AB 231

This bill creates income and franchise tax credits for film production companies and creates the State Film Office, attached to the Department of Tourism, to implement the tax credit accreditations and allocations. Under the bill, a film production company may claim a credit in an amount that is equal to 30 percent of the salary or wages paid to the company’s employees in the taxable year for services rendered in this state to produce a film, video, broadcast advertisement, or television production, as approved by the State Film Office, and paid to employees who were residents of this state at the time that they were paid. The total amount of the credits that may be claimed by a taxpayer may not exceed an amount that is equal to the first $250,000 of salary or wages paid to each of the taxpayer’s employees in the taxable year, not including the salary or wages paid to the taxpayer’s two highest-paid employees in the taxable year, for a production with budgeted expenditures of $1,000,000 or more. If the total amount of the credits claimed by a taxpayer exceeds the taxpayer’s tax liability, the state will not issue a refund, but the taxpayer may carry forward any remaining credit to subsequent taxable years.

Under the bill, a film production company may claim an income and franchise tax credit in an amount that is equal to 30 percent of the production expenditures paid by the company in the taxable year to produce a film, video, broadcast advertisement, or television production. If the total amount of the credits claimed by the company exceeds the company’s tax liability, the state will issue a refund.

The bill also allows a film production company to claim an income and franchise tax credit, for the first three taxable years that the company is doing business in this state, in an amount that is equal to 30 percent of the amount that the claimant paid in the taxable year to purchase depreciable tangible personal property or to acquire, construct, rehabilitate, remodel, or repair real property.

Under the bill, a film production company may claim an income and franchise tax credit in an amount that is equal to the amount of sales and use taxes that the claimant paid for tangible personal property and taxable services that are used to produce a film, video, broadcast advertisement, or television production in this state.

The bill provides that the State Film Office may not allocate more than $10,000,000 in film production and investment tax credits in each fiscal year. The bill also requires the State Film Office to annually submit a report to the legislature that specifies the number of persons who submitted credit applications in the previous year and the amount of the credits allocated to each such applicant and to make recommendations on improving the efficiency of the program. Finally, the bill requires the Legislative Audit Bureau to biennially prepare a performance evaluation audit of the accreditation program implemented by the State Film Office.