I have a photography business that is based in New Jersey. I have a few clients in New York City. I'm wondering how exactly should I be charging sales tax to the clients that are in New York? I sell both digital as well as hard copy print photographs. I also have a website online in which we sell photographs and we're expanding to California soon. Please advise.

ANSWER

The BIDaWIZ Team's Answer:

Given that you're selling your services in New York, your photography business may be subject to sales tax. Having said that, the sales tax rules depend largely on the nature of the services that you're offering to your clients in New York. Specifically, only the tangible property such as the hard copy photographs would be subject to sales tax. The labor is considered a service and exempt from sales tax in New York. If you're sending digital copies over the internet, that is also exempt. However, if you provide a tangible digital copy via CD ROM or a flash drive, that would be subject to sales tax. References: New York State sales tax publication 750 and TSB-A-09(56)S.

Expert Todd Alexander's Answer:

I would agree with Greg in regards to New York State sales tax rules. When you do decide to expand to California. There are a few items to keep in mind. California is different from New York in that labor and service charges are also considered taxable as they result in the creation of products. However, like New York, photographs and labor due to a digital copy the is electronically transferred is not subject to sales tax. In addition, charges for developing negatives are generally not taxable. This is referenced in California State Publication 68.

Todd Alexander, CPA

California

20 yrs experience

• Currently 5.0000/5 Stars.
• 1
• 2
• 3
• 4
• 5

31 Ans.