Tax Guide for Photography
Getting Started

If you own a business in California and you expect to make sales of tangible personal property (that is, items that can be seen, weighed, measured, felt, or touched), you must register with the California Department of Tax and Fee Administration (CDTFA) for a seller's permit and file regular sales and use tax returns. Whether you are starting a new business or growing your existing photography business, you will find these tools helpful in maintaining your account with us.

Registration

Register with us online for your seller's permit or to add a business location to an existing account. In addition to holding a seller's permit, you may also need to register for another license or permit with us. For more information about permits or licenses we administer, please see our Online Services Registrations page.

Filing and Payments

Tax Return Filing Deadlines — Find your filing due dates.

File a Tax Return Online — CDTFA's online filing service is easy, fast, and free!

Online Payment Options — Make payments online for tax and fee programs.

Taxpayer Online Service Portal — Update your account information by logging in to our online services system.

Sales and Use Taxes in General

In California, retail sales of tangible personal property are taxable unless the law provides a specific exemption or exclusion. Sales tax is imposed on retailers and generally applies to the retailers' gross receipts from their sales of tangible personal property made within California.

Use tax is imposed on consumers. When sales tax does not apply, use tax generally applies to the purchase of taxable items made from an out-of-state retailer for use in California. You may also owe use tax on items that you remove from your inventory and use in California when you did not pay tax when you purchased the items.

Record Keeping

If you hold a California seller's permit or any other CDTFA license or permit, you are required to maintain your business records to verify that you have properly paid the tax or fee.

Maintaining good books and records will help you keep track of your sales and purchases and assist you when preparing your sales and use tax return. You are required to keep records for at least four (4) years, unless directed by the CDTFA to keep them for a longer period. If you do not maintain records, it may be considered evidence of negligence or perceived as an intent to evade the tax process and may result in penalties.

Your records should be adequate so CDTFA representatives may:

  • Verify the accuracy of your tax returns; and
  • Determine if you have correctly paid the tax due on your sales and purchases.

Records you should keep include but are not limited to:

  • Cash register tapes/receipts
  • Purchase invoices
  • Sales invoices
  • Shipping documents
  • Resale Certificates
  • Tax returns and supporting documents

For more information on recordkeeping, please see publication 116, Sales and Use Tax Records.

Use Tax

California's use tax is imposed on the consumer and applies to the storage, use, or other consumption of merchandise within the state. Generally, if sales tax applies when you buy tangible personal property in California, use tax would apply when you make a similar purchase from a business located outside the state.

If you hold a California seller's permit, you must report and pay the use tax due on your business-related purchases on your sales and use tax return in the period in which your business first used, stored, or consumed the merchandise in California. To pay use tax, report the purchase price of the taxable items under “Purchases Subject to Use Tax” on your sales and use tax return. Those purchases become part of the total amount that is subject to tax.

Some out-of-state retailers are registered with the CDTFA and required to collect and pay California use tax. If your receipt indicates that the retailer collected the correct amount of the use tax on your purchase, you do not need to report that purchase on your sales and use tax return. However, if the retailer did not collect the correct rate of use tax, you would owe any additional tax that should have been collected.

Credit for Paying another State's tax

If you were required to pay, and did pay, another state's sales or use tax on a purchase in which you owe California use tax, you may claim a credit against your use tax liability by doing the following:

  • Report the purchase amount under “Purchases subject to use tax” on your return
  • Deduct the amount of tax paid under “Credit for tax paid to other state(s)” on your return. You may claim a deduction up to the amount of California use tax due on the purchase

You may not claim this deduction as credit against your sales tax liability. For more information on purchases from out-of-state retailers, see publication 110, California Use Tax Basics.

Inventory Withdrawals

As a registered seller's permit holder, you may purchase property that you plan to resell in the regular course of your business “for resale,” that is, without payment of tax (see Purchases for Resale topic under the Nontaxable Sales — In General section, in the Industry Topics tab). However, if you remove items from your resale inventory and make a use of the property prior to reselling the property, you owe use tax on your purchase price of the property. You must report and pay the use tax due on property withdrawn from resale inventory on your sales and use tax return.

For more information, please see California Use Tax Information.

Know Your Tax Rates

The current statewide base sales and use tax rate is 7.25 percent. However, the total sales and use tax rates are higher in areas where district taxes are imposed.

District taxes are voter-approved taxes imposed by cities, counties and other local jurisdictions and are added to the statewide base rate. As a retailer you are responsible for reporting your retail sales and paying the tax to the CDTFA at the proper rate. If you make retail sales in California from a business located in a taxing district, you are generally responsible for the district sales tax. You are also responsible for collecting, reporting, and paying the district use tax when making sales for delivery into taxing districts in which you are considered “engaged in business in the district.”

Generally, you are “engaged in business in a district” when you:

  • Have a permanent or temporary business location in the district, including a warehouse, salesroom, or office,
  • Have a representative or agent in the district even temporarily, who, for example, makes sales, takes orders, or makes deliveries for you,
  • Receive rental income from the lease of merchandise located in the district, or
  • Make annual sales of tangible personal property in California or for delivery in California exceeding $500,000
  1. On and after April 25, 2019, a retailer is considered engaged in business in all districts that impose a district tax if in the preceding or current calendar year their total combined sales of tangible personal property in this state or for delivery in this state exceed $500,000. As such, all retailers meeting this threshold are responsible for collecting and paying any district tax on taxable sales made for delivery in any district that imposes a district tax.

For more information on being engaged in business and the correct district tax rates, please see publication 44, District Taxes (Sales and Use Taxes).

You can look up tax rates by city and county or find the full tax rate in your city or county by going to the Find a Sales and Use Tax Rate webpage and entering the address as prompted.

Exempt Sales

Some of your sales transactions may qualify for a full or partial tax exemption. Exempt sales are transactions not subject to tax and deductions can be taken on your sales and use tax return. You must retain all documentation to support the deduction.

Some common exempt sales transactions include:

Nontaxable Labor

Generally, tax does not apply to your itemized charges for repair or installation labor. However in California, some types of labor charges are subject to tax. For example, charges for fabrication labor are generally taxable whether you itemize your labor charges or include them in the price of the product. For more information, please see publication 108, Labor Charges.

Sales for Resale

You may have customers who purchase goods from you with the intent of reselling those goods in their own regular course of business. If your customer provides you with a valid resale certificate and you accept it in good faith and in a timely manner, your sale to them is not taxable. For more information, please see publication 103, Sales for Resale.

Sales in Interstate or Foreign Commerce

Sales that involve shipments or deliveries from California to locations outside the state are generally exempt from sales or use tax if certain conditions are met. For more information, please see publication 101, Sales Delivered Outside of California.

Sales to the United States Government

Your sales and leases made to the United States government and its instrumentalities are generally exempt from California sales and use tax. However, sales to state, county, and city government agencies are still generally subject to tax. For more information, see publication 102, Sales to the United States Government.