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Form STE Instructions
What is the Sales Tax Exemption? General Information
For taxable years beginning on or after January 1, 2006 and before Complete the general information section of this application with the
January 1, 2023, Massachusetts allows sales tax exemptions for a information available at the time of filing. If the working title of the pro -
qualified motion picture production company or to an accredited film duction or any other information changes prior to filing for the actual
school student for production expenses related to a school film pro- credit, please notify the Department. The qualifying period must be
ject. MGL ch 64H, § 6(ww). Production expenses that qualify for the determined at the time of filing and can not change at any time after
sales tax exemption under the Act may also qualify for the production the exemption is granted.
expense credit.
Line 1
Who is Eligible for the Exemption? Indicate the type of entity.
Production companies who expend over $50,000 in Massachusetts
production costs during a consecutive twelve-month period are eligi- Line 2
ble if they meet certain requirements. A motion picture production A taxpayer or its payroll company must be registered for withholding
company is a company including its subsidiaries engaged in the busi- of Massachusetts personal income tax and must withhold from its
ness of producing motion pictures, videos, television series, or com - payroll expenses in order for the payments to qualify as an aggregate
mercials intended for a theatrical release or for television viewing. The payroll expense for purposes of the payroll credit or to qualify as a
term “motion picture production company” shall not mean or include Massachusetts production expense for purposes of the production ex-
any company which is more than 25 per cent owned, affiliated, or con- pense credit. Use DOR’s MassTaxConnect to register. The Commis-
trolled, by any company or person which is in default on a loan made sioner will require withholding whether or not the amounts paid are to
by the Commonwealth or a loan guaranteed by the Commonwealth. “employees” or constitute “wages” as defined in MGL ch 62B, § 1.
Eligibility Requirements Line 3
For taxable years beginning on or after January 1, 2006 and before A taxpayer (including an owner, parent or affiliate of the taxpayer) is
January 1, 2023, Massachusetts allows sales tax exemption for mo- not eligible for the payroll or production expense credit or the sales
tion picture production companies who meet certain qualification re- tax exemption if it is in default on a loan made by the Commonwealth
quirements and for accredited film school students for production or a loan guaranteed by the Commonwealth.
expenses related to a school film project. Production companies who Line 4
incur at least $50,000 of production costs in the Commonwealth and Enter the total overall estimated costs for the production. This should
whose Massachusetts production expenses exceed 50 percent of the include both Massachusetts and non-Massachusetts costs.
total production costs or the Massachusetts shoot days are at least 50
percent of the total shoot days are eligible for the sales tax exemption. Line 5
Enter the total Massachusetts costs for the production. This should in-
Additional Requirements clude only costs directly attributable to Massachusetts.
Note: The following requirements must be submitted electronically in
a standard database spreadsheet format. Note: Line 5 must be at least 50 per cent of line 4 to qualify for the
exemption. If line 5 is not 50 per cent of line 4, the production may
Submit with this application a detailed listing of prospective employ- still qualify if line 13 is 50 per cent of line 12.
ees and their estimated wages.
This list should include the prospective employees name, social se- Line 6
curity numbers, estimated gross wages for the production and Enter the total Massachusetts qualifying payroll amount. Only actual
weather they are hired by the production through a loan-out. payments to employees may be used to determine the qualifying
aggregate payroll, and only in the instance in which the payment
What is a Qualifying Period? constitutes Massachusetts source income to the recipient. Qualify-
The $50,000 qualification period serves as the “determination” period ing aggregate payroll may also include fringe benefits to employees
in that the taxpayer must incur in the Commonwealth at least $50,000 to the extent such benefits constitute Massachusetts source income.
of total production expenses during the consecutive twelve month Do not include payroll for salaries of “high salary employees”, where
period to be eligible for sales tax exemption. In some cases, the tax - the employee’s salary is $1,000,000 or more.
payer may be able to choose between one or more possible $50,000
qualification periods. However, only one $50,000 qualification period Line 7
is allowed for each motion picture. A taxpayer may choose to have a Enter the Massachusetts wages and salaries of “high salary employ-
$50,000 qualification period that is less than 12 months, but may not ees”, where the employee’s salary is $1,000,000 or more.
subsequently reopen or extend this qualification period in order to Line 8
claim more qualifying expenses. In addition, the $50,000 qualification Enter the cost of set construction and other qualified production costs
period must be the same for the payroll credit, the production expense included in line 5.
credit and the sales tax exemption. Consequently, the choice of the
$50,000 qualification period (including choosing a period shorter than Line 9
12 months) may have a bearing on the application of the production Enter location fees and cost of rental or purchased facilities and
expense credit and the sales tax exemption. Note that once a sales equipment included in line 5.
tax exemption application is filed the date of the approval letter from
the Department of Revenue is considered the first date of sales tax Line 10
exemption use by the production company and will start the 12 month Enter the total other Massachusetts production expenses.
qualification period unless the production company has already started
the qualification period with qualifying payroll or production expenses.
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