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Business Taxes Law Guide—Revision 2024
Sales and Use Tax Annotations
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435.0000 Producing, Fabricating and Processing Property Furnished by Consumers—General Rules—Regulation 1526
Annotation 435.0595
(c) Miscellaneous Operations
435.0595 Conversion of Black and White Video Tape. The conversion of a black and white motion picture on video tape into color is a taxable sale pursuant to Regulation 1526(a). The transaction is as follows: An owner of a black and white motion picture provides the converter with a black and white master on one inch video tape. The converter's personnel performs the following: (1) lists all scenes and contents thereof, (2) determines the overall scene by scene color strategy, (3) does research for photographs, contemporary colored motion pictures, etc.. This is done in order to find materials for reference during the color conversion process, to electronically color convert the black and white video tape in accordance with the reference materials, and to provide the owner with a color master on one inch video tape.
The work performed is a sale of tangible personal property rather than a service. Although a certain amount of thought, skill, and labor must go into the converter's conversion process, the true object of the contract between the converter and the owner is the color master video tape. 9/22/86.
(Subsequent statutory change re "qualified motion picture.")