SB300INTRODUCED
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SB300
DGQWMNN-1
By Senators Sessions, Livingston, Chesteen
RFD: Finance and Taxation General Fund
First Read: 08-Apr-25
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5 DGQWMNN-1 03/12/2025 RA (F)RA 2025-1254
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First Read: 08-Apr-25
SYNOPSIS:
Under existing law certain tangible personal
property, up to a certain market value, is exempt from
payment of the state levied ad valorem tax.
This bill would increase the threshold amount of
the market value of tangible personal property that can
be exempt from the state levied ad valorem tax.
This bill would also make nonsubstantive,
technical revisions to update the existing code
language to current style.
A BILL
TO BE ENTITLED
AN ACT
Relating to exemptions from taxation and licenses; to
amend Section 40-9-1, Code of Alabama 1975; to increase the
market value threshold amount for which tangible personal
property is exempt from the state ad valorem tax; and to make
nonsubstantive, technical revisions to update the existing
code language to current style.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Section 40-9-1, Code of Alabama 1975, is
amended to read as follows:
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amended to read as follows:
"§40-9-1
The following property and persons shall be exempt from
ad valorem taxation and none other:
(1) All bonds of the United States and this state and
all county and municipal bonds issued by counties and
municipalities in this state, all property, real and personal,
of the United States and this state and of county and
municipal corporations in this state; all cemeteries, all
property, real and personal, used exclusively for religious
worship, for schools or for purposes purely charitable;
provided, that property, real or personal, owned by any
educational, religious, or charitable institution, society or
corporation let for rent or hire or for use for business
purposes shall not be exempt from taxation, notwithstanding
that the income from such property shall be used exclusively
for education, religious, or charitable purposes; all
mortgages, together with the notes, debts, and credits secured
thereby on real and personal property situated in this state,
which mortgages have been filed for record and the privilege
tax paid thereon; all security agreements and security
interests under the Uniform Commercial Code, together with the
notes, debts, and credits secured thereby; all money on
deposit in any bank or banking institution and all other
solvent credits; and all warrants issued by county boards of
education and city boards of education for the purpose of
erecting, repairing, furnishing school buildings, or for other
school purposes.
(2) All property, real or personal, used exclusively
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(2) All property, real or personal, used exclusively
for hospital purposes, to the amount of seventy-five thousand
dollars ($75,000), where such hospitals maintain wards for
charity patients or give treatment to such patients; provided,
that the treatment of charity patients constitutes at least 15
percent of the business of such hospitals; provided further,
that such hospital need not be assessed for taxation if the
owner or manager shall file with the county tax assessor
wherein such hospital is located within the time allowed for
assessing the property for taxation a certificate that such
hospital has done 15 percent charity work in the preceding tax
year; and further provided, that such hospital through its
owner or manager shall have until the expiration of the
preceding tax year to class its work and ascertain whether or
not such hospital has done 15 percent of its treatment of
patients as charity work.
(3) The shares of the capital stock of any corporation
owning and operating a hospital, to the extent of seventy-five
thousand dollars ($75,000) in value; provided, that the
corporation maintains wards for charity patients and gives
treatment to such patients, which treatment constitutes at
least 15 percent of the business of the hospital of the
corporation; provided, that the total exemption granted to any
such corporation shall not exceed seventy-five thousand
dollars ($75,000), taking into consideration its real and
personal property and the value of its shares of capital
stock.
(4) All property owned by the American Legion or by
Veterans of Foreign Wars or by the Disabled American Veterans,
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Veterans of Foreign Wars or by the Disabled American Veterans,
or any post thereof; provided, that such property is used and
occupied exclusively by the organization.
(5) All the property of literary and scientific
institutions and literary societies, when employed or used in
the regular business of the institutions.
(6) The libraries of ministers of the gospel, all
libraries other than those of a professional character and all
religious books kept for sale by ministers of the gospel and
colporteurs.
(7) The property of individuals who are deaf, hard of
hearing, or insane to the extent of three thousand dollars
($3,000) and the property of blind individuals to the extent
of twelve thousand dollars ($12,000).
(8) All family portraits.
(9) All cotton, livestock, or agricultural products
that have been raised or grown in the State of Alabama and
remain in the hands of the producer thereof, or his or her
landlord, or in the hands of a cooperative association for all
time, and for a period of one year in the hands of the
purchaser or the manufacturer.
(10) All cotton, wherever grown, stored in licensed
warehouses in the State of Alabama for a period not exceeding
12 months.
(11) Provisions and supplies on hand for the current
year for the use of the family and the making of crops; all
wearing apparel; farming tools; tools and implements of
mechanics to the value of two hundred dollars ($200); all
livestock, including mules, studs, jacks and jennets, cattle,
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livestock, including mules, studs, jacks and jennets, cattle,
horses, cows, calves, hogs, sheep, and goats; and household
and kitchen furniture and one sewing machine.
(12) No license or taxation of any character, except
franchise taxes provided by Section 229 of the Constitution of
the State of Alabama of 2022, shall be collected or required
to be paid to the state or any county or municipality therein
by any state or county fair, agricultural association, or
stock, kennel, or poultry show. Athletic stadiums owned and
controlled by universities, schools, or colleges and which are
used exclusively for the purpose of promoting intercollegiate
or interschool athletics; provided, that the revenue received
from athletic stadiums, when admission is charged, shall be
used for the benefit of athletic associations of such
universities, colleges, or schools. Nothing contained in this
subdivision shall be construed to prohibit any municipality,
county, or state from imposing any license tax upon or for the
privilege of engaging in the business of supplying services
for hire or reward or selling commodities other than
livestock, farm products, or farm implements or conducting or
operating devices or games of skill or amusements or other
games or devices, or conducting or operating shows, displays
or exhibits other than shows, displays or exhibits of
agricultural implements, farm products, livestock, and
athletic prowess.
(13) All material, including , without limitation , coke,
to be compounded or further manufactured, when stocked at any
plant or furnace for manufacturing purposes in Alabama.
(14) All articles manufactured in Alabama, including
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(14) All articles manufactured in Alabama, including
pig iron, in the hands of the producer or manufacturer
thereof, for 12 months after its production or manufacture.
(15) All property, both real and personal, owned by any
unit or organization of the Alabama National Guard officially
recognized as such by the federal government and organized and
maintained by the state, and all property owned by shares and
used exclusively by and kept exclusively in the possession of
any such unit or organization of the Alabama National Guard,
the annual rent or hire of which is not in excess of the
annual state, county, and municipal taxes on the property
shall be exempt from taxation by the state, and the county and
municipality in which the same may be situated.
(16) All poultry.
(17) The property of all incompetent veterans to the
value of three thousand dollars ($3,000).
(18) The following items of personal property when
owned by individuals for personal use in the home or usually
kept at the home of the owner and not carried as stocks of
merchandise, namely: Libraries; phonographs; pianos and other
musical instruments; paintings; precious stones, jewelry,
plate silverware, ornaments, and articles of taste; watches
and clocks; wagons, buggies, bicycles, guns, pistols, canes,
golf sticks, golf bags, and sporting goods; money hoarded;
radios; mechanical and electrical refrigerators; and
electrical appliances.
(19) All property owned by the Benevolent and
Protective Order of Elks, Fraternal Order of Police, Fraternal
Order of Eagles, or Loyal Order of Moose, or lodge thereof;
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Order of Eagles, or Loyal Order of Moose, or lodge thereof;
provided, that such property is used and occupied exclusively
by such organization.
(20) All devices, facilities, or structures, and all
identifiable components thereof or materials for use therein,
acquired or constructed primarily for the control, reduction,
or elimination of air or water pollution.
(21) Tobacco leaf stored in hogsheads.
(22) All farm tractors, as that term is defined in
Section 32-1-1.1; and all farming implements, as that term is
used in subdivision (b)(5) of Section 40-11-1(b)(5), when used
exclusively in connection with agricultural property as
defined in subdivision (b)(1) of Section 40-8-1(b)(1).
(23) All grain bins used exclusively for the purpose of
storing, holding, drying, preserving, or otherwise preparing a
grain, as defined in Section 2-31-1, for market. For purposes
of this chapter, "grain bin" means a structure and its
component parts.
(24) All stocks of goods, wares, and merchandise
described in subdivision (b)(4) of Section 40-11-1(b)(4).
(25) All aircraft, replacement parts, components,
systems, supplies, and sundries affixed or used on the
aircraft, and ground support equipment and vehicles used by or
for the aircraft, when used by a certificated or licensed air
carrier with a hub operation within this state, for use in
conducting intrastate, interstate, or foreign commerce for
transporting people or property by air. For the purpose of
this subdivision, the words "hub operation" within this state
shall be construed to have all of the following criteria:
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shall be construed to have all of the following criteria:
a. There originates from the location 15 or more flight
departures and five or more different first-stop destinations
five days per week for six or more months during the calendar
year.
b. Passengers or property or both are regularly
exchanged at the location between flights of the same or a
different certificated or licensed air carrier.
(26) All property described in Title 12 U.S.C. § 1701q,
commonly known as HUD 202 property, is hereby exempt from any
and all ad valorem taxes.
(27) All vessels and equipment thereon, used
predominantly in the business of commercial fishing, as
defined in Section 40-23-1, by the owners thereof.
(28)a. The tangible personal property owned by a
business and reported in accordance with Article 1 of Chapter
7 to the extent of forty one hundred thousand dollars
($40,000)($100,000) in market value is exempt from the state
levied ad valorem tax.
b. Any county or municipality, by resolution or
ordinance, may adopt the exemption provided in paragraph a.
for county or municipal ad valorem taxes levied on tangible
personal property. The ordinance or resolution must be adopted
at least 90 days prior to October 1, 2023, or 90 days prior to
October 1 of the electing year."
Section 2. This act shall become effective on October
1, 2025.
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