Source: http://budget.alabama.gov/revenue_sources_description/
Timestamp: 2020-06-04 07:54:10
Document Index: 788145286

Matched Legal Cases: ['§ 28', '§ 27', '§ 40', '§40', '§ 40', '§ 40', '§ 40', '§ 40', '§ 40', '§ 35', '§ 12', '§ 40', '§ 41', '§ 40', '§40', '§ 40', '§ 32', '§ 40', '§ 40', '§ 40']

Revenue Sources – Description – Executive Budget Office
A general property tax that is levied on real and personal property within the State. For assessment, four separate classes of property have been established and a separate assessment ratio has been assigned to each class. The amount of ad valorem tax payable is determined by applying the applicable tax rate to the assessed value of the property in question. Ad Valorem Taxes are collected by the tax collectors in the various counties of the State, remitted to the State Treasury, and distributed to the Public-School Fund, the Public Welfare Trust Fund, Alabama Veterans’ Assistance Fund and the State General Fund.
Alcoholic Beverage Control Board Revenue
The Code of Alabama 1975, § 28-3A-3 requires that distillers, manufactures, importers, wholesalers and retailers obtain licenses and pay associated filing fees for the privilege of alcoholic beverage distribution within the state. Licenses, fees, liquor, beer, and wine taxes are collected by the ABC Board. These collections, as well as the profits of the ABC Board, are distributed to the State General Fund; Education Trust Fund; the Public Welfare Trust Fund; the Special Mental Health Trust Fund; ABC Board Fund; municipalities; counties; and specific appropriations. The last increase of 5% in the markup for bottle sales of liquor was approved by the ABC Board on June 14, 2017.
Insurance Company Licenses and Premium Tax
A varying license tax, depending on the type of insurance, is levied for the privilege of providing insurance within the State and a varying premium tax is imposed on the amount of premiums written by an insurer. Proceeds from the Insurance Premium Tax are distributed among the State General Fund, the Education Trust Fund, the Special Mental Health Trust Fund and the Insurance Department Fund. Proceeds from licenses and fees are distributed equally to the Insurance Department Fund and the State General Fund, except for application fees for agent licenses and appointments and fees for service representatives’ licenses, which are deposited to the Insurance Department Fund. Code of Alabama 1975, § 27-4-2 and 27-4A-5
An excise tax on the storage, use or other consumption of tangible personal property, machines used in mining, quarrying, compounding, processing, and manufacturing of tangible personal property; automotive vehicles, motorboats, truck trailers, semi-trailers, or house trailers and mobile home set-up materials and supplies; farm machinery or equipment; and the above property when used in the performance of a contract. This tax is paid on items purchased outside Alabama for consumption or use inside the state, unless the property is imported from a state having reciprocal agreement with Alabama, and a tax equal to or greater than the Alabama tax was paid in the other state. If the amount of the tax paid to the other state is less than the Alabama tax, then the difference must be paid to Alabama. The distribution of use tax on automobiles to the General Fund is provided in the Code of Alabama 1975, § 40-23-61(c). Remote use tax is distributed as follows: 75% to the General Fund and 25% to the Education Trust Fund. Any remaining amounts are distributed as follows: 53% to the State General Fund and 47% to the Education Trust Fund as provided in Section 40-23-85.
A privilege and use tax on tobacco is levied on the sale, storage or distribution of cigarettes by wholesalers and retailers and use by consumers. Beginning October 1, 2015, a rate of 33.75 mills was applied per cigarette which equates to $.675 per pack of 20 cigarettes. A majority of the proceeds is distributed to the State General Fund, with the remainder going to the Public Welfare Trust Fund, the Special Mental Health Trust Fund, the State Parks Development Authority, the State Parks Fund, the State Industrial Development Authority, and for the purpose of acquiring and constructing mental health facilities in the State. Code of Alabama 1975, §40-25.
Sales and Use Tax - Automobiles
The Code of Alabama 1975, § 40-23-2(4) establishes a sales tax rate of 2% and the Code of Alabama 1975, § 40-23-61(c) establishes a use tax rate of 2% from the sale of automobiles, truck trailers, semitrailers, house trailers or mobile home set-up materials with 42% of the amount of revenue collected deposited into the State General Fund and 58% deposited into the Education Trust Fund. The Code of Alabama 1975, § 40-23-101 establishes the sales tax rate of 2% and the Code of Alabama 1975, § 40-23- 108 established a use tax rate of 2% on the sale of motorboats. The amount of revenue deposited into the State General Fund from the sale of motorboats is 50% and the other 50% is deposited into the Education Trust Fund.
The Alabama Trust Fund is a perpetual trust which was established in June 1985 with an initial trust capital of $333,583,680 from cash bonus payments and royalties paid to the state from offshore oil and gas leases. The trust capital was augmented from time to time by the deposit of proceeds of any offshore oil and gas payment (including royalty payments) received after August 14, 1984. The lands division of the Department of Conservation and Natural Resources received 4% of the original lease payment of $347,483,000 and receives 1% of any payments made subsequent to August 14, 1984. Beginning in fiscal year 2013, the Alabama Trust Fund receives 32% of the balance of oil and gas capital payments received by the state; however, this amount will be reduced by an amount necessary to make an additional transfer to the Capital Improvement Trust Fund to pay debt service and 33% is distributed pursuant to the annual spending plan. The remaining 35% is transferred to: (1) the County and Municipal Government Capital Improvement Trust Fund (7%); and (2) the Alabama Capital Improvement Trust Fund (28%). Beginning in fiscal year 2013, 33% of the royalties received in the previous fiscal year plus 5% of the average market value of invested assets in the Alabama Trust Fund as of the end of the three fiscal years prior to the beginning of the fiscal year are distributed as follows: (1) 1% (up to a maximum of $5 million) to the Senior Services Trust Fund; (2) 10% to the County Government Capital Improvement Trust Fund; (3) 10% to the Municipal Government Capital Improvement Fund; (4) 10% (up to a maximum of $15 million) to the Forever Wild Land Trust and the remainder to the State General Fund.
A privilege tax is levied upon persons engaged in leasing or renting tangible personal property, including the renting or leasing of automotive vehicles, trucks, semi-trailers, or house trailers and the renting or leasing of linens and garments. The proceeds remaining after payment of administrative and enforcement expenses are deposited into the State General Fund. Code of Alabama 1975, § 40-12-222 and 40-12-227.
This revenue source is not a tax but a provision for the orderly disposition of unclaimed or abandoned property. Every person or entity holding funds or other property, tangible or intangible, presumed abandoned must file a repot with and deliver the property to the Treasurer. This property includes but is not limited to, monies kept on deposit in financial institutions, travelers’ checks, money orders, debit cards, or other payment instruments, safe deposit box contents, monies owed to policyholders by insurance companies, utility deposits, and corporate stocks, securities and dividends held by brokers and fiduciaries. The Treasurer is required to attempt to notify the apparent owners of abandoned property in a cost-effective manner. All abandoned property (other than money and securities) delivered to the State Treasurer is sold to the highest bidder at public sale within three years after its delivery (unless the treasurer determines that the probable cost of sale exceeds the value of the property). Code of Alabama 1975, § 35-12-70 through 35-12- 96.
The Code of Alabama 1975, § 12-19-152, states that a percentage of the fines collected in misdemeanor and felony cases in district and circuit courts are remitted to the State General Fund. The General Fund also receives a percentage of all fines collected by the municipal courts for non-traffic and traffic violations as well as docket fees and bail bond fees. In DUI cases, for the first offense the State General Fund receives $150, for the second offense $400, and for the third offense $900.00.
A privilege tax is levied upon every person or firm that rents or furnishes lodgings or accommodations for a period less than 180 days for a fee. A 5% tax rate is charged for accommodations in the counties comprising the Alabama mountain lakes geographic area: Blount, Cherokee, Colbert, Cullman, DeKalb, Etowah, Franklin, Jackson, Lauderdale, Lawrence, Limestone, Madison, Marion, Marshall, Morgan, and Winston. A 4% tax rate is charged for accommodations in all other Alabama counties. 20% of the 5% levy collected in Alabama mountain lakes area counties, after deduction of cost for collection, is distributed as follows: (1) 50% to the Alabama Mountain Lakes Association for the promotion of tourism and travel and (2) 50% to the respective counties for the promotion of tourism, recreation, and conventions. The balance of the tax collected in mountain lakes area counties, as well as the entire proceeds from the 4% levy collected in all other Alabama counties, is distributed to the State General Fund and to the Bureau of Tourism and Travel in a 75% to 25% ratio, respectively. Code of Alabama 1975, § 40-26-1 and 40-26-20.
Interest on State Deposits
Interest earned by the State Treasurer through the investment of State funds is credited to the State Treasury and, unless otherwise provided for by law, is credited to the State General Fund. Code of Alabama 1975, § 41-14-1 through 41-14A-14.
Oil and Gas Production and Privilege Tax
The Oil and Gas Privilege Tax is an annual privilege tax on all persons engaged in the business of producing or severing oil or gas from the soil or water, or from beneath the soil or water. Well units are taxed at a percentage of the gross value of the oil or gas at the point of production. However, offshore well units producing at a depth greater than 8,000 feet below mean sea level are taxed at a percentage of gross proceeds attributable to the offshore production. The privilege tax rate varies.
After deducting the cost of collection, 90% of the proceeds from the annual tax for offshore production are distributed to the State General Fund and the remaining 10% is distributed to the county in which the oil or gas was severed. Proceeds from onshore production are distributed as follows:
25% to the State General Fund
75% as follows:
(i.) 66.67% to the following:
(a)	25% to the counties in which the oil or gas was severed.
(b)	10% to the municipalities in which the oil or gas was severed.
(c)	Of the first $150,000 remaining, or any part thereof, 50% to the State General Fund, 42.5% to the county in which the oil or gas was severed and 7.5% to the cities therein on a population basis.
(d)	Of the balance, 84% to the State General Fund, 14% to the county in which the oil or gas was severed and 2% to cities therein on a population basis.
(ii.)	16.67% to the State General Fund
(iii.)	16.67% to the county in which the oil or gas was severed.
The first $9.5 million of collections from this tax required to be deposited to the State General Fund during each quarter of the fiscal year is credited to the Alabama State Docks Facilities Contingency Trust Fund. Up to $9.5 million annually may be used by the State Port Authority for operations and/or bond expenses, upon verification by the Director of Finance that such use of these funds is necessary. On the 30th day of each month of each fiscal year, any funds remaining in the Contingency Trust Fund which have not been designated as required by the Port Authority are deposited to the State General Fund. As of the end of FY 2016, the Port Authority had not required the use of any of the Contingency Trust Fund monies, so that all of the $9.5 million has been deposited to the State General Fund each year.
The Oil and Gas Production Tax is a tax on the production of oil or natural gas severed from any well or wells in Alabama. A 2% tax rate is levied on the gross value of the oil or gas at the point of production. The tax on offshore production, produced from depths greater than 8,000 feet below sea level is computed at the rate of 1.66% of the gross proceeds from offshore production. The entire proceeds from this tax are deposited into the State General Fund.
Mortgage Record Tax
A license or privilege tax of $.15 for each $100 of indebtedness, for filing a mortgage, deed of trust, contract of conditional sale, or similar instrument given to secure payment of any debt incurred in connection with the conveyance or transfer of any real or personal property in the State, or any security agreement or financing statement provided for by the Alabama Uniform Commercial Code. After deducting the cost of collections for the county probate judge, the net proceeds are deposited into the State General Fund (two-thirds) and into the county treasuries (one-third). Code of Alabama 1975, § 40- 22-1 through 40-22-12.
A tax authorized in lieu of sales and use taxes otherwise due by or on behalf of Alabama customers who have purchased items from an eligible seller who participates in The Simplified Sellers Use Tax Remittance Program that were shipped or otherwise delivered into Alabama by the eligible seller. An 8% tax rate is applied to the sales price of any tangible personal property sold or delivered into Alabama by an eligible seller participating in the program. After deducting the cost of collection, 50% to State Treasury allocated (1) 75% to the State General Fund and (2) 25% to the Education Trust Fund; and 50% to local governments allocated (1) 40% to each county on a population basis and (2) 60% to each municipality on a population basis. (Prior to January 1, 2019, collections were distributed as follows: (1) 50% to State Treasury, (2) 25% to counties, and (3) 25% to municipalities.) Code of Alabama 1975, §40-23-190 through 40-23-199.
A license tax of 2.2% on each dollar of gross receipts for the preceding year is imposed for operating a public utility (except railroads, express companies, telephone and telegraph companies). After a deduction for costs of collections, 15% of the net receipts are deposited into the State General Fund and 85% into the Special Mental Health Trust Fund. Code of Alabama 1975, § 40-21-51 and 40-21-62.
County probate judges or license commissioners collect fees for four-year driver’s licenses and learner’s permits. License duplicate, reinstatement and examination fees are collected by the Alabama Law Enforcement Agency. Each county retains $1.50 per license issued. The balance is deposited into the State General Fund to be appropriated for public safety use except for $20.75 of the $36.25 license fee for a regular license, nondrivers identification card or learner's license is deposited to the Public Safety Fund for the Alabama Law Enforcement Agency and $.50 is allocated and appropriated to the Alabama Veterans Living Legacy Trust Fund. Examination fees are deposited to the General Fund. There is an exam fee of $5.00 for an original driver’s license, temporary instruction and learner’s permit, and motor driven cycle operator’s license. Code of Alabama 1975, § 32-6-1, 32-6-6.1 and 32-6-21.
Tobacco Tax (Excluding Cigarettes)
A tax on sale, storage or distribution of tobacco or tobacco products by wholesalers and retailers and use by consumers. This tax is paid to the state through the use of stamps by the seller, who is acting as an agent of the state for the collection and payment of the tax to the state. The seller collects the tax from the consumer or user. The tax rates vary for different types of tobacco. After deduction of the cost of collection, the remaining proceeds are deposited into the State General Fund. Code of Alabama 1975, § 40-25-2a, 40-25-29, and 40-25-47.
This is an assessment on persons or firms, corporations, companies, associations, receivers or trustees engaged in certain businesses, vocations or professions. The rate of the tax varies according to the type of business, as outlined in the Code of Alabama 1975, § 40-12-40 through 40-12-180. After deducting the cost of collection, the receipts are distributed to the State General Fund unless there is a corresponding county tax levied, then distribution is 50% to the State General Fund and 50% to the respective counties where such receipts are collected.
Business Privilege Tax (Corporation Tax)
A privilege tax on every corporation, limited liability entity, and disregarded entity doing business in Alabama or registered under the laws of Alabama. The tax is based on the taxpayer’s net worth in Alabama. The tax rate is determined by the taxpayer’s taxable income apportioned and allocated to Alabama, and ranges from $0.25 to $1.75 per $1,000 of net worth. For financial institutions, the tax is based on the financial institution’s total deposits in Alabama and ranges from $0.125 to $0.225 per $1,000 of deposits. After deduction of the amount appropriated to the Department of Revenue as its costs of collection, the balance of the tax is distributed as follows: (1) Each county receives the amount that it received from the franchise tax collections during the fiscal year ending September 30, 1999. This amount is increased by .75% each year beginning in the fiscal year ending September 30, 2000. (2) Each county and each local ad valorem tax recipient agency of funds within each county receives the amount that it received from the domestic corporation assessment of shares tax during the fiscal year ending September 30, 1999. This amount is increased by .75% each year beginning in the fiscal year ending September 30, 2000. (3) The balance is distributed to the State General Fund. Code of Alabama 1975, § 40-14A-22 and 40-14A-26.