Public Act 097-0796
 
SB1286 EnrolledLRB097 08202 HLH 48327 b

    AN ACT concerning revenue.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Film Production Services Tax Credit Act of
2008 is amended by changing Section 10 and by adding Section 44
as follows:
 
    (35 ILCS 16/10)
    Sec. 10. Definitions. As used in this Act:
    "Accredited production" means: (i) for productions
commencing before May 1, 2006, a film, video, or television
production that has been certified by the Department in which
the aggregate Illinois labor expenditures included in the cost
of the production, in the period that ends 12 months after the
time principal filming or taping of the production began,
exceed $100,000 for productions of 30 minutes or longer, or
$50,000 for productions of less than 30 minutes; and (ii) for
productions commencing on or after May 1, 2006, a film, video,
or television production that has been certified by the
Department in which the Illinois production spending included
in the cost of production in the period that ends 12 months
after the time principal filming or taping of the production
began exceeds $100,000 for productions of 30 minutes or longer
or exceeds $50,000 for productions of less than 30 minutes.
"Accredited production" does not include a production that:
        (1) is news, current events, or public programming, or
    a program that includes weather or market reports;
        (2) is a talk show;
        (3) is a production in respect of a game,
    questionnaire, or contest;
        (4) is a sports event or activity;
        (5) is a gala presentation or awards show;
        (6) is a finished production that solicits funds;
        (7) is a production produced by a film production
    company if records, as required by 18 U.S.C. 2257, are to
    be maintained by that film production company with respect
    to any performer portrayed in that single media or
    multimedia program; or
        (8) is a production produced primarily for industrial,
    corporate, or institutional purposes.
    "Accredited animated production" means an accredited
production in which movement and characters' performances are
created using a frame-by-frame technique and a significant
number of major characters are animated. Motion capture by
itself is not an animation technique.
    "Accredited production certificate" means a certificate
issued by the Department certifying that the production is an
accredited production that meets the guidelines of this Act.
    "Applicant" means a taxpayer that is a film production
company that is operating or has operated an accredited
production located within the State of Illinois and that (i)
owns the copyright in the accredited production throughout the
Illinois production period or (ii) has contracted directly with
the owner of the copyright in the accredited production or a
person acting on behalf of the owner to provide services for
the production, where the owner of the copyright is not an
eligible production corporation.
    "Credit" means:
        (1) for an accredited production approved by the
    Department on or before January 1, 2005 and commencing
    before May 1, 2006, the amount equal to 25% of the Illinois
    labor expenditure approved by the Department. The
    applicant is deemed to have paid, on its balance due day
    for the year, an amount equal to 25% of its qualified
    Illinois labor expenditure for the tax year. For Illinois
    labor expenditures generated by the employment of
    residents of geographic areas of high poverty or high
    unemployment, as determined by the Department, in an
    accredited production commencing before May 1, 2006 and
    approved by the Department after January 1, 2005, the
    applicant shall receive an enhanced credit of 10% in
    addition to the 25% credit; and
        (2) for an accredited production commencing on or after
    May 1, 2006, the amount equal to:
            (i) 20% of the Illinois production spending for the
        taxable year; plus
            (ii) 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; and
        (3) for an accredited production commencing on or after
    January 1, 2009, the amount equal to:
            (i) 30% of the Illinois production spending for the
        taxable year; plus
            (ii) 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.
    "Department" means the Department of Commerce and Economic
Opportunity.
    "Director" means the Director of Commerce and Economic
Opportunity.
    "Illinois labor expenditure" means salary or wages paid to
employees of the applicant for services on the accredited
production;
    To qualify as an Illinois labor expenditure, the
expenditure must be:
        (1) Reasonable in the circumstances.
        (2) Included in the federal income tax basis of the
    property.
        (3) Incurred by the applicant for services on or after
    January 1, 2004.
        (4) Incurred for the production stages of the
    accredited production, from the final script stage to the
    end of the post-production stage.
        (5) Limited to the first $25,000 of wages paid or
    incurred to each employee of a production commencing before
    May 1, 2006 and the first $100,000 of wages paid or
    incurred to each employee of a production commencing on or
    after May 1, 2006.
        (6) For a production commencing before May 1, 2006,
    exclusive of the salary or wages paid to or incurred for
    the 2 highest paid employees of the production.
        (7) Directly attributable to the accredited
    production.
        (8) (Blank). Paid in the tax year for which the
    applicant is claiming the credit or no later than 60 days
    after the end of the tax year.
        (9) Paid to persons resident in Illinois at the time
    the payments were made.
        (10) Paid for services rendered in Illinois.
    "Illinois production spending" means the expenses incurred
by the applicant for an accredited production, including,
without limitation, all of the following:
        (1) expenses to purchase, from vendors within
    Illinois, tangible personal property that is used in the
    accredited production;
        (2) expenses to acquire services, from vendors in
    Illinois, for film production, editing, or processing; and
        (3) the compensation, not to exceed $100,000 for any
    one employee, for contractual or salaried employees who are
    Illinois residents performing services with respect to the
    accredited production.
    "Qualified production facility" means stage facilities in
the State in which television shows and films are or are
intended to be regularly produced and that contain at least one
sound stage of at least 15,000 square feet.
    Rulemaking authority to implement this amendatory Act of
the 95th General Assembly, if any, is conditioned on the rules
being adopted in accordance with all provisions of the Illinois
Administrative Procedure Act and all rules and procedures of
the Joint Committee on Administrative Rules; any purported rule
not so adopted, for whatever reason, is unauthorized.
(Source: P.A. 95-720, eff. 5-27-08; 95-1006, eff. 12-15-08.)
 
    (35 ILCS 16/44 new)
    Sec. 44. Accredited animated productions. Each applicant
requesting credits for an accredited animated production
commencing on or after July 1, 2010 may make an application to
the Department in each taxable year beginning with the taxable
year in which the production commences and ending with the
taxable year in which production is complete, provided that no
credit may be claimed under this Section for a taxable year
ending prior to December 31, 2012.
 
    Section 99. Effective date. This Act takes effect upon
becoming law.