Bill Text: IL SB1595 | 2019-2020 | 101st General Assembly | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Amends the Film Production Services Tax Credit Act of 2008. Provides that a taxpayer may not take a credit awarded under that Act for tax years beginning on or after January 1, 2027. Effective immediately.
Spectrum: Moderate Partisan Bill (Democrat 12-2)
Status: (Passed) 2019-08-01 - Public Act . . . . . . . . . 101-0178 [SB1595 Detail]
Download: Illinois-2019-SB1595-Introduced.html
Bill Title: Amends the Film Production Services Tax Credit Act of 2008. Provides that a taxpayer may not take a credit awarded under that Act for tax years beginning on or after January 1, 2027. Effective immediately.
Spectrum: Moderate Partisan Bill (Democrat 12-2)
Status: (Passed) 2019-08-01 - Public Act . . . . . . . . . 101-0178 [SB1595 Detail]
Download: Illinois-2019-SB1595-Introduced.html
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1 | AN ACT concerning revenue.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Income Tax Act is amended by | ||||||||||||||||||||||||||||
5 | changing Section 213 as follows:
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6 | (35 ILCS 5/213)
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7 | Sec. 213. Film production services credit. For tax years | ||||||||||||||||||||||||||||
8 | beginning on or
after January 1, 2004, a taxpayer who has been | ||||||||||||||||||||||||||||
9 | awarded a tax credit under the
Film Production Services Tax | ||||||||||||||||||||||||||||
10 | Credit Act or under the Film Production Services Tax Credit Act | ||||||||||||||||||||||||||||
11 | of 2008 is entitled to a credit against the
taxes imposed under | ||||||||||||||||||||||||||||
12 | subsections (a) and (b) of Section 201 of this Act in an
amount | ||||||||||||||||||||||||||||
13 | determined by the Department of Commerce and Economic | ||||||||||||||||||||||||||||
14 | Opportunity under those Acts. If the taxpayer is a partnership | ||||||||||||||||||||||||||||
15 | or
Subchapter S corporation, the credit is allowed to the | ||||||||||||||||||||||||||||
16 | partners or shareholders
in accordance with the determination | ||||||||||||||||||||||||||||
17 | of income and distributive share of income
under Sections 702 | ||||||||||||||||||||||||||||
18 | and 704 and Subchapter S of the Internal Revenue Code. | ||||||||||||||||||||||||||||
19 | A transfer of this credit may be made by the taxpayer | ||||||||||||||||||||||||||||
20 | earning the credit within one year after the credit is awarded | ||||||||||||||||||||||||||||
21 | in accordance with rules adopted by the Department of Commerce | ||||||||||||||||||||||||||||
22 | and Economic Opportunity.
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23 | The
Department, in cooperation with the Department of |
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1 | Commerce and Economic Opportunity, must prescribe rules to | ||||||
2 | enforce and administer the provisions of this
Section. This | ||||||
3 | Section is exempt from the provisions of Section 250 of this
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4 | Act.
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5 | The credit may not be carried back. If the amount of the | ||||||
6 | credit exceeds the tax liability for the year, the
excess may | ||||||
7 | be carried forward and applied to the tax liability of the 5 | ||||||
8 | taxable
years following the excess credit year. The credit
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9 | shall be applied to the earliest year for which there is a tax | ||||||
10 | liability. If
there are credits from more than one tax year | ||||||
11 | that are available to offset a
liability, the earlier credit | ||||||
12 | shall be applied first. In no event shall a credit
under this | ||||||
13 | Section reduce the taxpayer's
liability to less than
zero.
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14 | For tax years beginning on or after July 1, 2019, in no | ||||||
15 | event shall the credit under this Section be allowed in an | ||||||
16 | amount which will reduce the tax to less than zero. If, | ||||||
17 | however, the amount of credit allowed under this Section for | ||||||
18 | any taxable year reduces the tax to such amount, any amount of | ||||||
19 | credit not deductible in such taxable year shall be treated as | ||||||
20 | an overpayment of tax to be refunded in accordance with this | ||||||
21 | Section, provided however, that no interest shall be paid | ||||||
22 | thereon. | ||||||
23 | (Source: P.A. 94-171, eff. 7-11-05; 95-720, eff. 5-27-08.)
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24 | Section 10. The Film
Production Services Tax Credit Act of | ||||||
25 | 2008 is amended by changing Sections 10 and 42 as follows:
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1 | (35 ILCS 16/10)
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2 | Sec. 10. Definitions. As used in this Act:
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3 | "Accredited production" means: (i) for productions | ||||||
4 | commencing before May 1, 2006, a film, video, or television | ||||||
5 | production that
has been certified by the Department in which | ||||||
6 | the aggregate Illinois labor
expenditures
included in the cost | ||||||
7 | of the production, in the period that ends 12 months after
the | ||||||
8 | time principal filming or taping of the production began, | ||||||
9 | exceed $100,000
for productions of 30 minutes or longer, or | ||||||
10 | $50,000 for productions of less
than 30
minutes; and (ii) for | ||||||
11 | productions commencing on or after May 1, 2006, a film, video, | ||||||
12 | or television production that has been certified by the | ||||||
13 | Department in which the Illinois production spending included | ||||||
14 | in the cost of production in the period that ends 12 months | ||||||
15 | after the time principal filming or taping of the production | ||||||
16 | began exceeds $100,000 for productions of 30 minutes or longer | ||||||
17 | or exceeds $50,000 for productions of less than 30 minutes. | ||||||
18 | "Accredited production" does not include a production that:
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19 | (1) is news, current events, or public programming, or | ||||||
20 | a program that
includes weather or market reports;
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21 | (2) is a talk show;
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22 | (3) is a production in respect of a game, | ||||||
23 | questionnaire, or contest;
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24 | (4) is a sports event or activity;
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25 | (5) is a gala presentation or awards show;
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1 | (6) is a finished production that solicits funds;
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2 | (7) is a production produced by a film production | ||||||
3 | company if records, as
required
by 18
U.S.C. 2257, are to | ||||||
4 | be maintained by that film production company with respect
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5 | to any
performer portrayed in that single media or | ||||||
6 | multimedia program; or
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7 | (8) is a production produced primarily for industrial, | ||||||
8 | corporate, or
institutional purposes.
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9 | "Accredited animated production" means an accredited | ||||||
10 | production in which movement and characters' performances are | ||||||
11 | created using a frame-by-frame technique and a significant | ||||||
12 | number of major characters are animated. Motion capture by | ||||||
13 | itself is not an animation technique. | ||||||
14 | "Accredited production certificate" means a certificate | ||||||
15 | issued by the
Department certifying that the production is an | ||||||
16 | accredited production that
meets the guidelines of this Act.
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17 | "Applicant" means a taxpayer that is a film production | ||||||
18 | company that is
operating or has operated an accredited | ||||||
19 | production located within the State of
Illinois and that
(i) | ||||||
20 | owns the copyright in the accredited production throughout the
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21 | Illinois production period or (ii)
has contracted directly with | ||||||
22 | the owner of the copyright in the
accredited production
or a | ||||||
23 | person acting on behalf of the owner
to provide services for | ||||||
24 | the production, where the owner
of the copyright is not an | ||||||
25 | eligible production corporation.
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26 | "Credit" means:
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1 | (1) for an accredited production approved by the | ||||||
2 | Department on or before January 1, 2005 and commencing | ||||||
3 | before May 1, 2006, the amount equal to 25% of the Illinois | ||||||
4 | labor
expenditure approved by the Department.
The | ||||||
5 | applicant is deemed to have paid, on its balance due day | ||||||
6 | for the year, an
amount equal to 25% of its qualified | ||||||
7 | Illinois labor expenditure for the tax
year. For Illinois | ||||||
8 | labor expenditures generated by the employment of | ||||||
9 | residents of geographic areas of high poverty or high | ||||||
10 | unemployment, as determined by the Department, in an | ||||||
11 | accredited production commencing before May 1, 2006 and
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12 | approved by the Department after January 1, 2005, the | ||||||
13 | applicant shall receive an enhanced credit of 10% in | ||||||
14 | addition to the 25% credit; and | ||||||
15 | (2) for an accredited production commencing on or after | ||||||
16 | May 1, 2006, the amount equal to: | ||||||
17 | (i) 20% of the Illinois production spending for the | ||||||
18 | taxable year; plus | ||||||
19 | (ii) 15% of the Illinois labor expenditures | ||||||
20 | generated by the employment of residents of geographic | ||||||
21 | areas of high poverty or high unemployment, as | ||||||
22 | determined by the Department; and
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23 | (3) for an accredited production commencing on or after | ||||||
24 | January 1, 2009, the amount equal to: | ||||||
25 | (i) 30% of the Illinois production spending for the | ||||||
26 | taxable year; plus |
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1 | (ii) 15% of the Illinois labor expenditures | ||||||
2 | generated by the employment of residents of geographic | ||||||
3 | areas of high poverty or high unemployment, as | ||||||
4 | determined by the Department. | ||||||
5 | "Department" means the Department of Commerce and Economic | ||||||
6 | Opportunity.
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7 | "Director" means the Director of Commerce and Economic | ||||||
8 | Opportunity.
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9 | "Illinois labor expenditure" means
salary or wages paid to | ||||||
10 | employees of the
applicant for services on the accredited
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11 | production;
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12 | To qualify as an Illinois labor expenditure, the | ||||||
13 | expenditure must be:
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14 | (1) Reasonable in the circumstances.
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15 | (2) Included in the federal income tax basis of the | ||||||
16 | property.
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17 | (3) Incurred by the applicant for services on or after | ||||||
18 | January 1, 2004.
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19 | (4) Incurred for the production stages of the | ||||||
20 | accredited production, from
the final
script stage to the | ||||||
21 | end of the post-production stage.
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22 | (5) Limited to the first $25,000 of wages paid or | ||||||
23 | incurred to each
employee of a production commencing before | ||||||
24 | May 1, 2006 and the first $100,000 of wages paid or | ||||||
25 | incurred to each
employee of
a production commencing on or | ||||||
26 | after May 1, 2006 and prior to July 1, 2019 . For |
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1 | productions commencing on or after July 1, 2019, the first | ||||||
2 | $200,000 of out-of-state wages paid or incurred by the | ||||||
3 | production company and loan out corporations qualify, | ||||||
4 | subject to withholding payments provided for in Article 7 | ||||||
5 | of the Illinois Income Tax Act. Additionally, all resident | ||||||
6 | wages paid or incurred by the production company and loan | ||||||
7 | out corporations qualify.
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8 | (6) For a production commencing before May 1, 2006, | ||||||
9 | exclusive of the salary or wages paid to or incurred for | ||||||
10 | the 2 highest
paid
employees of the production.
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11 | (7) Directly attributable to the accredited | ||||||
12 | production.
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13 | (8) (Blank).
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14 | (9) Prior to July 1, 2019, paid Paid to persons | ||||||
15 | resident in Illinois at the time the payments were
made. | ||||||
16 | For a production company commencing production on or after | ||||||
17 | July 1, 2019, resident and non-resident wages will qualify | ||||||
18 | as an Illinois labor expenditure.
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19 | (10) Paid for services rendered in Illinois.
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20 | "Illinois production spending" means the expenses incurred | ||||||
21 | by the applicant for an accredited production, including, | ||||||
22 | without limitation, all of the following: | ||||||
23 | (1) expenses to purchase, from vendors within | ||||||
24 | Illinois, tangible personal property that is used in the | ||||||
25 | accredited production; | ||||||
26 | (2) expenses to acquire services, from vendors in |
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1 | Illinois, for film production, editing, or processing; and | ||||||
2 | (3) before July 1, 2019, the compensation, not to | ||||||
3 | exceed $100,000 for any one employee, for contractual or | ||||||
4 | salaried employees who are Illinois residents performing | ||||||
5 | services with respect to the accredited production. | ||||||
6 | "Qualified production facility" means stage facilities in | ||||||
7 | the State in which television shows and films are or are | ||||||
8 | intended to be regularly produced and that contain at least one | ||||||
9 | sound stage of at least 15,000 square feet.
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10 | "Loan out company" means a personal service corporation or | ||||||
11 | other entity that is under contract with the taxpayer to | ||||||
12 | provide specified individual personnel, such as artists, crew, | ||||||
13 | actors, producers, or directors for the performance of services | ||||||
14 | used directly in a production. "Loan out company" does not | ||||||
15 | include entities contracted with by the taxpayer to provide | ||||||
16 | goods or ancillary contractor services such as catering, | ||||||
17 | construction, trailers, equipment, or transportation. | ||||||
18 | Rulemaking authority to implement this amendatory Act of | ||||||
19 | the 95th General Assembly, if any, is conditioned on the rules | ||||||
20 | being adopted in accordance with all provisions of the Illinois | ||||||
21 | Administrative Procedure Act and all rules and procedures of | ||||||
22 | the Joint Committee on Administrative Rules; any purported rule | ||||||
23 | not so adopted, for whatever reason, is unauthorized. | ||||||
24 | (Source: P.A. 97-796, eff. 7-13-12.)
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25 | (35 ILCS 16/42) |
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1 | Sec. 42. Sunset of credits. This Act is exempt from the | ||||||
2 | provisions of Section 150 of the Illinois Income Tax Act. The | ||||||
3 | application of credits awarded pursuant to this Act shall be | ||||||
4 | limited by a reasonable and appropriate sunset date. A taxpayer | ||||||
5 | shall not be entitled to take a credit awarded pursuant to this | ||||||
6 | Act for tax years beginning on or after 10 years after the | ||||||
7 | effective date of this amendatory Act of the 97th General | ||||||
8 | Assembly. After the initial 10-year sunset, the General | ||||||
9 | Assembly may extend the sunset date by 5-year intervals.
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10 | (Source: P.A. 97-2, eff. 5-6-11; 97-3, eff. 5-6-11.)
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11 | Section 99. Effective date. This Act takes effect upon | ||||||
12 | becoming law.
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