Severance Tax Bill Moves Forward

AFA’s bill to modernize the state’s antiquated and confusing severance tax statute took a major step forward yesterday.  Managed by Elaine Beech (D- Chatom), HB313 passed the Alabama House of Representatives on a unanimous, 103-0 vote.  The bill now moves to the Senate where it is anticipated to get its first reading on the next legislative day, April 11, 2017.  The bill is expected to be referred to the Senate Agriculture and Forestry Committee chaired by Senator Tom Whatley (R- Auburn).  A similar bill, the Senate companion sponsored by Senator Greg Albritton (R- Range), was given a favorable report by this committee earlier in the session.

Please take a moment to express your appreciation to all the members of the House of Representatives that supported the legislation yesterday.  The overwhelming support that was demonstrated on passage is testimony to Representative Beech and the respect that she has within both parties in the House.

The purpose of the legislation is to; (1) change everyone to a weight calculation for severance taxes and to do away with the lumber tally and log scale providing clarity to reflect current industry practices, (2) make sure that there is no double taxation, (3) be revenue neutral, (4) clarify that out-of-state manufacturers are not responsible for paying the Forest Products Manufacturers tax, (5) set forth that the collection of severance taxes is at the point of first delivery, and, (6) codify the legislative intent that forest based wood waste used for energy is to not be subject to severance taxation.