On my current site (using PhotoStore), I set the sales tax percentage and that is added to each sale. I can't tell from the SmugMug website how that works when you sell through them. Anyone know?
My accountant wasn't sure so she called the appropriate Government agency ( I can remember who it was ) and they told her we do not owe sales tax because the arrangement we have with SmugMug is something like a contractor/subcontractor deal.
She tried to explain it to me but I kinda tuned out after she said "no sales tax"
That is in Georgia. It may be different where you are since sales tax is local.
SmugMug will give you an answer in a hurry but the best thing is to talk with a tax professional. Which is cheaper than talking to Uncle Sam
The way the majority of the print fulfillment sites work is that you are a subcontractor (form 1090). They record the sale, and take care of the paper in the background.
I just switched to instaproofs - they are a little different in that they more or less act as a webhost/cc middleman and you do the sales tax reporting.
nathanlake wrote:
That strikes me as a bit odd. Since I am selling the photo, and I am selling it to someone in the same state as my business, they should pay tax?
Why is it odd ? It is just like using a agent from another state which is also sales tax exempt if they do the billing and send you money . Don't complain about it , eventually everything online will get taxed .
nathanlake wrote:
SmugMug confirms what you have said. They pay the sales tax to the state of CA on all transactions. The photographer does not need to deal with it.
If they are shipping it out of state I believe they are not allowed to collect sales tax unless they have a office in the state they are shipping to .
