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Film, Video and Audio Production Companies and Broadcasting Companies
Production of Master Recordings and Live Program Broadcasts
This publication explains items and services producers can buy tax free when producing master recordings and live program broadcasts.
Master recordings include feature films, corporate films, television programs and commercials, recordings of live performances and other projects intended for commercial distribution.
Master recordings do not include recordings such as wedding videos, videos shown on social media (such as YouTube, Facebook and Instagram) and other recordings not sold to the public. Video games are not considered master recordings, even if they contain recorded audio or visual sequences.
Live program broadcasts include radio or television content that is not pre-recorded and that is broadcast by a producer of cable programs or a radio or television station licensed by the Federal Communications Commission.
Items and Services Used to Produce Master Recordings or Live Program Broadcasts
Producers can claim an exemption from sales and use tax on purchases of items and services used to produce master recordings or live program broadcasts for ultimate sale if the following conditions are met:
- The item is a component part of a master recording or live program broadcast; or
- The item or service is necessary to and used or consumed directly in or during the production of a master recording or live program broadcast.
The exemption includes:
- Cameras.
- Film.
- Film developing chemicals.
- Lights.
- Props.
- Sets.
- Teleprompters.
- Microphones.
- Digital equipment.
- Special effects equipment and supplies.
- Audio or video routing switchers in a studio.
The exemption does not include:
- Office equipment or supplies.
- Maintenance or janitorial equipment or supplies.
- Machinery, equipment or supplies used in sales or transportation.
- Telecommunications equipment and services.
- Most transmission equipment.
- Security services.
- Motor vehicle parking services.
- Catering tents.
- Prepared food and beverages.
- Storage, transfer or upload fees of audio or video recordings.
Master Recording and Live Program Broadcast Charges
| Sale of… | Is… |
|---|---|
| Master recording by producer | Exempt |
| Copy of master recording | Taxable |
| License of all or part of the rights of a master recording | Exempt |
| Right to broadcast | Exempt |
Qualified Media Production Locations
The Texas Film Commission certifies qualified media production locations and qualified persons through the Media Production Development Zone Program. The program authorizes a temporary sales tax exemption for certain items and services bought by a qualified person to be used at a qualified media production location. The exemption can include nonresidential repair remodeling services such as construction, maintenance, improvement or renovation.
Contact the Texas Film Commission for information on the application process.
More Information
For more information, see Rule 3.350, Master Recordings and Broadcasts.
94-104
(03/2018)