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-.10 - Services Rendered By Upholsterers

(1) An upholsterer renders a service and sells tangible personal property. Materials used or consumed by the upholsterer that are not passed to the customer are considered supplies and are taxable at the time of purchase by the upholsterer. Materials passed to the customer that either lose their identity or are inconsequential to the product are also taxable at the time of purchase by the upholsterer. Examples of these materials include but are not limited to:

(2) Materials passed to the customer that are a substantial part of the product and do not lose their identity are considered taxable retail sales made by the upholsterer. Custom items fabricated and sold are subject to Sales Tax on the full sales price of the item without any deduction for labor or service unless the installation fee is separately stated. Examples of these materials include but are not limited to:

(3) Separate agreements to sell the materials and perform the labor and service require tax to be collected and remitted on the price of the materials only, if the records and invoices clearly show separation of the amount received from the sale of the materials and the act of rendering the service. If there is no clear separation of the materials and services, then tax is due on both the sales and services rendered.