Massachusetts – Construction Progress Photographs Exempt

SALT Report 1836 – The Massachusetts Department of Revenue issued a letter ruling regarding a photographer’s sales of construction progress photographs that he provides to general contractors. The Taxpayer works as a subcontractor who is hired by general contractors to fulfill the photographic documentation requirements typically found in public works projects.

As a subcontractor, the Taxpayer’s contract usually stipulates that any photographs are to be delivered and invoiced to the general contractor on a monthly basis.  The general contractor, in turn, is required to provide the public works agency with the construction progress photographs, which then become the property of the agency.

Massachusetts law, G.L. c. 64H, § 6(d), provides an exemption for “sales to….the commonwealth or any political subdivision thereof, or their respective agencies.” Therefore, when a customer acts as an agent for an exempt government agency, and the customer is contractually obligated to provide tangible personal property, such as the construction progress photographs, to the exempt agency, sales to that customer are exempt from sales and use tax.

The Taxpayer must obtain Form ST-5C from the customer that will receive the tangible property before allowing the exemption.

For Further Information:

Massachusetts Department of Revenue – Letter Ruling 12-12