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 375.0885.200


(1) Generally

375.0885.200 Models—Qualified Motion Picture. Company A is engaged by Company X to (1) manufacture models or puppets, (2) photograph visual effects using model or puppets, and (3) deliver the original film of the visual effect to Company X. When the film is delivered, Company A will also deliver the models and puppets to Company X, which will be the owner of them. The visual effects produced by Company A will be used in the production of a qualified motion picture.

Under these facts, Company A is performing "qualified production service" and is the consumer of the models or puppets it manufactures. Tax applies to the sale to Company A of the materials it uses to manufacture the models or puppets. Company A also is the consumer of the "original film" that it delivers to Company X, and tax applies to the sale to Company A of the raw film or tape it delivers to Company X.

Tax does not apply to Company A's charge to Company X for the film or tape or models or puppets which Company A delivers to Company X in connection with Company A's performance of the qualified production service. 2/5/96.