Bill Text: MN HF3048 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Live theater production partnership credit established, and money appropriated.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2012-05-09 - Author added Loeffler [HF3048 Detail]
Download: Minnesota-2011-HF3048-Introduced.html
1.2relating to taxation; income and franchise; establishing a live theater production
1.3partnership credit; appropriating money;proposing coding for new law in
1.4Minnesota Statutes, chapter 290.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. [290.0682] LIVE THEATER PRODUCTION PARTNERSHIP CREDIT.
1.7 Subdivision 1. Credit allowed. Subject to the conditions set forth in this section,
1.8an individual or a corporate taxpayer is allowed a credit against the tax due under this
1.9chapter, for each taxable year in which the applicant is issued an accredited theater
1.10production certificate, equal to: 25 percent of the total qualifying labor expenditures and
1.11production expenditures for a tier-one production, and 35 percent of the total qualifying
1.12labor expenditures and production expenditures for a tier-two production.
1.13 Subd. 2. Definitions. (a) "Accredited theater production" means a tier-one or
1.14tier-two production that is a for-profit live stage presentation in a qualified production
1.15facility, as defined in this section.
1.16(b) "Accredited theater production certificate" means a certificate issued by the
1.17Department of Employment and Economic Development certifying that the production is
1.18an accredited theater production that meets the guidelines of this section.
1.19(c) "Applicant" means a taxpayer that is a theater producer, owner, licensee,
1.20operator, or presenter that is presenting or has presented a live stage presentation located
1.21in the state who:
1.22(1) owns or licenses the theatrical rights of the stage presentation for the production
1.23period, or has contracted or will contract directly with the owner or licensee of the
2.1theatrical rights or a person acting on behalf of the owner or licensee to provide live
2.2performances of the production; and
2.3(2) has entered into an agreement with a sponsor organization for the purposes of
2.4producing the accredited theater production.
2.5(d) "Labor expenditure" means gross salary or wages, including, but not limited to,
2.6taxes, benefits, and any other consideration incurred or paid to nontalent employees of
2.7the applicant for services rendered to and on behalf of the accredited theater production.
2.8The expenditure must be:
2.9(1) incurred or paid by the applicant on or after the effective date of this section for
2.10services related to any portion of an accredited theater production from its preproduction
2.11stages, including, but not limited to, the writing of the script, casting, hiring of service
2.12providers, purchases from vendors, marketing, advertising, public relations, load in,
2.13rehearsals, performances, other accredited theater production-related activities, and
2.14load out;
2.15(2) paid to Minnesota residents in the taxable year for which the applicant is
2.16claiming the tax credit award, or no later than 60 days after the end of the taxable year; and
2.17(3) limited to the first $100,000 of wages incurred or paid to each employee of an
2.18accredited theater production in a taxable year.
2.19(e) "Long-run production" means a live stage production that is performed in a
2.20qualified production facility for longer than eight weeks, with at least six performances
2.21per week.
2.22(f) "New or expanding" means a live theater production company that, on December
2.2331 of the year in which the applicant taxpayer files for surrender of its accredited theater
2.24production certificate and on the date of issuance of the accredited theater production
2.25certificate, has fewer than five employees in the state.
2.26(g) "Pre-Broadway production" means a live stage production that, in its original
2.27or adaptive version, is performed in a qualified production facility having a presentation
2.28scheduled for Broadway's Theater District in New York City not longer than 12 months
2.29after the date of its last Minnesota presentation.
2.30(h) "Production spending" means any and all expenses directly or indirectly incurred
2.31relating to an accredited theater production presented in any qualified production facility
2.32of the applicant, including, but not limited to, expenditures for:
2.33(1) national marketing; public relations; and the creation and placement of print,
2.34electronic, television, billboard, and other forms of advertising; and
2.35(2) the construction and fabrication of scenic materials and elements, provided that
2.36the maximum amount of expenditures attributable to the construction and fabrication of
3.1scenic materials and elements eligible for a tax credit award shall not exceed $500,000 per
3.2applicant per production in any taxable year.
3.3(i) "Qualified production facility" means a facility located in the state in which
3.4live theatrical productions are, or are intended to be, exclusively presented that contains
3.5at least one stage, dressing rooms, storage areas, and other ancillary amenities necessary
3.6for the accredited theater production, and:
3.7(1) for a tier-one production, a seating capacity of 700 or more; and
3.8(2) for a tier-two production, a seating capacity of between 200 and 699.
3.9(j) "Sponsor" means a Minnesota organization that:
3.10(1) is in the business of producing live stage presentations;
3.11(2) has its headquarters within 50 miles of the theater where the accredited theater
3.12production is performed; and
3.13(3) has nonprofit, tax-exempt status under section 501(c)(3) of the Internal Revenue
3.14Code.
3.15(k) "Tier-one production" means a pre-Broadway production or a long-run
3.16production performed in a qualified production facility for which aggregate expenditures,
3.17including labor, equal at least $100,000.
3.18(l) "Tier-two production" means a live stage production performed in a qualified
3.19production facility for more than six weeks but less than 36 weeks, with at least five
3.20performances per week for which aggregate expenditures, including labor, equal at least
3.21$50,000.
3.22 Subd. 3. Application for accredited theater production certificate; certification
3.23of credits. (a) An applicant must apply to the Department of Employment and Economic
3.24Development for an accredited theater production certificate for each accredited theater
3.25production at each of the applicant's qualified production facilities. The application must
3.26be in the form and in a manner approved by the Department of Employment and Economic
3.27Development and the commissioner of revenue. The Department of Employment and
3.28Economic Development shall issue an accredited theater production certificate to an
3.29applicant if it finds that:
3.30(1) the applicant intends to make the expenditures in the state required for
3.31certification of the accredited theater production;
3.32(2) the applicant's accredited theater production will benefit the people of the state
3.33by increasing opportunities for employment of state residents;
3.34(3) the relationship with the sponsor will utilize the sponsor's resources to the benefit
3.35of the accredited theater production; and
4.1(4) if not for the tax credit award, the applicant's accredited theater production
4.2would not occur in the state, which may be demonstrated by any means, including, but not
4.3limited to, evidence that:
4.4(i) the applicant, presenter, owner, or licensee of the production rights has other state
4.5or international location options at which to present the production and could reasonably
4.6and efficiently locate outside of the state;
4.7(ii) at least one other state or nation could be considered for the production;
4.8(iii) the receipt of the tax award credit is a major factor in the decision of the
4.9applicant, presenter, production owner, or licensee as to where the production will be
4.10presented and that without the tax credit award the applicant likely would not create or
4.11retain jobs in the state; or receipt of the tax credit award is essential to the applicant's
4.12decision to create or retain new jobs in the state; and
4.13(iv) the tax credit award will result in an overall positive impact to the state, as
4.14determined by the department using the best available data.
4.15(b) The commissioner shall act expeditiously regarding approval of applications for
4.16accredited theater production certificates so as to accommodate the preproduction work,
4.17booking, commencement of ticket sales, determination of performance dates, load in, and
4.18other matters relating to the live theater productions for which approval is sought.
4.19(c) Upon satisfactory review of each application, the Department of Employment
4.20and Economic Development shall issue a tax credit award certificate stating the amount
4.21of the applicant's tax credit award for the taxable year. By January 31 of each year, the
4.22Department of Employment and Economic Development must report to the commissioner
4.23of revenue the number, amount, and taxpayers to whom tax credit award certificates
4.24were issued during the preceding taxable year, and must provide verification that the
4.25applicants issued accredited theater production certificates made the full amount of labor
4.26expenditures and production expenditures for which the certificates were issued.
4.27(d) The amount of tax credits awarded to all applicants under this section shall not
4.28exceed $2,000,000 in any calendar year. Applications shall be considered in the order
4.29received.
4.30 Subd. 4. Carryover. The credit is limited to the liability for tax as computed under
4.31this chapter for the taxable year. If the amount of the credit determined under this section
4.32for any taxable year exceeds this limitation, the excess is a live theater production credit
4.33carryover to each of the five succeeding taxable years. The entire amount of the unused
4.34credit for the first taxable year is carried first to the earliest of the taxable years to which the
4.35credit may be carried and then to each successive year to which the credit may be carried.
5.1The amount of the unused credit which may be added under this subdivision shall not
5.2exceed the taxpayer's liability for tax, less the credit under this section for the taxable year.
5.3 Subd. 5. Transfers. After 180 days from the date of an applicant's first labor
5.4expenditure or production expenditure, the applicant may sell, assign, or otherwise
5.5transfer all or part of the value of the credits to another taxpayer subject to tax under this
5.6chapter and must notify the commissioner of revenue within 30 days of the transfer on
5.7a form prescribed by the commissioner. An applicant may not transfer a credit more
5.8than once in a 12-month period.
5.9 Subd. 6. Live theater tax credit award program required agreement; evaluation
5.10and reports. (a) The commissioner shall require a recipient of a live theater production
5.11tax credit award certificate to enter into a written agreement with the sponsor affiliated
5.12with the accredited theater production concerning the terms of their relationship for
5.13purposes of the live theater production.
5.14(b) By March 30 of each calendar year, the Department of Employment and
5.15Economic Development shall submit to the chairs and ranking minority members of the
5.16senate and house of representatives committees having jurisdiction over jobs, economic
5.17growth, and taxes, a report that includes:
5.18(1) an assessment of the effectiveness of the program in creating and retaining
5.19live theater production jobs in the state and whether the job positions are entry level,
5.20management, vendor, or production related;
5.21(2) the amount of accredited theater production spending brought to the state,
5.22including the amount of spending and type of Minnesota vendors hired in connection with
5.23an accredited theater production;
5.24(3) demographic information on the recipients of qualifying Minnesota labor
5.25expenditure salaries or wages, including geographical, racial and ethnic, gender, and
5.26income level information; and
5.27(4) the identification of each vendor that provided goods or services included in an
5.28accredited theater production's Minnesota production spending.
5.29(c) $....... is appropriated annually from the general fund to the Department of
5.30Employment and Economic Development for the evaluation and reporting required under
5.31this subdivision.
5.32EFFECTIVE DATE.This section is effective for taxable years beginning after
5.33December 31, 2011.
1.3partnership credit; appropriating money;proposing coding for new law in
1.4Minnesota Statutes, chapter 290.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. [290.0682] LIVE THEATER PRODUCTION PARTNERSHIP CREDIT.
1.7 Subdivision 1. Credit allowed. Subject to the conditions set forth in this section,
1.8an individual or a corporate taxpayer is allowed a credit against the tax due under this
1.9chapter, for each taxable year in which the applicant is issued an accredited theater
1.10production certificate, equal to: 25 percent of the total qualifying labor expenditures and
1.11production expenditures for a tier-one production, and 35 percent of the total qualifying
1.12labor expenditures and production expenditures for a tier-two production.
1.13 Subd. 2. Definitions. (a) "Accredited theater production" means a tier-one or
1.14tier-two production that is a for-profit live stage presentation in a qualified production
1.15facility, as defined in this section.
1.16(b) "Accredited theater production certificate" means a certificate issued by the
1.17Department of Employment and Economic Development certifying that the production is
1.18an accredited theater production that meets the guidelines of this section.
1.19(c) "Applicant" means a taxpayer that is a theater producer, owner, licensee,
1.20operator, or presenter that is presenting or has presented a live stage presentation located
1.21in the state who:
1.22(1) owns or licenses the theatrical rights of the stage presentation for the production
1.23period, or has contracted or will contract directly with the owner or licensee of the
2.1theatrical rights or a person acting on behalf of the owner or licensee to provide live
2.2performances of the production; and
2.3(2) has entered into an agreement with a sponsor organization for the purposes of
2.4producing the accredited theater production.
2.5(d) "Labor expenditure" means gross salary or wages, including, but not limited to,
2.6taxes, benefits, and any other consideration incurred or paid to nontalent employees of
2.7the applicant for services rendered to and on behalf of the accredited theater production.
2.8The expenditure must be:
2.9(1) incurred or paid by the applicant on or after the effective date of this section for
2.10services related to any portion of an accredited theater production from its preproduction
2.11stages, including, but not limited to, the writing of the script, casting, hiring of service
2.12providers, purchases from vendors, marketing, advertising, public relations, load in,
2.13rehearsals, performances, other accredited theater production-related activities, and
2.14load out;
2.15(2) paid to Minnesota residents in the taxable year for which the applicant is
2.16claiming the tax credit award, or no later than 60 days after the end of the taxable year; and
2.17(3) limited to the first $100,000 of wages incurred or paid to each employee of an
2.18accredited theater production in a taxable year.
2.19(e) "Long-run production" means a live stage production that is performed in a
2.20qualified production facility for longer than eight weeks, with at least six performances
2.21per week.
2.22(f) "New or expanding" means a live theater production company that, on December
2.2331 of the year in which the applicant taxpayer files for surrender of its accredited theater
2.24production certificate and on the date of issuance of the accredited theater production
2.25certificate, has fewer than five employees in the state.
2.26(g) "Pre-Broadway production" means a live stage production that, in its original
2.27or adaptive version, is performed in a qualified production facility having a presentation
2.28scheduled for Broadway's Theater District in New York City not longer than 12 months
2.29after the date of its last Minnesota presentation.
2.30(h) "Production spending" means any and all expenses directly or indirectly incurred
2.31relating to an accredited theater production presented in any qualified production facility
2.32of the applicant, including, but not limited to, expenditures for:
2.33(1) national marketing; public relations; and the creation and placement of print,
2.34electronic, television, billboard, and other forms of advertising; and
2.35(2) the construction and fabrication of scenic materials and elements, provided that
2.36the maximum amount of expenditures attributable to the construction and fabrication of
3.1scenic materials and elements eligible for a tax credit award shall not exceed $500,000 per
3.2applicant per production in any taxable year.
3.3(i) "Qualified production facility" means a facility located in the state in which
3.4live theatrical productions are, or are intended to be, exclusively presented that contains
3.5at least one stage, dressing rooms, storage areas, and other ancillary amenities necessary
3.6for the accredited theater production, and:
3.7(1) for a tier-one production, a seating capacity of 700 or more; and
3.8(2) for a tier-two production, a seating capacity of between 200 and 699.
3.9(j) "Sponsor" means a Minnesota organization that:
3.10(1) is in the business of producing live stage presentations;
3.11(2) has its headquarters within 50 miles of the theater where the accredited theater
3.12production is performed; and
3.13(3) has nonprofit, tax-exempt status under section 501(c)(3) of the Internal Revenue
3.14Code.
3.15(k) "Tier-one production" means a pre-Broadway production or a long-run
3.16production performed in a qualified production facility for which aggregate expenditures,
3.17including labor, equal at least $100,000.
3.18(l) "Tier-two production" means a live stage production performed in a qualified
3.19production facility for more than six weeks but less than 36 weeks, with at least five
3.20performances per week for which aggregate expenditures, including labor, equal at least
3.21$50,000.
3.22 Subd. 3. Application for accredited theater production certificate; certification
3.23of credits. (a) An applicant must apply to the Department of Employment and Economic
3.24Development for an accredited theater production certificate for each accredited theater
3.25production at each of the applicant's qualified production facilities. The application must
3.26be in the form and in a manner approved by the Department of Employment and Economic
3.27Development and the commissioner of revenue. The Department of Employment and
3.28Economic Development shall issue an accredited theater production certificate to an
3.29applicant if it finds that:
3.30(1) the applicant intends to make the expenditures in the state required for
3.31certification of the accredited theater production;
3.32(2) the applicant's accredited theater production will benefit the people of the state
3.33by increasing opportunities for employment of state residents;
3.34(3) the relationship with the sponsor will utilize the sponsor's resources to the benefit
3.35of the accredited theater production; and
4.1(4) if not for the tax credit award, the applicant's accredited theater production
4.2would not occur in the state, which may be demonstrated by any means, including, but not
4.3limited to, evidence that:
4.4(i) the applicant, presenter, owner, or licensee of the production rights has other state
4.5or international location options at which to present the production and could reasonably
4.6and efficiently locate outside of the state;
4.7(ii) at least one other state or nation could be considered for the production;
4.8(iii) the receipt of the tax award credit is a major factor in the decision of the
4.9applicant, presenter, production owner, or licensee as to where the production will be
4.10presented and that without the tax credit award the applicant likely would not create or
4.11retain jobs in the state; or receipt of the tax credit award is essential to the applicant's
4.12decision to create or retain new jobs in the state; and
4.13(iv) the tax credit award will result in an overall positive impact to the state, as
4.14determined by the department using the best available data.
4.15(b) The commissioner shall act expeditiously regarding approval of applications for
4.16accredited theater production certificates so as to accommodate the preproduction work,
4.17booking, commencement of ticket sales, determination of performance dates, load in, and
4.18other matters relating to the live theater productions for which approval is sought.
4.19(c) Upon satisfactory review of each application, the Department of Employment
4.20and Economic Development shall issue a tax credit award certificate stating the amount
4.21of the applicant's tax credit award for the taxable year. By January 31 of each year, the
4.22Department of Employment and Economic Development must report to the commissioner
4.23of revenue the number, amount, and taxpayers to whom tax credit award certificates
4.24were issued during the preceding taxable year, and must provide verification that the
4.25applicants issued accredited theater production certificates made the full amount of labor
4.26expenditures and production expenditures for which the certificates were issued.
4.27(d) The amount of tax credits awarded to all applicants under this section shall not
4.28exceed $2,000,000 in any calendar year. Applications shall be considered in the order
4.29received.
4.30 Subd. 4. Carryover. The credit is limited to the liability for tax as computed under
4.31this chapter for the taxable year. If the amount of the credit determined under this section
4.32for any taxable year exceeds this limitation, the excess is a live theater production credit
4.33carryover to each of the five succeeding taxable years. The entire amount of the unused
4.34credit for the first taxable year is carried first to the earliest of the taxable years to which the
4.35credit may be carried and then to each successive year to which the credit may be carried.
5.1The amount of the unused credit which may be added under this subdivision shall not
5.2exceed the taxpayer's liability for tax, less the credit under this section for the taxable year.
5.3 Subd. 5. Transfers. After 180 days from the date of an applicant's first labor
5.4expenditure or production expenditure, the applicant may sell, assign, or otherwise
5.5transfer all or part of the value of the credits to another taxpayer subject to tax under this
5.6chapter and must notify the commissioner of revenue within 30 days of the transfer on
5.7a form prescribed by the commissioner. An applicant may not transfer a credit more
5.8than once in a 12-month period.
5.9 Subd. 6. Live theater tax credit award program required agreement; evaluation
5.10and reports. (a) The commissioner shall require a recipient of a live theater production
5.11tax credit award certificate to enter into a written agreement with the sponsor affiliated
5.12with the accredited theater production concerning the terms of their relationship for
5.13purposes of the live theater production.
5.14(b) By March 30 of each calendar year, the Department of Employment and
5.15Economic Development shall submit to the chairs and ranking minority members of the
5.16senate and house of representatives committees having jurisdiction over jobs, economic
5.17growth, and taxes, a report that includes:
5.18(1) an assessment of the effectiveness of the program in creating and retaining
5.19live theater production jobs in the state and whether the job positions are entry level,
5.20management, vendor, or production related;
5.21(2) the amount of accredited theater production spending brought to the state,
5.22including the amount of spending and type of Minnesota vendors hired in connection with
5.23an accredited theater production;
5.24(3) demographic information on the recipients of qualifying Minnesota labor
5.25expenditure salaries or wages, including geographical, racial and ethnic, gender, and
5.26income level information; and
5.27(4) the identification of each vendor that provided goods or services included in an
5.28accredited theater production's Minnesota production spending.
5.29(c) $....... is appropriated annually from the general fund to the Department of
5.30Employment and Economic Development for the evaluation and reporting required under
5.31this subdivision.
5.32EFFECTIVE DATE.This section is effective for taxable years beginning after
5.33December 31, 2011.
