Bill Text: GA HB1247 | 2009-2010 | Regular Session | Introduced
Bill Title: Income tax; film, video, or digital productions; revise credit
Spectrum: Partisan Bill (Republican 2-0)
Status: (Introduced - Dead) 2010-03-08 - House Second Readers [HB1247 Detail]
Download: Georgia-2009-HB1247-Introduced.html
10 LC 18
8948ER
House
Bill 1247
By:
Representatives Stephens of the
164th
and Parrish of the
156th
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Article 2 of Chapter 7 of Title 48 of the Official Code of Georgia
Annotated, relating to the imposition, rate, and computation of income tax, so
as to revise and change the income tax credit with respect to qualified, film,
video, or digital productions; to provide for conditions and limitations; to
provide for powers, duties, and authority of the state revenue commissioner with
respect to the foregoing; to provide an effective date; to provide for
applicability; to repeal conflicting laws; and for other purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Article
2 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating
to the imposition, rate, and computation of income tax, is amended by revising
Code Section 48-7-40.26, relating to the income tax credit for qualified film,
video, or digital production, as follows:
"48-7-40.26.
(a)
This Code section shall be known and may be cited as the 'Georgia Entertainment
Industry Investment Act.'
(b)
As used in this Code section, the term:
(1)
'Affiliates' means those entities that are included in the production company's
affiliated group as defined in Section 1504(a) of the Internal Revenue Code and
all other entities that are directly or indirectly owned 50 percent or more by
members of the affiliated group.
(2)
'Base investment' means the aggregate funds actually invested and expended by a
production company as production expenditures incurred in this state that are
directly used in a state certified production or productions.
(3)
'Multimarket commercial distribution' means commercial distribution which
extends to markets outside the State of Georgia.
(4)
'Production company' means a company primarily engaged in qualified production
activities which have been approved by the Department of Economic Development.
This term shall not mean or include any form of business owned, affiliated, or
controlled, in whole or in part, by any company or person which is in default on
any tax obligation of the state, or a loan made by the state or a loan
guaranteed by the state.
(5)
'Production expenditures' means preproduction, production, and postproduction
expenditures incurred in this state that are directly used in a qualified
production activity, including without limitation the following: set
construction and operation; wardrobes, make-up, accessories, and related
services; costs associated with photography and sound synchronization, lighting,
and related services and materials; editing and related services; rental of
facilities and equipment; leasing of vehicles; costs of food and lodging;
digital or tape editing, film processing, transfers of film to tape or digital
format, sound mixing, computer graphics services, special effects services, and
animation services; total aggregate payroll; airfare, if purchased through a
Georgia based travel agency or travel company; insurance costs and bonding, if
purchased through a Georgia based insurance agency; and other direct costs of
producing the project in accordance with generally accepted entertainment
industry practices. This term shall not include postproduction expenditures for
marketing and distribution.
(6)
'Qualified Georgia promotion' means a qualified promotion of this state approved
by the Department of Economic Development consisting of a:
(A)
Qualified movie production which includes an approximately five-second long
animated logo that promotes Georgia within its presentation and all promotional
trailers worldwide for the life of the project;
(B)
Qualified TV production which includes an imbedded five-second long Georgia
promotion during each broadcast half hour worldwide for the life of the
project;
(C)
Qualified music video which includes the Georgia logo at the end of each video
and within online promotions; or
(D)
Qualified interactive game which includes a 15 second long Georgia advertisement
in units sold and imbedded in online promotions.
(7)
'Qualified production activities' means the production of new film, video, or
digital projects produced in this state and approved by the Department of
Economic Development, such as feature films, series, pilots, movies for
television, commercial advertisements, music videos, interactive entertainment
or sound recording projects used in feature films, series pilots, or movies for
television. Such activities shall include projects recorded in this state, in
whole or in part, in either short or long form, animation and music, fixed on a
delivery system which includes without limitation film, videotape, computer
disc, laser disc, and any element of the digital domain, from which the program
is viewed or reproduced, and which is intended for multimarket commercial
distribution via theaters, licensing for exhibition by individual television
stations, groups of stations, networks, cable television stations, public
broadcasting stations, corporations, live venues, the Internet, or any other
channel of exhibition. Such term shall not include the production of television
coverage of news and athletic events.
(8)
'Resident' means an individual as designated pursuant to paragraph (10) of Code
Section 48-7-1, as amended.
(9)
'State certified production' means a production engaged in qualified production
activities which have been approved by the Department of Economic Development in
accordance with regulations promulgated pursuant to this Code
section.
(10)
'Total aggregate payroll' means the total sum expended by a production company
on salaries paid to employees working within this state in a state certified
production or productions. For purposes of this paragraph:
(A)
With respect to a single employee, the portion of any salary which exceeds
$500,000.00 for a single production shall not be included when calculating total
aggregate payroll; and
(B)
All payments to a single employee and any legal entity in which the employee has
any direct or indirect ownership interest shall be considered as having been
paid to the employee and shall be aggregated regardless of the means of payment
or distribution.
(c)
For any production company and its affiliates that invest in a state certified
production approved by the Department of Economic Development and whose average
annual total production expenditures in this state did not exceed $30 million
for 2002, 2003, and 2004, there shall be allowed an income tax credit against
the tax imposed under this article. The tax credit under this subsection shall
be allowed if the base investment in this state equals or exceeds $500,000.00
for qualified production activities and shall be calculated as
follows:
(1)
The production company shall be allowed a tax credit equal to 20 percent of the
base investment in this state; and
(2)
The production company shall be allowed an additional tax credit equal to 10
percent of such base investment if the qualified production activity includes a
qualified Georgia promotion.
(d)
For any production company and its affiliates that invest in a state certified
production approved by the Department of Economic Development and whose average
annual total production expenditures in this state exceeded $30 million for
2002, 2003, and 2004, there shall be allowed an income tax credit against the
tax imposed under this article. For purposes of this subsection, the excess
base investment in this state is computed by taking the current year production
expenditures in a state certified production and subtracting the average of the
annual total production expenditures for 2002, 2003, and 2004. The tax credit
shall be calculated as follows:
(1)
If the excess base investment in this state equals or exceeds $500,000.00, the
production company and its affiliates shall be allowed a tax credit of 20
percent of such excess base investment; and
(2)
The production company and its affiliates shall be allowed an additional tax
credit equal to 10 percent of the excess base investment if the qualified
production activities include a qualified Georgia promotion.
(e)(1)
Where the amount of such credit or credits exceeds the production company's
liability or,
pursuant to subsection (f) of this Code section and effective for tax years
beginning on or after January 1, 2011, a production company transferee's
liability for such taxes in a taxable
year, the excess may be taken as a credit against such production company's
or
transferee's quarterly or monthly payment
under Code Section 48-7-103. Each employee whose employer receives credit
against such production company's
or
transferee's quarterly or monthly payment
under Code Section 48-7-103 shall receive credit against his or her income tax
liability under Code Section 48-7-20 for the corresponding taxable year for the
full amount which would be credited against such liability prior to the
application of the credit provided for in this subsection. Credits against
quarterly or monthly payments under Code Section 48-7-103 and credits against
liability under Code Section 48-7-20 established by this subsection shall not
constitute income to the production company
or
transferee.
(2)
If a production company, or a production company and its affiliates, claim the
credit authorized under Code Section 48-7-40, 48-7-40.1, 48-7-40.17, or
48-7-40.18, then the production company, or the production company and its
affiliates, will only be allowed to claim the credit authorized under this Code
section to the extent that the Georgia resident employees included in the credit
calculation authorized under this Code section and taken by the production
company, or the production company and its affiliates, on such tax return under
this Code section have been permanently excluded from the credit authorized
under Code Section 48-7-40, 48-7-40.1, 48-7-40.17, or 48-7-40.18.
(f)
Any tax credits with respect to a state certified production earned by a
production company and previously claimed but not used by such production
company against its income tax may be transferred or sold in whole or in part by
such production company to another Georgia taxpayer, subject to the following
conditions:
(1)
Such production company may make only a single transfer or sale of tax credits
earned in a taxable year; however, the transfer or sale may involve one or more
transferees;
(2)
Such production company shall submit to the Department of Economic Development
and to the Department of Revenue a written notification of any transfer or sale
of tax credits within 30 days after the transfer or sale of such tax credits.
The notification shall include such production company's tax credit balance
prior to transfer, the credit certificate number, the remaining balance after
transfer, all tax identification numbers for each transferee, the date of
transfer, the amount transferred, and any other information required by the
Department of Economic Development or the Department of Revenue;
(3)
Failure to comply with this subsection shall result in the disallowance of the
tax credit until the production company is in full compliance;
(4)
The transfer or sale of this tax credit does not extend the time in which such
tax credit can be used. The carry-forward period for tax credit that is
transferred or sold shall begin on the date on which the tax credit was
originally earned;
(5)
A transferee shall have only such rights to claim and use the tax credit that
were available to such production company at the time of the
transfer,
except for the use of the credit in paragraph (1) of subsection (e) of this Code
section. To the extent that such
production company did not have rights to claim or use the tax credit at the
time of the transfer, the Department of Revenue shall either disallow the tax
credit claimed by the transferee or recapture the tax credit from the
transferee. The transferee's recourse is against such production company;
and
(6)
The transferee must acquire the tax credits in this Code section for a minimum
of 60 percent of the amount of the tax credits so transferred.
(g)
The credit granted under this Code section shall be subject to the following
conditions and limitations:
(1)
The credit may be taken beginning with the taxable year in which the production
company has met the investment requirement. For each year in which such
production company either claims or transfers the credit, the production company
shall attach a schedule to the production company's Georgia income tax return
which will set forth the following information, as a minimum:
(A)
A description of the qualified production activities, along with the
certification from the Department of Economic Development;
(B)
A detailed listing of the employee names, social security numbers, and Georgia
wages when salaries are included in the base investment;
(C)
The amount of tax credit claimed for the taxable year;
(D)
Any tax credit previously taken by the production company against Georgia income
tax liabilities or the production company's quarterly or monthly payments under
Code Section 48-7-103;
(E)
The amount of tax credit carried over from prior years;
(F)
The amount of tax credit utilized by the production company in the current
taxable year; and
(G)
The amount of tax credit to be carried over to subsequent tax
years;
(2)
In the initial year in which the production company claims the credit granted in
this Code section, the production company shall include in the description of
the qualified production activities required by subparagraph (A) of paragraph
(1) of this subsection information which demonstrates that the activities
included in the base investment or excess base investment equal or exceed
$500,000.00 during such year; and
(3)
In no event shall the amount of the tax credit under this Code section for a
taxable year exceed the production company's income tax liability. Any unused
credit amount shall be allowed to be carried forward for five years from the
close of the taxable year in which the investment occurred. No such credit
shall be allowed the production company against prior years' tax
liability.
(h)
The Department of Economic Development shall determine through the promulgation
of rules and regulations what projects qualify for the tax credits authorized
under this Code section. Certification shall be submitted to the state revenue
commissioner.
(i)
The state revenue commissioner shall promulgate such rules and regulations as
are necessary to implement and administer this Code section.
(j)
Any production company claiming, transferring, or selling the tax credit shall
be required to reimburse the Department of Revenue for any department initiated
audits relating to the tax credit. This subsection shall not apply to routine
tax audits of a taxpayer which may include the review of the credit provided in
this Code section."
SECTION
2.
This
Act shall become effective January 1, 2011, and shall be applicable to all
taxable years beginning on or after January 1, 2011.
SECTION
3.
All
laws and parts of laws in conflict with this Act are repealed.