SB244 Alabama 2017 Session

Summary

Primary Sponsor

Greg AlbrittonSenator

Republican

Session

Regular Session 2017

Title

Forest Products Severance Tax, provide duel options for taxpayers to calculate, definitions revised, deduction provided, Secs. 9-13-80, 9-13-81, 9-13-82, 9-13-84 to 9-13-88, inclusive, 9-13-93, 9-13-103, 9-13-104, 9-13-108 am'd.

Summary

This bill updates Alabama's forest products severance tax by redefining terms, adding dual tax calculation options, and clarifying exemptions and how tax money is used.

What This Bill Does

It updates definitions for who pays, what counts as forest products, and how severance is measured. It creates two methods to calculate severance tax (per thousand board feet or per ton) for most forest products. It adds a separate forest products manufacturers tax (50% of the severance tax) that may apply to processors and out-of-state manufacturers, while clarifying that timber or byproducts used as fuel can be deducted. It directs tax revenue to a special forestry fund for statewide forestry work and requires quarterly reporting and recordkeeping, with no local taxes on these activities; the changes apply retroactively to open tax periods and become effective a few months after passage.

Who It Affects

• Forest product producers (timber owners/lessees and others who sever timber) would owe the severance tax under the new rules and reporting requirements, but would not be taxed on landowners or cutters themselves in certain cases.
• Processors and manufacturers (including out-of-state processors) who use or process forest products would pay the severance tax via the manufacturers tax, may claim energy-related deductions, and must report to the Department of Revenue; concentration yard owners would collect and remit taxes from sellers.

Key Provisions

• Dual options for severance tax calculation: the tax can be calculated either by 0.50 per 1,000 ft3 or 0.10 per ton for pine logs, and similar per-unit options for hardwood, pulpwood, and other products, with adjustments for whether the product is shipped in-state or out-of-state and whether it is used to produce lumber or other products.
• Definitions updated: clarifies terms such as PRODUCER, MANUFACTURER, PROCESSOR, CONCENTRATION YARD, and FOREST PRODUCTS to align who pays which tax and when.
• Introduction of a forest products manufacturers tax: a separate tax equal to 50% of the severance tax on the severed product, payable by processors/manufacturers (including out-of-state) using Alabama timber, with intent to avoid double taxation on the same product and not to tax landowners or the cutters themselves.
• Energy use deduction: manufacturers may deduct the amount of forest products severance tax and the manufacturers tax attributable to wood residue used as energy in the manufacturing process.
• Revenue use and protection funding: at least 85% of the tax receipts are directed to forest protection; funds go to a Special State Forestry Fund controlled by the State Forester for statewide forestry programs.
• Reporting and recordkeeping: quarterly reports are required from manufacturers/processors and producers, with records kept for three years and subject to review by the Department of Revenue.
• Tax administration: taxes are statewide and not subject to local taxes; penalties and delinquency rules apply for late or nonpayment.
• Retroactivity and effective date: the amendments apply retroactively to open tax periods; the act becomes effective on the first day of the third month after passage.

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

Subjects

Forest Products