A question I often hear on discussion forums is "Do I need to charge sales tax for an out of town client?" The short answer is, "No" and "It depends." Let's discuss.

The answer to the question depends solely on where you deliver the finished product. If you work in State A and deliver your product, be it proofs, prints or albums, to State B, no tax will ever apply (assuming you're in the USA). Now I often hear people respond to this question with a "You should ask your local state taxing agency." That however isn't necessary.

If you'll recall from your Civics 101 class, only the US Congress has the authority to regulate interstate commerce. When you ship your products from one state to the other, that's interstate commerce and thus not subject to taxation by individual states. In the absence of a national sales tax, individual state tax rates and policies don't apply.

But what if you did the shoot in the state where the client lives? Doesn't matter so long as your business is physically located in another state and you ship the product across state lines. The client must take deliver of the product in their state; if you hand deliver the product in your home state so that the client can take it home, then tax is due in the full amount.

For that reason, it's important that you use a trackable shipping source such as Fed Ex or UPS and maintain good records. In the event of an audit, you may be asked to provide evidence that all those out-of-state shipments are legitimate.

The caveat to this discussion is that this advice applies solely to photographers working in the USA. Other countries have Value Added Tax (VAT) that applies to all sales. If you're in Canada, the UK or elsewhere, you'll need to check with your national taxing agency for specifics. To be clear however, if you live and work in the US and ship out of the country, no sales tax applies (although various tariffs may be due from the client to their home country).

John Mireles

Like this on Facebook