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Tax and Legal Information
Sales Tax Issues | Location Permits | Special Effects and Explosives Guidelines and Regulations | Labor | Everday Business Issues | Worker's Compensation | Unemployment Security | Income Tax | O Visas for Foreign Film, Television and Video Personnel
SALES TAX ISSUES
Sales Tax Exemptions - Master Tapes
Sales tax exemption is in effect in North and South Carolina on audiovisual master tapes used in the motion picture, television and audio production industries.
Sales Tax Exemptions
North Carolina - Motion picture production companies are entitled to a cap of one percent on sales and use tax purchases or rentals of items used in the making of films in North Carolina. Companies interested in the tax break should register with the Sales and Use Tax Division of the North Carolina Department of Revenue, P.O. Box 25000, Raleigh, NC 27640 or telephone (919)733-3661. Upon registration, the company may present a completed manufacturers' certificate to each vendor at the time of purchase of tangible personal property which would enter into or become an ingredient or component part of the film produced.
Effective October 1, 1997: An act to exempt from sales tax audiovisual master tapes used in the motion picture, television, and audio production industries.
"(22a) Sales of audiovisual masters made or used by a production company in making visual and audio images for first generation reproduction. For the purpose of this subdivision, an Ôaudiovisual master' is an audio or video film, tape, or disk or another audio or visual storage device from which all other copies are made. For the purpose of this subdivision, a production company is a person engaged in the business of making motion picture, television, or radio images for theatrical, commercial, advertising, or educational purposes."
South Carolina - Equipment and supplies used in the production of motion pictures and television programs are exempt from sales and use tax in South Carolina. To obtain this exemption, you must obtain a certificate of exemption from the South Carolina Department of Revenue by completing an Application for Certificate (form ST-10) and returning it to the local office of the South Carolina Department of Revenue. You may also download this form from our Web site: www.scfilmoffice.com.
The certificate is issued to qualifying companies and the exemption is made at the point of purchase. For further information, contact the South Carolina Department of Revenue (803) 898-5040 or the South Carolina Film Office (803) 737-0490.
Sales Tax Cap
North Carolina - Motion picture production companies are entitled to a cap of one percent on sales and use tax for purchases or rentals of items in the making of films in North Carolina.
South Carolina - Equipment and supplies used in the production of motion pictures and television programs are exempt from sales and use tax in South Carolina.
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LOCATION PERMITS
North Carolina - Film permits and fees are practically unheard of statewide. State law prohibits charging permit fees for shooting on state property.
South Carolina - In most cases there are none. The few exemptions are: Within state-owned facilities such as parks or similar properties, contact the South Carolina Parks, Recreation and Tourism Department, 1205 Pendleton Street, Suite 110, Columbia, SC 29201, (803)734-0122 or the South Carolina Film Office (803)737-0490. Within federally owned properties such as federal forests, buildings or military installations, contact the South Carolina Film Office at (803)737-0490.
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SPECIAL EFECTS AND EXPLOSIVES GUIDELINES AND REGULATIONS
South Carolina - A license for pyrotechnic operators is required when using any pyrotechnic effects. All licensing and permitting requirements for the handling, supervision and discharge of pyrotechnic materials within the state of South Carolina apply to the use of pyrotechnic materials before a proximate audience (including exterior shooting and in enclosed assembly areas).
No person who has not actively participated in the set-up and loading of at least five proximate audience performances in which pyrotechnic special effects were used shall be granted a license. (At the option of the issuing officer, an alternative number shall be permitted to be substituted.)
No person shall be granted a license who has not met the above, and at least one of the following:
1. Successfully completed a comprehensive written examination covering this code and state laws pertaining to the display of proximate audience pyrotechnic special effects.
2. Received a competency certificate from a national organization that promotes the safe use of pyrotechnic special effects and approved by the SCFM.
3. Has been licensed for the use of pyrotechnic special effects by another state approved by the SCFM. The issuing officer will determine the reciprocity on a case-by-case basis.
4. A letter from both the authority having jurisdiction and a licensed operator stating their satisfaction as to the qualifications of the operator and approved by the SCFM.
The SCFM shall designate the type of pyrotechnic operator's license issued on an individual basis.
Permits may be issued for:
1. One day to 30 consecutive days. ($300.00)
2. Greater than 30 consecutive days to 180 consecutive days. ($600.00)
3. Special, one performance, less than five effects, and an audience of less than 20 persons. ($25.00)
Applications for permits shall be received in the South Carolina Fire Marshal's Office fifteen (15) days prior to the performance date.
Should an application be received less than 15 days prior to the performance date, the application fee is doubled.
A Certificate of Insurance, for a minimum of $1,000,000 naming The State of South Carolina and its agents as additionally insured, should accompany the permitee's application. For detailed explanation of the regulations, please contact the SC State Fire Marshal's Office at: (803) 896-9800; fax: (803) 896-9806.
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LABOR
North Carolina/South Carolina - North Carolina and South Carolina are right-to-work states that welcome both union and non-union productions.
Child Labor
North Carolina - Exemptions from the child labor provision of the act:
The child labor provisions do not apply to:
Children under 16 years of age employed by their parents in occupations other than manufacturing or mining,or occupations declared hazardous by the Secretary of Labor.
Children employed as actors and performers in motion pictures, theatrical, radio, or television productions.
Children engaged in the delivery of newspapers to the consumer.
Homeworkers engaged in the making of wreaths composed principally of natural holly, pine, cedar or other evergreens including the harvesting of the evergreens.
N.C. Department of Labor- Wage & Hour Act -
Cherie K. Berry, Commissioner of Labor s95-25.5
Youth Employment.
-(a) No youth under 18 years of age shall be employed by any occupation without youth employment certificates unless specifically exempted.
The Commissioner of Labor shall prescribe regulations for the youth and employers concerning the issuance, maintenance and renovation of certificates. Certificates will be issued by county directors of social services, subject to review by the Department of Labor; provided, the Commissioner may by regulation require that the Department of Labor issue certificates for occupations with unusual or unique characteristics.
(g) Youth employed as actors,or as models or performers in motion pictures or theatrical productions or in radio or television productions are exempt from all provisions of this section except the certificate requirements of subsection.
Film companies should contact the North Carolina Department of Labor at (919)807-2796 and Mrs. Frances Mason for copies of the youth employment certificates. Each certificate is to be completed, signed, accompanied by a copy of the youths' birth certificates, and returned to Mrs. Mason at the North Carolina Department of Labor, Labor Building 4, West Edenton Street, Raleigh, N.C. 27611 for approval.
South Carolina - Section 41-13-20, South Carolina Code of Laws, 1976 (as amended), provides that the Commissioner of Labor shall promulgate regulations that will prohibit oppressive child labor practices but be no more restrictive or burdensome than applicable federal laws or regulations. It is the purpose of these regulations to resolve any contradictions between state and federal law and to protect the well-being of the children at work in this state. The state of South Carolina adopted the US Child Labor Laws under the Fair Labor Standard Act (WH Publication 1330, revised July 1978). Exemptions from the Child Labor Provision of the Act include: 71-3105-d. Child Labor Provision does not apply to children employed as actors or performers in motion pictures, theatrical, radio or television productions.
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EVERDAY BUSINESS ISSUES
North Carolina - Film companies considering incorporation as a North Carolina firm, or film-related companies seeking business licenses to operate within the state, should communicate with the Department of the Secretary of State at (919)733-0641 or 1(800)228-8443 for one-step service.
Transportation Coordinators who expect to bring vehicles into North Carolina should contact an official at the State Department of Transportation regarding over-dimensional vehicles, (919)733-7154: Questions about vehicle registration should be directed to the State division of motor vehicles, (919)733-7458; information on fuel, gas permits may be obtained from the State Department of Revenue at (919)733-3409.
Catering Mobile Coordinators servicing film production companies are required to obtain approval from local health departments in the area of their base operations, and are subject to inspection to determine that regulations governing such operations are being observed.
South Carolina - Nonresident companies wishing to do business in South Carolina must obtain a Certificate of Authority to Transact Business in South Carolina or withhold 2% of each payment on any contract services performed in the state as required by Section 12-9-310 of the South Carolina Code. For more information, contact the office of the South Carolina Secretary of State (803)734-2126 or the South Carolina Film Office at (803)737-0490.
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WORKER'S COMPENSATION
South Carolina - Employers employing four or more workers full time or part time are required to purchase workers' compensation coverage. Workers' compensation for private business is predominantly purchased through private insurance companies. The cost is based on job classification and averages $3.61 per $100.00. Employers do, however, have the flexibility of applying to the South Carolina Workers' Compensation Commission to pay claims directly as a self-insured employer. To exclude a business from the provisions of the Workers' Compen-sation Act, an employer must file an Employers' Notice to Reject (Form), with the South Carolina Workers' Compensation Commission in Columbia, South Carolina. The notice becomes effective 30 days after receipt by the commission. The employer must post the notice in a conspicuous place in the business in which employees are employed, or serve it personally to each employee. For further information, contact the South Carolina Workers' Compensation Commission at (803)737-5704.
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UNEMPLOYMENT SECURITY
South Carolina - Contributions to the unemployment trust fund must be paid by the businesses having a payroll of $1,500.00 or more in a given quarter. Unemployment Insurance is 2.64% of taxable payroll for a period of 24 months. After that time, rates are computed based on the experience of the employer. In addition to the contribution rate there is also an assessment, known as the Contingency Assessment, of .06% on the taxable wages reported each quarter. In some cases, it may be possible to report wages and pay compensation in a company's home state. The decision to grant reciprocity with another state for an individual company is decided on a case-by-case basis. For example: A company with operations in multiple states that has an active account in their home state if both states agree. For further information, contact the South Carolina Employment Security Commission at (803)737-3075.
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INCOME TAX
South Carolina - Employers are required to withhold taxes on income paid to individuals, both resident and nonresident, for services performed in South Carolina, when the total wages paid are in excess of $400.00 per year. Nonresidents paying tax on income earned in South Carolina may deduct the amount of taxes paid to South Carolina against taxes owed in the employees' home state. For further information, contact the South Carolina Department of Revenue (803) 898-5040 or the South Carolina Film Office (803)737-0490.
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O VISAS FOR FOREIGN FILM, TELEVISION AND VIDEO PERSONNEL
The O visa category enables foreign national producers, directors, and many other film or television personnel (and their essential crew members) to enter the United States to work on television, film, and video productions. Artists and entertainers, as well as directors and other essential technical and creative personnel who have a very high level of accomplishments in the motion picture or television industry can qualify for O-1 visa classification. Crew members who are essential to the production either because of a pre-existing, longstanding working relationship with the O-1 director or producer or because they will be involved in pre- and post-production work essential to the completion of the production, can qualify for O-2 visa classification to accompany the O-1 individual to the United States.
Foreign movie and television personnel entering the United States in O-1 and O-2 visa status can remain in the United States as long as necessary to complete the production activity, with an initial visa validity period of 3 years. Extensions of O-1 and O-2 visa status can be obtained to complete the production, as needed.
Individual O-1 and O-2 visa petitions are "pre-approved" by the Immigration and Nationality Service before the individuals enter the United States. This enables the production firm to know in advance which members of the production will be admitted to the United States to participate in production activities. Recognizing the special scheduling needs of film and television personnel, O-1 and O-2 visa petitions are usually handled quickly by the INS, as are the O-1 and O-2 passport visa stamp applications by the U.S. Consulates and Embassies.
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