Did an independent-contractor photographer owe sales tax on amounts retained for supplying directory photographs to a dating service?

Plain-English summary

A dating service set a photographer's hours, supplied the studio and treated the photographer as an independent contractor for income-tax purposes. A new member completed a standard biography and paid part of a set service fee at signup, then paid the balance to the photographer when the photograph was taken.

The photographer remitted an unspecified fixed amount to the dating service, retained the balance as payment for shooting and furnishing the directory photograph, and provided that photograph to the service for its customer directory. The member received no photograph as part of the service charge.

The memorandum said employee status was the only question presented. Without stating a legal test or analyzing additional classification factors, it concluded from the quoted facts that the photographer appeared to be an independent contractor rather than an employee. It therefore treated the retained amount as taxable gross receipts from selling photographs to the dating service.

If a customer separately wanted prints, the dating service referred that customer back to the photographer. The inquiry called these sales rare and said tax was charged on their full selling price; the memorandum agreed sales tax was due on every amount paid for those prints.

Source posture and live annotation

The October 17 memorandum quotes the factual portion of the Taxpayer's Rights Advocate's October 9 email, but the email itself is not included. The record supplies no photographer, dating-service or customer identity; employment or independent-contractor agreement; membership contract; biography form; directory or photograph; schedule; studio arrangement; fixed remittance or retained amount; invoice; return; audit; assessment or later outcome. It also supplies no authority or general worker-classification method. The official text prints taxpayers hours, this is rare situation, and feel tree; those defects remain verbatim below.

The live 420.0096 annotation, in the 2026 revision of the Business Taxes Law Guide, closely retains the quoted hours, studio, income-tax treatment, membership-payment sequence, directory-photo transfer, retained-payment conclusion, separate-print sales and October 17, 1996 date. It omits the internal Taxpayer's Rights Advocate request, October 9 email, statement that employee status was the only question, lack of a cited classification test or authority, tentative appears wording, source errors and missing underlying records or applied tax outcome.

CDTFA's Annotated Legal Opinions collection says the letters are summarized as annotations and that statutory law controls whenever a statute and annotation conflict. The official one-page PDF has a clean native text layer and no embedded images, so no OCR was required. Both fresh direct PDF downloads and both live-page downloads were byte-identical, duplicate default PDF text extractions matched, and the original-text section remains byte-identical to its committed version and fresh extraction after removal of only the extractor's terminal newline and form feed.

What this means for you

Photographers, service businesses and tax professionals

Do not treat this short memorandum as a complete worker-classification test. Document the parties' current relationship and governing law separately. If the photographer is the seller, identify what is transferred, who pays, which portion the photographer retains, and every separate print charge rather than assuming the dating service's membership structure makes the photography receipts nontaxable.

Common questions

Q: Why did the memorandum tax the retained amount?

A: It treated the photographer as an independent contractor selling the directory photograph to the dating service, with the retained customer-payment portion as the photographer's gross receipts.

Q: Did the member receive a photograph with the membership?

A: No. The photograph included in the service arrangement went to the dating service for its customer directory.

Q: What about prints sold directly to the member?

A: The full selling price was taxable. The quoted inquiry described those separate sales as rare.

Q: Did setting hours and providing a studio make the photographer an employee?

A: Not on the limited stated facts, according to the memorandum. But the source gives no classification test or additional-factor analysis and phrases its result as it appears the photographer was an independent contractor.

Q: Did the source identify the fixed remittance, retained amount or actual tax paid?

A: No. It provides no dollar figures, invoices, returns, audit or final tax outcome.

Citations and references

• October 9, 1996 Taxpayer's Rights Advocate email — relevant facts quoted, original email not reproduced
• Standard biography and customer directory — described but not reproduced
• Contracts, classification evidence, schedules, studio terms, photos, dollar amounts, invoices, returns, audits, assessments and outcomes — described or implicated but not included
• No statute, regulation, case or worker-classification test is cited in the memorandum

Verbatim support

From the official October 17, 1996 Supervising Tax Counsel memorandum:

The only question presented is whether or not the photographer is an employee of [X]. Based upon the facts stated above, it appears that the photographer is an independent contractor, and not an employee.

Thus, the photographer contracts to sell photographs to [X] and the gross receipts from those sales are subject to sales tax.

Based on the facts stated above, those taxable gross receipts consist of the amounts retained by the photographer from the payment that the photographer accepts on behalf of [X] from its customer.

Sales tax, of course, is due on any amounts that the customer pays to the photographer for prints sold by the photographer to that customer.

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Live annotation: Annotation 420.0096
• Original supporting opinion: 420.0096 PDF

Original ruling text

State of California

Board of Equalization

420.0096

Memorandum
To:

Mr. Jeffrey L. McGuire
Taxpayer’s Rights Advocate

From:

David H. Levine
Supervising Tax Counsel

Subject:

[X]

Date:

October 17, 1996

Telephone:

(916) 445-5550
CalNet 485-5550

This is in response to your email message of October 9, 1996. You ask what, if anything, is subject to sales tax owed by the photographer in the following circumstance: “The taxpayer works for [X], a dating service. Although [X] sets the taxpayers hours and provides the studio facility, they treat the taxpayer for income tax purposes as an independent contractor. When a customer applies for service with [X], there is a set charge which involves the development of a bio and photo for placement in the [X] directory which is for the use of [X] customers. When the customer signs up for the [X] service/membership they complete a standard bio and part of the fee is collected at this time. The balance is collected when the photo is taken. Enter our taxpayer, the photographer. [X] sets an appointment time for the customer to have their photo taken. When our taxpayer takes the photo, they collect the balance of the [X] fee (made payable to our taxpayer). Our taxpayer then pays over to [X] a fixed amount of the charge and provides the photograph to [X] for use in the [X]'s directory. The amount retained by our taxpayer is her payment/consideration for shooting and providing the photos to [X]. No photos are provided to the customer as part of the charge made. However, if the customer is interested in prints of the photo taken, [X] refers them back to our taxpayer who then makes a sale of prints to the customer. Tax is charged on the full selling price of any prints provided to customers although this is rare situation.” The only question presented is whether or not the photographer is an employee of [X]. Based upon the facts stated above, it appears that the photographer is an independent contractor, and not an employee. Thus, the photographer contracts to sell photographs to [X] and the gross receipts from those sales are subject to sales tax. Based on the facts stated above, those taxable gross receipts consist of the amounts retained by the photographer from the payment that the photographer accepts on behalf of [X] from its customer. Sales tax, of course, is due on any amounts that the customer pays to the photographer for prints sold by the photographer to that customer. If you have further questions, feel tree to write again. DHL/cmm cc:

Mr. Jerry Cornelius (MIC:40)