Do Photographers Need to Pay Sales Tax?
Do You Sell Portrait Products?
When you purchase your products for resale, do you need to pay sales tax on those products? Whether you do In Person Sales or allow clients to purchase products through their portrait gallery, if you sell portrait products you are considered a dealer in tangible personal property that is for resale or re-release. As such you are legally able to purchase your portrait products (for resale) without paying sales tax. (Verify with your own state as laws may vary).
Collecting Sales Tax
If you are a photographer, most states require you to collect sales tax on your sales and your services. You’ll need to verify the laws in your own state, but in the state of Utah (and many others) photography services are ALSO subject to sales tax. That means regardless of whether you’re only giving digital files, if part of your fee is a “sitting fee” or if you sell products, you are required to collect sales tax on the entire fee you charge the client.
The main point for this article is that if you’re collecting sales tax on your portrait products, you don’t need to be PAYING sales tax when you purchase those products. You are considered a reseller and the state will collect that sales tax (well, YOU will collect that sales tax and pay it to the sate) from your clients.
How to file a Sales Tax Exemption
It’s pretty simple! Use Google to find the form for your specific state. For Utah, I just searched “utah sales tax exemption” and it brought me to this form https://tax.utah.gov/forms/current/tc-721.pdf
Fill it out (you’ll need your Sales Tax Account #, which is the number on your sales tax license). You’ll also need a separate form for each supplier.
Find where to submit it to your suppliers. If you can’t find it by searching in the help section, shoot them an email and ask! It’s worth a few minutes of your time.
What else do I need to do?
Keep track of your purchases using your sales tax exemption. You’ll be required to report these with your taxes, although they’ll be labeled as exempt.
If you make any personal purchases through these accounts, you’ll need to keep track of those as well and pay sales tax on them at the end of your reporting period (for example quarterly or at the end of the year). I actually treat my business as a separate entity, so if I purchase anything personal I then “sell it” to myself (and charge myself sales tax). Paying my business with my personal checking account.
That’s it! Leave a comment and then check out my other Education Topics
In summary, Do Photographers Need to Pay Sales Tax? Not on products they purchase TO RESELL!
I hope you enjoyed this Photography Business Tip! What would you like to learn about next? Leave me a comment!