Alabama Administrative Code › Title 810 - ALABAMA DEPARTMENT OF REVENUE › Chapter 810-6-1 - GROSS PROCEEDS OF SALES; GROSS RECEIPTS; WHOLESALE SALES, SALES AT WHOLESALE; RETAIL SALES, SALES AT RETAIL; AUTOMOTIVE VEHICLES › Section 810-6-1-.30 - Carpeting And Other Floor Coverings

Current through Register Vol. 42, No. 9, June 28, 2024
(1) The term "floor coverings" as used in
			 this rule shall include carpet, carpet tile, rugs, mats, carpet padding,
			 linoleum and vinyl roll floor covering, linoleum tile, vinyl tile, and similar
			 materials. Floor coverings may be installed as the initial finished floor
			 covering in new construction or as an addition to, or a replacement for, an
			 existing floor covering.
Floor coverings may be installed in a manner so as to become a
				permanent attachment to realty or may be laid on finished floors in a manner
				that it remains tangible personal property.
(2) Persons who contract to furnish and
			 install floor coverings, which are shaped to fit a particular room or area and
			 which are attached to the supporting floor with cement, tacks, or by some other
			 method making a permanent attachment to real property, are contractors and the
			 floor coverings they use in performing the contract are considered to be
			 building materials. Sales of floor coverings to persons who use them in
			 performing contracts to make additions or improvements to realty are retail
			 sales subject to sales or use tax. See Rule
			 810-6-1-.46 entitled Contractor's Liability (Sections
			 40-23-1(a)(10) and
			 40-23-60(5),
Code of Ala. 1975
).
(3) Persons who are both selling floor
			 coverings which they do not attach to realty as well as contracting with
			 customers to furnish and install floor coverings that become a part of realty
			 shall purchase all floor coverings at wholesale and thereafter collect and
			 remit sales or use tax to the Department of Revenue on their retail sales of
			 floor coverings which they do not attach to realty for the customer and compute
			 and pay sales tax to the Department of Revenue on the floor coverings which
			 they withdraw from inventory for use in performing "furnish and install"
			 contracts. State and local sales taxes are due on withdrawals at the time and
			 place of the withdrawal of the materials from inventory and shall be computed
			 on the cost of the materials to the person making the withdrawal.
Sales tax is due on withdrawals from instate inventory
				regardless of whether the floor covering materials are withdrawn for use in
				performing contracts inside or outside Alabama. The sales taxes applicable to
				withdrawals are those taxes applicable in the jurisdiction where the withdrawal
				occurs not where the materials are attached to realty. See Rule
				810-6-1-.56 entitled Dual Business and Rule
				810-6-1-.196 entitled Withdrawals from Inventory. (Sections
				40-23-1(a)(10) and
				40-23-60(5),
Code of Ala. 1975
).
(4) Sales of floor coverings to the federal
			 government, the State of Alabama, counties and municipalities of the State of
			 Alabama, their instrumentalities, or other exempt entities are not taxable when
			 the floor covering sold to the exempt entity is installed by the exempt entity
			 or by someone other than the seller who is hired by the exempt entity. See Rule
			 810-6-1-.46 entitled Contractor's Liability regarding the application of sales or use tax
			 to floor coverings both sold and installed by the seller. (Sections
			 40-23-4(a)(11),
			 40-23-4(a)(15),
			 40-23-4(a)(17),
			 40-23-62(2),
			 40-23-62(13),
			 and
			 40-23-62(16),
Code of Ala. 1975
).
(5) Sales of floor coverings which are not
			 attached to realty but which are simply laid on finished floors are retail
			 sales to the building owner or occupant. The seller shall collect sales or use
			 tax on retail sales to nonexempt entities measured by the total gross proceeds
			 of the sale without any deduction for services incidental to the sale such as
			 trimming, joining, binding, or delivering. (Sections
			 40-23-1(a)(6),
			 40-23-1(a)(8),
			 40-23-26,
			 40-23-60(10),
			 and
			 40-23-67,
Code of Ala. 1975
).
(6) Floor covering samples sold to dealers to
			 be used by the dealer for demonstration or display purposes, and not for resale
			 in the regular course of business, are retail sales subject to sales or use
			 tax. All samples bound in sample books and all samples having holes with metal
			 fasteners inserted shall be considered "not purchased for resale" by the dealer
			 unless the dealer is in the business of reselling floor covering samples.
Dealers who do purchase floor covering samples for resale in
				the regular course of business may purchase the samples tax-free and use them
				for demonstration or display purposes prior to selling them. (Sections
				40-23-1(a)(10) and
				40-23-60(5),
Code of Ala. 1975
).
Author:
Ernest Broadhead
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-23-1(a)(6),
				  40-23-1 -(a)(8),
				  40-23-1
				  -(a0(11),
				  40-23-4(a)(15),
				  40-23-4
				  -(a)(17),
				  40-23-26,
				  40-23-31,
				  40-23-60(5),
				  40-23-60(10),
				  40-23-62(2),
				  40-23-62(13),
				  40-23-62(16),
				  40-23-67,
				  40-23-83.