SB265 Alabama 2016 Session

Summary

Primary Sponsor

Larry StuttsSenator

Republican

Session

Regular Session 2016

Title

Uniform Severance Tax Act, exception for minerals severed in Alabama, sold to buyer in another state, and not transported on public roads in Alabama deleted, Sec. 40-13-53 am'd.

Summary

The bill would remove a tax exemption for minerals severed in Alabama that are sold for use outside the state and not transported on Alabama roads, making those minerals taxable under the Uniform Severance Tax Act.

What This Bill Does

If enacted, minerals severed in Alabama that are sold to buyers for use outside the state and not moved on Alabama public roads would no longer be exempt from the severance tax. The tax would apply to those severed materials when they are sold as tangible property, regardless of where the sale occurs or where delivery happens. Other exemptions and rules in the law would still apply, and tax records would continue to be available for audits.

Who It Affects

• Mineral producers and sellers in Alabama who sever minerals and sell them for use outside Alabama (they would owe severance tax on those sales)
• County commissions and state tax auditors who would collect and verify the severance tax on these minerals

Key Provisions

• Amends Section 40-13-53 to remove the exemption that allowed minerals severed in Alabama and sold for use outside the state, not transported on public roads, to avoid the severance tax.
• The tax would apply to all severed material severed from the ground in Alabama and sold as tangible personal property, regardless of the place of sale or delivery, removing the outside-state exemption.
• Preserves other existing provisions and exemptions in the act (for certain materials and processing uses), and includes audit and record-keeping requirements; establishes effective date: the first day of the third month after passage and governor approval.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation