| 1 | 1 | | 23 LC 43 2655 |
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| 2 | 2 | | H. B. 393 |
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| 3 | 3 | | - 1 - |
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| 4 | 4 | | House Bill 393 |
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| 5 | 5 | | By: Representatives Carpenter of the 4 |
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| 6 | 6 | | th |
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| 7 | 7 | | , Sharper of the 177 |
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| 8 | 8 | | th |
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| 9 | 9 | | , Seabaugh of the 34 |
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| 10 | 10 | | th |
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| 11 | 11 | | , Bonner |
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| 12 | 12 | | of the 73 |
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| 13 | 13 | | rd |
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| 14 | 14 | | , Gilliard of the 162 |
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| 15 | 15 | | nd |
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| 16 | 16 | | , and others |
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| 17 | 17 | | A BILL TO BE ENTITLED |
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| 18 | 18 | | AN ACT |
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| 19 | 19 | | To amend Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to |
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| 20 | 20 | | 1 |
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| 21 | 21 | | income taxes, so as to provide for tax credits for certain contributions made by taxpayers to2 |
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| 22 | 22 | | certain organizations investing in musical or theatrical performances or productions; to3 |
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| 23 | 23 | | provide for definitions; to provide for limitations on the amount of tax credits allowed; to4 |
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| 24 | 24 | | provide for terms and conditions; to provide for applications and certifications; to provide5 |
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| 25 | 25 | | for the revocation of qualified status; to provide for audits; to provide for certain penalties;6 |
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| 26 | 26 | | to require annual reporting; to provide for the discretion to refer certain acts to the Attorney7 |
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| 27 | 27 | | General for investigation and prosecution; to provide for the promulgation of rules and8 |
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| 28 | 28 | | regulations; to provide for a short title; to provide for related matters; to provide for an9 |
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| 29 | 29 | | effective date and applicability; to repeal conflicting laws; and for other purposes.10 |
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| 30 | 30 | | BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:11 |
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| 31 | 31 | | SECTION 1.12 |
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| 32 | 32 | | This Act shall be known and may be cited as the "Georgia Music Investment Credit Act" or13 |
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| 33 | 33 | | the "Georgia MIC Act."14 23 LC 43 2655 |
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| 34 | 34 | | H. B. 393 |
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| 35 | 35 | | - 2 - |
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| 36 | 36 | | SECTION 2. |
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| 37 | 37 | | 15 |
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| 38 | 38 | | Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to income taxes,16 |
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| 39 | 39 | | is amended by adding a new Code section to read as follows:17 |
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| 40 | 40 | | "48-7-29.26. |
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| 41 | 41 | | 18 |
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| 42 | 42 | | (a) As used in this Code section, the term:19 |
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| 43 | 43 | | (1) 'Musical or theatrical expenditures' means expenses incurred for a qualified music20 |
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| 44 | 44 | | investment project, which shall include, but not be limited to, those expenses incurred for21 |
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| 45 | 45 | | set construction and operation; wardrobe, makeup, accessories, and related services; costs22 |
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| 46 | 46 | | associated with photography and sound synchronization; expenditures incurred with23 |
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| 47 | 47 | | Georgia companies for sound recordings and musical compositions, excluding license24 |
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| 48 | 48 | | fees; lighting and related services and materials; editing and related services; rental of25 |
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| 49 | 49 | | facilities and equipment; leasing of vehicles; costs of food and lodging; total aggregate26 |
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| 50 | 50 | | payroll; talent and producer fees; technical fees; crew fees; per diem costs paid to27 |
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| 51 | 51 | | employees; airfare purchased through a Georgia travel agency or travel company;28 |
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| 52 | 52 | | insurance and bonding costs incurred with a Georgia insurance agency; other direct costs29 |
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| 53 | 53 | | of producing the project in accordance with generally accepted entertainment industry30 |
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| 54 | 54 | | practices; and payments made to loan-out companies.31 |
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| 55 | 55 | | (2) 'Musical or theatrical performance' means a live performance of a concert, musical32 |
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| 56 | 56 | | or performing arts tour, ballet, dance, opera, live variety entertainment, or a series of any33 |
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| 57 | 57 | | such performances that originates, is developed, and has at least one public performance34 |
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| 58 | 58 | | before a live audience within this state, or that prepares and rehearses a minimum of five35 |
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| 59 | 59 | | days within this state and has its United States debut within this state. Such term36 |
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| 60 | 60 | | excludes a single musical performance that is not intended for touring, a music or cultural37 |
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| 61 | 61 | | festival that is not intended for touring, an industry seminar, a trade show, or a market.38 |
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| 62 | 62 | | (3) 'Qualified contributions' means the preapproved contribution of funds made during39 |
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| 63 | 63 | | the taxable year by a taxpayer to a qualified music investment organization under the40 |
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| 64 | 64 | | terms and conditions of this Code section.41 23 LC 43 2655 |
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| 65 | 65 | | H. B. 393 |
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| 66 | 66 | | - 3 - |
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| 67 | 67 | | (4) 'Qualified expenditures' means musical or theatrical expenditures made by a qualified42 |
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| 68 | 68 | | music investment organization in support of a qualified music investment project in an43 |
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| 69 | 69 | | amount per project not to exceed 30 percent of the total outside investment in the44 |
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| 70 | 70 | | qualified music investment project.45 |
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| 71 | 71 | | (5) 'Qualified music investment organization' means any domestic corporation which has46 |
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| 72 | 72 | | been certified by the commissioner and the commissioner of the Department of Economic47 |
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| 73 | 73 | | Development as having the primary function of supporting one or more qualified music48 |
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| 74 | 74 | | investment projects.49 |
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| 75 | 75 | | (6) 'Qualified music investment project' means any music investment project certified50 |
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| 76 | 76 | | by the Department of Economic Development, which shall include musical or theatrical51 |
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| 77 | 77 | | performances and recorded music scored for or synchronized with any movie, television52 |
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| 78 | 78 | | show, music video, or interactive entertainment production, provided that such projects53 |
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| 79 | 79 | | equal or exceed their respective spending thresholds using qualified expenditures, which54 |
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| 80 | 80 | | are as follows:55 |
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| 81 | 81 | | (A) Tour rehearsal and preproduction of musical or theatrical performances,56 |
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| 82 | 82 | | $100,000.00;57 |
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| 83 | 83 | | (B) Recorded music in a studio, $15,000.00; or58 |
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| 84 | 84 | | (C) Recorded music scored for or synchronized with any movie, television show,59 |
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| 85 | 85 | | music video, or interactive entertainment production, $25,000.00.60 |
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| 86 | 86 | | (b)(1) The aggregate amount of tax credits allowed under this Code section shall not61 |
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| 87 | 87 | | exceed:62 |
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| 88 | 88 | | (A) For 2024, $7 million per year;63 |
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| 89 | 89 | | (B) For 2025, $10 million per year;64 |
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| 90 | 90 | | (C) For 2026 and 2027, $15 million; or65 |
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| 91 | 91 | | (D) For 2028, $25 million.66 |
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| 92 | 92 | | (2) Subject to the aggregate limit provided in paragraph (1) of this subsection and the67 |
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| 93 | 93 | | limitations of subsection (b.1) of this Code section, each taxpayer shall be allowed a68 23 LC 43 2655 |
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| 94 | 94 | | H. B. 393 |
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| 95 | 95 | | - 4 - |
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| 96 | 96 | | credit against the tax imposed by this chapter for qualified contributions made by the69 |
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| 97 | 97 | | taxpayer on or after January 1, 2024, as follows:70 |
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| 98 | 98 | | (A) In the case of a single individual or a head of household, 70 percent of the actual71 |
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| 99 | 99 | | amount of qualified contributions made or $2,500.00, whichever is less;72 |
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| 100 | 100 | | (B) In the case of a married couple filing a joint return, 70 percent of the actual amount73 |
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| 101 | 101 | | of qualified contributions made or $5,000.00, whichever is less;74 |
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| 102 | 102 | | (C) Anything to the contrary contained in subparagraph (A) or (B) of this paragraph75 |
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| 103 | 103 | | notwithstanding, in the case of an individual taxpayer who is a member of a limited76 |
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| 104 | 104 | | liability company duly formed under state law, a shareholder of a Subchapter 'S'77 |
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| 105 | 105 | | corporation, or a partner in a partnership, 70 percent of the actual amount of qualified78 |
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| 106 | 106 | | contributions it made, or $5,000.00, whichever is less; provided, however, that tax79 |
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| 107 | 107 | | credits pursuant to this paragraph shall only be allowed for the portion of the income80 |
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| 108 | 108 | | on which such tax was actually paid by such member of the limited liability company,81 |
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| 109 | 109 | | shareholder of a Subchapter 'S' corporation, or partner in a partnership; or82 |
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| 110 | 110 | | (D) A corporation or other entity not provided for in subparagraphs (A) through (C)83 |
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| 111 | 111 | | of this paragraph shall be allowed a credit against the tax imposed by this chapter for84 |
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| 112 | 112 | | qualified contributions in an amount not to exceed 70 percent of the actual amount of85 |
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| 113 | 113 | | qualified contributions made or 75 percent of such entity's income tax liability.86 |
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| 114 | 114 | | (c) Not later than October 1, 2023, the commissioner shall establish a page on the87 |
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| 115 | 115 | | department's website for the purpose of implementing this Code section. Such page shall88 |
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| 116 | 116 | | contain, at a minimum:89 |
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| 117 | 117 | | (1) A link to the Department of Economic Development's web based application for90 |
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| 118 | 118 | | certification as a qualified music investment organization as provided for in91 |
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| 119 | 119 | | subsection (d) of this Code section;92 |
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| 120 | 120 | | (2) The current list of all qualified music investment organizations;93 |
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| 121 | 121 | | (3) The total amount of tax credits remaining and available for preapproval for each year;94 23 LC 43 2655 |
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| 122 | 122 | | H. B. 393 |
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| 123 | 123 | | - 5 - |
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| 124 | 124 | | (4) A web based method for taxpayers seeking the preapproval status for contributions;95 |
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| 125 | 125 | | and96 |
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| 126 | 126 | | (5) The information received by the department from each qualified music investment97 |
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| 127 | 127 | | organization pursuant to paragraph (1) of subsection (g) except for division (g)(1)(B)(iv)98 |
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| 128 | 128 | | of this Code section.99 |
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| 129 | 129 | | (d)(1) The Department of Economic Development shall establish and maintain a web100 |
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| 130 | 130 | | based application process for the purpose of certifying organizations as qualified music101 |
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| 131 | 131 | | investment organizations. At a minimum, such application created by the Department of102 |
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| 132 | 132 | | Economic Development shall include an agreement submitted by the applicant to fully103 |
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| 133 | 133 | | comply with the terms and conditions of this Code section.104 |
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| 134 | 134 | | (2) The Department of Economic Development shall certify any valid organization as105 |
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| 135 | 135 | | a qualified music investment organization upon successful completion of such application106 |
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| 136 | 136 | | process.107 |
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| 137 | 137 | | (3) The Department of Economic Development shall accept a first round of applications108 |
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| 138 | 138 | | for certification as qualified music investment organizations by October 1, 2023, and109 |
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| 139 | 139 | | shall certify and notify such applicants of the Department of Economic Development's110 |
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| 140 | 140 | | decision on or before November 30, 2023. Thereafter, the Department of Economic111 |
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| 141 | 141 | | Development shall establish a process for rolling applications and certifications.112 |
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| 142 | 142 | | (e)(1) Prior to making a contribution to any qualified music investment organization, the113 |
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| 143 | 143 | | taxpayer shall electronically notify the department, in a manner specified by the114 |
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| 144 | 144 | | commissioner, of the total amount of contribution that such taxpayer intends to make to115 |
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| 145 | 145 | | such organization.116 |
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| 146 | 146 | | (2) Within 30 days after receiving a request for preapproval of contributions, the117 |
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| 147 | 147 | | commissioner shall preapprove, deny, or prorate requested amounts on a first come, first118 |
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| 148 | 148 | | served basis and shall provide notice to such taxpayer and the qualified music investment119 |
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| 149 | 149 | | organization of such preapproval, denial, or proration. Such notices shall not require any120 |
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| 150 | 150 | | signed release or notarized approval by the taxpayer. The preapproval of contributions121 23 LC 43 2655 |
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| 151 | 151 | | H. B. 393 |
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| 152 | 152 | | - 6 - |
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| 153 | 153 | | by the commissioner shall be based solely on the availability of tax credits subject to the122 |
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| 154 | 154 | | aggregate total limit established under paragraph (1) of subsection (b) of this Code123 |
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| 155 | 155 | | section.124 |
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| 156 | 156 | | (3) Within 60 days after receiving the preapproval notice issued by the commissioner125 |
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| 157 | 157 | | pursuant to paragraph (2) of this subsection, the taxpayer shall contribute the preapproved126 |
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| 158 | 158 | | amount to the qualified music investment organization or such preapproved contribution127 |
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| 159 | 159 | | amount shall expire. The commissioner shall not include such expired amounts in128 |
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| 160 | 160 | | determining the remaining amount available under the aggregate limit for the respective129 |
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| 161 | 161 | | calendar year.130 |
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| 162 | 162 | | (f)(1) Each qualified music investment organization shall issue to each contributor a131 |
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| 163 | 163 | | letter of confirmation of contribution, which shall include the taxpayer's name, address,132 |
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| 164 | 164 | | tax identification number, the amount of the qualified contribution, the date of the133 |
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| 165 | 165 | | qualified contribution, and the total amount of the credit allowed to the taxpayer.134 |
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| 166 | 166 | | (2) In order for a taxpayer to claim the tax credit allowed under this Code section, all135 |
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| 167 | 167 | | such applicable letters as provided for in paragraph (1) of this subsection shall be attached136 |
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| 168 | 168 | | to the taxpayer's tax return. When the taxpayer files an electronic return such137 |
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| 169 | 169 | | confirmation shall only be required to be electronically attached to the return if the138 |
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| 170 | 170 | | Internal Revenue Service allows such attachments to be affixed and transmitted to the139 |
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| 171 | 171 | | department. In any such event, the taxpayer shall maintain such confirmation and such140 |
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| 172 | 172 | | confirmation shall only be made available to the commissioner upon request.141 |
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| 173 | 173 | | (3) The commissioner shall allow tax credits for any preapproved contributions made to142 |
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| 174 | 174 | | an organization at the time the contributions were made if such organization was a143 |
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| 175 | 175 | | qualified music investment organization at the time of the commissioner's preapproval144 |
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| 176 | 176 | | of the contributions and the taxpayer has otherwise complied with this Code section.145 |
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| 177 | 177 | | (g)(1) Each qualified music investment organization shall annually submit to the146 |
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| 178 | 178 | | department no later than May 15 of each year:147 23 LC 43 2655 |
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| 179 | 179 | | H. B. 393 |
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| 180 | 180 | | - 7 - |
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| 181 | 181 | | (A) A complete copy of its IRS Form 990 including applicable attachments, or for any148 |
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| 182 | 182 | | qualified music investment organization that is not required by federal law to file an149 |
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| 183 | 183 | | IRS Form 990, such organization shall submit to the commissioner equivalent150 |
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| 184 | 184 | | information on a form prescribed by the commissioner; and151 |
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| 185 | 185 | | (B) A report detailing the contributions received during the calendar year pursuant to152 |
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| 186 | 186 | | this Code section on a date determined by, and on a form provided by, the153 |
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| 187 | 187 | | commissioner which shall include:154 |
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| 188 | 188 | | (i) The total number and dollar value of individual contributions and tax credits155 |
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| 189 | 189 | | approved. Individual contributions shall include contributions made by those filing156 |
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| 190 | 190 | | income tax returns as a single individual or head of household and those filing joint157 |
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| 191 | 191 | | returns;158 |
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| 192 | 192 | | (ii) The total number and dollar value of corporate contributions and tax credits159 |
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| 193 | 193 | | approved;160 |
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| 194 | 194 | | (iii) The total number and dollar value of all qualified expenditures made; and161 |
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| 195 | 195 | | (iv) A list of contributors, including the dollar value of each contribution and the162 |
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| 196 | 196 | | dollar value of each approved tax credit.163 |
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| 197 | 197 | | (2) Except for the information published in accordance with subsection (c) of this Code164 |
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| 198 | 198 | | section, all information or reports relative to this Code section that were provided by165 |
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| 199 | 199 | | qualified music investment organizations to the department shall be confidential taxpayer166 |
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| 200 | 200 | | information, governed by Code Sections 48-2-15, 48-7-60, and 48-7-61, whether such167 |
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| 201 | 201 | | information relates to the contributor or such qualified organization.168 |
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| 202 | 202 | | (h) By April 1 of each year, each qualified music investment organization shall publicly169 |
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| 203 | 203 | | post on its website in a prominent place a copy of its prior year's annual budget containing170 |
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| 204 | 204 | | the total amount of funds received from all sources relative to the amount of qualified171 |
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| 205 | 205 | | contributions it received and the total amount and a description of how such contributions172 |
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| 206 | 206 | | were utilized.173 23 LC 43 2655 |
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| 207 | 207 | | H. B. 393 |
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| 208 | 208 | | - 8 - |
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| 209 | 209 | | (i)(1) A taxpayer shall not be allowed to designate or direct the taxpayer's qualified174 |
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| 210 | 210 | | contributions to any particular purpose or for the direct benefit of any particular175 |
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| 211 | 211 | | individual.176 |
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| 212 | 212 | | (2) A taxpayer that operates, owns, or is a subsidiary of an association, organization, or177 |
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| 213 | 213 | | other entity that contracts directly with a qualified music investment organization shall178 |
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| 214 | 214 | | not be eligible for tax credits allowed under this Code section for contributions made to179 |
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| 215 | 215 | | such qualified organization.180 |
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| 216 | 216 | | (3) In soliciting contributions, no person shall represent or direct that, in exchange for181 |
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| 217 | 217 | | making qualified contributions to any qualified music investment organization, a taxpayer182 |
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| 218 | 218 | | shall receive any direct or particular benefit. The status as a qualified music investment183 |
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| 219 | 219 | | organization shall be revoked for any organization determined to be in violation of this184 |
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| 220 | 220 | | paragraph and shall not be renewed for at least two years.185 |
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| 221 | 221 | | (j)(1) Each qualified music investment organization shall use at least 80 percent of the186 |
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| 222 | 222 | | funds received by it from qualified contributions to make qualified expenditures. Each187 |
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| 223 | 223 | | such qualified organization shall maintain accurate and current records of all expenditures188 |
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| 224 | 224 | | of such funds and provide such records to the commissioner upon his or her request.189 |
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| 225 | 225 | | (2) A qualified music investment organization that fails to comply with any of the190 |
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| 226 | 226 | | requirements under this Code section shall be given written notice by the department of191 |
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| 227 | 227 | | such failure to comply by certified mail and shall have 90 days from the receipt of such192 |
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| 228 | 228 | | notice to correct all deficiencies.193 |
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| 229 | 229 | | (3) Upon failure to correct all deficiencies within 90 days, the department shall revoke194 |
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| 230 | 230 | | such organization's status as a qualified music investment organization and such entity195 |
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| 231 | 231 | | shall be immediately removed from the department's list of organizations. All196 |
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| 232 | 232 | | applications for preapproval of tax credits for contributions to such organization under197 |
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| 233 | 233 | | this Code section made on or after the date of such removal shall be rejected.198 |
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| 234 | 234 | | (4) Each such organization that has had its status revoked and has been delisted pursuant199 |
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| 235 | 235 | | to this Code section, shall immediately cease all expenditures of funds received relative200 23 LC 43 2655 |
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| 236 | 236 | | H. B. 393 |
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| 237 | 237 | | - 9 - |
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| 238 | 238 | | to this Code section, and shall transfer all of such funds that are not yet expended, to a201 |
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| 239 | 239 | | properly operating qualified music investment organization within 30 calendar days of202 |
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| 240 | 240 | | its removal from the department's list of qualified music investment organizations.203 |
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| 241 | 241 | | (k)(1) No credit shall be allowed under this Code section to a taxpayer for any amount204 |
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| 242 | 242 | | of qualified contributions that were utilized as deductions or exemptions from taxable205 |
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| 243 | 243 | | income.206 |
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| 244 | 244 | | (2) In no event shall the total amount of the tax credit under this Code section for a207 |
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| 245 | 245 | | taxable year exceed the taxpayer's income tax liability. Any unused tax credit shall be208 |
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| 246 | 246 | | allowed the taxpayer against the succeeding five years' tax liability. No such credit shall209 |
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| 247 | 247 | | be allowed the taxpayer against prior years' tax liability.210 |
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| 248 | 248 | | (l) The chairperson of the House Appropriations Committee and the chairperson of the211 |
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| 249 | 249 | | Senate Committee on Appropriations shall have the authority to request an audit212 |
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| 250 | 250 | | concerning this Code section as a whole or of any one or more qualified music investment213 |
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| 251 | 251 | | organizations. The commissioner, the state auditor, and each qualified music investment214 |
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| 252 | 252 | | organization, and the commissioner of the Department of Economic Development shall215 |
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| 253 | 253 | | cooperate to the full extent necessary to conduct such audits.216 |
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| 254 | 254 | | (m) At the discretion of the commissioner, any suspected misuse of funds contributed or217 |
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| 255 | 255 | | expended pursuant to this Code section shall be forwarded to the Attorney General for218 |
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| 256 | 256 | | investigation and prosecution.219 |
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| 257 | 257 | | (n) The commissioner shall promulgate rules and regulations necessary to implement and220 |
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| 258 | 258 | | administer the provisions of this Code section."221 |
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| 259 | 259 | | SECTION 3.222 |
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| 260 | 260 | | (a) This Act shall become effective on July 1, 2023.223 |
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| 261 | 261 | | (b) This Act shall be applicable to taxable years beginning on or after January 1, 2024.224 23 LC 43 2655 |
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| 262 | 262 | | H. B. 393 |
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| 263 | 263 | | - 10 - |
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| 264 | 264 | | SECTION 4. |
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| 265 | 265 | | 225 |
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| 266 | 266 | | All laws and parts of laws in conflict with this Act are repealed.226 |
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