| CAST & CREW ENTERTAINMENT SERVICES |
WEDNESDAY, FEBRUARY 15, 2017
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In this Issue
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ON THE GOVERNOR'S DESK
Awaiting Signature
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Virginia (H 1665)
House Bill 1665
recommends extending the sunset date of the Virginia motion picture production tax credit program from December 31, 2018 to December 31, 2021.
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PROPOSED LEGISLATION
Still in the House or Senate
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Georgia (H 147)
House Bill 147 recommends creating an additional tax credit equal to 5% of the first $100,000 paid to each Georgia resident that is a veteran of the armed forces.
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Georgia (H 199)
House Bill 199 proposes to amend the film incentive program by establishing a postproduction credit. Features of the new incentive are as follows:
- Creates a transferable tax credit equal to 20% of postproduction expenditures incurred in state, including editing, food and lodging, airfare, and resident and nonresident payroll;
- Requires companies to maintain a business location in the state and incur a total in-state payroll expense of $500,000 in the prior year to be eligible for the credit;
- Establishes a minimum spend requirement of $500,000 and a per project cap of 20% of the prior year's payroll;
- Institutes an annual funding cap of $5 million through December 31, 2017, $10 million from January 1, 2018 through December 31, 2018, and $15 million from January 1, 2019 through its sunset date of December 31, 2022;
- Allows any unclaimed funds to roll over to the succeeding year until fully claimed;
- Clarified that any postproduction costs claimed under this provision will not qualify for the base investment credit, promotional credit, or any additional state jobs credits.
If approved, the act would become effective on July 1, 2017 and apply to tax years beginning on or after January 1, 2017.
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Florida (H 223)
House Bill 223
recommends repealing
the real property rental and leasing tax
, from which p
roperty used for qualified production services is currently exempt
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beginning January 1, 2027. If affirmed, the act would take effect July 1, 2017.
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Hawaii (H 423) & (S 1060)
- Establishes an additional 35% credit for qualified spend incurred in a county with a population of 700,000 or less when at least 55% of hired crew are residents of such county, excluding individuals who principally add to the creative direction, process, voice, and narrative of the production, including the screenwriter, producer, and on-camera, microphone, or voice-over talent; and,
- Extends the sunset date from December 31, 2018 to December 31, 2023.
If enacted, the laws would take effect upon approval.
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Hawaii (H 1038) & (S 904)
- Requires applicants to submit an independent tax opinion certifying the amount of qualified costs in order to claim the credit; and,
- Extends the sunset date from December 31, 2018 to December 31, 2025.
If enacted, the law would take effect upon approval.
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Hawaii (H 1039) & (S 905)
- Amends the name of the existing Hawaii Television and Film Development fund to read "Creative Media and Film Infrastructure Special Fund";
- Provides for additional funding from amounts derived from the rental of the Hawaii film studio, film permitting, and the processing and management of film credits;
- Dissolves the film board and prohibits use of funding by the board;
- Directs all amounts allocated to the fund to the department of business, economic development, and tourism for maintenance of the Hawaii film studio, support for new infrastructure, initiatives for media industry development, and programs to expand Hawaiian resident workforce in the industry; and,
- Allocates $1 million from the fund to the activities noted above for fiscal year 2017.
If approved, the law would take effect July 1, 2017.
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Hawaii (S 1041)
- Requires qualifying applicants to provide evidence of their attention to and recognition of unique Hawaiian cultural and environmental interests while filming in the state;
- Provides that each production must employ an expert advisor in Hawaiian history, culture, or language in order to be eligible for the credit; and,
- Extends the sunset date from December 31, 2018 to December 31, 2023.
If enacted, the amendments would take effect upon approval.
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Hawaii (S 1086)
- Specifying that qualified costs must be incurred "and expended" within the state to earn incentives based upon those amounts;
- Establishing an annual funding cap of $50 million; and,
- Extending the sunset date from December 31, 2018 to December 31, 2023.
If enacted, the law would take effect on July 1, 2017.
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Hawaii (S 1191)
- Extends the sunset date from December 31, 2018 to December 31, 2028; and,
- Requires applicants to furnish financial or in-kind contributions to the University of Hawaii in order to qualify for the incentive.
If enacted, the act would take effect July 1, 2017.
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Hawaii (H 1328) & (S 1253)
- Allows productions to utilize alternative marketing opportunities to promote and acknowledge the state in lieu of an end title screen credit;
- Requires productions to provide evidence that reasonable efforts were unsuccessful to acquire goods or services from within Hawaii;
- Requires applicants to submit a verification review by a qualified CPA using procedures prescribed by the department of business, economic development, and tourism in order to claim a tax credit; and,
- Extends the sunset date from December 31, 2018 to December 31, 2023.
If approved, the law would apply to tax years beginning after December 31, 2016
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Illinois (S 9)
Senate Bill 9 recommends extending the sunset date of the state's production incentive program from May 6, 2021
to December 31, 2026. If enacted, the bill would take effect upon approval.
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Minnesota (H 789 & S 266)
House Bill 789 and Senate Bill 266 propose increasing the annual funding cap for the film rebate program for Fiscal Year 2018 (July 1, 2017 - June 30, 2018) from $6 million to $13 million.
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Mississippi (H 711 & S 2913)
House Bill 711 and Senate Bill 2913 propose to extend the sunset date for the 25% nonresident labor rebate from June 30, 2017 to June 30, 2020. If approved, the amendments would take effect July 1, 2017.
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Missouri (H 718)
House Bill 718 proposes to reinstate the production incentive program for qualified film projects. Highlights of the program are as follows:
- Provides for a transferable tax credit of up to 35% of qualifying expenses;
- Creates an annual funding cap of $4.5 million per calendar year;
- Establishes a per project cap of $1 million;
- Allows the incentive to be earned on resident and nonresident labor provided withholding taxes were remitted on such wages. Notwithstanding, qualified wages do not include any amounts paid to an individual receiving compensation of more than $1 million; and,
- Establishes a sunset date of December 31, 2017 and allows credits to be authorized through August 27, 2017.
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Missouri (H 788)
House Bill 788 proposes to revise the film production company tax credit in Missouri as outlined below:
- Creates a 20% transferable tax credit on all qualified spend and both resident and nonresident labor of those earning $250,000 or less for all tax years beginning on or after January 1, 2018;
- Offers an additional 5% credit on all qualifying expenditures if at least 50% of the project is filmed in Missouri;
- Establishes an annual funding cap of $4.5 million per calendar year;
- Requires a statement or logo in the end screen credits; and,
- Provides that the program will sunset on December 31 six years after the effective date. However, if reauthorized by the state prior to that date, the incentive will sunset on December 31 twelve years after the date of renewal. If allowed to expire, the program will terminate on September 1 of the calendar year immediately following the year of expiration.
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New Hampshire (H 581)
House Bill 581 proposes a new film production incentive program in New Hampshire. Highlights of the bill are as follows:
- Creates a transferable tax credit equal to 12.5% on the first $2 million paid to each resident and nonresident individual;
- Creates an additional transferable tax credit equal to 12.5% of qualified spend where the applicant is eligible for the payroll credit and either:
- New Hampshire production expenses are greater than 50% of total production expenses;
- New Hampshire production expenses are greater than $100,000; or,
- At least 50% of total principal photography days take place in the state;
- Limits annual funding to $10 million per fiscal year (July 1 - June 30) and, once this maximum amount is achieved, prorates all credit claims proportionally;
- Defines qualified spend as all costs clearly incurred in New Hampshire and non-New Hampshire costs of equipment or insurance when not otherwise available in the state;
- Establishes a minimum spend requirement of $25,000; and,
- Establishes a sunset date of June 30, 2021.
If approved, the program would go into effect July 1, 2017 and would apply to projects commencing principal photography after December 31, 2016.
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New Mexico (H 192)
House Bill 192 proposes to amend the Film Production Tax Credit Act as outlined below.
- Increases the annual funding cap from $50 million to $53.768 million for fiscal year 2018 (July 1, 2017 to June 30, 2018);
- Provides for an adjustment in annual funding in each subsequent year based on the consumer pricing index, the result of which shall not be less than the prior year's amount; and,
- Directs the taxation and revenue department to create rules for determining proper residency.
If enacted, the changes would take effect July 1, 2017 and would apply to productions that begin principal photography after July 1, 2017.
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New York (A 3009) & (S 2009)
Assembly Bill 3009 and Senate Bill 2009 propose to extend the sunset date of the film production and post production credit from December 31, 2019 to December 31, 2022 and remove Suffolk County as a qualifying upstate location. If enacted, this amendment would take effect immediately.
In addition, the bills specify that the credit for the cost of certain property used in New York in the creation, production, or reproduction, in any medium, of a film, visual, or audio recording, or commercial will not be available where the costs associated with the goods were incurred out of state. If enacted, this amendment would apply to tax years beginning on or after January 1, 2018.
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New York (A 3951)
Assembly Bill 3951 proposes to exempt owners of an unattended, detached trailer used in connection with a state sanctioned film or television production from the one-thousand dollar fine that would otherwise be applied to such vehicles. If approved, the fine and corresponding exemption would take effect immediately.
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New York (S 2256)
Senate Bill 2256 proposes to add writers' fees to the list of eligible production costs for the Empire State Film Production Credit, subject to the following provisions:
- Productions may claim eligible costs only up to $50,000 per writer;
- Fees must be subject to taxation in New York State and not paid for deferred or leveraged compensation or profit participation costs;
- If more than three writers are engaged, at least one writer must be a member of a minority group or a woman; and,
- Not more than $5 million will be awarded annually for costs associated with writing fees.
If enacted, the law would take effect April 1, 2018.
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New York (S 2852)
Senate Bill 2852 proposes adding documentary films to the list of projects eligible for the Empire State Film Production and Post Production Tax Credit. If affirmed, the law would take effect immediately and apply to years beginning on or after January 1, 2017.
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Oklahoma (H 1654)
House Bill 1654 proposes to repeal the film rebate program and, if enacted, would take effect immediately after passage and approval.
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Oklahoma (H 1848)
House Bill 1848 proposes to abolish the film rebate program, but directs the state to honor all unpaid rebate claims and claims for costs incurred in 2017. If enacted, the law would take effect upon passage.
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Oklahoma (S 567)
Senate Bill 567 proposes to accelerate the sunset date of the film rebate program from June 30, 2024 to June 30, 2017. If approved, the advance would take effect upon passage.
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Oregon (H 2066)
House Bill 2066 proposes to extend the sunset date for the Greenlight Oregon Labor Rebate (GOLR) from December 31, 2018 to December 31, 2023. This bill is identical to Draft Bill 2399 filed in December of 2016. If enacted, the extension would take effect on the 91st day after the date on with the 2017 regular session adjourns sine die.
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Oregon (H 2244)
House Bill 2244 proposes to amend the
Greenlight Oregon Labor Rebate (GOLR) program
as follows:
- Allows expenses associated with a large-scale, one-time sporting event of national or international significance, or a group of closely related events, to qualify for the labor rebate;
- Authorizes the film office to deduct up to 1% from an issued rebate for costs related to its workforce development and educational efforts; and,
- Extends the sunset date of the GOLR from December 31, 2017 to December 31, 2023.
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Rhode Island (S 135)
- Converts the current incentive from a transferable 25% tax credit to a 25% rebate on production costs and labor;
- Creates an additional rebate equal to 5% of payroll paid to residents, defined as those persons who have established residency at least 120 days prior to the date of the initial application;
- Raises the amount of annual funding from $15 million to $25 million;
- Abolishes the $5 million per project cap; and,
- Removes video games from the list of qualifying productions.
If enacted, the law would take effect upon passage.
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Virginia (H 2114)
House Bill 2114 proposes to preclude costs associated with digital interactive media productions from qualifying for state film credits beginning January 1, 2018.
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Virginia (S 1451)
Senate Bill 1451 proposes to amend the film tax credit program as outlined below:
- Allows an applicant to earn a refundable credit equal to 20% of qualified expenses if it meets the following:
- Films or produces at least 80% of the production in a qualified area of the commonwealth; and,
- Meets the minimum spend requirement of at least $250,000 of qualified expense.
- Provides that credits awarded to productions meeting these requirements will not be used to reduce the $6.5 million annual cap.
- Defines "qualified areas" as those certified as Historically Underutilized Business Zones or locations designated as National Historic Landmark or Federal Historic Districts; and,
- Removes any limit on the amount of credits awarded for use of qualified areas.
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Washington (H 1527) & (S 5502)
- Create a credit for contributions to the Washington motion picture competitiveness program for a major motion picture with a total budget of at least $20 million which portrays a significant historical event which took place in Washington during the twentieth century;
- Limit the aggregate maximum credit to $3 million across calendar years 2017, 2018, and 2019, with no cap per person;
- Require repayment of any credits previously awarded if a qualifying picture has not begun filming by July 1, 2019; and,
- Establish a sunset date of December 31, 2019.
In addition to the provision above, the bills extend the sunset date of the existing credits for contributions, which fund the Washington motion picture competitiveness program, from June 30, 2017 to June 30, 2027.
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Washington (H 1666)
House Bill 1666 proposes repealing the motion picture competitiveness program and sales tax exemption related to film production on July 1, 2018 and on July 1 of every following odd-numbered year if funds are not specifically appropriated for the incentives in the bi-annual budget.
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Production Incentives
Joe Bessacini
Vice President, Film & TV Production Incentives
818-480-4427
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Deirdre Owens
Vice President, Production Incentive Financing
818-972-3201
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