Sales Tax

[Wes]

Okay, I've just opened an account with ExposureManager and have uploaded some images. Do I need to configure it to charge sales tax when my customer is in Texas?

Also, if I go the route of digital fulfillment, do I have to charge sales tax? I couldn't find anything on the ExposureManager site to answer these questions.

Thanks.

[LoungeLizard]

Best place for answers is NOT ExposureManager but the State Comptroller's website.

Originally Posted by xmenporsche

Okay, I've just opened an account with ExposureManager and have uploaded some images. Do I need to configure it to charge sales tax when my customer is in Texas?

Yes...assuming they forward the tax to the state of Texas.

Originally Posted by xmenporsche

Also, if I go the route of digital fulfillment, do I have to charge sales tax? I couldn't find anything on the ExposureManager site to answer these questions.

Thanks.

Not sure what this is, but if you are providing a physical product (print, CD, proof sheet), you need to collect sales tax and pass it on to the state. The tax is not only on the price of the product sold, but the service that generated the product. So, if you charged $200 for a photo shoot and sold $10 worth of prints, you need to collect sales tax on $210 - not $10!

[cmalana]

For exposure manager, their model is that you license them the images when a customer orders and the customer purchases the prints from THEM. They are based in another state and that is why customers are not charged sales tax...similar to when we order stuff from b&h or other out-of-state mail order places.

[Wes]

Thanks, cmalana. That's pretty much what they told me when I sent them an e-mail. Which, truth be told, I should have done from the beginning rather than posting the question here.

Here's what they said:

Hi Wes,

If you use our pro fulfillment the sale is being made in California,
and therefore is subject to CA tax. (If the customer is in California,
they are charged sales tax.) We take a 'one time license for resale'
which technically allows us to be the seller in these cases, as a CA
business. In this case 'you' are not selling to TX residents, 'we'
are, and we are a CA company so they are not subject to tax.

If you use self fulfillment, then you are considered the seller, and
need to add TX sales tax. I hope that helps clarify.

Best regards,
Kerry Dupont
ExposureManager.com - Focus on Sales

LoungeLizard - When I said "digital fulfillment" I was referring to a situation where someone purchases the original digital image from me and I send it to them via something like e-mail or ftp. I read somewhere that there is no sales tax on this kind of transaction, but I don't know for sure.

[krodgers]

what i did is just built the tax in on the exposure manager price, after the order is completed I sort out what the item actually cost versus the tax.

[Steelsun]

According to the state, digital sales (ie Digital fulfilment as you descrive it) are still a sale and you would charge sales tax for that.

[bondarnes]

It's up to you, but I would err on the side of caution. Just suppose the comptrollers office decides to audit you in a couple of years and says you owe $ 11,000.00 on back sales taxes. You can 1. pay the tax 2. hire an attorney for $20,000.00 and then pay the tax or 3. you can collect the tax from your customer now and forward it to the state. I have been through an audit and it isn't pretty, but we didn't owe anything. It's a pass through added to your total bill and everyone is used to paying it. Oh BTW the $ 11,000.00 is a true amount that a friend of mine who shot little leagues etc. had to pony up when he was audited.

[Shane]

You might want to read throught this . . .

http://www.texasphotoforum.com/forum...ad.php?t=13628

[BigIggy]

From a conversation I had with a representative of the State Comptrollers Office when I was setting up for on line ordering, I asked specifically "if a customer orders one of my pictures on the internet from an out of state service" but I have the images printed locally and deliver them in state, is this a taxable event on my part since they are taking local delivery?" And to my surprise, the answer was no. I found that hard to believe and reposed the question, making certain we he was hearing what I was saying. And the answer was still no. There was no state sales tax forthcoming if the sale is made through an out of state service. Hope he told me right and hope this helps.

[Wes]

Thanks for the feedback. Your question was very similar to mine, but with one difference. ExposureManager is handling the printing, so that function isn't even happening locally.

[texaswolflady]

Exposure manager is very prompt on replying when you ask them a question......I have an account with them and am pleased with the timely turn around on questions.

[boomerd35]

I'm an accounting controller - not a tax expert, but I'm responisble for sales tax filing in my business. Whenever I have a sales tax question, here's what I do:

First, I open the state's sales tax website here. Then I call the Comptroller's office and ask them my question. When they give me their answer, I ask for a specific tax code section that applies to my question. I print out that section of the ruling, writing notes from my phone conversation, if necessary. Finally, I search on the sales tax opinions/rulings on the state's sales tax website to see if any related questions have been already answered (sometimes the person from the Comptroller's office will tell you about related rulings/opinions already issued).

Sometimes sales tax is a grey area, and sometimes it's black & white. But when you are unsure, it's best to get as much documentation to support your action.


Troy T.

[bondarnes]

Originally Posted by BigIggy

From a conversation I had with a representative of the State Comptrollers Office when I was setting up for on line ordering, I asked specifically "if a customer orders one of my pictures on the internet from an out of state service" but I have the images printed locally and deliver them in state, is this a taxable event on my part since they are taking local delivery?" And to my surprise, the answer was no. I found that hard to believe and reposed the question, making certain we he was hearing what I was saying. And the answer was still no. There was no state sales tax forthcoming if the sale is made through an out of state service. Hope he told me right and hope this helps.

And if you talked to four more reps from the comptroller at least three of them would give you the opposite answer. We just collect it and report it on every sale and the comptrollers office has never told us to give any of it back.