Sales Commissions Part of Taxable Photo Price

Wednesday, February 1st, 2017

 
 
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Alabama
General

The Alabama Tax Tribunal ruled that a photographer could not deduct sales commissions from the taxable price of photographs.

The taxpayer sold photos to students at schools in Alabama. It paid commissions to the schools on those sales. The taxpayer collected sales tax on its total sales proceeds. However, it reported tax based on the sales proceeds minus the commission amounts.

Sales tax applies to the total value of tangible personal property sold. There are no deductions for service costs or any other expenses. Here, tax applied to the total sales price of the photographs, and the taxpayer could not deduct the sales commissions paid to the schools. Also, the taxpayer had already collected sales tax on the entire sales proceeds, and it could not report less tax than it had collected.

http://www.ttrus.com/sites/default/files/al/AL_photography_2_1_2017.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.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

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