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Severance Taxes Administered & Tax Rates

  • Severance Taxes Administered & Tax Rates

The Severance Tax Section administers several tax types relating to natural resources in Alabama.  Taxes are filed through My Alabama Taxes.

Coal Severance Tax

Coal Severance Tax Rates

ProductPrivilege TaxOther Tax
Coal$0.335 per tonAdditional tax of $0.025 for underground mining or $0.05 for surface mining

State Administered Local Severance Taxes

LocalityTax TypeRateAuthority
Coosa CountySand, Clay, Silt, Loam, Dirt, Gravel, Rock, Sand-gravel, Sand-Clay25¢ per ton99-544
Coosa CountyGraphite$5 per ton2019-231
Jackson CountyCoal20¢ per ton79-349, 97-220
Marshall CountyCoal20¢ per ton81-482

Forest Products

Forest Products Tax Rates

Kind of ProductsRate of Taxation
Pine Logs received by a concentration yard, manufacturer, or processor$.10/ton
Pine Logs exported out-of-state$.10/ton
Logs-All Other Species received by a concentration yard, manufacturer, or processor$.065/ton
Logs-All Other Species exported out-of-state$.065/ton
Pulpwood received by a concentration yard, manufacturer, or processor$.10/ton
Pulpwood exported out-of-state$.10/ton
Stumpwood received by a manufacturer$.125/ton
Stumpwood exported out-of-state$.125/ton
Poles/Pilings received by a concentration yard or manufacturer$.205/ton
Poles/Pilings exported out-of-state$.205/ton
Inwoods Pulpwood Chips received by a concentration yard or manufacturer$.10/ton
Inwoods Pulpwood Chips exported out-of-state$.10/ton

There is also a privilege tax of 50% of the severance tax rates above, against manufacturers using forest products in the manufacturing process.  This tax applies to manufacturers located only within this state.

Oil & Gas

Due Date

Oil and gas severance tax payments and returns are due on or before the 15th day of the second month following the month of production.

Oil & Gas Production Tax Title 9, Chapter 17 Sections 25-35

Tax RateDescription
1%Production from wells permitted from 7/01/96 thru 6/30/2002 for five years from first production.
1.66%Gross proceeds from offshore production from depths greater than 8,000 feet below mean sea level.
2%All other production.

Oil & Gas Reduced Privilege Tax Title 40, Chapter 20 Article 1, Section 2(a)(8)

Tax RateDescription
2%Wells normally qualifying for the 4% privilege tax rate and permitted from 7/01/96 thru 7/01/2002 for five years from first production
3%Wells normally qualifying for the 6% privilege tax rate and permitted from 7/01/96 thru 7/01/2002 for five years from first production

Oil & Gas Privilege Tax Title 40, Chapter 20 Article 1 & 1a, Sections 2 & 21, Respectively

Tax RateDescription
4%
  • Offshore wells producing 200 MCF or 25 BBLs or less per day at depths less than 8,000 feet.
  • Oil wells producing 25 BBLs or less per day.
  • Gas wells producing 200 MCF or less per day.
  • Incremental production from qualified enhanced recovery projects and supplemental enhanced recovery projects approved by the State Oil and Gas Board.
3.65%Gross proceeds from offshore production from depths greater than 8,000 feet below mean sea level.
6%
  • Offshore wells producing greater than 200 MCF or 25 BBls per day at depths less than 8,000 feet.
  • Wells permitted 7/01/88 or later.
8%All other taxable production.

Uniform Severance Tax (Statewide except Coosa, Geneva, Lamar, Lee, and Wilcox)

  • Uniform Severance Tax is administered according to Title 40, Chapter 13, Sections 50 and 61.
  • The tax is due the 20th day of the month next succeeding the month of sale or delivery whichever occurs first.
  • Natural minerals are taxed at $.10 per ton.
  • All natural minerals, including sand, gravel, sandstone, granite, shale, clay, dolomite, limestone, bauxite, salt, silicon and any other mineral listed as such by the Geological Survey of Alabama that is not specifically excluded from taxation.

Penalties & Interest

  • Failure to timely pay tax – 10% of tax.
  • Failure to timely file return – Greater of 10% of tax or $50.00.
  • Interest on underpayments or delinquencies is calculated at the current applicable rate from the day the tax is due to the date the tax is paid.

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