Chris,
Sales Taxes differ greatly from state to state. My experience here in Texas
has been awful. The Sales tax representatives will not put anything in
writing.
Their lawyers will not allow them to. If they did it could become a
"ruling" and
could be cited in court. They will tell you lots of stuff over the
phone, or in person,
but it cannot be used in the courts. It's just "hear say". Depending on
who you talk to
you can get several different answers to your question. Some of them
conflicting.
You can request a "Ruling" from the State comptroller, but that can drag
on for
a year or two and you still might not get one. In general, they
interpret the law to
their favor. After all their job is to squeeze all the revenue out of
the public that they
can. There also may be fees involved in getting a written "ruling".
I'll tell you a long story about a small video production company that I
used to
work for. They sold clients a roll of video tape and a box and reel and
charged
separately for this and collected tax on the "Tangibles". They then
charged for
producing a video program and recording it on the clients own video
tape. They charged
no sales tax on this as it was "intangible" - just magnetic signals
applied to the tape.
The State maintained that it was a "manufacturing process" that added
"significant value" to the tangible property and thus was taxable for
the whole amount.
The state won in lower court and also in appeals court. The company was
put out of
business with a 1/4 million dollars in tax liability that forced them to
liquidate the company.
The state then proceeded to go after all of our competitors. They
panicked and formed an
association and hired lobbyists and got the state to pass a special law
defining
what our industry was required to do about sales taxes. It required us
to collect tax on
total price, but granted immunity from prosecution for past practices.
Our clients then began fleeing from Texas and started doing their
production in other states
where they did not charge sales taxes. I know of at least one producer
who moved his
company to California, but continued to service the same clients here in
Texas.
If in doubt I would collect the tax.
On 4/8/2011 11:48 PM, Chris Vanderhoof wrote:
>
> Well I put the photos on a CD and charged tax. I told my client I was
> in the
> process of learning what the "real deal" is in this digital image era
> and that
> if I found I had charged her incorrectly I would return the money to
> her. She
> was good with that.
>
> Thanks everyone for your input.
>
--
James Dunn
www.ImagesByJamesDunn.com
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