Mineral Documentary Tax.

Ala. Code tit. 40, ch. 20, art. 2

in effect

Ala. Code § 40-20-30 Definitions.

40-20-30. Definitions. 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.)

Ala. Code § 40-20-31 Levied; Applicability.

40-20-31. Levied; Applicability. 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.)

Ala. Code § 40-20-32 Tax to Be a Lien; Amount of Tax.

40-20-32. Tax to Be a Lien; Amount of Tax. 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.)

Ala. Code § 40-20-33 When and by Whom Tax Payable; Effect of Nonpayment.

40-20-33. When and by Whom Tax Payable; Effect of Nonpayment. 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.)

Ala. Code § 40-20-34 Tax Payable to Probate Judge; Entries on Instrument and Record.

40-20-34. Tax Payable to Probate Judge; Entries on Instrument and Record. 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.)

Ala. Code § 40-20-35 Tax to Be in Lieu of Ad Valorem Taxes; Exemption of Nonproducing Leasehold and Other Interests from Ad Valorem Taxes.

40-20-35. Tax to Be in Lieu of Ad Valorem Taxes; Exemption of Nonproducing Leasehold and Other Interests from Ad Valorem Taxes. 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.)

Ala. Code § 40-20-36 How Exemption Obtained Upon Existing Interests.

40-20-36. How Exemption Obtained Upon Existing Interests. 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.)

Ala. Code § 40-20-37 Fees of Probate Judge; Disposition of Remainder of Tax.

40-20-37. Fees of Probate Judge; Disposition of Remainder of Tax. 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.)

Source: Alabama Legislature (alison.legislature.state.al.us)URL: https://alison.legislature.state.al.us/code-of-alabamaFetched: 10/20/2026