When were fashion-stylist services, prop rentals, and other photo-shoot charges taxable, and could the agency buy client props for resale?

Plain-English summary

Fashion-stylist services were nontaxable by themselves. The letter listed finding and renting locations, selecting models and hair or makeup artists, arranging props and backgrounds, dressing models, supervising set breakdown, and returning rented items.

When the agency separately charged those services to a photographer or advertiser and did not bill for the finished photograph or other tangible item, the service fee was nontaxable.

Costume and prop rentals were taxable. When a stylist procured them on behalf of the client and paid the vendor, the agency could give the vendor a resale certificate and collect tax from the client on the separately stated rental.

If the stylist services became part of the cost of photographs or other taxable items, the person billing the end consumer had to include those service costs in the taxable sales price.

Common questions

Separately stated stylist time taxable? No, under the described service-only arrangement.

Prop and costume rentals taxable? Yes.

Could the agency buy client props for resale? Yes, with a resale certificate and tax collection from the client.

What if the service cost became part of a taxable photograph? The end seller included it in the taxable price.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9006L1029F03

Original ruling text

June 15, 1990

Dear ***:

I am responding to your letter(s) and our telephone conversations
regarding the application of sales tax to the services performed
by fashion stylists.

You stated that the fashion stylists provide certain pre-production,
production, and post production services during photographic shoots.
Your clients include photographers, advertising agencies, clothing
manufacturers, magazines, and retailers such as catalog companies
and department stores.

Preproduction services include locating a site for the shoot, negotiating
rental of the site, designing the set, and selecting the models
(including hair & makeup artists, costumes, and other necessary props).
Production services include assembling or arranging props, models, and
back drops as well as dressing and preparing models for the shoot. Post
production services include supervising the breakdown of the set and
returning the rented clothing and other props

Your clients are usually billed directly by the vendors supplying
taxable items such as rentals of costumes and props. However, on
occasion your stylists will pay the vendor for these taxable items
and you will in turn bill your client for these items.

As I stated in my November, 1989, response, your responsibility to
collect tax is determined by your relationship to the end consumer.
That is, the services and items which you provide to your customers
may be purchased for your customer's own use or for resale to their
respective customer. In either case, your company is responsible
for collecting either the tax or obtaining a properly completed and
valid resale certificate in lieu of the tax on taxable transactions
or taxable line items invoiced as part of the total service. For
those transactions/line items not subject to sales or use tax, it
is not necessary to collect the tax or the certificate in lieu of
the tax.

The services provided by these fashion stylists such as locating and
renting a site; model selection; selection of hair and makeup stylists;
arranging the props; dressing the live models for the shoot; and
supervising the breakdown of the props and returning them to the lessor
are not taxable in and of themselves. Your charge to the photographer,
advertising agency, etc. for these specific services is not taxable.
However, when these services become a portion of the cost of photographs
or other taxable items, then the entity responsible for billing the end
consumer must include these services as part of the taxable sales price.

The sample invoice to COMPANY shows a separately stated line item
amount to your client for prop rentals. Your invoice also shows tax
on the total of all line items including the artist's fee. The props
are rented for use by the advertising agency or photographer who is
your client. The fashion stylist/artist does not rent the props for
his/her own use. As you stated, these expenses are usually billed
directly to your client who is the end consumer. Therefore, when your
fashion stylist procures costumes, props, etc., on behalf of your
client and pays the vendor directly, your company may issue a resale
certificate to the vendor the rental of these items and collect the
tax from your client.

The separately stated charge to your client for the services discussed
above that are provided by the fashion stylist/artist is not taxable
when your company does not bill the client for the photograph or other
tangible personal property produced. In other words, when you are
merely providing a service to the photographer and the photographer
will bill the client for the photographs, etc., then you charge for
the fashion stylist's time is not taxable. This fee must be separately
stated from the charge for the rental of taxable items.

This opinion is based on the facts presented. If there are additional
or different facts, the opinion may change.

If you have any questions or need more information you may write to Tax
Correspondence, Comptroller of Public Accounts.

Sincerely,

Tax Policy Division