The Alabama House of Representatives passed legislation on the final day of the session to exempt certain agricultural operations from utility taxes. This move is expected to provide meaningful cost savings for producers across the state.
SB 159, sponsored by Jack Williams (R-Wilmer), passed unanimously, with a companion bill carried in the House by Danny Crawford (R-Athens). The legislation amends Alabama’s utility gross receipts tax and utility service tax statutes to exclude natural gas and electricity consumed as fuel or energy in commercial greenhouses, pivot irrigation systems and poultry houses. An amendment also extended the exemption to catfish production.
The bill was later signed into law by Kay Ivey as Act No. 2026-595 and will go into effect Sept. 1, 2026. The exemption is set to sunset on Aug. 31, 2029.
Alabama Farmers Federation External Affairs Department Director Brian Hardin called the legislation a crucial win for farmers.
“With increased input costs and consistent attacks on affordability, this is a win for farmers and will help save money in uncertain markets,” Hardin says. “We appreciate the leadership by Chairman Crawford, Sen. Williams, and members of both chambers who saw this through. We also thank the members who reached out to legislators, shared their stories and issues, and encouraged them to pass this bill.”
For peanut producers, this legislation is particularly impactful as irrigation is one of the most energy-intensive inputs in production. By reducing utility tax burdens on pivot irrigation systems, the law provides an opportunity for growers to improve efficiency and better manage rising input costs.
As implementation details are finalized, producers are encouraged to contact their local county tax assessor for guidance on how the exemption will be applied or watch for additional information to be released by state agencies in the coming months.
By Peyton Woods