It may be the dead of summer, but it’s never too early for poultry producers to prepare for the chill of winter when heating houses can drive utility bills through the roof.

What farmers may not realize is Alabama law offers a tax exemption on natural gas and electricity used specifically for heating poultry houses — but only if the farmer can prove how much energy goes to heating versus other uses.

Under Alabama Code 40-21-83, the state excludes from taxation any revenue derived from furnishing natural gas or electricity “for use or consumption as fuel or energy in and for the heating of poultry houses.” That means every kilowatt or cubic foot of gas used to run heaters could be tax-free. Only the portion used for heating qualifies — not the electricity running lights, feeders, fans or water systems.

This is where separate metering can work to a farmer’s advantage. By installing a dedicated utility meter or sub-meter for heating systems, a farmer can document the exact amount of energy used for heat. This provides the records needed to claim the tax exemption and lower operational overhead.

In an industry where margins are tight and energy costs keep climbing, it’s worth talking to an electrician and utility provider about metering options. A little up-front investment in proper metering could pay off every month when the utility bill comes due.

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.