Tax Type
Retail Sales and Use Tax
Description
Publishing and broadcasting; Exemption for production of video documentary
Topic
Taxability of Persons and Transactions
Date Issued
03-31-1997
March 31, 1997
Re: Request for Ruling: Retail Sales and Use Tax
Dear****************************
This is in reply to your letter of February 14, 1997, in which you request a ruling on the taxable status of the production of a video documentary.
Generally
Effective July 1, 1995, Virginia law provides a sales tax exemption for audiovisual production, to the extent that audiovisual works are being produced for licensure, distribution, commercial exhibition, broadcast, or for use in the production of another exempt work. The department has interpreted this exemption as applying to feature film, program, and documentary producers, audiovisual production companies, and others engaged in the production of tapes for use in the above manner. I have enclosed a copy of a previous ruling, P.D. 95-198 (07/31/95), which further explains the applicability of the exemption, as well as a copy of the Virginia Tax Bulletin 95-5, which announced the change in the law.
Accordingly, the costs directly associated with the production of the video documentary are exempt of the tax. I have also enclosed a copy of the Certificate of Exemption Form ST-20A which should be used in making such exempt purchases.
Questions
1. Editing services: Such services in connection with the development of the audiovisual work for the purposes previously outlined are nontaxable services by the videotape editor.
2. Historical document: The only provision for the exemption of historical documents is stated in Code of Virginia § 58.1-609.9, which provides that the tax shall not apply to historical documents purchased for use or consumption by a nonprofit state historical society, which is exempt from taxation under § 501(c) (3) of the Internal Revenue Code, which has a research library, a museum, and an educational department which are all open to the public. Based on the information presented, this exemption would not currently apply to the documentary.
3. Provision of master tape for the generation of copies for retail sale: Sales of the documentary at retail will be subject to the application of the sales tax. Since you will be purchasing the copies for resale only, and not making retail sales, you will be considered a wholesaler for sales tax purposes. You may present a Certificate of Exemption Form ST-10 to the entity producing the copies, and should place the word "Wholesaler" on the ST-10 form in the space where the Certificate of Registration number would have been placed had you been required to register for the collection of the tax.
Please note that as a wholesaler, there are specific requirements relating to the keeping of records. Code of Virginia § 58.1-633 states in part that:
-
- all wholesalers and jobbers in this Commonwealth shall keep a record of all sales of tangible personal property, whether such sales be for cash or on terms of credit. Such records shall include the name and address of the purchaser, the number of the certificate of registration issued to the purchaser, the date of the purchase, the article purchased, and the price at which the article is sold to the purchaser.
I trust that this information has been of some assistance to you. If, however, you require any additional assistance regarding the application of sales tax to a particular transaction, please contact *********** of the department's Office of Tax Policy at ********. Good luck in your endeavor.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/12233Q
Rulings of the Tax Commissioner