Photographers - Sitting Fees
Sales of photographs are taxable. Photographs can be made from film or from digital or electronic files, and can be sold as prints or on a DVD or CD. Photographs or files delivered digitally, electronically, or by any other medium are taxable.
The entire charge, including sitting fees, is taxable when at least one photograph is sold, even if the buyer is not the person who originally hired the photographer.
Once an agreement is reached to produce and transfer photographs, all expenses, services, and other costs connected with their production must be included with the cost of raw materials to arrive at the sales price. Such expenses include travel, meals, and lodging while shooting on location, costs of acquiring props and models, and "professional services" in shooting the photograph. All of these expenses are directly related to the production and sale of the tangible photograph whether the photographer bills lump sum, at an hourly rate, or by itemizing each and every expense.
When billing a client for sitting fees, a photographer must collect sales tax on the entire amount charged for all services performed at the time the pictures are taken (including the sitting fees).
If the customer does not buy finished photographs when prints are available, the photographer can refund sales tax collected on all charges attributed directly to the sitting fee.
Photographers - Internet Sales
Orders for photographs placed over the Internet are taxable in the same manner as orders received at a physical location. Texas sales and use tax is due on sales made by Internet or catalog order if the seller is engaged in business in Texas as defined in Rule 3.286, and if the prints will be received by a customer in Texas.
Some companies host websites that allow photographers to submit pictures that are posted on the Internet for customer viewing. The website allows customers to order photographs, with payment being sent either to the hosting company or the photographer. In many cases, the company will process the Internet orders and print and ship the photographs directly to the customer.
As payment for its services, the website hosting company may receive a fee from the photographer for each picture ordered or retain a portion of the amount paid by the customers.
In this situation, the photographer, not the hosting company, is responsible for collecting Texas sales tax for photographs sold to Texas residents. Tax is due on the entire charge to a customer in Texas for finished photographs, including any charges for shipping and handling.
A charge by the web hosting company to place, store, and operate a website is subject to Texas sales and use tax as a data processing service. Twenty percent of the charge for data processing services is exempt from Texas tax. See Rule 3.330 for further information regarding data processing services.
People get to wrapped up in new stuff, myself included, they they forget to realize it isn't our equipment that makes great photos, it is us. If you shoot in natural light all the time and get great results, why do you need lighting setups? Just try it and see what happens, and good luck with it too.
