Sales Taxation of Photographers: The Business Side
Posted Monday, October 22, 2012 by Ronald L. Bueing
As a follow on to my earlier blog post, I wanted to address the sale of photography services from a business as opposed to a consumer perspective. As noted in my earlier blog, sales of photography services, including creative fees, sitting fees and similar charges, are subject to retail sales tax when they are sold to a consumer and the customer receives electronic images from the photographer, even where no prints are actually made by the photographer.
There are a couple of situations where photography services provided in a business context are not subject to retail sales tax. The first area involves a sale of the right to publish a photograph. The sale of publication rights, even when accompanied by a physical or electronic image, are treated as the sale of an intangible right. These intangible rights are taxed as royalties and are not subject to retail sales tax.
The second area involves the sale of digital images to businesses for use solely for business purposes. While sales of digital images to any consumer is treated as a retail sale, an exemption is provided from the retail sales tax for sales of digital goods that are sold to businesses and are used solely for business purposes. Business purpose is broadly defined to include “any purpose relevant to the business needs of the taxpayer claiming an exemption under this section.”
For more information, contact Ron Bueing at (206) 805-1490.