Tattooing is a service NOT retail. Remove sales tax now!
Tattooing is a service NOT retail. Remove sales tax now!
Did you know that in Washington State, tattoo services are now catagorized as a personal service but tattoo artists are forced to charge retail sales tax?
Though recently tattooing has recently been considered a personal service, we are a "taxable" personal service clumped together with tanning salons, hot tub sales and escort services! None of which do anything similar to us.
We need your signature to change the tax classification to a non-taxable SERVICE to make it more affordable for our clients and accurately reflect what we do. Classifying tattoos for retail taxes means as tattoo artists, we have to charge clients sales tax on top of the tattooing service cost. This is usually 10% give or take depending on the area you live in.The definition of a retail service is “the sale of goods to the public in relatively small quantities for use or consumption rather than for resale.” We, tattoo artists, sell our time as a service to produce a finish product on skin and or to create a design, not for consumption, nor resale, and is not by definition a retail product. Additionally, if the tattoo industry was correctly considered a non-taxable service, we would only have to charge tax on actual retail items like aftercare, merchandise, jewelry etc. This would mean more affordable tattoos for our clients and more accurate tax classifications for artists without the extra step of sales tax, or paying the tax out of pocket.
Without this change, we must continue to charge an unjust tax to our clients and for a lot of us, pay the cost out of our own income. I have interviewed multiple CPAs that commented, "By definition, tattoing services are incorrectly classified for retail tax and should not be taxable." This harms the industry by making tattoos more expensive than they should be, oftentimes causing the artist to charge less for their services to accomodate the additional cost of the sales tax so that it is affordable for the client.
As an example, the piercing industry already made this change, and do not charge sales tax. The sales tax is only applicable to the jewelry, which would be appropriately itemized as retail, in addition to the service. It is called a piercing “service”. We are called a tattoo “service” as well but the state classifies it incorrectly for taxes.
Since the start of the COVID -19 outbreak, tattoo studios classification was changes by the state from retail to a PERSONAL SERVICE. We are NOT classified as retail any longer and yet, we are still expected to charge our clients and pay retail sales tax to the state. Other industries labled a personal service are hair salons, nail salons, barber shops, massage and more. However, they do not have to charge sales tax.
On top of this we were recently informed our licensing costs have suddenly been increased by 25% in the midst of a pandemic! This industry is being taxed to death when we are a large stimulus to the current, struggling, economy.
The direct ruling I received from the Washington State Department of Revenue says this: “Income from tattoo services is subject to B&O tax under the Retailing classification and you must collect retail tax from your customer. See RCW 82.04.050(3)(f)”
“Income from body piercing is subject to B&O tax under the Services and Other Activities classification and retail sales tax DOES NOT apply. See our guidelines for Beauticians.”
Certain kinds of cosmetic tattooing are already considered a service as they may be considered more medical in appearance. Such as areola replacement which is a tattoo.
The Department of Revenue lists permanent makeup, microblading, scalp micropigmentation, tattoo removal, branding (burning designs into skin) all as Retail Classification. However, they list Scarification (cutting designs out of the skin) to be a Service classification and they do NOT have to collect sales tax. There is no consistency here. Tattoo removal and branding go hand in hand with scarification as they all burn, cut or alter the skin just like tattooing, however some are retail and some are services.
The argument I received from the DOR as to why tattooing was classified as retail instead of a service was that “clients leave with an actual product in their skin that cannot be removed. Also, that the skin would never return to its normal state resulting in a permanent change.”
The counter argument to “tattoos cannot be removed”, is that tattoos CAN be removed with many different methods. Laser, skin removal, chemicals, certain oils and sometimes completely fading out. There is an entire industry called “tattoo removal.”
As for the permanent change, piercings use needles that create a hole in the body that will never return to complete normalcy. Especially because it is often pierced with a hollow needle that removes a chunk of flesh. They are considered a service. Scarification is absolutely altering the skin and it can not be repaired to it's exact former state. This is also a service. Surgeries do the same. The body will never be the exact same after a surgery and it cannot be undone. Surgeries also leave items inside of you that also can’t be removed without a surgical procedure or they take something out. No matter what, it leaves a scar. A permanent, physical change. Yet they are a “service.” The same goes for all dental procedures. You leave fillings. You remove a tooth etc. It is never the same and looks different permanently. They are a service. If all of these things listed are a service, why isn't tattooing?
After the argument with the DOR and presenting the counter appoints above, the representative admitted that they had no more good arguments and said they didn’t understand why tattooing is technically considered retail and not a non taxable service and it should be reconsidered.
Other industries that are considered a service:
-Hair salons: Make changes to physical appearance. Can also cause burns & reactions resulting in a permanent change. Customer also leaves with a product in their hair.
-Cosmetology: They leave with an actual product. Can also have reactions causeing alerting of skin.
-Estheticians: Some procedures cause scaring and will never be physically the same (waxing/tearing of skin)
-Barber shops: Some procedures cause scaring and will never be physically the same (shaving/ cuts)
-Piercing: Make permanent changes to physical appearance and scarring.
-Nail Salons: They leave with an actual product. Acrylics, color, altered physical nail appearance.
-Dentists/ Orthodontists: They leave with an actual product or permanent change physically
-Physicians: Some procedures or medications can cause permanent physical changes
-Veterinarian: Meds and procedures can cause permanent physical changes
-Surgeries : Leave with a product, permanent, physical change or damage
Optometrists, Farming, Internet service providers, Massage, Computer service, and attorneys are few among many more.
In conclusion, please sign this petition asking the state to reconsider the tattoo industry to be classified as a non-taxable service for tax classification because that is what we provide. We design art. We do consultations. We tattoo. We provide follow up. These are all services and we should not have to charge retail sales tax for them.