Were a retoucher's charges to commercial photographers taxable for work on negatives, positives, or prints?

Plain-English summary

The letter treated a commercial photographer as the consumer of negatives but the retailer of positives and finished prints. That distinction controlled the retoucher's tax treatment.

Charges for retouching a photographer's negatives were taxable processing of customer-owned property under section 6006(b). Charges for retouching positives or prints that the photographer bought for resale were nontaxable sales for resale, and the retoucher was instructed to obtain a resale certificate.

The source also addressed finished and preliminary artwork for printers. It treated finished art sold to a printer for use in producing printed material as taxable, while separately stated preliminary-design charges could be excluded if the preliminary work was not physically incorporated into the finished art and the historical rule's requirements were met.

The Board said it had no role in the questioner's city business-license obligations and gave no advice on that local issue.

Live annotation and source posture

The current live annotation preserves the photographer consumer/retailer distinction, taxable negative-retouching fabrication, resale treatment for positive or print retouching and October 16, 1964 date. It adds ordinarily to the photographer distinction, while the linked letter states it categorically for the reported question. It omits the section 6006(b) customer-material basis, resale-certificate instruction, city-license question, finished- and preliminary-art rules, missing September 23 inquiry, missing enclosures and unexplained 2281 heading.

The supporting PDF supplies no September 23 inquiry, requester identity, city or license requirement, commercial photographer or customer, negative, positive or print, retouching work, invoice, resale certificate, printer, preliminary or finished artwork, physical-incorporation evidence, charge statement, tax return, audit, assessment, refund or later outcome. It says copies of section 6006(b) and Rulings 2, 24 and 68 were enclosed, but none appears in the one-page PDF. The source therefore gives conditional answers without an applied transaction record.

CDTFA's Annotated Legal Opinions collection says letters are summarized as annotations and that statutory law controls whenever a statute and annotation conflict. The official PDF has a clean native text layer and one small page-one 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 the fresh extraction after removal of only the extractor's terminal newline and form feed.

What this means for you

Identify the exact property retouched, who consumes or resells it, and obtain the resale certificate before treating positive or print retouching as resale work. For artwork, separate qualifying preliminary design charges and prove the preliminary work is not physically incorporated into the finished art. Local licensing remains a separate city matter.

Common questions

Q: Why was negative retouching taxable?

A: The letter treated the photographer as consumer of the negative and section 6006(b) processing of customer-owned material as taxable.

Q: When was positive or print retouching nontaxable?

A: When the photographer bought that fabrication labor for resale and supported it with a resale certificate.

Q: Was finished artwork sold to a printer taxable?

A: Yes under the cited historical rule because the printer was treated as consumer of artwork used to prepare printed material.

Q: Could preliminary designs be excluded?

A: Only if separately stated, not physically incorporated into the finished art, and the missing Ruling 2 requirements were met.

Q: Did the Board decide the city-license question?

A: No. It said city business licensing was strictly between the requester and the city.

Citations and references

• California Revenue and Taxation Code § 6006(b)
• Historical California Sales and Use Taxes Rulings 2, 24, and 68
• September 23 inquiry and unexplained 2281 heading — request absent and number unidentified
• Section 6006(b) and Rulings 2, 24 and 68 — described as enclosures but absent
• License, retouching, certificates, artwork, charges, tax filings and outcomes — implicated but absent

Verbatim support

From the official October 16, 1964 Associate Tax Counsel letter:

The State Board of Equalization has no connection with city business licenses.

A commercial photographer is a retailer of positives or prints, and the consumer of negatives.

If you are retouching negatives tax applies to your charges.

On the other hand, if you are retouching positives or prints, the sale of the fabrication labor to the photographer is for resale to the photographer's customers.

Accordingly, you may exclude preliminary designs from the measure of tax, provided you meet the requirements of ruling 2.

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Live annotation: Annotation 420.0600
• Original supporting opinion: 420.0600 PDF

Original ruling text

STATE OF CALIFORNIA

420.0600

STATE BOARD OF EQUALIZATION
2281

Retouching-negatives-and-positives for commercial-photographers.

Cc:

San Jose – District Administrator

October 16, 1964

Dear Mr. X-----------------,
This is in reply to your letter of September 23, 1964 requesting information on several matters. The State Board of Equalization has no connection with city business licenses. We are, therefore, unable to aid you or give you any information concerning this. It is strictly a matter between you and the city. Your second question asked whether you are required to pay sales tax for retouching photos for commercial photographers. A commercial photographer is a retailer of positives or prints, and the consumer of negatives. If you are retouching negatives tax applies to your charges. This is because § 6006(b) of the California Sales and Use Tax Law (copy enclosed) specifically provides the processing of customerowned materials is subject to tax. On the other hand, if you are retouching positives or prints, the sale of the fabrication labor to the photographer is for resale to the photographer’s customers. Since tax applies only to retail sales, your sale to the photographer is nontaxable. You should obtain a resale certificate from the photographer as explained in ruling 68 (copy enclosed). If you have any further questions about this procedure, I am sure our San Jose district office can aid you. Your final question concerns art work for printers. Ruling 24 (copy enclosed) states in the fourth paragraph that printers are consumers of art work purchased for use in the preparation of printed material to be sold. Accordingly, tax applies' to any finished art sold to them. Ruling 2 (copy also enclosed) explains that separately stated charges for preliminary art is not subject to tax unless' it is physically incorporated into the finished art. Accordingly, you may exclude preliminary designs from the measure of tax, provided you meet the requirements of ruling 2. Very truly yours, John H. Knowles Associate Tax Counsel JHK:mm – Enc.