Rule 560-12-2-.17 - Broadcasting and Broadcasting Distribution; Cable, Radio, and Television(1) Radio, Television and Cable Broadcasters or Distributors are primarily engaged in the business of broadcasting or distributing radio or television signals over the free airwaves or by satellite or cable. These activities constitute a service that is not subject to sales and use tax. Such broadcasters and distributors are subject to sales and use tax on all purchases or leases unless otherwise exempt within the Act and this Regulation.(2) Definitions. For purposes of qualifying for the exemption provided for by O.C.G.A. § 48-8-3(74), and as used in this Regulation, the following definitions and explanation of terms shall apply. (a) The term "cable distributor" means any entity or enterprise, public or commercial, primarily engaged in providing broadcast programming over a cable system for purchase by subscribers or customers. Such entity delivers visual, aural, and textual programming received from cable networks, federally licensed commercial or public radio or television stations to consumers via a cable system or a direct-to-home satellite system on a subscription or fee basis.(b) The term "cable network" means any entity or enterprise, public or commercial, primarily engaged in operating studios and facilities for the broadcasting of programs on a subscription or fee basis. These companies produce programming in their facilities or acquire programming from other sources that are usually delivered to a third party for cable or satellite transmission to viewers.(c) The term "digital broadcast equipment" means, equipment purchased, leased, or used for the origination or integration of program materials for broadcast over the airwaves or transmission by cable, satellite, or fiber optic line which uses or produces an electronic signal where the signal carries data generated, stored, and processed as strings of binary data. Data transmitted or stored as digital data consists of strings of positive or nonpositive elements of a transmission expressed in strings of 0's and 1's which a computer or processor can reconstruct as an electronic signal.(d) The term "diskettes" means any blank recordable digital audio storage media used to record digital signals in the broadcast operations.(e) The term "federally licensed commercial or public radio or television station" means any entity or enterprise, either commercial or noncommercial, which operates under a license granted by the Federal Communications Commission for the purposes of free distribution of audio and video services when the distribution occurs by means of transmission over the public airwaves.(3) Purchases. Except as provided for in paragraph (4) the tax applies to all equipment, and other tangible personal property purchased, leased, or rented for use in producing and broadcasting radio, television and cable signals. Such purchases or leases include but are not limited to recordings, costumes, make-up materials, lumber, and other materials used in construction of stage property and scenery, transistors, condensers, transformers, tubes for lighting control, slides, and other non-digital broadcast equipment.(4) Digital Broadcast Equipment Exemption. (a) In accordance with O.C.G.A. § 48-8-3(74), transactions occurring on or after July 1, 2001, which involve the purchase or lease of digital broadcasting equipment, not otherwise exempt under Chapter 8 of Title 48 of the Official Code of Georgia Annotated, will be exempt from sales and use tax up to the specific purchase or lease dates as provided for in this Regulation.(b) Purchases or leases made by a federally licensed commercial or public radio broadcaster on or after July 1, 2001 through the last date of analog transmission or November 1, 2008, whichever occurs first, shall be exempt from the tax upon the issuance of the Certificate of Exemption.(c) Purchases or leases made by a federally licensed commercial or public television, or cable distributor or cable network on or after July 1, 2001 through the last date of analog transmission or November 1, 2004, whichever occurs first, shall be exempt from the tax upon the issuance of the Certificate of Exemption.(d)General Requirements for the Digital Broadcasting Equipment Exemption. In order to qualify for the digital broadcast equipment exemption provided for in O.C.G.A. § 48-8-3(74) and this Regulation, the following conditions must be met: 1. The qualified purchasers or lessees of such digital broadcast equipment must obtain a Certificate of Exemption from the commissioner as provided in paragraph (4)(e) of this Regulation. The application for such Certificate must contain a schedule of planned purchases or leases of qualified equipment for which the application is filed.2. The equipment must be purchased or leased exclusively for installation and operational use in this State by a qualified entity or enterprise as designated in O.C.G.A. § 48-8-3(74).3. The exemption is limited to the original purchase or lease of such eligible digital broadcast equipment and shall not extend to digital equipment purchased or leased to replace equipment previously extended exemption.(e)Application and Certificate of Exemption. 1. Any purchasers or lessees desiring to secure the benefits of the exemption provided by O.C.G.A. § 48-8-3(74)must file an Application for Certificate of Exemption (Form ST-BE1). The application shall include the business name, address, physical location, anticipated dates of purchase or lease, and a schedule of the anticipated digital broadcast equipment to be purchased or leased including sales price, manufacturer, supplier, and a description of the digital equipment's function. In addition thereto, the commissioner may require such other information as deemed necessary for the determination of the claim for exemption. This requirement is also applicable to holders of direct payment permits granted under Regulation 560-12-1-.16.2. Upon approval of an application, the commissioner will issue a Certificate of Exemption (Form ST-BE2) for presentation by the purchaser or lessee to the equipment suppliers, whereupon the purchaser or lessee shall be relieved from the payment of the tax and the equipment suppliers shall be relieved from the collection of the tax.3. Where the Certificate of Exemption (Form ST-BE2) has not previously been obtained and tax is collected or accrued on the purchase or lease of digital broadcast equipment which may qualify for exemption, the purchaser or lessee may apply for a refund of such tax. The Claim for Refund (Form ST-12) shall be accompanied by an Application for Exemption (Form ST-BE1) and any other documentation deemed necessary by the commissioner.(f)Specific Applications; Exemptions and Exceptions Relating Thereto. 1. For the purposes of federally licensed commercial or public television broadcasters and cable distributors, the term digital broad- cast equipment shall be limited to antennas, transmission lines, towers, digital transmitters, studio to transmitter links, digital routing switches, character generators, Advanced Television Systems Committee video encoders and multiplexers, monitoring facilities, cameras, terminal equipment, tape recorders, and file servers.2. For the purposes of federally licensed commercial or public radio broadcasters, the term digital broadcast equipment shall be limited to transmitters, digital audio processors and diskettes.3. For the purposes of cable networks, the exemption will apply to all digital broadcast equipment as defined in paragraph (2)(c) of this Regulation.4. If, after obtaining the Certificate of Exemption required under paragraph (4)(e) of this Regulation, the actual purchase(s) or lease(s) fails to meet the requirements of this exemption, the purchaser or lessee will be liable for tax and, if applicable, penalty and interest on the purchase(s) or lease(s).5. In cases where equipment has multiple uses (digital and analog), the taxability or exemption will be determined by the equipment's use. The equipment's use must meet the following requirements in order to be eligible for the exemption: (i) The equipment must use a digital signal; and(ii) The equipment is used as an essential part of a process to originate or integrate a digital signal for transmission or broadcast. (I) The equipment's use requirements as set forth under paragraph (4)(f)5. may be illustrated through the following examples:I. A piece of equipment used to convert analog signals to digital would qualify for the exemption.II. A piece of equipment that uses a digital signal but that is not used as part of a process that originates or integrates a digital signal for transmission or broadcast would not qualify for the exemption.III. A piece of equipment that converts a digital signal to analog as part of a process that originates or integrates a digital signal for transmission or broadcast purposes would qualify.IV. An antenna used to simulcast broadcast digital and analog signals would qualify for the exemption when purchased or leased with the ultimate purpose of exclusively broadcasting digital signals.6. The exemption provided for under O.C.G.A. § 48-8-3(74)shall only extend to the original purchase or lease of eligible digital broadcast equipment and shall not extend to the replacement of such equipment or to the repair or upgrading of the equipment.7. For the purposes of determining whether diskettes are original or replacement purchases for radio broadcasters and cable networks, it shall be presumed that diskettes purchased twelve months after the date of the first application for exemption are replacements.8. The exemption provided for under O.C.G.A. § 48-8-3(74)shall not extend to any person who contracts to furnish tangible personal property and perform services under a real property contract. Contractors are deemed to be the consumer of all tangible personal property used in a real property contract and shall pay the tax at the time of purchase.9. Examples of items that do not qualify for the exemption include, but are not limited to, real property improvements, lighting equipment, power supplies, analog broadcast equipment, diskettes or video tapes containing audio or video recordings purchased for broadcast, converter boxes, repairs to equipment, replacement of digital broadcast equipment where the exemption has previously been granted or the replacement of any other equipment and spare equipment.(5) Sales. (a) Charges for services rendered by radio, television broadcasters and cable network or cable distributors, including advertising, line charges, talent fees or other such charges are not subject to the tax.(b) The sale or rental of prerecorded video tape or motion picture film by federally licensed radio and television broadcasters or cable network or distributors for broadcast would be subject to the tax unless purchased or leased by a dealer charging admission to view the production.(c) Video tape or motion picture film recorded onto a radio or television broadcaster's or cable network's or distributor's own tapes, reels, or other storage medium at its own premises for later broadcast shall not be considered the sale or rental of video tape or motion picture film.(d) A transaction which involves only a charge for a copyright license and does not involve a sale, lease, or rental of video tape or motion picture film would not be considered taxable.(e) The sale of cable broadcasting through a cable distributor through a subscription or fee basis is not considered a taxable transaction. The lease or rental of a converter box or other tangible personal property to a cable subscriber is considered a taxable transaction.(f) If a television or radio broadcasting station, cable distributor or cable network makes retail sales of tangible personal property, the tax must be collected and remitted on such sales to the commissioner.Ga. Comp. R. & Regs. R. 560-12-2-.17
O.C.G.A. Secs. 48-2-12, 48-8-3.
Original Rule entitled "Broadcasting, Radio and Television" adopted. F. and eff. June 30, 1965.Amended: F. June 10, 1980; eff. June 30, 1980.Repealed: New Rule of same title adopted. F. Nov. 17, 1992; eff. Dec. 7, 1992.Amended: ER. 560-12-2-0.15-.17 entitled "Broadcasting and Broadcasting Distribution; Cable, Radio, and Television" adopted. F. July 6, 2001; eff. July 2, 2001, the date of adoption.Amended: Permanent Rule of same title adopted. F. Oct. 11, 2001; eff. Oct. 31, 2001.