By:  Betsy Jarnigan, CPA Tax Supervisor

Betsy is a member of the JMF Tax Department and an integral part of the JMF State and Local Tax (SALT) group.  She is also a recipient of the ASCPA Outstanding Young CPA Award. 

About a year ago, we blogged (ADOR considering changes to existing rules for sales tax on photography) about the Alabama Department of Revenue (ADOR) considering to change existing rules for sales tax on photographs and blue prints. On Friday, April 29th of this year, the Alabama Court of Civil Appeals unanimously affirmed the granting of a summary judgement in favor of Omni Studio, LLC dismissing an assessment of sales tax against the company. Omni Studio, LLC considers itself a service provider and not a retail seller of photographs (they primarily work for advertising and marketing firms and rarely for individuals).

The Alabama Department of Revenue argued that because Omni Studio, LLC delivered photographs as the end product, charges for those services should be taxable.  Omni Studio, LLC argued that in addition to photographs, they provided other services such as consultation and setting up photo shoots. The fees they charged were payable whether or not the end user actually used the photographs or services provided. Omni Studio, LLC relied on judicial precedents which held that tangible personal property delivered incident to the provision services were not subject to sales tax. The Court of Civil Appeals agreed with Omni Studio, LLC, which gives the Department of Revenue 14 days to ask for the Alabama Supreme Court to review and overturn the decision. This decision is a win for commercial photographers in the State of Alabama!

We will update you if this case goes before the Alabama Supreme Court. If you have any questions or comments, please contact the State and Local Tax Practice Group at JamisonMoneyFarmer PC.