Delivery of all videos on youtube?

[Nigel Barker]

Originally Posted by George Kilroy

Surely it's the financial transaction that's the taxable element regardless of there being a physical object or not. If that were the case we could all sell our discs for a nominal $1

It all depends on the rules in the particular legal jurisdiction. Here in the UK all goods & services are subject to a standard rate of Value Added Tax at 20% except for some goods/services that are either levied at a lower 5% rate (domestic fuel), zero-rated (food, books, children's clothes) or exempt (funeral services, insurance). There are similar rules for the rest of Europe. However as I recall Purchase Tax which was replaced by VAT in the early 1970s was purely a Sales Tax on physical goods so that services were not subject.

[George Kilroy]

I was thinking more of income tax rather than sales or VAT. as the final product for wedding video/film is not sold with a value independent of the cost of production. I could understand this in the context of a special interest DVD sold at a per copy basis but when the whole of the cost is in production it matters little how it is delivered in terms of the tax liability for the charge made to produce it.

But as I said I'm not a tax expert but I'm sure that most countries consider money earned through business as taxable whether there's a physical product or not.

[Bill Grant]

In South Carolina (bearing in mind sales tax is a state by state thing) If I perform a service that produces any kind of tangible product whether that be a photo print, DVD, etc. The entire purchase is subject to sales tax. If I perform a service and deliver a digital file online, it is not subject to sales tax, but every state is different.

[George Kilroy]

OK I understand you're talking about sales tax not income tax.

[Roger Van Duyn]

Sales tax in Florida works the same as Bill mentioned for South Carolina. This comes up with some of my corporate clients. I explain to them the difference in price between digital file transfer and giving them physical media. The price difference can be very substantial, and they really complain about sales tax on the whole package, not just the price of the media, but hey, that's the rules, and I don't make 'em.

My NPO clients don't need to worry about it. Valid NPO clients don't pay sales tax. (By valid I mean they have the proper tax certificate).

Federal Income Taxes have their own rules. I'm thankful to have a good CPA.

Back on topic, I upload watermarked previews with timecode to YouTube for my corporate clients and email them the link (with the proper privacy settings). It works well, and so far, no big problems. It's so convenient for the clients, and me. Plus the price is certainly right. The only problem is if YouTube is blocked on their corporate intranet. Then the client needs to talk to their IT people.

Now final delivery is normally not to YouTube, but to their FTP server, unless the client doesn't have one. Then I offer to set them up a YouTube channel.

Wedding clients (and I only have a few of them) don't have the watermarked preview step. They just get a final delivery. Final delivery is final, unless they spot a mistake that I'm responsible to fix. Previews for wedding clients open up a big can of worms, that others on the forum have discussed in other threads.

[Taky Cheung]

In California, you cannot just sell the disc for $1 and collect sales tax on that $1. It is stated time involved in producing that product is taxable.

Something good to read about
The 7 Common Tax Mistakes Made By Photographers ‹ PhotoShelter Blog

“If you hand over a CD, if you hand over a thumb-drive, if you hand over any thing that is tangible, you just sold a product and as such you have to pay sales tax on products that are sold,” he said.

“At the same time, if you are a photographer and you don’t give them a tangible product, and you just FTP all of the photos that you take for a wedding directly to the client, you’re not actually turning anything tangible over to them so you might not technically have to pay sales tax on the services that you provided.”

[Eric Olson]

Originally Posted by Taky Cheung

In California, you cannot just sell the disc for $1 and collect sales tax on that $1. It is stated time involved in producing that product is taxable.

Could one company provide the services and a separate company duplicate the disks? This would keep the services separate and make it more clear what should be taxed as sales.

Suppose I work as a second shooter for $X amount. If I turn a tape in at the end of the day, does that change my status from providing a service to selling $X amount of taxable merchandise? I can see the point if I originally purchased the tape with a tax exemption for resale, but what if I purchased the tape retail and already paid the sales tax.

[Nigel Barker]

Originally Posted by Eric Olson

Suppose I work as a second shooter for $X amount. If I turn a tape in at the end of the day, does that change my status from providing a service to selling $X amount of taxable merchandise? I can see the point if I originally purchased the tape with a tax exemption for resale, but what if I purchased the tape retail and already paid the sales tax.

If that were ever an issue then in this instance you would just get whoever hired you to provide the tapes before shooting commenced.

[Jeff Dinges]

Part of the cost of video service is subcontracting out... last time I checked, you don't pay sales tax when you 1099 people.