I'm trying to get a sense of when people are charging sales tax for the video work that they do. For the projects you work on, what do you consider the criteria are for when to charge tax and when not? For example, if you are the shooter and you hand over tapes, or if you do an edit and hand over a hard drive, or if you master a dvd and give that to them. Sales taxable?
For reference, I'm in New Jersey, but do work in many states.
In Wisconsin all of those services are taxable. However if you create footage or edited clips and give them to another production company for used in a larger project and they then resell that footage, then you are selling to a reseller and they are responsible for the tax on those things. Also, if your client is a non-profit and tax exempt you wouldn't charge tax.
You would charge tax (in wisconsin) if you sold your footage, edited videos, animations etc if they were the end user. For example, I usually don't charge tax to Agencies because they resell the video to their clients with a markup so they charge the tax. I have a reseller form on file for that agency. However if I author the demo reel for that agency to use as a selling tool, then they are the end user and I charge them tax.
Don't forget Use Tax, which is for tax on items you purchase not to sell but to use, like office supplies, decks etc, and buy via the internet and don't pay state or local sales tax.
Every quarter, the tax form you would file is for Sales and Use tax and includes the tax you charged your clients and Use tax for those items purchased out of state and were not charged tax on.
Your accountant can help identify which items are subject to use tax, and usually the accounting department at your client can help determine when to charge them tax.
Thanks for the quick sunday response Rick. Do you calculate the tax on the value of the deliverable (i.e. the DVD or tape) or the total project bill? And another question, for deliveries out of state do you have to register with that state? I have heard something about a multi-state registry you can enroll in so you don't have to go to every state.