Alabama Supreme Court Rules That All Software is Taxable Tangible Personal Property

[May 20, 2019] The Alabama Supreme Court recently issued a decision in Russell County Community Hospital v. State Department of Revenue holding that all software is tangible personal property and thus subject to sales tax. A number of justices concurred with respect to the result but not the reasoning of the decision and it is not clear whether a majority of justices held that there is no taxability distinction between canned and custom software. Sovos is actively seeking guidance from the Alabama Department of Revenue to determine if codes related to sales of custom software are now properly taxable in Alabama.

To see the published decision click here.

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Author

Alex Samuel

Alex Samuel is a Junior Regulatory Counsel at Sovos Compliance. Within Sovos’ Regulatory Analysis function, Alex focuses on enterprise sales tax issues arising in various domestic and international jurisdictions. Prior to Sovos, Alex worked as an attorney at New Hampshire Legal Assistance. Alex is a member of the New Hampshire and Massachusetts Bars, earned his B.S. from the University of Minnesota and his J.D./LL.M from the University of New Hampshire School of Law.
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