I just went through this with my accountant. He swore post production wasn’t taxable, and was similar to accounting. He hands me a stack of paper and his service isn’t taxable…I am paying for his service to fill out the papers. BUT,in Wisconsin, post production services are taxable because the final product, a tape, DVD or even a web stream is considered art or creative property and is taxable. We are, in fact, creating something and giving that to the client in one or more of many different forms. An accountant is only filling out forms correctly and is not, infact, creating anything. Lawyers are in the same non-sales-tax category in Wisconisn.
However, sales tax is only charged if you are selling those services to the end user of the product. If I sell a service to another production company and they will resell my services to their client, then I don’t charge sales tax. If I make 200 DVDs for a client who is then marking them up to their client and selling them, they charge the sales tax, not me. But if my services are direct to the end user of them, I do charge sales tax.
If you go to your state’s Department of Revenue page and go to the business section and look for Sales Tax, try to find a PDF that lists all the categories. In that PDF do a search for the text “advertising” or “video” or “tape” etc. In Wisconsin tax law it is listed under Advertising, but includes actual production and post production services.
It is going to be a state to state basis…
Rich Rubasch
Tilt Media
Paying corporate taxes since 2001…