NAC372.365. Producers.

     1. As used in this section, the term “producer” means a film or video producer, recording studio, postproduction edit facility, or audio record and mix facility, or any combination thereof.

     2. The gross receipts of a producer from engaging in the business of applying creative services to the development and communication of an idea, concept, opinion, perspective, point of view, image, sound or message, are not subject to the sales tax.

     3. Purchases of tangible personal property by a producer are subject to the sales tax if such property is acquired for use in the operation of the business and will not be resold in the normal course of the business. As an example of the application of this section, if a producer purchases capital equipment, materials, supplies or other devices for use in the business, the purchase is subject to the sales tax.

     4. When a producer engages in rendering creative services by creating production materials or rendering creative production services, including the development of advertising materials on behalf of a client for delivery to the print or broadcast media, the gross receipts from such creative services are not subject to the sales tax if the charges for those services are separately stated on the invoice. The producer is the consumer, not the retailer, of any tangible personal property which is used incidentally in rendering the creative service. The sales tax applies to the purchase of tangible personal property by a producer. As an example of the application of this subsection, if a postproduction facility creates an information video about a hotel and as a part of the creative process, the postproduction facility purchases various props, graphics, and stock footage, performs writing and research, and adds music and sound effects to communicate the idea, concept, opinion, perspective, point of view, image, sound or message, and then the postproduction facility prepares a film or tape of the finished concept, which the producer provides to the hotel, the sale of the first rendering videotape is not subject to the sales tax because the substance of the transaction is the expression of the idea, concept, opinion, perspective, point of view, image, sound or message and the rendering of creative services. In this example, the postproduction facility must pay the sales tax at the time of purchase on all materials for use in the production of the videotape.

     5. The gross receipts from any duplication, copying or regeneration of the original expression of the idea, concept, opinion, perspective, point of view, image, sound or message beyond the first rendering are subject to the sales tax. As an example of the application of this subsection, if a postproduction facility creates an information video about a casino, the first rendering is not subject to the sales tax because the substance of the transaction was the performance of creative services but if the casino wishes to purchase 400 copies of the videotape, the gross receipts from the sale of each duplicate, copy or regeneration after the first rendering 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)