An Act relative to Sales tax exemption for the Sale of Art
SECTION 1. The sale of a work defined as an original and creative work, whether written, composed, created or executed for “one of a kind, limited” production, which falls into the following categories, shall be exempt from the sale and use tax when sold by a writer, composer or artist who created such work and resides in the Commonwealth and who sells the work in the Commonwealth. The sale of a work by an art gallery located in the Commonwealth is also exempt from the sales and use tax.
(a)A book or other writing;
(b)A play or the performance of said play;
(c)A musical composition or the performance of said composition;
(d)A painting or drawing;
(f)Traditional and fine crafts;
(g)The creation of a film or the acting within said film;
(h)The creation of a dance or the performance of said dance
SECTION 2: Exceptions.
(a)A “work” shall not include any piece or performance created or executed for industry oriented or related production.
Section 3: A writer, composer or artist is deemed to be residing in the Commonwealth if he/she:
(a)Is domiciled in the Commonwealth
(b)Is not domiciled in the Commonwealth but maintains a permanent place of abode in the Commonwealth and is in the Commonwealth for more than one-hundred, eighty three days of the taxable year.
(c)Meets the requirements of either (a) or (b) above and physically occupies a place of abode in the Commonwealth.
Section 4: Application for Exemption
(a)Sales by Individuals – for a sale of a work to be exempt, an eligible writer, composer or artist must prior to the sale of the work, apply to the Department of Revenue for a Certificate of Exempt Sale on a form prescribed by the Department of Revenue. In determining the eligibility of the work for exemption the Department of Revenue may require the submission of all books, documents or other evidence relating to the creation of the work.
(b)Sales by Art Galleries – for the sale of work to be exempt by an art gallery, the operator of the art gallery must apply to the Department of Revenue for a sales tax exemption.
(c)The Department of Revenue may also require a writer, composer or artist, or the operator of an art gallery to submit an annual certified accounting of the numbers of works sold, the type of work sold and the date of sale. Failure to file such a report may, in the sole discretion of the Department of Revenue, terminate any further eligibility of the writer, composer, artist or art gallery.
Section 5: Compliance Under the Sales/Use Tax Law
(a)At the time of application, every writer, composer, artist or art gallery making any retail sales, whether or not such sales are exempt, shall hold a valid permit to make sales at retail and shall comply with all the administrative, collection and remittance requirements of the sales and use tax laws.
(b)The exemption number assigned to the artistic work by the Department of Revenue must be shown on the customer invoice. This exemption number must also be shown on the line designated as “other” deductions on the Sales and Use Tax Returns of the artist, writer, composer or art gallery, to substantiate the deduction taken from the gross sales being reported.
Section 6: Use Tax Exemption
(a)Any person storing, using or otherwise consuming in the Commonwealth any work or works which is deemed to be exempt from the sales tax pursuant to this section shall not be liable for the use tax on such work or works.
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