HB313 Alabama 2017 Session

Summary

Primary Sponsor

Elaine Beech

Democrat

Session

Regular Session 2017

Title

Forest products severance and manufacturers tax, revised, wood residue used in manufacturing process excluded from tax, Secs. 9-13-80, 9-13-81, 9-13-82, 9-13-84, 9-13-86, 9-13-88, 9-13-93, 9-13-104, 9-13-108 am'd.

Summary

HB313 revises Alabama's forest products taxes by updating rates, creating a wood-residue exemption, and directing revenue to a forestry fund.

What This Bill Does

The bill updates how forest products severance and manufacturing taxes are calculated, adds a new exemption for wood residue used in manufacturing, and sets up a separate manufacturers tax equal to 50% of the severance tax. It defines key terms (like producer, processor, and concentration yard), and specifies rate schedules for different timber products with options for per-ton or per-thousand-foot measurements. It also requires quarterly reporting, directs most tax revenue into a Special State Forestry Fund for forest protection, and prohibits local taxes on these state-level forest taxes. The act applies retroactively to open tax periods, clarifies when taxes are due to avoid double taxation, and includes a one-time rate adjustment starting in 2019 if total revenues fall short of previous levels; it repeals an old funding-allocation provision and becomes effective July 1, 2017.

Who It Affects

• Timber producers/severers in Alabama (owners, lessees, contractors) who sever timber or other forest products: subject to updated severance tax rates and the new framework, with revenues directed to the forestry fund.
• Forest products processors/manufacturers (both in-state and out-of-state) who use timber in Alabama: face the new manufacturers tax at 50% of the severance tax, may qualify for certain exemptions on pulpwood chips and residual chips through seller certificates, and must maintain records and follow reporting requirements.

Key Provisions

• wood residue used in conjunction with a forest products manufacturing process is exempt from the forest products severance tax.
• A forest products manufacturers tax equal to 50% of the severance tax is imposed on processors or manufacturers using timber in Alabama.
• Specific tax rates are reorganized for pine lumber, pine logs, hardwood/logs, pulpwood/bolts, crossties/switch ties, mine ties/props, piling/poles, turpentine, stumpwood, and inwoods pulpwood chips, with various per-unit or per-ton options.
• Fuel chips produced in the woods at the site of severance and used as energy in conjunction with manufacturing are exempt from these taxes; fuel chips are defined accordingly.
• Manufacturers may obtain a seller certificate to exempt certain pulpwood chips or residual chips from the severance tax; the certificate relates to whether the seller remits forest products severance taxes.
• Revenue from these taxes goes into the Special State Forestry Fund, with at least 85% used for forest protection and statewide forestry programs; no revenue reverts to the General Fund.
• No local or substate taxes may be levied on the excise or privilege of severing, processing, or manufacturing forest products in Alabama.
• The act includes retroactive applicability to open tax periods, clarifications to prevent double taxation, and a one-time rate adjustment beginning no earlier than April 1, 2019 if revenues fall short of previous levels.
• Section repeals 9-13-85 (allocation of funds) and the act becomes effective July 1, 2017.

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