Iowa Admin. Code r. 701—211.7(423) — Photography and retouching

211.7(1) Definitions. For purposes of this rule: “Photography” means the art or process of capturing or producing still or moving images, films, or videos using any device designed to record or capture images, film, or video. Taxable sales associated with photography services include but are not limited to sitting or photoshoot fees and fees relating to taking or producing photographs or videos, including editing. “Retouching” means the alteration, restoration, or renovation of a picture, film, video, image, artwork, likeness, or design. 211.7(2) In general. The sales price of photography services and retouching services are taxable regardless of whether the service results in the production of tangible personal property or specified digital products. A deduction shall not be allowed for the expenses incurred by the photographer, such as rental of equipment or salaries or wages paid to assistants or models, whether or not the expenses are itemized in billings to customers. Example 1: Standalone photography service. X operates a photography business where customers can purchase a half-hour photoshoot session for $50 and may purchase physical or electronic copies of any photographs taken during the photoshoot for $10 each. Y purchases a half-hour photoshoot from X for $50; however, after viewing the images, Y decides not to purchase any copies of any of the photographs. X must collect and remit sales tax and any applicable local option tax on $50, the cost of the photography service, even though Y decided not to purchase any of the resulting photographs. Example 2: Photography service and sale of photographs. Same facts as Example 1, except that Y decides to purchase ten photographs for $10 each. X must collect and remit sales tax and any applicable local option tax on $150, the total cost of the $50 photography service and the $100 cost of the ten photographs. Here, the photography service is taxable and the photographs are taxable as the sale of tangible personal property if they are delivered in hard copy or as the sale of specified digital products if they are delivered electronically. Revenue 211.7(3) Tax not applicable. Tax shall not apply to the sales price of tangible personal property to photographers and photostat producers that becomes an ingredient or component part of photographs or photostat copies sold, such as mounts, frames and sensitized paper; but tax shall apply to the sales price of materials to photographers or producers that are used in the processing of photographs or photostat copies. 211.7(4) Sourcing. More information about how various aspects of photography services may be sourced is available in 701—subrule 205.2(1).