A Houston County circuit judge says the National Peanut Festival is a tax-exempt organization.
Peanut Festival officials took the state revenue department to court earlier this month.
Attorneys claimed other fairs in Alabama already have tax-exempt status and they argued the Peanut Festival should not have to pay a 4 percent sales tax on admission tickets.
The Peanut Festival paid about $25,000 in taxes on gate receipts last year.
Judge Lawson Little ruled Tuesday that the festival is an agricultural organization and therefore tax exempt under state law.
There’s no word yet on whether the state department of revenue will appeal the decision.