Optional Fees on Inflatable Bounce Houses Not Taxable in Alabama

Friday, July 29th, 2016

 
 
Photo of an inflatable bounce house for kids.
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The Alabama Tax Tribunal recently decided that rental tax did not apply to a company's pickup fees for party rentals.

The company rented out inflatable bounce houses, games, tables, chairs, and other items. Customers could return the rented items themselves or arrange for the company to pick them up. When the company picked up the items, it charged the customer a pickup fee.

Alabama taxes rentals of tangible personal property. The tax applies to the gross proceeds from rentals. The Tribunal decided that the pickup charges were not included in the gross proceeds. This was because the customers could choose to not to pay the charges and instead return the rentals themselves. It noted that the charges were also not taxable because the service was performed after the rental ended.

http://my.ttrus.com/content/law/AL_Dkt_No_S_15_1595_1469551875.pdf


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TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

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