A sales tax id, sometimes referred to as a seller’s permit or a certificate of resale allows you to collect sales tax from your customers, which you will in turn pay to your state.
If you plan on taking even $.01 from a client that you are providing photography products and services to, you are legally required to collect sales tax on that sale if you are located in a state that requires sales tax to be collected. Some people believe that they don’t need to collect sales tax when they are portfolio building, charging only their cost or don’t make enough to even claim it on their income tax. Not true! It doesn’t matter how much or how little you make. The second you take even a penny from a client, you should be collecting sales tax from that person.
Different states have different rules as to what is and isn’t taxable. For instance, in some states, your session fee may not be taxable because it is a service and many states do not charge tax on services, however, some states consider the session to be the means to that end product; the print, and tax it. Then there are other states such as Oregon, for example, that don’t collect sales tax at all. The best thing to do is to call your department of revenue for your state and find out the requirements for sales tax. Just be sure to do this prior to doing any actual business.
Obtaining a sales tax id is a relatively easy process and in many cases can be done online at the department of revenue’s website for your state; many times resulting in an immediate issue of a sales tax id. Sales tax can be submitted monthly, quarterly or annually and is usually determined by the amount of sales tax you collect.
*Always seek the advice of your accountant or lawyer. Every state may differ in their laws and this article should only be used for informational purposes and not as the final word for every instance.