New wedding photography business in California. If I charge labor only for wedding shoots and give pictures and cd disks away no charge do i need to worry about paying California for sales tax?
I was planning on paying sales tax when I purchased the items and giving them away as no charge/free so California would still get the sales tax.
Labor for wedding shoots is subject to sales tax in California if the customer receives any tangible personal property (CDs, photos). It does not matter whether you are making a separate charge for the photos or not.
When the Board of Equalizaton audits you, they will make you pay tax on the entire charge to your customers with no exemptions for labor.
April 28th, 2009 at 1:23 am
You can get in trouble with the IRS for "avoiding" sale taxes.
Furthermore, you'll work yourself broke if you do that.
References :
April 28th, 2009 at 2:12 am
I don't think that the State Board of Equalization would agree with you, that you are giving away cd disks. I think that they would consider the CD as product from a sale.
You should go to thephotoforum.com, and post this question there on the photo business forums.
You will be able to get a definitive answer on what is required of wedding photographers in california.
http://www.thephotoforum.com/
References :
April 28th, 2009 at 2:25 am
Labor for wedding shoots is subject to sales tax in California if the customer receives any tangible personal property (CDs, photos). It does not matter whether you are making a separate charge for the photos or not.
When the Board of Equalizaton audits you, they will make you pay tax on the entire charge to your customers with no exemptions for labor.
References :
http://www.boe.ca.gov/pdf/reg1528.pdf
sales tax auditor