103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB2098 Introduced 2/9/2023, by Sen. Javier L. Cervantes SYNOPSIS AS INTRODUCED: 35 ILCS 16/10 Amends the Film Production Services Tax Credit Act of 2008. Provides that "accredited production" also includes productions in which only post production activities occur in Illinois. Provides that an accredited animated production also includes a production using visual effects (VFX), augmented reality (AR), mixed reality (MR), or virtual reality (VR). Provides for a credit in an amount equal to 10% of the Illinois production spending incurred for the purpose of building a soundstage or digital wall. Effective immediately. LRB103 29088 HLH 55474 b A BILL FOR 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB2098 Introduced 2/9/2023, by Sen. Javier L. Cervantes SYNOPSIS AS INTRODUCED: 35 ILCS 16/10 35 ILCS 16/10 Amends the Film Production Services Tax Credit Act of 2008. Provides that "accredited production" also includes productions in which only post production activities occur in Illinois. Provides that an accredited animated production also includes a production using visual effects (VFX), augmented reality (AR), mixed reality (MR), or virtual reality (VR). Provides for a credit in an amount equal to 10% of the Illinois production spending incurred for the purpose of building a soundstage or digital wall. Effective immediately. LRB103 29088 HLH 55474 b LRB103 29088 HLH 55474 b A BILL FOR
103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB2098 Introduced 2/9/2023, by Sen. Javier L. Cervantes SYNOPSIS AS INTRODUCED:
35 ILCS 16/10 35 ILCS 16/10
35 ILCS 16/10
Amends the Film Production Services Tax Credit Act of 2008. Provides that "accredited production" also includes productions in which only post production activities occur in Illinois. Provides that an accredited animated production also includes a production using visual effects (VFX), augmented reality (AR), mixed reality (MR), or virtual reality (VR). Provides for a credit in an amount equal to 10% of the Illinois production spending incurred for the purpose of building a soundstage or digital wall. Effective immediately.
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A BILL FOR
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1 AN ACT concerning revenue.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Film Production Services Tax Credit Act of
5 2008 is amended by changing Section 10 as follows:
6 (35 ILCS 16/10)
7 Sec. 10. Definitions. As used in this Act:
8 "Accredited production" means: (i) for productions
9 commencing before May 1, 2006, a film, video, or television
10 production that has been certified by the Department in which
11 the aggregate Illinois labor expenditures included in the cost
12 of the production, in the period that ends 12 months after the
13 time principal filming or taping of the production began,
14 exceed $100,000 for productions of 30 minutes or longer, or
15 $50,000 for productions of less than 30 minutes; and (ii) for
16 productions commencing on or after May 1, 2006, a film, video,
17 or television production that has been certified by the
18 Department in which the Illinois production spending included
19 in the cost of production in the period that ends 12 months
20 after the time principal filming or taping of the production
21 began exceeds $100,000 for productions of 30 minutes or longer
22 or exceeds $50,000 for productions of less than 30 minutes.
23 For productions commencing on or after May 1, 2006 and before
103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB2098 Introduced 2/9/2023, by Sen. Javier L. Cervantes SYNOPSIS AS INTRODUCED:
35 ILCS 16/10 35 ILCS 16/10
35 ILCS 16/10
Amends the Film Production Services Tax Credit Act of 2008. Provides that "accredited production" also includes productions in which only post production activities occur in Illinois. Provides that an accredited animated production also includes a production using visual effects (VFX), augmented reality (AR), mixed reality (MR), or virtual reality (VR). Provides for a credit in an amount equal to 10% of the Illinois production spending incurred for the purpose of building a soundstage or digital wall. Effective immediately.
LRB103 29088 HLH 55474 b LRB103 29088 HLH 55474 b
LRB103 29088 HLH 55474 b
A BILL FOR
35 ILCS 16/10
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1 July 1, 2023, Illinois production spending includes only
2 spending for the period that ends 12 months after the time
3 principal filming or taping of the production began. On and
4 after July 1, 2023, "accredited production" also includes
5 productions in which only post production activities occur in
6 Illinois. "Accredited production" does not include a
7 production that:
8 (1) is news, current events, or public programming, or
9 a program that includes weather or market reports;
10 (2) is a talk show;
11 (3) is a production in respect of a game,
12 questionnaire, or contest;
13 (4) is a sports event or activity;
14 (5) is a gala presentation or awards show;
15 (6) is a finished production that solicits funds;
16 (7) is a production produced by a film production
17 company if records, as required by 18 U.S.C. 2257, are to
18 be maintained by that film production company with respect
19 to any performer portrayed in that single media or
20 multimedia program; or
21 (8) is a production produced primarily for industrial,
22 corporate, or institutional purposes.
23 "Accredited animated production" means an accredited
24 production in which movement and characters' performances are
25 created using a frame-by-frame technique, visual effects
26 (VFX), augmented reality (AR), mixed reality (MR), or virtual
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1 reality (VR) and a significant number of major characters are
2 animated. Motion capture by itself is not an animation
3 technique.
4 "Accredited production certificate" means a certificate
5 issued by the Department certifying that the production is an
6 accredited production that meets the guidelines of this Act.
7 "Applicant" means a taxpayer that is a film production
8 company that is operating or has operated an accredited
9 production located within the State of Illinois and that (i)
10 owns the copyright in the accredited production throughout the
11 Illinois production period or (ii) has contracted directly
12 with the owner of the copyright in the accredited production
13 or a person acting on behalf of the owner to provide services
14 for the production, where the owner of the copyright is not an
15 eligible production corporation.
16 "Credit" means:
17 (1) for an accredited production approved by the
18 Department on or before January 1, 2005 and commencing
19 before May 1, 2006, the amount equal to 25% of the Illinois
20 labor expenditure approved by the Department. The
21 applicant is deemed to have paid, on its balance due day
22 for the year, an amount equal to 25% of its qualified
23 Illinois labor expenditure for the tax year. For Illinois
24 labor expenditures generated by the employment of
25 residents of geographic areas of high poverty or high
26 unemployment, as determined by the Department, in an
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1 accredited production commencing before May 1, 2006 and
2 approved by the Department after January 1, 2005, the
3 applicant shall receive an enhanced credit of 10% in
4 addition to the 25% credit; and
5 (2) for an accredited production commencing on or
6 after May 1, 2006, the amount equal to:
7 (i) 20% of the Illinois production spending for
8 the taxable year; plus
9 (ii) 15% of the Illinois labor expenditures
10 generated by the employment of residents of geographic
11 areas of high poverty or high unemployment, as
12 determined by the Department; and
13 (3) for an accredited production commencing on or
14 after January 1, 2009, the amount equal to:
15 (i) 30% of the Illinois production spending for
16 the taxable year; plus
17 (ii) 15% of the Illinois labor expenditures
18 generated by the employment of residents of geographic
19 areas of high poverty or high unemployment, as
20 determined by the Department; and .
21 (4) for an accredited production commencing on or
22 after July 1, 2023, the amount calculated under paragraph
23 (3), plus 10% of the Illinois production spending incurred
24 for the purpose of building a soundstage or digital wall.
25 "Department" means the Department of Commerce and Economic
26 Opportunity.
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1 "Director" means the Director of Commerce and Economic
2 Opportunity.
3 "Illinois labor expenditure" means salary or wages paid to
4 employees of the applicant for services on the accredited
5 production.
6 To qualify as an Illinois labor expenditure, the
7 expenditure must be:
8 (1) Reasonable in the circumstances.
9 (2) Included in the federal income tax basis of the
10 property.
11 (3) Incurred by the applicant for services on or after
12 January 1, 2004.
13 (4) Incurred for the production stages of the
14 accredited production, from the final script stage to the
15 end of the post-production stage.
16 (5) Limited to the first $25,000 of wages paid or
17 incurred to each employee of a production commencing
18 before May 1, 2006 and the first $100,000 of wages paid or
19 incurred to each employee of a production commencing on or
20 after May 1, 2006 and prior to July 1, 2022. For
21 productions commencing on or after July 1, 2022, limited
22 to the first $500,000 of wages paid or incurred to each
23 nonresident or resident employee of a production company
24 or loan out company that provides in-State services to a
25 production, whether those wages are paid or incurred by
26 the production company, loan out company, or both, subject
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1 to withholding payments provided for in Article 7 of the
2 Illinois Income Tax Act. For purposes of calculating
3 Illinois labor expenditures for a television series, the
4 nonresident wage limitations provided under this
5 subparagraph are applied to the entire season.
6 (6) For a production commencing before May 1, 2006,
7 exclusive of the salary or wages paid to or incurred for
8 the 2 highest paid employees of the production.
9 (7) Directly attributable to the accredited
10 production.
11 (8) (Blank).
12 (9) Prior to July 1, 2022, paid to persons resident in
13 Illinois at the time the payments were made. For a
14 production commencing on or after July 1, 2022, paid to
15 persons resident in Illinois and nonresidents at the time
16 the payments were made. For purposes of this subparagraph,
17 only wages paid to nonresidents working in the following
18 positions shall be considered Illinois labor expenditures:
19 Writer, Director, Director of Photography, Production
20 Designer, Costume Designer, Production Accountant, VFX
21 Supervisor, Editor, Composer, and Actor, subject to the
22 limitations set forth under this subparagraph. For an
23 accredited Illinois production spending of $25,000,000 or
24 less, no more than 2 nonresident actors' wages shall
25 qualify as an Illinois labor expenditure. For an
26 accredited production with Illinois production spending of
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1 more than $25,000,000, no more than 4 nonresident actor's
2 wages shall qualify as Illinois labor expenditures.
3 (10) Paid for services rendered in Illinois.
4 "Illinois production spending" means the expenses incurred
5 by the applicant for an accredited production, including,
6 without limitation, all of the following:
7 (1) expenses to purchase, from vendors within
8 Illinois, tangible personal property that is used in the
9 accredited production;
10 (2) expenses to acquire services, from vendors in
11 Illinois, for film production, editing, or processing; and
12 (3) for a production commencing before July 1, 2022,
13 the compensation, not to exceed $100,000 for any one
14 employee, for contractual or salaried employees who are
15 Illinois residents performing services with respect to the
16 accredited production. For a production commencing on or
17 after July 1, 2022, the compensation, not to exceed
18 $500,000 for any one employee, for contractual or salaried
19 employees who are Illinois residents or nonresident
20 employees, subject to the limitations set forth under
21 Section 10 of this Act.
22 "Loan out company" means a personal service corporation or
23 other entity that is under contract with the taxpayer to
24 provide specified individual personnel, such as artists, crew,
25 actors, producers, or directors for the performance of
26 services used directly in a production. "Loan out company"
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1 does not include entities contracted with by the taxpayer to
2 provide goods or ancillary contractor services such as
3 catering, construction, trailers, equipment, or
4 transportation.
5 "Qualified production facility" means stage facilities in
6 the State in which television shows and films are or are
7 intended to be regularly produced and that contain at least
8 one sound stage of at least 15,000 square feet.
9 Rulemaking authority to implement Public Act 95-1006, if
10 any, is conditioned on the rules being adopted in accordance
11 with all provisions of the Illinois Administrative Procedure
12 Act and all rules and procedures of the Joint Committee on
13 Administrative Rules; any purported rule not so adopted, for
14 whatever reason, is unauthorized.
15 (Source: P.A. 102-558, eff. 8-20-21; 102-700, eff. 4-19-22.)
16 Section 99. Effective date. This Act takes effect upon
17 becoming law.
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