Privilege Tax on Production.

Ala. Code tit. 40, ch. 20, art. 1

in effect

Ala. Code § 40-20-1 Definitions.

40-20-1. Definitions. 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.)

Ala. Code § 40-20-2 Levy and Amount of Tax Upon Business of Producing or Severing Oil or Gas from Soil, Etc., Generally.

40-20-2. Levy and Amount of Tax Upon Business of Producing or Severing Oil or Gas from Soil, Etc., Generally. (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.)

Ala. Code § 40-20-3 Tax Levied Upon Producers in Proportion to Ownership at Time of Severance; by Whom Tax Paid; Lien.

40-20-3. Tax Levied Upon Producers in Proportion to Ownership at Time of Severance; by Whom Tax Paid; Lien. (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.)

Ala. Code § 40-20-4 Enforcement of Article; Collection of Taxes; Statements to Be Filed and Records Kept; Inspection of Records; Hearings and Compelling Attendance of Witnesses; Rules and Regulations.

40-20-4. Enforcement of Article; Collection of Taxes; Statements to Be Filed and Records Kept; Inspection of Records; Hearings and Compelling Attendance of Witnesses; Rules and Regulations. (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.)

Ala. Code § 40-20-5 When Reports to Be Filed; Payments to Accompany Reports.

40-20-5. When Reports to Be Filed; Payments to Accompany Reports. 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.)

Ala. Code § 40-20-7 Deduction of Appropriation for Expenses of Department.

40-20-7. Deduction of Appropriation for Expenses of Department. 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.)

Ala. Code § 40-20-8 Allocation and Distribution of Net Taxes Collected; Property Which Consists of Submerged Lands and Onshore Lands; Onshore Lands Defined; Applicability of Section; Final Determination Establishing Allocation Base.

40-20-8. Allocation and Distribution of Net Taxes Collected; Property Which Consists of Submerged Lands and Onshore Lands; Onshore Lands Defined; Applicability of Section; Final Determination Establishing Allocation Base. (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.)

Ala. Code § 40-20-9 Reports to Be Made on Blanks Furnished by Department; Certificate and Verification Required.

40-20-9. Reports to Be Made on Blanks Furnished by Department; Certificate and Verification Required. 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.)

Ala. Code § 40-20-11 Enjoining Violation of Article.

40-20-11. Enjoining Violation of Article. 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.)

Ala. Code § 40-20-12 Exemption from Ad Valorem Taxes.

40-20-12. Exemption from Ad Valorem Taxes. (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.)

Ala. Code § 40-20-13 Collection and Disbursement of Additional Taxes.

40-20-13. Collection and Disbursement of Additional Taxes. 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.)

Ala. Code § 40-20-14 Credits Against Tax for Manufacturers of Direct Reduced Iron.

40-20-14. Credits Against Tax for Manufacturers of Direct Reduced Iron. Repealed by Act 2015-70 effective April 21, 2015. (Act 98-285, p. 463, §§1, 2, 5.)

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