Illinois 2023-2024 Regular Session

Illinois Senate Bill SB2098 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 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
2	2	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB2098 Introduced 2/9/2023, by Sen. Javier L. Cervantes SYNOPSIS AS INTRODUCED:
3	3	35 ILCS 16/10 35 ILCS 16/10
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5	5	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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11	11	1 AN ACT concerning revenue.
12	12	2 Be it enacted by the People of the State of Illinois,
13	13	3 represented in the General Assembly:
14	14	4 Section 5. The Film Production Services Tax Credit Act of
15	15	5 2008 is amended by changing Section 10 as follows:
16	16	6 (35 ILCS 16/10)
17	17	7 Sec. 10. Definitions. As used in this Act:
18	18	8 "Accredited production" means: (i) for productions
19	19	9 commencing before May 1, 2006, a film, video, or television
20	20	10 production that has been certified by the Department in which
21	21	11 the aggregate Illinois labor expenditures included in the cost
22	22	12 of the production, in the period that ends 12 months after the
23	23	13 time principal filming or taping of the production began,
24	24	14 exceed $100,000 for productions of 30 minutes or longer, or
25	25	15 $50,000 for productions of less than 30 minutes; and (ii) for
26	26	16 productions commencing on or after May 1, 2006, a film, video,
27	27	17 or television production that has been certified by the
28	28	18 Department in which the Illinois production spending included
29	29	19 in the cost of production in the period that ends 12 months
30	30	20 after the time principal filming or taping of the production
31	31	21 began exceeds $100,000 for productions of 30 minutes or longer
32	32	22 or exceeds $50,000 for productions of less than 30 minutes.
33	33	23 For productions commencing on or after May 1, 2006 and before
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37	37	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB2098 Introduced 2/9/2023, by Sen. Javier L. Cervantes SYNOPSIS AS INTRODUCED:
38	38	35 ILCS 16/10 35 ILCS 16/10
39	39	35 ILCS 16/10
40	40	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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43	43	A BILL FOR
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68	68	1 July 1, 2023, Illinois production spending includes only
69	69	2 spending for the period that ends 12 months after the time
70	70	3 principal filming or taping of the production began. On and
71	71	4 after July 1, 2023, "accredited production" also includes
72	72	5 productions in which only post production activities occur in
73	73	6 Illinois. "Accredited production" does not include a
74	74	7 production that:
75	75	8 (1) is news, current events, or public programming, or
76	76	9 a program that includes weather or market reports;
77	77	10 (2) is a talk show;
78	78	11 (3) is a production in respect of a game,
79	79	12 questionnaire, or contest;
80	80	13 (4) is a sports event or activity;
81	81	14 (5) is a gala presentation or awards show;
82	82	15 (6) is a finished production that solicits funds;
83	83	16 (7) is a production produced by a film production
84	84	17 company if records, as required by 18 U.S.C. 2257, are to
85	85	18 be maintained by that film production company with respect
86	86	19 to any performer portrayed in that single media or
87	87	20 multimedia program; or
88	88	21 (8) is a production produced primarily for industrial,
89	89	22 corporate, or institutional purposes.
90	90	23 "Accredited animated production" means an accredited
91	91	24 production in which movement and characters' performances are
92	92	25 created using a frame-by-frame technique, visual effects
93	93	26 (VFX), augmented reality (AR), mixed reality (MR), or virtual
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104	104	1 reality (VR) and a significant number of major characters are
105	105	2 animated. Motion capture by itself is not an animation
106	106	3 technique.
107	107	4 "Accredited production certificate" means a certificate
108	108	5 issued by the Department certifying that the production is an
109	109	6 accredited production that meets the guidelines of this Act.
110	110	7 "Applicant" means a taxpayer that is a film production
111	111	8 company that is operating or has operated an accredited
112	112	9 production located within the State of Illinois and that (i)
113	113	10 owns the copyright in the accredited production throughout the
114	114	11 Illinois production period or (ii) has contracted directly
115	115	12 with the owner of the copyright in the accredited production
116	116	13 or a person acting on behalf of the owner to provide services
117	117	14 for the production, where the owner of the copyright is not an
118	118	15 eligible production corporation.
119	119	16 "Credit" means:
120	120	17 (1) for an accredited production approved by the
121	121	18 Department on or before January 1, 2005 and commencing
122	122	19 before May 1, 2006, the amount equal to 25% of the Illinois
123	123	20 labor expenditure approved by the Department. The
124	124	21 applicant is deemed to have paid, on its balance due day
125	125	22 for the year, an amount equal to 25% of its qualified
126	126	23 Illinois labor expenditure for the tax year. For Illinois
127	127	24 labor expenditures generated by the employment of
128	128	25 residents of geographic areas of high poverty or high
129	129	26 unemployment, as determined by the Department, in an
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140	140	1 accredited production commencing before May 1, 2006 and
141	141	2 approved by the Department after January 1, 2005, the
142	142	3 applicant shall receive an enhanced credit of 10% in
143	143	4 addition to the 25% credit; and
144	144	5 (2) for an accredited production commencing on or
145	145	6 after May 1, 2006, the amount equal to:
146	146	7 (i) 20% of the Illinois production spending for
147	147	8 the taxable year; plus
148	148	9 (ii) 15% of the Illinois labor expenditures
149	149	10 generated by the employment of residents of geographic
150	150	11 areas of high poverty or high unemployment, as
151	151	12 determined by the Department; and
152	152	13 (3) for an accredited production commencing on or
153	153	14 after January 1, 2009, the amount equal to:
154	154	15 (i) 30% of the Illinois production spending for
155	155	16 the taxable year; plus
156	156	17 (ii) 15% of the Illinois labor expenditures
157	157	18 generated by the employment of residents of geographic
158	158	19 areas of high poverty or high unemployment, as
159	159	20 determined by the Department; and .
160	160	21 (4) for an accredited production commencing on or
161	161	22 after July 1, 2023, the amount calculated under paragraph
162	162	23 (3), plus 10% of the Illinois production spending incurred
163	163	24 for the purpose of building a soundstage or digital wall.
164	164	25 "Department" means the Department of Commerce and Economic
165	165	26 Opportunity.
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176	176	1 "Director" means the Director of Commerce and Economic
177	177	2 Opportunity.
178	178	3 "Illinois labor expenditure" means salary or wages paid to
179	179	4 employees of the applicant for services on the accredited
180	180	5 production.
181	181	6 To qualify as an Illinois labor expenditure, the
182	182	7 expenditure must be:
183	183	8 (1) Reasonable in the circumstances.
184	184	9 (2) Included in the federal income tax basis of the
185	185	10 property.
186	186	11 (3) Incurred by the applicant for services on or after
187	187	12 January 1, 2004.
188	188	13 (4) Incurred for the production stages of the
189	189	14 accredited production, from the final script stage to the
190	190	15 end of the post-production stage.
191	191	16 (5) Limited to the first $25,000 of wages paid or
192	192	17 incurred to each employee of a production commencing
193	193	18 before May 1, 2006 and the first $100,000 of wages paid or
194	194	19 incurred to each employee of a production commencing on or
195	195	20 after May 1, 2006 and prior to July 1, 2022. For
196	196	21 productions commencing on or after July 1, 2022, limited
197	197	22 to the first $500,000 of wages paid or incurred to each
198	198	23 nonresident or resident employee of a production company
199	199	24 or loan out company that provides in-State services to a
200	200	25 production, whether those wages are paid or incurred by
201	201	26 the production company, loan out company, or both, subject
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212	212	1 to withholding payments provided for in Article 7 of the
213	213	2 Illinois Income Tax Act. For purposes of calculating
214	214	3 Illinois labor expenditures for a television series, the
215	215	4 nonresident wage limitations provided under this
216	216	5 subparagraph are applied to the entire season.
217	217	6 (6) For a production commencing before May 1, 2006,
218	218	7 exclusive of the salary or wages paid to or incurred for
219	219	8 the 2 highest paid employees of the production.
220	220	9 (7) Directly attributable to the accredited
221	221	10 production.
222	222	11 (8) (Blank).
223	223	12 (9) Prior to July 1, 2022, paid to persons resident in
224	224	13 Illinois at the time the payments were made. For a
225	225	14 production commencing on or after July 1, 2022, paid to
226	226	15 persons resident in Illinois and nonresidents at the time
227	227	16 the payments were made. For purposes of this subparagraph,
228	228	17 only wages paid to nonresidents working in the following
229	229	18 positions shall be considered Illinois labor expenditures:
230	230	19 Writer, Director, Director of Photography, Production
231	231	20 Designer, Costume Designer, Production Accountant, VFX
232	232	21 Supervisor, Editor, Composer, and Actor, subject to the
233	233	22 limitations set forth under this subparagraph. For an
234	234	23 accredited Illinois production spending of $25,000,000 or
235	235	24 less, no more than 2 nonresident actors' wages shall
236	236	25 qualify as an Illinois labor expenditure. For an
237	237	26 accredited production with Illinois production spending of
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248	248	1 more than $25,000,000, no more than 4 nonresident actor's
249	249	2 wages shall qualify as Illinois labor expenditures.
250	250	3 (10) Paid for services rendered in Illinois.
251	251	4 "Illinois production spending" means the expenses incurred
252	252	5 by the applicant for an accredited production, including,
253	253	6 without limitation, all of the following:
254	254	7 (1) expenses to purchase, from vendors within
255	255	8 Illinois, tangible personal property that is used in the
256	256	9 accredited production;
257	257	10 (2) expenses to acquire services, from vendors in
258	258	11 Illinois, for film production, editing, or processing; and
259	259	12 (3) for a production commencing before July 1, 2022,
260	260	13 the compensation, not to exceed $100,000 for any one
261	261	14 employee, for contractual or salaried employees who are
262	262	15 Illinois residents performing services with respect to the
263	263	16 accredited production. For a production commencing on or
264	264	17 after July 1, 2022, the compensation, not to exceed
265	265	18 $500,000 for any one employee, for contractual or salaried
266	266	19 employees who are Illinois residents or nonresident
267	267	20 employees, subject to the limitations set forth under
268	268	21 Section 10 of this Act.
269	269	22 "Loan out company" means a personal service corporation or
270	270	23 other entity that is under contract with the taxpayer to
271	271	24 provide specified individual personnel, such as artists, crew,
272	272	25 actors, producers, or directors for the performance of
273	273	26 services used directly in a production. "Loan out company"
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284	284	1 does not include entities contracted with by the taxpayer to
285	285	2 provide goods or ancillary contractor services such as
286	286	3 catering, construction, trailers, equipment, or
287	287	4 transportation.
288	288	5 "Qualified production facility" means stage facilities in
289	289	6 the State in which television shows and films are or are
290	290	7 intended to be regularly produced and that contain at least
291	291	8 one sound stage of at least 15,000 square feet.
292	292	9 Rulemaking authority to implement Public Act 95-1006, if
293	293	10 any, is conditioned on the rules being adopted in accordance
294	294	11 with all provisions of the Illinois Administrative Procedure
295	295	12 Act and all rules and procedures of the Joint Committee on
296	296	13 Administrative Rules; any purported rule not so adopted, for
297	297	14 whatever reason, is unauthorized.
298	298	15 (Source: P.A. 102-558, eff. 8-20-21; 102-700, eff. 4-19-22.)
299	299	16 Section 99. Effective date. This Act takes effect upon
300	300	17 becoming law.
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