103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB1531

 

Introduced 2/8/2023, 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, 2023, 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.


LRB103 25040 HLH 51374 b

 

 

A BILL FOR

 

SB1531LRB103 25040 HLH 51374 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Film Production Services Tax Credit Act of
52008 is amended by changing Section 10 as follows:
 
6    (35 ILCS 16/10)
7    Sec. 10. Definitions. As used in this Act:
8    "Accredited production" means: (i) for productions
9commencing before May 1, 2006, a film, video, or television
10production that has been certified by the Department in which
11the aggregate Illinois labor expenditures included in the cost
12of the production, in the period that ends 12 months after the
13time principal filming or taping of the production began,
14exceed $100,000 for productions of 30 minutes or longer, or
15$50,000 for productions of less than 30 minutes; and (ii) for
16productions commencing on or after May 1, 2006, a film, video,
17or television production that has been certified by the
18Department in which the Illinois production spending included
19in the cost of production in the period that ends 12 months
20after the time principal filming or taping of the production
21began exceeds $100,000 for productions of 30 minutes or longer
22or exceeds $50,000 for productions of less than 30 minutes.
23"Accredited production" does not include a production that:

 

 

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1        (1) is news, current events, or public programming, or
2    a program that includes weather or market reports;
3        (2) is a talk show;
4        (3) is a production in respect of a game,
5    questionnaire, or contest;
6        (4) is a sports event or activity;
7        (5) is a gala presentation or awards show;
8        (6) is a finished production that solicits funds;
9        (7) is a production produced by a film production
10    company if records, as required by 18 U.S.C. 2257, are to
11    be maintained by that film production company with respect
12    to any performer portrayed in that single media or
13    multimedia program; or
14        (8) is a production produced primarily for industrial,
15    corporate, or institutional purposes.
16    "Accredited animated production" means an accredited
17production in which movement and characters' performances are
18created using a frame-by-frame technique and a significant
19number of major characters are animated. Motion capture by
20itself is not an animation technique.
21    "Accredited production certificate" means a certificate
22issued by the Department certifying that the production is an
23accredited production that meets the guidelines of this Act.
24    "Applicant" means a taxpayer that is a film production
25company that is operating or has operated an accredited
26production located within the State of Illinois and that (i)

 

 

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1owns the copyright in the accredited production throughout the
2Illinois production period or (ii) has contracted directly
3with the owner of the copyright in the accredited production
4or a person acting on behalf of the owner to provide services
5for the production, where the owner of the copyright is not an
6eligible 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
23    after May 1, 2006, the amount equal to:
24            (i) 20% of the Illinois production spending for
25        the 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
5    after January 1, 2009 and prior to July 1, 2023, the amount
6    equal to:
7            (i) 30% of the Illinois production spending for
8        the taxable year; plus
9            (ii) 15% of the Illinois labor expenditures
10        generated by the employment of residents of geographic
11        areas of high poverty or high unemployment, as
12        determined by the Department; and .
13        (4) for an accredited production commencing on or
14    after July 1, 2023, the amount equal to:
15            (i) 30% of the Illinois production spending for
16        the taxable year; plus
17            (ii) 15% of the Illinois labor expenditures
18        generated by the employment of residents of geographic
19        areas of high poverty or high unemployment, as
20        determined by the Department; plus
21            (iii) 5% of the Illinois labor expenditures
22        generated by the employment of residents of the State
23        who reside outside of the metropolitan area; if the
24        person is a resident of a geographic area of high
25        poverty or high unemployment and also resides outside
26        of the metropolitan area, then the credit includes

 

 

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1        both subparagraph (ii) and this subparagraph (iii);
2        plus
3            (iv) if 50% or more of the total hours of principal
4        filming or taping of the production are completed in
5        the State but outside of the metropolitan area, as
6        determined by the Department, then the total amount of
7        the credit under subparagraphs (i), (ii), and (iii),
8        as applicable, shall be increased by 5%.
9    "Department" means the Department of Commerce and Economic
10Opportunity.
11    "Director" means the Director of Commerce and Economic
12Opportunity.
13    "Illinois labor expenditure" means salary or wages paid to
14employees of the applicant for services on the accredited
15production.
16    To qualify as an Illinois labor expenditure, the
17expenditure must be:
18        (1) Reasonable in the circumstances.
19        (2) Included in the federal income tax basis of the
20    property.
21        (3) Incurred by the applicant for services on or after
22    January 1, 2004.
23        (4) Incurred for the production stages of the
24    accredited production, from the final script stage to the
25    end of the post-production stage.
26        (5) Limited to the first $25,000 of wages paid or

 

 

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1    incurred to each employee of a production commencing
2    before May 1, 2006 and the first $100,000 of wages paid or
3    incurred to each employee of a production commencing on or
4    after May 1, 2006 and prior to July 1, 2022. For
5    productions commencing on or after July 1, 2022, limited
6    to the first $500,000 of wages paid or incurred to each
7    nonresident or resident employee of a production company
8    or loan out company that provides in-State services to a
9    production, whether those wages are paid or incurred by
10    the production company, loan out company, or both, subject
11    to withholding payments provided for in Article 7 of the
12    Illinois Income Tax Act. For purposes of calculating
13    Illinois labor expenditures for a television series, the
14    nonresident wage limitations provided under this
15    subparagraph are applied to the entire season.
16        (6) For a production commencing before May 1, 2006,
17    exclusive of the salary or wages paid to or incurred for
18    the 2 highest paid employees of the production.
19        (7) Directly attributable to the accredited
20    production.
21        (8) (Blank).
22        (9) Prior to July 1, 2022, paid to persons resident in
23    Illinois at the time the payments were made. For a
24    production commencing on or after July 1, 2022, paid to
25    persons resident in Illinois and nonresidents at the time
26    the payments were made. For purposes of this subparagraph,

 

 

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1    only wages paid to nonresidents working in the following
2    positions shall be considered Illinois labor expenditures:
3    Writer, Director, Director of Photography, Production
4    Designer, Costume Designer, Production Accountant, VFX
5    Supervisor, Editor, Composer, and Actor, subject to the
6    limitations set forth under this subparagraph. For an
7    accredited Illinois production spending of $25,000,000 or
8    less, no more than 2 nonresident actors' wages shall
9    qualify as an Illinois labor expenditure. For an
10    accredited production with Illinois production spending of
11    more than $25,000,000, no more than 4 nonresident actor's
12    wages shall qualify as Illinois labor expenditures.
13        (10) Paid for services rendered in Illinois.
14    "Illinois production spending" means the expenses incurred
15by the applicant for an accredited production, including,
16without limitation, all of the following:
17        (1) expenses to purchase, from vendors within
18    Illinois, tangible personal property that is used in the
19    accredited production;
20        (2) expenses to acquire services, from vendors in
21    Illinois, for film production, editing, or processing; and
22        (3) for a production commencing before July 1, 2022,
23    the compensation, not to exceed $100,000 for any one
24    employee, for contractual or salaried employees who are
25    Illinois residents performing services with respect to the
26    accredited production. For a production commencing on or

 

 

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1    after July 1, 2022, the compensation, not to exceed
2    $500,000 for any one employee, for contractual or salaried
3    employees who are Illinois residents or nonresident
4    employees, subject to the limitations set forth under
5    Section 10 of this Act.
6    "Loan out company" means a personal service corporation or
7other entity that is under contract with the taxpayer to
8provide specified individual personnel, such as artists, crew,
9actors, producers, or directors for the performance of
10services used directly in a production. "Loan out company"
11does not include entities contracted with by the taxpayer to
12provide goods or ancillary contractor services such as
13catering, construction, trailers, equipment, or
14transportation.
15    "Metropolitan area" means the City of Chicago and any part
16of the State located within 30 miles of the corporate limits of
17the City of Chicago.
18    "Qualified production facility" means stage facilities in
19the State in which television shows and films are or are
20intended to be regularly produced and that contain at least
21one sound stage of at least 15,000 square feet.
22    Rulemaking authority to implement Public Act 95-1006, if
23any, is conditioned on the rules being adopted in accordance
24with all provisions of the Illinois Administrative Procedure
25Act and all rules and procedures of the Joint Committee on
26Administrative Rules; any purported rule not so adopted, for

 

 

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1whatever reason, is unauthorized.
2(Source: P.A. 102-558, eff. 8-20-21; 102-700, eff. 4-19-22.)
 
3    Section 99. Effective date. This Act takes effect upon
4becoming law.