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Claims adjusters, many of whom work remotely and travel extensively, can take heart from a recent Alabama court ruling, knowing that they may not have to pay the state’s income taxes, even if the adjusting firm is based in that state.

And to show that, adjusters may have to offer little more than their word and testimony.

The Alabama Tax Tribunal this month decided in favor of adjuster Candace Corley, overruling the Alabama Department of Revenue and finding that Corley did not transact business in the state in 2021.

Corley had agreed, the tribunal said in its , that she was employed by EP Claims Service, based in Mobile, Alabama, in 2021. But she said she was actually living and working in Florida, a state that has has no state income tax. EP Claims had contracted with Tampa-based Slide Insurance Co. and Corley was reviewing claims that year as a desk adjuster for Slide, while at her home in Florida.

“…The Taxpayer testified that ‘the work that I was working on was for insureds in Florida for a company in Florida. Slide Insurance was the insurance company,'” the tribunal’s chief judge wrote.

The ruling eliminated Corley’s $900 Alabama tax bill. But it has raised questions in Florida. Slide Insurance was founded by Bruce Lucas and others in 2021 but it did not receive its certificate of authority from Florida regulators until February 2022, records show.

Some in the industry wondered if Corley’s testimony indicated that Slide had somehow begun selling policies or handling claims before it was licensed.

A company official said that is not the case.

“Slide did not handle claims before February 2022. The company did not write or control policies at that time,” a Slide spokesperson said in an email.

Slide’s initial rate and form filings were not made with the Florida Office of Insurance Regulation until February 2022, OIR online records indicate.

Corley told ¾ÅÉ« that Slide is correct, and that she had misremembered for whom she was handling claims in 2021.

“It was a slip of the tongue” that came during video testimony, she said. “I didn’t remember where I was four years ago and who I was doing claims for at that time. We adjusters work for multiple carriers during an event sometimes.”

Corley said she now realizes she did not work for Slide until June 2022. She suggested she may have done work for FedNat Insurance and for Allstate Insurance in 2021, but not in Alabama.

The year 2021 was known for a few minor storms and a significant one: Hurricane Ida, which pummeled parts of Louisiana, produced thousands of claims, and contributed to the demise of FedNat and another carrier, Lighthouse Property Insurance Co.

It’s unclear what may happen now in the Corley tax case. The tribunal ordered DOR to refund the tax amount that had been withheld from her paychecks in 2021, but the department can appeal to a circuit court within 30 days. The attorney for the Alabama Department of Revenue referred questions to the department’s communications director, who noted that DOR “will evaluate the information but cannot comment on what actions we may or may not take in response.”

On her subsequent, 2022 W-2 tax form, Corley revised her workplace information to avoid further withholding from the Alabama Department of Revenue, the court explained.

Corley did not hire a lawyer in her appeal but handled it herself to save money, she said.

That, apparently, was enough for the tax tribunal.

“The Taxpayer handled the entire claims process for some policyholders insured by Slide Insurance, and she did so as a ‘desk adjuster,’ and not as a ‘field adjuster.’ She would review photographs and a field report of damage and compare those with an insured’s policy to determine the correct amount of damages due to the policy holder,” wrote tribunal Chief Judge Jeff Patterson, who previously worked as an attorney for Alabama DOR for 13 years, his Linkedin page shows.

“The facts testified to by the Taxpayer show that the income earned by her during 2021 was not the result of ‘business transacted in Alabama.’ Therefore, the final assessment in issue is declared void,” Patterson concluded.

Topics Alabama