May 16, 2019

Indie Filmmaking Is About to Get More Expensive in the U.S.

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Tariffs and enhanced tax enforcement are going to raise the price of the gear you use every day to make your films.

The possibility of increased costs for indie filmmaking has been percolating in the back of our minds recently. This morning, that possibility exploded loudly with this announcement arriving from display company Flanders Scientific:

Proposed tariff increases, if enacted, may result in a global price increase on most FSI products. At this time FSI is not adopting any price changes, but we may be required to do so as early as mid-June if a tariff increase is confirmed.

While we will make every effort to provide additional details on the amount and specific timing of price increases ahead of time, this may be difficult depending on timing and nature of tariff increases. Any paid orders received ahead of a potential tariff increase will be honored at that price, even if the item is currently out of stock. Please plan accordingly and note that quotes produced by FSI starting today will have a more limited than normal validity period until the uncertainty behind these potential tariff increases is resolved.

The trade war that has been simmering between the U.S. and China is about to expand significantly if the recently announced U.S. tariffs go into effect next month. Of interest to filmmakers are the new 25% tariffs announced by the U.S. government this week that apply to a broad range of imported products. These new tariffs are in addition to raising the rate for products currently under tariff from 10% to 25%. The new tariffs apply to a broad range of products imported from China, including photographic equipment and other electronics.

We have extracted some of what seem to be the most important products for filmmakers that would have the new 25% tariff. But note, we are not experts on tariffs or trade policy, and the list is not meant to be definitive. Also, trade policy is really complicated and currently in a state of flux, changing from week to week. 

Sample Products Subject to New Tariffs

Video Recording

  • 8521.90.00 Video recording or reproducing apparatus, other than magnetic tape-type

Sound Recording

  • 8519.81.40 Sound recording and reproducing apparatus using magnetic tape, optical media, or semiconductor media
  • 8519.89.30 Sound recording and reproducing apparatus, NESOI

Recording Media

  • 8523.51.00 Semiconductor media, solid-state non-volatile storage devices

Monitors

  • 8528.59.15 Color video monitors w/flat panel screen, video display diagonal n/ov 34.29 cm, incorporate VCR or player
  • 8528.59.23 Color video monitors w/flat panel screen, video display diagonal > 34.29 cm, incorporating VCR or player, not subject US note 13
  • 8528.59.25 Color video monitors w/flat panel screen, video display diagonal n/ov 34.29 cm, not incorporate VCR or player
  • 8528.59.33 Color video monitors w/flat panel screen, video display diagonal > 34.29 cm, not with VCR/player, not subj US note
  • 138528.59.40 Color video monitors NESOI, with video display diagonal over 34.29 cm, incorporating VCR or player
  • 8528.59.45 Color video monitors NESOI, with video display diagonal not over 34.29 cm, not incorporating VCR or player
  • 8528.59.50 Color video monitors NESOI, with video display diagonal over 34.29 cm, not incorporating VCR or player
  • 8528.69.55 Color video projectors NESOI, incorporating video recording or reproducing apparatus
  • 8528.69.60 Color video projectors NESOI, not incorporating a video recording or reproducing apparatus

Lamps

  • 8539.22.80 Electrical filament lamps of a power not exceeding 200 W and for a voltage exceeding 100 V NESOI, excluding ultraviolet and infrared lamps
  • 8539.29.30 Electrical filament lamps NESOI, designed for a voltage not exceeding 100 V, excluding ultraviolet and infrared lamps
  • 8539.29.40 Electrical filament lamps, designed for a voltage exceeding 100 V, of a power exceeding 200 W
  • 8539.50.00 Light-emitting diode (LED) lamps

Cameras

  • 9006.59.91 Photographic cameras, other than fixed focus, valued over $10 each, NESOI
  • 9006.61.00 Photographic discharge lamp ("electronic") flashlight apparatus
  • 9006.69.01 Photographic flashlight apparatus, NESOI
  • 9006.91.00 Parts and accessories for photographic cameras, not cinematographic
  • 9006.99.00 Parts and accessories for photographic flashlight apparatus and flashbulbs
  • 9007.91.40 Parts for cinematographic cameras
  • 9007.91.80 Accessories for cinematographic cameras

Wait, it can get worse

While it appears that photographic lenses are not included currently on the list for tariffs on China, there are threatened tariffs (of up to 100%) on EU products imported to the U.S. for this summer that do include them. This would primarily impact lenses from Germany:

  • 9002.11.90 Objective lenses and parts & access. thereof, for cameras, projectors, or photographic enlargers or reducers, except projection, NESOI

State sales tax enforcement

In addition to the tariffs, enforcement of mandatory collection of state sales taxes for goods sold by out-of-state vendors has finally hit critical mass with the U.S. Supreme Court ruling last year in South Dakota v. Wayfair Inc.  

The case ruled that, for the first time, states and local governments could require online retailers to collect sales tax even if they don’t have a physical presence, or nexus, in the state or local tax jurisdiction. California implemented mandatory collection of sales taxes on April 1, 2019 and many other states have already implemented the requirement or are in the process of doing so.

It should be noted that these are not new taxes, but rather shift the burden from voluntary compliance by the consumer (through paying use tax), to mandatory collection directly from the retailer. For those businesses or individuals who have not been compliant in their use tax payments, this could mean a net increase product cost of close to 10% in high tax states like California.

The era of really cheap gear in the U.S. may be coming to an end and filmmakers here will face the reality that folks in other countries have dealt with for a long time. However, it's impossible to predict whether the China or EU tariffs will actually take effect, or when.

If you are considering a major purchase in one of the targeted areas, it may be worth considering speeding up your purchase timeline.     

Your Comment

8 Comments

This is probably why, BHPHOTO has now added a new credit card line ( PayBoo Credit Card) " You pay the tax, we pay you back" . I'm sure those business folks over at BH, saw the writing on the wall. oh well, nothing last forever.

May 17, 2019 at 4:56AM

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we've been luck this "loophole" has been there for all these years.

May 17, 2019 at 2:38PM

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That card is fine as long as you can pay your balance off every month, otherwise the interest rate is 29% It can't be tied to any of your other BH payment accounts either. So, it's essentially a single purpose card for a single vendor.

May 17, 2019 at 7:34PM

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Craig Mieritz
Color, Light and Camera Geek

The sooner we can get rid of this idiot in office, the better for every one of us.

May 17, 2019 at 1:29PM

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if you'd like to get a good look at taxes and such ask your European friends .....

May 17, 2019 at 2:37PM

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Yeah, except our European friends are getting free college and healthcare with their money instead of funding corporate welfare for the billionaire class.

May 18, 2019 at 3:53PM

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The smoke and mirrors stock market surge was was economists call a "sugar rush."

We're in for some shitty times thanks to our realty tv big boy.

May 18, 2019 at 3:54PM

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This is a great thing for those who have equipment now. Raise the barrier-of-entry; raise the prices for ad hoc projects. The value of content increases as well since it will slow down the saturation of content. Our current gear retains it value longer as well.

May 18, 2019 at 7:46PM

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Freddy Long
Writer-Director
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