Full Text of SB1286 97th General Assembly
SB1286eng 97TH GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning revenue.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Film
Production Services Tax Credit Act of | 5 | | 2008 is amended by changing Sections 10 and 40 and by adding | 6 | | Section 42 as follows: | 7 | | (35 ILCS 16/10)
| 8 | | Sec. 10. Definitions. As used in this Act:
| 9 | | "Accredited production" means: (i) for productions | 10 | | commencing before May 1, 2006, a film, video, or television | 11 | | production that
has been certified by the Department in which | 12 | | the aggregate Illinois labor
expenditures
included in the cost | 13 | | of the production, in the period that ends 12 months after
the | 14 | | time principal filming or taping of the production began, | 15 | | exceed $100,000
for productions of 30 minutes or longer, or | 16 | | $50,000 for productions of less
than 30
minutes; and (ii) for | 17 | | productions commencing on or after May 1, 2006, a film, video, | 18 | | or television production that has been certified by the | 19 | | Department in which the Illinois production spending included | 20 | | in the cost of production in the period that ends 12 months | 21 | | after the time principal filming or taping of the production | 22 | | began exceeds $100,000 for productions of 30 minutes or longer | 23 | | or exceeds $50,000 for productions of less than 30 minutes. |
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| 1 | | "Accredited production" does not include a production that:
| 2 | | (1) is news, current events, or public programming, or | 3 | | a program that
includes weather or market reports;
| 4 | | (2) (blank) is a talk show ;
| 5 | | (3) is a production in respect of a game, | 6 | | questionnaire, or contest;
| 7 | | (4) is a sports event or activity;
| 8 | | (5) is a gala presentation or awards show;
| 9 | | (6) is a finished production that solicits funds;
| 10 | | (7) is a production produced by a film production | 11 | | company if records, as
required
by 18
U.S.C. 2257, are to | 12 | | be maintained by that film production company with respect
| 13 | | to any
performer portrayed in that single media or | 14 | | multimedia program; or
| 15 | | (8) is a production produced primarily for industrial, | 16 | | corporate, or
institutional purposes.
| 17 | | "Accredited production" includes an accredited animated | 18 | | production, a talk show, or a reality program. | 19 | | "Accredited animated production" means fully animated | 20 | | feature with a total production period of more than 12 months. | 21 | | "Accredited production certificate" means a certificate | 22 | | issued by the
Department certifying that the production is an | 23 | | accredited production that
meets the guidelines of this Act.
| 24 | | "Applicant" means a taxpayer that is a film production | 25 | | company that is
operating or has operated an accredited | 26 | | production located within the State of
Illinois and that
(i) |
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| 1 | | owns the copyright in the accredited production throughout the
| 2 | | Illinois production period or (ii)
has contracted directly with | 3 | | the owner of the copyright in the
accredited production
or a | 4 | | person acting on behalf of the owner
to provide services for | 5 | | the production, where the owner
of the copyright is not an | 6 | | eligible production corporation.
| 7 | | "Credit" means:
| 8 | | (1) for an accredited production approved by the | 9 | | Department on or before January 1, 2005 and commencing | 10 | | before May 1, 2006, the amount equal to 25% of the Illinois | 11 | | labor
expenditure approved by the Department.
The | 12 | | applicant is deemed to have paid, on its balance due day | 13 | | for the year, an
amount equal to 25% of its qualified | 14 | | Illinois labor expenditure for the tax
year. For Illinois | 15 | | labor expenditures generated by the employment of | 16 | | residents of geographic areas of high poverty or high | 17 | | unemployment, as determined by the Department, in an | 18 | | accredited production commencing before May 1, 2006 and
| 19 | | approved by the Department after January 1, 2005, the | 20 | | applicant shall receive an enhanced credit of 10% in | 21 | | addition to the 25% credit; and | 22 | | (2) for an accredited production commencing on or after | 23 | | May 1, 2006, the amount equal to: | 24 | | (i) 20% of the Illinois production spending for the | 25 | | taxable year; plus | 26 | | (ii) 15% of the Illinois labor expenditures |
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| 1 | | generated by the employment of residents of geographic | 2 | | areas of high poverty or high unemployment, as | 3 | | determined by the Department; and
| 4 | | (3) for an accredited production commencing on or after | 5 | | January 1, 2009, other than an accredited animated | 6 | | production qualifying under item (4) or a talk show or | 7 | | reality program qualifying under item (5), the amount equal | 8 | | to: | 9 | | (i) 30% of the Illinois production spending for the | 10 | | taxable year; plus | 11 | | (ii) 15% of the Illinois labor expenditures | 12 | | generated by the employment of residents of geographic | 13 | | areas of high poverty or high unemployment, as | 14 | | determined by the Department ; . | 15 | | (4) for an accredited animated production commencing | 16 | | on or after January 1, 2012: | 17 | | (i) 30% of the anticipated Illinois production | 18 | | spending for the entire production period; plus | 19 | | (ii) 15% of the anticipated Illinois labor | 20 | | expenditures generated by the employment of residents | 21 | | of geographic areas of high poverty or high | 22 | | unemployment, as determined by the Department, during | 23 | | the entire production period; | 24 | | the credits awarded for an accredited animated | 25 | | production commencing on or after January 1, 2012 shall be | 26 | | awarded as provided in Section 42; and |
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| 1 | | (5) for an accredited talk show or reality program | 2 | | commencing its first season in Illinois on or after May 1, | 3 | | 2011, the amount equal to: | 4 | | (i) 30% of the Illinois production spending for the | 5 | | taxable year; plus | 6 | | (ii) 15% of the Illinois labor expenditures | 7 | | generated by the employment of residents of geographic | 8 | | areas of high poverty or high unemployment, as | 9 | | determined by the Department. | 10 | | "Department" means the Department of Commerce and Economic | 11 | | Opportunity.
| 12 | | "Director" means the Director of Commerce and Economic | 13 | | Opportunity.
| 14 | | "Illinois labor expenditure" means
salary or wages paid to | 15 | | employees of the
applicant for services on the accredited
| 16 | | production;
| 17 | | To qualify as an Illinois labor expenditure, the | 18 | | expenditure must be:
| 19 | | (1) Reasonable in the circumstances.
| 20 | | (2) Included in the federal income tax basis of the | 21 | | property.
| 22 | | (3) Incurred by the applicant for services on or after | 23 | | January 1, 2004.
| 24 | | (4) Incurred for the production stages of the | 25 | | accredited production, from
the final
script stage to the | 26 | | end of the post-production stage.
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| 1 | | (5) Limited to the first $25,000 of wages paid or | 2 | | incurred to each
employee of a production commencing before | 3 | | May 1, 2006 and the first $100,000 of wages paid or | 4 | | incurred to each
employee of
a production commencing on or | 5 | | after May 1, 2006.
| 6 | | (6) For a production commencing before May 1, 2006, | 7 | | exclusive of the salary or wages paid to or incurred for | 8 | | the 2 highest
paid
employees of the production.
| 9 | | (7) Directly attributable to the accredited | 10 | | production.
| 11 | | (8) Except for expenditures paid with respect to an | 12 | | accredited animated production, paid Paid in the tax year
| 13 | | for which the applicant is claiming the credit
or no later | 14 | | than 60 days after the end of the tax
year.
| 15 | | (9) Paid to persons resident in Illinois at the time | 16 | | the payments were
made.
| 17 | | (10) Paid for services rendered in Illinois.
| 18 | | "Illinois production spending" means the expenses incurred | 19 | | by the applicant for an accredited production, including, | 20 | | without limitation, all of the following: | 21 | | (1) expenses to purchase, from vendors within | 22 | | Illinois, tangible personal property that is used in the | 23 | | accredited production; | 24 | | (2) expenses to acquire services, from vendors in | 25 | | Illinois, for film production, editing, or processing; and | 26 | | (3) the compensation, not to exceed $100,000 for any |
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| 1 | | one employee, for contractual or salaried employees who are | 2 | | Illinois residents performing services with respect to the | 3 | | accredited production. | 4 | | "Qualified production facility" means stage facilities in | 5 | | the State in which television shows and films are or are | 6 | | intended to be regularly produced and that contain at least one | 7 | | sound stage of at least 15,000 square feet.
| 8 | | Rulemaking authority to implement this amendatory Act of | 9 | | the 95th General Assembly, if any, is conditioned on the rules | 10 | | being adopted in accordance with all provisions of the Illinois | 11 | | Administrative Procedure Act and all rules and procedures of | 12 | | the Joint Committee on Administrative Rules; any purported rule | 13 | | not so adopted, for whatever reason, is unauthorized. | 14 | | (Source: P.A. 95-720, eff. 5-27-08; 95-1006, eff. 12-15-08.) | 15 | | (35 ILCS 16/40)
| 16 | | Sec. 40. Amount and duration of the credit. The amount of | 17 | | the credit awarded under this Act is based on the amount of the | 18 | | Illinois labor expenditure and Illinois production spending | 19 | | approved by the Department for the production as set forth | 20 | | under Section 10. The duration of the credit may not exceed (i) | 21 | | one taxable year for productions other than accredited animated | 22 | | productions or (ii) for accredited animated productions, the | 23 | | period beginning with the taxable year in which the production | 24 | | commences and ending with the taxable year in which the final | 25 | | audit required under Section 42 is complete .
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| 1 | | (Source: P.A. 95-720, eff. 5-27-08 .) | 2 | | (35 ILCS 16/42 new) | 3 | | Sec. 42. Accredited animated productions. Each applicant | 4 | | requesting credits for an accredited animated production | 5 | | commencing on or after January 1, 2012 must enter into an | 6 | | agreement with the Department detailing (i) the applicant's | 7 | | anticipated Illinois production spending for the entire | 8 | | production period and (ii) the anticipated Illinois labor | 9 | | expenditures generated by the employment of residents of | 10 | | geographic areas of high poverty or high unemployment. The | 11 | | accredited production certificate for an accredited animated | 12 | | production shall list those amounts. An applicant that is | 13 | | awarded a credit for an accredited animated production is | 14 | | entitled to take (i) 25% of the total credit awarded in the | 15 | | taxable year in which Stage 1 of the production is completed, | 16 | | (ii) 25% of the total credit awarded in the taxable year in | 17 | | which Stage 2 of the production is completed, (iii) 25% of the | 18 | | total credit awarded in the taxable year in which Stage 3 of | 19 | | the production is completed, and (iv) 25% of the total credit | 20 | | awarded in the taxable year in which Stage 4 of the production | 21 | | is completed, including the final audit. | 22 | | For the purposes of this Section: | 23 | | Stage 1 of the production is considered complete upon | 24 | | review and approval by the Department of an animatic reel in | 25 | | QuickTime format (with watermark). "Animatic reel" means a |
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| 1 | | timed and edited compilation of images/storyboard | 2 | | pre-visualising the final feature from first to last scene, | 3 | | including dialogue from the first pass voice recording or | 4 | | "scratch track". The completion of Stage 1 is the end of | 5 | | pre-production and includes the culmination of the following: | 6 | | (1) conclusion of the screenplay; | 7 | | (2) conclusion of the initial dialogue record; | 8 | | (3) asset design (2D); and | 9 | | (4) conclusion of the storyboard stage. | 10 | | Stage 2 of the production is considered complete upon | 11 | | review and approval by the Department of a | 12 | | pre-visualization/blocking reel in QuickTime format (with | 13 | | watermark). "Pre-visualization/blocking reel" means a timed | 14 | | and edited compilation of rendered 3D pre-visualization from | 15 | | the first to last scene, including any and all motion capture. | 16 | | The completion of Stage 2 includes the completion of asset | 17 | | modeling and asset rigging. | 18 | | Stage 3 of the production is considered complete upon | 19 | | review and approval by the Department of the first animation | 20 | | pass in QuickTime format (with watermark). "First animation | 21 | | pass" means a timed and edited compilation of rendered | 22 | | animation from the first to last scene, including the second | 23 | | dialogue pass. The completion of Stage 3 means the completion | 24 | | of asset surfacing: color and texture, | 25 | | pre-visualization/motion capture, and the progress of | 26 | | animation stage. |
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| 1 | | Stage 4 of the production is considered complete upon | 2 | | review and approval by the Department of a final rendered | 3 | | feature in QuickTime format (with watermark). The completion of | 4 | | Stage 4 includes the completion of the entire post-production | 5 | | process. | 6 | | Upon the completion of Stage 4, the applicant shall submit | 7 | | to a final audit by the Department. If the Department finds | 8 | | that the actual Illinois production spending is less than the | 9 | | applicant's anticipated Illinois production spending, as set | 10 | | forth in the agreement with the Department, then the final tax | 11 | | credit award shall be reduced accordingly. | 12 | | Section 99. Effective date. This Act takes effect upon | 13 | | becoming law.
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