| 4 | 10 | | AN ACT |
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| 5 | 11 | | relating to the sales and use tax exemption for property used in the |
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| 6 | 12 | | production of motion picture, video, or audio recordings and |
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| 7 | 13 | | broadcasts. |
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| 8 | 14 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 9 | 15 | | SECTION 1. The heading to Section 151.3185, Tax Code, is |
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| 10 | 16 | | amended to read as follows: |
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| 11 | 17 | | Sec. 151.3185. PROPERTY USED IN THE PRODUCTION OF MOTION |
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| 12 | 18 | | PICTURE, [PICTURES OR] VIDEO, OR AUDIO RECORDINGS AND BROADCASTS. |
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| 13 | 19 | | SECTION 2. Section 151.3185, Tax Code, is amended by |
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| 14 | 20 | | amending Subsections (a) and (e) and adding Subsection (h) to read |
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| 15 | 21 | | as follows: |
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| 16 | 22 | | (a) The sale, lease, or rental or storage, use, or other |
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| 17 | 23 | | consumption of the following items are exempted from the taxes |
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| 18 | 24 | | imposed by this chapter: |
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| 19 | 25 | | (1) tangible personal property that will become an |
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| 20 | 26 | | ingredient or component part of: |
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| 21 | 27 | | (A) a motion picture, [or] video, or audio master |
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| 22 | 28 | | recording, a copy of which is sold or offered for ultimate sale, |
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| 23 | 29 | | licensed, distributed, broadcast, or otherwise exhibited for |
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| 24 | 30 | | consideration; or |
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| 25 | 31 | | (B) a broadcast by a producer of cable programs |
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| 26 | 32 | | or by a radio or television station licensed by the Federal |
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| 27 | 33 | | Communications Commission; |
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| 28 | 34 | | (2) tangible personal property that is necessary or |
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| 29 | 35 | | essential to and used or consumed in or during: |
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| 30 | 36 | | (A) the production of a motion picture, [or] |
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| 31 | 37 | | video, or audio master recording, a copy of which is sold or offered |
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| 32 | 38 | | for ultimate sale, licensed, distributed, broadcast, or otherwise |
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| 33 | 39 | | exhibited for consideration; or |
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| 34 | 40 | | (B) the production of a broadcast by or for a |
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| 35 | 41 | | cable program producer or by or for a radio or television station |
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| 36 | 42 | | licensed by the Federal Communications Commission; and |
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| 37 | 43 | | (3) except as provided by Subsection (c), services |
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| 38 | 44 | | that are necessary and essential to and used directly in a |
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| 39 | 45 | | production described by Subdivision (2)(A) or (B). |
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| 40 | 46 | | (e) The sale of a motion picture, video, or audio master |
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| 41 | 47 | | recording by the producer of the master recording is exempt from the |
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| 42 | 48 | | taxes imposed by this chapter. |
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| 43 | 49 | | (h) In this section, "master recording" means the principal |
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| 44 | 50 | | media on which images, sound, or a combination of images and sound |
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| 45 | 51 | | are first fixed and from which copies are commercially made |
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| 46 | 52 | | available for sale, license, distribution, broadcast, or |
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| 47 | 53 | | exhibition for consideration. |
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| 48 | 54 | | SECTION 3. The amendment made by this Act is a clarification |
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| 49 | 55 | | of existing law and does not imply that existing law may be |
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| 50 | 56 | | construed as inconsistent with the law as amended by this Act. |
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| 51 | 57 | | SECTION 4. This Act takes effect immediately if it receives |
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| 52 | 58 | | a vote of two-thirds of all the members elected to each house, as |
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| 53 | 59 | | provided by Section 39, Article III, Texas Constitution. If this |
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| 54 | 60 | | Act does not receive the vote necessary for immediate effect, this |
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| 55 | 61 | | Act takes effect September 1, 2019. |
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