Shutterstock Photographer Forum :: View topic - Question for US contributors to stock agencies

pjmorley · Joined: 15 Apr 2005 Posts: 3299

I don't blame SS for the laws of the US but unfortunately it's a classic case of 'shoot the messenger'. However, in this case at least half the message so far has been shown to be in error. Somewhere along the line, some bad advice has been given.

sandralise · Posted: Fri May 29, 2009 9:55 pm

Susan · Joined: 06 May 2005 Posts: 6263

Thanks Sandra... I think that we should make a special effort to reach out to each other. We can break down the walls that this trauma caused if we take the time to understand and care about each other!

Sending good vibes... I sincerely hope that this will not cause as much difficulty for everyone as they fear.

:)

davidcrehner · Joined: 20 Jul 2005 Posts: 4839

No one in their right mind could blame Shutterstock for trying to follow US law. We can, however, expect them to take responsibility for the various ways they mismanaged this whole fiasco: "dropping" it like a bomb but without complete info, unprofessional response from the CEO, at the same time telling us to "settle down" but also needing us to tell them that the withholding should be taken from non-USA sales, banning any dissenting voices, unrealistically short timelines for compliance, etc., etc.

I think this was all fuel for the fire. Fanning the flames, so to speak. I see now that SS has taken some steps to try to ameliorate their first misteps (tone adopted is now reconciliatory and even-handed, Jon Oringer seems to have revised his previous unprofessional response where he basically told us all to shut up or leave, they have agreed that sales must be split US and non-US, now they say if we tell them we're in the process of getting the papers then they won't withhold, etc., etc.)

Now imagine how much easier this would have been if SS had done more homework before dropping the bomb, and had STARTED the whole process with all these concessions already in place...

Please don't misunderstand... not being anti-SS here. I am trying to shed light on a) why people were sooo upset, and b) how it might have been better-handled.

themightyshrub · Posted: Sat May 30, 2009 11:34 am

Yes - I think a lot of people got a bit anti-USA when this came out because there were a few American submitters on this forum (I wont name names) who posted things along the lines of "I don't know why you're complaining, we have to pay tax in the USA as well", as if they resented us not paying any tax on our earnings before this came in. I don't think a lot of US submitters realised that actually, we do pay tax on our earnings in our own country, so these new rules mean we are being taxed twice, partly to a county that we are not part of and will not benefit from.

And I completely agree that SS should have handled this better, but I'm glad they are getting their act together. One post I wrote on a forum got an admin response within ten minutes, which I was very pleased with.

I also think that the amount of help and support that members are getting from other members on this forum has been phenomenal, especially those helping translate posts for members who do not understand a lot of what is being said in English (and I'm not surprised. I don't understand half this tax jargon, and I only speak English. I still have no idea what a notorized public is.) Just goes to show what a great community this is.

photka · Joined: 29 Mar 2008 Posts: 5

Susan · Joined: 06 May 2005 Posts: 6263

Personally I think there is a big difference between peaceful protest and spreading false information that creates yet more trauma for people who may be losing income and are already scared, distrustful and confused.

Did you taken a good look at the original content of the petition which was posted on SS's forums? Update: The petition has since been revised to omit slanderous info

Do you think it is fair for the banned submitter to be accusing American submitters of not caring when in reality for many that could not be further than the truth. That was the jist of a good many posts by the banned person in threads throughout the site to drum up support for something that none of us could do anything about. We live in America, we understand that you can not win when dealing with the IRS, that does not mean we do not care. My heart goes out for those who actually will be paying double taxes, and I feel terrible for the people with large galleries who rely on stock for their only income and will be double taxed.

Personally I think that there is a very good chance that this bomb shell was dropped on SS with very little notice. I would bet they also have a short deadline to comply. Therefore in reality maybe they did not have much time to gather information to respond. It would not make much sense to just drop the bombshell otherwise!

Who knows what the IRS was telling SS in regard to taxation on internationally derived image sales. Bombshells take time to work thru, especially when dealing with government agencies.

Would you rather have SS spend more time researching, negotiating and gather all of the info so that everything is completely correct or wouldn't you rather have SS tell you up front what the situation is so you have more time to respond to the treaty requirements before the IRS implements the withholding's?

Have you ever dealt with a large government agency that gives you conflicting information about its regulations... I have, therefore I am willing to give SS a little slack in regard to how they dealt with the situation... just as I am willing to understand the reactions of those who have had to deal with the real consequences of something we all have no control over!

doppelklick · Moderator Joined: 19 Dec 2006 Posts: 42

sjgh · Joined: 06 May 2008 Posts: 15

Just wanted to put in my two cents as a US citizen-

a)ask yourself why Shutterstock would literally want to cut off the hand that feeds itself? My guess is that they received some sort of notification from the IRS which is requiring them to comply immediately. Also since they are not going back and withholding amounts in arrears would mean that the IRS is enforcing the laws as they see it applied. My guess is typically the IRS will add assessed penalties and demand any unpaid back taxes to be paid. The IRS does not care about who they go after (look at the number of celebrities who have run afoul of the IRS) - they charge huge fines,take you to court and enforce very strictly. Typically there is little to no negotiating.

b)for countries that have a tax treaty with the US you are not being double-taxed as many have mentioned. It means that you should be able to offset the taxes that you are paying in your country of residence. If you pay say 10% of Shutterstock earnings you should be able to adjust the full 10% amount against the taxes you should be paying in your country. Check your own tax laws.

c)The payments that you receive from Shutterstock are deemed to be US originated income and hence the reason that you are being taxed. We all in the US have to deal with the IRS and every year fillup forms that are a lot more complex than the ones that you are being asked to complete. We all hate it as much as I am sure you do too whenit comes to paying taxes. Similarly we have to pay the Federal Government,State and city (in some cases e.g NYC) taxes as well as a whole host of other taxes. Typically the taxes are taken off directly from our paychecks. At the end of the year you fill out the IRS forms to determine if you owe more or if you have paid too much and the government returns the balance

If you were a citizen of a different country and received a small income while you were in the US you can complete the 1040EZ form with your ITIN number and the US government will return the money that you paid in taxes after adjusting for what you should pay in taxes. So typically if you received $3000 in income you would get 100% of the taxes you paid back from the government.

d) I would suggest you should rationally look as this as the cost of doing business or a hobby as the case may be. For some it is going to be worth the hassle of this one-time exercise of getting an ITIN. If it is a hobby then it may be easier to let the 30% be deducted as much as it hurts - but then it is a hobby.

For those who are concerned about providing the information to a foreign government, it is no more than what I or you normally fill out if I were to get a visa to visit another country- really not a big deal. Now if you were not reporting this income or you are a tax-scofflaw in your own country I may have the same concerns.

Yes the IRS does cross-check information- for example at the end of every year Shutterstock sends us a form with my earnings. Shutterstock has to by law report this to the IRS too. When I file my taxes I have to send provide the Shutterstock income to the IRS- if I didn't I could be picked up in a random IRS audit and subject to penalties and backtaxes.

You have my sympathies- but now that we know that this is something that is required by the IRS we should take it on more pragmatically and based on your individual circumstances.

stefaniemohr · Joined: 23 Feb 2008 Posts: 768 Location: Nuremberg, Germany

danderson · Joined: 19 Aug 2006 Posts: 1

I submit photos to paintingsfromphotos.co.uk and I have to pay vat tax on everything sold there. This might be a little different from stock but similiar. I also pay us taxes on that money but only because I'm too lazy to see if I can get out of it and it's not much money. Hope this helps.

michaeldb · Joined: 09 Sep 2005 Posts: 1178 Location: Helena, MT