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MN – Photographers; be careful what you include with service.

Posted by salestax on February 26, 2009

MN Dept. of Revenue recently issued a judgement to a photography studio for it’s issuance of the photographs taken in digital form to its customers.  Previously, in the film era, the photographer would give the negatives to customers to obtain their own prints and they were considered as only providing exempt services. 

But, now that the digital world has arrived, and the photographer now gives DVDs with the photos taken, the services are taxable because the received disk provides a usable form. 

Sounds like there is a planning opportunity here… if the photographer gives the photos through a website and allows the customers to have full rights to those photos, it would not be taxable.  

Unless and until MN decides to tax digital property -like some states are starting to do.  (Online Books, Music, etc.)

You can read the case and decision here.

2 Responses to “MN – Photographers; be careful what you include with service.”

  1. Is this a potential loophole for those of us conducting business in the State of Arizona under TPT tax laws ?

  2. I do not deliver a photographic product in MN and deliver all files online so I should be exempt from charging sales tax correct and if not why?

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