i have to admit, i had to work backwards in a few areas since starting my photography business. i don’t know about you guys, but when i had the realization that this was what i wanted to do for the rest of my life, i kinda just jumped in with both feet. i tend to do that when i get really excited about something. i think i know that i have the ability to think my way out of anything, so by reacting this way i have a greater chance of success…hopefully =)
which brings me to today’s Foto Focus Friday topic…the lovely seller’s permit!
i was talking to one of my talented photog friends, Christina, about a month ago, and she asked if i had my seller’s permit. this sounded familiar but i couldn’t remember why. then it dawned on me. it was one of the additional options i had when filing for my DBA. but because it was an extra $100 or so for them to do it, i just skipped over it, thinking they were trying to make more money =) well, Christina’s mom works in this arena, so she had supplied her with all of the paperwork. we went over to spend the day with her and her family a few weeks ago, and she gave me a copy of the application, along with a book of tax tips for photographers.
i learned so much from this little booklet, so i wanted to share 3 quick tips related to obtaining your seller’s permit and taxable sales for your photography business:
1. Do You Need a Seller’s Permit? i’m not sure about other states, but in the state of California you are required to obtain a seller’s permit if you sell any merchandise. this includes items sold at wholesale or retail. that means, if you are selling prints or photo albums to your clients (even if it’s through Pictage or SmugMug or another site), you must have a seller’s permit to legally sell these items. this also applies if you’re simply selling a DVD of images to the client. the good news is…it’s free! and it’s a very simple one page application!
2. How Do You Obtain a Seller’s Permit? again, i don’t know about other states, but in order to obtain the California Seller’s Permit, you need to contact the State Board of Equalization or visit a local office to get an application. once you have completed the application, you can mail it in or bring it to your local BOE office. i chose to visit a local office, because i wanted to get the permit in my hands as quickly as possible. i had my permit in a week! you can visit the website here for more information: CA State Board of Equalization
3. Taxable Sales of Photographs & Related Products – one of the most important things that i personally learned was that anytime you are providing any final photographic product (DVD, prints, album, etc.) to your client, you should be charging state sales tax. this means, sales tax based on the entire price of the products and services. however, if you are not providing a final, tangible product (for example: you are only emailing the image file or setting up an online gallery for them), then you cannot charge your client any sales tax.
i hope that some of you found this helpful! i’d be more than happy to try to answer any questions (although i’m still learning myself), and i’d love to hear your thoughts and feedback!
have an awesome weekend!
xoxo
jess
Hey Jess! Soooo glad you posted this! Question … do you need a seller’s permit in order to charge tax? And, there is no fee for it? What about that $100 they were wanting to charge originally? And … how can I get a copy of the book of tax tips for photographers?
I know … a lot of questions!
Thanks!
Lynda
Hi Lynda! okay I’m gonna try and answer your questions =)
1) do you need a seller’s permit in order to charge tax? Yes! I guess you can only charge tax on your service and products when you’re actually delivering some kind of final, tangible item. And, in order to do that, you have to have a seller’s permit. At least that’s what I’ve been told.
2) And, there is no fee for it? What about that $100 they were wanting to charge originally? There is no fee to obtain the permit. I just realized that the way I phrased that was probably confusing. The site that I used to get my DBA was bizfilings.com, and they charge for it because they are doing the paperwork and filing for you.
3) how can I get a copy of the book of tax tips for photographers? Here is a link to the pdf of the book: http://www.boe.ca.gov/pdf/pub68.pdf
thanks!
Another educational post Jess. YOU are going to be getting me through a lot with your posts!! 😉