It is not a complete text of the law covering sales tax exemptions for filmmakers, nor is it written in the exact language of the law. These exemptions are covered in the Texas Tax Code, Section 151.3185, and the Comptroller of Public Accounts Administrative Rule 3.300. Producers may claim exemptions on purchases, rentals or leases of qualifying machinery, equipment and supplies, and on many services performed during production or postproduction. Use tax, at the same rates as sales tax, is due on items purchased outside the state and used in Texas, but the State of Texas may allow credit for any sales or use tax that has been paid in another state. Items exempt from Texas sales tax are also exempt from Texas use tax.
Similar exemptions are also available to multimedia and audio producers.
To qualify for an exemption, an item or service must be necessary and essential to the making of the master film or tape, and must be used directly and exclusively in production or postproduction. Items are tax-exempt only if they are used exclusively in production, and not retained for other use. Repairs to qualifying machinery, equipment or supplies are also exempt. These goods and services are not exempt because they are not used directly in production or postproduction. Duplication of a master tape is taxable unless the copies are being made for resale.