Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 420.0096


420.0096 Employee or Independent Contractor. A photographer works for a dating service. Although the dating service sets the photographer's hours and provides the studio facility, they treat the photographer for income tax purposes as an independent contractor. When a customer applies for service with the dating service, there is a set charge which involves the development of a biography and photo for placement in the dating service's directory which is for the use of customers. When the customer signs up for the dating service, he completes a standard biographical sketch and part of the fee is collected at that time. The balance is collected when the photo is taken.

The dating service sets an appointment time for the customer to have his photo taken. When the photographer takes the photo, she collects the balance of the dating service fee (made payable to the photographer). The photographer then pays over to the dating service a fixed amount of the charge and provides the photograph to the dating service for use in the directory. The amount retained by the photographer is her payment for shooting and providing the photos to the dating service. No photos are provided to the customers as part of the charge made. However, if the customer is interested in prints of the photo taken, the dating service refers him back to the photographer who then makes a sale of the prints to the customer.

Based on the facts presented, the photographer is an independent contractor and not an employee. Thus, the photographer contracts to sell photographs to the dating service and the gross receipts consist of the amount retained by the photographer from the payment that the photographer accepts on behalf of the dating service from its customer. Sales tax, of course, is due on any amount that the customer pays to the photographer for prints sold to that customer. 10/17/96.