Bill Text: IL SB3249 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Amends the Film Production Services Tax Credit Act of 2008. Provides that, for an accredited production that commences on or after July 1, 2024, the credit includes the sum of the following: 30% of the Illinois production spending for the taxable year; 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 of Commerce and Economic Opportunity; an additional 5% of the Illinois labor expenditures generated by the employment of residents of the State who reside outside of the metropolitan area if the person is a resident of a geographic area of high poverty or high unemployment and also resides outside of the metropolitan area; and (iv) an additional 5% if 50% or more of the total hours of principal filming or taping of the production are completed in the State but outside of the metropolitan area, as determined by the Department. Provides that the term "metropolitan area" means the City of Chicago and any part of the State located within 30 miles of the City of Chicago. Effective immediately.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced) 2024-02-06 - Referred to Assignments [SB3249 Detail]

Download: Illinois-2023-SB3249-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB3249 Introduced 2/6/2024, by Sen. Dale Fowler SYNOPSIS AS INTRODUCED:
35 ILCS 16/10
Amends the Film Production Services Tax Credit Act of 2008. Provides that, for an accredited production that commences on or after July 1, 2024, the credit includes the sum of the following: 30% of the Illinois production spending for the taxable year; 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 of Commerce and Economic Opportunity; an additional 5% of the Illinois labor expenditures generated by the employment of residents of the State who reside outside of the metropolitan area if the person is a resident of a geographic area of high poverty or high unemployment and also resides outside of the metropolitan area; and (iv) an additional 5% if 50% or more of the total hours of principal filming or taping of the production are completed in the State but outside of the metropolitan area, as determined by the Department. Provides that the term "metropolitan area" means the City of Chicago and any part of the State located within 30 miles of the City of Chicago. Effective immediately.
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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:
"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,
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:

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(1) is news, current events, or public programming, or
a program that includes weather or market reports;
(2) is a talk show;
(3) is a production in respect of a game,
questionnaire, or contest;
(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
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)

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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.
"Credit" means:
(1) for an accredited production approved by the
Department on or before January 1, 2005 and commencing
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

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(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 and before July 1, 2024, the amount
equal to:
(i) 30% 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 .
(4) for an accredited production commencing on or
after July 1, 2024, the amount equal to:
(i) 30% 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; plus
(iii) 5% of the Illinois labor expenditures
generated by the employment of residents of the State
who reside outside of the metropolitan area; if the
person is a resident of a geographic area of high
poverty or high unemployment and also resides outside

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of the metropolitan area, then the credit includes
both subparagraph (ii) and this subparagraph (iii);
plus
(iv) if 50% or more of the total hours of principal
filming or taping of the production are completed in
the State but outside of the metropolitan area, as
determined by the Department, then the total amount of
the credit under subparagraphs (i), (ii), and (iii),
as applicable, shall be increased by 5%.
"Department" means the Department of Commerce and Economic
Opportunity.
"Director" means the Director of Commerce and Economic
Opportunity.
"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.
(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.

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(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
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).

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(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
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

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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.
"Illinois production spending" means the expenses incurred
by the applicant for an accredited production, including,
without limitation, all of the following:
(1) expenses to purchase, from vendors within
Illinois, tangible personal property that is used in the
accredited production;
(2) expenses to acquire services, from vendors in
Illinois, for film production, editing, or processing; and

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(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, 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.
"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
provide goods or ancillary contractor services such as
catering, construction, trailers, equipment, or
transportation.
"Metropolitan area" means the City of Chicago and any part
of the State located within 30 miles of the corporate limits of
the City of Chicago.
"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.

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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.)