mylifephoto Loc: Tehachapi

On the subject of sales Tax. I offer flat packages for different session types. Flat fee is for/includes studio time, editing of 'x' number of images and a CD of said images with a print release.

Example $$$ flat fee for all of the above. I was told i need to tax the $$$ since the CD is considered a tangible item and is directly related to the flat service fee.

But ive run into some other photographers who say different things. Example. One says that if i would to advertise my CD as Free with the Service package then there would be no tax. My accountant has advised me thats not the case. Others say i need to list my service fee separate from my Cd fee to reduce taxation on my customers.

Just curious how you are all handling the case of Sales tax. My customers seem to be fine with the way im doing it now. But if i can save them a little money just by restructuring my packages then it might be worth it.

Let me know your thoughts and experience. I know every state is different, im in CA

Nikonian72 Loc: Chico CA

When I have the oil in my truck professionally changed, the invoice taxes the oil, but not the labor charge. Same applies to any service-oriented sale. Only & all tangible items are taxed. In L.A. County, that is 9%.

wilsondl2 Loc: Lincoln, Nebraska

In Nebraska It's the same either way we get taxed for both sales and service. - Dave

mylifephoto Loc: Tehachapi

When I got married in September my photographer charged me tax on the entire package. I've asked friends and they said the same. I've asked around to other photographers and I get so many different responses. I just want to make sure I have my rear covered if the IRS ever decides to audit .

The tax man he be a tricky one.

geclevel Loc: Springville, Utah

mylifephoto,
I live in Bakersfield, just West of you. I deal with service providers daily for my work and here is where I can help.

If the service provider makes me an item on my location he/she can not charge me tax on making that item, only the tax on the materials. If the item has to be made at his/her location then I can be charged tax on the service of making the items(s) along with the materials.

mylifephoto Loc: Tehachapi

Does anyone have specifically photography related tax experience though?

I only ask because my accountant says the terms and rules of the photographers sales tax are different of that of the standard retail tax.

Nikonian72 Loc: Chico CA

Chapter & verse, please.

Danilo Loc: Las Vegas

Why not have this discussion with your accountant? If he/she is in your home state, you should be getting sound advise. You might ask if you can alter your pricing to create a tax advantage to the client. If your contract with the accountant includes he/she taking responsibility for any errors in your tax accounting you should have no worries.
Hedgehoggers from states other than CA can only be of limited assistance.

lacsar Loc: Columbia SC and Newland NC

If she can tell you they are different, why can't she tell you what they are? It may be time to look for a new accountant.

jerryc41 Loc: Catskill Mts of NY

Labor in NY is taxable. That's why hot dogs in the supermarket are tax-free, but if you buy one from a vendor, you pay tax on the service.

Nikonian72 Loc: Chico CA

In California, prepared food is taxable, while grocery store, unprepared food items, are not. I pay tax when I buy dinner at Panda Express, and a latte at Starbucks Coffee stand, even though both are within my local grocery store.

SharpShooter Loc: NorCal

MLP, the tax laws are not different for photographers, we are not that special, we still pay our taxes. But it's not the IRS you are worried about. They could care less if you pay your state sales tax. It's the State Board of Equalization in CA. They can tell you anything you need to know about what and when you do and do not collect sales tax.
I will give you some examples that should be consistant with what you will need to pay.
For ex., Anything you produce in your place of business will be fully taxed to the customer. If you go to their home and photograpgh then go back to your place of business and make the product, it gets taxed. If you make up some framed photographs and go hang them in their home, you again tax the product but not the labor of hanging them since it occurred at their home.
You will also tax all supplies that go into that product, such as the CDs and any picture frames etc. But with a Sellers Permit, you can buy both wholesale and resale. Resale means you do not pay tax when you buy the materials but your customer, the end user, does pay the tax on those materials. If you buy retail and pay tax then their is a line item on your tax form when you report sales tax where you subtract any tax you payed from that that you collected. The state tax is not payed twice, only once by the end user. You can by wholesale for yourself but not resale, since you are the end user, you pay the tax.
These are not specific to photoraphy, and I don't have any photography specific experience but I'm pretty sure there are no special applications for photographers. We just need to know where and how to tax our work.
Forget your tax person unless they are a CPA. Go straight to the State Bd of Equalization. They are not the bad guy. They want to see you getting it right. I've been dealing with'em for 30 years.
And this would be good ONLY in CA. I don't know anything about other states. Good luck

mylifephoto Loc: Tehachapi

Thanks sharp shooter :) will call state board on Monday.

Steve M Loc: Chester, NS, Canada

mylifephoto: 9 percent tax. With I lived there. Here in Nova Scotia, Canada, we are paying 15 percent on everything except food. I won't say how much they tax gasoline, but there are three levels of tax, so we pay tax on tax on top of tax. Ripoff I say.

Steve

jerryc41 Loc: Catskill Mts of NY

Years ago, gas stations had a price chart like movies theaters. They would list the price, then show state tax, county tax, fed tax, local tax, and then the total. I guess they thought that it took them off the hook for the price they were charging.