Bill Text: IL SB1745 | 2025-2026 | 104th General Assembly | Introduced

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Bill Title: Amends the Film Production Services Tax Credit Act of 2008. Provides that the term "Illinois labor expenditure" does not include: (1) above-the-line spending exceeding 40% of the total Illinois production spending for the production, unless the Department of Commerce and Economic Opportunity determines that the inclusion of such excess above-the-line spending is necessary for the production to be accredited; (2) above-the-line spending paid to related parties that exceeds, in the aggregate, 12% of the total Illinois production spending for the production; or (3) below-the-line spending paid to a related party that exceeds the fair market value of the transaction. Defines "above-the-line spending" and "below-the-line spending". Provides that the term "Illinois production spending" includes the fair market value of any transaction that (i) is entered into between the taxpayer and a related party or the taxpayer and an unrelated party, (ii) is related to the accredited production, and (iii) has terms that reflect the fair market value of the transaction.

Sponsorship: Partisan Bill (Democrat 1)

Status: (Introduced - Dead) 2025-06-02 - Senate Committee Amendment No. 1 Rule 3-9(a) / Re-referred to Assignments [SB1745 Detail]

Download: Illinois-2025-SB1745-Introduced.html

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104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB1745 Introduced 2/5/2025, by Sen. Cristina Castro SYNOPSIS AS INTRODUCED:
35 ILCS 16/10
Amends the Film Production Services Tax Credit Act of 2008. Provides that the term "Illinois labor expenditure" does not include: (1) above-the-line spending exceeding 40% of the total Illinois production spending for the production, unless the Department of Commerce and Economic Opportunity determines that the inclusion of such excess above-the-line spending is necessary for the production to be accredited; (2) above-the-line spending paid to related parties that exceeds, in the aggregate, 12% of the total Illinois production spending for the production; or (3) below-the-line spending paid to a related party that exceeds the fair market value of the transaction. Defines "above-the-line spending" and "below-the-line spending". Provides that the term "Illinois production spending" includes the fair market value of any transaction that (i) is entered into between the taxpayer and a related party or the taxpayer and an unrelated party, (ii) is related to the accredited production, and (iii) has terms that reflect the fair market value of the transaction.
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A BILL FOR
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AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Film Production Services Tax Credit Act of
2008 is amended by changing Section 10 as follows:
(35 ILCS 16/10)
Sec. 10. Definitions. As used in this Act:
"Above-the-line spending" means all salary, wages, fees,
and fringe benefits paid for services performed by personnel
of the production that are considered above-the-line services
in the film and television industry, including, but not
limited to, services performed by a producer, executive
producer, co-producer, director, screenwriter, lead cast,
supporting cast, or day player.
"Accredited production" means: (i) for productions
commencing before May 1, 2006, a film, video, or television
production that has been certified by the Department in which
the aggregate Illinois labor expenditures included in the cost
of the production, in the period that ends 12 months after the
time principal filming or taping of the production began,
exceed $100,000 for productions of 30 minutes or longer, or
$50,000 for productions of less than 30 minutes; and (ii) for
productions commencing on or after May 1, 2006, a film, video,

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or television production that has been certified by the
Department in which the Illinois production spending included
in the cost of production in the period that ends 12 months
after the time principal filming or taping of the production
began exceeds $100,000 for productions of 30 minutes or longer
or exceeds $50,000 for productions of less than 30 minutes.
"Accredited production" does not include a production that:
(1) is news, current events, or public programming, or
a program that includes weather or market reports;
(2) is a talk show produced for local or regional
markets;
(3) (blank);
(4) is a sports event or activity;
(5) is a gala presentation or awards show;
(6) is a finished production that solicits funds;
(7) is a production produced by a film production
company if records, as required by 18 U.S.C. 2257, are to
be maintained by that film production company with respect
to any performer portrayed in that single media or
multimedia program; or
(8) is a production produced primarily for industrial,
corporate, or institutional purposes.
"Accredited animated production" means an accredited
production in which movement and characters' performances are
created using a frame-by-frame technique and a significant
number of major characters are animated. Motion capture by

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itself is not an animation technique.
"Accredited production certificate" means a certificate
issued by the Department certifying that the production is an
accredited production that meets the guidelines of this Act.
"Applicant" means a taxpayer that is a film production
company that is operating or has operated an accredited
production located within the State of Illinois and that (i)
owns the copyright in the accredited production throughout the
Illinois production period or (ii) has contracted directly
with the owner of the copyright in the accredited production
or a person acting on behalf of the owner to provide services
for the production, where the owner of the copyright is not an
eligible production corporation.
"Below-the-line spending" means salary, wages, fees, and
fringe benefits paid for services performed by a person in a
position that is off camera and who provides technical
services during the physical production of a film.
"Below-the-line spending" does not include salary, wages,
fees, or fringe benefits paid to a person who is a producer,
executive producer, co-producer, director, screenwriter, lead
cast, supporting cast, or day player, or who performs other
services that are customarily considered above-the-line
services in the film and television industry.
"Credit" means:
(1) for an accredited production approved by the
Department on or before January 1, 2005 and commencing

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before May 1, 2006, the amount equal to 25% of the Illinois
labor expenditure approved by the Department. The
applicant is deemed to have paid, on its balance due day
for the year, an amount equal to 25% of its qualified
Illinois labor expenditure for the tax year. For Illinois
labor expenditures generated by the employment of
residents of geographic areas of high poverty or high
unemployment, as determined by the Department, in an
accredited production commencing before May 1, 2006 and
approved by the Department after January 1, 2005, the
applicant shall receive an enhanced credit of 10% in
addition to the 25% credit; and
(2) for an accredited production commencing on or
after May 1, 2006 and before January 1, 2009, the amount
equal to:
(i) 20% of the Illinois production spending for
the taxable year; plus
(ii) 15% of the Illinois labor expenditures
generated by the employment of residents of geographic
areas of high poverty or high unemployment, as
determined by the Department; and
(3) for an accredited production commencing on or
after January 1, 2009, the amount equal to:
(i) 30% of the Illinois production spending for
the taxable year; plus
(ii) 15% of the Illinois labor expenditures

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generated by the employment of residents of geographic
areas of high poverty or high unemployment, as
determined by the Department.
"Department" means the Department of Commerce and Economic
Opportunity.
"Director" means the Director of Commerce and Economic
Opportunity.
"Fair market value" means:
(1) for unrelated parties, the value established
through comparable transactions between unrelated parties
for substantially similar goods and services considering
the geographic market and other pertinent variables as
specified by the Department by rule; and
(2) for related parties, the value established through
the related party's historical dealings with unrelated
parties or established by comparable transactions between
other unrelated parties for substantially similar goods
and services considering the geographic market and other
pertinent variables as specified by the Department by
rule.
"Illinois labor expenditure" means salary or wages paid to
employees of the applicant for services on the accredited
production.
To qualify as an Illinois labor expenditure, the
expenditure must be:
(1) Reasonable in the circumstances.

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(2) Included in the federal income tax basis of the
property.
(3) Incurred by the applicant for services on or after
January 1, 2004.
(4) Incurred for the production stages of the
accredited production, from the final script stage to the
end of the post-production stage.
(5) Limited to the first $25,000 of wages paid or
incurred to each employee of a production commencing
before May 1, 2006 and the first $100,000 of wages paid or
incurred to each employee of a production commencing on or
after May 1, 2006 and prior to July 1, 2022. For
productions commencing on or after July 1, 2022, limited
to the first $500,000 of wages paid or incurred to each
eligible nonresident or resident employee of a production
company or loan out company that provides in-State
services to a production, whether those wages are paid or
incurred by the production company, loan out company, or
both, subject to withholding payments provided for in
Article 7 of the Illinois Income Tax Act. For purposes of
calculating Illinois labor expenditures for a television
series, the eligible nonresident wage limitations provided
under this subparagraph are applied to the entire season.
For the purpose of this paragraph (5), an eligible
nonresident is a nonresident whose wages qualify as an
Illinois labor expenditure under the provisions of

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paragraph (9) that apply to that production.
(6) For a production commencing before May 1, 2006,
exclusive of the salary or wages paid to or incurred for
the 2 highest paid employees of the production.
(7) Directly attributable to the accredited
production.
(8) (Blank).
(9) Prior to July 1, 2022, paid to persons resident in
Illinois at the time the payments were made. For a
production commencing on or after July 1, 2022, paid to
persons resident in Illinois and nonresidents at the time
the payments were made.
For purposes of this subparagraph, if the production
is accredited by the Department before the effective date
of this amendatory Act of the 102nd General Assembly, only
wages paid to nonresidents working in the following
positions shall be considered Illinois labor expenditures:
Writer, Director, Director of Photography, Production
Designer, Costume Designer, Production Accountant, VFX
Supervisor, Editor, Composer, and Actor, subject to the
limitations set forth under this subparagraph. For an
accredited Illinois production spending of $25,000,000 or
less, no more than 2 nonresident actors' wages shall
qualify as an Illinois labor expenditure. For an
accredited production with Illinois production spending of
more than $25,000,000, no more than 4 nonresident actor's

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wages shall qualify as Illinois labor expenditures.
For purposes of this subparagraph, if the production
is accredited by the Department on or after the effective
date of this amendatory Act of the 102nd General Assembly,
wages paid to nonresidents shall qualify as Illinois labor
expenditures only under the following conditions:
(A) the nonresident must be employed in a
qualified position;
(B) for each of those accredited productions, the
wages of not more than 9 nonresidents who are employed
in a qualified position other than Actor shall qualify
as Illinois labor expenditures;
(C) for an accredited production with Illinois
production spending of $25,000,000 or less, no more
than 2 nonresident actors' wages shall qualify as
Illinois labor expenditures; and
(D) for an accredited production with Illinois
production spending of more than $25,000,000, no more
than 4 nonresident actors' wages shall qualify as
Illinois labor expenditures.
As used in this paragraph (9), "qualified position"
means: Writer, Director, Director of Photography,
Production Designer, Costume Designer, Production
Accountant, VFX Supervisor, Editor, Composer, or Actor.
(10) Paid for services rendered in Illinois.
For a production commencing on or after the effective date

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of this amendatory Act of the 104th General Assembly,
"Illinois labor expenditure" does not include:
(1) above-the-line spending exceeding 40% of the total
Illinois production spending for the production, unless
the Department determines, through a process specified by
administrative rule, that inclusion as an Illinois labor
expenditure of above-the-line spending for the production
in an amount that exceeds 40% of the production's total
Illinois production spending is necessary for the
production to meet the conditions set forth in subsection
(a) of Section 30;
(2) above-the-line spending paid to related parties
that exceeds, in the aggregate, 12% of the total Illinois
production spending for the production; or
(3) below-the-line spending paid to a related party
that exceeds the fair market value of the transaction.
"Illinois production spending" means the expenses incurred
by the applicant for an accredited production that are
reasonable under the circumstances, but does not include any
monetary prize or the cost of any non-monetary prize awarded
pursuant to a production in respect of a game, questionnaire,
or contest. "Illinois production spending" includes, without
limitation, unless otherwise specified in this definition, all
of the following:
(1) expenses to purchase, from vendors within
Illinois, tangible personal property that is used in the

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accredited production;
(2) expenses to acquire services, from vendors in
Illinois, for film production, editing, or processing; and
(3) for a production commencing before July 1, 2022,
the compensation, not to exceed $100,000 for any one
employee, for contractual or salaried employees who are
Illinois residents performing services with respect to the
accredited production. For a production commencing on or
after July 1, 2022, Illinois labor expenditure the
compensation, not to exceed $500,000 for any one employee,
for contractual or salaried employees who are Illinois
residents or nonresident employees, subject to the
limitations set forth under Section 10 of this Act; and .
(4) for a production commencing on or after the
effective date of this amendatory Act of the 104th General
Assembly, the fair market value of any transaction that
(i) is entered into between the taxpayer and a related
party or the taxpayer and an unrelated party, (ii) is for
the accredited production, and (iii) has terms that
reflect the fair market value of the transaction.
"Loan out company" means a personal service corporation or
other entity that is under contract with the taxpayer to
provide specified individual personnel, such as artists, crew,
actors, producers, or directors for the performance of
services used directly in a production. "Loan out company"
does not include entities contracted with by the taxpayer to

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provide goods or ancillary contractor services such as
catering, construction, trailers, equipment, or
transportation.
"Qualified production facility" means stage facilities in
the State in which television shows and films are or are
intended to be regularly produced and that contain at least
one sound stage of at least 15,000 square feet.
"Related party" means a party that is deemed to be related
to the taxpayer by common ownership or control according to
generally accepted accounting standards and generally accepted
accounting principles.
"Unrelated party" means a party that is not a related
party with respect to the taxpayer.
The Department shall adopt rules to implement the changes
made to this Section within one year after the effective date
of this amendatory Act of the 104th General Assembly.
Rulemaking authority to implement Public Act 95-1006, if
any, is conditioned on the rules being adopted in accordance
with all provisions of the Illinois Administrative Procedure
Act and all rules and procedures of the Joint Committee on
Administrative Rules; any purported rule not so adopted, for
whatever reason, is unauthorized.
(Source: P.A. 102-558, eff. 8-20-21; 102-700, eff. 4-19-22;
102-1125, eff. 2-3-23; 103-595, eff. 6-26-24.)