SB 204

This bill creates a refundable video game production income and franchise tax credit. The credit is equal to the sum of the following: 1) 30 percent of the eligible wages paid by the claimant directly relating to developing, producing, or creating a video game product; and 2) 30 percent of the claimant’s eligible expenditures directly relating to developing, producing, or creating a video game product. Under the bill, “video game product” means, subject to certain exceptions, an electronic game developed for commercial distribution and entertainment that involves interaction with a used interface to generate visual feedback on a video device. “Video game product” does not include social media, gambling products, or products with obscene content. The bill also defines “eligible expenditures” as expenditures directly relating to developing, producing, or creating a video game product but excludes various specified expenditures, such as payments for royalties, capital expenditures, management and administrative expenses, marketing expenses, and interest. To claim the credit for a tax year, a person must file an application with the Department of Revenue and receive a certificate of eligibility for the credit. To receive a certificate, an applicant must submit an audit of its eligible expenditures to DOR. The credit under the bill is refundable, which means that if the credit exceeds the claimant’s tax liability, the claimant will receive the difference as a refund check.