Photograph Tinting and Coloring Services Subject to North Carolina Sales and Use Tax

Effective September 1, 2018, charges for services to tint or color a consumer’s tangible or digital photograph are subject to North Carolina sales and use tax as repair, maintenance, and installation services. These services are subject to the 4.75% state sales and use tax rate and applicable local and transit sales and use tax. Photograph tint or color supplies and other tangible personal property (TPP) that become a part of or are applied to a purchaser’s property and are part of the sales price of repair, maintenance, and installation services are exempt. To make exempt purchases of such TPP, a person should issue Form E-595E, Streamlined Sales and Use Tax Agreement Certificate of Exemption, to the seller. Alternatively, the data elements required to substantiate an exemption, may be provided to the seller.

A person is liable for sales and use tax on the purchase of any tool, equipment, supply, or similar TPP that is used to tint or color a tangible or digital photograph but does not become a part of or is not applied to a customer’s property or TPP sold at retail. If the tax due is not paid at the time of purchase, an excise tax is applicable, at the same rate. (Directive No. SD-18-5, North Carolina Department of Revenue, May 25, 2018)

Posted on June 12, 2018