98-004
Response February 3, 1998
December
29, 1997
Dear
Ms. Reese:
On
this date we received a notice of Failure to File "Tourism Tax" on
Sales Tax License
#####.
We
realize the statute calls for collection of this tax on vehicle rentals or
leases less than 30 days in length. However we are in a unique position
relative to the law in that the cars we rent are not for tourists nor
recreational purpose.
We
rent police cars and ambulances equipped with red lights, sirens and radios
which serve as props in movies filmed in northern Utah. The cars are usually
transported to the movie on a trailer due to the laws against red lights being
shown forward. They may or may not be driven relative to a scene in the
movie... in most cases they are parked with the lights flashing and serve as
additional substantiation to the movie scenes.
At no time do they meet the criteria of "tourism" or
"recreational purposes".
I
have enclosed a certificate of insurance from one of the productions. You can verify with the State Film
Commission, the average movie of the week is in production 5-8 weeks, the
average theatrical film is in production from 12 weeks up... and the two XXXXX
series produced locally are in production approximately 9 months of the year.
We are contracted verbally to provide props of uniforms, belts, plastic guns,
cars etc for the police presence in the productions. Once a prop has been
photographed, or established, in a production, we have to make that prop
available through the entire production, even tho we can only bill for the days
it is used, unless it is hired open-ended for "run of production". I
therefore believe further that the "under 30 day" provision does not
apply in our case either. All of this information can be supported by the staff
at the film commission. We invite your
opinion as to the assessment of this tourist tax, an earlier inquiry to your
office stated that under the circumstance they felt it would not be applicable.
I called today upon receipt of the notice and talked to Mr's Steve Anderson and
Jeff McNemar and both agreed we were in a grey area and that we should seek a
solution through your office. They have placed a 30 day hold on the letter sent
to us in order to allow us to seek an interpretation that would grant us relief
from this situation.
Thank
you for your consideration, and I look forward to a speedy resolution.
NAME
February
3, 1998
NAME
ADDRESS
CITY
STATE ZIP
Advisory
Opinion - Application of tourism tax to rentals of vehicles used as props in
films.
Dear
NAME,
We have received your request for tax
guidance pertaining to the rental of vehicles used as props in the production
of films. As we understand your
business, you rent equipment, including vehicles, to movie makers for use as
props in their productions. As to the
vehicles, approximately 70% of the vehicles in your inventory are not
registered for use on our highways.
These are delivered to the movie shoot site on a trailer. As a rule, they are towed by a camera
trailer during the shoot. The remainder
of your vehicles are registered for the purpose of driving them on the highways
to deliver them to the movie shoot site.
You deliver them to the site, and your customer (the lessee) never
operates them on the highways except to extent that they may be moved around
the movie shoot site. The vehicles
involved include emergency vehicles, such as ambulances and police cars, and
may also include wrecked cars used for accident scenes. Specifically, you asked if the tourism tax and the motor vehicle rental tax apply to
your transactions.
The statutes that impose these two
taxes do not specifically address your situation. However, we have concluded that these taxes are intended to be
imposed on motor vehicles as that term is defined in section 41-1a-102 of the
Utah Code. That statute defines motor
vehicle as a “self-propelled vehicle intended primarily for use and operation
on the highways.” As to the
unregistered vehicles, the answer to your question is fairly simple. Unregistered cars cannot be driven on the
highways, so we assume that they are not “intended primarily for use and
operation on the highways.” As to the
registered vehicles, the registration serves your purposes, not your lessee’s
purposes. Once rented, the vehicles are
not used by the lessee primarily for operation on the highways. Because these rentals are not rentals of
motor vehicles which are intended or expected to be operated on our highways,
the transportation tax and the tourism tax do not apply. However, these rentals are subject to sales
tax.
Please let us know if you have
additional questions or comments.
For
the Commission,
Joe
B. Pacheco,
Commissioner
^^