Document Number
98-151
Tax Type
Retail Sales and Use Tax
Description
Photography
Topic
Taxability of Persons and Transactions
Date Issued
10-14-1998
October 14, 1998

Re: Request for Ruling: Retail Sales and Use Tax

Dear *****

This will reply to your letter in which you seek a ruling concerning the application of the sales and use tax to purchases of photographic film by ***** (the ``Taxpayer').

FACTS

The Taxpayer is a portrait and wedding photographer. The Taxpayer has started selling processed film to its customers and wishes to know if purchases of the film now qualify for the resale exemption. The Taxpayer has previously paid sales and use tax on film purchases. The Taxpayer also asks if sales tax
should be charged on sales of the processed film to customers.

RULING

Title 23 of the Virginia Administrative Code (VAC) 10-210-2050 (copy enclosed) addresses the application of sales and use tax to photographers. Paragraph B of this regulation states that:
    • Chemicals, paper and other materials that become a component part of the finished photograph or other print for sale may be purchased under a resale certificate of exemption. Purchases of cameras, equipment and other tangible personal property by commercial photographers and others for use or consumption are taxable.
In September 1996, the department issued Virginia Tax Bulletin 96-6 (copy enclosed) which provides that commercial photographers are required to pay the tax on purchases of tangible personal property used and consumed in the provision of photography services. Photographers are considered the final consumers of film purchased for use in providing photography services. The department's longstanding policy is that tangible personal property which becomes a component part of, or is coated upon or impregnated into the finished product, can be purchased under the resale exemption.

The film is used by the Taxpayer to produce a finished product; however, the processed film does not become a component part of the finished product, i.e., a portrait or photograph. If the Taxpayer sells the processed film to customers, the sale is considered a separate and distinct transaction from the purchase of the film used by the Taxpayer to provide photography services. Therefore, the resale exemption does not apply to purchases of the film although the processed film may later be sold or transferred to customers.

The Taxpayer asks if sales tax is charged on sales of processed film. Title 23 VAC 10-21 0-2050(A) states that:
    • The tax is applicable to the total charge to the customer for a photograph, slide, etc., including, but not limited to, charges for labor, photocomposition, setting design, photography time, and any other components of the charge, regardless of whether such components are separately stated.

Based on the above, sales of processed film alone and sales of processed film made in connection with the sale of a photograph, slide, or other tangible personal property are taxable.

I trust the foregoing has addressed your concerns. If you need additional assistance, please contact ***** at *****.

Sincerely,

Danny M. Payne
Tax Commissioner

OTP/13800S




Rulings of the Tax Commissioner

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