This guide will help you determine which photography products or services are taxable.

There are different kinds of photography products and services, such as the following:

• Aerial photography
• Architectural photography
• Event and party photos
• Holiday photos
• Model portfolios
• Passport photos
• Photo booth sales
• Portraits
• School photos
• Sonogram imaging (non-medical)
• Wedding photos

Whether a photography product or service is taxable depends on how the final product is delivered to the customer: in a tangible (physical) form or electronically.

If the sale includes any products delivered in a tangible and an electronic format, then the entire amount billed to the customer is taxable.

Tangible delivery examples:

• Compact discs (CDs)
• Flash drives
• Printed photos and proofs
• Negatives

Electronic delivery examples:

• Images delivered by email
• Images that a customer downloads from a website

Altering Services

The labor charge to alter a customer’s photo into a new or changed product is taxable.

Examples include:

• Red eye reduction
• Resizing
• Retouching
• Tinting

Printing Services

Printing services are taxable.

Examples include:

• Holiday greeting cards
• Memorabilia with the photo
• Original or duplicate photos
• Posters

Restoration Services 

The labor charge to restore a photograph to its original condition is not taxable. This does not include creating a replacement of the original photograph.

The sales price includes all charges necessary to create the taxable product.

The entire amount billed to the customer is taxable, even if services are separately stated because the end product could not exist without the labor and materials to create the images.

If the customer pays for a sitting fee or other services but it does not purchase any tangible photos or proofs, then there is no taxable sale.

Sales Tax Rate

To determine the tax rate, use the location where the product is being delivered to the customer. Local taxes may apply in addition to state tax. 

Example 1:  Your photography studio is in Minneapolis. You take photos at a wedding and reception in Duluth. The couple now lives in Saint Paul. You provide proofs to the customer on a flash drive at your studio, but deliver the finished canvas and albums to the customer’s home address in Saint Paul. You send an additional album to the bride’s mother in Wisconsin. 

• The flash drive you provided at your studio is taxed at the rate in effect for Minneapolis.
• The finished canvas and albums delivered to the couple’s home are taxed at the rate in effect for St. Paul.
• If the mother’s album is separately stated, no Minnesota tax is due on the out-of-state delivery.

Example 2: You’re a photographer who sends images to a photo processing lab. The lab prepares the prints and sends them to the customer in Rice County. You bill the customer for taking the photos and for the final prints. The entire charge is taxable at the rate in effect for Rice County. 

Local Sales Tax

Some cities and counties have local sales and use taxes. If you make sales into or are located in an area with a local tax, you may owe local sales or use tax. For more information, see Local Sales and Use Taxes. 

To determine the sales tax rate, use the location where the product is received by the customer, typically your business or a delivery address. You can use the Sales Tax Rate Map or Sales Tax Rate Calculator to help you determine the sales tax rate. 

Note: The map and rate calculator do not include special local taxes. 

For more information, see:

• Local Sales Tax Information
• Special Local Taxes
• Minneapolis Special Local Taxes

Exemptions

Photography sales to certain types of customers and for certain uses are not taxable.

You must charge sales tax unless the customer gives you a completed Form ST3, Certificate of Exemption. The customer must complete the following required sections on the form:

• Purchaser’s name and address
• Purchaser’s identification number
• Type of business
• Reason for exemption
• Signature

Keep the completed Form ST3 in your records.

Out-of-State Sales

Photography delivered to customers outside of Minnesota is not subject to Minnesota tax. No exemption certificate is required.

You must maintain records that show the items were shipped to a customer outside of Minnesota. Tax may be due in the state where the photography was delivered

Photography sold to an advertising agency is taxable unless the agency provides a completed Form ST3, Certificate of Exemption.

Photography sold to an ad agency for its own use is taxable.

If an agency uses a photo in nontaxable advertising services such as brochures or posters, or to develop a webpage, the photo is taxable.

Photos are exempt when purchased by an agency for use in: 

• Exempt publications, such as a newspaper or magazine ad
• Designing packaging material or instructions for a product that will ultimately be sold at retail
• Specialty advertising such as mugs or calendars to be sold to clients
• Developing training manuals or videos to be sold to clients

Sometimes photography has both taxable and exempt uses. An ad agency may give a photographer an exemption certificate to show that they are using the photography for multiple purposes. The ad agency is then responsible for accruing and paying use tax on any taxable photography use. 

Stock Photography

When an ad agency contracts to use stock photography, each contract is considered separately. For example, if an ad agency contracts to use stock photography for a newspaper ad, it is exempt since the newspaper is an exempt publication. If the agency contracts to use the same photo in an advertising brochure, the charge is taxable. 

Photographer as an Ad Agency

A photographer may act as an ad agency if they work directly with the advertiser and bills the advertiser directly. The sales invoice given to the client must indicate it is for creative advertising/promotional services. 

Example

You are hired by an advertiser to produce a promotional poster. You develop the original concept and perform the entire production process of the poster. 

• You are acting as an advertising agency and are selling a nontaxable advertising service.
• You do not charge the advertiser sales tax on the service, but you must pay sales or use tax on all inputs used to produce the poster. 

Items you use to operate your photography business are taxable, unless an exemption applies. Several services are also taxable.

If you do not pay sales tax on a taxable purchase, then you owe use tax.

Use Tax

If you buy equipment, supplies, or other taxable items for your business and the seller does not charge Minnesota sales tax, you owe use tax on the cost of the items. If your business is located in an area with a local tax, you may also owe local use tax.

Some common situations where you may owe use tax include:

• You buy taxable items or services online without paying sales tax
• You withdraw an item from inventory to use (instead of selling it), donate, or give away
• You buy taxable items outside of Minnesota
• You buy taxable items in another Minnesota city or county with a lower (or no) local sales tax

For more information, see Use Tax for Businesses and Local Sales and Use Taxes.

If you create or sell tangible (physical) products, you may purchase certain items for your business without paying tax by giving your vendor Form ST3, Certificate of Exemption.

The following purchases are not taxable:

• Items you buy for resale to your customers
• Materials or supplies you use to create a tangible product (industrial production)
• Equipment used primarily in Minnesota to create a tangible product (capital equipment)

These exemptions do not apply when images are delivered electronically, and there is no transfer of a tangible product.

Resale

Items that you will resell to your customers are not taxable.

Industrial Production

Materials and supplies are not taxable if they are used or consumed in the production process of creating a tangible product. 

For more information about this exemption, see Industrial Production. 

Capital Equipment

 Equipment is taxable if it’s used more than half of its operating time:

• to produce photography that is electronically delivered to a customer; or
• to provide nontaxable advertising services.

For more information about this exemption, see Capital Equipment.

When filing your return, you must report all sales tax collected and use tax you owe.

Filing Returns

When filing your return, you must report all sales tax collected and use tax you owe.

If you are not registered for sales and use tax, you must contact the Minnesota Department of Revenue and register to collect and report taxes. Call Business Registration at 651-282-5225 or 1-800-657-3605 (toll-free).  

For more information, see Sales Tax Return Due Dates.

How to Report Sales and Use Tax

You must file a Sales and Use Tax return online through our e-Services system. For more information, see Filing Information.

Record-Keeping

It is important to keep good records to determine the correct amount of state and local tax you owe.

Your records should include:

• bills, receipts, invoices, cash-register tapes, and any other documents that support the entries in your books
• exemption certificates
• shipping documents
• worksheets used to prepare your tax returns

For more information, see the Sales and Use Tax Business Guide.

The legal references and resources related to the photography industry are listed.

Minnesota Statutes

• 297A.61, subd. 7, Sales price
• 297A.68, Business exemptions
  • subd. 2, Materials consumed in industrial production
  • subd. 10, Publications, publication materials
  • subd. 11, Advertising materials
  • subd. 30, Television commercials

Minnesota Rules

• 8130.0700, Producing, fabricating, printing, or processing of property furnished by the customer
• 8130.8800, Commercial artist and photographers
• 8130.9250, Advertising

Fact Sheets

• Advertising-Creative Promotional Services
• Capital Equipment
• Industrial Production
• Isolated and Occasional Sales
• TV Commercials
• Use Tax for Businesses

Industry Guides

• Local Sales and Use Tax
• Video Production