Hi Lane,Thank you for your help. What product are we manufacturing and selling? Great question. The easiest way to answer this is to give you an example.Have you ever been to an amusement park, ridden a wild ride, and upon exiting the ride been directed to an area where you could view a picture that had been candidly taken of you capturing your experience? Usually the images are posted on a monitor for you to view and which you are encouraged to purchase. And if one picture is great, then a package of 4 they explain would be better. And why do 4 of the same size? For a little more money, you could get a variety package that captures your experience in 3 different sizes in addition to a matted frame which would help preserve your memory for a lifetime.If you have ever experienced this type of promotion, then you have a pretty good idea of the foundation of our business. The business was created back 28 years ago with the goal of taking that type of technology and instead of limiting it to a permanent installation type setup, making it mobile. Which means, we can capture any event you want, any location you want, and print the product right there on site for your enjoyment. This idea caught on and the business grew fast which grew into what it is today - 50% of the business focused on professional sports teams the other 50% focused on corporate meetings.In the sporting arena, we have photographers that roam the stands throughout the game taking pictures of patrons enjoying their experience. The customer is handed a card that directs them to visit a particular booth to view their photo. When they do, just like with the amusement park, they are offered a variety of options and packages to choose from. They order their package, we print their product right there on site in front of them, and they go on their merry way. See attached image "08271978.jpg".In the corporate arena, it's the same idea, just not nearly as exciting. We mainly get requests from large corporations to come photograph their annual meeting, company anniversaries, retirement
parties, etc. We use a green screen format where the employees stand in a particular area in front of a literal green screen, we shoot them with traditional studio lights and cameras, etc. See attached image "greenscreen.jpg". The client can either choose to have the photos printed right there on site if they want, but many times corporate customers want them mailed to their corporate office, and usually they want the digital image in addition to the printed product. See attached image "1 Contact Sheets.pdf".OK, having said all that, as you might imagine, there are a large number of expenses that go into providing the customer with their final product. From the photography equipment and lighting and computers we use to generate the photo all the way down to the paper we print them on, the folders we put the pictures in, the bags we give the customers to carry their product, the jump drive we sell with their digital image. The question of what is taxable and what isn't is complex to us
on the equipment side of things more than anything. I realize that the jump drives we purchase to turn around and resale with their digital image uploaded on is tax exempt as it is resold and tax is collected from the consumer. But what about the equipment to generate that image? Or the computers and printers that generate that print? Or the software on the computer that we have to have to print on our specialty printers? That is where I'm needing further help.Our company has 5 locations and we provide both sports and photography services in each: Dallas, TX; San Antonio, TX; Bronx, NY (nexus); San Francisco, CA (nexus); and Tuscaloosa,AL (nexus)Any help you can offer is greatly appreciated!