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Coal Severance Tax

Tax Types >
  • Coal Severance Tax

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Sections 40-13-1 through 40-13-10, 40-13-30 through 40-13-36, 40-13-80 through 40-13-83, Code of Alabama 1975.

Severing coal within state.

$.135 per ton; levied under Section 40-13-2.

$.20 per ton; levied under Section 40-13-31.

*$.025 per ton levied on underground mining. 

*$.05 per ton levied on surface mining. 

*Levied on a maximum of 2 million tons.

Expired on August 1, 2019.

Sections 40-13-5 and 40-13-6.

The $.135 per ton levy is first obligated to the State Docks Bulk Handling Facility Trust Fund for the servicing of bonds issued for dock construction.

Monies remaining after payment of servicing the State Dock’s bonds, or any anticipated deficiencies in operating the docks shall be distributed as follows:

$300,000 to the Alabama Mining Academy.

60% transferred by ALDOR to the general fund of the county of severance based on the ratio of the $.135 per ton coal severance tax collections from within the county to the total coal severance tax collections, except those sent to the Walker County Economic and Industrial Development Authority, which shall not be less than $100,000. Provided, however, the distribution to the Jefferson County General Fund shall be $500,000.

Beginning with fiscal year 2021-2022 and every year thereafter, the additional severance tax equal to the amount that is 10% or greater than the three-year average for fiscal years 2017-2018, 2018-2019, 2019-2020 will be distributed to the initial county from which the coal was severed, except if the coal is loaded for shipping in another county. If the coal is loaded for shipping in another county, the initial county from where the coal was severed will receive 75% of the additional severance
tax distribution and the remaining 25% of the additional severance tax distribution will be disbursed to the county where the coal was initially loaded for shipping.

In addition:

  • $100,000 to Community Development Foundation, Inc.
  • $50,000 to Marion County Community Development Association, Inc.
  • $50,000 to West Alabama Development Association of Fayette County
  • $100,000 to West Alabama Economic Development Association
  • $100,000 to Winston County General Fund
  • Remainder to the Surface Mining Commission

 

Section 40-13-32, Code of Alabama 1975.

The $.20 per ton levy is distributed to the counties and municipalities where the coal is severed.

Section 40-13-82, Code of Alabama 1975.

Collections from the additional tax levies, which expired on August 1, 2019, were distributed to the Surface Mining Commission.