REQUEST LETTER

02-031

 

NAME

ADDRESS

PHONE

 

Request for Advisory Opinion

 

I am requesting your opinion on a matter of "Legal Video Service." I formally worked out of state in the legal video field. Our services were tax exempt. I am requesting this information from you on the service that I give to attorneys and courts in this field. I video tape legal depositions for court cases with attorneys and a court reporter. The Attorney takes the video and will use it in building his case. I also build cases with them using trial software and then go into the courtroom with them to present the case we have built.

 

What I am wondering is if your video laws pertaining to weddings, etc. are imposed on my legal business also? Or, is it taxed exempt? A court reporters transcript is not taxed in depositions, so why would the video? Also, for whatever reason when I received my business license, no one had come across this situation on the tax issue. Even though I know there are other places like myself in Salt Lake and some court reporting firms have "in house" videographers. No one can really tell me if they are having to charge sales tax themselves.

 

The downside is that the legal cost of litigation will surely rise. If you will please arrange a meeting where I could come and meet with you to discuss this matter I would greatly appreciate it. There is a lot more to this than what can be put on a paper in a appropriate amount of time. Please, respond as soon as possible. Feel free to call me with the number provided.

 

NAME

PHONE

 

RESPONSE LETTER

 

February 19, 2003

 

NAME

ADDRESS

 

RE: Private Letter Ruling – Taxation of Legal Video Services

 

Dear NAME,

 

We have received your request for a private letter ruling concerning the taxation of your legal video services. These services consist of videotaping legal depositions, helping attorneys prepare their cases using trial software, and helping attorneys present their cases in the courtroom.

 

Sales of most services are not taxable under Utah law, while sales of most items of tangible personal property are taxable. Utah Code Ann. §59-12-103(1). When you sell your services to help an attorney present a case in the courtroom or prepare the case beforehand, it is likely that these transactions are sales of nontaxable services. However, should you sell or lease canned computer software, as defined in Utah Admin. Rule R985-19S-92(A)(1), in the performance of these services, then more information would be needed before your tax liability can be determined.

 

It appears, however, that your primary concern in requesting this ruling is the taxation of videotaping legal depositions and other legal proceedings. You state that such sales were exempt from taxation in other states. Of course, Utah law may be different from the law found in other states. The only exemption in Utah law that relates specifically to video tapes is found in Utah Code Ann. §59-12-104(6), which provides that “sales of commercials, motion picture films, prerecorded audio program tapes or records, and prerecorded video tapes by a producer, distributor, or studio to a motion picture exhibitor, distributor, or commercial television or radio broadcaster” are exempt. (Emphasis added). As an attorney client would not be considered a “motion picture exhibitor, distributor, or commercial television or radio broadcaster,” sales of prerecorded video tapes to an attorney would not be exempt.

 

Regardless of the lack of a specific exemption, were the Commission to consider the video tape to be incidental to the sale of nontaxable videotaping services, then the entire transaction would be nontaxable. However, under similar circumstances, such as producing wedding videos, the Commission has found that the primary object of such transactions is the video tape itself, not the services. Accordingly, the sale of videotaping services, including videotaping legal proceedings, is considered a taxable sale. We also note that the Commission has previously found in USTC Advisory Opinion 96-154DJ (October 1, 1996) that videotaping services are taxable even if your client supplies a blank tape for you to use.

 

You also compare the videotaping of legal proceedings to the transcription services provided by a court reporter. Because transcription services have not been historically taxed in Utah, you believe the videotaping of legal proceedings should also be deemed nontaxable services. However, although there may be some argument to support the taxation of transcription services, the Commission feels it is inappropriate to reverse the current and long-standing treatment not to tax these services. Nor would we consider it reasonable to extend such nontaxable treatment to videotaping services. The Commission believes the distinction between videotaping of court proceedings, as opposed to transcription services, is sufficient, for the reasons stated above, to warrant different tax treatment for the two. Accordingly, we find that your services to videotape court proceedings are subject to sales tax under Utah law.

 

Please contact us if you have any further questions.

 

For the Commission,

 

 

 

Marc B. Johnson

Commissioner

 

MBJ/KC

02-031