California sales tax exemption info...

[Ken Corben]

Fellow California Red Buyers,

For those California RED ONE reservation holders and you wannabes here's the info for the sales tax exemption in California for "teleproduction" pursuant to California State Assembly Bill 2798 Chapter 323 that provides for, among other things, a limited "tax exemption for sales of ... teleproduction and post production equipment."

In English that means fill out the correct form and receive a 5.25% reduction in the sales tax collected upon the purchase of your red gear if you live in California.

Link to full explaination and the correct form to fill out and provide to the Red Team opon final payment:

http://www.marketec.com/pdfdox/boe6378.pdf

Synopsis:

Do Your Sales or Purchases Qualify for a Partial Tax Exemption?
If so, you should know the partial rate exemption increases on July 1, 2004.
Rate Change
Under California’s Sales and Use Tax Law, some sales and purchases are exempt from the state portion of the sales and use tax rate. The total rate is made up of a state component and county, local, and district tax components. As a result of changes to the law, the state component will increase from 5.00% to 5.25% on July 1, 2004. This means that a sale that was entitled to a 5.00% tax rate exemption prior to July 1, 2004, will be entitled to a 5.25% exemption on an after July 1, 2004.
Note: The total statewide base sales and use tax rate will not change. It will remain at 7.25%. The increase of 0.25% in the state rate component is offset by a decrease of 0.25% in the local rate component.
Eligible Sales and Purchases
The partial tax exemption applies to eligible sales and purchases of
• Farm equipment and machinery
• Diesel fuel
• Timber harvesting equipment
• Racehorse breeding stock
• Teleproduction and other post-production equipment
For information on who qualifies for the partial tax exemptions listed above, please visit our website at www.boe.ca.gov. Select “Sales and Use Tax” under the BOE Programs menu, and then click on the menu item, “New Sales and Use Tax Exemptions—AB 426 Summary.” You may also call our Information Center at 800-400-7115.
Determining the Correct Tax Rate
To determine the correct tax rate for a partial exemption on and after July 1, 2004, you should subtract 5.25% from rate of tax normally due on a sale or purchase. For example, if the tax rate in effect for a sale or purchase is 7.50%, you should subtract 5.25% from that amount to find the correct rate to use, which is 2.25% (7.50% - 5.25% = 2.25%).
Note to Retailers
You do not need obtain new blanket exemption certificates. Properly completed certificates already on file may be used to support partially exempt sales made under the new rate.
Help Us Get the Word Out
To ensure news of the rate change for the partial exemption reaches as many interested parties as possible, we request that you provide a copy of this notice to your organization members, colleagues, and other associates.

[Steve Gibby]

Yeah Shark Guy...glad you posted that! I remember hearing about that last year and I've been wondering when someone would bring it up. There are a ton of RED One cameras reserved in California, and with RED being based here, well...we've got the "good" old Franchise Tax Board to deal with.

Good post...

[CVB]

Does it count if RED is a Washington company doing business in California?

[Rick Darge]

Do people in other states get the Red One tax free then?

[Jarred Land]

nice work sharky.

[Chris Kenny]

Do people in other states get the Red One tax free then?

Many states have a "use tax" on goods purchased out of state... which is usually the same as what the sales tax would have been had the items been purchased in state.

That's the bad news. The good news is, California is not the only state where you might be able to avoid paying some or all of the tax on a Red.

For New York, a Red purchased by a production company could possibly fall under this provision:

"You may purchase, exempt from tax, tangible personal property used directly and predominantly in the production (including editing, dubbing, and mixing) of a film for sale regardless of the medium by which the film is conveyed to the purchaser. (For purposes of this exemption, the term film means feature films, documentary films, shorts, television films, television commercials, and similar productions.)"

This would make it totally exempt from sales/use tax (see form ST-121). Consult your favorite accountant before taking tax advice from random people on the Internet.

[Sanjin Jukic]

Do people in other states get the Red One tax free then?

richard,

congratulation for your new avatar,

as history knows stalin was a killer,

lenin was russian revolutionary leader during october revolution

he was actually a real RED

best describerd in warren beatty's Reds

http://www.imdb.com/title/tt0082979/

http://homevideo.about.com/od/dvdr6/fr/RedsDVDReviewfa.htm

[Rick Darge]

I need to check this flick out, thanks for the link Third Man!

[MikeCurtis]

Texas has a sales tax exemption as well for items that fall under a "direct use in production" clause. If it is something essential to the production that can't be accomplished without (for film, video, or multimedia), it is exempt. Things like director's chairs are not. Cameras, lenses, software, computers, decks, drives, etc. are exempt, furniture, food, etc. are not AFAIK, IANAL.

But in any case, I expect to not need to pay sales tax on my Red One.

-mike

[donatello b]

great find - looks like i don't have to temporary move to Oregon everytime i get a RED shipment!!!!

[Zakaree Sandberg]

Does it count if RED is a Washington company doing business in California?

HUH?

the company is located in lake forest, ca... although its possible they set up their corporation in wa.. im not sure

[Storyline]

If I'm not mistaken, the catch on the tax credit is that it defines teleproduction as basically post-production activities. I don't believe that what we all think of as production is included in the tax board's definition for the sake of that credit. So - computers, NLEs, graphics programs, drives and the like count - but cameras, Steadicams, lights, etc. to my knowledge. Worth double checking, though.

[Ken Corben]

It's all in the download link, however here's the English version:

Sec 6 - 6378 (a) specifically states "Tangible personal property purchased for use by a qualified person to be used primarily in teleproduction or other post production services."

This is California's weak/pathetic attempt to aid filmmakers/producers. Canadian style tax benefits would be better. Anyway, a $17,500 camera system is "tangible personal property for teleproduction..."

The real question is, "...for use by a qualified person," No?

[therosser]

I tried to click on Shark guy's link, but it didn't work.

[donatello b]

RED does accept the CA exception .. there are 2 different forms ... one you list the equipement for each time you buy ( you have to fill out new form every time you purchase) ... the other is a blanket form - good for all the times you buy ( you don't list the equipment ) ...
it's not up to RED to determine if you qualify ... also note that if you sell or locate the equipment outside of CA ( example : your business is located in another state) within a year of purchase you will owe the 5.25% TAX to CA..

link to both forms ...
http://www.boe.ca.gov/sutax/pdf/parttelecert.pdf

[Kevin Halverson]

Here is a link to the 6378.

http://www.boe.ca.gov/pdf/reg1532.pdf

[Rich Schaefer]

I have bought many items with the tax exemption, including cameras!!!!

Band Pro and many other vendors use it!

It rocks!

Rich

[Jonathan L. Bowen]

great find - looks like i don't have to temporary move to Oregon everytime i get a RED shipment!!!!

lol, my dad's home is in Oregon, that's where I grew up. I was just going to have them shipped there but I realized that it's actually a 5% reduction for California, not sure where you got the 5.25%, it's been 5% for us so far. Instead of 8.25% in L.A. it's 3.25%, and we usually get that discount up front from retailers like Birns & Sawyer. I don't mind paying 3.25% sales tax, but I wouldn't pay 8.25%. I'd rather get it shipped to Oregon and ship it back to L.A. myself.

Sales tax is a good idea and all, but not combined with the million other taxes they have. There should be no income taxes whatsoever, state or federal, just sales taxes. Then it would be acceptable, even if it was 25% sales tax on any item but food, great, fine, but the founding fathers would turn in their graves at all these ridiculous taxes to feed an overbearing and ludicrously wasteful government that shouldn't be doing 99% of what it is doing. The money-grubbing wankers.

[Matthew Rogers]

Sales tax is a good idea and all, but not combined with the million other taxes they have. There should be no income taxes whatsoever, state or federal, just sales taxes. Then it would be acceptable, even if it was 25% sales tax on any item but food, great, fine, but the founding fathers would turn in their graves at all these ridiculous taxes to feed an overbearing and ludicrously wasteful government that shouldn't be doing 99% of what it is doing. The money-grubbing wankers.

It's called the FairTax. A 23% federal tax on all new item sales at the FINAL level. A great system since all other federal taxes will be eliminated and prices of items (which already have 23% tax basically built into them) will drop by 23% (so it's like your not paying any tax because items will be the same price as before.) Plus, hopefully states would calculate their sales tax on the pre federal sales tax (and hopefully the same for the federal--pre state sales) so you'd be paying less state sales tax.

Read more at fairtax.org.

Matthew

[BASSAM MSSALATIE]

hi is this Tax cove whose outside California ?
:weight_lift: those in NY or outdie us .will they pay this Tax? :watsup:

[Matthew Rogers]

hi is this Tax cove whose outside California ?
:weight_lift: those in NY or outdie us .will they pay this Tax? :watsup:

Are you talking about the FairTax? If you are, yes retailers would be collecting the FEDERAL sales tax, but not the state sales tax (unless sometime in the future states can regulate out of state sales, but I doubt that will happen for a long while.)

One thing I love about the FairTax is that it will tax ill-gotten money (drug money, etc.) because when those people buy their high end cars, or even TV's, they will be paying "income tax" on that money (whereas they are not now.)

Matthew

[Jeff Deveraux]

One thing I love about the FairTax is that it will tax ill-gotten money (drug money, etc.) because when those people buy their high end cars, or even TV's, they will be paying "income tax" on that money (whereas they are not now.)

Matthew

Unless, of course, these shady wheeler dealers buy their products on the black market. I think the FairTax is a good idea though.

[Matthew Rogers]

Unless, of course, these shady wheeler dealers buy their products on the black market. I think the FairTax is a good idea though.

True. But I wonder how many criminals bother to go buy a $2,000 TV from a "dealer"? As Neil Bortz says, if someone wants to cheat, they will find some way to do it. It's always been that way, it will always be that way.

Glad to hear you like it. Now just 303,200,000 more Americans to convince!

Matthew

[Jeff Deveraux]

One possible down fall of the FairTax is that the corporations will be afraid that the American public will avoid buying things they don't need in order to save on taxes. Just about every lobbyist in Washington will fight it.

[Matthew Rogers]

One possible down fall of the FairTax is that the corporations will be afraid that the American public will avoid buying things they don't need in order to save on taxes. Just about every lobbyist in Washington will fight it.

But why would people avoid buying things when everything will be the same price (because you are already paying a 23% built in/passed on corporate tax) and you will be taking home ALL 100% of your pay? It should actually encourage people to spend more because they will be walking away with almost 23% more income each year. Of course, we need to be saving more as a country.... I would take what I am saving (since I am living fine even with paying income tax/social s.) and start saving that. It would help me to actually have some kind of savings! Actually, the system should help people to save because they aren't penalized for saving, but they are for spending (but hey, we won't notice it because the items are the same price!)

Let's face it. Americans love to spend money. Nothing is going to stop that. "Supposedly" our economy isn't doing well...but then why every time I go shopping, the stores are freakin packed with people buying absurdly priced crap?!;)

Matthew

[John DeBoer]

This gem has caused more problems in audits for many a rental and owner operated company.

In the spirit of the season, an late (or early, depending on how you look at it) Christmas present for all the new rental companies out there.....

You can elect to not pay taxes in California on your RED. However, nothing in life is free. You must then charge the state tax to all your clients.

www.boe.ca.gov/pdf/pub46.pdf

If you already paid for your camera without paying the state sales tax, you really have no remedy. You must now remit to the state all revenues that should have been collected. This means that any revenue you make from the camera, must have the sales tax applied, or it will be conisidered "tax included".



ANd this little gem was brought to you by:


John DeBoer
Director of HD Sales, Worldwide
Sim Video Group

www.Simvideo.com

(50+ reds, (#200 and up)

[Bob Torrance]

If this threat is about the partial sales tax exemption make sure you read it.

"Regulation 1532 (of Section 6378 of the tax code)

(C) definitions

(4) ...For the purposes of the regulation, "tele-production or other post-production services" includes post-production services and does not include production services or activities......

This bill was about post production. If you are going into the rental business it's a different animal. There are tax breaks for that but under a different set of rules.

disclaimer, I am not a tax advisor (I have a post business). Talk to your accountant.

[Mark B.]

If you're taking delivery in Washington, there's a 9% sales tax against the purchase.