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The Seller’s Permit

The Seller’s Permit

one of the things i’m so excited about with our upcoming First Year Photographer course is helping people do it right the first time around! i have to admit, i had to work backwards in a few areas since starting my photography business.  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 know that i have the ability to think my way out of anything, so i think that by reacting this way i have a greater chance of success…but it’s not the smartest way to start a business.

which brings me to today’s topic…the lovely seller’s permit!

i’ll never forget talking to one of my photog friends about 6 months into starting my business, when 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 off of me 🙂 well, turns out i was wrong, and it’s something you actually need. my friend was kind enough to share her booklet of info on the topic and give me an extra application she had on hand.

today i will be sharing 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? most states require you 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 another site), you must have a seller’s permit to legally sell these items.  this also applies if you’re simply selling a DVD or flash drive 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? in the State of California, 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 (see below for other states)

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 may not be required to charge your client any sales tax.

*UPDATE: It was recently brought to our attention that the laws have changed regarding taxable sales on digital files. Alabama, Maine, South Dakota, Texas, Utah, Washington and a few other states require that sales tax be charged for digital images. It’s also important to note that sales tax laws do change! If you find your state does not apply sales tax to digital images today, be aware that more and more states are passing legislation to tax these types of digital products. So keep an eye out for any changes, as you don’t want the government coming after you for this! (Thank you for bringing this to our attention, Kristin!)

here’s a nifty little tool you can use on the SBA.gov site to search for your city and state and see what’s required where you live: Find Business Licenses and Permits

we will also be covering this topic in more depth in our First Year Photographer course!

xo

Jess

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4 Responses to The Seller’s Permit

  1. It’s really great that you are bringing these issues to a new photographers attention, it can save them some pain and heartache down the road. But electronically delivered images, are indeed taxable in some states…

    A business owner can’t presume that delivering something digitally/electronically absolves them from sales tax obligations. For example, Alabama, Maine, South Dakota, Texas, Utah, Washington and a handful of other states require that sales tax be charged for digital images transferred electronically.

    I wanted to set the record straight here — above you say “if you are only emailing a client images you cannot charge sales tax” and that’s not true in all states. Sales tax is a complex matter and I highly suggest that photographers do their due diligence to confirm tax obligations in their business jurisdictions. And as we all know — not collecting sale tax when you should could be MAJOR pain for a photography when you get audited and sent a check for uncollected tax. Because the photographer is liable and on the hook for that money 🙁

    • @Kristin, thank you so much for this update! We will research this further to see what has changed and update the post. Thanks again!

  2. I am trying to start my photography business in California and my head is spinning! This article came up in the midst of my many google searches as I am trying to figure out what to do first and what all I may need and I found it very helpful! I am very interested in the First Year Photographers Course but when I click the link from the article, it doesn’t seem to redirect me to anything relevant? I may be mistaken but can you please help guide me in the right direction?
    Thanks!!

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