ALABAMA DEPARTMENT OF REVENUE
SALES, USE & BUSINESS TAX DIVISION
SALES & USE TAX RULE
810-6-3-.36. Liquefied Petroleum Gas.
(1) Liquefied petroleum gas sold to be used for agricultural purposes
is exempt from sales tax.
(2) Liquefied petroleum gas sold to hatcheries for use as fuel for heaters
used to maintain a constant temperature in incubators qualifies for the
exemption outlined in (1) above. This exemption applies to a hatchery whose
sole function is the hatching and raising of poultry even if the hatchery
is not located on a traditional farm.
(3) Liquefied petroleum gas sold for use in the commercial production
of greenhouse and nursery products qualifies for the exemption outlined
in (1) above. (AGO Graddick February 6, 1979) Noncommercial greenhouses
or hothouses when not being operated as part of a farming operation are
not entitled to this exemption.
(4) The ginning of cotton occurs after harvesting is completed and,
since the agricultural aspect ends with harvesting, cotton gins are nonagricultural
processing operations and do not qualify for the exemption outlined in
(1) above. Sales of liquefied petroleum gas to cotton gins located on traditional
farms and operated by the farmer do not qualify for this exemption.
(5) The drying of grain by grain dealers not located on traditional
farms occurs after the harvesting is completed and, since the agricultural
aspect ends with harvesting, such operations are nonagricultural processing
in nature and do not qualify for the exemption outlined in (1) above. (Section
40-23-4(a)(33)) (Readopted through APA effective October 1, 1982, amended
July 7, 1989)
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