As professional photographer, or amateur turning pro, one of the first questions that may come to your mind is probably: do I need a sellers permit? If you’re a wedding photographer in California, the unfortunate answer is … yes.
According to the California State Board of Equalization, the government entity that collectsCalifornia state sales and use tax, you must obtain an seller’spermit if you sell or lease merchandise, vehicles, or other tangible personal property in California. The best resource we found for California Photographers is the “Tax Tips For Photographers, Photo, Finishers, and Film Processing Labratories. According to this document, as well as the application for the permit (BOE-400-SPA) found on http://www.boe.ca.gov/, photographs are unfortunately considered a tangible item, with the few exceptions listed below.
So how much tax do we need to pay?
As wedding photographers, since part of our product is services, and services are generally not taxed, we originaly thought that we wouldn’t have to pay taxes on the entire package prices. However, upon further research, we learned that when you sell art prints or shoot photographs for noncommercial use, i.e. wedding photography, the taxable amount of your charge will generally include all of the following: 1)Your charges for the physical product you transfer to your customer, 2) Any labor and services involved in producing or fabricating the photograph, and 3) Any reproduction rights associated with the photograph.
What are the exceptions?
According to the aforementioned Tax Tips document, “common nontaxable sales include sales of photographs transferred electronically, sales for resale, sales to the U.S. government, and sales in interstate and foreign commerce. Tax applies to your sale of tangible, physical products, including photographs. However, if you transfer a photograph electronically and do not include any physical product in your sale, tax does not apply. You should document any electronic transfer of a photograph so that you can show why tax does not apply to that transaction. For instance, if you electronically transmit a photograph to a customer by e-mail, you should print out a copy of the transmittal e-mail and retain that copy in your records”
When and how do we pay?
Returns are filed quarterly through the BOE website. E-filing is free and fast.
Who to ask for any questions?
Unlike most government agencies, the field offices have very few prompts; and it’s pretty quick to talk to a represenative. My questions were answered the quickest and best by the offices in small, wealthy towns. You can find your local California State Board of Equalization office phone number from http://www.boe.ca.gov/.
What form do I need and where can I get the form?
BOE-400-SPACalifornia Seller’s Permit Application for Individuals/ Partnerships/ Corporations/ Organizations (Regular or Temporary)
How to apply: Download form from the website mentioned above and send or take your application to the district office nearest your place of business.
How long does it take to get my permit?
Approximately two weeks from the time of receipt.
Do I need to charge my clients sales tax?
YES! That is, unless you want to pay the sales tax out of your own pocket. Either way, the state will get their sales tax one way or another.