The Podcast is here and it is about sales tax for photographers!
Yes! You read correctly, the first podcast from Nifty Knowledge Rocks is live!
In this first episode I introduce myself, what the blog is about and then head into some discussion about sales tax and what a new portrait or wedding photographer just starting their business would want to know, as well as helpful information for photographers that have been in business several years.
While recording this first episode I realized that my initial goal of talking about a bunch of sales tax information was just way TOO much for 30 minutes, duh, I should have know that. So while some of the discussion on this podcast is short, there will be more detailed discussions of these topics in the future. But this podcast points out some of the areas of sales tax that photographers need to know about which I think is a great starting point!
In this episode, I discuss:
1. The taxability of services and products and why sales tax can (and often will) apply to non-tangible items when photography services are involved.
2. Registering your new business with your local and state authorities to collect sales and use tax
3. Shipping fees, travel fees, discounts, coupons and groupons
4. Nexus and what that means…
A few things I want to point out and clarify:
Since treatment varies by state, you might have to register to collect sales tax with both your local authorities (city and possibly county) as well as your state authorities. This is because some states have locals that self-administer their sales taxes (note the local sales tax rate may vary from city to city within a state). That means that there is a local tax that is remitted to the local authorities, but then there is also a state tax that is remitted to the state authorities. A great example of this is Arizona. Arizona has many cities that apply a local sales tax. Some of those cities such as Glendale, self-administer the sales tax and you need to register and remit the tax directly to them, but the state and county portions of tax will be remitted to the Arizona Department of Revenue. So just know that you might have to register with both the locals and the state…
California “Ship-To” Example
This brings me to my example in the podcast where I discussed California and mentioned that a photographer was delivering an album to a client located in Fresno, and that was called the “ship-to” location. I should have stated that California has a modified sourcing method. Only district taxes are destination based, meaning they are calculated at the “ship-to” and in this case the photographer would have to know the rate of sales tax in Fresno (where their client is/where they are shipping the album). The sales tax rate in Fresno, CA might not be the same sales tax rate as other areas in the state. Fresno might have a special local district rate that applies, which would mean the rate of tax would be HIGHER than the statewide base rate of 7.5%.
I wanted to make clear that you might be doing business in a state where this is NOT an issue, meaning the rate of sales tax is the SAME throughout the entire state. Massachusetts is a good example of that, wherever you are located in Massachusetts the sales tax rate is 6.25%. Massachusetts calculates tax at the “Ship-to” location, meaning they use destination based sourcing, but any destination in Massachusetts will have a 6.25% so that’s easy to calculate.
Hopefully these points make sense after you have listened to the podcast about sales tax for photographers and your photography business. I will continue putting together podcasts on a bi-weekly basis (maybe even weekly so I can get some more cranked out). The future podcasts will go into more detail on sales tax, as well as many other important business issues!