It’s official….we live in a world gone mad. The Alabama Department of Revenue is now asking consumers to pay Sales Tax on SERVICES. They are starting with photographer services, but state they will move on to other types of services from there.
This was posted by a fellow photographer who (like so many of us) has been targeted by the Alabama Department of Revenue. Liesa Cole of Omni Studios is fighting the fight for commercial photographers. Terry Bruno, the head of Fotowerks is working with Representatives April Weaver and Matt Fridy, Senator Cam Ward and Rosemary Elebash of the NFIB to ensure that retail photographers and all creatives will not be subjected to taxation on their services.
Here is Liesas post:
“Just to be clear: A couple of years ago the ADOR decided to re-interpret 50+ year old tax law to suit their desire to scrape more money into the state’s coffers. They did this WITHOUT a change in the law or notice to the creative community they targeted to audit. Instead they blindsided us with audits that went back 6 years and assessed BACK SALES TAX on our services which have never been collected as a practice in the industry. Then, they added fines and penalties as if we were tax evading criminals. THEY HAVE GONE COMPLETELY ROGUE AND UNILATERALLY CHANGED THE RULES AND ARE BULLYING US TO PAY RUINOUS SUMS WE DON’T HAVE. This new interpretation of outdated tax code means that any creative service that has a “deliverable” is subject to 6 years of back taxes. They have started with photographers. But, writers, designers, architects, beware. If you deliver anything, (blue prints, text, logos, etc) electronic or otherwise to your client, ADOR claims that is a taxable good and all of your billable hours are the price tag. They know they have NEVER regarded our services as sales taxable in the past. They know that we are not selling anything “off the shelf”, but rather customizing our services to meet the demands of each client. They also know that case law does not support their actions. And yet, they persist to bully us. IF they could persuade the legislature to CHANGE the law that would be one thing. But, this is an outrageous abuse of power that can not stand. Please educate yourselves on this issue and speak out to anyone that will listen. If anyone has a connection to our sorry Governor, PLEASE ask him to call off the dogs. The unethical tactics of the Alabama Department of Revenue send a horrible message that is BAD for business and the reputation of our state. This is the kind of backward thinking that keeps us down.”
(I have been told by ADOR that videographers and DJs will be audited as well, so don’t think you are excluded!)
What this means for all of our clients: You will be required to pay sales tax on photography services. Not just the product you purchase, BUT THE ENTIRE AMOUNT OF SERVICES. So if we do an event for you, or a wedding for you…you will pay Alabama Sales Tax on the total amount!
OH, I need to mention that the Alabama Department of Revenue has sent us a form letter to send all of our previous clients asking them to pay sales taxes on the services that were performed as far back as 6 YEARS!
How you can help? Write your Representative, your Congressman, your Senator. Tell everyone you can what the Alabama Department of Revenue is doing to creatives. It, as Liesa says will NOT stop with photographers. EVERY service will be subject to sales tax, which YOU the consumer will be paying! Let’s band together and let the Alabama Department of Revenue know that we will not stand for taxation of services!