Hawaii 2024 Regular Session

Hawaii Senate Bill SB2858 Compare Versions

Only one version of the bill is available at this time.

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1	1	THE SENATE S.B. NO. 2858 THIRTY-SECOND LEGISLATURE, 2024 STATE OF HAWAII A BILL FOR AN ACT relating to Motion picture, digital media, and film production income tax credit. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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3	3	THE SENATE S.B. NO. 2858
4	4	THIRTY-SECOND LEGISLATURE, 2024
5	5	STATE OF HAWAII
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7	7	THE SENATE
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9	9	S.B. NO.
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11	11	2858
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13	13	THIRTY-SECOND LEGISLATURE, 2024
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17	17	STATE OF HAWAII
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31	31	A BILL FOR AN ACT
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37	37	relating to Motion picture, digital media, and film production income tax credit.
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43	43	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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47	47	SECTION 1. Section 235-17, Hawaii Revised Statutes, is amended as follows: 1. By amending subsection (d) to read: "(d) To qualify for this tax credit, a production shall: (1) Meet the definition of a qualified production specified in subsection (o); (2) Have qualified production costs totaling at least $100,000; (3) Provide the State a qualified Hawaii promotion, which shall be at a minimum, a shared-card, end-title screen credit, where applicable; (4) Provide evidence of reasonable efforts to hire local talent and crew; (5) Provide evidence when making any claim for products or services acquired or rendered outside of this State that reasonable efforts were unsuccessful to secure and use comparable products or services within this State; (6) Provide evidence of financial or in-kind contributions or educational or workforce development efforts, in partnership with related local industry labor organizations, educational institutions, or both, toward the furtherance of the local film and television and digital media industries; (7) Provide all call sheets and payroll records related to the individuals on the call sheets; [(7)] (8) Be compliant with all applicable requirements under title 14, including tax return filing and payments; and [(8)] (9) Provide complete responses to the department of taxation's inquiries and document requests, in the form prescribed by the department, no later than ninety days from the inquiry or request." 2. By amending subsection (h) to read: "(h) Every taxpayer claiming a tax credit under this section for a qualified production shall, no later than ninety days following the end of each taxable year in which qualified production costs were expended, submit a written, sworn statement to the department of business, economic development, and tourism that [identifies:] includes: (1) All qualified production costs as provided by subsection (a), if any, incurred in the previous taxable year; (2) The amount of tax credits claimed pursuant to this section, if any, in the previous taxable year; and (3) The number of total hires versus the number of local hires by category and by county[.]; provided that an individual who is listed on a qualified production's call sheet but is hired or classified as an independent contractor shall not be considered a local hire for purposes of this section. This information may be reported from the department of business, economic development, and tourism to the legislature pursuant to subsection (i)(4)." 3. By amending subsection (o) to read: "(o) For the purposes of this section: "Commercial": (1) Means an advertising message that is filmed using film, videotape, or digital media, for dissemination via television broadcast or theatrical distribution; (2) Includes a series of advertising messages if all parts are produced at the same time over the course of six consecutive weeks; and (3) Does not include an advertising message with Internet-only distribution. "Digital media" means production methods and platforms directly related to the creation of cinematic imagery and content, specifically using digital means, including but not limited to digital cameras, digital sound equipment, and computers, to be delivered via film, videotape, interactive game platform, or other digital distribution media. "Post-production" means production activities and services conducted after principal photography is completed, including but not limited to editing, film and video transfers, duplication, transcoding, dubbing, subtitling, credits, closed captioning, audio production, special effects (visual and sound), graphics, and animation. "Production" means a series of activities that are directly related to the creation of visual and cinematic imagery to be delivered via film, videotape, or digital media and to be sold, distributed, or displayed as entertainment or the advertisement of products for mass public consumption, including but not limited to scripting, casting, set design and construction, transportation, videography, photography, sound recording, interactive game design, and post-production. "Qualified production": (1) Means a production, with expenditures in the State, for the total or partial production of a feature-length motion picture, short film, made-for-television movie, commercial, music video, interactive game, television series pilot, single season (up to twenty-two episodes) of a television series regularly filmed in the State (if the number of episodes per single season exceeds twenty-two, additional episodes for the same season shall constitute a separate qualified production), television special, single television episode that is not part of a television series regularly filmed or based in the State, national magazine show, or national talk show. For the purposes of subsections (d) and (l), each of the aforementioned qualified production categories shall constitute separate, individual qualified productions; and (2) Does not include: (A) News; (B) Public affairs programs; (C) Non-national magazine or talk shows; (D) Televised sporting events or activities; (E) Productions that solicit funds; (F) Productions produced primarily for industrial, corporate, institutional, or other private purposes; and (G) Productions that include any material or performance prohibited by chapter 712. "Qualified production costs" means the costs incurred by a qualified production within the State that are subject to the general excise tax under chapter 237 at the highest rate of tax or income tax under this chapter if the costs are not subject to general excise tax and that have not been financed by any investments for which a credit was or will be claimed pursuant to section 235-110.9. Qualified production costs include but are not limited to: (1) Costs incurred during preproduction such as location scouting and related services; (2) Costs of set construction and operations, purchases or rentals of wardrobe, props, accessories, food, office supplies, transportation, equipment, and related services; (3) Wages or salaries of cast, crew, and musicians; provided that individuals listed on a qualified production's call sheet but paid as an independent contractor shall not be considered a qualified production cost for purposes of this section; (4) Costs of photography, sound synchronization, lighting, and related services; (5) Costs of editing, visual effects, music, other post-production, and related services; (6) Rentals and fees for use of local facilities and locations, including rentals and fees for use of state and county facilities and locations that are not subject to general excise tax under chapter 237 or income tax under this chapter; (7) Rentals of vehicles and lodging for cast and crew; (8) Airfare for flights to or from Hawaii, and interisland flights; (9) Insurance and bonding; (10) Shipping of equipment and supplies to or from Hawaii, and interisland shipments; and (11) Other direct production costs specified by the department in consultation with the department of business, economic development, and tourism; provided that any government-imposed fines, penalties, or interest that are incurred by a qualified production within the State shall not be "qualified production costs". "Qualified production costs" does not include any costs funded by any grant, forgivable loan, or other amounts not included in gross income for purposes of this chapter." SECTION 2. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 3. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2024. INTRODUCED BY: _____________________________
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49	49	SECTION 1. Section 235-17, Hawaii Revised Statutes, is amended as follows:
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51	51	1. By amending subsection (d) to read:
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53	53	"(d) To qualify for this tax credit, a production shall:
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55	55	(1) Meet the definition of a qualified production specified in subsection (o);
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57	57	(2) Have qualified production costs totaling at least $100,000;
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59	59	(3) Provide the State a qualified Hawaii promotion, which shall be at a minimum, a shared-card, end-title screen credit, where applicable;
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61	61	(4) Provide evidence of reasonable efforts to hire local talent and crew;
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63	63	(5) Provide evidence when making any claim for products or services acquired or rendered outside of this State that reasonable efforts were unsuccessful to secure and use comparable products or services within this State;
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65	65	(6) Provide evidence of financial or in-kind contributions or educational or workforce development efforts, in partnership with related local industry labor organizations, educational institutions, or both, toward the furtherance of the local film and television and digital media industries;
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67	67	(7) Provide all call sheets and payroll records related to the individuals on the call sheets;
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69	69	[(7)] (8) Be compliant with all applicable requirements under title 14, including tax return filing and payments; and
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71	71	[(8)] (9) Provide complete responses to the department of taxation's inquiries and document requests, in the form prescribed by the department, no later than ninety days from the inquiry or request."
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73	73	2. By amending subsection (h) to read:
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75	75	"(h) Every taxpayer claiming a tax credit under this section for a qualified production shall, no later than ninety days following the end of each taxable year in which qualified production costs were expended, submit a written, sworn statement to the department of business, economic development, and tourism that [identifies:] includes:
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77	77	(1) All qualified production costs as provided by subsection (a), if any, incurred in the previous taxable year;
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79	79	(2) The amount of tax credits claimed pursuant to this section, if any, in the previous taxable year; and
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81	81	(3) The number of total hires versus the number of local hires by category and by county[.]; provided that an individual who is listed on a qualified production's call sheet but is hired or classified as an independent contractor shall not be considered a local hire for purposes of this section.
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83	83	This information may be reported from the department of business, economic development, and tourism to the legislature pursuant to subsection (i)(4)."
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85	85	3. By amending subsection (o) to read:
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87	87	"(o) For the purposes of this section:
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89	89	"Commercial":
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91	91	(1) Means an advertising message that is filmed using film, videotape, or digital media, for dissemination via television broadcast or theatrical distribution;
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93	93	(2) Includes a series of advertising messages if all parts are produced at the same time over the course of six consecutive weeks; and
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95	95	(3) Does not include an advertising message with Internet-only distribution.
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97	97	"Digital media" means production methods and platforms directly related to the creation of cinematic imagery and content, specifically using digital means, including but not limited to digital cameras, digital sound equipment, and computers, to be delivered via film, videotape, interactive game platform, or other digital distribution media.
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99	99	"Post-production" means production activities and services conducted after principal photography is completed, including but not limited to editing, film and video transfers, duplication, transcoding, dubbing, subtitling, credits, closed captioning, audio production, special effects (visual and sound), graphics, and animation.
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101	101	"Production" means a series of activities that are directly related to the creation of visual and cinematic imagery to be delivered via film, videotape, or digital media and to be sold, distributed, or displayed as entertainment or the advertisement of products for mass public consumption, including but not limited to scripting, casting, set design and construction, transportation, videography, photography, sound recording, interactive game design, and post-production.
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103	103	"Qualified production":
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105	105	(1) Means a production, with expenditures in the State, for the total or partial production of a feature-length motion picture, short film, made-for-television movie, commercial, music video, interactive game, television series pilot, single season (up to twenty-two episodes) of a television series regularly filmed in the State (if the number of episodes per single season exceeds twenty-two, additional episodes for the same season shall constitute a separate qualified production), television special, single television episode that is not part of a television series regularly filmed or based in the State, national magazine show, or national talk show. For the purposes of subsections (d) and (l), each of the aforementioned qualified production categories shall constitute separate, individual qualified productions; and
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107	107	(2) Does not include:
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109	109	(A) News;
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111	111	(B) Public affairs programs;
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113	113	(C) Non-national magazine or talk shows;
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115	115	(D) Televised sporting events or activities;
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117	117	(E) Productions that solicit funds;
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119	119	(F) Productions produced primarily for industrial, corporate, institutional, or other private purposes; and
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121	121	(G) Productions that include any material or performance prohibited by chapter 712.
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123	123	"Qualified production costs" means the costs incurred by a qualified production within the State that are subject to the general excise tax under chapter 237 at the highest rate of tax or income tax under this chapter if the costs are not subject to general excise tax and that have not been financed by any investments for which a credit was or will be claimed pursuant to section 235-110.9. Qualified production costs include but are not limited to:
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125	125	(1) Costs incurred during preproduction such as location scouting and related services;
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127	127	(2) Costs of set construction and operations, purchases or rentals of wardrobe, props, accessories, food, office supplies, transportation, equipment, and related services;
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129	129	(3) Wages or salaries of cast, crew, and musicians; provided that individuals listed on a qualified production's call sheet but paid as an independent contractor shall not be considered a qualified production cost for purposes of this section;
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131	131	(4) Costs of photography, sound synchronization, lighting, and related services;
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133	133	(5) Costs of editing, visual effects, music, other post-production, and related services;
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135	135	(6) Rentals and fees for use of local facilities and locations, including rentals and fees for use of state and county facilities and locations that are not subject to general excise tax under chapter 237 or income tax under this chapter;
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137	137	(7) Rentals of vehicles and lodging for cast and crew;
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139	139	(8) Airfare for flights to or from Hawaii, and interisland flights;
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141	141	(9) Insurance and bonding;
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143	143	(10) Shipping of equipment and supplies to or from Hawaii, and interisland shipments; and
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145	145	(11) Other direct production costs specified by the department in consultation with the department of business, economic development, and tourism;
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147	147	provided that any government-imposed fines, penalties, or interest that are incurred by a qualified production within the State shall not be "qualified production costs". "Qualified production costs" does not include any costs funded by any grant, forgivable loan, or other amounts not included in gross income for purposes of this chapter."
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149	149	SECTION 2. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
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151	151	SECTION 3. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2024.
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155	155	INTRODUCED BY: _____________________________
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157	157	INTRODUCED BY:
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165	165	Report Title: Motion Picture, Digital Media, and Film Production Income Tax Credit; Call Sheets; Payroll; Independent Contractors; Local Hires; Qualified Production Costs Description: Requires qualified productions claiming the Motion Picture, Digital Media, and Film Production Income Tax Credit to submit call sheets and payroll information. Specifies that individuals listed on a qualified production's call sheet who are hired or classified as independent contractors shall not be considered a local hire. Exempts from the definition of "qualified production costs" wages or salaries paid to individuals listed on a qualified production's call sheet who are paid as independent contractors. The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
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173	173	Report Title:
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175	175	Motion Picture, Digital Media, and Film Production Income Tax Credit; Call Sheets; Payroll; Independent Contractors; Local Hires; Qualified Production Costs
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179	179	Description:
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181	181	Requires qualified productions claiming the Motion Picture, Digital Media, and Film Production Income Tax Credit to submit call sheets and payroll information. Specifies that individuals listed on a qualified production's call sheet who are hired or classified as independent contractors shall not be considered a local hire. Exempts from the definition of "qualified production costs" wages or salaries paid to individuals listed on a qualified production's call sheet who are paid as independent contractors.
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189	189	The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.