Taxes across state lines

<p>Hello,</p>

<p>I've been a part-time photographer for a few of years now. Primarily I do weddings. I want to go full time and do things right by law.<br>

My biggest confusion comes to state taxes, both sales and income.</p>

<p>So here's my situation, broken into sections:<br>

1- Each year I get booked directly by a handful of couples to photograph their weddings (5-10 per year). I live in Boston, MA and those weddings may sometimes be located not just in MA, but also in RI, CT, NY, VT, NH, ME. I've even done one in CA. I know that if they are getting a tangible product, I need to charge sales tax, in some states only on the product, and in some other states on the entire service+product as long as product is included in the package. Sometimes couples want only image files downloaded through internet, so in those cases I don't charge sales tax, but I'm not always sure if this method will work for every state. So that was about Sales Tax.<br>

2- My next and maybe even bigger confusion is regarding State Income Taxes. If I go to other states to photograph weddings, shouldn't I technically also pay income tax in those other states? Whenever I go to photograph a wedding in other state, I establish Sales Tax Nexus with just my presence there, but wouldn't that mean I'm also liable for income taxes in that state for the jobs I did there? How would I go about paying all those income taxes in each state?<br>

3- Next thing is my freelance work for other more established photographers. I'm frequently working as a second or associate shooter with other studios. Those studios are from MA, RI, CT and NH. They send me 1099 each year. Now, do I pay my state income tax to the state where each of those studios is based, or to my own state of MA? It gets even more complicated if I consider that many of the weddings I do for those studios, are also spread across multiple states.<br>

4- Other freelance work (some product and food photography) is directly with other businesses (restaurants, hotels, etc), which are also not only in my state. Depending on the size of the job, I give them either just an invoice, or in some cases also W9 when the job asks for more money. Then they might or might not send me 1099, but I assume they claim this expense in their taxes. Again... do I pay income tax on those jobs to the state where I did the job?</p>

<p>I know this will be very obvious and simple to many of you, so I apologize for my lack of knowledge. Some might refer me to Google search, but please believe me, I did try that route, and most posts I found discuss just sales tax and income tax within your own state, they don't delve into details of work with other studios or businesses across state lines. They don't say if I do or don't have to sign up for sales tax license in each state. State income tax information is even more difficult to find - state gov websites talk about this, of course, but I could only find info for the residents of those states.<br>

I hope for your understanding and patience with me.</p>

<p>Thank you!<br>

Andy</p>

<p>You should REALLY be seeking out a tax accountant for this.</p>

<blockquote>

<p>I know this will be very obvious and simple to many of you, so I apologize for my lack of knowledge.</p>

</blockquote>

<p>It's not simple or obvious. As Howard said, you need to <strong>see a tax accountant</strong>. Ask not only about your tax liabilities, but also the benefits: a host of expenses which become deductible (some of which I hadn't imagined) as a result of having to travel for you work.</p>

<p>"Tax accountant" is too general a description of whom you need to see. I've worked with several over the years, and I'm sure they have only a foggy understanding of these sorts of complex sales-tax issues. Make sure whomever you see really knows about this. Don't pay someone to research the topic for you. Only someone who really already knows.</p>

<p>I agree that you definitely need to talk to an accountant. You need a good one -- someone who does taxes for businesses that operate across state lines, not just a tax preparer who files taxes for people who don't know how to do a 1040EZ. Call a place or two and let them know what your issues are before you make an appointment -- somebody who already deals with this won't have to do research.<br /><br />It sounds like you're trying to be totally honest and do the right thing. Much better to do that than not. But there are a lot of legal arguments over what constitutes nexus for tax purposes, either sales or income. In situations where you are getting a 1099 there is definitely a paper trail and an incentive to report. In cases where you are doing work for individuals (aka weddings) nobody likely ever knew you were in a given state and different accountants or lawyers might give you different opinions on what your obligations are.<br>

There can also be "de minimus" standards where you have to do a certain dollar volume of business in a state before you have to report income or collect sales tax, or where your business overall has to be of a certain size before you are covered.<br /><br />Again, talk to an accountant.</p>

<p>Thank you!</p>

<p>Are any of you using an accountant? I have inquired with a few and they quoted me some pretty steep fees for their services. Not something I can currently afford - adding each state for both income and sales increases their prices by a very large margin. A few accountants actually sounded confused when I described my situation and suggested looking for an accountant who specializes in wedding photographers.</p>

<p>The strange thing is that the few wedding photographers I talked to, also appear confused. Most of them charge only their own state taxes (sales and income) and never bother with any other states, even though some of them might be photographing more weddings in a neighboring sate (RI is one of the most popular in this region).</p>

<p>I know this situation doesn't really apply to landscape photographers or local portrait studios. While landscape photography comes with a lot of travel, this dilemma isn't something you need to worry about, unless you're doing it per assignment for someone or some company from another state.</p>

<p>If any of you have done wedding (or commercial) photography in multiple states, I thought maybe you already had experienced this situation and could offer some insight. And if you're in New England, or MA specifically, maybe you can point me to accountant who specializes in wedding photographers.</p>

It can be tricky depending on States Laws. As said above consult an expert.

Here is an article explaining how tricky it can get and this link should not be taken as advice in place of a Tax accountant or attorney.

 

LINK