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Revenue Administrative Bulletin 1989-65
SALES AND USE TAX EXEMPTION FOR COMMERCIAL RADIO AND TELEVISION BROADCASTERS
Approved: October 5, 1989
RAB-89-65 The purpose of this Bulletin is to clarify the sales and use tax exemption available to commercial radio and television broadcasters. [MCL 205.54a(i) and 205.94(o)]
In December 1988, P.A. 519 and P.A. 459 were passed amending the Sales and Use Tax Acts, respectively. Under the new laws.
- A specific exemption is given for certain tangible personal property purchased by persons licensed to operate commercial radio and television stations. The exemption is available when the property is used in the origination or integration of the various sources of program material for commercial radio or television transmission.
- The exemption specifically excludes a vehicle licensed and titled for use on public highways and property used in transmitting to, or receiving from, an artificial satellite.
Listed below and on the following pages are examples illustrating the tax treatment of various items associated with the broadcast industry.
Typical Tax Exempt Items
Tapes, recordings and film
Tape editing equipment
Film processing, editing and preview equipment
Film cameras and projectors
T.V. cameras and associated equipment
Turntable and playback equipment
Broadcast tape recorder systems, compact discs, audio cartridge decks, R-dat
Audio tape recorders, edit controllers, mixers
Master digital clock
Automated logging (traffic/scheduling) system
Audio and video cartridge machines
Monitor and switching equipment
Computer and weather graphic equipment
Studio consoles and production interconnecting amplifiers
Teleprompters, teletypewriters, wire service
Character generators, animation devises and frame synchronizers
Image storage equipment (still store) and associated disc drives
Digital audio and video effect equipment (paint box)
Optical laser (video) equipment
Remote broadcast equipment
Audio News Gathering equipment
Electronic news gathering and electronic film production equipment
Telephone lines/service between remote broadcast and permanent studio
Typical Taxable Items
Main and auxiliary transmitters
Transmitter cooling system, control console, and power switching equipment
Transmitter automation and emergency equipment
Transmitter remote control equipment
Antennas and supporting towers
Antenna deicing systems
Satellite receiving and sending equipment
Radio ground systems
Tower elevators and lighting equipment
Tower guy line snubbing systems
Tower strobe light systems
Transmission lines and line pressurizing equipment
Field test measuring equipment
Modulation, frequency, and phase monitors
Radio limiting amplifiers
Bridging and distribution amplifiers
Phase correcting equipment (monochrome and color)
Visual and aural monitoring equipment
Multi-channel sound systems (stereo generators and monitoring equipment-transmission area)
Production lighting systems
Production materials – props, script materials, sets
Studio lighting broads and fixtures
Racks and cabinets to house equipment
Two-way radio/paging systems
Mobile and cellular telephones
Telephone lines/service other than between remote broadcast and permanent studio
Vehicles licensed and titled for use on public highways (production equipment contained in vehicle may be exempt)
Typical Multiple Use Items
The following items generally have multiple uses within the broadcast industry. Where the items can be used or consumed in an exempt use and one or more other uses, the tax will apply to the items unless it can be determined and substantiated that a percentage use of the item or other apportionment of use is equitable and practical.
- Test equipment, maintenance equipment, replacement parts, and power requirements. These items are exempt if consumed in the studio production area and taxable when consumed in relation to the transmitter, tower, or satellite equipment.
- Microwave and related equipment. The communication link between the studio and the transmitter is taxable. However, between the studio and an off-site source gathering point the link is exempt.
- Audio/video processing equipment. Consumption in the transmitting area is taxable while pre-transmission use is exempt.
- Audio limiting and bridging/distribution amplifiers. Exempt if used to integrate sources of program material.
Any questions regarding the amendments to the commercial radio and television exemption section of the Sales and Use Tax acts may be directed to:
Michigan Department of Treasury
Sales, Use, and Withholding Tax Division
Lansing, Michigan 48922