Photographers, Film Developers

68.1. Persons engaged in the business of taking photographs, who do not develop the film are performing a service subject to the consumers sales and service tax and use tax. Tax must be collected unless the purchaser properly executes an exemption certificate or presents a direct pay permit number.

68.2. Purchases of tangible personal property or services for use or consumption in the business of selling tangible personal property or a taxable service are taxable.

68.3. Persons engaged in the business of taking photographs and who also develop the film are engaged in a manufacturing activity to the extent they develop film. For purposes of this regulation, the activity of developing film includes the making of prints.

68.4. Persons engaged in a manufacturing activity are taxable on their purchases except for items directly used in the manufacturing activity. Other items which are not integral or essential to the manufacturing activity, but which are instead considered to be incidental, convenient or remote to the manufacturing activity, are taxable. Guidelines for determining what is considered to be "directly used" are given in Sections 2 and 123 of these regulations.

68.5. Persons engaged in a manufacturing activity must either pay the tax and request a refund or credit or use a direct pay permit to obtain exemption on goods and services directly used in their manufacturing activity. An exemption certificate, as well as a direct pay permit, may be used to obtain an exemption on purchases of goods and services for resale. A person who takes photographs and develops film of others is considered to be engaged in multiple business activities. Such persons may need to apportion purchases between taxable activities and those which are exempt. See Section 9d of these regulations for further information regarding apportionment.

68.6. If a direct pay permit is presented to the vendor, no tax is charged on the sale of tangible personal property or service rendered to the purchaser. The person using the direct pay permit must keep a record of the purchases made using the direct pay permit and whether the items purchased were used in an exempt or taxable manner.

68.7. Pursuant to Section 9c.7 of these regulations, a direct pay permit consumers sales and service tax return and a direct pay use tax return must be filed on a monthly basis by the direct pay permit holder, together with the tax due on taxable purchases made using the direct pay permit.