Was a separately stated fee for reserving a photographer on a specific day taxable?

Plain-English summary

The photographer charged a separate retainer to reserve services on a specific day, apart from the photography service and any photographs sold.

The retainer was taxable when a photograph was sold. It was not taxable when no photograph was sold. The letter also cited Rule 3.312(a)(3), under which a graphic artist charged tax on the total art charge to the customer.

Common questions

Was the retainer always taxable? No.

When was it taxable? When a photograph was sold.

When was it nontaxable? When no photograph was sold.

Citations and references

• 34 Tex. Admin. Code Rule 3.312(a)(3) — graphic-artist total charge.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8605L0737E10

Original ruling text

May 28, 1986

Dear ***:

Thank you for your letter of May 14, 1986, concerning the taxability
of a retainer fee.

The retainer fee will be a charge for reserving your photography services
on a specific day. The retainer fee will be charged separately from the
service and any photographs sold.

The retainer fee will be taxable when a photograph is sold. The retainer
fee will not be taxable when a photograph is not sold.

Under section (a)(3) of Rule 3.312, a graphic artist is required to
charge sales tax on the total charge to the customer for the art.

If you have any questions or need more information, please call us at
1-800-252-5555 toll free from anywhere in Texas. You may write us at
the Tax Administration Division.

Sincerely,

Tax Policy Section
Tax Administration Division