New York City Announces Sales Tax Exemption For Productions

Good news for producers whose final film, commercial or televisionshow format is digital - or carried electronically. Starting December1, 2002, any expenditures on goods and services used during thepre-production, production or post-production of such projects areexempt from city and state sales tax.

Currently, New York is unique in its stance toward taxation on filmand television production activity, because it is classified as amanufacturing activity that results in "tangible personal property."When the film/tv project is being created for ultimate sale, it isexempt from sales tax on goods and services consumed during productionof the project.

Until recently, "tangible personal property" was defined in theexisting tax law as film or tape - meaning that only projects deliveredin these mediums were eligible for the exemption. Beginning December 1,any film or television project that may be delivered in a medium thatcan be carried electronically, including digital, can take advantage ofthis exemption - and save production dollars.

To get started, producers need to register as sales tax vendors inNew York State, and proceed to obtain a resale certificate, which canbe presented to suppliers when purchasing goods or services. For moreinformation and links to these forms, visithttp://www.nyc.gov/html/filmcom/html/nystax.html