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PA Bulletin, Doc. No. 00-1035

RULES AND REGULATIONS

Title 12--COMMERCE, TRADE AND LOCAL GOVERNMENT

DEPARTMENT OF COMMUNITY
AND ECONOMIC DEVELOPMENT

[12 PA. CODE CH. 33]

Commercial Motion Picture Sales Tax Exemption Certificate Form

[30 Pa.B. 3035]

   The Department of Community and Economic Development (Department), under the authority of section 204(54) of the Tax Reform Code of 1971 (TRC) (72 P. S. § 7204(54)), adopts Chapter 33 (relating to commercial motion picture sales tax exemption certificate). The purpose of the final-form regulation is to prescribe a Pennsylvania Exemption Certificate (FORM REV-1220) as the form to be used by producers of commercial motion pictures, who are qualified to take advantage of the Pennsylvania Sales and Use Tax exemption provided by section 204(54) of the TRC.

Introduction

   Section 204(54) of the TRC exempts from the tax imposed by section 202 of the TRC (72 P. S. § 7202) (Pennsylvania Sales and Use Tax) the ''sale at retail to or use by a producer of commercial motion pictures of any tangible personal property directly used in the production of a feature-length commercial motion picture distributed to a national audience: Provided, however, that the production of any motion picture for which the property will be used does not violate any Federal or State law; and, Provided further, that the purchaser shall furnish to the vendor a certificate substantially in the form as the Department of Community and Economic Development may, by regulation, prescribe, stating that the sale is exempt from tax pursuant to this clause.'' Before qualified producers of commercial motion pictures can take advantage of the tax exemption, they must know what form of certificate to use. Under section 204(54) of the TRC, only the Department may prescribe the type of certificate to be used.

   The Department received only one comment to the proposed regulation. The comment came from the Independent Regulatory Review Commission (IRRC) and dealt with the Department's inconsistent use of the terms ''exemption'' and ''exclusion.'' Because the use of these terms affects the burden of proof, IRRC recommended that only one term be used and recommended the sole use of the word ''exemption,'' because use of that term places the burden of proof on the taxpayer claiming the exemption, rather than the Commonwealth. The Department welcomed the comment and has implemented it in the final regulation.

Analysis

   Section 33.1 (relating to form required) prescribes the type of certificate to be furnished by a qualified producer of commercial motion pictures to a vendor to comply with the statutory exemption from the Pennsylvania Sales and Use Tax.

Fiscal Impact

   The final-form regulation has no fiscal impact on the Commonwealth, political subdivisions or the public.

Paperwork

   Because the certificate to be used by qualified producers of commercial motion pictures is a Pennsylvania Exemption Certificate (FORM REV-1220) which is already in use, the final-form regulation imposes no new or different paperwork requirements.

Regulatory Review

   Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), the Department submitted a copy of the notice of proposed rulemaking, published at 28 Pa.B. 1530 (March 18, 1998) to IRRC, the Chairpersons of the House Commerce and Economic Development Committee and the Senate Community and Economic Development Committee for review and comment.

   In compliance with section 5(c) of the Regulatory Review Act, the Department also provided IRRC and the Committees with copies of the comments received, as well as other documentation. In preparing this final-form regulation, the Department has considered the comments received from IRRC, the Committees and the public.

   Under section 5.1(d) of the Regulatory Review Act (71 P.S. § 745.5a(d)), this final-form regulation was deemed approved by the House and Senate Committees on May 1, 2000. Under section 5.1(e) of the Regulatory Review Act, IRRC met on May 11, 2000, and approved the final-form regulation.

Effective Date/Sunset Date

   This final-form regulation will become effective upon final publication in the Pennsylvania Bulletin and shall apply retroactively to May 7, 1997. This final-form regulation will expire when section 204(54) of the TRC no longer requires the Department to prescribe the type of certificate to be used under this section.

Contact Person

   For an explanation of this final-form regulation, contact Jill Busch, Deputy Chief Counsel, Department of Community and Economic Development, 524 Forum Building, Harrisburg, PA 17120, (717) 720-7314.

Findings

   The Department finds that:

   (1)  Public notice of intention to adopt this regulation has been given under sections 201 and 202 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. §§ 1201 and 1202).

   (2)  That the regulation is necessary and appropriate.

Order

   The Department, acting under the authorizing statute, orders that:

   (a)  The regulations of the Department, 12 Pa. Code, are amended by adding § 33.1 to read as set forth in Annex A.

   (b)  The Department shall submit this order and Annex A to the Office of Attorney General and the Office of General Counsel for approval as to legality as required by law.

   (c)  This order shall take effect upon publication in the Pennsylvania Bulletin and apply retroactively to May 7, 1997.

SAMUEL MCCULLOUGH,   
Secretary

   (Editor's Note:  For the text of the order of the Independent Regulatory Review Commission relating to this document, see 30 Pa.B. 2688 (May 27, 2000).)

   Fiscal Note:  Fiscal Note 4-67 remains valid for the final adoption of the subject regulation.

Annex A

TITLE 12.  COMMERCE, TRADE AND LOCAL GOVERNMENT

PART I.  GENERAL ADMINISTRATION

Subpart E.  COMMERCIAL MOTION PICTURE SALES TAX EXEMPTION CERTIFICATE

CHAPTER 33.  COMMERCIAL MOTION PICTURE SALES TAX EXEMPTION CERTIFICATE

Sec.

33.1.Form required.

§ 33.1.  Form required.

   Producers of motion pictures, who are qualified to take advantage of the Pennsylvania Sales and Use Tax exemption provided by section 204(54) of the Tax Reform Code of 1971 (72 P. S. § 7204(54)), shall use a Pennsylvania Exemption Certificate (FORM REV-1220).

[Pa.B. Doc. No. 00-1035. Filed for public inspection June 16, 2000, 9:00 a.m.]


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