Sitting fees are subject to the sales and use tax when sold with a taxable product (i.e., photographs transferred by tangible medium). Separation of the sitting fee charge from the charge for the tangible product does not remove the tax obligation on the value of the sitting fee.
However, sitting fees are not subject to the sales and use tax if the photographs are transferred without using a tangible medium (e.g., electronically). Furthermore, if a customer is charged a sitting fee but ultimately elects not to purchase any photographs (the tangible product), the sitting fee is not taxable.
This article does not apply to photographs sold as final artwork (in digital or tangible medium), as defined by Tennessee sales tax law. Sales of final artwork transferred electronically or by tangible medium are subject to sales and use tax. For more information on final artwork and advertising materials, see Ruling #12-33.