Exemption From Lodgings Tax For Film Production Companies Approved by The Alabama Film Office

ALABAMA DEPARTMENT OF REVENUE

SALES, USE & BUSINESS TAX DIVISION

SALES & USE TAX RULE

810-6-3-.48.05. Exemption For Certain Purchases by Film Production Companies Approved by The Alabama Film Office.

(1) Unless otherwise defined herein, the definitions of terms set forth in Act # 2001-975 are incorporated by reference herein.

(2) The term “department” as used in this rule shall mean the Department of Revenue.

(3) The term “agreement” as used in this rule shall mean a written agreement entered into between the Alabama Film Office, or its agent, and an approved company with respect to a film project.

(4) The term “approved company” as used in this rule shall mean a company or those directly involved in production decisions for an organization certified by the Alabama Film Office as approved to produce a film project in Alabama primarily using available state resources.

(5) The term “approved project” as used in this rule shall mean an Alabama film production to be undertaken by an approved company using Alabama resources to the extent possible.

(6) The term “approved costs” as used in this rule shall mean expenses of an approved company that are preapproved by the Alabama Film Office as those costs directly related to and essential to the production of an approved film project.

(7) The term “film” as used in this rule shall mean the following types of production, in film or digital form: motion picture, videography, music video, and television (all of which may be for commercial or non-commercial exploitation and distribution), and commercial advertising for television that is intended to promote specific products, brands, ideas, or positions, as well as ancillary services to the above named productions such as music for the production and animation added to the production. Film does not include productions not intended for public distribution or viewing, such as family or personal productions, recurring news, or current events shows, nor does it include the staging of music concerts to which tickets are sold and where a music video may be filmed as an ancillary activity to the staging of the concert.

(8) Code Section 40-26-1(b) provides an exemption from state, county, and municipal sales and use taxes available for an approved company which is actively engaged in the production of an approved project authorized by the Alabama Film Office and which meets the criteria established by the Alabama Film Office for certain purchases of approved costs.

(9) Approved costs may include any or all of the following:

(a) Purchases for the construction, equipping, and installation of necessities for the location of a film project

(b) Purchases of vehicles, equipment, supplies, props, and other necessities for the film project.

(c) Purchases to replace, restore, recycle, or return to the owner equipment, props, and other property that was used or altered in the process of the film project.

(d) Purchases for the installation of utilities in connection with a film project, including, but not limited to, water, sewer, sewage treatment, gas, electricity, and communications, and including off-site construction of utility extensions paid for by the approved company.

(e) Any other purchases deemed unique and essential by the Alabama Film Office for the approved film project.

(10) In order to qualify for the sales and use tax exemptions, an approved company that has obtained written approval from the Alabama Film Office shall apply to the Department of Revenue for a Sales Tax Certificate of Exemption (Form STE-1) by completing and submitting application Form ST:EX-A1. (See Sales & Use Tax Rule 810-6-5-.02.) The following information must be included with the ST:EX-A1 application for the department to consider it for the sales and use tax exemptions:

(a) A copy of the agreement which indicates the name of the approved company and/or those directly involved in production decisions for an organization certified by the Alabama Film Office.

(b) The description and desired location of the project.

(d) The projection of capital and other anticipated expenditures for the project that indicate the total cost of the project including a projection of expenses that would be subject to Alabama sales and use tax absent the exemption.

(11) Upon review and approval of the application, the department shall issue the applicant a Form STE-1 which shall be used by the certificate holder to claim the exemption when making qualifying tax-exempt purchases. The STE-1 will be issued by the department to those specifically named in the agreement. If the department denies the application, the applicant may appeal the denial in accordance with Section 40-2A-8, Code of Alabama 1975. An approved company who obtains a Form STE-1 shall comply with all the provisions of Rule 810-6-5-.02 and shall maintain records sufficient to document the tax-exempt status of qualifying purchases.

(12) The exemption from sales and use taxes shall expire at the end of the fiscal year ending September 30, 2006, unless otherwise continued by an act of the Alabama Legislature. (Adopted through APA effective April 29, 2002, amended February 23, 2006)

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