Sales Tax and Professionalism
Nobody likes paying taxes, and yes sometimes they seem unfair and excessive, but we all enjoy many of the benefits we derive from them. Good streets and highways, schools, police and fire protection just to name a few. As citizens it is our legal, moral and ethical responsibility.
As photographers, if we sell goods and services, we are engaged in a “profession” defined as an occupation or vocation requiring training in a specialized field. Being in a “profession” we are defined as Professionals. That means that we derive at least a portion of our livelihood from this activity. Professionalism requires our assured competence in our chosen field. It also requires that we conduct ourselves and our businesses in a highly legal, moral and ethical manner. Most of the photographers, whether full or part time, that I know have a great deal of love for this profession but the playing field must be level for all to succeed. We all invest a great deal of time and money in equipment and perfecting our photographic abilities. It is easy to rationalize that since one only sells their goods and services occasionally it is a lot of trouble or inconvenient to report or pay sales tax or set up a sales tax account with the state. Just remember that you are breaking the law and are subject to fines, penalties or even imprisonment if you are caught and charged with a crime.
Many of our stats Professional Photographers, myself included, have faced sales tax audits in recent years. Most of this was caused by misunderstanding or non-payment of Use Tax. If you purchase something on line, out of state or at a trade show for your business that is not for resale and the seller does not collect sales tax you are required to pay Arkansas Use Tax on these purchases. Examples we ran into during our audit were camera equipment, backgrounds, props and etc. purchased on-line or at trade shows.
The Arkansas State Sales Tax rate is currently 6.5%. Most cities and counties have additional sales taxes. Theses are paid through your state reports and redistributed by the state. The Arkansas State Department of Finance and Administration can provide you with the information you need for your location.
You don’t have to be a full time photographer or earn 100% of your livelihood from photography to be a professional. If you conduct yourself and your photography in a professional (Legal, moral and ethical) manner everyone benefits.
A good source of information to give new business owners a general overview of the different areas of taxation required by the state can be found on the Arkansas Department of Finance and Administration web-site
Article by Bobby Jines Owner BW’s Studio Full time Professional Photographer since 1974