Question about sales tax

ShutterMom

Okay... so a customer likes photos that I've taken of their child and they want to order.

If they order directly from my site, SmugMug takes care of charging them sales tax, correct?

Do I need to keep track of that for my own business purposes? Do I need to get some sort of license for that?

What if I want to provide a package of some kind to my customer? I know that SmugMug does not have that option at this time. So, in that case, I would have to collect the money from the customer and then I would place the order through SmugMug. Again, SmugMug would be charging me sales tax on what I ordered... am I supposed to pass that sales tax cost on to my customer?

I don't have a ton of business right now, but I'd like to know how this works.

Thanks!

chuckinsocal

HI Lisa,

I see by your area code that you live in or around San Diego (I'm in Carlsbad).

I believe that if your customers order through SmugMug that SmugMug will take care of collecting and paying the sales tax.

For the second part of your question you should visit the State Board of Equalization's web site. They have a whole section on sales taxes for photographers. It's the most convoluted thing I've ever read but I think it boils down to if you deliver a tangible product such as prints, CDs, and the like, you need to collect and pay sales tax. But if your customer downloads images or if you transfer images electronically, there is no sales tax. If you decide you need/want to collect sales taxes, then you'd probably have to get a Reseller's License so the state can look over your shoulder.

But in the end, you should probably talk to an accountant or other professional that specializes in small business and follow their advice.

Good luck.