Tax Trouble
Tuesday, August 11, 2009 at 8:14AM

The last thing you want on your hands as a successful business-person is the issue of back-taxes. Some of the time it's because you decided not to pay them - most of the time it's because you didn't know you had to pay a particular tax. Depending on which state you reside in, and how you deliver your photos to your clients, you may or may not be subject to sales tax.
Check out an excerpt from a Photopreneur article on this matter:
"West argued that the demand for sales tax was wrong because even though he gave the completed film to the clients and didn’t even retain copyright over the images, his transactions were for services rather than tangible personal property. He also claimed that his relationship with his clients was that of employer/employee – a definition even few photographers would want to support. That meant the client always owned the photographs and he didn’t need to pay sales tax for what was effectively a salary. The court, perhaps not surprisingly, didn’t agree. He was ordered to pay 4.5 percent of the gross receipts of each sale for the three years covered in the audit."
Read the complete article here.
Also, Read Dan Heller's article, specifically the licensing guideines:
"Another situation in which sales tax is not charged is when you license images. (Licensing is when you sell someone a right to use an image, but you're not transferring a physical asset.) In California, licensing images is not subject to sales tax, but some states have different laws on this."
Read the complete article here.
Mike |
Post a Comment | 







