WAC 227

Advertising Income-Cable Television Producers Repealed 6/30/2000 - This information is provided in WAC 458-20-227 (Subscriber television services).

"Gross income of the business."

Tax on selected business services, financial businesses, or other business or service activities.

Subscriber television services.Effective 3/16/91

B&O TAX -- DEDUCTIONS -- SATELLITE FEES, COPYRIGHT FEES & FRANCHISE/UTILITY TAXES -- CABLE TELEVISION CO. Satellite and copyright fees passed on to Washington subscribers by Washington cable company are fully B&O taxable. Taxpayer's activity is entirely intrastate, thus no commerce clause violation. Franchise tax not deductible because not collected by taxpayer as agent for taxing authority.

B&O TAX, USE TAX -- CABLE -- RENTAL -- CONVERTERS. A cable television company's receipts from the rental of remote control units and standard converters are taxable under the retailing classification. Addressable converters which descramble the company's signal for premium channels are for the premium service and receipts labeled as "rental" for these converters are taxed under the service and other activities classification. The taxpayer owes deferred sales/use tax on purchases of addressable converters since they are not for resale.

SUBSCRIBER TELEVISION SERVICES.Taxpayers who have a contract with a video entertainment provider under which the provider is permitted to make videos available to hotel guests for which the hotel receives a commission are not in the subscriber television business based on the following:they do not provide television programming; do not pay a cable tax or fee to the city they operate in; and do not own any transmission facilities, distribution lines, or equipment that is being used to provide this service to guests.

USE TAX – EXEMPTION --PRODUCTION EQUIPMENT ACQUIRED AND USED BY A MOTION PICTURE OR VIDEO PRODUCTION BUSINESS – SATELLITE UPLINK SERVICE.The sales and use tax exemption for production equipment acquired by a motion picture or video production business does not apply to equipment acquired and used by a company that provides satellite uplink of live programming.Neither the fact that the service performs some editing and engineering of the signal before uplink, nor the fact that the service makes a video tape of the signal for its customer for the customer’s possible later use, requires that t

RULE 227(3), RULE 178; RCW 82.12.020, RCW 82.04.190(2): USE TAX – DIRECT BROADCAST SATELLITE PROGRAMMING – FREE EQUIPMENT AND INSTALLATION: Providers of direct broadcast satellite programming, as consumers, are liable for deferred sales tax/use tax per on equipment and the installation of that equipment they gave to their subscribers for free.

Rule 241, Rule 227; RCW 82.04.280: B&O TAX – RADIO OR TELEVISION BROADCASTING CLASSIFICATION – LICENSING CONTENT TO CABLE TELEVISION COMPANIES. A taxpayer that relicenses copyrighted television programs to cable companies for transmission to cable subscribers does not qualify for the television broadcasting rate in RCW 82.04.280(1). The taxpayer’s advertising revenues are taxable under the service B&O tax rate.

B&O TAX -- BROADCASTING -- CABLEVISION -- ADVERTISING. A taxpayer, in using, in part, its own equipment to transmit client advertising on a cablevision network during purchased timeframes, is functioning as a cablecaster.The revenue it receives from its clients for scheduling and transmitting those commercials, under the holding of Community Telecable, is thus "advertising revenue" taxable under the special Broadcasting classification.