SmugMug vs ... those other guys

ziggy53

I'm about 98% sure that I want a SmugMug Pro account. I am curious how I handle things like state taxes from customers in states other than my own? Is there a SmugMug support tool for that?

For instance, I am close to 2 bordering states, close enough that I might get work in those states. If I set up a gallery in SmugMug for a project, SmugMug handles order-taking and order fulfillment.

Will I get a report telling me where money is coming from and do they report this information to the appropriate states?

Is there anything else folks have stumbled upon that I should be "heads-up" about?

Thanks,

ziggy53

Andy

Sales Tax Collection and Taxes

ziggy53 wrote:

I'm about 98% sure that I want a SmugMug Pro account. I am curious how I handle things like state taxes from customers in states other than my own? Is there a SmugMug support tool for that?

For instance, I am close to 2 bordering states, close enough that I might get work in those states. If I set up a gallery in SmugMug for a project, SmugMug handles order-taking and order fulfillment.

Will I get a report telling me where money is coming from and do they report this information to the appropriate states?

Is there anything else folks have stumbled upon that I should be "heads-up" about?

Thanks,

ziggy53

Hi Ziggy...

You will have reporting that tells you who bought what - your client infomation will tell you their email address and name, and what they bought.

Because it is an online sale that technically takes place in California, we charge sales taxes on any California purchase. It is up to the customer to declare taxes themselves according to their own state regulations. Sales taxes on Internet purchases are only required to be charged by the seller on purchases in states where the seller has a physical presence. Since we collect the credit card information, we are considered to be the seller.

You will get a 1099 from SmugMug that will list all income (money we pay you). Any other tax or sales tax questions you have, you should probably discuss with a tax accountant or tax attorney.

Details on that are here:

http://www.smugmug.com/help/reporting

I hope this helps!

ziggy53

Andy wrote:

Hi Ziggy...

You will get a 1099 from SmugMug that will list all income (money we pay you). Details on that are here:

http://www.smugmug.com/help/reporting

I hope this helps!

Thanks Andy, that helps a lot.

ziggy53

JimM

Hi Ziggy,

You will be very happy with the entire site and the process. Marking up photos is easy and watching the sales come in is icing on the cake!

Good luck to you!

Bodley

Andy wrote:

Hi Ziggy...

Because it is an online sale that technically takes place in California, we charge sales taxes on any California purchase. It is up to the customer to declare taxes themselves according to their own state regulations. Sales taxes on Internet purchases are only required to be charged by the seller on purchases in states where the seller has a physical presence. Since we collect the credit card information, we are considered to be the seller.

You will get a 1099 from SmugMug that will list all income (money we pay you). Details on that are here:

http://www.smugmug.com/help/reporting

I hope this helps!

I know I'm on dangerous ground disagreeing with "Andy" BUT:

I have been told by taxing officials, and from what I read in our law, my business is considered a nexus (think thats right) therefore would be considered a physical presence in the State and I would be required to submit sales tax. Therefore I pay sales tax on each sale to the State and local agencies.

I don't think I'm in the majority but I think it's heading my way.

Good Luck!

Andy

Bodley wrote:

I know I'm on dangerous ground disagreeing with "Andy" BUT:
Good Luck!

Bod, you bring up a good point - and I've amended my post above.

We don't give Tax advice. We do comply with tax laws - collecting sales tax for those folks from California who purchase from us. And we report Pro income to the government via 1099 reporting.

Anything else, beyond this, should be taken up between the Pro and his/her tax advisor.

Thanks Greg!

Bodley

Andy wrote:

Bod, you bring up a good point - and I've amended my post above.

We don't give Tax advice. We do comply with tax laws - collecting sales tax for those folks from California who purchase from us. And we report Pro income to the government via 1099 reporting.

Anything else, beyond this, should be taken up between the Pro and his/her tax advisor.

Thanks Greg!

Agreed - Smugmug is obeying the tax laws as I understand them. If I did "stock" photography I would look at the situation differently and would probably not pay the taxes and would leave it to the purchaser as required by the law.

However, I am doing event type shots and direct clients to purchase from "Me" via the website. I consider the shots mine and Smugmug provides a service for "Me" by handling a portion of my collections and printing. So in a sense I've contracted out that portion of my business.

Legally - technically - this is probably not correct. However I'm an engineer and this seems logical to me. When I go to bed at night it's me I must deal with.

If I'm wrong - someone straighten me out - paying these taxes can be a hassle.

JimM

Greg, I am not going to tell you if you are right or wrong, but my interpretation is stop paying the taxes, as you are not charging the customer directly for the print.

It would also depend on what state you are in and what their laws are. I am in Michigan and sales tax is not charged on services. Even if your arguement were true, in MI it wouldn't matter. The product is the print, the customer is purchasing it from California. The profit given to me covers my "service" of shooting the print and uploading it. Does this help?

Also, sales tax should be charged at the time of sale and paid by the customer, not the business (photographer). In your case, you are paying them out of your pocket. It is my understanding that your customers should be paying the state the sales tax (as all of us should everytime we purchase something online or mail order, and I know I ALWAYS DO ).

Does this help any?

Bodley

JimM wrote:

Greg, I am not going to tell you if you are right or wrong, but my interpretation is stop paying the taxes, as you are not charging the customer directly for the print.

It would also depend on what state you are in and what their laws are. I am in Michigan and sales tax is not charged on services. Even if your arguement were true, in MI it wouldn't matter. The product is the print, the customer is purchasing it from California. The profit given to me covers my "service" of shooting the print and uploading it. Does this help?

Also, sales tax should be charged at the time of sale and paid by the customer, not the business (photographer). In your case, you are paying them out of your pocket. It is my understanding that your customers should be paying the state the sales tax (as all of us should everytime we purchase something online or mail order, and I know I ALWAYS DO ).

Does this help any?

Thanks for the info.

I go back and forth on this - but I have had a knowledgeable taxing official tell me I had to pay the taxes. I re-read part of the law and there may be a relative test which could eliminate the need for me to pay taxes on my online transactions. Think I'll do some more investigation. But, in the inter-um, since I sell direct and remit those taxes guess I'll keep on paying the online taxes as well. Kind of a customer service.

mercphoto

Bodley wrote:

I go back and forth on this - but I have had a knowledgeable taxing official tell me I had to pay the taxes.

The sales tax laws regarding internet sales are murky, and I know many states would like to see this changed in their favor. But I would not necessarily trust a state taxing official with a question like this. Its in their best interest to get you to send them money. Kinda like the mechanic who tells you you really do need that brake job...

I had a long example, but here is a simpler example. Do you ever remember paying sales tax before on out-of-state mail or phone orders? You know, before the arrival of the Internet? No. Why is the net different?

NHBubba

Smugmug should move their operation to Oregon, Montana, Deleware or New Hampshire!

Bodley

mercphoto wrote:

I would not necessarily trust a state taxing official with a question like this. Its in their best interest to get you to send them money.

He's a friend.

mercphoto wrote:

I had a long example, but here is a simpler example. Do you ever remember paying sales tax before on out-of-state mail or phone orders? You know, before the arrival of the Internet? No. Why is the net different?

I guess the difference would be I consider the purchases to be from me at my home location where my main internet connection resides. I think of SmugMug as a contractor performing a service for my business.

I'm starting to re-think my position

SportsShots

I will try and steer the topic back on track. Does anyone here have much experience with exposuremanger.com? I hope this does not cause too many waves with the admins.....

Andy

SportsShots wrote:

I will try and steer the topic back on track. Does anyone here have much experience with exposuremanger.com? I hope this does not cause too many waves with the admins.....

Not in the least! We welcome all discussion here, including about Exposure Manager. You'll find there are a bunch of prior threads, check out the search here on Dgrin

mercphoto

SportsShots wrote:

I will try and steer the topic back on track. Does anyone here have much experience with exposuremanger.com? I hope this does not cause too many waves with the admins.....

I don't have "much" experience with them, only about two months and a handful of races.

SM definitely has a nicer, more polished look than EM. However customers have said they don't mind -- the EM site looks more than good enough. Sales have been rather nice. SM has better keywording but EM's keywording is nicer in at least one area. However, I don't keyword like I used to and so this has become a non-issue for me.

I like my shopping cart in EM better. Take a look and notice I only offer 3:2 ratio prints. To do the same in my SM cart is a bit clumsy. Also EM lets me hide the "true color" button altogether, plus no cropping by customer (which is either good or bad).

I've toyed with both the uploading of print-ready and display-only images. I don't have a strong preference yet. However if you are a photographer who shoots 3:2 but offers 4:5 prints for sale, the display-only route has a distinct advantage. When the customer orders an 8x10, for example, you crop yourself before you upload the print-ready JPG for that size.

Uploading is FTP based, and FTP can recurse and build directory trees, which is nice. Your directory structure becomes your gallery structure, and can be as deep as you need.

I have offered digitial downloads of individual files but sold none (maybe one, need to check). Very interesting. But I've also defined a self-fulfill product called the CD-ROM and have sold 5 of those! This is something I always advertised at Smugmug in the gallery description. However when a product is in the actual shopping cart things sell much more easily.

The other nice thing, lower annual fee, 10% commission versus 15%, and (with exception of 4x6) the print prices are cheaper.

I'll keep both accounts for different reasons. The race photography will be at Exposure Manager. I'll use Smugmug for other reasons. Neither site is all I would like it to be.

SportsShots

Thanks for the response and honesty Bill. I currently have the EM account. It was less expensive to set up and yes the comission rate was more attractive. I am new to online sales and am not sure how well they will do.

I have looked at several of the accounts and read a lot at Rob Galbraith before it was shut down.

Thanks again for your input.

john

DanielB

i too have been thinking about getting a pro account... my question is for some of you. *not including portrait photogs* how long did it take you before you started making a profit from selling the photos? as in, how long did it take you to make as much as a pro account costs? then, whats the most popular size purchased of your photos?

thanks,
Daniel

mercphoto

DanielB wrote:

then, whats the most popular size purchased of your photos?

70% 4x6's, which was an eye-opener. I find myself needing to price that small printer higher because of that. Or, stop offering the smallest print. About 12% 5x7, maybe 10% 8x10. A spattering of larger sizes, all the way to 20x30. CD-ROMs are starting to become more popular in the lasts two months as well.

How long it will take to get back your pro account fee depends entirely on waht type of photography you are doing and how people go about finding you.

marlinspike

DanielB wrote:

i too have been thinking about getting a pro account... my question is for some of you. *not including portrait photogs* how long did it take you before you started making a profit from selling the photos? as in, how long did it take you to make as much as a pro account costs? then, whats the most popular size purchased of your photos?

thanks,
Daniel

I wouldn't make a penny if it weren't for the fact that I shoot the sports at my college and market directrly those parents. Having said that, my account fees are actually paid for mostly (last year) or in total (next year) by referrals. If they weren't, each year I'd only make about 2.5 times what the account costs. Admitedly I'm not super dedicated and I'm small potatoes.
That said my breakdown is 62.1% 4x6, 15.2% 5x7, 15.9% 8x10, .007% 24x36, 1.4% 20x30, .007% 16x20, .021% 12x18 and .021% 11x14 (that's going to add up to over 100% because of rounding).