Alabama

State of Alabama

Alabama Utility Sales Tax Exemption

Alabama allows an exemption on the furnishing of electricity to a manufacturer or compounder for use in an electrolytic or electrothermal manufacturing or compounding process, natural gas which becomes a component of tangible personal property manufactured or compounded (but not used as fuel or energy), and natural gas used by a manufacturer or compounder to chemically convert raw materials prior to the use of such converted raw materials in an electrolytic or electrothermal manufacturing or compounding process.

§ 40-21-83 & 40-21-103, Code of Alabama.

Alabama Sales Tax Exemption Certificate

An Application for Sales Tax Certificate of Exemption ST: EX-A1 must be first be submitted in Alabama in order for a business to be considered for the Utility Sales Tax Exemption.

Energy Study Requirement

In Alabama, a detailed energy study must be performed to identify the exact percentage of utility that is exempt from sales tax. This includes calculating the annual consumption for each device that is consuming the utility and then distinguishing between production devices and non-production devices.

Our Process
01. Discovery

SmartSave investigates client’s current utility situation, and quickly identifies if the company is eligible to save on its utility sales tax through the exemption.

02. Energy Study

A SmartSave energy specialist performs an in-depth study at the business location to determine the exact proportion of energy use that is exempt from taxation.

03. Request

All necessary information is compiled into a report and submitted to the required utility companies and state agencies. SmartSave works hand-in-hand with these entities to ensure that all reports are accurate and compliant with statute.

04. Certification

Once the exemption request is approved, your company receives a refund on the past 2-4 years of overpaid utility sales tax, and stops paying sales tax on all certified production items, generating significant savings for the business each month moving forward.

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