Exclusions. (Effective September 1, 2026)
Ala. Code § 40-21-103
in effect40-21-103. Exclusions. (Effective September 1, 2026)
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 Alabama of 2022;
(2) Whenever any tax relating to the sale, use, storage, or consumption of the utility services is levied under the provisions of Article 2 of Chapter 23, 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 the utility services is at a wholesale sale;
(4) Whenever electricity, natural gas, or domestic water is 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 the converted raw materials in an electrolytic or electrothermal manufacturing or compounding process;
(8) Whenever the sales price of utility services is 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 the 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 the electricity is purchased from a subsidiary corporation of the corporation engaged in the isotopic enrichment of uranium;
(10) Whenever utility services are furnished through the use of a prepaid telephone calling card; and
(11)a. Whenever natural gas or electricity purchased for storage, use, or other consumption is used or consumed as fuel or energy in commercial aquaculture aeration systems, commercial greenhouses, pivot irrigation systems, and poultry houses.
b. The exclusion provided in this subdivision shall not include natural gas or electricity purchased for storage, use, or other consumption as fuel or energy in the production of industrial hemp or hemp, as defined in Section 2-8-381, or cannabis, as defined in Section 20-2A-3.
(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; Act 2026-595, §1.)
Source: Alabama Legislature (alison.legislature.state.al.us)URL: https://alison.legislature.state.al.us/code-of-alabama#40-21-103Fetched: 10/20/2026