Life Coaches?

I got this question the other day, and since it combines a couple of issues, here ya go...

"I am a life coach. I coach people in various states via phone or Skype. Are these services taxable? What if I physically go to a client location?"

First of all, are your services taxable?

There are a few states where what you do is taxable. You need to research those states and see for yourself. Keep in mind that they may not use the term "life coaching".  But look deeper at things like training, consulting and professional services.  And a few states tax ALL services by default. So your services are going to be taxable somewhere.

This doesn't necessarily mean you have to tax the services that you perform over the phone or Skype.  This only is necessary, for right now, if you actually have nexus in the state where the buyer is receiving the benefit of your services.  Based on my assumption about your business model (I actually know a couple of life coaches), your only physical presence in a state is going to be YOU.

Are you required to collect taxes in those other states?

If you GO TO THAT STATE and perform services, do marketing, etc., you probably have nexus in that state.  Which means you may have to collect that state's taxes (assuming your services are taxable in that state.   

And if you subsequently perform your services online or on the phone, then you will need to collect taxes on your services for the states where you have nexus.  

Note that, at some point in time, your nexus in a particular state will "wear out" if you don't revisit periodically.  So you got that going for you, which is nice.

So, to summarize

1.  Your services may be taxable, depending on the state.
2.  In those states, if you go there and do work, you'll have to collect and pay the tax
3.  When you perform the services online after you've been to the state, you'll have to collect and pay the tax.

Life sucks, doesn't it?

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The Sales Tax Guy http://salestaxguy.blogspot.com

See the disclaimer on the right.

Don't forget our upcoming seminars and webinars. http://www.salestax-usetax.com and there's more sales tax news and links here http://salestaxnews.blogspot.com

Picture note: the image above is hosted on Flickr. If you'd like to see more, click on the photo.

What's taxable when it comes to photography?

There was an link on Sales Tax News and Links today that brought up this topic.  I actually wrote about this originally on July 16, 2009.  Amazingly, the article needed little updating.  But I have changed a few things and applied a little wordsmithing.  So for you professional or semi-professional photographers out there, enjoy.

Photography services

Most states don't broadly tax services - but some do. And photography is also considered the delivery of product (the prints), and that product is usually taxable as the sale of tangible personal property. However, these rules vary enormously from state to state.  So you need to research what YOUR state does.

For example, I'm in Illinois, and photography services aren't taxable. Even the delivery of the prints, if they're part of the photographer's service, like doing a wedding or a portrait session, are still not taxable.

However, in Wisconsin (a popular vacation destination for people from Illinois in case you've never seen Stripes), most photographic services, including shooting those portraits and weddings, are taxable. I bet that just bummed out a bunch of photographers I know in Wisconsin.

Film or print processing

Getting prints from the drug store is taxable in most states. It's the delivery of tangible personal property. And if you order prints online and they're delivered to you, you'll owe use tax if they don't charge tax.

Sale of prints

Just like the sale of any other tangible personal property, sales of photographic prints (eg. at an art show) are taxable.

Delivery of images online

In a few states, the delivery of pictures electronically is taxable. But while many states tax downloaded video, music and books, most states just haven't gotten around to photographs yet.  But that will change over time. And the auditor might try to bluff you, just for grins.

And if you deliver the photographs on a flash drive or a DVD, then you've transferred tangible personal property, and the sale is no longer simply a transfer over the internet but a true sale of TPP.

Special tax breaks

There are a few states that have special exemptions for the sale of art - and this usually includes fine art photography.  Don't get excited though.  Only a few states do this.

Here's the cool part

If you're selling your taxable prints, then the paper and ink that you purchase is usually exempt as purchases for resale (or ingredients if you're thinking manufacturing).  Heck, the inkjet printer might even be exempt as manufacturing equipment.

Please remember that, as you saw with Illinois and Wisconsin, the rules vary widely from state to state.  You gotta look it up for your state.  Because it's going to be different there.

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The Sales Tax Guy http://salestaxguy.blogspot.com

See the disclaimer on the right.

Don't forget our upcoming seminars and webinars. http://www.salestax-usetax.com and there's more sales tax news and links here http://salestaxnews.blogspot.com

Picture note: the image above is hosted on Flickr. If you'd like to see more, click on the photo.