Be sure to research your state law. Some states require that the
exempt entity be a certified §501(c) organization, and that the
organization must have filled out an application with the state
tax agency. Additionally, not all transactions will qualify for the
exemption. Just because someone tells you they don’t have to pay
sales tax doesn’t mean they are correct.
Doing Business in Other States
If you are traveling to other states to photograph clients, you may
actually be doing business in more than one state for sales tax
purposes. This is a common occurrence where states are located
in close proximity to one another, particularly in the Northeast.
Photographers in these areas often must collect and remit sales
tax to more than one state—the state in which their business is
physically located as well as other states.
This is a more complex area of sales tax, but know that if you
are traveling to other states to photograph for clients, you may be
obligated to collect sales tax in those states. The individual state
law, along with the specifics of your transactions, location of your
clients and how you deliver products to your clients, should all be
reviewed in order to determine these tax obligations.
Hiring a Professional
As noted previously, sales tax can be complex and confusing to
navigate through. If you already have contacted your state and
local tax agencies but have found them unhelpful, you might
want to consider hiring a tax professional. But first make sure he
or she has a broad understanding of sales tax laws, as well as the
issues specific to a photography business. Not all accountants or
attorneys are sales tax experts, nor do all of them understand the
transactions that are unique to photographers. RF
| THE SALES TAX PRIMER |
Making tax laws even more confusing is that they differ depending on where you live. Here are ten State
Tax Specifics to keep in mind.
1. Electronically delivered images are subject to sales tax
in Alabama, Maine, South Dakota, Texas, Utah, Washington and a handful of other states.
2. The purchase or rental of cameras, lenses, filters,
tripods, lighting equipment, etc., is exempt from New
Jersey sales tax as equipment used directly in the production of tangible personal property. An exemption
certificate must be presented upon purchase.
3. Shipping and handling charges may be subject to
sales tax, depending on individual state law.
4. Sitting fees are not subject to sales tax in Massachusetts if the customer is under no obligation to purchase
any of the photos taken.
5. Travel expenses may be subject to sales tax depending
on state law, when such travel is required to complete
the sale, (i.e. you must travel in order to capture the images you are selling to the client).
6. Some states have annual sales tax holidays, during
which the purchase of photography services, photographs, albums and other items may be exempt from
7. In California, electronically delivered images and photography services become taxable the instant any tangible items are also provided to the client. This is true in
many other states as well.
8. Sales of gift certificates and gift cards are generally
exempt from sales tax when sold. Sales tax is then calculated on the purchase made at the time the gift certificate is used.
9. Qualifying purchases made by certain entities (
organizations like churches and non-profits) may be exempt
from sales tax. Laws vary by state.
10. In North Carolina, purchases by commercial or portrait photographers of machinery or accessories used to
manufacture photographs are exempt from sales and use
tax and subject to only the 1 percent privilege tax with a
maximum tax of $80 per item.
—Compiled by Kristin Korpos