Partial Sales and Use Tax Exemption for Teleproduction or Other Postproduction Service Equipment
A partial exemption from the sales and use tax became available under section 6378 for the sale, storage, use or other consumption of machinery, equipment including component parts to a qualified person used primarily in teleproduction or other postproduction services. The exemption also includes property sold or purchased by a qualified person primarily to maintain, repair, measure, or test any property used in teleproduction or postproduction services. The partial exemption may also apply to rental receipts paid by a qualified person for teleproduction or postproduction equipment and machinery.
- The partial exemption applies only to the state sales and use tax portion. The exemption does not apply to any local, city, county or district taxes. Sales and purchases of teleproduction or other postproduction services including property used to maintain, repair, measure or test any such property will continue to be subject to the remaining portion of the sales and use tax rate consisting of the local, city, county and any applicable district taxes.
- "Primarily" means property used 50 percent or more of the time in one or more teleproduction or postproduction service activities for the one-year period following the date property purchased. Property will not be considered used in such activities for any period of time the property is located outside the state. The partial exemption does not apply to property used primarily in administration, general management, or marketing when it is used 50 percent or more of the time in one or more of those activities for the one-year period following the date of purchase.
- A "qualified person" means any person whose line of business is primarily engaged in teleproduction or other postproduction activities, including postproduction audio services for film, television and video productions described in Code 512191 of the North American Industry Classification System (NAICS) Manual. A "qualified person" does not include persons who are primarily engaged in portrait studios, providing still, video, or digital portrait photography services.
- A retailer will be relieved from the liability for the sales and use tax subject to the partial exemption if they take a partial exemption certificate timely and in good faith, from purchasers stating the property will be used in a qualified manner as provided under section 6378. The partial exemption certificate should be retained for a period of not less than four (4) years.
- A purchaser who provides a partial exemption certificate to a retailer and who makes use of the property for anything other than teleproduction or postproduction services, will be liable for the state tax rate, plus interest and applicable penalties. Purchasers must maintain records supporting the use of any property purchased under a partial exemption certificate.