| (C) audio or video routing switchers located in a production
or recording studio that are necessary and essential to and used or
consumed directly in the production of a master recording or a live
program.
(d) Nonexempt items used in production.
(1) The following items do not qualify for exemption
under this section even when used in the production of a master recording
or a live program:
(A) office equipment or supplies;
(B) maintenance or janitorial equipment or supplies;
(C) machinery, equipment, or supplies used in sales
or transportation activities;
(D) machinery, equipment, or supplies used in distribution
activities, unless otherwise exempted by this section;
(E) taxable items that are used incidentally in the
production of a master recording or a live program;
(F) telecommunications equipment and services;
(G) transmission equipment, other than qualifying C.F.R.-compliant
digital television transmission equipment and qualifying C.F.R.-compliant
digital audio broadcast equipment;
(H) security services;
(I) motor vehicle parking services; and
(J) food ready for immediate consumption.
(2) Examples of nonexempt items used in production
include, but are not limited to: tents for catering or staging areas;
office furniture; crew jackets; flowers for dressing rooms; catering
or other food ready for immediate consumption; bodyguard services;
script typing; landscape maintenance; director's chairs; gas cans;
ladders; shipping cases; battery chargers; mobile offices; pagers,
cellular phones, and other communication equipment (except those used
exclusively on the set); telecommunications services such as mobile
phone service; waste removal (including waste that will be recycled);
wardrobe racks; and alcoholic and non-alcoholic beverages.
(3) Taxable items are not exempt under this section
when used in the production of a master recording for broadcast, or
in the production of a live program for broadcast, if the master recording
or live program is not intended to be broadcast to either the general
public or to cable television service subscribers or paying customers.
(e) Transportation equipment. Motor vehicles, including
trailers and semitrailers, are subject to motor vehicle sales tax
and are exempt from sales and use tax imposed by Tax Code, Chapter
151 (Limited Sales, Excise, and Use Tax). For more information on
the taxes due on motor vehicles, see Subchapter F, of this chapter
(Motor Vehicle Sales Tax). Other types of machinery, equipment, or
supplies used in transportation activities, such as helicopters, do
not qualify for exemption from sales and use tax under this section.
(f) C.F.R.-compliant digital television transmission.
(1) The purchase of C.F.R.-compliant digital television
transmission equipment by a digital television broadcast station permittee
or licensee is exempt from sales and use tax. The exemption applies
whether the equipment is used for television transmission in high
or standard definition.
(2) Equipment that may be used for both analog and
digital television transmission is exempt if it is necessary to comply
with 47 C.F.R. §73.682(d) (TV transmission standards). Transmission
equipment that is not necessary for digital television transmission,
or that can be used only for analog transmission, is not exempt under
this section.
(3) An Advanced Television Systems Committee (ATSC)
encoder is exempt.
(4) Entities that are not subject to the relevant provisions
of 47 C.F.R. Part 73 (Radio Broadcast Services), such as cable and
satellite television providers, may not make exempt purchases under
this subsection.
(g) C.F.R.-compliant digital audio broadcast equipment.
(1) The purchase of C.F.R.-compliant digital audio
broadcast equipment by a radio broadcast station permittee or licensee
is exempt from sales and use tax.
(2) Equipment used to transmit both over-the-air digital
audio programming at no direct charge to listeners and over-the-air
digital audio programming for a fee to listeners is exempt.
(3) Equipment used solely to transmit over-the-air
digital audio programming for a fee to listeners is not exempt.
(h) Exemptions for repair and maintenance. Repair or
maintenance of tangible personal property that is exempted under this
section is also exempt, unless the tangible personal property is installed
into realty and has lost its identity as tangible personal property.
For information on the repair or maintenance of items that become
real property after installation, see §3.357 of this title (relating
to Nonresidential Real Property Repair, Remodeling, and Restoration;
Real Property Maintenance). For information on new construction that
incorporates materials exempted under this section see §3.291
of this title (relating to Contractors).
(i) Exemptions for natural gas and electricity.
(1) Natural gas and electricity used in the production
of a master recording are exempt.
(2) Natural gas and electricity are taxable when used
for a non-exempt purpose. For example, an entertainment venue provides
beverages to customers during live performances. The venue also makes
master recordings of the live performances. The electricity used for
the beverage refrigeration equipment is not exempt; however the electricity
used to power the recording equipment is exempt under this subsection.
Non-exempt purposes include, but are not limited to, the following:
(A) administrative or office operations;
(B) marketing;
(C) transportation; or
(D) warehousing.
(3) A predominant use study is required to determine
the exempt and non-exempt use of natural gas or electricity measured
by a single meter. See §3.295 of this title (relating to Natural
Gas and Electricity).
(j) Exemptions for qualified media production locations.
(1) The exemption in this subsection is available only
to a qualified person acquiring a taxable item for use at a qualified
media production location. Information on becoming certified as a
qualified person or a qualified media production location is available
through the Texas Film Commission.
(2) The sale, lease, or rental of a taxable item, including
nonresidential repair or remodeling services, is exempt if the item
is used:
(A) for the construction, maintenance, expansion, improvement,
or renovation of a media production facility at a qualified media
production location;
(B) to equip a media production facility at a qualified
media production location; or
(C) for the renovation of a building or facility at
a qualified media production location that is to be used exclusively
as a media production facility.
(3) Repair or maintenance of tangible personal property
used to equip a media production facility at a qualified media production
location is exempt during the exemption period described in paragraph
(4) of this subsection.
(4) The exemption in this subsection is temporary.
(A) The exemption begins when both the qualified person
and related qualified media production location are certified by the
Texas Film Commission.
(B) The exemption ends on the earlier of:
(i) the expiration date identified in the approval
documents issued for the certification of the qualified media production
location;
(ii) the expiration date identified in the approval
documents issued for the certification of the qualified person; or
(iii) the date the certification of either the qualified
person or the qualified media production location is revoked.
(C) In no event shall the exemption period extend for
more than two years from the earlier of the date of certification
of the qualified person or the date of certification of the related
qualified media production location.
(5) Reports required. Each qualified person is required
to submit a report for each qualified media production location.
(A) The report must be in the form and manner prescribed
by the comptroller and must contain the following information:
(i) the name, address, and comptroller-issued taxpayer
identification number of the qualified person;
(ii) the name, address, and, if applicable, comptroller-issued
taxpayer identification number of the qualified media production location;
(iii) a description of the project or activity conducted
by the qualified person at the qualified media production location;
(iv) the date of certification and the expiration date
of the certification of the qualified person and related qualified
media production zone as identified in the approval documents issued
by the Texas Film Commission;
Cont'd... |
