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What You Need to Know: Sales Taxation of Photography Services

Posted Thursday, August 16, 2012 by Ronald L. Bueing

alt text During a recent conversation, I was reminded of an area that routinely causes problems for small businesses in Washington - sales taxation of photography services. Especially in this area it is important for businesses to remember the old sales tax mantra, “If in doubt, collect and remit.”

Many photographers that first begin to provide photography services for consumers, whether a family portrait or a more involved event like a wedding, do not realize that sitting fees, creative fees and similar charges are subject to retail sales tax even where no actual photographs are printed for the customer. Prior to the advent of digital photography, these fees would not necessarily be subject to retail sales tax, provided that no actual finished photographs were provided to the customer. With the advent of digital photography and the recent laws passed in Washington regarding taxation of digital photography services, such fees are clearly subject to tax under Washington law when those services are provided to consumers and the customers receive the photographs electronically via e-mail, CD, flash drive, etc.

Another frequent question involves photography services provided at out of state venues for local residents by a local photographer. Under Washington law the performance of photographic services for a consumer accompanied by electronic delivery of the photographs to the customer is treated as the sale of a digital good. Sales of digital goods are generally source to location where the purchaser receives the digital goods. Thus, in many cases, although the services are performed out of state the customer will take delivery of the “digital good” at their residence in Washington, resulting in a Washington sale. It should also be noted that any reimbursements of travel cost will be treated as additional payments for the services provided by the photographer and will also be subject to retail sales tax.

Contact Ron Bueing at (206) 340-2008 if you have any questions regarding the taxation of photographic services and digital goods, or have any other questions related to Washington B&O, sales, use, or other Washington excise taxes.

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