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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 and by adding Section 44
6as follows:
 
7    (35 ILCS 16/10)
8    Sec. 10. Definitions. As used in this Act:
9    "Accredited production" means: (i) for productions
10commencing before May 1, 2006, a film, video, or television
11production that has been certified by the Department in which
12the aggregate Illinois labor expenditures included in the cost
13of the production, in the period that ends 12 months after the
14time principal filming or taping of the production began,
15exceed $100,000 for productions of 30 minutes or longer, or
16$50,000 for productions of less than 30 minutes; and (ii) for
17productions commencing on or after May 1, 2006, a film, video,
18or television production that has been certified by the
19Department in which the Illinois production spending included
20in the cost of production in the period that ends 12 months
21after the time principal filming or taping of the production
22began exceeds $100,000 for productions of 30 minutes or longer
23or 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) 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 animated production" means an accredited
18production in which movement and characters' performances are
19created using a frame-by-frame technique and a significant
20number of major characters are animated. Motion capture by
21itself is not an animation technique.
22    "Accredited production certificate" means a certificate
23issued by the Department certifying that the production is an
24accredited production that meets the guidelines of this Act.
25    "Applicant" means a taxpayer that is a film production
26company that is operating or has operated an accredited

 

 

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1production located within the State of Illinois and that (i)
2owns the copyright in the accredited production throughout the
3Illinois production period or (ii) has contracted directly with
4the owner of the copyright in the accredited production or a
5person acting on behalf of the owner to provide services for
6the production, where the owner of the copyright is not an
7eligible production corporation.
8    "Credit" means:
9        (1) for an accredited production approved by the
10    Department on or before January 1, 2005 and commencing
11    before May 1, 2006, the amount equal to 25% of the Illinois
12    labor expenditure approved by the Department. The
13    applicant is deemed to have paid, on its balance due day
14    for the year, an amount equal to 25% of its qualified
15    Illinois labor expenditure for the tax year. For Illinois
16    labor expenditures generated by the employment of
17    residents of geographic areas of high poverty or high
18    unemployment, as determined by the Department, in an
19    accredited production commencing before May 1, 2006 and
20    approved by the Department after January 1, 2005, the
21    applicant shall receive an enhanced credit of 10% in
22    addition to the 25% credit; and
23        (2) for an accredited production commencing on or after
24    May 1, 2006, the amount equal to:
25            (i) 20% of the Illinois production spending for the
26        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 after
6    January 1, 2009, the amount equal to:
7            (i) 30% of the Illinois production spending for the
8        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.
13    "Department" means the Department of Commerce and Economic
14Opportunity.
15    "Director" means the Director of Commerce and Economic
16Opportunity.
17    "Illinois labor expenditure" means salary or wages paid to
18employees of the applicant for services on the accredited
19production;
20    To qualify as an Illinois labor expenditure, the
21expenditure must be:
22        (1) Reasonable in the circumstances.
23        (2) Included in the federal income tax basis of the
24    property.
25        (3) Incurred by the applicant for services on or after
26    January 1, 2004.

 

 

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1        (4) Incurred for the production stages of the
2    accredited production, from the final script stage to the
3    end of the post-production stage.
4        (5) Limited to the first $25,000 of wages paid or
5    incurred to each employee of a production commencing before
6    May 1, 2006 and the first $100,000 of wages paid or
7    incurred to each employee of a production commencing on or
8    after May 1, 2006.
9        (6) For a production commencing before May 1, 2006,
10    exclusive of the salary or wages paid to or incurred for
11    the 2 highest paid employees of the production.
12        (7) Directly attributable to the accredited
13    production.
14        (8) (Blank). Paid in the tax year for which the
15    applicant is claiming the credit or no later than 60 days
16    after the end of the tax year.
17        (9) Paid to persons resident in Illinois at the time
18    the payments were made.
19        (10) Paid for services rendered in Illinois.
20    "Illinois production spending" means the expenses incurred
21by the applicant for an accredited production, including,
22without limitation, all of the following:
23        (1) expenses to purchase, from vendors within
24    Illinois, tangible personal property that is used in the
25    accredited production;
26        (2) expenses to acquire services, from vendors in

 

 

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1    Illinois, for film production, editing, or processing; and
2        (3) the compensation, not to exceed $100,000 for any
3    one employee, for contractual or salaried employees who are
4    Illinois residents performing services with respect to the
5    accredited production.
6    "Qualified production facility" means stage facilities in
7the State in which television shows and films are or are
8intended to be regularly produced and that contain at least one
9sound stage of at least 15,000 square feet.
10    Rulemaking authority to implement this amendatory Act of
11the 95th General Assembly, if any, is conditioned on the rules
12being adopted in accordance with all provisions of the Illinois
13Administrative Procedure Act and all rules and procedures of
14the Joint Committee on Administrative Rules; any purported rule
15not so adopted, for whatever reason, is unauthorized.
16(Source: P.A. 95-720, eff. 5-27-08; 95-1006, eff. 12-15-08.)
 
17    (35 ILCS 16/44 new)
18    Sec. 44. Accredited animated productions. Each applicant
19requesting credits for an accredited animated production
20commencing on or after July 1, 2010 may make an application to
21the Department in each taxable year beginning with the taxable
22year in which the production commences and ending with the
23taxable year in which production is complete, provided that no
24credit may be claimed under this Section for a taxable year
25ending prior to December 31, 2012.
 

 

 

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1    Section 99. Effective date. This Act takes effect upon
2becoming law.