SALT Report 2772 – The Nebraska Department of Revenue updated their Information Guide for photographers and photofinishers to reflect changes related to the application of sales and use tax to digital audio-visual works.
Digital Audio-Visual Works are defined as a series of related images which, when shown in succession, create an impression of motion, and may be accompanied by sound. This includes recordings of live events, such as weddings.
The guide states that anyone who sells photographs, proofs, or digital audio-visual works in Nebraska is considered a retailer and is required to have sales tax permits for each of their business locations. Once registered, sales tax must be collected and remitted on all sales, including charges for film developing, unless the customer provides a Resale or Exempt Sale Certificate, Form 13.
A photographer’s or photofinisher’s sales or charges are taxable when the image is delivered by tangible means. For example:
- Videotapes, CDs, and DVDs
- Cameras, accessories, and film
- Developing film and/or digital images
- Filming and videotaping
- Media conversions
- Photographs, slides, or prints
- Repairing photographic equipment
- Reproducing photographs, documents, drawings, or blueprints
- Restoring, tinting, retouching, enlarging, or coloring of photographs
- Digital audio-visual works delivered electronically
Sales tax should be collected on these items based on the total charge to the customer, regardless of how the charges are stated on the invoice. The state and local sales tax applies to sales of photography based on where the customer takes possession of the product. Sales of digital audio-visual works are subject to the sales tax rate imposed at the purchaser’s address.
Sales of digital audio-visual works are exempt from Nebraska sales tax if the purchaser’s address is outside Nebraska. No exemption certificate is necessary, however, the photographer’s records should clearly indicate that the item was delivered outside Nebraska.
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