If a farmer has incorrectly paid taxes on some farm inputs, a refund might be available from the Alabama Department of Revenue (ADOR). 

State regulations exempt several agricultural inputs like fertilizer and seed from sales and use tax, while certain energy use is exempt from utility tax.

Obtaining a refund requires following specific procedures.

Gather documentation. Collect all utility bills or receipts where taxes were charged on input items believed to be tax exempt. Ensure detailed records are kept. This includes distinguishing heating energy from other uses and demonstrating inputs were used for an agricultural purpose.

Complete the refund petition. Fill out the “Petition for Refund of Taxes” form at revenue.alabama.gov. This form requires information about the taxpayer, the amount of tax paid and the reason for the refund request. If the tax was paid to a seller, use Form ST-6. If the tax was paid directly to the state, use Form ST-5.

Submit the petition. Send the completed form, along with supporting documents, to the ADOR. Keep copies of all submissions for personal records.

In this farm economy, every dollar matters. By proactively managing utility expenses and by understanding the refund process, a farmer can ensure compliance with tax regulations and potentially recover funds rightfully owed to the operation. 

Compiled by John Allen Nichols, Alabama Farmers Federation Agriculture Counsel

The material presented above is for educational purposes only. The content does not constitute legal advice. If readers require specific advice or services, a lawyer or other professional should be consulted.