§40-23-62. Exemptions.

The storage, use, or other consumption in this state of the following tangible personal property is hereby specifically exempted from the tax imposed by this article:

(1) Property, on which the sales tax imposed by the provisions of Article 1 of this chapter is paid by the consumer to a person licensed under the provisions of Article 1 of this chapter.

(2) Property, the storage, use, or other consumption of which this state is prohibited from taxing under the Constitution or laws of the United States of America or under the constitution of this state.

(3) Tangible personal property, not to be used in the performance of a contract, brought into this state by a nonresident thereof for his own storage, use, or consumption while temporarily within this state.

(4) Lubricating oil and gasoline as defined in Sections 40-17-30 and 40-17-170, the storage, use, or other consumption of which is otherwise taxed.

(5) All fertilizer; provided, that the word "fertilizer" as used in this article shall not be construed to include cottonseed meal when not in combination with other material.

(6) All seeds for planting purposes and baby chicks and poults; provided, that nothing herein shall be construed to exempt plants, seedlings, nursery stock or floral products.

(7) Insecticides and fungicides and feed for livestock and poultry, but not including prepared foods for dogs and cats.

(8) The use, storage, or consumption of all livestock by whomsoever sold; and also the gross proceeds of poultry and other products of the farm, dairy, grove or garden, when in the original state of production or condition of preparation for sale, when such sale or sales are made by the producer or members of his immediate family or for him by those employed by him to assist in the production thereof. Nothing herein shall be construed to exempt or exclude from the measure or computation of the tax levied, assessed, or payable hereunder, the gross proceeds of sales of poultry or poultry products when not products of the farm.

(9) Cottonseed meal exchanged for cottonseed at or by cotton gins.

(10) Transportation, gas, water, or electricity, of the kinds and natures, the rates and charges for which when sold by public utilities, are customarily fixed and determined by the Public Service Commission of Alabama or like regulatory bodies.

(11) Coal or coke to be stored, used, or consumed by manufacturers, electric power companies and transportation companies for use or consumption in the production of by-products or the generation of heat or power used:

a. In manufacturing tangible personal property for sale;

b. For the generation of electric power or energy for use in manufacturing tangible personal property for sale or for resale; or

c. For the generation of motive power for transportation.

(12) Fuel and supplies for use or consumption aboard ships, vessels, towing vessels, or barges, or drilling ships, rigs or barges, or seismic or geophysical vessels, or other watercraft (herein for purposes of this exemption being referred to as vessels) engaged in foreign or international commerce or in interstate commerce; provided, that nothing in this article shall be construed to exempt or exclude from the measure of the tax herein levied the gross proceeds of sale or sales of material and supplies to any person for use in fulfilling a contract for the painting, repair or reconditioning of vessels, barges, ships, other watercraft and commercial fishing vessels of over five tons load displacement as registered with the U.S. Coast Guard and licensed by the State of Alabama Department of Conservation and Natural Resources. For purposes of this subdivision, it shall be presumed that vessels engaged in the transportation of cargo between ports in the State of Alabama and ports in foreign countries or possessions or territories of the United States or between ports in the State of Alabama and ports in other states are engaged in foreign or international commerce or interstate commerce, as the case may be. For the purposes of this subdivision, the engaging in foreign or international commerce or interstate commerce shall not require that the vessel involved deliver cargo to or receive cargo from a port in the State of Alabama. For purposes of this subdivision, vessels carrying passengers for hire, and no cargo, between ports in the State of Alabama and ports in foreign countries or possessions or territories of the United States or between ports in the State of Alabama and ports in other states shall be engaged in foreign or international commerce or interstate commerce, as the case may be, if, and only if, both of the following conditions are met: (i) The vessel in question is a vessel of at least 100 gross tons; and (ii) the vessel in question has an unexpired certificate of inspection issued by the United States Coast Guard or by the proper authority of a foreign country for a foreign vessel, which certificate is recognized as acceptable under the laws of the United States. Vessels which are engaged in foreign or international commerce or interstate commerce shall be deemed for the purposes of this subdivision to remain in such commerce while awaiting or under repair in a port of the State of Alabama if such vessel returns after such repairs are completed to engaging in foreign or international commerce or interstate commerce. For purposes of this subdivision, seismic or geophysical vessels which are engaged either in seismic or geophysical tests or evaluations exclusively in offshore federal waters or in traveling to or from conducting such tests or evaluations shall be deemed to be engaged in international or foreign commerce. For purposes of this subdivision, proof that fuel and supplies purchased are for use or consumption aboard vessels engaged in foreign or international commerce or in interstate commerce may be accomplished by the merchant or seller securing the duly signed certificate of the vessel owner, operator or captain or their respective agent on a form prescribed by the department that the fuel and supplies purchased are for use or consumption aboard vessels engaged in foreign or international commerce or in interstate commerce. Any person filing a false certificate shall be guilty of a misdemeanor and upon conviction shall be fined not less than $25 nor more than $500 for each offense. Each false certificate filed shall constitute a separate offense. Any person filing a false certificate shall be liable to the department for all taxes imposed by this division upon the merchant or seller, together with any interest or penalties thereon, by reason of the sale or sales of fuel and supplies applicable to such false certificate. If a merchant or seller of fuel and supplies secures the certificate herein mentioned, properly completed, such merchant or seller shall not be liable for the taxes imposed by this division, if such merchant or seller had no knowledge that such certificate was false when it was filed with such merchant or seller.

(13) Property stored, used, or consumed by the State of Alabama, by the counties within the state or by incorporated municipalities of the State of Alabama.

(14) The use, storage, or consumption of materials, equipment and machinery which, at any time, enter into and become a component part of ships, vessels, towing vessels or barges, or drilling ships, rigs or barges, or seismic or geophysical vessels, other watercraft and commercial fishing vessels of over five tons load displacement as registered with the U.S. Coast Guard and licensed by the Department of Conservation and Natural Resources. Additionally, the use, storage, or consumption of lifeboats, personal flotation devices, ring life buoys, survival craft equipment, distress signals, EPIRB's, fire extinguishers, injury placards, waste management plans and logs, marine sanitation devices, navigation rulebooks, navigation lights, sound signals, navigation day shapes, oil placard cards, garbage placards, FCC SSL, stability instructions, first aid equipment, compasses, anchor and radar reflectors, general alarm systems, bilge pumps, piping, and discharge and electronic position fixing devices on the aforementioned watercraft.

(15) The use, storage, or consumption of fuel oil purchased as fuel for kilns used in manufacturing establishments.

(16) Tangible personal property stored, used, or consumed by county and city school boards within the State of Alabama, independent school boards within the State of Alabama, all educational institutions and agencies of the State of Alabama, the counties within the state or any incorporated municipality of the State of Alabama, and private educational institutions operating within the State of Alabama offering conventional and traditional courses of study, such as those offered by public schools, colleges, or universities within the State of Alabama; but not including nurseries, day care centers, and home schools.

(17) The storage, use, or consumption of railroad cars, vessels, and barges and commercial fishing vessels of over five tons load displacement as registered with the U.S. Coast Guard and licensed by the State of Alabama Department of Conservation and Natural Resources when purchased from the manufacturers or builders thereof.

(18) The storage, use, or consumption of all devices or facilities, and all identifiable components thereof or materials for use therein, used or placed in operation primarily for the control, reduction or elimination of air or water pollution, and the storage, use, or consumption of all identifiable components of or materials used or intended for use in structures built primarily for the control, reduction or elimination of air or water pollution.

(19) When dealers or distributors use parts taken from stocks owned by them in making repairs without charge for such parts to the owner of the property required pursuant to warranty agreements entered into by manufacturers, such use shall not constitute taxable sales to the manufacturers, distributors or to the dealers, under this article, or under any county use tax law.

(20) The storage, use, or other consumption in this state of religious magazines and publications. For the purpose of this subdivision the words "religious magazines and publications" shall be construed to mean printed or illustrated lessons, notes and explanations distributed by churches or other religious organizations free of charge to pupils or students in Sunday schools, Bible classes or other educational facilities established and maintained by churches or similar religious organizations in this state.

(21) The storage, use, or other consumption of wrapping paper and other wrapping materials when used in preparing poultry or poultry products for delivery, shipment or sale by the producer, processor, packer, or seller of such poultry or poultry products including pallets used in shipping poultry and egg products, paper or other materials used for lining boxes or other containers in which poultry or poultry products are packed together with any other materials placed in such containers for the delivery, shipment or sale of poultry or poultry products.

(22) The storage, use, or other consumption of all antibiotics, hormones and hormone preparations, drugs, medicines or medications, vitamins, minerals, or other nutrients and all other feed ingredients including concentrates, supplements and other feed ingredients when such substances are used as ingredients in mixing and preparing feed for livestock and poultry. Such exemption herein granted shall be in addition to exemptions now provided by law for feed for livestock and poultry, but not including prepared foods for dogs and cats.

(23) The use of seedlings, plants, shoots, and slips which are to be used for planting vegetable gardens or truck farms. Nothing herein shall be construed to exempt, or exclude from the computation of the tax levied, assessed, or payable, the use of plants, seedlings, shoots, slips, nursery stock and floral products except as hereinabove exempted.

(24) Fabricated steel tube sections, when produced and fabricated in this state by any person, firm, or corporation, for any vehicular tunnel for highway vehicular traffic, when sold by the manufacturer or fabricator thereof, and also steel which enters into and becomes a component part of such fabricated steel tube sections of said tunnel, shall be exempted from the provisions of this article and from the computation of the amount of the tax levied, assessed or payable under this article.

(25) The storage, use, or other consumption of herbicides for agricultural uses by whomsoever sold. The term "herbicides" as used in this subdivision means any substance or mixture of substances intended to prevent, destroy, repel, or retard the growth of weeds or plants. It shall include preemergence herbicides, postemergence herbicides, lay-by herbicides, pasture herbicides, defoliant herbicides, and desiccant herbicides.

(26) The Alabama Chapter of the Cystic Fibrosis Research Foundation, and the Jefferson Tuberculosis Sanatorium and any of their departments or agencies, heretofore or hereafter organized and existing in good faith in the State of Alabama for purposes other than for pecuniary gain and not for individual profit, shall be exempted from the payment of the state use tax levied under this article.

(27) Fuel for use or consumption aboard commercial fishing vessels are hereby exempt from the payment of the state use tax levied under this article, or levied under any county or municipal use tax law.

The words commercial fishing vessels shall mean vessels whose masters and owners are regularly and exclusively engaged in fishing as their means of livelihood.

(28) The storage, use, or withdrawal of sawdust, wood shavings, wood chips, and other like materials purchased for use as chicken litter by poultry producers and poultry processors shall be exempt under this article.

(29) The storage, use, or other consumption of all antibiotics, hormones and hormone preparations, drugs, medicines and other medications including serums and vaccines, vitamins, minerals or other nutrients for use in the production and growing of fish, livestock, and poultry are hereby specifically exempted from the payment of the state use tax levied by this article. Such exemption as herein granted shall be in addition to the exemptions now provided by law for feed for fish, livestock, and poultry, and in addition to the exemptions now provided by law for the above-enumerated substances and products when mixed and used as ingredients in fish, livestock and poultry feeds.

(30) All medicines prescribed by physicians for persons who are 65 years of age or older, and when said prescriptions are filled by licensed pharmacists, shall be exempted from the operation of the state use tax law levied by this article, or by any county or municipal use tax law. The exemptions provided in this subdivision shall not apply to any medicine purchased in any manner other than as is herein provided.

For the purposes of this subdivision, proof of age may be accomplished by filing with the dispensing pharmacist any one or more of the following documents:

a. The name and claim number as shown on a "Medicare" card issued by the United States Social Security Administration.

b. A certificate executed by any adult person having knowledge of the fact that the person for whom the medicine was prescribed is not less than 65 years of age.

c. An affidavit executed by any adult person having knowledge of the fact that the person for whom the medicine was prescribed is not less than 65 years of age.

For the purposes of this subdivision any person filing a false proof of age shall be guilty of a misdemeanor and upon conviction thereof shall be punished by a fine of $100.

(31) All diesel fuel used for off-highway agricultural purposes.

(32) The storage, use, or other consumption of any aircraft and replacement parts, components, systems, supplies and sundries affixed or used on said aircraft and ground support equipment and vehicles used by or for the aircraft 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:

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; and

b. Passengers and/or property are regularly exchanged at the location between flights of the same or a different certificated or licensed air carrier.

(33) The storage, use, or other consumption of any aviation jet fuel used by an aircraft operated by a certificated or licensed air carrier that purchases jet fuel for use in scheduled all-cargo operations being conducted on international flights or in international commerce. For purposes of this subdivision, the following words or terms shall be defined and interpreted as follows:

a. Air Carrier. Any person, firm, corporation, or entity undertaking by any means, directly or indirectly, to provide air transportation.

b. All-Cargo Operations. Any flight conducted by an air carrier for compensation or hire other than a passenger carrying flight, except passengers as specified in 14 C.F.R. §121.583(a) or 14 C.F.R. §135.85, as amended.

c. International Commerce. Any air carrier engaged in all-cargo operations transporting goods for compensation or hire on international flights.

d. International Flights. Any air carrier conducting scheduled all-cargo operations between any point within the 50 states of the United States and the District of Columbia and any point outside the 50 states of the United States and the District of Columbia, including any interim stops within the United States so long as the ultimate origin or destination of the aircraft is outside the United States and the District of Columbia.

(34) The storage, use, or other consumption of hot or cold food and beverage products 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:

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; and

b. Passengers and/or property are regularly exchanged at the location between flights of the same or a different certificated or licensed air carrier.

(35) The storage, use, or other consumption of the following:

a. Drill pipe, casing, tubing, and other pipe used for the exploration for or production of oil, gas, sulphur, or other minerals in offshore federal waters.

b. Tangible personal property exclusively used for the exploration for or production of oil, gas, sulphur, or other minerals in offshore federal waters.

c. Fuel and supplies for use or consumption aboard boats, ships, aircraft, and towing vessels when used exclusively in transporting persons or property between a point in Alabama and a point or points in offshore federal waters for the exploration for or production of oil, gas, sulphur, or other minerals in offshore federal waters.

d. Drilling equipment that is used for the exploration for or production of oil, gas, sulphur, or other minerals, that is built for exclusive use outside this state and that is, on completion, removed forthwith from this state.

e. All domestically mined or produced coal, coke, and coke by-products used in cogeneration plants in Alabama.

The delivery of items exempted by this subdivision to the purchaser or lessee in this state does not disqualify the purchaser or lessee from the exemption if the property is removed from the state by any means, including by the use of the purchaser's or lessee's own facilities.

The shipment to a place in this state of equipment exempted by this subdivision for further assembly or fabrication does not disqualify the purchaser or lessee from the exemption if on completion of the further assembly or fabrication the equipment is removed forthwith from this state. This subdivision applies to a sale that may occur when the equipment exempted is further assembled or fabricated if on completion the equipment is removed forthwith from this state.

(36) The storage or use of metal, other than gold or silver, when such metal is held by an investment trust the shares or other units in the trust's net assets of which have been issued in exchange for such metal and are publicly traded, including metal stored in warehouses located in this state. For purposes of this subdivision, the term metals includes, but is not limited to, copper, aluminum, nickel, zinc, tin, lead, and other similar metals typically used in commercial and industrial applications.

(37) For the period commencing October 1, 2012, and ending May 30, 2022, unless extended by joint resolution, all parts, components, and systems that become a part of a fixed or rotary wing military aircraft or certified transport category aircraft which undergoes conversion, reconfiguration, or general maintenance so long as the address of the aircraft for FAA registration is not in the state; provided, however, that this exemption shall not apply to a local use tax unless previously exempted by local law or approved by resolution of the local governing body.

(38) Lunches sold not for profit and within school buildings to pupils of kindergarten, grammar, and high schools, either public or private.

(Acts 1939, No. 67, p. 96; Acts 1939, No. 127, p. 170; Acts 1939, No. 155, p. 228; Code 1940, T. 51, §789; Acts 1943, No. 475, p. 439; Acts 1947, No. 304, p. 158; Acts 1949, No. 210, p. 300; Acts 1959, 2nd Ex. Sess., No. 99, p. 295, §1; Acts 1961, No. 743, p. 1060; Acts 1961, No. 818, p. 1205; Acts 1963, No. 423, p. 930; Acts 1963, No. 571, p. 1193; Acts 1965, 1st Ex. Sess., No. 227, p. 307; Acts 1965, 1st Ex. Sess., No. 245, p. 361; Acts 1965, No. 375, p. 511; Acts 1965, 2nd Ex. Sess., No. 57, p. 83; Acts 1965, 2nd Ex. Sess., No. 123, p. 171; Acts 1966, Ex. Sess., No. 419, p. 564; Acts 1969, No. 1141, p. 2134; Acts 1970, Ex. Sess., No. 16, p. 2616; Acts 1970, Ex. Sess., No. 18, p. 2617; Acts 1971, 3rd Ex. Sess., No. 176, p. 4435, §§1-3; Acts 1973, No. 1171, p. 1976; Acts 1976, No. 505, p. 632; Acts 1983, No. 83-576, p. 895, §2; Acts 1986, No. 86-214, p. 282, §8; Acts 1987, No. 87-742, p. 1439, §1; Acts 1991, No. 91-546, p. 988, §1; Acts 1996, No. 96-544, p. 762, §1; Acts 1997, No. 97-301, p. 522, §1; Act 2001-975, 3rd Sp. Sess., p. 908, §6; Act 2009-144, p. 268, §12; Act 2010-514, p. 848, §1; Act 2012-395, p. 1056, §1; Act 2013-196, p. 376, §2; Act 2013-200, p. 391, §1; Act 2014-325, §1.)