settlement is made by the taxpayer within 10 days after notification of receipt of a bad check, money order, or non-payable electronic funds by the department or other taxing authority.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §21; Act 2017-227, §3.)
Where the Department of Revenue determines that a taxpayer is entitled to a refund, the Department of Revenue shall automatically refund to that taxpayer the amount of any excess tax so paid to the State of Alabama; provided, however, that the statute of limitations provisions of the applicable tax law shall apply.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §22.)
(a) Penalty assessed as tax. The penalties and liabilities provided by this article shall be paid upon notice and demand by the commissioner or his delegate, and shall be assessed and collected in the same manner as taxes. Except as otherwise provided, any reference in this title to “tax” imposed by this title shall be deemed also to refer to the penalties and liabilities provided by this article.
(b) “Person” defined. The term “person,” as used in this article, includes an officer of a corporation, or a member of a partnership, who as such officer, or member is under a duty to perform the act in respect of which the violation occurs.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §23.)
(a) General rule. Any person required to collect, truthfully account for, and/or pay over any tax imposed by Sections 40-17-2, 40-17-220, 40-18-71, 40-21-82, 40-23-2, 40-23-61, 40-26-1 and any other local sales, use, and gross receipts taxes collected by the state Department of Revenue who willfully fails to collect such tax, or truthfully account for, and/or pay over such tax, or willfully attempts in any manner to evade or defeat any such tax or the payment thereof, shall, in addition to other penalties provided by law, be liable for a penalty up to the total amount of the tax evaded, or not collected, or not accounted for and paid over.
(b) Extension of period of collection where bond is filed.
(1) IN GENERAL. If, within 30 days after the day on which notice and demand of any penalty under subsection (a) is made against any person, such person:
a. Pays an amount which is not less than the minimum amount required to commence a proceeding in court with respect to his liability for such penalty;
b. Files a claim for refund of the amount so paid; and
c. Furnishes a bond which meets the requirements of subdivision (3); no levy or proceeding in court for the collection of the remainder of such penalty shall be made, begun, or prosecuted until a final resolution of a proceeding begun as provided in subdivision (2).
(2) SUIT MUST BE BROUGHT TO DETERMINE LIABILITY FOR PENALTY. If, within 30 days after the day on which his claim for refund with respect to any penalty under subsection (a) is denied, the person described in subdivision (1) fails to begin a proceeding in the appropriate court for the determination of his liability for such penalty, subdivision (1) shall cease to apply with respect to such penalty, effective on the day following the close of the thirty-day period referred to in this subdivision.
(3) BOND. The bond referred to in subdivision (1) shall be in such form and with such sureties as the commissioner may by regulations prescribe and shall be in an amount equal to one and one-half times the amount of excess of the penalty assessed over the payment described in subdivision (1).
(4) SUSPENSION OF RUNNING OF PERIOD OF LIMITATIONS ON COLLECTION. The running of the period of limitations provided in Section 40-29-50 on the collection by levy or by a proceeding in court in respect of any penalty described in subdivision (1) shall be suspended for the period during which the commissioner is prohibited from collecting by levy or a proceeding in court.
(5) JEOPARDY COLLECTION. If the commissioner makes a finding that the collection of the penalty is in jeopardy, nothing in this subsection shall prevent the immediate collection of such penalty.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §24.)
In addition to the criminal penalty provided by Section 40-29-114, any person required under this title to furnish a statement to an employee who willfully furnishes a false or fraudulent statement, or who willfully fails to furnish a statement in the manner, at the time, and showing the information required shall for each such failure be subject to a penalty under this article of $50.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §25.)
(a) Civil penalty. In addition to any criminal penalty provided by law, if:
(1) Any individual makes a statement under Section 40-18-73 which results in a decrease in the amounts deducted and withheld under Section 40-18-71; and
(2) As of the time such statement was made, there was no reasonable basis for such statement, such individual shall pay a penalty of $500 for such statement.
(b) Exception. The commissioner may waive (in whole or in part) the penalty imposed under subsection (a) if the taxes imposed with respect to the individual under Chapter 18 of this title for the taxable year are equal to or less than the sum of:
(1) The credits against such taxes allowed by Sections 40-18-21, 40-18-120 and 40-18-121; and
(2) The payments of estimated tax which are considered payments on account of such taxes.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §26.)
(a) Termination of taxable period. If the commissioner or his delegate finds that a taxpayer designs quickly to depart from the State of Alabama or to remove his property therein, or to do any other act tending to prejudice or to render wholly or partly ineffectual proceedings to collect the income tax for the current or the preceding taxable year unless such proceedings be brought without delay, the commissioner or his delegate shall declare the taxable period for such taxpayer immediately terminated, and shall cause notice of such finding and declaration to be given the taxpayer, together with a demand for immediate payment of the tax for the taxable period so declared terminated and of the tax for the preceding taxable year or so much of such tax as is unpaid, whether or not the time otherwise allowed by law for filing return and paying the tax has expired; and such taxes shall thereupon become immediately due and payable. In any proceeding in court brought to enforce payment of taxes made due and payable by virtue of the provisions of this section, the finding of the commissioner or his delegate, made as herein provided, whether made after notice to the taxpayer or not, shall be for all purposes presumptive evidence of jeopardy.
(b) Reopening of taxable period. Notwithstanding the termination of the taxable period of the taxpayer by the commissioner or his delegate, as provided in subsection (a), the commissioner or his delegate may reopen such taxable period each time the taxpayer is found by the commissioner or his delegate to have received income, within the current taxable year, since a termination of the period under subsection (a). A taxable period so terminated by the commissioner or his delegate may be reopened by the taxpayer if he files with the commissioner or his delegate a true and accurate return of the items of gross income and of the deductions and credits allowed under this title for such taxable period, together with such other information required under this title. If the taxpayer is a nonresident, the taxable period so terminated may be reopened by him if he files, or causes to be filed, with the commissioner or his delegate a true and accurate return of his total income derived from all sources within the State of Alabama, in the manner prescribed in this title.
(c) Abatement if jeopardy does not exist. The commissioner or his delegate may abate the jeopardy assessment if he finds that jeopardy does not exist. The period of limitation on the making of assessments and levy or a proceeding in court for collection, in respect of any deficiency, shall be determined as if the jeopardy assessment so abated had not been made, except that the running of such period shall in any event be suspended for the period from the date of such jeopardy assessment until the expiration of the tenth day after the day on which such jeopardy assessment is abated.
(d) Approved bond. When a jeopardy assessment has been entered as provided in subsection (a), the collection of all or any part of such assessment may be stayed by filing with the commissioner or his delegate an approved bond conditioned upon the payment of the assessment together with applicable interest and costs of collection. The commissioner or his delegate shall have sole discretion to approve or disapprove the bond, but such approval shall not be unreasonably withheld.
(e) Appeal. A final jeopardy assessment entered hereunder may be appealed to either the Alabama Tax Tribunal of the department or the appropriate circuit court of Alabama in the same manner as provided by the procedures contained in Chapter 2B of this title for the appeal of final assessments. If the appeal is taken to the Alabama Tax Tribunal, the taxpayer must file the bond required by subsection (d).
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §27; Acts 1992, No. 92-186, p. 349, §78; Act 2015-316, §1; Act 2015-368, §1.)
(a) If the commissioner or his delegate finds that a taxpayer designs quickly to depart from the State of Alabama or to remove his property therein, or to do any other act tending to prejudice or to render wholly or partly ineffectual proceedings to collect any tax imposed by this title other than income tax, the commissioner or his delegate may issue notice of such finding to the taxpayer by personal service or mailing to his/her last known address, together with a demand for immediate payment of the tax declared to be in jeopardy, including penalties and additions thereto and such tax, penalty, interest, and additions thereto shall be immediately due and payable. A final assessment of such tax may be entered immediately and if the assessment is not paid upon such demand of the commissioner or his delegate, the commissioner or his delegate may forthwith issue a warrant for levy and distraint of any personal property of the taxpayer which shall be collected in the same manner and with like effect as provided under Article 2 of this chapter.
(b) In the case of a tax for a current period, the commissioner or his delegate may declare the taxable period of the taxpayer immediately terminated and may at his discretion estimate the tax liability based upon the best information obtainable. Notice of such finding and declaration shall be issued to the taxpayer in the same manner as in subsection (a).
(c) When a jeopardy assessment has been made as provided in subsection (a), the collection of all or any part of such assessment may be stayed by filing with the commissioner or his delegate an approved bond conditioned upon the payment of the assessment together with applicable interest and costs of collection. The commissioner or his delegate shall have sole discretion to approve or disapprove the bond, but such approval shall not be unreasonably withheld.
(d) In any proceeding in court to contest the jeopardy assessment or to enforce payment of the taxes made due and payable by virtue of the provisions of this section, the finding of the commissioner or his delegate, made as herein provided, shall be for all purposes presumptive evidence of jeopardy.
(e) A final jeopardy assessment entered hereunder may be appealed to either the Alabama Tax Tribunal of the department or the appropriate circuit court of Alabama in the same manner as provided in Chapter 2B of this title for the appeal of final assessments. If the appeal is to the Alabama Tax Tribunal, the taxpayer must file the bond required by subsection (c). Provided further, an appeal from a final jeopardy assessment of the drugs and controlled substances excise tax levied by Chapter 17A of this title may only be taken to the appropriate circuit court.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §28; Acts 1992, No. 92-186, p. 349, §79; Act 2015-316, §1; Act 2015-368, §1.)
Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than five years, or both.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §29.)
Any person required under this title to collect, account for, and pay over any tax imposed by this title who willfully fails to collect or truthfully account for and pay over such tax shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $10,000, or imprisoned not more than five years, or both.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §30.)
Any person required under this title to pay any estimated tax or tax, or required by this title or by regulations made under authority thereof to make a return (other than a return required under Section 40-18-82), keep any records, or supply any information, who willfully fails to pay such estimated tax or tax, make such return, keep such records, or supply such information, at the time or times required by law or regulations, shall, in addition to other penalties provided by law, be guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than $25,000 ($100,000 in the case of a corporation), or imprisoned not more than one year, or both, together with the costs of prosecution. In the case of any person with respect to whom there is a failure to pay any estimated tax, this section shall not apply to such person with respect to such failure if there is no addition to tax under subsections (a) and (b) of Section 40-18-80 with respect to such failure.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §31.)
In lieu of any other penalty provided by law (except the penalty provided by Section 40-29-75) any person required under the provisions of Section 40-18-75 to furnish a statement who willfully furnishes a false or fraudulent statement or who willfully fails to furnish a statement in the manner, at the time, and showing the information required under Section 40-18-75, or regulations prescribed thereunder, shall, for each such offense, upon conviction thereof, be fined not more than $1,000, or imprisoned not more than one year, or both.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §32.)
Any individual required to supply information to his employer under Section 40-18-73 who willfully supplies false or fraudulent information, or who willfully fails to supply information thereunder which would require an increase in the tax to be withheld under Section 40-18-73 shall, in lieu of any other penalty provided by law, upon conviction thereof, be fined not more than $500, or imprisoned not more than one year, or both.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §33.)
(a) Any person who:
(1) DECLARATION UNDER PENALTIES OF PERJURY. Willfully makes and subscribes any return, statement, or other document, which contains or is verified by a written declaration that it is made under the penalties of perjury, and which he does not believe to be true and correct as to every material matter; or
(2) AID or ASSISTANCE. Willfully aids or assists in, or procures, counsels, or advises the preparation or presentation under, or in connection with any matter arising under, the state revenue laws, of a return, affidavit, claim, or other document, which is fraudulent or is false as to any material matter, whether or not such falsity or fraud is with the knowledge or consent of the person authorized or required to present such return, affidavit, claim, or document; or
(3) FRAUDULENT BONDS, PERMITS, AND ENTRIES. Simulates or falsely or fraudulently executes or signs any bond, permit, entry, or other document required by the provisions of this title, or by any regulation made in pursuance thereof, or procures the same to be falsely or fraudulently executed, or advises, aids in, or connives at such execution thereof; or
(4) REMOVAL OR CONCEALMENT WITH INTENT TO DEFRAUD. Removes, deposits, or conceals, or is concerned in removing, depositing, or concealing, any goods or commodities for or in respect whereof any tax is or shall be imposed, or any property upon which levy is authorized by Section 40-29-23, with intent to evade or defeat the assessment or collection of any tax imposed by this title; shall be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than three years, or both.
(b) It shall be unlawful for anyone to falsify or misrepresent the correct residence address of the owner or the correct address of the business location, of an automotive vehicle, truck trailer, trailer, semitrailer, or travel trailer with the intent to avoid municipal or county ad valorem, sales or use tax in any county or municipality in which the owner resides, or in which the business owner of such vehicle or trailer is subject to tax. Violation of this subsection shall be a Class C misdemeanor.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §34; Acts 1989, No. 89-691, p. 1358, §7.)
Any person who willfully delivers or discloses to the commissioner or his delegate any list, return, account, statement, or other document, known by him to be fraudulent or to be false as to any material matter, shall be fined not more than $10,000 ($50,000 in the case of a corporation), or imprisoned not more than one year, or both. Any person required pursuant to this title to furnish any information to the commissioner or his delegate who willfully furnishes to the commissioner or his delegate any information known by him to the fraudulent or to be false as to any material matter shall be fined not more than $10,000 ($50,000 in the case of a corporation), or imprisoned not more than one year, or both.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §35.)
Any person who, being duly subpoenaed to appear to testify, or to appear and produce books, accounts, records, memoranda, or other papers, as required under subdivisions (7) and (8) of Section 40-2-11, or any other section in this title requiring the production of information, neglects or fails to appear without cause or to produce such books, accounts, records, memoranda, or other papers without cause, shall, upon conviction thereof, be fined not more than $1,000, or imprisoned not more than one year, or both.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §36.)
(a) Corrupt or forcible interference. Whoever corruptly or by force or threats of force (including any threatening letter or communication) endeavors to intimidate or impede any officer or employee of the State of Alabama acting in an official capacity under this title, or in any other way corruptly or by force or threats of force (including any threatening letter or communication) obstructs or impedes, or endeavors to obstruct or impede, the due administration of this title, shall, upon conviction thereof, be fined not more than $5,000, or imprisoned not more than three years, or both, except that if the offense is committed only by threats of force, the person convicted thereof shall be fined not more than $3,000, or imprisoned not more than one year, or both. The term “threats of force,” as used in this subsection, means threats of bodily harm to the officer or employee of the State of Alabama or to a member of his family.
(b) Forcible rescue of seized property. Any person who forcibly rescues or causes to be rescued any property after it shall have been seized under this title, or shall attempt or endeavor so to do, shall, excepting in cases otherwise provided for, for every such offense, be fined not more than $500, or not more than double the value of the property so rescued, whichever is the greater, or be imprisoned not more than two years.
(c) Intimidation or harassment of taxpayer; “threats of force” defined. Any employee of the state Department of Revenue acting in an official capacity under the provisions of this title who by unlawful force or threats of force endeavors to intimidate or harass a taxpayer, upon determination by a special board to be appointed by the state Personnel Department that the charge is valid, shall be subject to immediate dismissal, and upon such dismissal may be subject to such penalties as provided under this section. The term “threats of force” as used in this subsection means threats of bodily harm to the taxpayer or to a member of his family.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §37.)
(a) No person shall be prosecuted, tried, or punished for any of the various offenses arising under the revenue laws unless the indictment is found or the prosecution instituted within three years next after the commission of the offense, except that the period of limitation shall be six years:
(1) For offenses involving the defrauding or attempting to defraud the State of Alabama or any agency thereof, whether by conspiracy or not, and in any manner;
(2) For the offense of willfully attempting in any manner to evade or defeat any tax or the payment thereof;
(3) For the offense of willfully aiding or assisting in, or procuring, counseling, or advising, the preparation or presentation under, or in connection with any matter arising under, the statute revenue laws, of a false or fraudulent return, affidavit, claim or document (whether or not such falsity or fraud is with the knowledge or consent of the person authorized or required to present such return, affidavit, claim, or document);
(4) For the offense of willfully failing to pay any tax, or make any return at the time or times required by law or regulations;
(5) For offenses described in Sections 40-29-115 and 40-29-116 (relating to false statements and fraudulent documents);
(6) For the offense described in Section 40-29-118 (relating to intimidation of officers and employees of the State of Alabama); or
(7) For the offense described in Section 40-29-121 (relating to the possession or use of an automated sales suppression device or phantom-ware).
(b) The time during which the person committing any of the various offenses arising under the revenue laws is outside the State of Alabama or is a fugitive from justice within the meaning of the Code of Alabama, shall not be taken as any part of the time limited by law for the commencement of such proceedings.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §38; Act 2015-502, 1st Sp. Sess., §1.)
The Commissioner of Revenue will file a report in one-year periods from January 1, 1984, for a period of five years that states the amount of additional tax money that was collected as the result of this chapter. This report shall be delivered to each legislator and each constitutional officer.
(Acts 1983, 4th Ex. Sess., No. 83-891, p. 128, §39.)
(a) For purposes of this section, the following terms have the following meanings:
(1) AUTOMATED SALES SUPPRESSION DEVICE. A software program carried on a memory stick or removable compact disc, accessed through an Internet link, or by any other means, that falsifies the electronic records of electronic cash registers and other point-of-sale systems, including, but not limited to, transaction data and transaction reports.
(2) ELECTRONIC CASH REGISTER. A device that keeps a register or supporting documents through the use of an electronic device or computer system designed to record transaction data for the purpose of computing, compiling, or processing retail sales and other transaction data.
(3) PHANTOM-WARE. Any hidden or concealed programming option embedded in the operating system of an electronic cash register or hardwired into the electronic cash register that can be used to create a second set of records or to eliminate or manipulate transaction records that may or may not be preserved in digital formats in order to represent the true or manipulated record of a transaction in the electronic cash register.
(4) TRANSACTION DATA. Data relating to a transaction which includes, but is not limited to, data identifying each item purchased by a customer, the price for each item, a taxability determination for each item, a segregated tax amount for each of the taxed items, the amount of cash or credit tendered, the net amount returned to the customer in change, the date and time of the purchase, the name, address, and identification number of the vendor, and the receipt or invoice number of the transaction.
(5) TRANSACTION REPORTS. Either of the following or any variation thereof:
a. A report that contains, but is not limited to, documentation of sales, taxes, or fees collected; media totals; and discount voids at an electronic cash register, and that is printed on a cash register tape at the end of a day or shift, or
b. A report that documents every action at an electronic cash register and that is stored electronically.
(b) It is unlawful to knowingly sell, purchase, install, transfer, use, or possess in this state any automated sales suppression device or phantom-ware.
(c) Any person convicted of a violation of this section is guilty of a Class C felony and upon conviction, shall also be fined not more than one hundred thousand dollars ($100,000), or in the case of a corporation, not more than five hundred thousand dollars ($500,000). In addition, the person shall be liable for all taxes, fees, penalties, and interest due the state and any locality as the result of the fraudulent use of an automated sales suppression device or phantom-ware and shall forfeit to the state, as an additional penalty, all profits associated with the sale or use of an automated sales suppression device or phantom-ware.
(d) An automated sales suppression device or phantom-ware and any device containing such device or software shall be contraband and shall be forfeited to the state.
(Act 2015-502, 1st Sp. Sess., §2.)
The Department of Revenue, with assistance and support from other state offices and agencies that participate in the income tax refund process, is authorized and instructed to pursue all reasonable options available to it in order to reduce identity theft related refund fraud. The department and other assisting state offices and agencies are authorized to incur all reasonable costs associated in combating refund fraud, to partner with other state, federal, and private sectors in various programs and projects designed to reduce or eliminate refund fraud, and to compensate or reimburse the partners in these programs for the reasonable costs incurred in carrying out these programs.
(Act 2017-227, §1.)
This chapter shall be known as and may be cited as the “Alabama Tax Delinquency Amnesty Act of 2016”.
(Act 2015-555, 2nd Sp. Sess., §1.)
As used in this chapter, the following terms have the meaning ascribed to them in this section, except when the context clearly indicates otherwise:
(1) COMMISSIONER. The Commissioner of the Department of Revenue.
(2) CONTACT or CONTACTED. Previous contact of any kind by the department or an agent of the department within five years prior to the initial written request for amnesty. This includes returns filed for the tax types included in the application for tax periods beginning before the look-back period. Contact includes, but is not limited to, with regard to potential liability for the type of tax identified in the amnesty application: receipt of a nexus questionnaire, an audit or notice of audit, payment of tax, registration for tax, registration with the Secretary of State, request for extension of time to file, making a payment of estimated tax, filing a return, and non-compliance issued in response to an application for a certificate of good standing or a certificate of compliance by the taxpayer, or on behalf of the taxpayer.
(3) COURIER. A messenger other than the United States Postal Service that delivers parcels, packages, and the like, containing returns, reports, and other documents or payments.
(4) DEPARTMENT. The Department of Revenue.
(5) LOOK-BACK PERIOD. The last three full tax years or 36 months of tax returns which are delinquent.
(6) POSTMARK. An official mark made by the United States Postal Service on a piece of mail to cancel the stamp and to indicate the place and date of sending.
(7) TAX PERIOD. Any period for which a tax return is required by law to be filed with the department.
(8) TAXPAYER. Any individual or entity subject to any tax imposed by any law of the State of Alabama, payable to the State of Alabama, and collected by the department.
(Act 2015-555, 2nd Sp. Sess., §2.)
(a) The department shall develop and implement a tax amnesty program in accordance with the provisions of this chapter. The commissioner may provide by rule as necessary for the administration and implementation of the program. The commissioner shall publicize the program in order to maximize the public awareness of and participation in the program. The commissioner, for purpose of publicizing the program, may contract with any advertising agency within or outside this state and use public service announcements, pamphlets, mail notices, and print, television, and radio announcements. Such publications shall include increasing public awareness that the program will provide amnesty for sales and use tax due on internet, mail order, or other purchases made from out-of-state vendors for which Alabama sales or use tax was not charged at the time of purchase. In furthering the collections of amnesty, the commissioner may procure amnesty program administration services on a fee basis; however, the fee shall not exceed 10 percent of the total dollars collected.
(b) The amnesty program shall be effective for a period of at least two months duration in 2016, occurring prior to August 31, 2016. The program shall apply to all taxes administered by the department except for motor fuel taxes, penalties imposed by Section 40-29-73, and penalties for failure to submit information reports that are not based on an underpayment of tax.
(c) Notwithstanding any other provision of law to the contrary, and except as provided in subsection (b), the following taxes are eligible for amnesty:
(1) Taxes due prior to January 1, 2015.
(2) Taxes for taxable periods that began before January 1, 2015.
(d) Participation in the amnesty program shall be conditioned upon the agreement of the taxpayer that the right to protest or initiate an administrative or judicial proceeding is barred. The agreement shall only apply to the specific tax and the tax period for which amnesty is granted.
(e) Amnesty may be granted only for eligible taxes to eligible taxpayers who apply for amnesty during the amnesty period on forms prescribed by the commissioner and who pay all of the tax, all fees and costs, if applicable, and any interest due upon filing the amnesty application. A standard look-back period, as defined in this chapter, applies for all tax types eligible for amnesty. If the taxpayer has collected any tax without remitting such tax to the department, the look-back period shall be extended to include all periods, back to the point of collection. The commissioner shall reserve the right to require taxpayers to file tax returns with the amnesty application. Notwithstanding any other provision of law to the contrary, if the amnesty application is approved during the amnesty period the commissioner shall waive one-half of the interest and all of the penalties associated with the tax periods for which amnesty is applied. An amnesty payment or application submitted in a properly addressed envelope with sufficient postage delivered by the United States Postal Service is deemed paid or received on the date it is postmarked. An amnesty payment or application delivered by courier or taxpayer is deemed paid or received on the date it is delivered to the department’s headquarters or a regional office. No installment agreements will be entered into for tax periods that are approved for amnesty.
(f) Amnesty shall not be granted to taxpayers who have been contacted by the department, who are parties to any criminal investigation or criminal litigations in any court of the United States or the State of Alabama pending on September 22, 2015, for nonpayment, delinquency, or fraud in relation to any state tax imposed by a law of the State of Alabama and administered by the department. Further, a taxpayer who delivers or discloses any false or fraudulent application, document, return, or other statement to the department in connection with an amnesty application shall be ineligible for amnesty and shall be subject of the fraud penalty under Section 40-2A-11(d), or a penalty of ten thousand dollars ($10,000), whichever is greater.
(g) Amnesty applications shall include a written waiver of all rights, restrictions, and delays for assessing, collecting, or protesting taxes and interest due as set forth in Chapter 2A and Chapter 2B. The filing of such applications shall make the tax, interest, and penalty immediately due and payable; subject to the notice and due process procedures provided for by law; ineligible for refund, credit, or claim against the state; and ineligible for redetermination; however, a taxpayer shall be eligible for a refund or credit if the overpayment arises after the amnesty application is submitted and is attributable to a properly claimed Alabama net operating loss or attributable to an adjustment made by the Internal Revenue Service to the taxpayer’s federal income tax, and the taxpayer provides notice of the adjustment to the commissioner within 60 days of receipt of the adjustment from the Internal Revenue Service. A taxpayer who files an application for amnesty retains all administrative and judicial rights of appeal with respect to any additional tax assessed by the department.
(h) No interest shall be paid on refunds for those amounts previously collected by the department from the taxpayer for a tax period for which amnesty is granted.
(i) If, following the termination of the tax amnesty period, the commissioner issues a deficiency assessment for a period for which amnesty was taken, the commissioner shall have the authority to impose penalties and institute civil proceedings or criminal proceedings as authorized by law only with respect to the difference between the amount shown on the amnesty application and the correct amount of tax due. The commissioner may by rule impose after the expiration of the tax amnesty period a cost of collection penalty not to exceed twenty percent of any additional deficiency assessed for any taxable period for which amnesty was taken. This penalty shall be in addition to all other applicable penalties, fees, or costs. The commissioner shall have the right to waive any or all of the collection penalty when it is demonstrated that any of the deficiency of the taxpayer was not due to negligence, intentional disregard of administrative rules, or fraud. The imposition of penalties or civil proceedings or criminal proceedings shall not invalidate the amnesty that was previously granted. No penalty shall be imposed if the deficiency results from an adjustment made by the Internal Revenue Service to the taxpayer’s federal income tax and the taxpayer provides written notice of the adjustment to the Commissioner within 60 days of receipt of the adjustment from the Internal Revenue Service or if the taxpayer’s application for amnesty was based on a proposed assessment or notice of assessment.
(j) For taxable periods beginning on or after January 1, 2016, and before December 31, 2023, taxpayers that participate in the amnesty and later fail to comply with any payment or filing provision administered by the commissioner shall be subject to the negligence penalty under Section 40-2A-11(c), or a penalty of one hundred dollars, whichever is greater.
(Act 2015-555, 2nd Sp. Sess., §3.)
(a) The commissioner shall also retain an amount not to exceed two hundred fifty thousand dollars ($250,000) for advertising expenses from monies collected from taxes paid pursuant to this chapter. Such amount is appropriated to the department and shall be in addition to any and all other funds heretofore or hereafter appropriated, for the fiscal year beginning October 1, 2015.
(b) After satisfaction of the requirements of Subsection (a), all remaining monies collected pursuant to this chapter shall be paid into the State Treasury and placed in the appropriate state funds for the specific tax collected pursuant to current law.
(Act 2015-555, 2nd Sp. Sess., §4.)
This chapter shall be known as and may be cited as the Alabama Tax Delinquency Amnesty Act of 2018.
(Act 2018-153, §1.)
For the purposes of this chapter, the following terms have the following meanings:
(1) COMMISSIONER. The Commissioner of the Department of Revenue.
(2) CONTACT or CONTACTED. Previous contact of any kind with the department, or an agent of the department, within two years prior to submitting an initial amnesty application. The term includes returns filed for the tax types included in the application for tax periods beginning before the look-back period. The term includes, but is not limited to, with regard to potential liability for the type of tax identified in the amnesty application, any of the following:
a. An audit or notice of audit.
b. Payment of tax.
c. Registration for tax.
d. Request for extension of time to file.
e. Making a payment of estimated tax.
f. Filing a return.
g. Non-compliance issued in response to an application for a certificate of good standing or a certificate of compliance by the taxpayer or on behalf of the taxpayer.
(3) COURIER. A messenger other than the United States Postal Service that delivers parcels, packages, or similar items containing returns, reports, and other documents or payments.
(4) DEPARTMENT. The Department of Revenue.
(5) LOOK-BACK PERIOD. The last three full tax years or 36 months of eligible tax returns that are delinquent.
(6) POSTMARK. An official mark made by the United States Postal Service on a piece of mail to cancel the stamp and to indicate the place and date of sending.
(7) TAX PERIOD. Any period for which a tax return is required by law to be filed with the department.
(8) TAXPAYER. An individual or entity subject to a tax imposed by this state, payable to this state, and collected by the department.
(Act 2018-153, §2.)
(a) The department shall develop and implement a tax amnesty program in accordance with this chapter. The commissioner may adopt rules necessary for the implementation and administration of the program. The commissioner shall publicize the program in order to maximize public awareness of and participation in the program. The commissioner may publicize the program by contracting with any advertising agency within or outside the state and use public service announcements, pamphlets, mail notices, and print, television, and radio announcements. The publications shall operate to increase public awareness that the program will provide amnesty for taxpayers who have not been contacted by the department in the past two years concerning the tax type for which amnesty is being applied.
(b) The tax amnesty program shall be effective for the period beginning July 1, 2018, and ending on September 30, 2018. The program shall apply to all taxes administered by the department except for motor fuel, motor vehicle, and property taxes.
(Act 2018-153, §3.)
(a) Notwithstanding any provision of law to the contrary, and except as provided in subsection (b) of Section 40-29B-3, the following taxes are eligible for amnesty:
(1) Taxes due prior to January 1, 2017.
(2) Taxes for taxable periods that began before January 1, 2017.
(b) Participation in the amnesty program shall be conditioned upon the agreement of the taxpayer to waive any right to protest or initiate an administrative or judicial proceeding. The agreement shall apply only to the specific tax and the tax period for which amnesty is granted.
(c) Amnesty may be granted only for eligible taxes to eligible taxpayers who have not been contacted by the department in the past two years concerning the tax type for which amnesty has been applied and who apply for amnesty during the amnesty period prescribed by this chapter. Amnesty applications must be submitted in an electronic manner as prescribed by the department.
(d) Amnesty applications shall include a written waiver of all rights, restrictions, delays for assessing, collecting, or protesting taxes and interest due as set forth in Chapter 2A and Chapter 2B of this title. The filing of the applications shall make the applicable tax ineligible for refund, credit, or claim against the state and ineligible for redetermination. A taxpayer shall be eligible for a refund or credit if the overpayment arises after the amnesty application is submitted and is attributable to a properly claimed Alabama net operating loss or an adjustment made by the Internal Revenue Service to the taxpayer’s federal income tax, and the taxpayer provides notice of the adjustment to the commissioner within 60 days of receipt of the adjustment from the Internal Revenue Service. A taxpayer who files an application for amnesty retains all administrative and judicial rights of appeal with respect to any additional tax assessed by the department.
(Act 2018-153, §4.)
Notwithstanding any provision of law to the contrary, the commissioner shall waive all of the interest and penalties associated with the tax periods for which amnesty is granted. A limited look-back period shall apply separately to each tax type. If the taxpayer has collected any tax without remitting the tax to the department, the look-back period will be extended to include all periods, back to the point of collection.
(Act 2018-153, §5.)
Tax amnesty may not be granted to a taxpayer under any of the following circumstances:
(1) The taxpayer is a party to a criminal investigation or criminal litigation in a court of the United States or this state pending on March 6, 2018, for nonpayment, delinquency, or fraud in relation to any state tax imposed by this state and administered by the department.
(2) The taxpayer has delivered or disclosed a false or fraudulent application, document, return, or other statement to the department in connection with an amnesty application.
(3) The taxpayer has been issued a final assessment in which the appeal period has ended pursuant to Section 40-2A-7.
(4) The taxpayer has entered into a voluntary disclosure agreement with the department before December 31, 2017.
(5) The taxpayer has been granted amnesty for the tax type as part of the Alabama Tax Delinquency Amnesty Act of 2016, Chapter 29A of this title.
(Act 2018-153, §6.)
(a) An eligible taxpayer who is granted amnesty for an eligible tax type shall comply with all of the following requirements:
(1) Submit to the department by November 15, 2018, all applicable returns, supporting documentation, and the full payment of the tax. No payment plans will be entered into for taxes that are approved for amnesty. An amnesty payment or return submitted in a properly addressed envelope with sufficient postage delivered by the United States Postal Service is deemed paid or received on the date it is postmarked. An amnesty payment or return delivered by courier or taxpayer is deemed paid or received on the date it is delivered to the department’s headquarters or a regional office.
(2) Include the current year return with the amnesty returns filed for the eligible tax type. Penalties for failure to timely file a return and failure to timely pay in accordance with subsections (a) and (b) of Section 40-2A-11, respectively, shall be waived. Waiver of interest does not apply to current year returns.
(b) No interest shall be paid on refunds for a tax period for which amnesty is granted.
(c) If the taxpayer complies with the provisions of this chapter, the taxpayer is deemed to be in compliance with the department for the tax type for which amnesty was granted.
(d) If the approved taxpayer fails to fulfill all the requirements of this section, the amnesty agreement shall be deemed null and void.
(Act 2018-153, §7.)
(a)(1) For taxable periods beginning on or after January 1, 2017, and before December 31, 2024, taxpayers that are granted amnesty and later fail to comply with any payment or filing provision administered by the department shall be subject to the penalty for underpayment due to negligence under subsection (c) of Section 40-2A-11, or a civil penalty of one hundred dollars ($100), whichever is greater.
(2) A taxpayer who delivers or discloses a false or fraudulent application, document, return, or other statement to the department in connection with an amnesty application is subject to the penalty for underpayment due to fraud under subsection (d) of Section 40-2A-11, or a civil penalty of ten thousand dollars ($10,000), whichever is greater.
(b) Following the termination of the tax amnesty period, if the commissioner issues a deficiency assessment for a period for which amnesty was taken, the commissioner may impose penalties and institute civil or criminal proceedings as authorized by law only with respect to the difference between the amount shown on the amnesty application and the correct amount of tax due. The commissioner may impose by rule, after the expiration of the tax amnesty period, a cost of collection penalty not to exceed twenty percent of any additional deficiency assessed for any taxable period for which amnesty was taken. This penalty shall be in addition to all other applicable penalties, fees, or costs. The commissioner may waive any or all of the collection penalty when it is demonstrated that any deficiency of the taxpayer was not due to negligence, intentional disregard of administrative rules, or fraud. The imposition of penalties or civil or criminal proceedings shall not invalidate the amnesty that was previously granted. No penalty shall be imposed if the deficiency results from an adjustment made by the Internal Revenue Service to the taxpayer’s federal income tax and the taxpayer provides written notice of the adjustment to the commissioner within 60 days of receipt of the adjustment from the Internal Revenue Service or if the taxpayer’s application for amnesty was based on a proposed assessment or notice of assessment.
(Act 2018-153, §8.)
(a) The department shall retain an amount not to exceed two hundred fifty thousand dollars ($250,000) for advertising, programming, and other amnesty related expenses from monies collected from taxes paid pursuant to this chapter. The amount is hereby appropriated to the department and shall be in addition to any and all other funds appropriated for the fiscal year beginning October 1, 2017.
(b) After satisfaction of the requirements of subsection (a), all remaining monies collected pursuant to this chapter shall be paid into the State Treasury and placed in the appropriate state funds for the specific tax collected pursuant to state law.
(Act 2018-153, §9.)
This chapter shall be known as and may be cited as the “Electronic Tax Return Filing Act.”
(Acts 1997, No. 97-493, p. 878, §1.)
(a) Purpose. The purpose of the Electronic Tax Return Filing Act is to authorize the Department of Revenue to accept tax returns and other documents of all types filed in electronic commerce without violating other statutes originally drafted for the use of paper returns submitted either personally or through the mail.
(b) Intent of the Legislature. It is recognized that because of constant technological advances, the statutory outline herein for filing tax returns and other documents electronically cannot encompass all of the intricacies in requirements or qualifications currently or into the future. The bulk of the requirements and qualifications must be implemented through the Department of Revenue’s authority to promulgate regulations hereunder. It is the intent of the Legislature to allow the Department of Revenue the necessary flexibility to adopt specific regulations for accepting tax returns by electronic media, to control the integrity of the data submitted, to reduce processing costs and processing times, to aid accuracy, reduce complexities of filing, expedite the processing of refunds to taxpayers, and to update signature and return requirements.
(Acts 1997, No. 97-493, p. 878, §2.)
Notwithstanding any other laws or understandings to the contrary, the following terms shall have the following meanings throughout this chapter:
(1) DEPARTMENT. The Alabama Department of Revenue.
(2) ELECTRONIC FILING. The filing of a tax return or other document of any type by any medium acceptable to the department as provided by rule or regulation, which may include but is not limited to the filing of returns and other documents by telephone transmission, electronic transmission, disk transfer, automated clearing-house, value added networks, or magnetic media.
(3) ELECTRONIC RETURN ORIGINATOR. A firm, organization, or person that provides services as an electronic return preparer, or an electronic return collector, or both.
(4) ELECTRONIC RETURN PREPARER. A firm, organization, or person who prepares tax returns including filing declarations, for taxpayers who intend to have their returns electronically filed.
(5) ELECTRONIC RETURN COLLECTOR. A firm, organization, or person who accepts completed tax returns, including filing declarations, for taxpayers who intend to have their returns electronically filed.
(6) FILING DECLARATION. A packet of information that is maintained by the electronic return originator, submitted to the Department of Revenue, or maintained by the taxpayer, in accordance with regulations of the department. The filing declaration includes all documents usually submitted with a tax return which may be more specifically designated by regulation. The filing declaration shall be considered a part of the tax return.
(7) SOFTWARE DEVELOPER. A firm, organization, or person which sells prepackaged software products or develops customized software for formatting returns to electronic filing specifications.
(8) TRANSMITTER. A firm, organization, or person that transmits electronic returns or other documents directly to the department or its designated receiver.
(Acts 1997, No. 97-493, p. 878, §3.)
The department shall have the authority to accept electronically filed returns or other documents of any type which meet the requirements of this chapter and the department’s regulations. Electronically filed returns may be accepted if submitted directly by the taxpayer, or by any entity authorized by the department in accordance with its regulations.
(Acts 1997, No. 97-493, p. 878, §4.)
(a) Electronic Filing Return. The tax return consists of the electronic transmission and electronic data, and any and all supporting documentation as required by regulation.
(b) Electronic Filing Signature Requirements. The signature requirement for all of the tax returns or other documents required to be filed for any tax or other matter administered by this department will be met if the submission is made pursuant to department regulations. The taxpayer’s and the preparer’s signature in the filing declaration is presumed to be a valid signature of the person with the responsibility for the filing of the tax return. The electronic return preparer shall be responsible for the verification of the taxpayer’s and the preparer’s signature in the filing declaration. In addition, all electronic return originators may be required by the department by regulation to maintain valid and verified signatures and other documents for the department.
(Acts 1997, No. 97-493, p. 878, §5.)
(a) Generally. Qualified electronic return originators, qualified transmitters, and qualified software developers serve as agents of the Department of Revenue. Qualification with the department as an electronic return originator, transmitter, or software developer does not involve a property right of the party so qualified and such qualification may be revoked by the department at any time. The department may by regulation provide specific and general requirements for qualifications.
(b) Qualification. An entity or person may be qualified with the department as an electronic return originator, a transmitter, or as a software developer upon notification of the entity’s or person’s application. If the application for qualification is not accepted by the department, the party making the application may appeal the decision of the department pursuant to Section 40-2A-8. The department may promulgate regulations for the qualifications of electronic return originators, transmitters, and software developers. The failure of the applicant to meet minimum requirements for electronic return originators, transmitters, or software developers is reasonable cause for the department to deny the application for qualification or to revoke a previously granted application.
(c) Revocation of Qualification for Cause. The department may revoke an accepted qualification at any time for cause. Revocation for cause includes but is not limited to actual fraud or failure to adhere to any regulations of the department. An electronic return originator, transmitter, or software developer whose qualification has been revoked by the department is to be notified of the revocation of qualification by certified mail to their last known address or by actual notice. An entity whose qualification has been revoked may appeal the revocation of qualifications for cause by the same process and subject to the same limitations as an appeal under Section 40-2A-8. A revocation of qualification shall be effective upon the mailing of the revocation notice. This revocation of qualification may be stayed only as provided by subsection (d) of this section during the pendency of any appeal of the decision to revoke their qualification. A revocation of qualification for cause will not be considered a waiver of any other remedy at law or equity which the department may pursue against the party whose qualification is revoked.
(d) Temporary Qualification during Pendency of Appeal from Revocation of Qualification for Cause. If requested by the electronic return originator, transmitter, or software developer a temporary qualification may be granted by the Commissioner of the Department of Revenue to be effective during the pendency of the appeal. As a consideration in the grant of a temporary qualification, the commissioner may require a bond and personal guarantees to protect the interest of the department during the pendency of the appeal. The decision of the commissioner as to whether to grant the temporary qualification is final.
(Acts 1997, No. 97-493, p. 878, §6.)
The department, whenever feasible, shall standardize the method of filing returns, license applications, and methods of payments. The department may prescribe by administrative rule the method of filing tax returns, license applications, and other information related to laws for which the department is responsible for administering as well as the method of payment for such taxes, licenses, and other information in order to standardize these processes whenever feasible. Such rules shall be promulgated in accordance with the Administrative Procedure Act and shall be reviewed every five years in accordance with the Red Tape Reduction Act.
(Act 2017-227, §2.)
This chapter shall be known and may be cited as the Facilitating Business Rapid Response to Declared Disasters Act of 2014.
(Act 2014-157, p. 440, §1.)
For the purposes of this chapter, the following terms shall have the following meanings:
(1) DECLARED STATE DISASTER OR EMERGENCY. A disaster or emergency event within the state for which either of the following applies:
a. A Governor’s State of Emergency Proclamation has been issued.
b. A presidential declaration of a federal major disaster or emergency has been issued.
c. A joint resolution of the Legislature has been issued.
(2) DISASTER OR EMERGENCY RELATED WORK. Repairing, renovating, installing, building, rendering service, or other business activities that relate to infrastructure, owned or operated by a registered business, municipality, county, or public corporation, that has been damaged, impaired, or destroyed by the declared state disaster or emergency.
(3) DISASTER PERIOD. A period that begins 10 calendar days before the declared state disaster or emergency and that extends for a period of 60 calendar days after the end of the declared state disaster or emergency period, or any longer period authorized by the Governor, the President of the United States, or the Legislature.
(4) INFRASTRUCTURE. Property and equipment owned or used by communications networks, broadband and Internet service provider, cable and video service provider, electric generation, transmission and distribution systems, gas distribution systems, and related support facilities that service multiple customers or citizens including, but not limited to, real and personal property, such as lines, poles, pipes, structures, and equipment.
(5) OUT-OF-STATE BUSINESS. A business entity whose services are requested by:
a. a registered business in the state that owns or operates infrastructure in this state, or
b. a municipality, or public corporation the governing body of which is appointed by a municipality or the governing body thereof, that owns or operates infrastructure in this state, for purposes of performing disaster or emergency related work in the state that meets one of the following tests:
During the previous 12 months, the business entity did not have employees in Alabama who were subject to Alabama’s income tax withholding requirements, excluding employees who were in Alabama for previous disaster or emergency related work.
The business entity is headquartered outside Alabama and is affiliated through common ownership with the registered business in the state requesting such disaster or emergency related work in Alabama.
(6) OUT-OF-STATE EMPLOYEE. An employee who does not work in the state except for disaster or emergency related work during one or more disaster periods.
(7) REGISTERED BUSINESS IN THE STATE. A business entity that is registered to do business in the state before the declared state disaster or emergency.
(Act 2014-157, p. 440, §2.)
(a) An out-of-state employee performing disaster or emergency related work on infrastructure owned or operated by a registered business, municipality, county, or public corporation shall not be considered to have established residency or a presence in the state that would require that person or his or her employer to file and pay income taxes or to be subject to tax withholdings or to file and pay any other state or local tax or fee which is based on a physical presence in the State of Alabama or with a local taxing jurisdiction during one or more disaster periods. This includes any related state or local employer withholdings and remittance obligations, but does not include any transaction taxes and fees as described in subsection (d).
(b) Any out-of-state business that has no registrations or tax filings or nexus in the state prior to a declared state disaster or emergency that enters the state solely to conduct operations within the state for purposes of performing disaster or emergency related work during any disaster period shall not: (1) With respect to the requirements of Alabama law other than those codified in Title 37, be considered to have established a level of presence that would require that business or its out-of-state employees or property to be subject to any state or local taxes, licensing, registration, or filing requirements including, without limitation, state or local income taxes, payroll taxes, occupational and business licensing fees, privilege or franchise taxes, certification requirements, or Secretary of State licensing requirements, and (2) with respect to the requirements of Title 37, be subject to the certification requirements of Section 37-2-4 or Section 37-2A-9. Except as expressly provided in the preceding sentence, nothing in this chapter shall be construed to amend or affect any other provisions or requirements of Title 37. For the purpose of apportioning income, the payroll, sales or gross receipts, and property of the business related to the conduct of disaster or emergency work shall not be sourced or taxable to or by the state or any locality. The out-of-state business shall also not be subject to any use tax or ad valorem tax on equipment brought into the state during a disaster period for use or consumption during the disaster period. Business that is conducted in this state pursuant to this chapter shall be disregarded with respect to whether a return must be filed for such tax or fee including any filing required for a unitary or combined group of which the out-of-state business may be a part.
(c) Any out-of-state business that has registrations or tax filings or nexus in the state prior to a declared state disaster or emergency shall not: (1) With respect to the requirements of Alabama law other than those codified in Title 37, be considered to have established an additional level of presence, to the extent such business conducts additional operations within the state for purposes of performing disaster or emergency related work on infrastructure owned or operated by a registered business, municipality, county, or public corporation during any disaster period, that would require that business or its out-of-state employees or property to be further subject to any state or local taxes, licensing, registration, or filing requirements including, without limitation, state or local income taxes, occupational and business licensing fees, payroll taxes, privilege or franchise taxes, certification requirements, or Secretary of State licensing requirements, except for transaction-based taxes provided for in subsection (d) and (2) with respect to the requirements of Title 37, be subject to the certification requirements of Section 37-2-4 or Section 37-2A-9. Except as expressly provided in the preceding sentence, nothing in this chapter shall be construed to amend or affect any other provisions or requirements of Title 37. For the purpose of apportioning income, the payroll, sales or gross receipts, and property of the business related to the conduct of disaster or emergency work shall not be sourced or taxable to or by the state or any locality. The business shall also not be subject to any use tax or ad valorem tax on equipment brought into the state during a disaster period for use or consumption during the disaster period. Business that is conducted in this state pursuant to this chapter shall be disregarded with respect to whether a return must be filed for such tax or fee including any filing required for a unitary or combined group of which the out-of-state business may be a part.
(d) Except as otherwise provided in subsections (b) and (c), nothing in this chapter shall exempt an out-of-state employee and out-of-state business from paying transaction-based taxes and fees during the disaster period including, but not limited to, fuel taxes, lodging taxes, and automobile leasing taxes.
(e) Any out-of-state employee or out-of-state business that remains in or otherwise enters the state after one or more disaster periods shall thereafter become subject to the state’s normal standards for establishing presence, residency, or doing business in the state, state and local registration requirements, licensing requirements, filing requirements, and employee and business tax requirements, but not retroactive to the disaster period.
(f) An out-of-state business, upon request, shall provide to the Secretary of State and to the Department of Revenue a statement that the business is in the state for the purpose of responding to the declared state disaster or emergency, which statement shall include the name of the business, state of domicile, principal business address, federal taxpayer identification number, date of entry, and contact information.
(g) A registered business in the state, upon request, shall provide the information required in subsection (f) for any affiliate that is an out-of-state business, including contact information for the registered business.
(h) Nothing in this chapter shall be interpreted to exempt any out-of-state business, out-of-state employee, or individual from securing and paying applicable license and related fees imposed by professional licensing boards of the State of Alabama.
(Act 2014-157, p. 440, §3.)
A registered business in the state and any out-of-state business whose services are requested by a registered business in the state are encouraged to be aware of the need for diversity in the selection or hiring of vendors, contractors, or other business entities whose services are required or requested during a disaster period.
(Act 2014-157, p. 440, §4.)
Connect Omnilex to search the legal corpus from your AI assistant.