When California Senate Bill 122 was passed and signed into law, photographers started asking me about whether it would affect them when it goes in to effect January 1, 2027. I am happy to say, as long as you are delivering electronically as before, it does not.
Specifically, SB 122 expands the definition of “tangible personal property” to include more digital assets and mentions their copyrights as well. In other words, if photographs (or videos) were included in this expanded definition, their sale or licensing would now be taxable (sales/use tax).
However, as per an advisory letter I received yesterday from the California Dept. of Tax and Fee Administration, photographs are specifically excluded as a “digital visual work1” or a “digital audiovisual work” in the case of videos. So, photographers, you can take a deep breath.
While the letter did not specifically address other visual arts (I asked specifically about photographs), I would say that since the letter does include that a “digital visual work” and a “digital audiovisual work” are specifically excluded, most visual artists (illustrators, graphic designers, etc.) should not be affected by SB122 and its associated regulations.
Also, please note that the letter I received was in response to the general question of whether the sale or licensing of (digital) photographs would be taxable and should not be taken as a definitive answer for your business. If you want to be as close as possible to 100% sure/safe, contact the CDTFA directly yourself for specific guidance.
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- The draft regulation (1600) currently reads: (10) “Digital visual work” means artwork created by using computer hardware and software processes which results in artwork in a digital format that is transferred electronically or accessed remotely. ↩︎