|
Reelscene |
Alabama Motion Picture Incentive Legislation |
| Home Wire Ezine Video Magazine News Legislation Production Casting/Auditions Classes Grants Calendar |
|
A proposed Bill that would that would eliminate any termination date of the Alabama Film Office authorized employment tax credits to companies for film production that currently expire or sunset. |
79363-1:n:01/05/2006:LLR/nan LRS2005-2639
| SYNOPSIS: | Currently, Act 2001-975, 2001 Third Special Session (Acts 2001, p. 908) as amended by Act 2005-305 of the 2005 Regular Session provides sales, use, and lodging tax exemptions for approved film production companies, which would expire September 30, 2006, unless extended by legislative act. Under existing law, an approved motion picture company does not have an employment tax credit for the production of a film authorized by the Alabama Film Office. |
| This bill would provide for a state sales and use tax refund program for certain film productions to encourage the filming of motion pictures or television programs in Alabama. This bill would provide for the qualification, limitations, and administration of the program. The bill would provide for employment tax credit. This bill would allow for the promulgation of rules and regulations by the Department of Revenue and Alabama Department of Economic and Community Affairs. This bill would not have an automatic termination date. |
Relating to incentives to encourage filming of motion pictures or television programs in Alabama; to provide for a sales and use tax refund program to encourage the filming of motion pictures or television programs in Alabama; to provide for the qualification, limitation, and administration of the program; and to provide for employment tax credit. This bill would allow for the promulgation of rules and regulations by the Department of Revenue and the Alabama Department of Economic and Community Affairs.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. This act shall be known as the "Alabama Motion Picture Incentive Act."
Section 2. The Legislature declares and finds the following:
(1) That the natural beauty, diverse topography, and architectural heritage of the state, the wilderness qualities and ecological regimen of its scenic rivers system, and the profusion of plants and wildlife provide a variety of excellent settings from which the motion picture industry might choose a location for filming a motion picture or television program, and together with those natural settings, the availability of labor, materials, climate, and hospitality of its people have been instrumental in the filming of several successful motion pictures.
(2) That the motion picture industry brings with it a much needed infusion of capital into areas of the state which may be economically depressed and the multiplier effect of the infusion of capital resulting from the filming of a motion picture or television program serves to stimulate economic activity beyond that immediately apparent on the film set.
(3) Since a significant portion of the cost of a motion picture or television production will not be eligible for existing tax incentives due to the fact that portions of the production are carried out in another state, it is the purpose of this act to provide a financial incentive to the film industry in order that the state might compete with other states for filming locations.
Section 3. The following words shall have the following meanings:
(1) Act 2001-975. Act 2001-975 of the 2001 Third Special Session (Acts 2001, p. 908) as amended.
(2) COMPANY. A corporation, partnership, limited liability company, or other business entity.
(3) DEPARTMENT. The Department of Economic and Community Affairs.
(4) DIRECTOR. The Director of the Department of Economic and Community Affairs.
(5) FINANCIAL INSTITUTION or INSTITUTION. Any financial institution in the state which is insured by the FDIC.
(6) MOTION PICTURE. A nationally distributed feature-length film, video, television series, or commercial made in Alabama, in whole or in part, for theatrical or television viewing or as a television pilot. The term motion picture may not include the production of television coverage of news and athletic events.
(7) MOTION PICTURE PRODUCTION COMPANY. A company engaged in the business of producing nationally distributed motion pictures, videos, television series, or commercials intended for a theatrical release or for television viewing. Motion picture production company shall not mean or include any company owned, affiliated, or controlled, in whole or in part, by any company or person, which is in default on a loan made by the state or a loan guaranteed by the state.
(8) PAYROLL. A salary, wages, or other compensation including related benefits.
(9) RESIDENT or RESIDENT OF ALABAMA. A natural person and, for the purpose of determining eligibility for the tax incentives provided by this act, any person domiciled in the State of Alabama and any other person who maintains a permanent place of abode within the state and spends in the aggregate more than six months of each year within the state.
(10) STATE-CERTIFIED PRODUCTION. A production approved by the Alabama Film Office and the Director of the Department of Economic and Community Affairs, produced by a motion picture production company domiciled and headquartered in Alabama which has a viable multi-market commercial distribution plan.
Section 4. An approved motion picture production company involved in a film production in Alabama in compliance with Chapter 7A of Title 41 of the Code of Alabama 1975, which intends to expend in the aggregate two hundred fifty thousand dollars ($250,000) or more in connection with the filming or production of one or more state-certified productions in the State of Alabama within any consecutive 12-month period shall, upon making application for and meeting the requirements as provided in this act, be relieved from the payment of state sales and use taxes on funds expended in this state in connection with the filming or production of a state-certified production. The production of television coverage of news and athletic events is specifically excluded from the provisions of this act. This act may not apply to sales and use tax levied by any local governmental subdivision.
Section 5. (a) A motion picture production company which intends to film all, or parts of, a motion picture or television program in Alabama, and desires to be relieved from the payment of state sales and use tax as provided for in this act, shall provide an estimate of the total expenditures to be made in this state in connection with the filming or production of the motion picture or television program. The estimate of expenditures shall be filed with the department prior to the commencement of filming in Alabama.
(b) At the time the motion picture production company provides the estimate of expenditures to the department, it shall also designate a member, or representative, of the motion picture production company to work with the department and the Alabama Department of Revenue on the reporting of expenditures and other information necessary to take advantage of the tax relief afforded by this act.
(c)(1) Applications for the tax relief provided by this act shall be accepted only from those motion picture production companies which report anticipated expenditures in the state which in the aggregate equal or exceed two hundred fifty thousand dollars ($250,000) in connection with the filming or production of one or more motion pictures in the state within a consecutive 12-month period.
(2) To be eligible for the tax relief provided for by this act, expenditures shall be made from a checking account at any financial institution located in this state.
(3) Applications for relief from the payment of sales and use taxes provided for by this act shall be approved by the director of the department, after the application has been reviewed by the director and the recommendation of the Alabama Film Office has been considered.
(d)(1) A motion picture production company that has been approved for relief from the payment of sales and use taxes as provided for by this act and which fails to expend two hundred fifty thousand dollars ($250,000) within a consecutive 12-month period shall be liable for the sales and use taxes that would have been paid had the approval not been granted. The sales and use taxes shall be considered due as of the date that taxable expenditures were made.
(2) The Commissioner of the Alabama Department of Revenue shall promulgate rules for the implementation of this subsection.
(e) Tax relief authorized pursuant to this act shall not be provided if and to the extent the same sales and use tax relief is provided by Act 2001-975.
Section 6. (a) An approved motion picture production company involved in a film production in Alabama in compliance with Chapter 7A of Title 41 of the Code of Alabama 1975, shall be entitled to a tax credit for the employment of residents of Alabama in connection with production of an approved project as defined in Section 41-7A-21, Code of Alabama 1975. The credit shall be equal to 10 percent of the total aggregate payroll for residents employed in connection with the production when the total production costs in Alabama equal or exceed three hundred thousand dollars ($300,000) but total less than one million dollars ($1,000,000) during the taxable year. The credit shall be equal to 20 percent of the total aggregate payroll for residents employed in connection with the production when total production costs in Alabama equal or exceed one million dollars ($1,000,000) during the taxable year. For purposes of this section, the term "total aggregate payroll" may not include the salary of any employee whose salary is equal to or greater than one million dollars ($1,000,000).
(b) The credit may be applied to any income tax or corporation franchise tax liability applicable to the motion picture production company.
(c) If the motion picture production company is an entity not subject to income or franchise tax, the credit shall flow through to its partners or members as follows:
(1) Corporate partners or members shall claim their share of the credit on their corporation income or corporation franchise tax returns.
(2) Individual partners or members shall claim their share of the credit on their individual income tax returns.
(3) Partners or members that are estates or trusts shall claim their share of the credit on their fiduciary income tax returns.
(d) Any unused credit may be carried forward no more than 10 years from the date the credit was earned.
(e) The Commissioner of the Department of Revenue shall promulgate such rules and regulations necessary to administer this section.
Section 7. The State of Alabama reserves the right to refuse the use of its name in the credits of any motion picture filmed or produced in the state.
Section 8. The Department of Revenue may require that reported expenditures and the application for a tax incentive from the motion picture production company be subjected to an audit by the department to verify expenditures.
Section 9. The department shall promulgate rules and regulations to carry out the intent and purposes of this act.
Section 10. This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.