Ok, so I have gotten a little confused about a couple things with sales tax in Ohio. I have talked to a few CPA's and no one seems to be able to give me a straight answer, so anyone from Ohio that can help me, would be greatly appreciated!

1) What is taxable? Service? Product?

2) How do you all include tax in your price? Do you tack it on at the end of the package? (i.e. Package is $XXXX + tax) or do you include it in the package and worry about paying your county behind the scenes?

Any other advice or info you can give me would be awesome! I really need someone's help!
....and a new CPA!

I have a little help for you, not a lot though. My friend works for the department of taxation and I keep asking her questions for my design business. Product is taxable. Service is not. What she told me is that if you charge a sitting fee, it's not taxable, because they don't receive a product, but if they buy images (printed AND on disk) it is taxable. It's all VERY confusing to me.

I would suggest including the tax in the price.

I'm actually taking a business skills class for photographers right now - I'll have to pick the prof's brain on this a little since she runs her own business. I'll let you know what she has to say.

I really appreciate the info Danielle! That was a solid answer I was looking for.

It did however, bring up another question....let's say I include the tax in a wedding package that includes product, do I just tax the products within the package for what the value is? and not the service (i.e. my time)?

Anyone?

I'm in Cincinnati. What my CPA told me is very different than what Danielle said. I was told to charge and pay sales tax on every penny I collect. It doesn't matter whether it's a product or service.

Service used to be exempt, but not anymore. This is a recent change. We didn't used to pay sales tax when we got our hair cut. Now we do.

To make things even more difficult, according to my CPA we are technically supposed to pay the sales tax to the county the service is performed in. That would get very difficult when the e-session, ceremony, and reception are all in different counties. My CPA said just pay it to the county you live in and don't worry about it.

Jeff

Though that does seem to simplify things, do you mind telling me if you tack on the tax as a (+ tax) way, or are you including it in the cost of your package? I am just wondering what clients expect.

Jeff - that's interesting, I'll have to give my friend a call and see what she says about it. It seems like everyone I've talked (CPA's, etc) all have a slightly different take - guess it's better to be safe than sorry!!

Uh oh! Conflicting responses? That is what is happening with the CPA's!

Anyone else have anything for me?

We've called, checked online, and talked to people about this. And parts have recently (in the past month) changed, so read carefully.

You must collect tax on any product (most people understand this). You don't need to collect tax on services UNLESS a product ever comes about from that service. For photographers, that's everything. There is no point in hiring a photographer just to photograph and not see anything from them (it doesn't make much sense). Therefore, at least in Ohio, you (as a photographer) must collect tax on everything you charge for.

The only time I can think of where you wouldn't pay the state its tax on the session is if you only did online proofing and they ended up not purchasing anything. In that case, you could refund the tax to your customer, but it would be such a PITA to do I doubt anyone would care. You'd still have to collect it at the time of the sale.

Collecting tax on everything makes it easy to figure out.

Now for the part that has recently changed. A couple years ago, Ohio changed its tax collection to be for the county of delivery. So, if you bought a washing machine at hhgregg on Sawmill (in Dublin, Franklin County) and had it delivered to your house in Powell (in Delaware County), you would pay Delaware County tax, and hhgregg would have to pay Delaware county that money collected. Even though both Franklin and Delaware counties have the same tax rate at this time.

What this meant for us as photographers is that for every sale that we mailed to an Ohio address, we'd have to look up their tax rate using The Finder and adjust their total, if necessary. We'd then have to make sure their county received the tax. It's usually something like 80 cents -- really stupid. Luckily we don't have to write separate checks out to each county, we can pay it all at once and let them know where the money goes.

There was a grace period that just passed that you had to start doing it this way.

They've now changed it so that if your annual sales are less than $3 million, you can collect tax based on your location, not the location of delivery. Luckily (or not), our sales are less than that so (I think) we can now go back to collecting for Franklin County only. The reason "I think so" is that if you had started collecting sales tax the "correct" way before the grace period was up, you might have to keep doing it that way. We still need to figure that one out.

I told you it was confusing. And, of course, I'm not a CPA or a lawyer (nor do I play either on TV) so make sure you check it out yourself and don't take my word for it.

I certainly appreciate your time in writing that for me, I can see clearly now!

Thanks for the info Adam!

Can I ask who you use locally for a CPA? I need to find one in C-bus and just haven't gotten around to it.

The prices I quote do not include tax. It gets tacked on.