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Film, Video and Audio Production Companies and Broadcasting Companies

April 2001

Exempt items used to produce film, video and audio masters

A production company may claim an exemption from sales or use tax on the following items if they are necessary and essential to and used or consumed directly in the production of motion pictures or video or audio recordings, a copy of which is sold or offered for ultimate sale, licensed, distributed, broadcast or otherwise exhibited:

  • tangible personal property that becomes a component part of the qualifying motion picture, video or audio recording, or broadcast;
  • cameras;
  • film;
  • film developing chemicals;
  • lights;
  • props;
  • sets;
  • teleprompters;
  • microphones;
  • digital equipment;
  • special effects equipment and supplies;
  • audio or video routing switchers located in a studio;
  • certain services; and
  • certain other equipment and tangible personal property that are necessary and essential to and used directly in the production.

An exemption may also be claimed in the production of broadcasts by a producer of cable programs or by a radio or television station licensed by the Federal Communications Commission.

A qualifying production does not include a production for broadcast that is not intended to be broadcast to the general public or to cable television service subscribers or paying customers.


Non-exempt items

The exemption does not include and tax is due on the items listed below:

  • office equipment or supplies;
  • maintenance or janitorial equipment or supplies;
  • machinery, equipment, and supplies used in sales or transportation activities;
  • machinery, equipment, or supplies used in distribution activities, unless otherwise exempted;
  • taxable items used incidentally in a qualifying production or broadcast;
  • telecommunications equipment and services;
  • transmission equipment;V
  • security services;
  • motor vehicle parking services;
  • food sold ready for immediate consumption; and
  • beverages such as soft drinks, flavored water, beer, and wine.

Charges for the Right to Broadcast

The amount you pay for the right to broadcast a program is not taxable. This includes programs physically delivered to the station and those transmitted electronically. The person who provides the program to you owes tax on the cost of the film or tapes on which the program is recorded.


Charges for Air Time

The amount you charge for air time is not taxable.


94-104
(04/01)

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