The New York Department of Taxation and Finance recently published advisory opinion TSB-A-20(66)S regarding the taxability of photographs provided to purchasers either digitally or through a tangible medium for less than permanent use. The Department held that the electronic transfer of photographs is not taxable in New York because a digital photograph is not considered tangible personal property and thus, the transfer is not taxable regardless of whether the transfer is permanent or temporary. Transferring a photograph via a tangible medium (CD, paper, slide, negative, etc.), is generally taxable because the method of transfer is a taxable tangible medium. However, if the transfer of a photograph via tangible medium is only temporary as suggested by the requesting taxpayer, the Department determined that is not a taxable sale as long as (i) the customer only takes possession of the photograph for the purpose of making a reproduction, and (ii) the payment is in the nature of a royalty.