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Connecticut Professional Photographers Association

CT Sales Tax for Photographers - when you should be charging it.

July 22, 2012 5:01 PM | Anonymous

The sales of tangible personal property made in Connecticut to in-state customers and out-of-state customers are subject to 6.35% sales and use taxes pursuant to Conn. Gen. Stat. §12-407(a)(2)(A).


Photographic studio services are subject to 6.35% Connecticut sales and use taxes pursuant to Conn. Gen. Stat. §12-407(a)(37)(F).   Photographic studio services performed in Connecticut to in-state customers and out-of state customers are subject to 6.35% sales and use taxes.

Conn. Agencies Regs. §12-407(2)(i)(F)-1 states:

“(b) Charges made by service providers. (1)(A) When a photographic studio sells photographs, videotapes or movie films, it is generally deemed to be selling tangible personal property, and charges for any services performed in connection with the production of such property are includible in the measure of tax for its sale. Separate charges for services of a photographic studio that do not culminate in, or that are in addition to, the sale of tangible personal property (such as sitting fees charged when the customer does not choose to purchase the photograph, videotape or movie film, or fees for the restoration or retouching of a photograph, videotape or movie film supplied by the customer) are taxable as photographic studio services.”


The regulation further states, “(d) Where sales by photographic studios are deemed to be made.

(1) Sales of tangible personal property by a photographic studio are taxable if the location where title to such property is passed is within Connecticut.”

(2) Photographic studio services shall be subject to tax if the photographs, videotapes or movie films are taken in Connecticut. If the photographs, videotapes or movie films are taken in Connecticut, the sale of photographic studio services shall be taxable, notwithstanding the fact that the materials consumed in rendering such services were purchased outside Connecticut, the contract for services was negotiated or executed outside Connecticut, the bill or invoice for such services is mailed to or from an address outside Connecticut, or the purchaser of such services is a nonresident.”


The sale of tangible personal property, such as photographs and wedding albums, in Connecticut is the sale of tangible personal property and subject to 6.35% sales and use taxes.


If title to tangible personal property transfers outside Connecticut and the tangible personal property is for use outside this state, the sale of tangible personal property is considered an out-of-state sale and not subject to Connecticut sales and use taxes. If a photographer takes photographs in Connecticut and the photographs are delivered outside Connecticut and transfer of title to the photographs occurs outside this state, the sale of the photographs is considered an out-of-state sale and not subject to Connecticut sales and use taxes. This transaction may be subject to tax in the state where title to the tangible personal property is transferred.

The sale of tangible personal property, such as photographs and wedding albums, outside this state are not subject to 6.35% Connecticut sales tax. If a customer purchases tangible personal property outside this state that is intended for use in Connecticut, the customer owes Connecticut use tax when the item is brought into and used in this state. If a customer purchases an item of tangible personal property outside Connecticut for use in this state and properly pays the other states sales tax at the time the item is purchased, the customer owes use tax to Connecticut on the difference between the 6.35% Connecticut sales and use tax rate and the rate of tax paid to the other state or political subdivision; see Conn. Gen. Stat. §12-430(5) and page 11 of Informational Publication 2006 (11)Getting Started in Business.  

Photographic studio services are subject to 6.35 % sales and use taxes in Connecticut.  If photographic studio services are performed in Connecticut and the customer receives the photographs in digital form (over the Internet), the photographic studio services are subject to 6.35% Connecticut sales and use taxes. The Connecticut sales and use tax applies to the transaction regardless of whether the customer receives the photographs in digital form in Connecticut or outside this state because the services are performed in this state.

If photographic studio services are performed in Connecticut (photos or videos are taken in Connecticut) and the customer does not purchase tangible personal property, any amounts that the photographer charges for taking the photographs or videos is subject to 6.35% sales and use taxes regardless of whether the customer is from Connecticut or another state.  Likewise, it a photographer performs photographic studio services in Connecticut and the customer purchases some of the photographs or videos, any amount that the photographer charges for photographs or videos not purchased are photographic studio services and subject to 6.35% sales and use taxes.


If a customer does not hire a photographer for the photographer’s services but merely purchases a photograph electronically from an existing database of photographs, and does not receive any tangible personal property with the purchase, such as a print of the photograph, the transaction is considered the sale of computer and data preprocessing services and the total sales price is subject to 1% sales and use taxes when the images are delivered to a Connecticut location.  If the electronically delivery occurs outside Connecticut, the transaction is not subject to Connecticut sales and use taxes.


If a customer purchases a photograph electronically from an existing database of photographs and receives tangible personal property such as a print of the photograph, the sale considered a sale of tangible personal property and is subject to 6.35% Connecticut sales and use taxes.


If the tangible personal property (print) is delivered to the customer outside Connecticut for use outside this state, the transaction is considered and out-of-state sale and not subject to Connecticut sales and use taxes.

 

Conn. Agencies Regs. §12-407(2)(i)(F)-1 addresses the taxability of reproduction rights and states:

(2)(A) If the true object of a transaction involving a photographic studio is not to obtain outright ownership of the photograph, videotape or movie which was created, restored or retouched for a particular customer, but to obtain only certain of the intangible incidents of ownership thereto, such as the right to reproduce, change or market the photograph, videotape or movie, the charge for such transaction shall be considered a charge for photographic studio services and the transfer of intangible personal property. The charge for the transfer of the intangible incidents of ownership may be only excluded from tax to the extent that it is separately stated from the charge for the photographic studio services on the bill to the customer and the service provider can demonstrate to the satisfaction of the commissioner that such charge is reasonable. If, however, the charges for the sale of the intangible incidents of ownership are not so separately stated, the entire charge shall be taxable as the sale of photographic studio services.


Therefore, reproduction rights are considered intangible personal property. When a customer is purchasing reproduction rights to a photograph that is either taken for the customer or from an existing database of photographs, a separate charge for the reproduction rights is not subject to sales and use taxes.

 

Conn. Agencies Regs. §12-407(2)(i)(F)-1(c) addresses purchases by photographers and states:

“(c) Purchases by service providers. Photographic studios may purchase tangible personal property, such as mounts, frames, sensitized paper used in finished photographs, videotapes and films, that is transferred to the customer as an ingredient or component part of the finished product being sold on a resale basis when the true object of the transaction is the sale of tangible personal property. When the true object of a sale by a photographic studio is to render services or convey an intangible right, as opposed to selling tangible personal property as discussed above, then the tangible personal property purchased by the photographic studio in connection with rendering such services or such conveyance is considered to be consumed by the studio and is taxable. Providers of photographic studio services are the consumers of supplies that are used by them, such as chemicals, trays, film (other than film incorporated into the tangible personal property sold to the customer), plates, proof paper, cameras and video equipment, and their purchases of supplies are taxable."


If a photographer is purchasing prints for resale in the regular course of business, the photographer may purchase the photographs without payment of sales and use taxes by issuing a Resale Certificate to the seller.  See Informational Publication 2009(15)Notice to Retailers on Sales and Use Tax Resale Certificates for further information on resale certificates. The photographer must charge Connecticut sales and use taxes on the sales of the prints delivered to the photographer’s customers in Connecticut.  If the prints are delivered to the photographer’s customers outside Connecticut for use outside this state and title to the prints transfers outside Connecticut, the sales of the prints are considered out-of-state sales and are not subject to Connecticut sales and use taxes.


See page 9 of Informational Publication 2006(11)Getting Started in Business, for information regarding sales and use tax nexus in Connecticut.


You can find statutes, regulations, rulings, publications, and forms of DRS at the DRS website: www.ct.gov/drs.

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