Illinois 2023-2024 Regular Session

Illinois House Bill HB3431 Compare Versions

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

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1	1	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3431 Introduced , by Rep. Dave Severin SYNOPSIS AS INTRODUCED: 35 ILCS 16/1035 ILCS 16/42 Amends the Film Production Services Tax Credit Act of 2008. Provides that the term "accredited production" does not include a talk show produced for a local or regional market and does not include a reality competition production. Provides that the credit applies on a permanent basis. Provides that the credit includes 5% of the Illinois labor expenditures generated by the employment of residents of the State who reside outside of the metropolitan area. Provides that the credit amount shall be increased by 5% if 50% or more of the total hours of principal filming or taping of the production are completed in the State but outside of the metropolitan area. Provides that the term "metropolitan area" means the City of Chicago and any part of the State located within 30 miles of the City of Chicago. Effective immediately. LRB103 28568 HLH 54949 b A BILL FOR 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3431 Introduced , by Rep. Dave Severin SYNOPSIS AS INTRODUCED: 35 ILCS 16/1035 ILCS 16/42 35 ILCS 16/10 35 ILCS 16/42 Amends the Film Production Services Tax Credit Act of 2008. Provides that the term "accredited production" does not include a talk show produced for a local or regional market and does not include a reality competition production. Provides that the credit applies on a permanent basis. Provides that the credit includes 5% of the Illinois labor expenditures generated by the employment of residents of the State who reside outside of the metropolitan area. Provides that the credit amount shall be increased by 5% if 50% or more of the total hours of principal filming or taping of the production are completed in the State but outside of the metropolitan area. Provides that the term "metropolitan area" means the City of Chicago and any part of the State located within 30 miles of the City of Chicago. Effective immediately. LRB103 28568 HLH 54949 b LRB103 28568 HLH 54949 b A BILL FOR
2	2	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3431 Introduced , by Rep. Dave Severin SYNOPSIS AS INTRODUCED:
3	3	35 ILCS 16/1035 ILCS 16/42 35 ILCS 16/10 35 ILCS 16/42
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5	5	35 ILCS 16/42
6	6	Amends the Film Production Services Tax Credit Act of 2008. Provides that the term "accredited production" does not include a talk show produced for a local or regional market and does not include a reality competition production. Provides that the credit applies on a permanent basis. Provides that the credit includes 5% of the Illinois labor expenditures generated by the employment of residents of the State who reside outside of the metropolitan area. Provides that the credit amount shall be increased by 5% if 50% or more of the total hours of principal filming or taping of the production are completed in the State but outside of the metropolitan area. Provides that the term "metropolitan area" means the City of Chicago and any part of the State located within 30 miles of the City of Chicago. Effective immediately.
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12	12	1 AN ACT concerning revenue.
13	13	2 Be it enacted by the People of the State of Illinois,
14	14	3 represented in the General Assembly:
15	15	4 Section 5. The Film Production Services Tax Credit Act of
16	16	5 2008 is amended by changing Sections 10 and 42 as follows:
17	17	6 (35 ILCS 16/10)
18	18	7 Sec. 10. Definitions. As used in this Act:
19	19	8 "Accredited production" means: (i) for productions
20	20	9 commencing before May 1, 2006, a film, video, or television
21	21	10 production that has been certified by the Department in which
22	22	11 the aggregate Illinois labor expenditures included in the cost
23	23	12 of the production, in the period that ends 12 months after the
24	24	13 time principal filming or taping of the production began,
25	25	14 exceed $100,000 for productions of 30 minutes or longer, or
26	26	15 $50,000 for productions of less than 30 minutes; and (ii) for
27	27	16 productions commencing on or after May 1, 2006, a film, video,
28	28	17 or television production that has been certified by the
29	29	18 Department in which the Illinois production spending included
30	30	19 in the cost of production in the period that ends 12 months
31	31	20 after the time principal filming or taping of the production
32	32	21 began exceeds $100,000 for productions of 30 minutes or longer
33	33	22 or exceeds $50,000 for productions of less than 30 minutes.
34	34	23 "Accredited production" does not include a production that:
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38	38	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3431 Introduced , by Rep. Dave Severin SYNOPSIS AS INTRODUCED:
39	39	35 ILCS 16/1035 ILCS 16/42 35 ILCS 16/10 35 ILCS 16/42
40	40	35 ILCS 16/10
41	41	35 ILCS 16/42
42	42	Amends the Film Production Services Tax Credit Act of 2008. Provides that the term "accredited production" does not include a talk show produced for a local or regional market and does not include a reality competition production. Provides that the credit applies on a permanent basis. Provides that the credit includes 5% of the Illinois labor expenditures generated by the employment of residents of the State who reside outside of the metropolitan area. Provides that the credit amount shall be increased by 5% if 50% or more of the total hours of principal filming or taping of the production are completed in the State but outside of the metropolitan area. Provides that the term "metropolitan area" means the City of Chicago and any part of the State located within 30 miles of the City of Chicago. Effective immediately.
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71	71	1 (1) is news, current events, or public programming, or
72	72	2 a program that includes weather or market reports;
73	73	3 (2) is a talk show produced for local or regional
74	74	4 markets;
75	75	5 (3) is a production in respect of a game,
76	76	6 questionnaire, or contest, not including a reality
77	77	7 competition production;
78	78	8 (4) is a sports event or activity;
79	79	9 (5) is a gala presentation or awards show;
80	80	10 (6) is a finished production that solicits funds;
81	81	11 (7) is a production produced by a film production
82	82	12 company if records, as required by 18 U.S.C. 2257, are to
83	83	13 be maintained by that film production company with respect
84	84	14 to any performer portrayed in that single media or
85	85	15 multimedia program; or
86	86	16 (8) is a production produced primarily for industrial,
87	87	17 corporate, or institutional purposes.
88	88	18 "Accredited animated production" means an accredited
89	89	19 production in which movement and characters' performances are
90	90	20 created using a frame-by-frame technique and a significant
91	91	21 number of major characters are animated. Motion capture by
92	92	22 itself is not an animation technique.
93	93	23 "Accredited production certificate" means a certificate
94	94	24 issued by the Department certifying that the production is an
95	95	25 accredited production that meets the guidelines of this Act.
96	96	26 "Applicant" means a taxpayer that is a film production
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107	107	1 company that is operating or has operated an accredited
108	108	2 production located within the State of Illinois and that (i)
109	109	3 owns the copyright in the accredited production throughout the
110	110	4 Illinois production period or (ii) has contracted directly
111	111	5 with the owner of the copyright in the accredited production
112	112	6 or a person acting on behalf of the owner to provide services
113	113	7 for the production, where the owner of the copyright is not an
114	114	8 eligible production corporation.
115	115	9 "Credit" means:
116	116	10 (1) for an accredited production approved by the
117	117	11 Department on or before January 1, 2005 and commencing
118	118	12 before May 1, 2006, the amount equal to 25% of the Illinois
119	119	13 labor expenditure approved by the Department. The
120	120	14 applicant is deemed to have paid, on its balance due day
121	121	15 for the year, an amount equal to 25% of its qualified
122	122	16 Illinois labor expenditure for the tax year. For Illinois
123	123	17 labor expenditures generated by the employment of
124	124	18 residents of geographic areas of high poverty or high
125	125	19 unemployment, as determined by the Department, in an
126	126	20 accredited production commencing before May 1, 2006 and
127	127	21 approved by the Department after January 1, 2005, the
128	128	22 applicant shall receive an enhanced credit of 10% in
129	129	23 addition to the 25% credit; and
130	130	24 (2) for an accredited production commencing on or
131	131	25 after May 1, 2006, the amount equal to:
132	132	26 (i) 20% of the Illinois production spending for
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143	143	1 the taxable year; plus
144	144	2 (ii) 15% of the Illinois labor expenditures
145	145	3 generated by the employment of residents of geographic
146	146	4 areas of high poverty or high unemployment, as
147	147	5 determined by the Department; and
148	148	6 (3) for an accredited production commencing on or
149	149	7 after January 1, 2009 and prior to July 1, 2023, the amount
150	150	8 equal to:
151	151	9 (i) 30% of the Illinois production spending for
152	152	10 the taxable year; plus
153	153	11 (ii) 15% of the Illinois labor expenditures
154	154	12 generated by the employment of residents of geographic
155	155	13 areas of high poverty or high unemployment, as
156	156	14 determined by the Department; and .
157	157	15 (4) for an accredited production commencing on or
158	158	16 after July 1, 2023, the amount equal to:
159	159	17 (i) 30% of the Illinois production spending for
160	160	18 the taxable year; plus
161	161	19 (ii) 15% of the Illinois labor expenditures
162	162	20 generated by the employment of residents of geographic
163	163	21 areas of high poverty or high unemployment, as
164	164	22 determined by the Department; plus
165	165	23 (iii) 5% of the Illinois labor expenditures
166	166	24 generated by the employment of residents of the State
167	167	25 who reside outside of the metropolitan area; if the
168	168	26 person is a resident of a geographic area of high
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179	179	1 poverty or high unemployment and also resides outside
180	180	2 of the metropolitan area, then the credit includes
181	181	3 both paragraphs (ii) and (iii); plus
182	182	4 (iv) if 50% or more of the total hours of principal
183	183	5 filming or taping of the production are completed in
184	184	6 the State but outside of the metropolitan area, as
185	185	7 determined by the Department, then the total amount of
186	186	8 the credit under paragraphs (i), (ii), and (iii), as
187	187	9 applicable, shall be increased by 5%.
188	188	10 "Department" means the Department of Commerce and Economic
189	189	11 Opportunity.
190	190	12 "Director" means the Director of Commerce and Economic
191	191	13 Opportunity.
192	192	14 "Illinois labor expenditure" means salary or wages paid to
193	193	15 employees of the applicant for services on the accredited
194	194	16 production.
195	195	17 To qualify as an Illinois labor expenditure, the
196	196	18 expenditure must be:
197	197	19 (1) Reasonable in the circumstances.
198	198	20 (2) Included in the federal income tax basis of the
199	199	21 property.
200	200	22 (3) Incurred by the applicant for services on or after
201	201	23 January 1, 2004.
202	202	24 (4) Incurred for the production stages of the
203	203	25 accredited production, from the final script stage to the
204	204	26 end of the post-production stage.
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215	215	1 (5) Limited to the first $25,000 of wages paid or
216	216	2 incurred to each employee of a production commencing
217	217	3 before May 1, 2006 and the first $100,000 of wages paid or
218	218	4 incurred to each employee of a production commencing on or
219	219	5 after May 1, 2006 and prior to July 1, 2022. For
220	220	6 productions commencing on or after July 1, 2022, limited
221	221	7 to the first $500,000 of wages paid or incurred to each
222	222	8 nonresident or resident employee of a production company
223	223	9 or loan out company that provides in-State services to a
224	224	10 production, whether those wages are paid or incurred by
225	225	11 the production company, loan out company, or both, subject
226	226	12 to withholding payments provided for in Article 7 of the
227	227	13 Illinois Income Tax Act. For purposes of calculating
228	228	14 Illinois labor expenditures for a television series, the
229	229	15 nonresident wage limitations provided under this
230	230	16 subparagraph are applied to the entire season.
231	231	17 (6) For a production commencing before May 1, 2006,
232	232	18 exclusive of the salary or wages paid to or incurred for
233	233	19 the 2 highest paid employees of the production.
234	234	20 (7) Directly attributable to the accredited
235	235	21 production.
236	236	22 (8) (Blank).
237	237	23 (9) Prior to July 1, 2022, paid to persons resident in
238	238	24 Illinois at the time the payments were made. For a
239	239	25 production commencing on or after July 1, 2022, paid to
240	240	26 persons resident in Illinois and nonresidents at the time
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251	251	1 the payments were made. For purposes of this subparagraph,
252	252	2 only wages paid to nonresidents working in the following
253	253	3 positions shall be considered Illinois labor expenditures:
254	254	4 Writer, Director, Director of Photography, Production
255	255	5 Designer, Costume Designer, Production Accountant, VFX
256	256	6 Supervisor, Editor, Composer, and Actor, subject to the
257	257	7 limitations set forth under this subparagraph. For an
258	258	8 accredited Illinois production spending of $25,000,000 or
259	259	9 less, no more than 2 nonresident actors' wages shall
260	260	10 qualify as an Illinois labor expenditure. For an
261	261	11 accredited production with Illinois production spending of
262	262	12 more than $25,000,000, no more than 4 nonresident actor's
263	263	13 wages shall qualify as Illinois labor expenditures.
264	264	14 (10) Paid for services rendered in Illinois.
265	265	15 "Illinois production spending" means the expenses incurred
266	266	16 by the applicant for an accredited production, including,
267	267	17 without limitation, all of the following:
268	268	18 (1) expenses to purchase, from vendors within
269	269	19 Illinois, tangible personal property that is used in the
270	270	20 accredited production;
271	271	21 (2) expenses to acquire services, from vendors in
272	272	22 Illinois, for film production, editing, or processing; and
273	273	23 (3) for a production commencing before July 1, 2022,
274	274	24 the compensation, not to exceed $100,000 for any one
275	275	25 employee, for contractual or salaried employees who are
276	276	26 Illinois residents performing services with respect to the
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287	287	1 accredited production. For a production commencing on or
288	288	2 after July 1, 2022, the compensation, not to exceed
289	289	3 $500,000 for any one employee, for contractual or salaried
290	290	4 employees who are Illinois residents or nonresident
291	291	5 employees, subject to the limitations set forth under
292	292	6 Section 10 of this Act.
293	293	7 "Loan out company" means a personal service corporation or
294	294	8 other entity that is under contract with the taxpayer to
295	295	9 provide specified individual personnel, such as artists, crew,
296	296	10 actors, producers, or directors for the performance of
297	297	11 services used directly in a production. "Loan out company"
298	298	12 does not include entities contracted with by the taxpayer to
299	299	13 provide goods or ancillary contractor services such as
300	300	14 catering, construction, trailers, equipment, or
301	301	15 transportation.
302	302	16 "Metropolitan area" means the City of Chicago and any part
303	303	17 of the State located within 30 miles of the City of Chicago.
304	304	18 "Qualified production facility" means stage facilities in
305	305	19 the State in which television shows and films are or are
306	306	20 intended to be regularly produced and that contain at least
307	307	21 one sound stage of at least 15,000 square feet.
308	308	22 Rulemaking authority to implement Public Act 95-1006, if
309	309	23 any, is conditioned on the rules being adopted in accordance
310	310	24 with all provisions of the Illinois Administrative Procedure
311	311	25 Act and all rules and procedures of the Joint Committee on
312	312	26 Administrative Rules; any purported rule not so adopted, for
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323	323	1 whatever reason, is unauthorized.
324	324	2 (Source: P.A. 102-558, eff. 8-20-21; 102-700, eff. 4-19-22.)
325	325	3 (35 ILCS 16/42)
326	326	4 Sec. 42. Sunset of credits. This Act is exempt from the
327	327	5 provisions of Section 250 of the Illinois Income Tax Act. The
328	328	6 application of credits awarded pursuant to this Act shall be
329	329	7 limited by a reasonable and appropriate sunset date. A
330	330	8 taxpayer shall not be awarded any new credits pursuant to this
331	331	9 Act for tax years beginning on or after January 1, 2027.
332	332	10 (Source: P.A. 101-178, eff. 8-1-19; 102-700, eff. 4-19-22.)
333	333	11 Section 99. Effective date. This Act takes effect upon
334	334	12 becoming law.
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