Expert: Wedding Photographics - 9/23/2009

Question
Hi,

I have a very specific and highly debated sales tax question for the state of Alabama.  I'm a professional photographer.  From my understanding, if I shoot a job and bill the client for the labor with no products included in the sale price, I do not need to collect sales tax.  If they order products later, I will then collect sales tax.  But when I sell a wedding package for, let's say $3000, that package includes some products such as albums, cds, proofs, ect.  From my understanding, in this case, I am supposed to collect 9% sales tax on the entire wedding package even if most of the package price is for labor.  Is this correct?  Is there any way of billing the client so that they don't have to pay 9% sales tax on the labor?  Most photographers in my area do not know about the rules or are confused and many don't charge sales tax at all.  I don't want to ward off potential clients by charging unneccesary sales tax.

Thank you very much,

Lori

Answer
Hi Lori,

Sales tax does laws do vary between states. I don't know how those work in Alabama. I use a certified public accountant (CPA) to handle all my business matters. I would just like to recommend you seek the services of a public accountant for the answer to those questions as they apply to Alabama as well as to help keep your business records in proper order in case of audit. Your CPA can also help you benefit from equipment depreciation, properly recording mileage and most all other business operating expenses etc., to reduce your income tax liability as well.

Of course, a competent CPA in Alabama should be able to answer your questions. If a CPA in Alabama suggests asking another photographer, that photographer should also be based in Alabama.  But you would still be left wondering if that is just another photographer who knows the legal answer to your question since you said this is a highly debated sales tax question. So my recommendation is that you seek a CPA who knows the answer to that simple sales tax question in Alabama.

Thanks for your photography business questions. Photography I'm pretty knowledgeable about, but sales tax is not my expertise among the various states.

John Wilson