Business and Occupation Tax: Washington's business and occupation (B&O) tax is levied on a business’s gross receipts or gross income, without any deduction for costs of labor, materials, business taxes, or other costs of doing business, unless a valid exemption or deduction applies. This is different from an income tax which is applied to the net income of the business after deducting business costs.
The nature of the business activity determines the appropriate B&O tax classification. B&O tax classifications commonly found in the photography industry include Retailing, Service and Other Activities, Wholesaling, and Royalties. Each B&O classification has its own tax rate. B&O tax is computed by applying the applicable B&O tax rate against the gross proceeds of sale or gross income of the business.
Retail Sales Tax: Businesses engaged in retail activities must collect and remit retail sales tax on their total charges unless a specific exemption applies. The sales tax rate is generally determined by the location where the photos are delivered to, and sales tax rates vary around the state. To determine the correct rate and location code for any given address, use the Department’s tax rate lookup tool.
If you are an out of state business with activities, customers, or employees in Washington, please refer to our Tax Guide for out of State Businesses. You are required to collect and remit sales tax when selling to Washington customers if you have established nexus in this state.
Use Tax: Photographers owe deferred sales or use tax on items used as a consumer if Washington sales tax has not been collected by the seller, unless an exemption applies. Deferred sales or use tax also applies to retail services if sales tax was not paid at the time of purchase. This includes the purchase of remote access software (RAS) or digital automated services (DAS) that the photographer uses in the course of business. See “When the Photographer is the Consumer” in this guide.
Wholesale Sales: Businesses making wholesale sales do not collect retail sales tax on their charges when they receive a valid reseller permit (or other resale document approved by the Department). Wholesale sales are those made to businesses buying a product or service for resale without any intervening use. The seller’s wholesale income is subject to Wholesaling B&O tax. If a seller does not obtain a reseller permit (or approved resale document) from the buyer the sale is deemed to be a retail sale and the seller is required to collect retail sales tax.
Reseller Permit: You must submit an application to the Department to receive a reseller permit for your business. Photographers who have been issued a reseller permit may use it to purchase goods that will be resold to their customers in the normal course of business. Typical items purchased for resale include photograph quality paper, picture frames, etc.
Royalties: The photographer’s gross income from licensing the right to use their intangible property to others is subject to B&O tax under the Royalties classification. See the “Licensing of Photographs” section of this guide for more information. The photographer does not need to collect sales tax from the customer on royalties transactions.