Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2013
 

Sales and Use Tax Annotations


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375.0000 MOTION PICTURES—Regulation 1529

Annotation 375.0305

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

(2) Productions

375.0305 Trailers. "Generally, advertisements for motion pictures do not qualify as "productions" under Regulation 1529. Specifically, "trailers" do not qualify as "productions". Trailers consist of nothing more than film clips from the advertised motion picture films, together with titles and voiceovers.

Trailers, whether prepared for showing in motion picture theaters, on television, or through other media, are not productions. Trailers are not productions because the person who makes a motion picture trailer is not responsible for the content of the film sequences taken from the complete motion picture and used in preparation of the trailer. The producer of the motion picture is responsible for the video or graphic content and the sound content of the segments incorporated into the trailer. The person preparing the trailer performs essentially an editing function with respect to this material. The person who prepares the trailer is not responsible for the script, budget, casting, sound or music content of the film sequences incorporated into the trailer. The fact that the person who prepares the motion picture trailer may perform a creative function and may hire talent (an announcer) to incorporate narrative sound material (voiceover) into the trailer is not sufficient to overcome the fact that the person who prepares the trailer does no production recording and does no production photography.

A "producer," under paragraph (b)(2) of the regulation, is "a person who is responsible for and in complete charge of making a production. . . ." The making of a motion picture production involves those elements described in paragraph (c)(2) of the regulation, under which a classification is made of charges to producers. Virtually all of the graphic and sound content of the trailer is arranged for by the producer of the motion picture film. The person who makes the trailer may prepare the advertising scenario, may engage talent to a minimal extent, and may be responsible for film editing. What is missing, however, is the heart of what a producer does. What a producer does is couple video images with sound on a film product. That function has been performed by the person who produces the motion picture production itself. For purposes of the sales tax law, a trailer is nothing more than an edited version of a production. If a production is shortened for showing on television, the television version is not a new production. The result would be the same even if some resequencing of the scenes were to occur.

The entire matter may be stated another way—excerpts from a production, do not a production make. The person who makes the trailer is not responsible for film content within the concept of Regulation 1529."

It is possible that an advertisement for a motion picture might qualify in an unusual case as a "commercial" and as a "production," but for the film to so qualify, the person who produces the advertisement must be responsible for and in general charge of filming and recording the principal portion of the film. 12/17/84; 4/11/85; 12/11/85.