1. (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:

   1. (a) Tacks
   2. (b) Glue
   3. (c) Thread
   4. (d) Binding Twine
   5. (e) Webbing
   6. (f) Glimp Tape
   7. (g) Welting
   8. (h) Padding
   9. (i) Stain
   10. (j) Varnish

2. (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:

   1. (a) Cloth
   2. (b) Leather
   3. (c) Vinyl
   4. (d) Foam rubber
   5. (e) Springs
   6. (f) Covers for cars, boats, and furniture
3. (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.

Author: Leslie Michaud

Statutory Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-23-1-(a)(10), 40-23-31, 40-23-83.

History: Adopted March 9, 1961. Amended: November 1, 1963; November 3, 1980; February 10, 1982. Repealed and New Rule: Published September 30, 2021; effective November 14, 2021.