Photo Attorney

Jun 29, 2006

Sales Tax for Photographers

Many photographers sell their work either on the side or for their full-time job. Those sales may be subject to sales tax. Since the photographer, as the seller, is responsible for collecting and paying those taxes, you should understand your tax obligations to protect your business.

Sales taxes are imposed by state governments, but each state handles them differently. For example, some states don't require tax collection for services, only goods. California photographers who deliver images electronically do not have to collect sales tax from their clients. In some other states, you must collect sales tax for all photography services, including materials, services, and fees.

Tax obligations may apply only if you sell your work on a retail basis (direct to the public) rather than wholesale (to a middle person). For example, if you sell your prints directly to individuals, you need to charge sales tax. If a gallery sells your prints, the gallery is responsible for collecting and remitting sales tax.

You should separate the sales tax amount from your charges on your invoice or receipt or state specifically that the total due includes sales tax. In the latter case, you must remit the collected tax by backing it out of the total amount received.

If you sell products or services to someone who lives in another state, you may not have to collect sales tax for that transaction. However, a few states, such as Texas, require that you pay sales tax for sales to persons in that state regardless of your location.

How do you determine your tax obligations? Consult your state treasurer's office, a tax attorney or an accountant. Even then, you may get different information than your colleague receives. So get the advice in writing. You may be relieved of tax, penalty, and interest charges that are due on a transaction if the state's treasurer determines that you reasonably relied on written advice that was erroneous and were harmed by that reliance.

It's important to understand your tax liabilities. If you do not collect and remit the correct amount, you may owe the taxes due plus penalties and interest. They can mount quickly.

Take my advice; get professional help.