Tennessee Enacts Exemption for Certain Film Productions

Tennessee has enacted a sales and use tax exemption for qualified film or television production costs provided the Commissioners of Revenue and Economic and Community Development determine that the exemption is in the best interests of the state (such as jobs created or community impact). The film production costs include the sale, use, storage, or consumption of tangible personal property, computer software, or services that are necessary to and primarily used for a qualified production.

In order to be eligible for the exemption:

1. The applicant must apply to the Tennessee Film, Entertainment and Music Commission by explaining their basis for seeking an exemption;
2. If the Commission determines it is a qualified production, the Commission will notify the applicant and the Department of Revenue, and the applicant may apply to the Department of Revenue for the exemption;
3. The Department of Revenue will not approve the exemption unless the Commissioner of Revenue and the Commissioner of Economic and Community Development each determine in their sole discretion and in writing, that approving the exemption is in the best interests of the state.

If the exemption is granted, it will remain valid for two years after the effective date and may be renewed subsequently for two-year periods. A third-party

purchaser or consumer of tangible personal property, computer software, or services that are necessary to, and primarily used for, a qualified production granted an exemption may apply to the department to use the exemption to make exempt purchases. If approved by the department, the third party will be issued a sales and use tax exemption certificate that identifies the qualified production. (Tennessee H.B. 141, Laws 2021, effective July 1, 2021)