What did the Comptroller's letter on the proposed audiovisual-works rule say about taxing video photographers?

Plain-English summary

Despite the "Letter Ruling" label on the STAR system, this June 9, 1988 document is not a ruling on a taxpayer's liability. It is a short cover letter from the Deputy Comptroller responding to an industry group's comments on a proposed rule on audiovisual works (a sales-tax rule then being developed).

What the letter actually says:

• The Comptroller adopted the commenter's "first alternative" of basing the tax on the raw film cost for audiovisual works.
• It used the commenter's suggested language in the rule's "video photographer's section."
• It received comments from several other industry groups and from members of TAB, and tried to address their concerns.
• The rule would be filed in the Texas Register shortly.

So the operative point for anyone researching this document is that the taxability of a video photographer's work—such as tape produced for airing as a newscast—was to be governed by the audiovisual-works rule the Comptroller was finalizing, and that rule based the tax on the raw film cost. This letter does not itself set out the rule's full text or decide any particular transaction.

What this means for you

Video photographers and audiovisual producers

Do not read this as a determination of what you owe. It records a rulemaking decision: the Comptroller's audiovisual-works rule was written to base sales tax on the raw film cost and to include specific treatment for video photographers. To know the actual tax treatment, look to the finalized rule (and its current successor), not to this cover letter.

Researchers using STAR

This is a useful example of the caution in the disclaimer below: a document indexed on STAR under a taxpayer-style subject can turn out to be rulemaking correspondence rather than a ruling. Read the body, not just the index label, before treating it as a holding. Given its 1988 date, any rule described here has almost certainly been amended since—verify current law.

Common questions

Q: Is this a ruling on whether a video photographer's newscast tape is taxable?
A: No. It is a cover letter about the proposed audiovisual-works rule; the taxability question is governed by that rule, which the letter does not reproduce.

Q: What tax base did the audiovisual-works rule use?
A: The letter says the Comptroller adopted the commenter's alternative of basing the tax on the raw film cost.

Q: Where would the actual rule appear?
A: The letter says the rule would be filed in the Texas Register shortly.

Q: Can I rely on this document?
A: No. STAR letters support a detrimental-reliance claim only for the taxpayer they were issued to, and this 1988 rulemaking correspondence does not state current policy.

Citations and references

• No statutory sections are cited in the body of this letter.
• The letter concerns the Comptroller's then-proposed rule on audiovisual works (sales and use tax), to be published in the Texas Register.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8806L0882F06

Original ruling text

Bob Bullock
Comptroller of Public Accounts
Austin, Texas 78774

June 9, 1988

Dear **:

Thank you for sending us your comments and suggestions on the proposed
rule on
audiovisual works.

As you can see from the attached draft, we took your first alternative
for
basing the tax on the raw film cost and your suggestion for language in
the
video photographer's section.

We received comments from several other industry groups and we've tried
to
address their concerns as well as those from members of TAB. The rule
will
be filed in the Texas Register shortly.

Please feel free to contact me if you have additional questions.

Sincerely,
Dan Pearson
Deputy Comptroller