Taxable Sales

Sales and rentals of videos are taxable regardless of how they are delivered to the customer. This includes:

• Videos sold in a tangible (physical) format, such as on tape, CD or DVD, or flash drive.
• Video transferred electronically, which became a “taxable digital product” on July 1, 2013. Common examples include:
  • Accessing video on a website
  • Streaming video
  • Uploading and downloading Internet videos
  • Sending video by email

Note: Selling access to view or use videos is taxable – whether temporary or permanent – even if the purchaser does not make or retain a copy.

For more information, see Digital Products.

Video production services are taxable when they result in the sale of a tangible (physical) product or taxable digital product. All charges to create, modify, or alter these products are taxable, even if the customer provides some of the materials or equipment. For details, see Revenue Notice #06-11, Sales Price Labor Charges.

Examples of video production services include:

• filming
• editing
• voice-overs
• animating