Was a publication company's one-time use of a returned photograph taxable when the photograph could no longer be reused?

Plain-English summary

The letter answered a mislaid July 23 inquiry asking whether sales tax applied to a publication company's charge for using a photographer's physical photograph for reproduction and returning it after one use. The requester and account were redacted.

Assistant Counsel explained that sales tax applied to tangible-property sales, while historical Ruling 62 treated certain leases or rentals made in lieu of sales as sales. The letter's answer was conditional: when newspaper reproduction necessarily treated a photograph so harshly that it could not be reused after return, the transaction was regarded as a sale and the photographer's amount was taxable.

The physical condition after return therefore controlled the 1952 reasoning. The letter sent an extra copy and Ruling 62 rather than writing the Los Angeles Times directly, asked the Los Angeles office to investigate, and added that a large volume of such transactions might exist. It supplies no investigation result and does not say every temporary reproduction transfer met the harsh-use condition.

Later authority layers and source posture

The official PDF contains a bracketed editorial note, signed DJH 11/30/88, directing readers to Regulations 1641(b) and 1660(d). That note postdates the 1952 letter by 36 years. The live 420.0220 annotation, in the 2026 revision of the Business Taxes Law Guide, adds another parenthetical: effective July 15, 1991, one-time newspaper photograph leases are taxable. The PDF does not identify the source or text for that later rule. This page preserves and labels all three layers rather than attributing the 1988 or 1991 material to Assistant Counsel.

The live page otherwise retains publication-company reproduction, one use, return, harsh treatment, nonreusability, sale characterization and November 5, 1952 date. It omits the conditional in some cases posture, lease-in-lieu-of-sale explanation, misplaced inquiry, redacted account, Ruling 62 enclosure, Los Angeles Times handling, requested investigation, volume concern and absent outcome.

The record supplies no July 23 inquiry, photographer or publication identity, account file, agreement, physical photograph, before/after condition evidence, reproduction method, return record, charge, tax computation, copy of Ruling 62, Los Angeles communication, investigation or later assessment. Whether any actual returned photograph was unusable is therefore unproven in the source.

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 one small page-1 letterhead stencil rather than scanned text, 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, publishers and tax professionals

For a physical-photo transaction, document the transfer terms, reproduction process, return and actual post-return condition. Do not treat this 1952 condition-based answer or the later unsourced parenthetical as a modern rule for digital images. Identify the controlling current lease and licensing provisions separately.

Common questions

Q: Did returning the photograph automatically make the charge nontaxable?

A: No. If reproduction left the returned photo unusable, the letter treated the transfer as a sale despite return.

Q: Did every one-time photo transfer qualify as a sale under the 1952 letter?

A: No. The answer was expressly limited to a particular case where harsh use destroyed reusability.

Q: Was the Los Angeles investigation included?

A: No. The letter requests one and supplies no result.

Q: Who added Regulations 1641(b) and 1660(d)?

A: A bracketed note signed DJH 11/30/88, not the 1952 author.

Q: Where does the July 15, 1991 rule come from?

A: It appears on CDTFA's live annotation, but the supporting PDF provides no underlying 1991 text or citation.

Citations and references

• Historical California Sales and Use Tax Ruling 62 — described and enclosed but not reproduced
• Historical California Sales and Use Tax Regulations 1641(b) and 1660(d) — added in a bracketed November 30, 1988 editorial note
• Live Annotation 420.0220 effective-July-15-1991 parenthetical — later layer without supporting text or citation in the PDF
• July 23 inquiry; parties; account; agreement; photograph; condition evidence; reproduction and return records; charge; Ruling 62; investigation; assessment and outcome — described or implicated but not included

Verbatim support

From the official November 5, 1952 Assistant Counsel letter:

For the purpose of the sales tax, however, certain leases and rentals, which are in lieu of sales, are treated as if they were sales.

We understand that in some cases, where a photographer allows a newspaper to use a photograph for reproduction purposes, the photograph is necessarily treated so harshly as not to be reusable after its return to the photographer.

If such are the facts of a particular case, the transaction is regarded as a sale and the amount received by the photographer is subject to sales tax.

It is possible that a large amount of transactions of the type described in the above letter take place. Please investigate and contact me.

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Live annotation containing the 1991 rule note: Annotation 420.0220
• Original supporting opinion: 420.0220 PDF

Original ruling text

420.0220

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
November 5, 1952

X---------------

Your letter of July 23
Account Z-------------

You inquire whether your understanding is correct that the sales tax applies to the charge made for the use of photographs by publication companies even though the photograph is obtained for reproduction purposes and even though the photograph is returned after one use. We are sorry that we temporarily mislaid your letter. The sales tax applies only to sales of tangible personal property. For the purpose of the sales tax, however, certain leases and rentals, which are in lieu of sales, are treated as if they were sales. See the last sentence of the first paragraph of Sales and Use Tax Ruling 62 (copy enclosed). [Now see Regs. 1641 (b) and 1660( d). DJH 11/30/88]. We understand that in some cases, where a photographer allows a newspaper to use a photograph for reproduction purposes, the photograph is necessarily treated so harshly as not to be reusable after its return to the photographer. If such are the facts of a particular case, the transaction is regarded as a sale and the amount received by the photographer is subject to sales tax. We enclose an extra copy of this letter and the ruling instead of writing to the Los Angeles Times directly. We are also requesting our Los Angeles office investigate this matter. One of our representatives from that office will contact you. Yours very truly, W.W. Mangels Assistant Counsel NBH:ja Cc: Los Angeles – Tax Administrator It is possible that a large amount of transactions of the type described in the above letter take place. Please investigate and contact me.