NAC372.155. Broadcasters.

     1. As used in this section, the term “broadcaster” means a radio or television broadcasting station primarily engaged in, and deriving income from, the business of facilitating speech via over-the-air communications, both as to pure speech and commercial speech.

     2. The gross receipts of a broadcaster from the furnishing of broadcasting services are not subject to the sales tax, including, without limitation, the gross receipts from the sale of airtime and any charge for transmission of the signal.

     3. Purchases of tangible personal property by broadcasters are subject to the sales tax if such property is consumed by the station and is not resold in the normal course of business. As an example of the application of this subsection, the purchase of a transmitter by a broadcaster is subject to the sales tax.

     4. When a broadcaster engages in production services, including the development of commercially suitable audiotapes and videotapes intended for broadcasting purposes only, the gross receipts from the sale of the tapes to the client are not subject to the sales tax. The broadcaster is the consumer, not the retailer, of any tangible personal property which is used incidentally in rendering the service therefore the sales tax applies to the purchase of the property by the broadcaster. As an example of the application of this subsection, if a television station is engaged by a client to create an advertisement for a client and the television station:

     (a) Purchases paint and other materials necessary to construct a set upon which the advertisement will be filmed;

     (b) Purchases raw videotape footage onto which to dub the advertisement for the client;

     (c) Engages in activities such as writing copy, preparing animation, taking photographs and putting music to the piece to complete the advertisement; and

     (d) Prepares videotapes of the advertisement which will be distributed to various other television stations for broadcasting,

Ê the gross receipts from the sale of the finished videotapes are not subject to the sales tax but the sales tax on the purchase of the paint, videotape and other materials necessary for the production of the videotape must be paid by the station at the time of purchase by the station.

     5. If a broadcaster engages in the business of duplicating audiotapes or videotapes beyond the first rendering which are not intended for broadcasting purposes only, the gross receipts from the copies are subject to the sales tax, except that, if a part of the charge for the copies is for services and that portion of the charge is separately stated on the invoice, the portion of the charge that is attributable to services is not subject to the sales tax. As an example of the application of this subsection, if a television station produces an advertisement for a client promoting his or her law practice and the client orders three commercially suitable videotapes of the advertisement intended for broadcast purposes only and 10 copies of the videotape to mail to family and friends, the gross receipts from the three videotapes for use in broadcasting only are not subject to the sales tax but the gross receipts from the 10 copies not for use in broadcasting are subject to the sales tax.

     6. The sales tax does not apply to any charges for supervision, consultation, research, postage, express, telephone and telegraph messages, transportation and travel expenses, or talent fees, if the charge is stated separately on the invoice or is part of a charge for other services.

     (Added to NAC by Tax Comm’n, eff. 11-12-93)