Don’t tick off the comptroller…
Monday, June 13th, 2011Thinking about starting your own photography business, or already have one up and running? Have you thought about all the legal requirements of running your own business including things like tax reporting not only to the federal government but your own state as well?
Austin photographer and artist Eric Setter is diving into the world of sales tax for the State of Texas. Down here, the law is that photography services, not just products, are taxable and to sell those you are required to have a Sales Tax Reseller License from the state. If they find out you’ve been selling products and not charging sales tax it can get ugly, and can ruin a fledgling small business.
There are a few select states that have no sales tax, and kudos to you if you live there! Just don’t forget about your State Income Tax reporting… For everyone else, make sure you check with your State Comptroller’s Office to find out if you should be charging sales tax. When you do, anything you buy in order to resell should not have sales tax charged on it so make sure your vendors have your ID number on file (again, this is your State Sales Tax Reseller ID number and not your Federal EIN or SSN) and the products aren’t double taxed.
Once you’ve got that all setup come check us out at Canvas Press Pro, which offers special discounts and products just for professional photographers and artists who are reselling the things they buy from Canvas Press.
Read Eric’s story as he learns about charging sales tax for his photography business:
As part of my evolving self-education in the realm of entrepreneurship, I recently was alerted to the fact that there are several things one needs to really get set up right.
- Set up your business structure (which can be as easy as setting up a DBA)
- Get a Tax ID (Also pretty easy)
- Get a Sales & Use Tax permit (not the same as the Tax ID)
The last one there is what just bit me. The permit is what many of you have probably seen hanging up in a public area of any business you’ve been in in Texas. It’s a piece of paper with a Texas flag watermark and basically it allows you to collect the sales tax you’re supposed to be collecting. Places get shut down if they’re not in compliance or don’t have one. The standard nowadays is to file quarterly and pay the state comptroller those sales taxes you’ve collected. Again, this is completely separate from your income tax filing.
I’m in the process now of filing an annual report for 2010 and another for the first quarter of this year. Let me tell you I’m not having fun finding out I’ve not been in compliance. In case you missed it, you need to file (and pay) sales & use tax reports quarterly. Also, know that photography as a service is still taxable. I am not a tax professional but so far what I’ve been directed to is a special publication by the Texas comptroller that directly addresses photography businesses. That publication is located here. One of the opening statements contradicts what had been my (mis)understanding of taxable products has caused me to re-visit my pricing structure and categorization of products in Quickbooks. Here is that paragraph with my added emphases underlined:
Luckily, I’ve not been busting at the seams with business and hopefully the burden will be minimal. Still, I owe the government money and they can be jerks about charging interest and fees. Let’s hear it for mercy for the little guy! I encourage anyone out there with a small service based business to check into what their responsibilities are because it’s something you want to deal with sooner rather than later. As I think I mentioned before, the government tends to be pretty unforgiving in their charging of interest and late fees…













