I’ve worked with the fine folks at BNN, a full-service accounting firm based in Portland, ME, for a few years now. In honor of their 20th anniversary, they just relaunched their refreshed website look this week with a new logo and a few of the environmental portraits we’ve done featuring their principals within their beautiful downtown Portland office space. They wanted to emphasize the personal, human component of their services, and I think the new web design and images work well to do that.
Collection of sales tax is one of those things that photographers should be charging but may not be charging correctly. This is because it can be hard to find information online, because each state approaches the issue differently and because as photographers we may (or may not) deal with things like prints, electronic image delivery, sitting fees, out of state clients and license and usage fees. It can be very confusing.
I’ve directly contacted the state of Maine in the past to ask questions about sales tax, and have had many discussions with other local photographers including Kathleen Kelly, a Scarborough-based commercial photographer who has gotten answers from the state. Recently I corresponded with a tax section manager, Peter, from Maine Revenue Services regarding my most oft-seen scenarios.
His responses revealed a few surprises. I’ll explain further, but must note that I’m not a lawyer or a tax professional. You should hire a good CPA to handle your business taxes and if you have further questions, contact the state directly.
First, some things I already knew: I don’t charge tax to my out-of-state clients, but I do to my in-state ones. Sometimes I don’t charge tax as a separate line-item to clients in-state. In these cases I’m still required to pay the state the appropriate state sales tax. Electronic file delivery is considered a tangible product, just like a CD of images or a box of prints. It’s taxable.
If you charge usage or license fees, however, it gets interesting. If your license is unlimited in terms of time, then it’s subject to tax. If your license is restricted to ten years or less, it’s not subject to state tax. This is a recent decision on the part of the state of Maine to treat photography licensing like software licensing. Note that they use a length of time (10 years), not type of use (brochures, web, etc) to define the restriction.
A couple of things to make sure of: Make sure to apply sales tax to line items in your invoices. Things like postage using common carriers (USPS, FedEx, UPS) are not taxable. Reimbursed expenses aren’t either.
As always, consult a professional when deciding how to approach state sales tax, and actively seek answers that pertain to your specific situation. remember that just because you didn’t know the right way to go doesn’t make you immune from being held responsible by the state later.
With so many quality digital cameras plus the enthusiasts willing to work for little or free, the question comes up a lot: why should anyone hire a professional photographer? In my mind, there are four major reasons I hire a professional to do anything, whether it’s building a web page to installing a window. Can I do all of these things? Yes, I can. And, I have. But, since we all can only do so much in the course of a day–and only become an expert in so many disciplines in our lifetimes, we are all forced to choose where to spend our efforts. With 17 years’ experience as a professional photographer, I’ve clearly chosen mine. Here, then, are the major reasons I counter such questions with:
You get what you pay for
What’s your expectation of the quality, timeliness and satisfaction of a job you give to a non-professional? Probably it’s just good enough. If that’s what you want, you should hire an amateur photographer.
Peace of Mind
When you hire a bonded, licensed electrician, you put your trust in their skills and mentally check out of the process so you can attend to other things. You know it’ll be done right and that when you flip that light switch, the lights will come on. You know if they don’t, you know who to talk to. You don’t worry, fret or stress because the problem is being handled. With a professional photographer, you may be excited and interested in the outcome, but you don’t have to worry that the images witll be of high quality, of consistent tone and feel…..you’ll have the confidence that you are getting the best effort and the best results.
Quality Consistency
Anyone can take a great photo–especially with the digital tools available today. A photographer I know, a pro, once had two flashes go down on him during a night time wedding–shot during a hurricane, no less. He sweated a bit, made adjustments, and the bride never knew the difference. The photos? If placed side-by-side with images from other weddings, other pros would be hard-pressed to guess which one had technical difficulties. A non-pro would have folded when faced with a daunting technical issue like this, and the wedding would have been in jeopardy. With a pro, you are guaranteed quality good photos every time–not just once in a while.
The extra 10%
An established photographer once told a much younger version of myself that I should never just give the client what they asked for. There had to be a way to come back with something more, something in addition….some value-add. That way if an assignment didn’t develop in the way the client was expecting, I’d have provided them with something else they could still use. Great advice. I call this the extra 10%. A professional photographer is always thinking about what they can do that the client could use, or needs. They listen to the client to truly understand the problem and use their experience and skills to provide a solution the client can’t be expected to think of. Because they hired you, a professional, to do so. The 10% is what you demand of yourself, not what the clients expects of you.
It’s a relationship
Why develop a relationship with a professional? Because who are you going to call when you need your drain unclogged on a Sunday morning over a holiday weekend–the plumber you’ve worked with for many years or someone you choose at random in the phone book? I’m always getting calls from clients wanting images processed for an ad, cropped, or to have a DVD burned from a long-ago assignment. They know that no matter what I’m doing or wherever I am in the world, I have the systems and help to get the answers and what they need done quickly. That gets back to peace of mind.
We live in a world in which we are bombarded with choices and information. The professional in any field stands as an anchor in a sea of chaos, ready to make sense of your needs and to provide you with the solutions you actually need. Whether you’re looking for a photographer or plumber, a tax accountant or a Realtor, do your research, ask for personal references, and do yourself a favor. Hire a pro, and get back to your life and work.
–30–
At times I’m reminded just how small Portland can be. Just last week I read in MaineBiz‘s “New Ventures” section a profile of TriPom Chews. Located in Brunswick, ME, owners Autumn Gullifer and Ken Bryant make chicken and turkey jerky treats for dogs. As with all great ideas, once I heard about the healthy product they make, it seemed a natural fit for Maine–where healthy living and ‘buy local’ are deeply embedded values.
At an event this Tuesday night, a friend and fellow photographer Kathleen Kelly won a package of TriPom treats. Since Kathy has a cat but no dogs, she passed them on to me, thinking our two pugs, Frodo and Fred, might like them. I then met Autumn and Ken in person, and got the back story about their business.
Ken is from Chicago and Autumn hails from Maine. They started doing their business to solve a problem–namely to provide a healthy treat for their three Pomeranian dogs that was a much safer alternative to similar treats made in China (and often containing harmful substances and ingredients). They are bootstrapping their growing company and are already in an impressive 18 small pet boutiques and venues venues throughout the state. Their goal is not to get into the box stores that compete against the smaller pet retail operators. The smaller service and retail shops are where they want to be, although they are pursuing direct online sales.
I love to hear about other small business owners living the dream. Great to meet you, Autumn and Ken! I can tell you that Frodo and Fred LOVED the treats. That’s not exactly a stretch for a Pug, but they seem to like them so much that I think I may be able to train them to vacuum their own hair from the carpet in exchange for regular TriPom treats. If that works, I’m a customer for life.
–30–
After many years’ experience as working, professional photographer, I’m well-versed in the technical side of my craft. The largest part of my business isn’t photography, though–it’s business. You know, everything from marketing to maintaining my site to keeping records and doing taxes. That’s often where photography businesses either make it or break it.
Whether you run a retail business (selling prints and products) or a service one, where deliverables are usually in electronic form, you need to know about state sales tax laws and how they apply to you. I’ve been confused about this in the past, as have many other photographers I know. My accountant didn’t know the answer, and so I called the state. A very nice lady named Mary helped answer my questions and directed me to the instructional form on the Maine.Gov website that explained what I needed to know. Click to download the form that applies to Photographers and Photofinishers.
Chances are if you’re like me, your sales tax strategy could use a few tweaks.