Finance - Industry Specific Information

Frequently Asked Questions

Questions:

	Our British Columbia motion picture company purchases blank tapes in British Columbia and pays PST on those tapes. We send those tapes to Ontario to have another company produce special effects on the tapes and ship them back. Do we have to pay PST for the special effects service?
	I am a screenplay writer. How does PST apply to my company?
	I operate a set building company for the movie/commercial industry. We assemble pre-built walls, windows, doors and ceilings for temporary use in studios, then dismantle them and put the products back into our stock inventory. Sometimes we custom build these items, then dispose of them after shooting. Do I charge PST on my fees?
	I provide video services for motion picture producers that include the video equipment and an operator. I bill for the video equipment, while the operator is paid from the production company's payroll. How do I apply PST?
	My production company gathers news stories, interviews people and takes scene shots. We also prepare and edit scripts, assemble news stories, arrange the broadcast order and lease airtime. This is done for a public television broadcaster. Do we add PST to the fees we charge the broadcaster?
	We buy music CDs and licence rights from out-of-province suppliers. We re-record this music for a particular commercial or television show. Do we pay PST for the CDs and licence rights?
	I own a television station in British Columbia. I have contracted with an out-of-province supplier to create a closed captioned service for some of their television programs. The supplier records the captions onto the master tape and sends the master to the client's out-of-province head office. The head office copies the tape and distributes copies to its British Columbia subsidiary. How does the British Columbia PST apply?
	Do I charge PST for post-production services, such as sound recording, sound dubbing and mixing?
	Do I charge my customers PST when I do a dig patch or ISDN sound transfer for them - transferring a voice digitally over the Internet?
	I provide audio recording services (musicians, live sound mixing etc.) for my customers. If my customer provides the blank tape and I record music onto it, do I have to charge PST?

Answers:

Our British Columbia motion picture company purchases blank tapes in British Columbia and pays PST on those tapes. We send those tapes to Ontario to have another company produce special effects on the tapes and ship them back. Do we have to pay PST for the special effects service?

No. You do not pay PST because adding a special effect is a non-taxable service, whether provided in British Columbia or another province.

You also do not pay PST if you purchase the tapes with the incorporated special effects from the Ontario company. Prior to recent changes in our tax laws, this was considered an effective way to reduce PST costs for customers. Now there is no need to have customers provide the blank tape because motion picture and audio recording services are non-taxable, even when the recording company provides a final tape or CD with the service.

I am a screenplay writer. How does PST apply to my company?

You are performing a non-taxable service when you write screenplays or scripts. You do not charge PST on the sale of the screenplay rights, but you pay PST on all taxable products used to create the screenplay, such as the screenwriting software.

I operate a set building company for the movie/commercial industry. We assemble pre-built walls, windows, doors and ceilings for temporary use in studios, then dismantle them and put the products back into our stock inventory. Sometimes we custom build these items, then dispose of them after shooting. Do I charge PST on my fees?

Yes. You charge PST on your fees to assemble and dismantle pre-built walls, windows, doors and ceilings for temporary use in studios.

I provide video services for motion picture producers that include the video equipment and an operator. I bill for the video equipment, while the operator is paid from the production company's payroll. How do I apply PST?

You do not charge PST because you are renting the equipment and providing the operator (regardless that the production company pays the operator's wages for the term of the rental). However, you must ensure that your lease agreement clearly shows that your company has the responsibility to provide the operator. You should pay PST when you purchase your video equipment.

My production company gathers news stories, interviews people and takes scene shots. We also prepare and edit scripts, assemble news stories, arrange the broadcast order and lease airtime. This is done for a public television broadcaster. Do we add PST to the fees we charge the broadcaster?

No. You do not charge the broadcaster PST because you are performing a non-taxable service. However, you pay PST on all equipment and products you use to perform that service.

We buy music CDs and licence rights from out-of-province suppliers. We re-record this music for a particular commercial or television show. Do we pay PST for the CDs and licence rights?

No. You do not pay PST on the CDs or licence rights because you are purchasing them to incorporate into another production.

I own a television station in British Columbia. I have contracted with an out-of-province supplier to create a closed captioned service for some of their television programs. The supplier records the captions onto the master tape and sends the master to the client's out-of-province head office. The head office copies the tape and distributes copies to its British Columbia subsidiary. How does the British Columbia PST apply?

You do not pay PST to the out-of-province supplier because the supplier is performing a non-taxable service, regardless that the service is performed out-of-province. Additionally, the closed captioned service that is incorporated into the final master recording is specifically tax exempt.

You do not charge PST on the sale or distribution of the copies to television stations because copies of audio and movie recordings for public broadcast are also specifically tax exempt

Do I charge PST for post-production services, such as sound recording, sound dubbing and mixing?

No. You do not charge PST as these are non-taxable services. However, you pay PST on all the equipment and supplies you buy or lease to perform the sound recording, sound dubbing and mixing.

Do I charge my customers PST when I do a dig patch or ISDN sound transfer for them - transferring a voice digitally over the Internet?

No. You do not charge your customers PST because you are not selling a tangible product; however, you pay PST on the cost of the ISDN service. Tax applies the same to digital audio file transfers over the internet via DSL, cable modem or T1 ethernet connections - you pay PST on your Internet Service Provider (ISP) connection fees.

I provide audio recording services (musicians, live sound mixing etc.) for my customers. If my customer provides the blank tape and I record music onto it, do I have to charge PST?

No. You do not charge PST. You are providing a non-taxable service whether your customer provides the blank tape, or whether you purchase the blank tape to record onto, and then sell to your customer.

Prior to recent changes in our tax laws, this was considered an effective way to reduce PST costs for customers. Now there is no need to have customers provide the blank tape because audio recording services are non-taxable, even when the recording company provides a final tape or CD with the service. However, you pay PST on all equipment and supplies you purchase or lease to perform the service.