News and Insights

Digital Photo Services Not Taxable in Mississippi

Tax Development Oct 24, 2022

Digital Photo Services Not Taxable in Mississippi

The Mississippi Supreme Court ruled1 that a digital photographer was not subject to sales tax on providing digital photography packages to his customers. The Court affirmed a lower court decision that determined that providing photography services and selling the copyrights to digital images does not subject the transactions to sales tax.

EKB Inc. provides wedding photography services that include the transfer of digital images on a DVD or flash drive. After a wedding, the digital photos are adjusted and cropped on a computer and delivered to the customer on either a DVD or flash drive. The company paid all sales taxes due on the purchase of the supplies used in the wedding contract, including electronics and books.

During a sales tax audit, the Department of Revenue (DOR) asserted that the photographer’s customers were not securing the photographer’s services, but rather were buying photographs delivered through a tangible form of a flash drive, DVD, or coffee table book. Because personal property was included, the entire package sold by the photographer was subject to sales tax, per the DOR. The DOR contended that there was no difference between the customer receiving one thousand physically printed photos and customers receiving one thousand photos on a disk or flash drive, as the end result was the same—photos in a tangible form. 

In disputing the DOR’s position, the Court noted that the tangible drive or disk is incidental to the nontaxable photography services being provided, similar to a lawyer providing a will on paper, which is not subject to sales tax per Miss. Code Ann. § 27-65-3(i). When the state began taxing “specified digital products” in 2009, the statute2 conspicuously did not include still digital images. Only the transfer of “digital audio-visual works, digital audio works, and digital books” are subject to tax. The DOR argued alternatively that the company provided the taxable business activity of “photo finishing” by touching up digital images before transferring them to customers. The Court noted that the definition of photo finishing is the “commercial development and printing of film,” which is clearly not the case when no film is used.

1 Mississippi Department of Revenue v. EKB, Inc., Miss., No. 2021-SA-00441-SCT, October 6, 2022.

2 Miss. Code Ann. § 27-65-26.


Brian Stromen

Mary Bernard

The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals. For additional information about this topic, please contact us at