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 375.1000


(1) Generally

375.1000 Sale of Rights to Motion Picture. Taxpayer A proposes to incorporate a new wholly-owned subsidiary B. "A" will sell to "B" all rights to one or more motion pictures that will have been released prior to the transfer. Simultaneously, "A" will enter into a distribution agreement with "B" pursuant to which "A" will license the distribution rights to the picture from "B". There are good business reasons for the transaction, unrelated to sales tax.

The transfer to the wholly-owned subsidiary would be a nontaxable transfer to an entity that is under control of the entity that held exploitation rights directly. (Regulation 1529(b)(1)(c).)