Effective July 1, 2021, Public Chapter 70 (2021) creates a sales and use tax exemption relating to qualified productions in Tennessee.
The exemption applies to the sale, use, storage, or consumption of tangible personal property, computer software, or services that are necessary to and primarily used for a “qualified production” in this state.
A “qualified production” means:
- The production of a film, pilot episode, series, esports event, or other episodic content;
- The creation of computer-generated imagery, video games, or interactive digital media; or
- Stand-alone audio or visual post-production scoring and editing.
To apply for the exemption, the taxpayer must first apply to the Tennessee Film, Entertainment and Music Commission (“Commission”), describing the taxpayer’s basis for the exemption, including the nature of the production activities involved. If the Commission determines that the taxpayer is engaging in a qualified production in this state, the Commission will notify the taxpayer and the Department of Revenue of such determination. The taxpayer may then apply to the Department of Revenue for the exemption.
The taxpayer’s exemption application will be subject to the approval of the Commissioner of Revenue and the Commissioner of Economic and Community Development. If the exemption is approved, the Department of Revenue will issue a sales and use tax exemption certificate to the taxpayer that identifies the qualified production. A third party that purchases or uses tangible personal property, computer software, or services that are necessary to and primarily used for a qualified production in this state, for which a sales and use tax exemption is granted, may separately apply to the Department of Revenue for a sales and use tax exemption certificate relating to such qualified production.
A sales and use tax exemption certificate that is issued for a qualified production in this state will expire two years from its effective date. Individuals to whom the exemption certificate is granted may apply for a renewal of the exemption certificate through the process described above. Each renewed exemption certificate also expires two years from its effective date.