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Alabama State Manufacturing Exemptions

Sales & Use Tax Exemptions

Pollution Control Equipment. Equipment or materials purchased primarily for the control, reduction, or elimination of air or water pollution are exempt from sales and use tax under Alabama law (Sections 40-23-4(a)(16) and 40-23-62-(18)).

Raw Materials. Tangible personal property used by manufacturers or compounders as an ingredient or component part of their manufacturing or compounded product are specifically exempt from sales and use tax under Alabama law (Sections 40-23-1(a)(9)b and 40-23-60(4)b).

Utility Gross Receipts Tax Exclusion. Alabama law (Sections 40-21-83 and 40-21-103) allows exclusions from the utility gross receipts tax and the utility service use tax if electricity or natural gas is used in an electrolytic or electro-thermal manufacturing or compounding process.

Other exemptions for sales and use taxes are described in the Sales & Use Tax Laws.

Sales Tax Enterprise Zone Exemption

This exemption is offered to help encourage economic growth in areas considered to have depressed economies (Section 41-23-30, Code of Alabama 1975). To qualify for this incentive, a business must meet detailed requirements concerning site location and employee qualifications

Exemption Certificate Link


SMART TAX USA specialized comprehensive analysis can determine how these new exemp- tions; credits and incentives directly affect your business. This will result in a reduction of current and future tax liabilities providing significant tax savings for your business! Most importantly our success rate is 90% of the companies we work with will have a

substantial tax saving benefit. Our initial review will determine the validity of your refund status and as always, the consultation is absolutely free. Our work is performed on a contingency fee basis, “if we do not perform no fee is due!”