If you have never sold photos online, taxes can be a bit intimidating. Tax policy can vary between states, counties, and even districts! Fortunately, PhotoDay has done the research and set up our system to automatically calculate tax amounts and comply with these policies. PhotoDay does not report tax on your behalf, so it is your responsibility to file taxes appropriately for your studio.
Here are the three things you need to know about PhotoDay and taxes.
1. PhotoDay collects tax on your behalf for applicable products (and possibly shipping) using both the delivery destination zip code and your state tax nexus. Your nexus is determined from the physical address you provided for your studio. If you have a nexus in additional states, you can set this up under your Taxes panel in My Studio under Settings.
2. Surtax is the extra tax that gets applied in certain situations. If your state and the delivery destination zip code has an applicable surtax, PhotoDay will collect this additional tax on your behalf. Reporting this is simple. You can download the detailed “Report” spreadsheet from your Studio Panel, and then sort by surtax to group each amount using Excel, Google Sheets or a similar application.
3. Reconciling. When it comes down to breaking down expenses, our reports have all the details you need! The Net Profit in PhotoDay includes sales tax that was collected on your behalf. This is so you can reconcile the deposit amounts into your Stripe account. From Stripe, you can reconcile the deposits that were made into your bank account. You cannot reconcile from PhotoDay reports to your bank account. This is because Stripe payment frequencies may not match according to your Stripe transfer settings.