Do photographers have to charge sales tax?

Do Photographers need to charge sales tax?

In the state of Texas, whether photographers need to charge sales tax depends on their licensing arrangements. If photographers sell the licensing for a photograph while retaining the copyright, sales tax is not applicable.

The Comptroller generally assumes that charges in a standard bill of sale for photographs constitute the sale of tangible personal property subject to sales tax, unless the invoice or contract explicitly states otherwise.

When a photographer retains the copyright in a photograph, sales tax is not applicable under the following conditions:

  1. The photographer has written documentation reserving title to the photograph in their name.
  2. The photographer has transferred a copyright interest in the photograph to the customer.
  3. The customer is obligated to either return or destroy their copies of the photograph.

If a photographer sells both the photograph and a copyright interest, the charge for the copyright is not subject to sales tax. However, if the photographer fails to separate the charge for the copyright, and the tangible property is transferred, the entire charge becomes subject to sales tax.

When billing a client for finished photographs, a photographer must collect sales tax on the total charge, whether the billing is lump sum or separated. There is an exception for separately itemized expenses not related to the production of the photographs being sold, such as consultation fees and charges for expenses and professional services incurred before an agreement to produce a photograph and before the first production stage.

Importantly, a “sitting charge” is not subject to sales tax if the customer does not purchase any prints, negatives, or transparencies.

Understanding licensing is crucial for photographers, not only for potential sales growth but also as a means of protection against theft. This information is available on the state comptroller’s website, providing further insights for photographers navigating licensing considerations.

6 thoughts on “Do photographers have to charge sales tax?

  1. What if it is a service…. ie retouching a clients photos. They send you a digital file, you fix white balance, blemish removal, etc and email the file back? I can’t figure this out….

  2. I think if you don’t create the file, you are performing a service. The file is the product.

  3. What I find confusing is that this same person is also stating here http://www.window.state.tx.us/taxinfo/taxpubs/tx94_176.pdf that “Photographers who sell copyrighted pictures are not manufacturing taxable items for
    sale and thus cannot claim the
    manufacturing exemption when
    buying goods and materials
    used to create those photographs. A photographer who
    has retained a copyright on a
    photograph is responsible for
    paying tax for the supplies and for the divergent
    use of any equipment purchased under a manufacturing exemption.”

  4. That is confusing. I just know that you won’t get in trouble for charging sales tax and paying the county. That seems the lesser of the two (confusing) evils!

  5. Yes, this is so confusing and I have received so many different answers.  So…If I offer a flat rate session, which includes digital files of the session, do I charge sales tax?  I currently only charge tax on tangible items I sell…prints, albums, etc.  

  6. it’s about how you license your photos. If you lease your photos and put a return/destroy time, they aren’t a tangible product.

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