Could a photographer exclude a $2 Little League donation from the taxable price of a mandatory $17 photograph package?

Plain-English summary

A photographer said its needed price was $15 per package with sales tax included and a Little League added a $2 donation or commission. Instead of remitting the full $2, the photographer deducted sales tax and paid the league the remainder. The leagues wanted a written explanation.

Staff Counsel said the description was unclear and expressly assumed a different formulation: the photographer sold each package for $17 and had an agreement to donate $2 from every sale to the Little League.

Because the customer could not buy the package for $15 by refusing the $2 amount, the mandatory selling price was $17. The entire $17 was taxable gross receipts; labeling part of it a donation did not reduce the taxable price.

If the requester wrote again, the letter required a step-by-step, detailed explanation and copies of relevant contracts. None appears in CDTFA's source, so the assumed $17 structure, mandatory $2 and agreement with the league are not independently established.

Cited comparison and live annotation

The letter cited live Annotation 495.0370, whose distinct facts concern religious pamphlets and tapes supplied for a suggested minimum donation. That live authority states those transfers are regarded as sales. This page preserves the citation without importing religious-publication facts into the photo-package transaction.

The live 420.0289 annotation, in the 2026 revision of the Business Taxes Law Guide, says as facts that the photographer sells packages for $17 and has an agreement to donate $2, then carries forward the no-$15-option conclusion. The supporting letter labels each of those propositions as its understanding because the request was unclear. The live page omits the requester's tax-included $15 description, commission alternative, sales-tax deduction before league remittance, leagues' request for writing, requested contracts and transaction detail, source typo From the sale of each purchase, and absent applied outcome.

The record supplies no July 12 inquiry beyond the quotation, photographer or league identity, package, customer order, agreement, invoice, receipt, proof whether $2 could be withheld, donation record, commission record, sales-tax computation, remittance, contract, return, audit, assessment or later clarification.

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 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, leagues and tax professionals

Document the actual package price, whether the buyer may refuse an added amount, who contracts with whom, and whether the league payment is a donation, commission or other obligation. A mandatory amount collected as part of the sale cannot be removed from gross receipts merely by labeling it a donation under this historical assumed analysis.

Common questions

Q: Why was the full $17 taxable?

A: Staff Counsel assumed the customer could not buy the package for $15 by withholding the $2, making $17 the required selling price.

Q: Did the source prove that was the actual structure?

A: No. It expressly called the request unclear and asked for transaction details and contracts if its assumptions were incomplete.

Q: Did calling the $2 a donation control?

A: No under the assumed mandatory-price facts. The requester also called it a commission.

Q: Did the letter explain how to calculate tax-included pricing or remittance?

A: No. It records the requester's practice but supplies no computation or accounting analysis.

Q: Was there an audit or final transaction outcome?

A: No. The source is advisory and gives no return, audit, assessment or follow-up clarification.

Citations and references

• California Revenue and Taxation Code section 6051 — cited for sales tax measured by retail gross receipts
• Business Taxes Law Guide Annotation 495.0370 (Oct. 16, 1972) — cited minimum-donation comparison involving different property and parties
• July 12 inquiry; package; league agreement; customer choice; invoices; accounting; donation/commission records; contracts; returns; audits; assessments; and outcomes — described or implicated but not included

Verbatim support

From the official September 22, 1995 Staff Counsel letter:

In other words, my price that I need is $15 per package, sales tax included. The league then adds $2 'donation' or commission to that amount.

Although it is not clear from your letter, our understanding is that you sell packages of photographs for $17.00 and that you have an agreement with the little leagues that you will donate $2.

That is, it appears that the selling price of each package is $17., and that the purchaser cannot purchase a package for $15. by withholding the $2. "donation."

If you do write again, please provide a step-by-step, detailed explanation of the transactions about which you inquire, and please also provide copies of any relevant contracts.

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Live annotation: Annotation 420.0289
• Original supporting opinion: 420.0289 PDF
• Cited comparison: Annotation 495.0370

Original ruling text

420.0289

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

JOHAN KLEHS
First District, Hayward

LEGAL DIVISION – MIC: 82
450 N STREET, SACRAMENTO, CALIFORNIA
PO BOX 942879, SACRAMENTO, CALIFORNIA 94279-0082
TELEPHONE (916) 327-2291
FAX (916) 323-3387

DEAN F. ANDAL
Second District, Stockton
ERNEST J. DRONENBURG, JR.
Third District, San Diego
BRAD SHERMAN
Fourth District, Los Angeles
KATHLEEN CONNELL
Controller, Sacramento

September 22, 1995
BURTON W. OLIVER
Executive Director

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

Dear X------------------,
This is in response to your letter dated July 12, 1995, regarding suggested minimum donations. You state: "I need to obtain from you in writing the reasons why the little leagues that I service have to pay sales tax on their 'donation' received from each player through an added amount to the price of each package. In other words, my price that I need is $15 per package, sales tax included. The league then adds $2 'donation' or commission to that amount. Instead of turning over that amount to them, I deduct the sales tax and pay it to you. Then, I give them their donation minus the sales tax. They want to see the reasons for this IN WRITING. So, please send this to me so that I can show them that I am doing it right. Thanks!" DISCUSSION Retail sales of tangible personal property in California are subject to sales tax, measured by gross receipts, unless specifically exempt by statute. (Rev. & Tax. Code § 6051.) Although it is not clear from your letter, our understanding is that you sell packages of photographs for
$17.00 and that you have an agreement with the little leagues that you will donate $2. From the sale of each purchase to the little leagues. That is, it appears that the selling price of each package is $17., and that the purchaser cannot purchase a package for $15. by withholding the
$2. "donation." As such, the entire charge for the package is subject to tax. (See Business Taxes Law Guide Annotation 495.0370 (10/16/72.) If you have further questions, please feel free to write again. If you do write again, please provide a step-by-step, detailed explanation of the transactions about which you inquire, and please also provide copies of any relevant contracts. Sincerely, Kelly W. Ching Staff Counsel