Congratulations, you got your first book deal! Now you’re probably wondering, “What royalties will I…
Should an illustrator charge for sales tax when submitting his or her invoice? Though the laws differ slightly from state to state, in most cases the general answer would be “no.”
Sales tax typically applies to tangible goods bought and sold. When you’re working on an illustration assignment, it’s not the actual art that’s purchased, but the rights of reproduction. So in those instances, for most states in America, illustration work would be exempt. In New York, for instance, according to the Graphic Artists Guild Handbook of Pricing and Ethical Guidelines:
At the end of a creative process, if specified restricted rights are only transferred, but there is no transfer of ownership of tangible personal property (the original, physical artwork or 50,000 brochures), the transaction is not taxable. Grant of rights are not subject to sales tax.
However, when the transfer of physical art is part of the deal or you’re selling originals, prints, or merchandise, you will most likely need to collect sales tax. In order to do so, you’ll need to apply for a license from your state.
Of course, every state will have its own slightly varying laws about sales tax and yours might be different. This blog does not constitute legal advice so you should double check with a local accountant if you’re unsure.