Broadway Bound! Exempt Dramatic and Musical Arts in New York
- Sales Tax News
- Aug 20, 2014 | Gail Cole
Hollywood may be home to the cinema, but does anyplace say live dramatic and musical arts performances like New York? Perhaps that’s why certain property and services used in dramatic and musical arts performances are exempt from New York sales and use tax.
In order for an exemption to be valid, the purchase must be documented by the proper exemption certificate: Form ST-121.9. The exemption certificate must be submitted to the seller “within 90 days of the delivery of the property or the performance of the service.” Both paper and electronic exemption certificates may be used.
Live dramatic and musical arts performances meeting all of the following conditions are eligible for an exemption from sales tax:
- The production/performance is presented in a theater or other similar place of assembly in New York State (excluding roof gardens, cabarets, or other similar places).
- The production/performance is performed in a facility at least 100 permanently installed seats.
- The production/performance is presented to the public at least five times a week for a period of at least two consecutive weeks.
- The content of each production/performance is the same.
- There is a charge for admission to each production/performance.
In addition, the exemption only applies to tangible personal property “used or consumed directly and predominantly in the production of qualifying live dramatic or musical arts performances.” “Directly” means:
- It is used to prepare the state for performances.
- It is on stage during performances.
- It is otherwise actually used directly in producing the performances.
“Predominantly” means “more than 50% of its use is in the production of the performances.”
Exempt services “must be performed on exempt tangible personal property” (such as scenery and scenic elements, lighting and sound equipment, props and costumes) and include:
- The installation, repair, maintenance or servicing of exempt personal property,
- The production, fabrication, processing, printing, and imprinting of tangible personal property for a person who directly or indirectly furnishes the property.
Not everything related to the production of dramatic and musical performances is exempt. Sales tax applies to:
- Tangible personal property that is permanently affixed to or becomes an integral component part of a building, structure or land.
- Property or services used for administrative purposes.
- Advertising and promotional materials.
- Electricity and other utilities.
- Food, drink and gifts purchased for the cast and crew.
Abuse of the exemption described above may lead to penalties, criminal felony prosecution, and the revocation of the Certificate of Authority in New York.
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