Was a videotape documenting Oakland fire cleanup and showing government and the public how cleanup funds were spent a qualified motion picture?

Plain-English summary

An audiovisual consultant videotaped properties for a private firm and the City of Oakland after the Oakland fire. A redacted contact supplied the further information that the City would use the video to document cleanup work and show the federal government and the public how cleanup funds were spent.

California treated the video as a qualified motion picture produced for commercial or industrial purposes and for a state or local government.

The consultant's charge was nontaxable. The consultant was the consumer of tangible personal property used to produce the video and had to report and pay tax on its cost.

Source and live-annotation limits

The official PDF responds to a June 29, 1992 request and says counsel discussed the case with a redacted contact, but includes neither source. It identifies no consultant, private firm, property, cleanup task, expenditure, federal recipient, public presentation, videotape, contract, charge, production material, cost, invoice, return, assessment, refund, or later outcome.

The live annotation preserves the private-firm and City work, cleanup and fund-documentation purposes, federal and public audiences, qualified-motion-picture conclusion, nontaxable charge, and producer-consumer result. It omits the June 29 request, the source of the further facts in a separate discussion, Regulation 1529 pinpoints, missing records, and no-outcome limit.

What this means for you

Government media contractors and tax professionals

Document the video's governmental, commercial, or industrial purpose, intended audiences, contract deliverable, and all production materials consumed.

Common questions

Q: Was the cleanup-documentation video a qualified motion picture?

A: Yes.

Q: Was the consultant's charge taxable?

A: No.

Q: Who owed tax on production materials?

A: The consultant as consumer.

Q: Did all material facts come from the written request?

A: No. Counsel attributed the cleanup and fund-documentation details to a separate discussion with a redacted contact.

Citations and references

• California Sales and Use Tax Regulation 1529(a)(1), (b)(1), and (b)(1)(A)3
• June 29, 1992 request — described but not included
• Discussion with a redacted contact — described but not documented
• Properties, cleanup work and funds, videotape, contract, production property, tax records, and outcomes — described but not documented

Verbatim support

From the official senior-tax-counsel letter:

The videotape will be used by the City to document to the federal government and to the public how the cleanup funds were expended.

Based on this further information, we conclude that your charge for the videotape is a nontaxable charge for a qualified motion picture, since the videotape was produced for a commercial or industrial purpose.

You are the consumer of and should report and pay tax on the cost to you of tangible personal property you consume in producing qualified motion pictures.

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Annotation page: Annotation 375.1350
• Original supporting opinion: 375.1350 PDF

Original ruling text

375.1350

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

August 6, 1992

Dear --- ---

This is in reply to your June 29, 1992 letter regarding the application of sales tax to your charge for videotaping properties for --- and the City of Oakland after the Oakland fire. I have discussed the case with Mr. --- of --- Mr. --- notes that the videotape is provided to the City of Oakland to document the cleanup work performed after the fire. The videotape will be used by the City to document to the federal government and to the public how the cleanup funds were expended. Based on this further information, we conclude that your charge for the videotape is a nontaxable charge for a qualified motion picture, since the videotape was produced for a commercial or industrial purpose. (Sales and Use Tax Reg. 1529, Motion Pictures, subd. (b) (1).) Further, the definition of qualified motion picture includes “[m]otion pictures produced for ... state and local governments.”(Reg. 1529, subd. (b) (1) (A)3.) You are the consumer of and should report and pay tax on the cost to you of tangible personal property you consume in producing qualified motion pictures. (Reg. 1529, subd. (a) (1).) If you have any further questions regarding this, feel free to contact me directly.

Very truly yours,

Ronald L. Dick
Senior Tax Counsel

RLD:sr