Are printed, media-delivered, or electronically delivered photographs taxable in South Carolina, and what charges enter the tax base?

Plain-English summary

South Carolina Revenue Ruling 15-10 made taxability turn mainly on how the customer received the photographs.

• Traditional printed photographs were taxable.
• Photos delivered on videotape, CD, DVD, or flash drive were taxable tangible personal property, whether the photographer or customer supplied the media.
• Photos delivered only as an email attachment or website download were not tangible personal property and were not taxable.
• When the customer received the same photos both electronically and in tangible form, the entire gross proceeds were taxable.

Charges included in a taxable sale

When tangible photographs were sold, the tax base included all charges connected to producing and delivering them, without deduction for:

• consultation fees;
• sitting or setup fees;
• nonrefundable retainers tied to the completed sale;
• photographer labor;
• travel;
• models, props, aircraft, and similar production expenses; and
• other service or transportation costs that formed part of the sale.

The Department reasoned that the photographer would not receive those charges but for the sale of the tangible photographs.

If no tangible photos were sold—such as a sitting with no purchase, an electronic-only photo delivery, or a canceled session with no photos taken or purchased—the ruling did not impose tax merely on the service or retained fee.

Out-of-state delivery

Electronically delivered photos sent to a customer in another state were not taxable for the same electronic-delivery reason.

Tangible photos were exempt when the photographer was contractually obligated to deliver them outside South Carolina using the photographer's vehicle, mail, or common carrier. The destination obligation mattered; simply dealing with an out-of-state customer was not the stated test.

Examples from the ruling

• $25 sitting fee plus $50 printed package: tax on the full $75.
• $25 sitting fee plus $50 email or website download only: no tax.
• $2,000 retainer plus $500 photos on CD or flash drive: tax on the full $2,500.
• $3,000 consulting/download contract with electronic-only photos: no tax.
• $1,000 consulting, $1,500 download, and $500 CD of the same photos delivered in South Carolina: tax on the full $3,000.
• Printed photos mailed to North Carolina plus electronic downloads for an out-of-state wedding: no South Carolina tax under the stated delivery facts.

Common questions

Q: Does a customer-supplied flash drive make the sale nontaxable?

A: No. Delivering the photos on tangible media was taxable regardless of who supplied it.

Q: Are website downloads taxable?

A: Not under RR 15-10 when the photographs were delivered electronically only and there was no separate website-access charge.

Q: What if the customer gets both a download and prints?

A: The whole transaction was taxable, not just the separately stated print charge.

Q: Is a sitting fee taxable when the customer buys nothing?

A: No under the ruling's example because no tangible personal property was sold.

Citations and references

• S.C. Code Sections 12-36-910 and 12-36-1310 (sales and use tax)
• S.C. Code Section 12-36-60 (tangible personal property)
• S.C. Code Sections 12-36-90 and 12-36-130 (gross proceeds and sales price)
• S.C. Code Section 12-36-2120(36) (required out-of-state delivery)
• S.C. Regulation 117-309.2 (photographers)

Subject

Photographers - Photographs Sold in Tangible or Electronic Form

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/RR15-10.pdf

Original ruling text

STATE OF SOUTH CAROLINA

DEPARTMENT OF REVENUE
300A Outlet Pointe Blvd., Columbia, South Carolina 29210
P.O. Box 12265, Columbia, South Carolina 29211

SC REVENUE RULING #15-10

SUBJECT:

Photographers - Photographs Sold in Tangible or Electronic Form
(Sales & Use Tax)

EFFECTIVE DATE:

Applies to all periods open under the statute.

SUPERSEDES:

All previous advisory opinions and any oral directives in conflict
herewith.

REFERENCES:

S.C. Code Section 12-36-910(A) (2014)
S.C. Code Section 12-36-1310(A) (2014)
S.C. Code Section 12-36-60 (2014)
S.C. Code Section 12-36-2120(36) (2014)
S.C. Regulation 117-309.2

AUTHORITY:

S. C. Code Ann. Section 12-4-320 (2014)
S. C. Code Ann. Section 1-23-10(4) (2005)
SC Revenue Procedure #09-3

SCOPE:

The purpose of a Revenue Ruling is to provide guidance to the public. It
is an advisory opinion issued to apply principles of tax law to a set of
facts or general category of taxpayers. It is the Department’s position
until superseded or modified by a change in statute, regulation, court
decision, or another Departmental advisory opinion.

QUESTIONS

1. Are sales at retail of photographs in traditional printed form subject to sales and use tax?
2. Are sales at retail of photographs in non-printed tangible form, such as by videotape, CD,
   DVD or flash drive, subject to sales and use tax?
3. Are sales at retail of photographs delivered electronically as an attachment to an email or as a
   download from the photographer’s website subject to sales and use tax?

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4. Are sales at retail of photographs in which the photographer provides the customer the same
photographs in tangible form (traditional printed form, videotape, CD, DVD or flash drive)
and electronically as an attachment to an email or as a download from the photographer’s
website subject to sales and use tax?

5. Are sales at retail of photographs where the photographer is obligated to deliver the
   photographs outside of South Carolina subject to sales and use tax?
6. What is the measure of the sales and use tax when the transaction is subject to tax?
   CONCLUSIONS
7. Sales at retail of photographs in traditional printed form are subject to South Carolina sales
   and use tax, unless otherwise exempt. 1
8. Sales at retail of photographs delivered in non-printed tangible form, such as by videotape,
   CD, DVD or flash drive, are sales of tangible personal property under Code Section 12-36-60
   and are subject to South Carolina sales and use tax, unless otherwise exempt.
   Note: The sale of the photographs is subject to the tax regardless whether the photographer or
   customer provides the videotape, CD, DVD or flash drive upon which the photographs are
   transferred to the customer.
9. Sales at retail of photographs delivered electronically as an attachment to an email or as a
   download from the photographer’s website are not sales of tangible personal property under
   Code Section 12-36-60 and, therefore, are not subject to South Carolina sales and use tax.
10. Sales at retail of photographs in which the photographer provides the customer the same
    photographs in tangible form (traditional printed form, videotape, CD, DVD or flash drive)
    and electronically as an attachment to an email or as a download from the photographer’s
    website are subject to South Carolina sales and use tax, unless otherwise exempt. The
    measure of the tax is the entire gross proceeds of sale. (See Note in Question 2.)
11. Sales at retail of photographs to a customer in another state as an attachment to an email or as
    a download from the photographer’s website are not subject to South Carolina sales and use
    tax.
    Sales at retail of photographs in tangible form (traditional printed form, videotape, CD, DVD
    or flash drive) where the photographer is obligated to deliver (using his own truck, the mail,
    or a common carrier) the photographs outside of South Carolina are exempt from South
    Carolina sales and use tax. See Code Section 12-36-2120(36).

1

For example, sales of photographs to the federal government are not subject to sales and use tax. See Code Section
12-36-2120(2).

2

6. The calculation of the South Carolina sales and use tax imposed on sales of photographs is
based upon the entire gross proceeds of the sale or sales price. This includes charges for
consultation fees, sitting fees, travel, or other expenses incurred in providing the photograph,
as well as the cost of the photographer’s labor.
FACTS
Professional photographers are engaged to take portraits of families, weddings, children, pets,
landscapes and more at a studio or at an off-site location. Today, photographs are provided to the
customer in a variety of forms, including (1) traditional print form, (2) alternative tangible
means, such as by videotape, CD, DVD or flash drive provided by the photographer or customer,
(3) electronic methods, such as email or customer download through the photographer’s website,
or (4) a combination of printed or non-printed tangible photographs and electronic photographs.
In addition to selling photographs, some photographers may also provide services that are sold in
conjunction with photographs. Often, the photographer charges a flat fee for the photographs or
may charge separately for a consultation fee, sitting fee, set up fee, travel fee, and other expenses
incurred in providing the photograph.
The purpose of this advisory opinion is to address the application of the sales and use tax to sales
of photographs sold at retail by a photographer to a customer in tangible and electronic form and
to provide guidance in determining the amount of the charges used to compute the South
Carolina sales and use tax.2
DISCUSSION
Sales of Photographs Subject to Tax
Code Sections 12-36-910(A) and 12-36-1310(A) impose the South Carolina sales tax and use
tax, respectively. South Carolina imposes a sales tax on the gross proceeds of sales of every
person engaged in the business of selling tangible personal property at retail. The sales tax
applies when the person is engaged in the business of selling, the person is selling tangible
personal property in South Carolina, and the sales in South Carolina are at retail. The retailer is
liable for the sales tax.
South Carolina imposes a use tax on the sales price of tangible personal property purchased at
retail for use in South Carolina. It mostly applies to purchases of tangible personal property for
use in South Carolina from out of state retailers and includes purchases from retailers made
through the Internet or when visiting another state. The purchaser is liable for the use tax. If the
purchaser has a receipt from a seller showing the seller has collected the South Carolina tax from
the purchaser, the purchaser is relieved of the use tax liability. 3 South Carolina allows a credit
against the use tax due in South Carolina for the state and local sales or use tax due and paid in
another state on purchases of tangible personal property.
2

For purposes of this advisory opinion, it is assumed that no charges are incurred for merely viewing or accessing
the photographer’s website. See SC Revenue Ruling #06-8 concerning taxable communications charges for
accessing a website.
3
Code Section 12-36-1330(B).

3

Code Section 12-36-60 defines the term “tangible personal property”, in part, as “personal
property which may be seen, weighed, measured, felt, touched, or which is in any other manner
perceptible to the senses. It also includes services and intangibles … the sale or use of which is
subject to tax under this chapter … .”
South Carolina Regulation 117-309.2 specifically provides that photographers operating
photographic studios for the purpose of taking photographs and portraits are primarily engaged
in the business of selling tangible personal property at retail to their customers and such sales are
taxable. 4
Based on the above, sales at retail of photographs to a customer in tangible form (e.g., print,
videotape, CD, DVD, flash drive, etc.) are sales of tangible personal property and are subject to
tax, unless otherwise exempt. 5 For example, Code Section 12-36-2120(36) provides an
exemption from the tax for sales of tangible personal property where the seller is obligated to
deliver (using his own truck, the mail, or a common carrier) the tangible personal property to the
buyer in another state. 6
Now it must be determined whether sales of photographs solely by electronic forms are taxable.
For electronic delivery (e.g., by email or a website download from the photographer’s site) of
photographs to be subject to sales and use tax, it must be determined that there is a sale of
tangible personal property. It is the longstanding position of the Department that photographs
that are sold and transferred electronically as an attachment to an email or as a download from
the photographer’s website do not meet the definition of tangible personal property in Code
Section 12-36-60. Accordingly, sales of photographs at retail electronically as an attachment to
an email or as a download from the photographer’s website are not subject to South Carolina
sales and use tax.
Note: Sales at retail of photographs in which the photographer provides the customer the same
photographs in tangible form (traditional printed form, videotape, CD, DVD or flash drive) and
electronically as an attachment to an email or as a download from the photographer’s website are
subject to South Carolina sales and use tax, unless otherwise exempt. The measure of the tax is
the entire gross proceeds of sale.
Charges Subject to Sales or Use Tax
Having established that the sale of photographs by tangible means is subject to South Carolina
sales or use tax, it must be determined what charges associated with the purchase are taxable.
4

This regulation also addresses sales by photo finishers and photo copiers and provides examples of specific
transactions not subject to tax by them because they are the result of a service. These provisions are not applicable to
this advisory opinion and are not discussed.
5
See Citizens and Southern Systems, Inc. v. South Carolina Tax Commission, 280 S.C. 138, 311 S.E.2d 717 (Ct.
App. 1984) and SC Revenue Ruling #03-5, concluding the same regarding the delivery of computer software by
magnetic tape and other tangible forms.
6
Code Section 12-36-2120(36) specifically exempts from the tax the gross proceeds or sales price of “tangible
personal property where the seller, by contract of sale, is obligated to deliver to the buyer, or to an agent or donee of
the buyer, at a point outside this State or to deliver it to a carrier or to the mails for transportation to the buyer, or to
an agent or donee of the buyer, at a point outside this State”.

4

The sales tax is calculated on the retailer’s “gross proceeds of sales.” Code Section 12-36-90
provides that gross proceeds is the value proceeding or accruing from the sale of tangible
personal property. It includes the proceeds from the sale of tangible personal property without
any deduction for (1) the cost of goods sold, (2) cost of materials, labor, or service, (3)
transportation costs, or (4) any other expenses.
Similarly, the use tax is calculated on the “sales price” of tangible personal property. Code
Section 12-36-130 provides that sales price is the total amount for which tangible personal
property is sold, without any deduction for the cost of the property sold, the cost of the materials
used, labor or service cost, any services or transportation costs that are a part of the sale, or any
other expenses.
Based upon the above, the total amount charged in conjunction with the sale of tangible personal
property is included in the tax base. This includes charges for consultation fees, sitting fees,
travel, or other fees or expenses incurred in providing the photograph, as well as the cost of the
photographer’s labor.
The principle of what is includable in “gross proceeds” was established in Meyers Arnold, Inc. v.
South Carolina Tax Commission, 285 S.C. 303, 328 S.E.2d 920 (Ct. App. 1985). In this case, the
Court of Appeals reasoned:
But for the lay away sales, Meyers Arnold would not receive the lay away fees.
The fees are obviously charged for the service rendered in making lay away sales.
For these reasons, this court holds the lay away fees are part of the gross proceeds
and subject to the sales tax.
This principle was followed in Commission Decision S-D-175 (1986), where the Department
concluded that services provided by a commercial photography studio in producing original
transparencies for a customer are part of the sale and may not be exempted from the gross
proceeds of sale.
As such, but for the sales of photographs, the photographer would not receive the consultation
fees, sitting fees, and other fees incurred in providing the photographs. For these reasons, the
consultation fees, sitting fees, and compensation for his labor are a part of the gross proceeds of
sales or sales price and are subject to the sales and use tax, if the photographs are sold and
delivered in tangible form (traditional printed form, videotape, CD, DVD or flash drive), unless
otherwise exempt.
EXAMPLES
The following examples provide guidance in determining whether various transactions with a
photographer in South Carolina are subject to the sales and use tax and the measure of the tax.
Sitting Fee and Purchase of Traditional Printed Photos. A photographer charges a $25 sitting fee
for a photo shoot. The customer purchases a package of traditional prints for $50. The sales and
use tax is imposed on the entire $75.

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Sitting Fee and Purchase of Electronic Photos. A photographer charges a $25 sitting fee for a
photo shoot. The customer pays $50 to receive the photographs as an attachment to an email or
as a download from the photographer’s website. Since no tangible personal property is sold, no
sales and use tax is imposed.
Sitting Fee but No Photos are Purchased. A photographer charges a $25 sitting fee for a photo
shoot. The customer does not purchase any photos. Since no tangible personal property is sold,
no sales and use tax is imposed.
Retainer Fee and Purchase of Photos in Tangible Format. A photographer charges a
nonrefundable retainer fee of $2,000. For $500, the customer purchases photographs that are
placed on a CD or flash drive. The entire $2,500 is included in the calculation of the sales tax.
Consulting Fee and Purchase of Electronic Photos. The customer enters into a contract with a
photographer to produce photographs for $3,500 ($500 for download of photos from the
photographer’s website and a $3,000 consulting fee). Since no tangible personal property is sold,
no sales and use tax is imposed.
Combination of Tangible and Electronic Photos Sold and Delivered in South Carolina. The
customer enters into a contract with a photographer to produce photographs for $3,000 (a $1,000
consulting fee, a $1,500 fee to download digital photos from the photographer’s website, and
$500 for the purchase and delivery in South Carolina of a CD of the same photos.) The entire
$3,000 is subject to the tax.
Out of State Photo Session and Print and Electronic Photos Delivered Outside of South Carolina.
A South Carolina photographer charges $1,000 to photograph a wedding in North Carolina, $500
to deliver printed photos through the mail to a North Carolina address, and $1,000 for the
customer to download electronic photos. None of the charges are subject to South Carolina sales
and use tax since the photographer mailed the tangible photographs out of state.
Retainer Fee Paid but Photo Session Canceled. The customer pays a $3,000 nonrefundable
retainer fee to reserve the photographer’s services for a wedding date planned for next summer.
The wedding is canceled, and no photos are taken or purchased. Since no tangible personal
property is sold, no sales and use tax is imposed.
Separate Purchase by Family and Friends. A photographer charges a couple $3,000 to take
wedding photos and mail tangible prints to their address in South Carolina. The photographer
posts the photos online where family and friends can purchase printed photos for $50 plus $5
shipping and handling. The measure of the tax for each printed photograph sold and delivered to
family and friends in South Carolina is $55. The measure of the tax for the sale to the bride and
groom is $3,000. (Photographs sold and delivered outside of South Carolina are not subject to
the sales and use tax.)

6

Miscellaneous Expenses Incurred in Making Tangible Photos. A photographer charters an
airplane, hires models or rents props for use in making tangible photographs. These charges are
included in the gross proceeds or sales price of the photographs and subject to the sales and use
tax. See Richland County v. South Carolina Tax Commission, Richland County Court of
Common Pleas, Case No. 82-CP-40-2143 (1983). See Regulation 117-310 for when delivery
charges or transportation charges are included in gross proceeds of sales.
SOUTH CAROLINA DEPARTMENT OF REVENUE

s/Rick Reames III
Rick Reames III, Director
August 3
, 2015
Columbia, South Carolina

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