A photographer offers glamour photography sessions that include a free makeover. Can the makeup and supplies used in the makeover be purchased tax free, and is the photographer responsible for collecting tax on the session itself?

Plain-English summary

A photographer beginning to offer glamour photography sessions wrote to the Comptroller asking whether the make-up and supplies used in a free makeover (included as part of the session) could be purchased tax free.

The Comptroller drew a line based on what happens to the item after the makeover:

• Items transferred to the customer — like makeup, lipstick, and hair spray — can be purchased tax free by issuing a resale certificate, because they end up in the customer's possession.
• Items used during the makeover but kept by the photographer — like hairdryers, brushes and combs, cotton balls, cotton swabs, and wardrobe or accessories — are not eligible for a resale certificate. The photographer owes tax on those purchases, since they aren't transferred to the customer.

Separately, the photographer is responsible for collecting tax on the makeover session itself if the customer receives computer printouts or proofs of the session to keep, or later purchases photographs.

The Comptroller noted that this opinion is based on the facts presented, and the answer could change if the facts were different.

What this means for you

Photographers offering makeovers or other add-on services

Split your purchases by end use. If a product physically ends up with the customer (makeup, lipstick, hair spray), you can buy it tax free with a resale certificate. If you use it on the customer but keep it yourself (hairdryers, brushes, combs, cotton balls, cotton swabs, wardrobe, or accessories), you owe tax on that purchase — a resale certificate doesn't apply.

Billing customers for the photography session

If your makeover customers walk away with printouts or proofs, or later buy photographs, you need to collect sales tax on that session. Don't treat the makeover as a free perk with no tax consequences once photographs or printouts change hands.

Accountants and tax professionals

This letter illustrates the basic resale-certificate rule in a service context: a resale certificate is proper only for property that will be resold or transferred to the customer in the same form, not for supplies or equipment the business consumes in performing a service.

Common questions

Q: Can a photographer buy all makeover supplies tax free with a resale certificate?
A: No. Only supplies actually transferred to the customer — like makeup, lipstick, and hair spray — qualify. Supplies the photographer uses but keeps, like hairdryers, brushes, combs, cotton balls, cotton swabs, and wardrobe or accessories, are taxable purchases.

Q: Is the makeover itself taxable?
A: The photographer is responsible for collecting tax on the makeover session if the customer receives computer printouts or proofs of the session to keep, or later purchases photographs.

Q: What items were specifically mentioned as eligible for tax-free purchase?
A: Makeup, lipstick, and hair spray were given as examples of supplies transferred to the customer.

Q: What items were specifically mentioned as taxable purchases for the photographer?
A: Hairdryers, brushes and combs, cotton balls, cotton swabs, and wardrobe or accessories were given as examples of supplies used in the makeover but not transferred to the customer.

Q: Can this photographer rely on this letter if the facts of their business change?
A: No. The opinion is based on the facts presented, and if there are any additional or different facts, the opinion may change.

Citations and references

No specific statutes or rule numbers were cited in this letter.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9605L1414A05

Original ruling text

May 28, 1996

Dear ***:

Thank you for your letter of May 21, 1996. You asked whether make-up and
supplies used in glamour photography may be purchased tax free.

As I understand it, you are beginning to do glamour photography. Part of
the photography session is a free makeover. You asked if the make-up and
supplies used in the makeover are taxable.

You may issue a resale certificate for the purchase of makeup and supplies
transferred to your customer. Examples include makeup, lipstick and hair
spray. You owe tax on supplies you use in the makeover but do not transfer
to your customer. Examples include hairdryers, brushes and combs,
cottonballs, cotton swabs, and wardrobe or accessories.

You are responsible for collecting tax on the makeover session if the
customer receives computer printouts or proofs of the session to keep, or
later purchases photographs.

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

You may call me toll free at 1-800-531-5441, ext. 5-0037. The direct line
is 512/475-0037. You also may write to Sales Tax Policy Division,
Comptroller of Public Accounts.

Sincerely,

Lindey Osborne
Sales Tax Policy Division

NOTE: Previous Accession Number 9605291L