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-.81.01 - Interior Decorators And Interior Designers

Current through Register Vol. 42, No. 9, June 28, 2024
(1) Further, these interior decorators must
			 collect sales tax from their clients on their retail sales of tangible personal
			 property and remit the tax to the Department of Revenue.
Out-of-state interior decorators and interior designers, who do
				not have a place of business in Alabama but for whose business sufficient nexus
				exists, must register to collect sellers use tax on their Alabama sales and
				collect and remit sellers use tax to the Department of Revenue on those sales.
				(Sections
				40-23-6 and
				40-23-66).
(2) Fees charged by
			 interior decorators or interior designers in conjunction with sales of tangible
			 personal property are a part of the gross proceeds of sales and must be
			 included in the measure of sales or use tax charged to and collected from their
			 clients. Fees charged by interior decorators or interior designers are taxable
			 even if they are billed to clients as an amount separate from the cost of
			 tangible personal property on a cost plus basis. (Sections
			 40-23-1(a)(6),
			 40-23-1(a)(8),
			 and
			 40-23-60(10)).
(3) Sales or use tax does not
			 apply to fees charged by interior decorators or interior designers solely for
			 consultation or designing services when no sale of tangible personal property
			 occurs in conjunction with those services.
(4) In those instances where interior
			 decorators or interior designers receive a fixed sum fee which is not in any
			 way contingent upon the sale of tangible personal property and, subsequently,
			 sell tangible personal property in a completely unrelated transaction, the
			 fixed sum fee is not a part of the selling price of the tangible personal
			 property and is not subject to sales or use tax.
(5) Interior decorators or interior designers
			 who contract to furnish and install tangible personal property which becomes a
			 part of realty are the users or consumers of such property and owe sales or use
			 tax on the cost of the property so used or consumed. Property withdrawn from
			 inventory by an interior decorator or interior designer for use in performing
			 contracts for additions or improvements to realty must be reported as taxable
			 withdrawals and the sales tax thereon remitted directly to the Department of
			 Revenue. The measure of tax on withdrawals is the cost of the property to the
			 interior decorator or interior designer who withdraws the property.
Except as enumerated in Rule
				810-6-3-.77,
				interior decorators or interior designers making additions or improvements to
				realty may not claim immunity or exemption from sales or use tax on account of
				property purchased and used in connection with contracts with the federal,
				state, county, or city governments. The fact that a governmental agency has
				advised the interior decorator or interior designer not to include tax on the
				invitation to bid or purchase order would not relieve the interior decorator or
				interior designer from liability for sales or use tax on the cost of materials
				used in fulfilling a contract with that agency for making additions or
				improvements to realty. (Sections
				40-23-1(a)(10) and
				40-23-60(5)).
Author:
Ginger L. Buchanan
Statutory Authority:
Code of Ala.
				  1975
, §§
										40-2A-7(a)(5),
				  40-9-33,
				  40-23-1(a)(6),
				  40-23-1(a)(8),
				  40-23-1(a)(10),
				  40-23-6,
				  40-23-31,
				  40-23-60(5),
				  40-23-60(10),
				  40-23-66,
				  40-23-83.