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Texas still requires sales tax?

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    David ManningDavid Manning Registered Users Posts: 66 Big grins
    edited September 29, 2009
    This is what Smugmug sent back to me:
    Hi Patsy,

    Thanks for contacting SmugMug.

    We don't receive the copyright to your images, the copyright is retained by you. So you would need to be responsible for collecting sales tax.

    We don't have any way to charge for the sales tax, you'll have to build that extra cost into your profits. I will forward your message to our Feature Request crew to see if there's something we can do about this. Currently, we only charge sales tax to customers that live in California, as that's where our Headquarters is located.
    If you need anything else, please let us know.

    Take care,
    Wendee
    Support Hero

    This may not be the answer any of us want to hear, but it is the answer. Texas has stipulations on how it has to be noted and recorded when including the sales tax in the purchase price. That may make it hard to keep proper records while selling images through smugmug.

    Sounds like SmugMug Pro wasn't ready to launch outside CA. Other providers collect taxes properly based on the client's mailing address. The SmugMug response appears somewhat uninformed and not at all customer (photographer) friendly. PicPick anyone?

    David
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    SmugShooterSmugShooter Registered Users Posts: 20 Big grins
    edited October 1, 2009
    Texas sales tax law requires that the customer's receipt says something like "Tax included" whereas the SmugMug receipt says that zero sales tax was charge / collected. Here's the reference (see item 4)

    http://www.window.state.tx.us/taxinfo/sales/faq_collect.html

    "4. Am I required to separately state the sales tax amount to my customers?<dl><dd>Yes. You must separately state the sales tax amount on your invoice or receipt unless you provide a written statement on the invoice or receipt that the sales price includes sales tax. If you use a written statement that sales tax is included in the sales price, you have collected sales tax and must report the collected tax by backing it out of the total amount received...."</dd></dl>
    I was curious about this, so I sent an e-mail to smugmug about Texas sales tax and smugmug. This thread was over two years old when it was revived so it may not be checked by anyone at smugmug on a regular basis and I wanted an answer. I have to say I got the answer I expected by reading the information from the state. Photographers that live in Texas and sell prints online, with the help of any online company that does not take possession of the copyright of the photographs, are responsible for paying the sales tax on the photographs. Texas requires that shipping fees be taxed as well.

    This is what I sent to Smugmug:
    Texas has recently updated the sales tax policies for photographers using online hosting companies. I am attaching a link to the pdf from the Texas Comptroller.
    It states "the photographer, not the hosting company, is responsible for collecting Texas sales tax for photographs sold to Texas residents." and "However, if the hosting company receives the copyright to pictures sold on its Web site, then the hosting company is considered the seller of the photographs."

    Unless I am mistaken this means that I am responsible for sales tax on purchases made by anyone living in the state of Texas. Texas also requires that the price of shipping is taxed. Does SmugMug have any plans to add a feature so I can set a sales tax rate on print sales for purchasers in Texas?
    The information regarding internet sales in on page 3 of this pdf. www.window.state.tx.us/taxinfo/taxpubs/tx94_176.pdf
    Thank you
    -Patsy-

    This is what Smugmug sent back to me:
    Hi Patsy,

    Thanks for contacting SmugMug.

    We don't receive the copyright to your images, the copyright is retained by you. So you would need to be responsible for collecting sales tax.

    We don't have any way to charge for the sales tax, you'll have to build that extra cost into your profits. I will forward your message to our Feature Request crew to see if there's something we can do about this. Currently, we only charge sales tax to customers that live in California, as that's where our Headquarters is located.
    If you need anything else, please let us know.

    Take care,
    Wendee
    Support Hero

    This may not be the answer any of us want to hear, but it is the answer. Texas has stipulations on how it has to be noted and recorded when including the sales tax in the purchase price. That may make it hard to keep proper records while selling images through smugmug.
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    BeachBillBeachBill Registered Users Posts: 1,311 Major grins
    edited October 1, 2009
    Okay, so I read most of the messages in this thread but not all so it's possible this has already been brought up...

    Question #1 - Who is selling the prints ordered from your Smugmug site?

    If you are using the built-in Smugmug shopping cart, the transaction is between the purchaser and Smugmug, who is based in California. I assume Smugmug collects sales tax for sales shipped to CA addresses.

    Question #2 - How are your customer's paying for these prints?

    Most likely via credit card, and if you are using the built-in Smugmug shopping cart, the charge is via Smugmug's merchant account.

    It is very cut and dry -- if you are using the Smugmug built-in shopping cart, YOU are not selling the prints, Smugmug is. Therefore, Smugmug must collect the sales tax and they are only legally required to do so in their home state.

    If you are collecting money from your customer for prints (either cash or credit charged using your OWN merchant account), then you would need to make sure you are collecting sales tax in accordance with your home state's laws.
    Bill Gerrard Photography - Facebook - Interview - SmugRoom: Useful Tools for SmugMug
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    patsy easleypatsy easley Registered Users Posts: 91 Big grins
    edited October 1, 2009
    BeachBill wrote:
    Okay, so I read most of the messages in this thread but not all so it's possible this has already been brought up...

    Question #1 - Who is selling the prints ordered from your Smugmug site?

    If you are using the built-in Smugmug shopping cart, the transaction is between the purchaser and Smugmug, who is based in California. I assume Smugmug collects sales tax for sales shipped to CA addresses.

    Question #2 - How are your customer's paying for these prints?

    Most likely via credit card, and if you are using the built-in Smugmug shopping cart, the charge is via Smugmug's merchant account.

    It is very cut and dry -- if you are using the Smugmug built-in shopping cart, YOU are not selling the prints, Smugmug is. Therefore, Smugmug must collect the sales tax and they are only legally required to do so in their home state.

    If you are collecting money from your customer for prints (either cash or credit charged using your OWN merchant account), then you would need to make sure you are collecting sales tax in accordance with your home state's laws.

    That was the assumption when I signed up with SmugMug. The problem is that some states have put policies in place to make the photographer responsible for the sales tax. Texas put a policy in place earlier this year that states the photographer is responsible for the tax unless the copyright to the photograph is signed over to the hosting company. You can find that information in this pdf. www.window.state.tx.us/taxinfo/taxpubs/tx94_176.pdf
    States are realizing they are loosing tons of money in revenue every year from online sales and they are doing all they can to recoup some of that loss.
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    promoguypromoguy Registered Users Posts: 58 Big grins
    edited October 1, 2009
    BeachBill wrote:
    Okay, so I read most of the messages in this thread but not all so it's possible this has already been brought up...

    Question #1 - Who is selling the prints ordered from your Smugmug site?

    If you are using the built-in Smugmug shopping cart, the transaction is between the purchaser and Smugmug, who is based in California. I assume Smugmug collects sales tax for sales shipped to CA addresses.

    Question #2 - How are your customer's paying for these prints?

    Most likely via credit card, and if you are using the built-in Smugmug shopping cart, the charge is via Smugmug's merchant account.

    It is very cut and dry -- if you are using the Smugmug built-in shopping cart, YOU are not selling the prints, Smugmug is. Therefore, Smugmug must collect the sales tax and they are only legally required to do so in their home state.

    If you are collecting money from your customer for prints (either cash or credit charged using your OWN merchant account), then you would need to make sure you are collecting sales tax in accordance with your home state's laws.

    Again, I am not an accountant, but I have a business that is involved in interstate commerce with a rep in a couple of states. I at one time had a rep in TX

    The fact of the matter is if the photographer is in TX or any state for that matter and Smugmug is forwarding a 'commission' check to that individual then in fact the photographer is a sales rep for smugmug and as a sales rep in the state of TX smugmug is responsible for collecting the sale tax and remitting to the state of TX.

    If the sale is between smugmug and the buyer in TX and no commission is being paid, there is no nexus. Although the state of TX could, I would think, make the connection only because the photographer is in TX.

    I have no dog in this fight nor horse in this race, but I believe that the system in place for interstate sales of photos via smugmug would for me not be a viable option. Just be careful, because TX is getting tough on the collection of sales tax.
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    David ManningDavid Manning Registered Users Posts: 66 Big grins
    edited October 2, 2009
    I bought RedCart.
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    SmugShooterSmugShooter Registered Users Posts: 20 Big grins
    edited October 6, 2009
    Did a bit of research and found that PhotoReflect and ZenFolio can both handle state sales tax in Texas for photographers doing business in Texas. They can handle other states too. PhotoReflect has a very sophisticated and powerful sales tax capability. ZenFolio lets the photographer decide to turn sales tax collection on or off, instead of being at the mercy of the online service provider. Both add the sales tax to the purchase price during check out, and remit the tax collected back to the photographer to pay to the state.
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    philsphotographyphilsphotography Registered Users Posts: 22 Big grins
    edited January 27, 2011
    Are there any tips on Android applications for sales tax by zip code?
    Phil Forister
    www.philsphoto.com
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    txbobstxbobs Registered Users Posts: 5 Beginner grinner
    edited January 27, 2011
    Are there any tips on Android applications for sales tax by zip code?

    How many times would you need to look it up? You're sales tax is calculated based only on your business address. https://ourcpa.cpa.state.tx.us/atj/addresslookup.jsp
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