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DPChallenge Forums >> Business of Photography >> Paying Taxes Questions; Can someone answer?
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10/27/2006 07:44:28 AM · #1
I recently received my federal and state Tax ID numbers. Question 1: Are the taxes on the sale of prints to my customer considered sales tax or service tax? Would it be considered general merchandise or a service? Question 2: When I order prints from a print processing company (I'm not charged tax), so when I pay my taxes is that considered sales tax or service tax?

If anyone can offer advice, I'd sincerely appreciate it!

Wendy
10/27/2006 03:30:54 PM · #2
bump? Any CPA's out there?
10/27/2006 09:35:39 PM · #3
What country are you in?

In the US, anything you buy FOR RESALE you don't pay sales tax on. The end-user pays sales tax. For example, if you buy a frame to display a print (in your studio or living room) you pay sales tax. You buy a frame for a print and sell that to a customer, then that person pays sales tax.
Any vendor will have a form for you to fill out showing your 'tax exempt status' so they don't have to charge you sales tax.

In Pennsylvania where I am photographic services are taxable as is photographic items (prints, albums, frames, buttons, etc).

You state will have (probably online) a list of what's taxable and what's not, and what that tax is (amt), and when you pay and to who.

I pay quarterly, oct 20 for the third quarter ending sept 30. I can file via the internet or a phone, and i can pay 4 different ways. I collect 6% but the state only collects something like 5.94 - the difference is my 'fee' for collecting their tax.

service or product...it's all the same here in PA. If where you are they are taxed differently then you have to decide how much of each is what - for example, a wedding package of $1500 includes 8 hours shooting and X hours processing, an album and some prints. You might say the album and prints are $750 and the 'service' is $750.
10/27/2006 11:55:32 PM · #4
Oh, I mean, when I pay the state taxes monthly and I have to figure out whether my sale of prints to a customer (not to the person but to the state) is considered sales tax or service tax -a difference of sales .0625 or service .00625. I consider the tax included in the sale to the customer, but I'm talking about my monthly state payment. Another photographer told me that I am providing a service, and therefore, what I pay the state is a service tax.

Additionally, anything I purchase that I haven't paid tax on, I have to report to the state of IL and pay sales tax (monthly - same form). I figure props would be merchandise (sales tax), but I'm not sure about my prints expense that I'm not taxed on, but the state is expecting tax from me.

Message edited by author 2006-10-27 23:58:30.
10/29/2006 08:26:30 PM · #5
You'll have to contact your state's tax dept. At least here in PA they do answer teh phone rather quickly, are nice and efficient.
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