Sales tax can be tricky! The sales tax rules that apply to Photographers are no exception. Nebraska has created specific sales tax rules for services & sales provided by Photographers. Let’s break it down to simply this complex issue.
· Photography services are subject to sales tax when a retail sale occurs. This would be a paid session that includes the sale of a tangible item (ex: photograph, album, flash drive etc.) The entire session becomes subject to sales tax at this point.
· Photography services are not subject to sales tax if the paid session does not include a retail sale. If your clients must download their own photos from a 3rd party, then there is no requirement to charge sales tax on the session.
· Videography services including digital audio-visual works are usually subject to sales tax.
· The rate of sales tax you charge depends on the location of the sale. If you sell items from a studio, then the location of the studio would be the location of the sale. If you deliver items to a client, then the client’s location would be the location of the sale.
· Retail sales of photographs, albums, or digital audio-visual works are exempt from Nebraska sales tax if the product is delivered outside of Nebraska. Keep records to show that the product was delivered out of state.
· You must pay sales tax on the equipment, supplies, and props that you purchase for your business if you use these products in your business.
· Products that you purchase to resale are exempt from sales tax.
Lee Neville Tax, LLC specializes in assisting Photographers with their business and offers sales tax consultations and provides sales tax return preparation services among other services. Check them out online today.