Effective January 1, 1999, Revenue and Taxation Code section 6378 was added under the
provisions of Assembly Bill 2798, Chapter 323, Statutes of 1998, copy enclosed (See Section 6).
This section provides an exemption from the 5 percent state sales and use tax on purchases
of tangible personal property by qualified persons to be used primarily in teleproduction and
other postproduction services. The exemption also extends to tangible personal property
(with a useful life of one year or more) purchased for use by qualified persons to be used
primarily to maintain, repair, measure, or test any property described in the preceding sentence.
Enclosed are copies of an exemption certificate and use tax declaration. Qualified persons
who purchase or lease tangible personal property from an in-state retailer or an out-of-state
retailer obligated to collect the use tax must provide the retailer with an exemption certificate.
However, unlike a resale certificate, an exemption certificate must be provided each time a
purchase is made. The use tax declaration must be completed by a qualified person to claim a
partial exemption from use tax on purchases of tangible personal property from an out-of-state
retailer not obligated to collect the use tax. The use tax declaration should accompany a
timely filed sales and use tax return or consumer use tax return.
A regulation interpreting the provisions of Section 6378 is currently being drafted and
will be available in the near future for public review and comment.
Please contact Mr. Roy Hui at (916) 324-2952 if you would like to be added to the interested
party list for this proposed regulation.
