Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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375.0000 MOTION PICTURES—Regulation 1529

Annotation 375.0200


(2) Productions

375.0200 Animated Pictures. The production of ananimated motion picture film includes six general steps:

(1) Storyboard. Covers story planning with a client through a discussion of rough visualization of the high points of the script.

(2) Layout. Consists of preparation of a sufficient number of pictures in technical and artistic detail to guide the animation artists.

(3) Animation. Consists of the drawing of step-by-step scenes necessary to produce the entire action.

(4) Inking and/or Painting. Consists of tracing and/or painting the scenes prepared in step No. 3 on celluloid cells.

(5) Photographing. Consists of photographing the cells on a continuous roll of film.

(6) Dub-in-sound. Consists of fabricating the sound track that goes on the film.

An animation film studio need not do all six general steps in order to be considered the producer of the film. If an animation film studio contracts with an ad agency or anyone else to produce the film and is responsible for and in general charge of making the finished film, the studio will be the producer. If the film is a complete production, the producer will be considered to be the consumer.

A person who is responsible for and in complete charge of making a completed film production may subcontract for the production of segments of the film. Where this is done, the person responsible for the completed film is the consumer of the segments subcontracted and the subcontractor is the retailer thereof.

If an animation studio merely produces a segment of a complete production, either as a subcontractor or independent contractor, the studio will be the retailer of the segment so produced and tax will apply to charges therefor. 8/30/65.