But see Miller Studio, Inc. v. Commissioner of Revenue, A.T.B. Docket No. 157022 (1992). September 18, 1984

This is in response to your letter dated March 21, 1984, requesting that a sitting fee charged by a photographer not be subject to Massachusetts sales tax.

The Massachusetts sales tax is an excise on sales at retail of tangible personal property (G.L. c. 64H, § 2). Any amount paid for any services that are a part of a sale of tangible personal property must be included in determining the sales price of the property on which the tax is base, and no deduction may be taken on account of the cost of materials used, labor or service cost, or other expenses (G.L. c. 64H, § 1(14)).

Chapter 64H, Section 1(13)(c) excludes from the definition of a retail sale "professional, insurance, or, personal service transactions which involve no sale or which involve sales as inconsequential elements for which no separate charges are made." The Massachusetts Supreme Judicial Court setout the standard for determining whether or not a transaction is a service transaction in Houghton Mifflin Co. v. State Tax Commission:

Whether a particular transaction involving the transfer of property is a personal service transaction depends on the facts ...Where the services and the property are inseparable, because of the integrated nature of the transaction, the character of the transaction must be analyzed to ascertain whether the buyer's basic purpose was to acquire the property which was sold to it or to obtain the services. (373 Mass. 772, 774 (1977)).

In Letter Ruling 82-42, dated May 4, 1982, the sitting fee charged by a photographic studio was determine to be part of the sales price of photographs sold by the studio and subject to the sales tax only when the student ordered prints or when the photograph was provided to the school for publication in its yearbook. If no photographs were sold or the photo was not provided to the school, the sitting fee would not be subject to the sales tax.

The buyer's purpose in "sitting" for a photograph is o acquire tangible personal property, the photograph. Therefore, a photographer's charges for "sitting fees" are part of the total sales price subject to the sales tax if the photograph is subsequently sold. But if no sale of photographs occurs, "sitting fees" are not subject to the sales tax.

Very truly yours,

Commissioner of Revenue


LR 84-79