The Beatles said it years ago, “If you drive a car, I’ll tax the street.”
Hard to avoid taxes, especially when you run a business. There are lots of discussions about when to charge tax and when not to, and the internet is a horrible place to look for information. If it is wrong, it is no defense if you get caught.
After a discussion a couple of weeks ago I sent an email to the Texas State Comptroller’s office for clarity on taxes on photography products in Texas. I heard back from Texas State Comptroller’s office. It is ALL taxable and they do have to be charged no matter what the delivery is going to be.
Here is the response I received from the Texas State Comptroller.
Thank you for your inquiry about the taxability of photography services. We are pleased to be of assistance.
In response, we are sending you a general information letter under Rule 3.1, Private Letter Rulings and General Information Letters.
In Texas, sales of photographs provided to customers as physical prints or as a digital or electronic image, are taxable. All expenses directly related to the production and sale of photographs and billed to the customer are subject to tax.
See Sales Tax Publication 96-259, Taxable Services for other types of sales that are commonly considered “services”.
Tax is due on the labor charge associated with a photography or videography session as the selling, processing or remodeling of tangible personal property. See Publication 94-176, Photographers and Texas Sales Tax for more information.
Digital Content Delivered Electronically
In Texas, digital content, although delivered electronically, is taxable as tangible personal property, as defined by Texas Tax Code Section 151.009, Tangible Personal Property.
The taxability, however, is determined where the digital content is being delivered to, either out-of-state or in-state.
In Texas we do have to remit taxes, however there is one big benefit. With a Texas Tax ID number, photographers are considered manufacturers and we do not have to pay sales tax on tools of the trade (or expendables). Any camera, lights, lens, etc. we buy in Texas we do not pay sales tax on. Excellent way to keep money, and jobs in the state.
If you don’t live in Texas, ask your state taxing agencies. Here is a list of state agencies to get you started, https://www.taxadmin.org/state-tax-agencies.
‘Cause I’m The Tax Man, yeah I’m the tax man…