Alabama farmers may qualify for an exemption from utility taxes on electricity and natural gas used in poultry houses, commercial greenhouses, pivot irrigation systems and commercial catfish aeration systems. The exemption took effect Sept. 1. 

Applying for Exemption:

Farmers must obtain a Form STE-3 Utility Tax Certificate of Exemption from the Alabama Department of Revenue (ALDOR) and provide a properly completed copy to their electric or natural gas provider.

Step 1: Apply for Form STE-3

Apply to ALDOR for a Utility Tax Certificate of Exemption here. Click register a business/obtain a new tax account number located in the businesses section of the website, or download a PDF of the application here. Applications must be submitted to ALDOR first. Once approved and tax certificate has been received, farmers should take certificate to local utility office.

The application will require basic information about the business, including name, address, federal identification number, type of business, type of utility service and the reason for claiming the exemption.

Step 2: Identify Qualifying Use

Tell ALDOR what qualifying agricultural use is being claimed, such as electricity used in poultry houses, pivot irrigation systems, commercial greenhouse, or commercial aquaculture aeration systems. Identify electricity, natural gas or both, as applicable.

Step 3: Give Certificate to Utility Provider

After ALDOR approves application and issues the STE-3, provide a completed copy to the electric or natural gas provider supplying the qualifying service. The certificate must include the provider’s name and address, the date it is provided, signature and title.

Step 4: Keep Records

Keep a copy of STE-3 and maintain a list of utility providers to which farmer has provided the certificate. 

Note:

The exemption applies only to qualifying utility use. It does not automatically make all electricity or natural gas purchased by a farm tax exempt. If a utility account serves both qualifying and non-qualifying uses, contact utility provider about how the exempt portion should be handled as a separate meter may be required.

For questions, email Preston Roberts at PRoberts@alfafarmers.org.