California Releases New Guidance for Photography Sales and Services.

Thursday, December 18th, 2014

 
 
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The California State Board of Equalization has updated tax guidance for photographers, photo finishers, and film processing laboratories.

California generally taxes photography services and sales of photographs. Labor and service charges related to photography services are also taxable if they result in the creation of tangible personal property. For example, editing photos or assembling them into a collection is taxable labor, regardless of whether an editor/assembler took the photos.

Some photography sales are non-taxable. Electronic transfers of photographs, where there is no transfer of tangible personal property, are not taxed. Repair and restoration services to return a photograph to its original condition are not taxed. However, sales of reproduction rights and leases are taxable if the purchaser/lessee receives tangible personal property and does not resell or sublease the photos. Reproduction rights and leases for electronically transferred photographs are not taxable.

Creative art services performed for qualified motion pictures are not taxed. These services can only convey ideas, concepts, looks, or messages. They cannot create photographic products that clients will reproduce or display. A "qualified motion picture" is a motion picture intended for commercial use.

Tax paid by the photographer on photography chemicals varies based on how the chemicals are used. Purchases of chemicals consumed in creating photographs, but not incorporated in the photograph, are taxed. They do not qualify for the resale exemption unless they are resold unused. Purchases of chemicals that become a physical part of a photograph are not taxable. These chemicals qualify for the resale exemption.

http://www.boe.ca.gov/pdf/pub68.pdf


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