LR3714
RE: Photography Services, Photographs, and Labor
April 4, 2007
Dear Applicant:
This is a letter ruling issued by the Director of Revenue pursuant to Section 536.021.10, RSMo and Missouri Code of State Regulations 12 CSR 10-1.020, in response to your letter dated February 6, 2007.
The facts as you presented them in your letter are summarized as follows:
Applicant provides professional photography services in Missouri. Among the services provided, Applicant provides services in the areas of wedding photography, commercial photography, and portraits.
In the wedding photography, Applicant charges its clients an hourly or daily rate to take wedding photos. This hourly or daily rate entitles the clients to view the images Applicant captured of the wedding. The clients may then order individual photographs or a complete album of photographs for an additional charge. The additional charge for photographs or albums includes processing, printing, overhead, labor, and profit. Sales tax is charged on the additional charge for the photographs and albums.
In commercial photography, Applicant charges its clients an hourly rate for Applicant’s time. Clients’ needs vary from digital files to prints. Applicant sells these items on an individual basis and collects sales tax on the sale of the digital files and prints. The prices for the digital files and prints include processing, printing, overhead, labor, and profit.
For portraits, Applicant charges its clients a portrait-sitting fee for the time required to take the portrait. The portrait fee only entitles the client to view the photographs. The client then chooses what photographs to purchase, if any. Portraits are purchased individually and sales tax is charged on the sale price. The separate charges for the portraits include processing, printing, overhead, labor, and profit.
ISSUE 1:
Should Applicant charge sales tax on its hourly or daily rates for taking wedding photographs?
RESPONSE 1:
No. Applicant should not charge sales tax on its hourly or daily rates for taking wedding photographs if the charges are separately stated.
Sales of finished photographs by photographers are subject to sales tax. Services rendered by the photographer frequently represent a substantial portion of the total charges. Fees for the photographer’s consultative and photographic services up to the point of previews are not subject to tax if separately stated. Other charges for labor involved in creating the finished photographs are subject to tax even if separately stated. See Missouri Code of State Regulations 12 CSR 10-103.380.
ISSUE 2:
Should Applicant charge sales tax on its hourly rates for commercial photography service?
RESPONSE 2:
No. Applicant should not charge sales tax on its hourly rates for commercial photography service if the charges are separately stated.
Fees for the photographer’s consultative and photographic services up to the point of previews are not subject to tax if separately stated. Charges for labor involved in creating the finished digital files or prints are subject to sales tax even if separately stated. See Response 1.
ISSUE 3:
Should Applicant charge sales tax on its portrait-sitting fee?
RESPONSE 3:
No. Applicant should not charge sales tax on its portrait-sitting fee if the fee is separately stated.
Fees for the photographer’s consultative and photographic services up to the point of previews are not subject to tax if separately stated. Charges for labor involved in creating the finished portrait are subject to sales tax even if separately stated. See Response 1.
This letter ruling is binding upon the Department of Revenue with respect to the Applicant for three (3) years from the date of this letter and is subject only to statutory changes by the General Assembly and to changes in the interpretation of law by the courts or administrative tribunals. If a change occurs, the taxpayer who relies upon an outdated interpretation may be subject to additional taxes, interest, and penalties, which may be imposed prospectively from the date of the change. For this reason, the interpretation set forth above should be reviewed on a regular basis. Please note that any change in or deviation from the facts as presented will render this ruling inapplicable.
Should additional information be needed, please contact Ron Clements, Senior Counsel, Office of General Counsel, Post Office Box 475, Jefferson City, Missouri 65105-0475 (phone 573-751-0961), or me.
Sincerely,
Trish Vincent
Photographic Education - JerryCentral 