The Alabama Court of Civil Appeals has recently upheld a decision by the Jefferson County Circuit Court and determined that a photographer does not have to collect and remit Alabama sales tax on its sales of tangible personal property sold in conjunction with the provision of nontaxable services. Interestingly, the taxpayer averred that it charged its clients based on time and resources in providing services and not on the number, size, or type of photographs actually produced. It should be noted that most of the sales in question were in a commercial setting, rather than photographs for individual customers.
This ruling, to some extent, appears to contradict previous rulings from the Alabama Tax Tribunal, formerly known as the Administrative Law Division of the Alabama Department of Revenue, on similar issues.
It will be interesting to see if the decision is appealed to the Alabama Supreme Court and if that court decides to uphold the decision of the Court of Civil Appeals.
For a copy of the Court's ruling, click here.