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

 

SB3249LRB103 37843 HLH 67973 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 and before January 1, 2009, the amount
24    equal to:
25            (i) 20% of the Illinois production spending for
26        the taxable year; plus

 

 

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1            (ii) 15% of the Illinois labor expenditures
2        generated by the employment of residents of geographic
3        areas of high poverty or high unemployment, as
4        determined by the Department; and
5        (3) for an accredited production commencing on or
6    after January 1, 2009 and before July 1, 2024, the amount
7    equal to:
8            (i) 30% of the Illinois production spending for
9        the taxable year; plus
10            (ii) 15% of the Illinois labor expenditures
11        generated by the employment of residents of geographic
12        areas of high poverty or high unemployment, as
13        determined by the Department; and .
14        (4) for an accredited production commencing on or
15    after July 1, 2024, the amount equal to:
16            (i) 30% of the Illinois production spending for
17        the taxable year; plus
18            (ii) 15% of the Illinois labor expenditures
19        generated by the employment of residents of geographic
20        areas of high poverty or high unemployment, as
21        determined by the Department; plus
22            (iii) 5% of the Illinois labor expenditures
23        generated by the employment of residents of the State
24        who reside outside of the metropolitan area; if the
25        person is a resident of a geographic area of high
26        poverty or high unemployment and also resides outside

 

 

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1        of the metropolitan area, then the credit includes
2        both subparagraph (ii) and this subparagraph (iii);
3        plus
4            (iv) if 50% or more of the total hours of principal
5        filming or taping of the production are completed in
6        the State but outside of the metropolitan area, as
7        determined by the Department, then the total amount of
8        the credit under subparagraphs (i), (ii), and (iii),
9        as applicable, shall be increased by 5%.
10    "Department" means the Department of Commerce and Economic
11Opportunity.
12    "Director" means the Director of Commerce and Economic
13Opportunity.
14    "Illinois labor expenditure" means salary or wages paid to
15employees of the applicant for services on the accredited
16production.
17    To qualify as an Illinois labor expenditure, the
18expenditure 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
3    before 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 and prior to July 1, 2022. For
6    productions commencing on or after July 1, 2022, limited
7    to the first $500,000 of wages paid or incurred to each
8    eligible nonresident or resident employee of a production
9    company or loan out company that provides in-State
10    services to a production, whether those wages are paid or
11    incurred by the production company, loan out company, or
12    both, subject to withholding payments provided for in
13    Article 7 of the Illinois Income Tax Act. For purposes of
14    calculating Illinois labor expenditures for a television
15    series, the eligible nonresident wage limitations provided
16    under this subparagraph are applied to the entire season.
17    For the purpose of this paragraph (5), an eligible
18    nonresident is a nonresident whose wages qualify as an
19    Illinois labor expenditure under the provisions of
20    paragraph (9) that apply to that production.
21        (6) For a production commencing before May 1, 2006,
22    exclusive of the salary or wages paid to or incurred for
23    the 2 highest paid employees of the production.
24        (7) Directly attributable to the accredited
25    production.
26        (8) (Blank).

 

 

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1        (9) Prior to July 1, 2022, paid to persons resident in
2    Illinois at the time the payments were made. For a
3    production commencing on or after July 1, 2022, paid to
4    persons resident in Illinois and nonresidents at the time
5    the payments were made.
6        For purposes of this subparagraph, if the production
7    is accredited by the Department before the effective date
8    of this amendatory Act of the 102nd General Assembly, only
9    wages paid to nonresidents working in the following
10    positions shall be considered Illinois labor expenditures:
11    Writer, Director, Director of Photography, Production
12    Designer, Costume Designer, Production Accountant, VFX
13    Supervisor, Editor, Composer, and Actor, subject to the
14    limitations set forth under this subparagraph. For an
15    accredited Illinois production spending of $25,000,000 or
16    less, no more than 2 nonresident actors' wages shall
17    qualify as an Illinois labor expenditure. For an
18    accredited production with Illinois production spending of
19    more than $25,000,000, no more than 4 nonresident actor's
20    wages shall qualify as Illinois labor expenditures.
21        For purposes of this subparagraph, if the production
22    is accredited by the Department on or after the effective
23    date of this amendatory Act of the 102nd General Assembly,
24    wages paid to nonresidents shall qualify as Illinois labor
25    expenditures only under the following conditions:
26            (A) the nonresident must be employed in a

 

 

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1        qualified position;
2            (B) for each of those accredited productions, the
3        wages of not more than 9 nonresidents who are employed
4        in a qualified position other than Actor shall qualify
5        as Illinois labor expenditures;
6            (C) for an accredited production with Illinois
7        production spending of $25,000,000 or less, no more
8        than 2 nonresident actors' wages shall qualify as
9        Illinois labor expenditures; and
10            (D) for an accredited production with Illinois
11        production spending of more than $25,000,000, no more
12        than 4 nonresident actors' wages shall qualify as
13        Illinois labor expenditures.
14        As used in this paragraph (9), "qualified position"
15    means: Writer, Director, Director of Photography,
16    Production Designer, Costume Designer, Production
17    Accountant, VFX Supervisor, Editor, Composer, or Actor.
18        (10) Paid for services rendered in Illinois.
19    "Illinois production spending" means the expenses incurred
20by the applicant for an accredited production, including,
21without limitation, all of the following:
22        (1) expenses to purchase, from vendors within
23    Illinois, tangible personal property that is used in the
24    accredited production;
25        (2) expenses to acquire services, from vendors in
26    Illinois, for film production, editing, or processing; and

 

 

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1        (3) for a production commencing before July 1, 2022,
2    the compensation, not to exceed $100,000 for any one
3    employee, for contractual or salaried employees who are
4    Illinois residents performing services with respect to the
5    accredited production. For a production commencing on or
6    after July 1, 2022, the compensation, not to exceed
7    $500,000 for any one employee, for contractual or salaried
8    employees who are Illinois residents or nonresident
9    employees, subject to the limitations set forth under
10    Section 10 of this Act.
11    "Loan out company" means a personal service corporation or
12other entity that is under contract with the taxpayer to
13provide specified individual personnel, such as artists, crew,
14actors, producers, or directors for the performance of
15services used directly in a production. "Loan out company"
16does not include entities contracted with by the taxpayer to
17provide goods or ancillary contractor services such as
18catering, construction, trailers, equipment, or
19transportation.
20    "Metropolitan area" means the City of Chicago and any part
21of the State located within 30 miles of the corporate limits of
22the City of Chicago.
23    "Qualified production facility" means stage facilities in
24the State in which television shows and films are or are
25intended to be regularly produced and that contain at least
26one sound stage of at least 15,000 square feet.

 

 

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1    Rulemaking authority to implement Public Act 95-1006, if
2any, is conditioned on the rules being adopted in accordance
3with all provisions of the Illinois Administrative Procedure
4Act and all rules and procedures of the Joint Committee on
5Administrative Rules; any purported rule not so adopted, for
6whatever reason, is unauthorized.
7(Source: P.A. 102-558, eff. 8-20-21; 102-700, eff. 4-19-22;
8102-1125, eff. 2-3-23.)
 
9    Section 99. Effective date. This Act takes effect upon
10becoming law.