Alabama Court of Appeals Rules In Favor of Scholastic Book Clubs

Brann & Isaacson partner David W. Bertoni, representing Scholastic Book Clubs, Inc., successfully argued to the Alabama Court of Civil Appeals that the company had no obligation to collect and remit use taxes in connection with its sales of children’s books and related items to teachers, homeschooling parents, and schoolchildren.  The decision, which affirmed a judgment of the Montgomery Circuit Court, is available at Dep’t of Rev. v. Scholastic Book Clubs, Inc.

In its decision, the Alabama Court of Appeals took note of the United States Supreme Court’s decision in South Dakota v. Wayfair, Inc., but made clear that it expressed “no opinion on whether SBC will be subject to the obligation to collect and remit use tax after October 1, 2018, based on the amount of sales it makes in the State of Alabama.”  Unlike the State of South Dakota, the State of Alabama does not participate in the Streamlined Sales and Use Tax Agreement, and thus has not taken a key step to making its sales and use tax laws uniform with those of other states.