Forest Products Privilege and Severance Taxes.

Ala. Code tit. 9, ch. 13, art. 4

in effect

Ala. Code § 9-13-80 Definitions.

9-13-80. Definitions. 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) COMMISSIONER. The Commissioner of Revenue of the State of Alabama. (2) CONCENTRATION YARD. A place where logs, pulpwood, or inwoods pulpwood chips severed in Alabama are brought or received within the State of Alabama in a green or rough form or condition for resale to processors or manufacturers or for shipment out of state. (3) DEPARTMENT. The Department of Revenue of the State of Alabama. (4) FOREST PRODUCTS. Logs, pulpwood, poles, pilings, inwoods pulpwood chips, and stumpwood (tarwood). (5) MANUFACTURER. As applied to logs suitable for manufacture into lumber, plywood, veneer, or other solid wood product, the person who operates the sawmill or plant in which the products are manufactured; as applied to pulpwood, the person who operates the paper or pulp mill, oriented strand board mill, pellet mill, or other plant in which the products are manufactured; as applied to poles and pilings, the person who purchases from the producer; as applied to stumpwood, the person who operates the plant or retort in which the product is utilized. (6) PERSON. Any individual, firm, copartnership, association, corporation, receiver, trustee, or any other group or combination acting as a unit. (7) PROCESSOR. A chip mill or other facility that receives forest products from a producer and further processes those forest products before delivery to a manufacturer. (8) PRODUCER. Any person engaging or continuing to engage in this state in the business of severing timber or any other forest products from the soil, whether as owner, lessee, concessionaire, or contractor. The term shall also include any person who assembles or causes to be assembled any forest product for shipment out of the State of Alabama in an unmanufactured condition. (9) SEVER. To fell, cut, or otherwise separate from the soil. For the purpose of this article, any person who is the owner or lessee of timber and is also the processor thereof or a manufacturer of products derived therefrom shall be deemed the producer engaged in severing such timber from the soil, notwithstanding the fact that the severance is made by an independent contractor or otherwise. (10) TAXPAYER. Any person liable for taxes under this article. (Acts 1945, No. 169, p. 285, §1; Acts 1953, No. 695, p. 948, §1; Acts 1955, No. 530, p. 1177, §1; Act 2017-301, §1.)

Ala. Code § 9-13-81 Levy of Severance Tax; Lien Upon Forest Products, Etc., for Payment of Tax.

9-13-81. Levy of Severance Tax; Lien Upon Forest Products, Etc., for Payment of Tax. To provide further for conservation of the natural resources of the state by protection of the state’s forests and development of the forestry program, there is levied and shall be collected as provided in this article a privilege tax on every person who owns timber prior to severance and engages or continues to engage in the state in the business of severing timber or any other forest products from the soil for sale, profit, or commercial use whether as owner, lessee, concessionaire, or contractor. The privilege tax imposed by this article is in addition to other taxes now levied and shall be known as the forest products severance tax. The tax, together with interest and penalties imposed by this article, shall be a lien upon the forest products so severed and upon the product or products manufactured therefrom until the tax imposed by this article with respect to such forest products shall have been paid or until such forest products or the products manufactured therefrom shall have been sold by the manufacturer thereof, but the lien of such tax shall not be enforceable against the bona fide purchaser from the manufacturer of any such forest products or of the products manufactured therefrom. (Acts 1945, No. 169, p. 285, §2; Act 2017-301, §1.)

Ala. Code § 9-13-82 Rates; Additional Taxes; Exemption; Legislative Intent.

9-13-82. Rates; Additional Taxes; Exemption; Legislative Intent. (a) The measure of the forest products severance tax is at the following rates: (1) On pine logs severed in Alabama and delivered to a manufacturer, processor, or concentration yard in Alabama, the rate shall be $0.10 per ton (2,000 pounds). On pine logs severed in Alabama for transport out of the state, the rate shall be $0.10 per ton (2,000 pounds). (2) On all other species of logs severed in Alabama and delivered to a manufacturer, processor, or concentration yard in Alabama, the rate shall be $0.065 per ton (2,000 pounds). On all other species of logs severed in Alabama for transport out of the state, the rate shall be $0.065 per ton (2,000 pounds). (3) On pulpwood, $0.10 per ton (2,000 pounds) on pulpwood severed in Alabama and delivered to the manufacturer, concentration yard, or processor. On pulpwood transported out of the state, $0.10 per ton (2,000 pounds) for pulpwood severed in Alabama. (4) On pilings and poles, $0.205 per ton (2,000 pounds) on pilings and poles severed in Alabama and delivered to a manufacturer or concentration yard. On pilings and poles severed in Alabama and transported out of the state, $0.205 per ton (2,000 pounds). (5) On stumpwood (tarwood), $0.125 per ton (2,000 pounds) on stumpwood severed in Alabama and delivered to a manufacturer. On stumpwood severed in Alabama and transported out of the state, $0.125 per ton (2,000 pounds). (6) On inwoods pulpwood chips, $0.10 per ton (2,000 pounds) on chips produced in the woods from pulpwood severed in Alabama and delivered to the manufacturer or concentration yard. On inwoods pulpwood chips produced from pulpwood severed in Alabama and transported out of the state, $0.10 per ton (2,000 pounds). (b) There is also levied a privilege tax against the manufacturer using the forest products in an amount equal to 50 percent of the tax on the severer as set out above. The privilege tax shall be collected in the same manner as the forest products severance tax is collected and shall be known as the forest products manufacturers tax. This tax is levied on manufacturers located only within this state. It is the legislative intent that this privilege tax is not to be levied in any manner upon the person owning the land from which the forest products are severed nor upon the producer but it is levied upon the manufacturer that uses the forest products in the manufacturing process. (c) Pulpwood, logs, or portions thereof on which the forest products severance tax has been paid shall not be subject to an additional forest products severance tax when converted into pulpwood chips. The additional forest products manufacturers tax levied by subsection (b) shall be paid by the manufacturer utilizing the pulpwood chips in a manufacturing process. A manufacturer utilizing logs in a manufacturing process that also produces residual pulpwood chips from those logs shall not be liable for the additional forest products manufacturers tax levied by subsection (b) on that portion of the log that is converted into residual pulpwood chips. The additional forest products manufacturers tax levied by subsection (b) attributable to those residual pulpwood chips shall be paid by the manufacturer utilizing the residual pulpwood chips in a manufacturing process. (d) A manufacturer may establish entitlement to the exemption from forest products severance tax provided by subsection (c) by obtaining a certificate from the seller providing that the seller is a manufacturer, concentration yard, or processor that is registered with the department to remit forest products severance taxes, and any manufacturer who obtains a certificate shall not be held liable for any forest products severance tax on the pulpwood chips or residual pulpwood chips purchased from the seller. (e) It is the intent of the Legislature to encourage the use of forest based renewable energy. Fuel chips produced in the woods at the site of severance are not subject to the taxes set forth in this article. For purposes of this section, fuel chips include woodchips that are produced from tree tops and limbs, logging slash, down timber material, or standing live or dead trees which do not meet commercial standards because of size, species, merchantable volume, or economic selection criteria, and are used as a form of energy in conjunction with a manufacturing process. Fuel chips do not include similar materials utilized as feedstock in a manufacturing process. Trees that are grown specifically as an energy crop do not qualify for the exemption set forth in this subsection. (Acts 1945, No. 169, p. 285, §3; Acts 1955, No. 385, p. 921, §1; Acts 1967, No. 763, p. 1619, §1; Acts 1973, No. 500, p. 738, §1; Acts 1985, No. 85-700, p. 1141, §1; Acts 1988, 1st Ex. Sess., No. 88-842, p. 315, §1; Acts 1993, 1st Ex. Sess., No. 93-888, p. 158, §2; Acts 1995, No. 95-255, p. 427, §1; Act 2017-301, §1.)

Ala. Code § 9-13-83 Exemptions from Taxes.

9-13-83. Exemptions from Taxes. The taxes levied by this article shall not apply to nor shall such taxes be required of those individual owners of timber who occasionally sever or cut the same from their own premises to be utilized by them in the construction or repair of their own structures, buildings or improvements or for their home consumption or used by them in the processing of their farm products. (Acts 1945, No. 169, p. 285, §4.)

Ala. Code § 9-13-84 Payment and Disposition of Taxes Generally; Special State Forestry Fund; Appropriation of Tax Receipts for Use of State Forestry Commission.

9-13-84. Payment and Disposition of Taxes Generally; Special State Forestry Fund; Appropriation of Tax Receipts for Use of State Forestry Commission. (a) The taxes imposed by this article, and any other taxes imposed on the severance of forest products, shall be due and payable quarterly to the department and, when collected, shall be paid by the department into the State Treasury. When so paid into the State Treasury, all such taxes shall be credited by the Treasurer to a special fund which is hereby created and which shall be known as the Special State Forestry Fund of the State of Alabama, which fund shall be disbursed under the supervision of the State Forester, subject to the restrictions embodied in this article, for the purpose of carrying out the statewide forestry program as provided by law and for no other or different purposes. Not less than 85 percent of the taxes collected under and by virtue of this article shall be expended for forest protection. No portion of the fund shall revert to the General Fund of the state at the end of any fiscal year, and any surplus shall be allowed to accumulate from year to year and be disbursed as exigencies of the statewide forestry program may require. (b) There is continuously appropriated the receipts from the taxes levied in this article to the State Forestry Commission for the use of the State Forestry Commission. The amount of money as shall be appropriated for each 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. The expenditure of the sum so appropriated shall be budgeted and allotted pursuant to Article 4, commencing with Section 41-4-80, of Chapter 4, Title 41 and limited to the amount appropriated to defray the expenses of operating the department for each fiscal year, or two percent of the receipts, whichever is less. (Acts 1945, No. 169, p. 285, §5; Acts 1951, No. 843, p. 1474, §1; Acts 1967, No. 763, p. 1619, §1; Acts 1988, 1st Ex. Sess., No. 88-842, p. 315, §1; Act 2017-301, §1.)

Ala. Code § 9-13-86 Filing of Quarterly Reports and Payment of Taxes - Manufacturers and Processors; Payment of Taxes.

9-13-86. Filing of Quarterly Reports and Payment of Taxes - Manufacturers and Processors; Payment of Taxes. Every manufacturer and processor, within 30 days after the expiration of each quarter annual period expiring, respectively, shall on the last day of March, June, September, and December of each year, file with the department a statement under oath, on forms prescribed by the department, showing the kinds of forest products and the gross quantity of each manufactured during the preceding quarter annual period by the manufacturer or processor, showing the county or counties in which such products were severed from the soil and showing the gross quantity, if any, of such forest products severed from soil outside the State of Alabama and such other reasonable and necessary information pertaining thereto as the department may require for the proper enforcement of this article. At the time of rendering such quarter annual reports, the manufacturer or processor shall pay to the department the taxes imposed by this article with respect to all forest products severed from the soil in the State of Alabama and embraced in the report. In the case that any logs, pulpwood, or inwoods pulpwood chips are sold or delivered to a concentration yard, then the taxes provided for in this article shall be reported and paid by the owner or owners of the concentration yard to the department. (Acts 1945, No. 169, p. 285, §7; Acts 1953, No. 695, p. 948, §2; Act 2017-301, §1.)

Ala. Code § 9-13-87 Filing of Quarterly Reports and Payment of Taxes - Producers of Forest Products Shipping, Etc., Same Out of State in Unmanufactured Condition.

9-13-87. Filing of Quarterly Reports and Payment of Taxes - Producers of Forest Products Shipping, Etc., Same Out of State in Unmanufactured Condition. Every producer of forest products who shall ship the same out of the State of Alabama in an unmanufactured condition or who shall sell such product for shipment outside the State of Alabama in an unmanufactured condition shall, within 30 days after the expiration of each quarter annual period expiring, respectively, on the last day of March, June, September and December of each year, file with the Department of Revenue a statement under oath, on forms prescribed by the Department of Revenue, showing the kinds of forest products and the gross quantity thereof severed from the soil in Alabama and shipped or sold for shipment to points outside the State of Alabama in an unmanufactured condition, the county or counties in which such products were severed from the soil and such other reasonable and necessary information pertaining thereto as the Department of Revenue may require for the proper enforcement of the provisions of this article. At the time of rendering such quarter annual reports, such producer of forest products shall pay to the Department of Revenue the taxes herein imposed by this article upon the forest products embraced in said report. (Acts 1945, No. 169, p. 285, §8.)

Ala. Code § 9-13-88 Recordkeeping Requirements.

9-13-88. Recordkeeping Requirements. It shall be the duty of every manufacturer and processor in this state and of every producer who shall ship forest products out of the State of Alabama in an unmanufactured condition and of every concentration yard where any logs, pulpwood, or inwoods pulpwood chips are sold or delivered to it to keep and preserve suitable records with the items separated into the various items on which privilege taxes are levied in this article, and other books or accounts as may be necessary to determine the amount of taxes for which he or she is liable under this article. The books and records shall be kept and preserved for a period of three years, and all records shall be open for examination at any time by the department or its duly authorized agent. (Acts 1945, No. 169, p. 285, §9; Acts 1953, No. 695, p. 948, §3; Act 2017-301, §1.)

Ala. Code § 9-13-90 Failure to Make Reports or Maintain Records.

9-13-90. Failure to Make Reports or Maintain Records. Any person subject to the provisions of this article who shall fail to make the reports or any of them as required by this article or who shall fail to keep the records as required by this article shall be guilty of a misdemeanor and, upon conviction, shall be fined not less than $25.00 nor more than $500.00 for each offense. Each month of such failure shall constitute a separate offense. (Acts 1945, No. 169, p. 285, §11.)

Ala. Code § 9-13-93 When Taxes Delinquent.

9-13-93. When Taxes Delinquent. The taxes provided in this article shall become delinquent after the date fixed for the filing of the quarter annual report to be filed with the department. (Acts 1945, No. 169, p. 285, §28; Act 2017-301, §1.)

Ala. Code § 9-13-99 Lien Upon Property for Payment of Taxes, Interest and Penalties.

9-13-99. Lien Upon Property for Payment of Taxes, Interest and Penalties. The taxes together with interest and penalties imposed by this article shall be a lien upon the property of any person subject to the provisions of this article, and the provisions of the revenue laws of the State of Alabama applying to liens for license taxes shall apply fully to the taxes levied by this article. (Acts 1945, No. 169, p. 285, §19.)

Ala. Code § 9-13-103 Proceedings as to Persons Designing to Engage in Acts Prejudicial to Collection of Taxes, Etc.

9-13-103. Proceedings as to Persons Designing to Engage in Acts Prejudicial to Collection of Taxes, Etc. If the department finds that a person liable for taxes under any provisions of this article designs quickly to depart from the state or to remove his property therefrom, or to conceal himself or his property therein or to do any other act tending to prejudice or to render wholly or partly ineffectual proceedings to collect such tax unless such proceedings are brought without delay, the department shall cause notice of such finding to be given such person together with a demand for an immediate return and immediate payment of such taxes. Thereupon such taxes shall become immediately due and payable. If such person is not in default in making such return or paying any taxes prescribed by this article and furnishes evidence satisfactory to the department under regulations to be prescribed by the department that he will duly return and pay the taxes to which the department’s finding relates, then such tax shall not be payable prior to the time otherwise fixed for payment. If such person fails to appear and make such showing, then the department shall make such assessment final and execution may immediately issue as is provided in this article. (Acts 1945, No. 169, p. 285, §23.)

Ala. Code § 9-13-104 Reports of Transporters of Forest Products - Required.

9-13-104. Reports of Transporters of Forest Products - Required. When requested by the department, all transporters of forest products out of, within or across the State of Alabama shall be required to furnish the department, under oath and upon forms prescribed by the department, any and all information relative to the transportation of forest products, and the reports shall contain, in addition to other required information, the name of the shipper, the date of shipment, the quantity and type or character of the forest products, stated in units or measurements applicable to the forest products, the point of receipt or shipment, and the point of destination. In the case of common carriers using bills of lading or way bills prescribed or approved by the Interstate Commerce Commission, the common carriers shall only be required to keep the usual records at the office or offices in this state where the records are usually kept. (Acts 1945, No. 169, p. 285, §25; Act 2017-301, §1.)

Ala. Code § 9-13-105 Reports of Transporters of Forest Products - Failure to Make Report.

9-13-105. Reports of Transporters of Forest Products - Failure to Make Report. The failure of any person to make the transporter’s report provided for in Section 9-13-104 shall be punished by a fine of not less than $50.00 and not more than $500.00 for each offense. (Acts 1945, No. 169, p. 285, §26.)

Ala. Code § 9-13-106 Payment of Taxes by Counties or Municipalities Purchasing Forest Products.

9-13-106. Payment of Taxes by Counties or Municipalities Purchasing Forest Products. When the governing body of any county or municipality in the state shall purchase any forest products upon which the privilege taxes imposed by this article have not been paid, then the said governing body of said county or municipality shall withhold from the purchase price the amount of the taxes due and shall remit it to the Department of Revenue in the same manner as is required of other taxpayers. (Acts 1945, No. 169, p. 285, §27.)

Ala. Code § 9-13-107 Forest Products to Which Taxes Imposed by Article Applicable.

9-13-107. Forest Products to Which Taxes Imposed by Article Applicable. The taxes imposed by this article shall apply to any forest products severed from land owned by either the State of Alabama or the United States of America, where the forest products severed enter commercial channels of trade for competitive markets. (Acts 1945, No. 185, p. 285, §24.)

Ala. Code § 9-13-108 Taxes Upon the Excise or Privilege of Severing or Manufacturing of Forest Products.

9-13-108. Taxes Upon the Excise or Privilege of Severing or Manufacturing of Forest Products. Any and all taxes upon the excise or privilege of severing or manufacturing of forest products shall inure to the State of Alabama and shall be exercised only in a uniform, statewide tax. No tax shall be levied by local law or by any political subdivision of the state, including counties, cities, special taxing authorities, or other taxing instrumentalities, upon the excise or privilege of severing or manufacturing of forest products in Alabama. (Acts 1988, 1st Ex. Sess., No. 88-842, p. 315, §2; Act 2017-301, §1.)

Ala. Code § 9-13-109 Legislative Findings.

9-13-109. Legislative Findings. (a) The Legislature finds and declares that the intent of Act 2017-301 is to simplify and clarify existing language used to calculate and collect forest product severance taxes and forest product manufacturing taxes and to ensure that these taxes are levied and paid only once. In furtherance of that intent, the Legislature finds that Act 2017-301 clarifies all of the following: (1) Before July 1, 2017, if a manufacturer paid forest products severance tax utilizing a formula to convert from the weight of delivered logs to an estimate of volume based on either board measure lumber tally or log scale (Doyle Rule) for the purposes of determining the amount of forest products severance tax to be paid, then no additional forest products severance tax shall be due on the products produced from that log including the parts of the logs that are converted to residual pulpwood chips. (2) Before July 1, 2017, if any manufacturer collected and paid forest products severance tax based on the weight of delivered logs, no additional forest products severance tax shall be due on the products produced from that log including the parts of the logs that are converted to residual pulpwood chips. (3) Before July 1, 2017, if the forest products severance tax was paid on either pulpwood chips or the logs used to produce pulpwood chips, no additional forest products severance tax shall be due by the manufacturer purchasing the pulpwood chips for use in a manufacturing process. (b) The clarifications provided in subsection (a) shall apply to all open tax periods and all periods for which a preliminary or final assessment of tax could be or was entered pursuant to Section 40-2A-7, or any successor general or local law, before July 1, 2017. (c) No refunds shall be due or issued pursuant to the clarifications provided in subsection (a) with respect to those tax periods occurring before July 1, 2017. (Act 2017-301, §2.)

Ala. Code § 9-13-110 Legislative Intent.

9-13-110. Legislative Intent. It is the intent of the Legislature that the forest products severance tax prescribed in subsections (a) and (b) of Section 9-13-82, beginning July 1, 2017, shall initially generate revenues not less than the revenues generated by the tax prior to July 1, 2017. In order to ensure that the revenues previously generated are not decreased, the department shall determine the total forest products severance tax revenue generated from all severance taxpayers from Act 2017-301 for the fiscal year ending September 30, 2018. The department, no later than December 1, 2018, or as soon thereafter as practical, shall determine the amount collected from all severance taxpayers for the fiscal year ending September 2018. If the forest products severance tax generated from all severance taxpayers in the fiscal year ending 2018 are less than the forest products severance taxes generated from all severance taxpayers in the fiscal year ending in 2017, on January 1, 2019, or as soon thereafter as practical, the department shall notify all severance taxpayers of the rate adjustment needed to maintain collections at the level received and collected by all severance taxpayers prior to July 1, 2017. The rate adjustment shall be effective no earlier than the quarter beginning April 1, 2019. The rate adjustment provided for in this section shall be a one-time adjustment to each of the tax rates set forth in Section 9-13-82, and no further adjustments shall be made pursuant to Act 2017-301. (Act 2017-301, §3.)

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