Business Taxes Law Guide – Revision 2013
 

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375.0000 MOTION PICTURES—Regulation 1529

Annotation 375.0054

(a) TRANSACTIONS UNDER PRIOR LAW (MAY 1, 1950 TO SEPT. 21, 1988)

(1) In General—Producers

375.0054 Film Editing. A film editor is hired directly by motion picture producers to edit commercials. The editor sends a bid quotation to the producer, breaks out the components such as services and materials (e.g., film) and adds a 35% markup.

The bid quotation, together with the customer's acceptance, constitutes the contract between the parties. Where the contract provides for a sale of materials and the performance of a service, the editor would be making a retail sale of materials despite the lump-sum billing. In order for the editor to be regarded as a consumer of the materials, both the contract and the invoicing must be consistent with that conclusion. 7/11/88.