Is the charge for tattooing a person, including applying a temporary tattoo, subject to Texas sales tax?

Subject

Tattoo Shop — Charge For Tattooing People Vs. Selling Temporary Tattoos

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9310L1260E04

Plain-English Summary

A taxpayer running a tattoo business wrote to the Comptroller asking about the sales tax treatment of tattooing charges. The Comptroller's response draws a clear line between two different transactions that can happen in a tattoo shop.

Charging a customer to tattoo them is not taxable, whether the tattoo is permanent or temporary. The letter explains this is because tattooing a person is treated as a service, not a sale of tangible personal property. Because the tattoo artist is the one performing a nontaxable service, the artist is instead the end consumer of the tattoo ink and other supplies used in the process — meaning the artist owes sales tax on their own purchase of the tattoo and supplies used to apply it, rather than collecting tax from the customer.

The letter then addresses the flip side: selling tangible personal property is taxable. As the example given in the letter states, if the shop sells a temporary tattoo to a person (as a product, rather than applying it as a service), the shop must collect and remit state and local sales tax on that sale. That distinction also determines whether a sales tax permit is required — a permit is needed if the business sells tangible personal property, but a business that only provides nontaxable services does not need one.

As with all STAR letter rulings, the Comptroller notes this opinion is based on the specific facts submitted by the taxpayer, and other facts, though similar, may yield a different result.

What This Means For You

If you run a tattoo shop and only apply tattoos (permanent or temporary) to customers: Under this letter, your tattooing charge is a nontaxable service — you do not collect sales tax from the customer on the tattooing charge itself. Instead, you are the one who owes sales tax when you purchase the tattoo ink/transfers and other supplies you use to perform the service, since you are treated as the end consumer of those supplies.

If you also sell temporary tattoos as a product (for example, selling one to a customer to apply themselves rather than applying it yourself): that sale is a sale of tangible personal property and is subject to state and local sales tax, which you must collect and remit.

On permits: Whether you need a sales tax permit depends on whether you make taxable sales of tangible personal property. If your business only provides the nontaxable tattooing service, the letter states you do not need a sales tax permit. If you also sell tangible items like temporary tattoos, you would need one to collect and remit tax on those sales.

Q&A

Q: Is the charge to tattoo someone subject to Texas sales tax?
A: No. The letter states the charge for tattooing people, including a temporary tattoo, is not taxable because it is a service rather than a sale of tangible personal property.

Q: Who owes sales tax on the tattoo ink and supplies used to apply a tattoo?
A: The person who applies the tattoo (the tattoo artist/shop) owes sales tax on the purchase of the tattoo and other supplies used to apply it.

Q: If I sell a temporary tattoo to a customer instead of applying it as a service, is that taxable?
A: Yes. The letter gives this as an example: if you sell the temporary tattoo to a person, you should collect and remit sales tax, since the sale of tangible personal property is subject to state and local sales tax.

Q: Do I need a sales tax permit to run a tattoo shop?
A: It depends on what you sell. The letter states you would need a sales tax permit if you sell tangible personal property, but if you only provide nontaxable services, you do not need a sales tax permit.

Q: Can I rely on this letter if my situation is a little different?
A: The letter itself cautions that its opinion is based on the facts submitted, and other facts, though similar, may yield different results.

Original ruling text

October 4 1993

Dear ***:

Thank you for your letter concerning *.

The charge for tattooing people, including a temporary tattoo, is not
taxable. This is a service rather than a sale of tangible personal
property. The person who applies the tattoo owes sales tax on the
purchase of the tattoo and other supplies used to apply the tattoo.

The sale of tangible personal property is subject to state and local
sales tax. For example, if you sell the temporary tattoo to a person,
you should collect and remit the tax. You would need a sales tax
permit if you sell tangible personal property. If you only provide
nontaxable services, you do not need a sales tax permit.

This opinion is based on the facts you submitted. Other facts, though
similar, may yield different results.

You may call me toll free at 1-800-531-5441, ext. 5-0030. The direct
line is 512/475-0030. You may also write to Tax Administration,
Comptroller of Public Accounts.

Sincerely,

David Somerville
Tax Administration Division

NOTE: Previous Accession Number 93070197L.3 and/or 9307197L