Form Ste - Application For Sales Tax Exemption

Schedule STE Instructions

expense credit. The Commissioner will require withholding whether

or not the amounts paid are to “employees” or constitute “wages” as

For taxable years beginning on or after January 1, 2006 and before

What is the Sales Tax Exemption?

defined in M.G.L. c. 62B, § 1.

January 1, 2023, the Act provides sales tax exemptions that can be

asserted by a qualifying motion picture production company or a

qualifying film school student. M.G.L. c. 64H, § 6(ww). Production

A taxpayer (including an owner, parent or affiliate of the taxpayer) is

Line 3

expenses that qualify for the sales tax exemption under the Act may

not eligible for the payroll or production expense credit or the sales

also qualify for the production expense credit.

tax exemption if it is in default on a loan made by the Commonwealth

or a loan guaranteed by the Commonwealth.

Production companies who expend over $50,000 in Massachusetts

Who is Eligible for the Exemption?

production costs during a consecutive twelve-month period are eligi-

Enter the total overall estimated costs for the production. This should

Line 4

ble if they meet certain requirements. A motion picture production

include both Massachusetts and non-Massachusetts costs.

company is a company including its subsidiaries engaged in the busi-

ness of producing motion pictures, videos, television series, or com -

mercials intended for a theatrical release or for television viewing. The

Enter the total Massachusetts costs for the production. This should in-

Line 5

term “motion picture production company” shall not mean or include

clude only costs directly attributable to Massachusetts.

any company which is more than 25 per cent owned, affiliated, or con-

Note: Line 5 must be at least 50 per cent of line 4 to qualify for the

trolled, by any company or person which is in default on a loan made

exemption. If line 5 is not 50 per cent of line 4, the production may

by the Commonwealth or a loan guaranteed by the Commonwealth.

still qualify if line 13 is 50 per cent of line 12.

For taxable years beginning on or after January 1, 2006 and before

Eligibility Requirements

Enter the total Massachusetts qualifying payroll amount. Only actual

January 1, 2023, Massachusetts allows sales tax exemption for mo-

Line 6

payments to employees may be used to determine the qualifying

tion picture production companies who meet certain qualification re-

aggregate payroll, and only in the instance in which the payment

quirements. Production companies who incur at least $50,000 of

constitutes Massachusetts source income to the recipient. Qualify-

production costs in the Commonwealth and whose Massachusetts

ing aggregate payroll may also include fringe benefits to employees

production expenses exceed 50 percent of the total production costs

to the extent such benefits constitute Massachusetts source income.

or the Massachusetts shoot days are at least 50 percent of the total

Do not include payroll for salaries of “high salary employees”, where

shoot days are eligible for the sales tax exemption.

the employee’s salary is $1,000,000 or more.

The $50,000 qualification period serves as the “determination” period

What is a Qualifying Period?

Enter the Massachusetts wages and salaries of “high salary employ-

in that the taxpayer must incur in the Commonwealth at least $50,000

Line 7

ees”, where the employee’s salary is $1,000,000 or more.

of total production expenses during the consecutive twelve month

period to be eligible for sales tax exemption. In some cases, the tax -

payer may be able to choose between one or more possible $50,000

Enter the cost of set construction and other qualified production costs

Line 8

qualification periods. However, only one $50,000 qualification period

included in line 5.

is allowed for each motion picture. A taxpayer may choose to have a

$50,000 qualification period that is less than 12 months, but may not

subsequently reopen or extend this qualification period in order to

Enter location fees and cost of rental or purchased facilities and

Line 9

claim more qualifying expenses. In addition, the $50,000 qualification

equipment included in line 5.

period must be the same for the payroll credit, the production expense

credit and the sales tax exemption. Consequently, the choice of the

$50,000 qualification period (including choosing a period shorter than

Enter the total other Massachusetts production expenses.

Line 10

12 months) may have a bearing on the application of the production

expense credit and the sales tax exemption.

Enter the estimate of all Massachusetts production expenses included

Line 11

in line 5. This should be the total of lines 7 through 10.

Complete the general information section of this application with the

General Information

Note: The total of lines 6 and 11 should equal line 5.

information available at the time of filing. If the working title of the pro -

duction or any other information changes prior to filing for the actual

credit, please notify the Department. The qualifying period must be

Enter the total number of principal photography days on this

Line 12

determined at the time of filing and can not change at any time after

production.

the exemption is granted.

Enter the total number of principal photography days taking place in

Line 13

Indicate the type of entity.

Line 1

Massachusetts.

Mail to: Massachusetts Department of Revenue, Audit Division,

A taxpayer or its payroll company must be registered for withholding

200 Arlington Street, Room 4300, Chelsea, MA 02150, attn.: Film

Line 2

of Massachusetts personal income tax and must withhold from its

Credit Unit.

payroll expenses in order for the payments to qualify as an aggre-

gate payroll expense for purposes of the payroll credit or to qualify as

a Massachusetts production expense for purposes of the production

Form Ste - Application For Sales Tax Exemption - 2014 Page 2

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