Do you charge tax in your state?
- Thread starter firehawk
- Start date
mainstreetprod
Veteran
Sales Tax is generally not charged on any service. I'm sure there are states that are exceptions, but generally it is only charged on merchandise. Check with your state dept. of revenue.
j1clark@ucsd.edu
Veteran
In California if there is any 'physical' item transferred, 'sales' tax applies.
Here's an excerpt from the 'online' sales brochure...
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Your sale of electronic data products such as software, data, digital books (eBooks), mobile applications, and digital images is generally not taxable when you transmit the data to your customer over the Internet or by modem. However, if as part of the sale you provide your customer with a printed copy of the electronically transferred information or a backup data copy on a physical storage medium such as a CD-ROM, your entire sale is usually taxable.
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Of course if you went to the tax office the person there would make a blanket statement that all photography services are taxable. But that's not how their brochure read...
So, one would need to separate the 'production' services, that is shooting the material, from the deliverables, which could be provided via electronic means, and hence not have tax applied.
abreu-canedo
Well-known member
Yes, I totally agree with McBob. I add the 30% tax surcharge on top of my cost of doing business that determines my day rate. This is not itemized, just a determining factor on my rate. It's not a sales tax, it's accounting for the income tax I'll have to pay as my own business in the eyes of the government. Figure out how much you plan to make (or base it on how much you made last year), use it to determine which tax bracket that will put you in, and that should tell you how much income tax you'll need to pay.
Another tip is to always have a document documenting the prices and rates you charge, so that if you ever give discounts, you can write off your discounts as losses. This way, if you want to work a gig but you need to lower your rate to get it, then you can safely write off that discount so you're not losing money on it. Just make sure your invoice lists the original price and the discount amount.
Another tip is to always have a document documenting the prices and rates you charge, so that if you ever give discounts, you can write off your discounts as losses. This way, if you want to work a gig but you need to lower your rate to get it, then you can safely write off that discount so you're not losing money on it. Just make sure your invoice lists the original price and the discount amount.
In my backwards state, Photography services (video is categorized in this) are taxable. Even if the service consists of the client downloading the video over internet with no physical deliverable, the tax applies to the location where they received the final product, which in that example would be the location where they were when they downloaded it.
If I shoot the video in XX City in my state, and the client receives the finished video in YY City in my state, then the job is taxed according to the city/county/state rates in YY city.
If I shoot the video in XX City in my state, and the client receives the finished video in YY City in my state, then the job is taxed according to the city/county/state rates in YY city.