Arizona Sales Tax for Photographers
It’s a common misconception or bad advice given that photographers in Arizona are not required to collect sales tax. It’s also a misconception that sale-tax is profit for a business. In fact, as defined by the Arizona Department of Revenue, it’s law. To be clear, it’s not profit, we collect that amount then have to document all of our sales income and pay that money directly to the state, every-single-month. Our studio is located in Phoenix, AZ so 8.6% will be added to your final invoice total. (See below for the official letter from the State of Arizona)
The State of Arizona Department of Arizona requires that ALL photographers collect Sales Tax for all services and deliverables.
501(c) or other Nonprofit Charitable Organizations in Arizona
It is a misconception that nonprofit organizations are automatically exempt from the transaction privilege tax and use tax. Arizona does not provide an overall exemption from transaction privilege tax for nonprofit organizations. Generally, most I.R.C. § 501(c) nonprofit charitable organizations are not exempt from the Arizona transaction privilege tax (TPT) or Arizona use tax when making purchases of tangible personal property, unless the purchase is for resale in the ordinary course of business or the nonprofit organization qualifies for an exemption under the Arizona Revised Statutes.
The designation by the Internal Revenue Service as an I.R.C. § 501(c) nonprofit organization that is exempt from federal corporate income taxes, does not automatically qualify such organizations as exempt from Arizona TPT or use tax when making purchases of tangible personal property.
Arizona tax law provides that certain specifically delineated organizations are exempt from transaction privilege tax under some business classifications. Please note that these exemptions are available for sales by the tax-exempt organizations, not for sales to the tax-exempt organizations. Generally, sales to a nonprofit organization are subject to the transaction privilege and use tax unless the organization is a qualified hospital or healthcare organization. Certain qualifying organizations may apply for exemption from the items they purchase based on the criteria listed below.
Please review the transaction privilege tax procedure (link here) for an overview of the exemptions from transaction privilege tax that are available to tax-exempt organizations engaged in business under certain business classifications. Some nonprofits are exempt from the retail business classification when they sell tangible personal property to the end user.