Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
375.0000 MOTION PICTURES—Regulation 1529
(b) ON AND AFTER SEPTEMBER 22, 1988
375.1048 Television Commercials. The transfer of the final production of a commercial on video tape to a client is the transfer of a "qualified motion picture" because it is a commercial produced, adapted, or altered for exploitation through a medium for the purpose of advertisement. Since the transfer of a qualified motion picture is not a "sale," the person who produces the commercial is the consumer of the materials that the person uses for the production of that qualified motion picture. Hence, tax applies to the sale of materials used to produce the qualified motion picture including the videotape which is transferred to the client. Tax does not apply to any charges made to the client for the qualified motion picture. On the other hand, when release prints are transferred to television stations, such transfers are sales subject to tax and the producers of the qualified motion picture may purchase those videotapes for resale. 9/5/96.