Are a photo-shoot company's sales and the props, equipment, and services it buys subject to sales tax?

Plain-English summary

The petitioner is hired by clients to organize and pay for an entire photo shoot -- talent, stylists, props, equipment rentals, studio, catering, travel, insurance -- then bills the client. Its sample invoice produces a photograph the client may use in advertising for one year, and reserves ownership/title of the photo to the photographer. The shoot and the final delivery may be inside or outside New York, and the photo may be delivered on tangible media or electronically. It asked how tax applies to its sales and to its purchases/costs, and whether four factors matter: shoot location, delivery location, tangible vs. electronic delivery, and the customer's exempt status.

The Office of Counsel concluded delivery format and destination drive the tax.

• Selling the photo. A photo delivered electronically is not tangible personal property -- those receipts are not taxable (Google, Timm). A photo delivered on tangible media (disc, photocard, flash drive, etc.) is tangible personal property and taxable if delivered in New York (not taxable if delivered out of state). The shoot location is irrelevant. The photographer/petitioner retaining rights or limiting use to "reproduction only" doesn't turn the sale into a nontaxable license (Stock Market Photo Agency); this is a contract to produce and sell a photo.
• The whole receipt is taxed. All shoot expenses passed through to the client (talent, props, catering, travel, even tax the petitioner paid) are part of the taxable receipt when the photo is taxable (Tax Law 1101(b)(3); 20 NYCRR 526.5(e)).
• Production exemptions -- only for tangible output. When the photo is sold in tangible form, machinery, equipment, parts, tools, and supplies (cameras, lights, set materials, props, wigs, wardrobe) used directly and predominantly in production can be exempt under 1105-B/1115(a)(12). When the photo is delivered electronically, no tangible product is made, so these production exemptions don't apply and the petitioner owes tax on that gear.
• Individual cost lines (tax status unaffected by delivery format): catering (taxable, 1105(d)), hotel occupancy in NY (taxable, 1105(e)), parking/protective traffic cones (taxable), NYC make-up/hair (beauty/barbering, taxable); but talent/labor fees, permits, airfare/subway/bus/taxi (transportation), insurance, and shipping/FedEx/messenger are not taxable standing alone -- though delivery charges on taxable goods become part of the taxable receipt. The photographer's fee is a resale purchase to the extent the photographer is selling the tangible photo.
• Exempt customers. Sales to organizations/governments exempt under 1116(a) aren't taxable with a proper ST-119.1 or government purchase documentation.

What this means for you

Photographers and production companies

Format is everything. A picture handed over on a drive or print in New York is taxable on the entire bill; the same picture delivered electronically isn't taxed at all. But the trade-off cuts both ways: you only get the production exemptions on cameras, lights, props, and wardrobe when you're making a tangible photo for sale -- go all-digital and you pay tax on that gear yourself.

Clients commissioning shoots

Expect the full pass-through bill to be taxed when you take tangible delivery in New York -- not just the "photo" line. Exempt organizations should hand over an ST-119.1 up front.

Bookkeeping on mixed invoices

Talent, labor, transportation, insurance, and standalone shipping aren't taxable on their own, but once they're rolled into a taxable photo sale (or are delivery charges on taxable goods) they ride along in the taxable receipt. Separate, reasonable charges for genuinely nontaxable services help.

Common questions

Q: Same photo, two ways to deliver -- does it matter?
A: Yes. Tangible delivery in New York is fully taxable; electronic delivery isn't taxed.

Q: We retain the copyright and only license reproduction -- isn't that a nontaxable license?
A: No. Reserving rights or limiting use to reproduction doesn't change a contract to produce and sell a photo into a license (Stock Market Photo Agency).

Q: Can I claim the production exemption on my cameras and props?
A: Only when you're producing a photo sold in tangible form. For electronically delivered photos, no tangible product is made, so the production exemptions don't apply.

Citations and references

• Tax Law section 1105 (sales tax on tangible personal property and enumerated services)
• Tax Law section 1101(b)(3) (taxable receipt includes all expenses)
• Tax Law section 1105-B and 1115(a)(12) (production machinery/equipment/supplies exemption)
• Tax Law section 1115(n)(7) (printed promotional material)
• Tax Law section 1105(c)(8), 1105(d), 1105(e), 1105(c)(10) (protective/catering/occupancy/livery services)
• 20 NYCRR 525.2(a)(3) (destination tax) and 526.5(e), 526.7(f)
• TSB-A-08(22)S (Google; electronic delivery not TPP) and TSB-A-05(34)S (Timm)
• TSB-A-99(48)S (Stock Market Photo Agency; retained rights irrelevant)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2009.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a09_56s.pdf

Original ruling text

New York State Department of Taxation and Finance

TSB-A-09(56)S
Sales Tax
December 7, 2009

Office of Counsel
Advisory Opinion Unit
STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S090602A

Petitioner name and address redacted, requested an advisory opinion as to whether its receipts from
the sale of its photographs in either tangible or electronic form and the purchases of property and services
used in creating the photographs are subject to sales tax.
We conclude that Petitioner’s receipts from the sale of photographs in tangible format are subject to
the sales tax if delivered in New York. The purchase of equipment used directly and predominantly in the
production of those photographs, in tangible format, as well as certain supply items, may be eligible for
exemption from the sales tax. The receipts from the sale of the photographs delivered electronically are not
subject to the sales tax. However, purchases of the equipment and supplies used in the production of the
electronically delivered photographs are subject to tax.
Facts
Petitioner is hired by clients to assemble all the personnel, property and services required to produce
a complete photo shoot requested by the client. Petitioner pays all the bills and collects the money from the
customer. Petitioner hires and pays all the talent (models, producer, casting director, photographer, etc. ) and
assistants (prop stylist, wardrobe stylist, hair stylist, makeup artist, etc.). Petitioner pays for all the costs
(props, catering, location rental, equipment rentals, studio, subway, bus, airfare, insurance, etc.). It asks
whether its fees and expenses are subject to sales tax.
Petitioner presented a sample invoice for a hypothetical sale. The invoice reflects that a photograph
is being produced for a client. The invoice reflects that the client is authorized to use the photograph in
direct mail, catalog, and newspaper advertising for a period of 1 year.
The sample invoice reflects costs and expenses of the photo shoot for:
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photographer
photo assistants – prep/shoot/wrap (billed at $x a day)
Polaroid film
equipment rentals (billed at $xx per day)
studio (daily rental)
talent/models
casting director
film and processing (may be purchased by the photographer)
set materials (some of the materials may be purchased by the photographer)
location scout
location rental fees
permits, parking, traffic cones
mobile home for crew
catering – delivery, setup, wrap
subway, taxi, bus
airfare

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TSB-A-09(56)S
Sales Tax
December 7, 2009

hotel lodging
prop stylist -setup/shoot/wrap (daily fees)
prop assistant - setup/shoot/wrap (daily fees)
prop rentals (may be initially purchased by the prop assistant)
prop purchases (client retains after the shoot)
wig purchase (may be initially purchased by the hair stylist)
hair stylist (daily fees + a commission charge)
make-up artist (daily fees + a commission charge)
wardrobe stylist - setup/shoot/wrap (daily fees + a commission charge)
wardrobe assistant - setup/shoot/wrap (daily fees)
wardrobe / accessories rental (may be initially purchased by the wardrobe stylist)
producer
insurance
shipping
Fed Ex
messengers
production fee

Petitioner’s sample invoice includes a subtotal for “fees and production costs” and identifies a
“taxable portion” of the subtotal to which Petitioner adds “Sales Tax.” Petitioner then totals the Estimated
Costs (subtotal fees and production costs + taxable portion subtotal+ sales tax) to arrive at its charges to its
customer.
Under a heading of “Terms” the invoice provides that: “Ownership and title of all photographs
remain with the photographer at all times, any transfer of possession is temporary and granted for purposes
of reproduction only….”
The “shipping” and “Fed Ex” costs reflected on the invoice represent charges made to Petitioner for
delivery of equipment and props to Petitioner and charges for delivery of items that Petitioner sends to its
customers (e.g., photos taken of models at a casting call that are sent to the client for a decision/approval as
to whom to hire for use in the photo shoot).
The photo shoot may occur within or outside New York. The completed photographs may be
delivered within or outside New York. The photographs may be delivered in tangible form or may be
delivered electronically. Petitioner’s clients may make a claim of an exempt purchase and may present
exemption documents to Petitioner or the client may be an exempt organization.
Petitioner asks whether the tax status of its sales, purchases, and costs is affected by the following
factors: (1) the location of the photo shoot, (2) the delivery location for the photographs, (3) whether the
photograph is delivered electronically or in tangible format, or (4) whether the customer is an exempt
organization or claims an exempt purchase.
Analysis
The Tax Law imposes sales tax on sales, unless for resale or otherwise exempt, of tangible personal
property and certain enumerated services (Tax Law section 1105). Generally, the sales tax is a "destination
tax." The point of delivery or point at which possession is transferred by the vendor to the purchaser, or the

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Sales Tax
December 7, 2009

purchaser's designee, controls both the tax incidence and the tax rate. See section 525.2(a)(3) of the Sales
and Use Tax Regulations.
Petitioner's sales of photographs
Petitioner's sample invoice reflects that a photograph is being produced for a customer. Likewise,
Petitioner's charge to the customer for the production fee appears to be a charge to the customer for the
production and sale of the photograph.
The sale of a photograph provided and delivered electronically is not considered to be a sale of
tangible personal property, and the receipts from that sale are not subject to the sales tax. (See Martin R.
Timm, Adv Op Comm T&F, September 27, 2005, TSB-A-05(34)S; Google Inc, Adv Op Comm T&F, May 2,
2008, TSB-A-08(22)S.) The sale of a photograph provided and delivered in tangible format (including by
disc, photocard, tape, flash drive, etc) is considered a sale of tangible personal property the receipts of which
are subject to sales tax when the photograph is delivered within New York State. The sale of a photograph in
tangible format will not be taxable if the photograph is delivered outside New York. The location of the
photo shoot does not affect the tax status of Petitioner's sales of photographs.
Transfers of original photographs or other artwork may be deemed to be nontaxable licenses to
reproduce when there is a temporary transfer of a piece of art or photograph for use as background in the
advertisements, catalogues, etc. to be created or for purposes of taking measurements to make a copy, etc.,
and the payment made for the license to reproduce is in the nature of a royalty under the laws relating to
artistic and literary property. (See section 526.7(f) of the Sales and Use Tax Regulations.) However, in the
present case, Petitioner’s customers have hired Petitioner to create photographs the customer expects to
incorporate in the customer’s catalogs, newspaper advertisements, etc. The customers are not limited in the
amount of use they may make of the photograph (other than the 1 year limitation) and Petitioner receives no
royalty or other payment based on the amount of usage of the photograph. The fees paid appear to remain
the same whether the photographs are used in 1,000 or 1,000,000 catalogues or are published in media with a
circulation of 1,000 or 1,000,000. The fact that Petitioner and/ or the photographer has retained certain rights
in the photograph or limited the use of the photograph by the customer for reproduction purposes only is of
no account. See Stock Market Photo Agency Inc., Adv Op Comm Tx & Fin, November 12,1999,
TSB-A-99(48)S. Based on the facts in this Opinion, we do not see Petitioner’s transactions as being other
than a contract for the production and sale of the photograph (whether delivered in tangible or electronic
format).
The customers’ purchases of photographs delivered in New York in tangible format for use in
making catalogues or other printed promotional materials may qualify for exemption pursuant to section
1115(n)(7) of the Tax Law. See Summary of Recently Enacted Sales and Use Tax Legislation, February 8,
2001, TSB-M-01(4)S. Photographs used for production of the customer’s ads in newspapers and periodicals
may be eligible for the production exemption under section 1115(a)(12). (See Printing Industry, May
15,1980, TSB-M-79(7.1)S.)
Petitioner's sales of photographs to an organization or governmental entity exempt from sales tax
pursuant to section 1116(a) of the Tax Law are not taxable. Petitioner need not collect sales tax on these
sales. In lieu of collecting the sales tax from such customers, Petitioner should obtain a properly completed
Exempt Organization Exempt Purchase Certificate (Form ST-119.1), or, in the case of a governmental entity,
a copy of a governmental purchase order or a contract signed by an authorized governmental representative
to substantiate the exempt nature of the transaction. See Parts 529 and 533 of the Sales and Use Tax
Regulations.

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Petitioner’s purchases/costs
When the photograph is sold in tangible format, the exemptions provided in Tax Law sections
1105-B and 1115(a)(12) for machinery, equipment, parts, tools and supplies purchased for use directly and
predominantly in the production of tangible personal property (the photograph) for sale and for services to
that machinery, equipment, etc. may be applicable to certain of Petitioner’s purchases. The production
exemptions do not apply with respect to purchases used directly and predominantly in the production and
sale of a photograph which is delivered electronically because there is no sale of tangible personal property
in such circumstance (i.e., the machinery, equipment, etc. in that circumstance has not been used in the
production of tangible personal property for sale).
There is an exemption from sales tax for Petitioner’s purchases of machinery, equipment, and parts,
tools and supplies used and consumed directly and predominantly (more than 50% use) in the production of
photographs for sale in tangible format. In this context, the purchases or rentals of set materials, props, wigs,
and wardrobe and accessories are eligible for the exemptions provided in sections 1105-B and 1115(a)(12) of
the Tax Law. Likewise, to the extent equipment such as cameras, lights, booms, etc. is used or consumed
directly and predominantly in the production of the photograph for sale in tangible format, the rentals of the
equipment would also be exempt from sales tax. Equipment not directly used in production (e.g., leased
vehicles used to transport people to and from the shoot location) would be taxable.
The tax status of certain of Petitioner’s expenses is not affected by whether the photograph produced
is delivered in tangible or electronic format:
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Permits, parking, and traffic cones – Fees for required municipal permits are generally not subject to
sales tax. Purchases of taxable parking services will be subject to tax regardless of the delivery
method for the photographs. Traffic cones (assuming they are not being used as a prop) are subject
to tax as purchases of tangible personal property or, as applicable, protective services. See Tax Law
§1105(c)(8).
Catering – Catering services, including charges for delivery, setup, cleanup, wrap, etc., are subject to
sales tax under Tax Law §1105(d).
Hotel lodging – Charges for occupancy provided at hotels within the State are subject to the State
and local sales tax on occupancy and may also be subject to additional local taxes, where applicable.
See Tax Law §1105(e).
Airfare, subway, taxi, and bus fares– Subway and bus fares and airfare are generally considered
purchases of transportation services, which are not subject to tax. However, livery services provided
by limousine, black car, and certain other motor vehicles, with a driver, are subject to sales tax. See
Tax Law § 1105(c)(10) and Sales Tax Imposed on Certain Transportation Services, May 6, 2009,
TSB-M-09(2)S; Additional Guidance Relating to the Sales Tax Imposed on Certain Transportation
Services, May 22, 2009, TSB-M-09(7)S. In addition, there is a tax of 50 cents for each medallion
taxi cab ride that originates and terminates within the Metropolitan Commuter Transportation
District. This tax is imposed on the cab owner, but the economic incidence of the tax is required to
be passed through to the passenger as part of the fare. See Tax Law Article 29-A; Tax on Medallion
Taxicab Rides in the Metropolitan Commuter Transportation District, October 1, 2009,
TSB-M-09(9)M.
Insurance – Fees paid for the purchase of insurance contracts are not subject to tax. However, the
reimbursement of a lessor’s or service provider’s insurance expenses as an added cost of the rental of
equipment (and other tangible personal property) or as an added cost of the purchase of the services
is a part of the receipt for such rental/services and will be considered included in the receipt subject
to tax if the rental/service is otherwise taxable.

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December 7, 2009

Shipping, FedEx, messengers – Charges for the purchase of shipping and transportation services
(shipping, FedEx, messenger service) are generally not subject to sales tax. Thus, Petitioner’s
purchase of, for example, FedEx or a messenger service to deliver photos of models to a customer is
not a purchase of a service subject to tax. However, the charge for shipping and delivering taxable
tangible personal property or services is considered part of the receipt for the purchase of such goods
and services and taxed as part of that receipt. Thus, delivery charges for Petitioner’s purchase of
taxable property or services are part of the receipt upon which tax is to be charged and collected.
Petitioner’s total charge to its customers for sales of taxable tangible personal property, including
Petitioner’s cost for the transportation/delivery of the property to the customer (whether these costs
are separately stated and charged or merely included within the amount of the receipt), is the taxable
receipt upon which tax is computed.
Trailers, motorhomes, etc. – Rentals of trailers, portable dressing rooms, motorhomes, etc. for use by
the crew are subject to sales tax.
Location rental fees, studio fees – Fees for the rental, lease, license to use, etc. of real property and
land are not subject to sales tax. Studio rentals may, depending on the equipment provided in
conjunction with the rental (and depending on whether Petitioner as lessee has dominion and control
of the equipment), constitute a rental of equipment (separately stated operator’s fees might be
excludable from the taxable receipt) or a purchase of a service. (See A Guide to Sales Tax for
the Film Industry, Publication 28 (10/98), and Sigma Sound Studios, Adv Op Comm Tx & Fin,
October 1, 1987, TSB-A-87(39)S.)

The fees paid by Petitioner for talent/models are not subject to sales tax. Similarly, assuming the
fees paid by Petitioner are for labor and not otherwise in conjunction with the sale of taxable tangible
personal property or services by the individuals, the fees paid by Petitioner to the photographer’s assistant,
casting director, location scout, and producer are not subject to sales tax. If the services of the make-up
artist, wardrobe stylist and assistant, and prop stylist and assistant are separately available apart from the
tangible personal property sold by them and the charges for such services and property are reasonable in
relation to their respective value and separately stated on their invoice to Petitioner, generally the receipts for
the tangible personal property are taxable (unless the production exemption applies as discussed above) and
the charges to Petitioner for the services are not taxable. However, make-up artists’ and hair stylists’
services are subject to the tax on beauty and barbering services when performed in the city of New York. See
J.P. Molyneux Studio Ltd., Adv Op Comm T & F, May 22, 1996, TSB-A-96(31)S; Lewis Van Arnam, Adv
Op Comm T & F, December 29, 2006, TSB-A-06(33)S.
With respect to the fees paid by Petitioner to the photographer, to the extent the fee relates solely to
the photographer’s labor and is not otherwise in conjunction with the sale of tangible personal property by
the photographer to Petitioner, the fee is not subject to sales tax. However, Petitioner indicates that the
photographer may purchase some of the set materials and the film and film processing. Thus, though being
paid an hourly/daily rate, it appears that the photographer may be producing and selling the actual
photograph to Petitioner and/or Petitioner’s customer. Petitioner’s sample invoice to customers provides
further support for this conclusion, since the invoice reserves rights in the photograph to the photographer
rather than to Petitioner as seller. To the extent that Petitioner is purchasing tangible personal property (i.e.,
the photograph with any use restrictions that might be imposed) from the photographer, the purchase would
be exempt from tax as a purchase for resale, since Petitioner is selling that same tangible personal property to
its customer. If the photographer is selling an electronically delivered photograph to Petitioner, the fee paid
by Petitioner for that photograph is likewise not subject to tax.
Whether the photograph sold by Petitioner to its customer is delivered inside or outside New York
and whether the location of the photo shoot is within or outside New York will not affect the tax status of the

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property and services purchased by Petitioner. The tax status of Petitioner's purchases will be determined by
whether the property or services purchased are delivered to or used by Petitioner in New York. Thus,
purchases of beauty and barbering services in New York City and of parking services or hotel occupancy
within the State will be taxable to Petitioner regardless of whether the photograph is delivered inside or
outside the State and whether delivered electronically or in tangible form. Conversely, purchases of these
services or hotel occupancy outside of New York are not subject to tax.
Petitioner’s purchases may be eligible for the exemptions for machinery, equipment, parts, etc. used
and consumed directly and predominantly in production when the photograph is sold in tangible form (or
may be eligible for the resale exclusion with respect to the purchase of the tangible photograph itself)
notwithstanding that the charge for the sale of the photograph to the customer is not subject to New York
State sales and use tax because the photograph is delivered to the customer outside the State.
All expenses incurred by Petitioner in producing the photograph that are passed through to the
customer (whether or not separately itemized on the receipt) are included in the taxable receipts from the
sale. See Tax Law §1101(b)(3) and 20 NYCRR 526.5(e). The cost of items (equipment rentals, props, set
materials, wardrobe, motor home, etc.), services (catering, stylists, hotel lodging, etc.) and other expenses
(models, subway, taxi, airfare, shipping, messenger, etc.) used and consumed by a Petitioner in producing the
photographs, as well as the applicable sales tax paid by the Petitioner on its purchases of these items, are
expenses incurred by it in its production of the photograph for sale. Since all these expenses are passed
through to the customer, the expenses are included in the receipt for the sale. If the sale of the photograph is
subject to tax, it is upon this total receipt (i.e., the sum total of all the expenses including tax paid and
accrued in respect of those expenses) that tax is computed. If the receipt for the purchase of the photograph
is ultimately not subject to tax (e.g., if the photograph is delivered electronically in or outside the State, or
delivered to the customer outside the State in tangible form), Petitioner would still be required to pay sales
tax on its purchase of taxable property and services used and consumed by it in the production of the
photograph, and Petitioner’s costs for the property and services, including the tax, would be passed along to
the customer. See TSB-A-09(42)S, Adv Op Comm Tx & Fin, September 22, 2009.

DATED: December 7, 2009

NOTE:

/S/
Jonathan Pessen
Director of Advisory Opinions
Office of Counsel

An Advisory Opinion is issued at the request of a person or entity. It is limited to the
facts set forth therein and is binding on the Department only with respect to the
person or entity to whom it is issued and only if the person or entity fully and
accurately describes all relevant facts. An Advisory Opinion is based on the law,
regulations, and Department policies in effect as of the date the Opinion is issued or
for the specific time period at issue in the Opinion.