Ga. Comp. R. & Regs. R. 560-12-2-.109 - Film Producer or Film Production Company
(1) A Film Producer or Film Production
Company is primarily engaged in the production of feature films, training
films, series, pilots, movies for television, commercials, music videos or
sound recordings captured on film, video or digital format. Such entities are
subject to sales and use tax on all purchases and taxable services unless
otherwise exempt within the Act and this Regulation.
(2)
Definitions. For purposes of
qualifying for the exemption provided for by O.C.G.A. §
48-8-3(73), and as used in this Regulation, the following definitions and explanation of
terms shall apply:
(a) "Certified Film
Producer or Certified Film Production Company" means any person that is
certified by the Georgia Film and Videotape Office of the Department of
Industry, Trade and Tourism that is engaged in the business of organizing and
supervising qualified production activities.
(b) "Film Producer" means any person engaged
in the business of organizing and supervising qualified production activities.
Such person may also be engaged in the business of organizing and supervising
nonqualified production activities.
(c) "Film Production Company" means any
company that employs one or more film producers and whose goal is to engage in
film production activity. Such company may also be engaged in the business of
organizing and supervising nonqualified production activities.
(d) "Nation-Wide Commercial Distribution"
means intended for commercial distribution extending outside the State of
Georgia. Such term shall not mean distribution primarily via Internet or live
coverage of an event, including, but not limited to news, sporting events, and
concerts.
(e) "Production
Equipment" means items purchased or leased for use exclusively in qualified
production activities in Georgia, including, but not limited to, cameras,
camera supplies, camera accessories, lighting equipment, cables, wires,
generators, motion picture film and videotape stock, cranes, booms, dollies and
teleprompters.
(f) "Production
Services" means services purchased for use exclusively in qualified production
activities in Georgia, including, but not limited to, digital or tape editing,
film processing, transfers of film or tape or digital format, sound mixing,
computer graphics services, special effects services, animation services and
script production.
(g) "Qualified
Production Activities" means the production or postproduction of film or video
projects including feature films, series, pilots, movies for television,
commercials, music videos or sound recordings used in feature films, series,
pilots or movies for television, for which the film producer or film production
company will be compensated and which are intended for nation-wide commercial
distribution.
(3)
Purchases. Except as provided for in paragraph (4) of this
Regulation, the tax does not apply to all tangible personal property or taxable
services purchased, leased, or rented for use in production activities. Such
purchases include, but are not limited to, office equipment, furniture or
supplies, maintenance or janitorial equipment and supplies, motor vehicles,
trailers and motor homes, nonqualified production equipment, telecommunications
equipment, catering services, including food and beverages and restaurant
meals, any fuel or gas, lodging, flowers and gifts.
(4)
Production Equipment or Production
Services Exemption.
(a) In accordance
with O.C.G.A. §
48-8-3(73), transactions occurring on or after January 1, 2002, which involve the purchase
of production equipment or production services for exclusive use in Georgia,
not otherwise exempt under Chapter 8 of Title 48 of the Official Code of
Georgia Annotated, will be exempt from sales and use tax.
(b)
General Requirements for the
Production Equipment or Production Services Exemption. In order to
qualify for the production equipment or production services exemption provided
for in O.C.G.A. §
48-8-3(73)
and this Regulation, the following conditions must be met:
1. The qualified purchasers, renters or
lessees of such production equipment or production services must obtain a
Certificate of Exemption from the Commissioner as provided in paragraph (4)(c)
of this Regulation. The application for such Certificate of Exemption must be
requested using the Application for Certificate of Exemption (Form ST-PE1) and
contain an itemized listing of the production equipment or production
services.
2. The production
equipment or production services must be purchased, rented or leased for
exclusive use in this state by a certified film producer or certified film
production company.
3. As a
condition precedent to the issuance of the Certificate of Exemption, a film
producer or film production company must submit an application to the
Commissioner with their designation as a certified film producer or certified
film production company.
4. The
application shall not be valid without prior written approval by the Georgia
Film and Videotape Office of the Department of Industry, Trade and Tourism
designating the film producer or film production company to be a certified film
producer or certified film production company.
(c)
Application and Certificate of
Exemption.
1. Any purchaser or lessee
desiring to secure the benefits of the exemption provided by O.C.G.A. §
48-8-3(73)
must file an Application for Certificate of Exemption (Form ST-PE1). The
application shall include the following information: name of the producer, name
of the production company, title of the project, type of project (feature film,
television series, commercial, etc.), dates of project (production through
final shoot day), federal employer's identification number, description of the
property anticipated to be purchased, including the sales price or rental or
lease amount payable, and a copy of the certification from the Georgia Film and
Videotape Office of the Department of Industry, Trade and Tourism. In addition
thereto, the Commissioner may require such other information as deemed
necessary for the determination of the claim for exemption.
2. Upon approval of an application, the
Commissioner will issue a Certificate of Exemption (Form ST-PE2) for
presentation by the purchaser, renter or lessee to the production equipment or
production service suppliers, whereupon the purchaser or lessee shall be
relieved from the payment of the tax and the equipment suppliers shall be
relieved from the collection of the tax.
3. Where the Certificate of Exemption (Form
ST-PE2) has not previously been obtained and tax is collected or accrued on the
purchase or lease of production equipment or production services, which may
qualify for exemption, the purchaser or lessee may apply for a refund of such
tax. The Claim for Refund (Form ST-12) shall be accompanied by an Application
for Certificate of Exemption (Form ST-PE1) and any other documentation deemed
necessary by the Commissioner.
(d)
Specific Applications; Exemptions
and Exceptions Relating Thereto.
1.
Production equipment when sold or leased to a certified film producer or
certified film production company and used exclusively in connection with a
qualified film production activity in Georgia is exempt from Georgia sales and
use tax. Such equipment shall include, but is not limited to:
(i) Camera equipment, supplies and
accessories;
(ii) Motion picture
film and videotape stock;
(iii)
Digital discs and masters;
(iv)
Lighting equipment, including gel, bulbs and lamps;
(v) Stage equipment;
(vi) Cranes, booms, dollies and
jibs;
(vii) Electric stands, cables
and wires;
(viii) Generators used
to operate tax exempt lighting and stage equipment;
(ix) Time code equipment;
(x) VTR and digital editing
equipment;
(xi)
Switchers;
(xii) Character
generators;
(xiii) Sound recording
equipment;
(xiv) Costumes, props,
scenery and materials to construct them;
(xv) Design equipment;
(xvi) Heating and air conditioning equipment
that is not a part of the realty and is used on the set;
(xvii) Drafting equipment;
(xviii) Special effects supplies and
equipment;
(xix) Photographic
film;
(xx) Animation
equipment;
(xxi) Computer graphic
and image equipment;
(xxii) Motor
vehicle rentals and leases that are exclusively used on film production sets;
and
(xxiii) Equipment and supplies
for dubbing, mixing, editing and cutting.
2. Production or post production services
when sold to a certified film producer or certified film production company and
used exclusively in connection with a qualified film production activity in
Georgia are services exempt from Georgia sales and use tax. Such services shall
include, but are not limited to:
(i) Film
processing;
(ii) Computer graphics
services;
(iii) Photography on the
set used in the film; and
(iv)
Fabrication, printing, or production of scripts, storyboards, costumes,
wardrobes, props, scenery or special effects.
3. The exemption provided for under O.C.G.A.
§
48-8-3(73)
shall not extend to:
(i) Leases or rentals
that are continuous in nature where the leased or rented equipment is not
exclusively for use in Georgia;
(ii) Equipment used for both qualifying
production activities and non-qualifying production activities;
(iii) Any person who contracts to furnish
tangible personal property and perform services under a real property contract.
Contractors are deemed to be the consumers of all tangible personal property
used in a real property contract and shall pay the tax at the time of purchase;
and
(iv) Items not considered
production equipment or production services. Such items include, but are not
limited to, office supplies and furniture, bottled water, catered food and
beverages, crew uniforms, flowers and plants used off the set, personal gifts,
utilities, cell phones, pagers and battery chargers, hotel rooms and lodging,
reusable shipping cases and packaging materials, janitorial supplies, make-up,
motor fuel, repairs to equipment, transportation services, purchases of motor
vehicles or motor vehicle leases or rentals used to transport items or
individuals and any other tangible personal property or taxable services not
specifically exempt under this Regulation.
4. If, after obtaining the Certificate of
Exemption required under paragraph (4)(c) of this Regulation, the actual
purchase(s) or lease(s) fails to meet the requirements for this exemption, the
dealer will be liable for tax, penalty and interest on the purchase(s) or
lease(s).
(5)
Sales.
(a) Charges for services
rendered by a film producer or film production company are exempt when
performing production or postproduction work on a motion picture master under
the direction of another producer or production or post-production company.
Postproduction work includes, but is not limited to, editing and
synchronization of a motion picture master.
(b) The sale or rental of master tapes or
master records that are used by the recording industry in reproducing audio
recordings and visual images for showing on screens or television are not
considered subject to sales and use tax.
(c) Sales of training films or other
non-qualified production activities that are not reproduced are subject to
sales and use tax.
(d) Retail sales
of any film producer's or production company's assets that would not otherwise
be exempt from Georgia sales and use tax, are subject to sales and use
tax.
(e) A transaction involving
only a charge for a copyright license and does not include a sale, lease, or
rental of video tape or motion picture film would not be considered
taxable.
Notes
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