Photographers: To Collect or Not Collect WA Sales Tax...
Having clients from both WA and OR can be super confusing as WA has sales tax and OR does not. Do they collect when shooting in WA? Or never to an OR resident? So how is a photographer able to keep this all straight?
Well, I’ve created a straightforward blog to outline these rules (updated as of 1/2020).
For the purpose of this article, lets assume that you are performing a photography service that is ordinarily subject to sales tax. Think weddings, portraits, family, events, empowerment, etc. Basically NOT commercially licensed photos.
If you aren’t sure who is subject to WA sales tax, I created this super easy guide.
When to charge sales tax to OR clients as a WA photographer:
Ultimately, regardless of where the services are performed (in WA or not), the sales tax is charged only if they are a WA resident or if they received the product in WA.
The income is sourced to wherever the client takes possession of the product.
So, say you have a wedding in Vancouver, WA for a couple who live in Portland, Oregon. As long as you deliver the product to them in Portland, Oregon (either electronically, via mail or at their home), then sales tax should NOT be collected.
These sales will be reported under exclusions - interstate and foreign sales - and will be exempt from sales tax when you report it.
What about if the customer is a Washington resident but the shoot is in Oregon?
Doesn’t matter where the shoot is. If they are a WA resident and you are a WA photographer, you must impose sales tax on the entire sale. Wah wahh.
What about the new rulings regarding collecting sales tax?
If you don’t know what I’m talking about, this is regarding the new 7/1/19 rule requiring all retailers to collect sales tax in WA, Click here for a fun read ;) It’s the ruling where even if an Oregon resident presents their Oregon ID at Fred Meyers they still have to pay WA sales tax.
The only time where that ruling change on July 1st will affect a photographer is if this OR client comes to you in WA and receives the final product from you in WA. In this case, the OR client will need to apply for a sales tax refund. So annoying, definitely try to avoid if possible.
What if you are an Oregon photographer shooting for WA residents?
Now, this is more complicated. Until you reach certain thresholds, you are not required to collect sales tax for WA. These thresholds are:
Have physical presence is WA
Have more than $100k in sales to WA
Is organized or commercially domiciled in WA
See here for more information.
Why do they make it so complex for photographers?
No idea. It’s like they hate you.
All information above is sourced from the WA DOR guide for photographers.
