Hey photographers and videographers: you're selling services, right?

You sure?

Here in Florida, we have a retail sales and use tax. It's about 6% (with additional amounts in many counties/municipalities), and it applies mainly to retail sales of "tangible personal property".  If the tax applies to sales you're making, you have to separately state the tax on invoices and receipts, collect it from customers, and file returns/pay it over to your friends and mine at the Florida Department of Revenue.

Now, that tax doesn't apply to most sales of services. And photographers and videographers sell services. But this is Florida. So we make things weird.

Under Section 212.02(16) of the good ol' Florida Statutes, the "sales price" of a transaction involving tangible personal property includes "the total amount paid for tangible personal property, including any services that are part of the sale."

Under the Department of Revenue's implementation of that statute, virtually any transaction including both services and tangible personal property is subject to Florida sales and use tax. So, for instance, the Department of Revenue has held that an interior decorator's fee for her services is subject to sales tax when he or she is also selling furniture to the client in the same or a related transaction. The Department of Revenue even states that when an architect charges oodles for their services, if they deliver a tiny scale model with those services, the whole transaction is taxable.

So... how about that thumb drive?

According to the Department of Revenue, if you deliver your pictures or videos to your client on a thumb drive, you've given them tangible personal property as part of the transaction, and the entire transaction is probably subject to sales tax. However, if you deliver no tangible personal property and provide those pictures through a cloud sharing service, you don't run into this problem. It might help if your contract specifically states that you are not obligated to (and will not) deliver any tangible personal property as part of that transaction.

So. Keep your images in the cloud... and keep that thumb drive in your pocket.

Feel free to reach out to us with any questions you might have about doing business as a creative entrepreneur here in Florida.