Illinois 2025-2026 Regular Session

Illinois House Bill HB2870 Compare Versions

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

Old	New	Differences
1	1	104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB2870 Introduced , by Rep. Margaret Croke SYNOPSIS AS INTRODUCED: 35 ILCS 5/701 from Ch. 120, par. 7-70135 ILCS 16/1035 ILCS 16/42 Amends the Film Production Services Tax Credit Act of 2008. Provides that accredited productions shall be considered Category 1 productions or Category 2 productions. Provides that a Category 1 production is an accredited production that meets the following criteria: (1) at least 75% of all principal filming or taping days of the accredited production that occur at any soundstage facility within or without Illinois occur at a qualified production facility; and (2) at least 20% of the total expenditures for the accredited production are for (i) tangible property that will be used at a qualified production facility or for the use of the qualified production facility; (ii) the performance of services at a qualified production facility; or (iii) any combination of (i) and (ii). Makes changes concerning the amount of the credit. Makes changes concerning the number of nonresident employees whose wages may be considered Illinois labor expenditures. Makes changes concerning the definition of "qualified production facility". Amends the Illinois Income Tax Act to make changes concerning withholdings for loan out company employees. Effective immediately. LRB104 12118 HLH 22217 b A BILL FOR 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB2870 Introduced , by Rep. Margaret Croke SYNOPSIS AS INTRODUCED: 35 ILCS 5/701 from Ch. 120, par. 7-70135 ILCS 16/1035 ILCS 16/42 35 ILCS 5/701 from Ch. 120, par. 7-701 35 ILCS 16/10 35 ILCS 16/42 Amends the Film Production Services Tax Credit Act of 2008. Provides that accredited productions shall be considered Category 1 productions or Category 2 productions. Provides that a Category 1 production is an accredited production that meets the following criteria: (1) at least 75% of all principal filming or taping days of the accredited production that occur at any soundstage facility within or without Illinois occur at a qualified production facility; and (2) at least 20% of the total expenditures for the accredited production are for (i) tangible property that will be used at a qualified production facility or for the use of the qualified production facility; (ii) the performance of services at a qualified production facility; or (iii) any combination of (i) and (ii). Makes changes concerning the amount of the credit. Makes changes concerning the number of nonresident employees whose wages may be considered Illinois labor expenditures. Makes changes concerning the definition of "qualified production facility". Amends the Illinois Income Tax Act to make changes concerning withholdings for loan out company employees. Effective immediately. LRB104 12118 HLH 22217 b LRB104 12118 HLH 22217 b A BILL FOR
2	2	104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB2870 Introduced , by Rep. Margaret Croke SYNOPSIS AS INTRODUCED:
3	3	35 ILCS 5/701 from Ch. 120, par. 7-70135 ILCS 16/1035 ILCS 16/42 35 ILCS 5/701 from Ch. 120, par. 7-701 35 ILCS 16/10 35 ILCS 16/42
4	4	35 ILCS 5/701 from Ch. 120, par. 7-701
5	5	35 ILCS 16/10
6	6	35 ILCS 16/42
7	7	Amends the Film Production Services Tax Credit Act of 2008. Provides that accredited productions shall be considered Category 1 productions or Category 2 productions. Provides that a Category 1 production is an accredited production that meets the following criteria: (1) at least 75% of all principal filming or taping days of the accredited production that occur at any soundstage facility within or without Illinois occur at a qualified production facility; and (2) at least 20% of the total expenditures for the accredited production are for (i) tangible property that will be used at a qualified production facility or for the use of the qualified production facility; (ii) the performance of services at a qualified production facility; or (iii) any combination of (i) and (ii). Makes changes concerning the amount of the credit. Makes changes concerning the number of nonresident employees whose wages may be considered Illinois labor expenditures. Makes changes concerning the definition of "qualified production facility". Amends the Illinois Income Tax Act to make changes concerning withholdings for loan out company employees. Effective immediately.
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13	13	1 AN ACT concerning revenue.
14	14	2 Be it enacted by the People of the State of Illinois,
15	15	3 represented in the General Assembly:
16	16	4 Section 5. The Illinois Income Tax Act is amended by
17	17	5 changing Section 701 as follows:
18	18	6 (35 ILCS 5/701) (from Ch. 120, par. 7-701)
19	19	7 Sec. 701. Requirement and amount of withholding.
20	20	8 (a) In General. Every employer maintaining an office or
21	21	9 transacting business within this State and required under the
22	22	10 provisions of the Internal Revenue Code to withhold a tax on:
23	23	11 (1) compensation paid in this State (as determined
24	24	12 under Section 304(a)(2)(B)) to an individual; or
25	25	13 (2) payments described in subsection (b) shall deduct
26	26	14 and withhold from such compensation for each payroll
27	27	15 period (as defined in Section 3401 of the Internal Revenue
28	28	16 Code) an amount equal to the amount by which such
29	29	17 individual's compensation exceeds the proportionate part
30	30	18 of this withholding exemption (computed as provided in
31	31	19 Section 702) attributable to the payroll period for which
32	32	20 such compensation is payable multiplied by a percentage
33	33	21 equal to the percentage tax rate for individuals provided
34	34	22 in subsection (b) of Section 201.
35	35	23 (a-5) Withholding from nonresident employees. For taxable
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39	39	104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB2870 Introduced , by Rep. Margaret Croke SYNOPSIS AS INTRODUCED:
40	40	35 ILCS 5/701 from Ch. 120, par. 7-70135 ILCS 16/1035 ILCS 16/42 35 ILCS 5/701 from Ch. 120, par. 7-701 35 ILCS 16/10 35 ILCS 16/42
41	41	35 ILCS 5/701 from Ch. 120, par. 7-701
42	42	35 ILCS 16/10
43	43	35 ILCS 16/42
44	44	Amends the Film Production Services Tax Credit Act of 2008. Provides that accredited productions shall be considered Category 1 productions or Category 2 productions. Provides that a Category 1 production is an accredited production that meets the following criteria: (1) at least 75% of all principal filming or taping days of the accredited production that occur at any soundstage facility within or without Illinois occur at a qualified production facility; and (2) at least 20% of the total expenditures for the accredited production are for (i) tangible property that will be used at a qualified production facility or for the use of the qualified production facility; (ii) the performance of services at a qualified production facility; or (iii) any combination of (i) and (ii). Makes changes concerning the amount of the credit. Makes changes concerning the number of nonresident employees whose wages may be considered Illinois labor expenditures. Makes changes concerning the definition of "qualified production facility". Amends the Illinois Income Tax Act to make changes concerning withholdings for loan out company employees. Effective immediately.
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47	47	A BILL FOR
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53	53	35 ILCS 5/701 from Ch. 120, par. 7-701
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55	55	35 ILCS 16/42
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74	74	1 years beginning on or after January 1, 2020, for purposes of
75	75	2 determining compensation paid in this State under paragraph
76	76	3 (B) of item (2) of subsection (a) of Section 304:
77	77	4 (1) If an employer maintains a time and attendance
78	78	5 system that tracks where employees perform services on a
79	79	6 daily basis, then data from the time and attendance system
80	80	7 shall be used. For purposes of this paragraph, time and
81	81	8 attendance system means a system:
82	82	9 (A) in which the employee is required, on a
83	83	10 contemporaneous basis, to record the work location for
84	84	11 every day worked outside of the State where the
85	85	12 employment duties are primarily performed; and
86	86	13 (B) that is designed to allow the employer to
87	87	14 allocate the employee's wages for income tax purposes
88	88	15 among all states in which the employee performs
89	89	16 services.
90	90	17 (2) In all other cases, the employer shall obtain a
91	91	18 written statement from the employee of the number of days
92	92	19 reasonably expected to be spent performing services in
93	93	20 this State during the taxable year. Absent the employer's
94	94	21 actual knowledge of fraud or gross negligence by the
95	95	22 employee in making the determination or collusion between
96	96	23 the employer and the employee to evade tax, the
97	97	24 certification so made by the employee and maintained in
98	98	25 the employer's books and records shall be prima facie
99	99	26 evidence and constitute a rebuttable presumption of the
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110	110	1 number of days spent performing services in this State.
111	111	2 (a-10) If the compensation is paid through a loan out
112	112	3 company, as defined under Section 10 of the Film Production
113	113	4 Services Tax Credit Act of 2008, if the compensation is
114	114	5 considered compensation paid in this State under paragraph (B)
115	115	6 of item (2) of subsection (a) of Section 304, and if the
116	116	7 compensation is for in-State services performed for a
117	117	8 production that is accredited under Section 10 of the Film
118	118	9 Production Services Tax Credit Act of 2008 and concludes on or
119	119	10 after July 1, 2025, then the production company or its
120	120	11 authorized payroll service company shall be considered the
121	121	12 employer for the purpose of withholding tax on that
122	122	13 compensation under this Article 7 and shall withhold at the
123	123	14 tax rate provided in subsection (b) of Section 201 on all
124	124	15 payments to loan out companies for services performed in
125	125	16 Illinois by the loan out company's employees. Notwithstanding
126	126	17 any other provision of law, nonresident employees of loan out
127	127	18 companies who perform services in Illinois shall be considered
128	128	19 taxable nonresidents and shall be subject to the tax under
129	129	20 this Act in the taxable year in which the employee performs
130	130	21 services in Illinois.
131	131	22 (b) Payment to Residents. Any payment (including
132	132	23 compensation, but not including a payment from which
133	133	24 withholding is required under Section 710 of this Act) to a
134	134	25 resident by a payor maintaining an office or transacting
135	135	26 business within this State (including any agency, officer, or
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146	146	1 employee of this State or of any political subdivision of this
147	147	2 State) and on which withholding of tax is required under the
148	148	3 provisions of the Internal Revenue Code shall be deemed to be
149	149	4 compensation paid in this State by an employer to an employee
150	150	5 for the purposes of Article 7 and Section 601(b)(1) to the
151	151	6 extent such payment is included in the recipient's base income
152	152	7 and not subjected to withholding by another state.
153	153	8 Notwithstanding any other provision to the contrary, no amount
154	154	9 shall be withheld from unemployment insurance benefit payments
155	155	10 made to an individual pursuant to the Unemployment Insurance
156	156	11 Act unless the individual has voluntarily elected the
157	157	12 withholding pursuant to rules promulgated by the Director of
158	158	13 Employment Security.
159	159	14 (c) Special Definitions. Withholding shall be considered
160	160	15 required under the provisions of the Internal Revenue Code to
161	161	16 the extent the Internal Revenue Code either requires
162	162	17 withholding or allows for voluntary withholding the payor and
163	163	18 recipient have entered into such a voluntary withholding
164	164	19 agreement. For the purposes of Article 7 and Section 1002(c)
165	165	20 the term "employer" includes any payor who is required to
166	166	21 withhold tax pursuant to this Section.
167	167	22 (d) Reciprocal Exemption. The Director may enter into an
168	168	23 agreement with the taxing authorities of any state which
169	169	24 imposes a tax on or measured by income to provide that
170	170	25 compensation paid in such state to residents of this State
171	171	26 shall be exempt from withholding of such tax; in such case, any
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182	182	1 compensation paid in this State to residents of such state
183	183	2 shall be exempt from withholding. All reciprocal agreements
184	184	3 shall be subject to the requirements of Section 2505-575 of
185	185	4 the Department of Revenue Law (20 ILCS 2505/2505-575).
186	186	5 (e) Notwithstanding subsection (a)(2) of this Section, no
187	187	6 withholding is required on payments for which withholding is
188	188	7 required under Section 3405 or 3406 of the Internal Revenue
189	189	8 Code.
190	190	9 (Source: P.A. 101-585, eff. 8-26-19; 102-558, eff. 8-20-21.)
191	191	10 Section 10. The Film Production Services Tax Credit Act of
192	192	11 2008 is amended by changing Sections 10 and 42 as follows:
193	193	12 (35 ILCS 16/10)
194	194	13 Sec. 10. Definitions. As used in this Act:
195	195	14 "Accredited production" means: (i) for productions
196	196	15 commencing before May 1, 2006, a film, video, or television
197	197	16 production that has been certified by the Department in which
198	198	17 the aggregate Illinois labor expenditures included in the cost
199	199	18 of the production, in the period that ends 12 months after the
200	200	19 time principal filming or taping of the production began,
201	201	20 exceed $100,000 for productions of 30 minutes or longer, or
202	202	21 $50,000 for productions of less than 30 minutes; and (ii) for
203	203	22 productions commencing on or after May 1, 2006, a film, video,
204	204	23 or television production that has been certified by the
205	205	24 Department in which the Illinois production spending included
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216	216	1 in the cost of production in the period that ends 12 months
217	217	2 after the time principal filming or taping of the production
218	218	3 began exceeds $100,000 for productions of 30 minutes or longer
219	219	4 or exceeds $50,000 for productions of less than 30 minutes.
220	220	5 "Accredited production" does not include a production that:
221	221	6 (1) is news, current events, or public programming, or
222	222	7 a program that includes weather or market reports;
223	223	8 (2) is a talk show produced for local or regional
224	224	9 markets;
225	225	10 (3) (blank);
226	226	11 (4) is a sports event or activity;
227	227	12 (5) is a gala presentation or awards show;
228	228	13 (6) is a finished production that solicits funds;
229	229	14 (7) is a production produced by a film production
230	230	15 company if records, as required by 18 U.S.C. 2257, are to
231	231	16 be maintained by that film production company with respect
232	232	17 to any performer portrayed in that single media or
233	233	18 multimedia program; or
234	234	19 (8) is a production produced primarily for industrial,
235	235	20 corporate, or institutional purposes.
236	236	21 "Accredited animated production" means an accredited
237	237	22 production in which movement and characters' performances are
238	238	23 created using a frame-by-frame technique and a significant
239	239	24 number of major characters are animated. Motion capture by
240	240	25 itself is not an animation technique.
241	241	26 "Accredited production certificate" means a certificate
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252	252	1 issued by the Department certifying that the production is an
253	253	2 accredited production that meets the guidelines of this Act.
254	254	3 "Applicant" means a taxpayer that is a film production
255	255	4 company that is operating or has operated an accredited
256	256	5 production located within the State of Illinois and that (i)
257	257	6 owns the copyright in the accredited production throughout the
258	258	7 Illinois production period or (ii) has contracted directly
259	259	8 with the owner of the copyright in the accredited production
260	260	9 or a person acting on behalf of the owner to provide services
261	261	10 for the production, where the owner of the copyright is not an
262	262	11 eligible production corporation.
263	263	12 "Category 1 production" means an accredited production
264	264	13 that meets the following criteria:
265	265	14 (1) at least 75% of all principal filming or taping
266	266	15 days of the accredited production that occur at any
267	267	16 soundstage facility within or without Illinois occur at a
268	268	17 qualified production facility; and
269	269	18 (2) at least 20% of the total expenditures for the
270	270	19 accredited production are for (i) tangible property that
271	271	20 will be used at a qualified production facility or for the
272	272	21 use of the qualified production facility; (ii) the
273	273	22 performance of services at a qualified production
274	274	23 facility; or (iii) any combination of (i) and (ii).
275	275	24 "Category 2 production" means an accredited production
276	276	25 that that is not a Category 1 production.
277	277	26 "Credit" means:
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288	288	1 (1) for an accredited production that (i) is approved
289	289	2 by the Department on or before January 1, 2005, (ii)
290	290	3 begins and commencing before May 1, 2006, and (iii)
291	291	4 concludes before July 1, 2025, the amount equal to 25% of
292	292	5 the Illinois labor expenditure approved by the Department.
293	293	6 The applicant is deemed to have paid, on its balance due
294	294	7 day for the year, an amount equal to 25% of its qualified
295	295	8 Illinois labor expenditure for the tax year. For Illinois
296	296	9 labor expenditures generated by the employment of
297	297	10 residents of geographic areas of high poverty or high
298	298	11 unemployment, as determined by the Department, in an
299	299	12 accredited production commencing before May 1, 2006 and
300	300	13 approved by the Department after January 1, 2005, the
301	301	14 applicant shall receive an enhanced credit of 10% in
302	302	15 addition to the 25% credit; and
303	303	16 (2) for an accredited production that (i) begins
304	304	17 commencing on or after May 1, 2006, (ii) begins and before
305	305	18 January 1, 2009, and (iii) concludes before July 1, 2025,
306	306	19 the amount equal to:
307	307	20 (i) 20% of the Illinois production spending for
308	308	21 the taxable year; plus
309	309	22 (ii) 15% of the Illinois labor expenditures
310	310	23 generated by the employment of residents of geographic
311	311	24 areas of high poverty or high unemployment, as
312	312	25 determined by the Department; and
313	313	26 (3) for an accredited production that begins
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324	324	1 commencing on or after January 1, 2009 and concludes
325	325	2 before July 1, 2025, the amount equal to:
326	326	3 (i) 30% of the Illinois production spending for
327	327	4 the taxable year; plus
328	328	5 (ii) 15% of the Illinois labor expenditures
329	329	6 generated by the employment of residents of geographic
330	330	7 areas of high poverty or high unemployment, as
331	331	8 determined by the Department; .
332	332	9 (4) for a Category 1 production that concludes on or
333	333	10 after July 1, 2025, the amount equal to:
334	334	11 (i) 35% of the Illinois production spending for
335	335	12 the use of tangible personal property or the
336	336	13 performance of services from vendors in Illinois and
337	337	14 for Illinois labor expenditures generated by the
338	338	15 employment of Illinois residents; plus
339	339	16 (ii) 3% of the Illinois labor expenditures
340	340	17 generated by the employment of Illinois residents that
341	341	18 perform services as one of the 2 most senior positions
342	342	19 in any department of the accredited production or as
343	343	20 an actor appearing in a series regular role on an
344	344	21 accredited production that is a television series;
345	345	22 plus
346	346	23 (iii) 15% of the Illinois labor expenditures
347	347	24 generated by the employment of residents of geographic
348	348	25 areas of high poverty or high unemployment, as
349	349	26 determined by the Department; plus
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360	360	1 (iv) 30% of the wages paid to nonresidents for
361	361	2 services performed on an accredited production,
362	362	3 subject to the limitations of paragraphs (5) and (9.3)
363	363	4 of the definition of "Illinois labor expenditure";
364	364	5 (5) for a Category 2 production that concludes on or
365	365	6 after July 1, 2025, the amount equal to:
366	366	7 (i) 35% of the Illinois production spending for
367	367	8 Illinois labor expenditures generated by the
368	368	9 employment of Illinois residents; plus
369	369	10 (ii) 3% of the Illinois labor expenditures
370	370	11 generated by the employment of Illinois residents that
371	371	12 perform services as one of the 2 most senior positions
372	372	13 in any department of the accredited production or as
373	373	14 an actor appearing in a series regular role on an
374	374	15 accredited production that is a television series;
375	375	16 plus
376	376	17 (iii) 15% of the Illinois labor expenditures
377	377	18 generated by the employment of residents of geographic
378	378	19 areas of high poverty or high unemployment, as
379	379	20 determined by the Department; plus
380	380	21 (iv) 30% of the Illinois production spending for
381	381	22 the use of tangible personal property and the
382	382	23 performance of services from vendors in Illinois; plus
383	383	24 (v) 30% of the wages paid to nonresidents for
384	384	25 services performed on an accredited production,
385	385	26 subject to the limitations of paragraphs (5) and (9.4)
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396	396	1 of the definition of "Illinois labor expenditure"; and
397	397	2 (6) notwithstanding any other provision of law, for an
398	398	3 accredited production that concludes on or after July 1,
399	399	4 2025, if the total expenditures for the production exceed
400	400	5 $75,000,000, then the amount of the credit shall not
401	401	6 exceed 30% of the total expenditures for the production.
402	402	7 "Department" means the Department of Commerce and Economic
403	403	8 Opportunity.
404	404	9 "Director" means the Director of Commerce and Economic
405	405	10 Opportunity.
406	406	11 "Illinois labor expenditure" means salary or wages paid to
407	407	12 employees of the applicant for services on the accredited
408	408	13 production.
409	409	14 To qualify as an Illinois labor expenditure, the
410	410	15 expenditure must be:
411	411	16 (1) Reasonable in the circumstances.
412	412	17 (2) Included in the federal income tax basis of the
413	413	18 property.
414	414	19 (3) Incurred by the applicant for services on or after
415	415	20 January 1, 2004.
416	416	21 (4) Incurred for the production stages of the
417	417	22 accredited production, from the final script stage to the
418	418	23 end of the post-production stage.
419	419	24 (5) Limited to the following:
420	420	25 (A) for productions that begin before May 1, 2006
421	421	26 and conclude before July 1, 2025, the first $25,000 of
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432	432	1 wages paid or incurred to each employee of the a
433	433	2 production; commencing before May 1, 2006 and
434	434	3 (B) for productions that (i) begin on or after May
435	435	4 1, 2006, (ii) begin before July 1, 2022, and (iii)
436	436	5 conclude before July 1, 2025, the first $100,000 of
437	437	6 wages paid or incurred to each employee of the a
438	438	7 production; commencing on or after May 1, 2006 and
439	439	8 prior to July 1, 2022.
440	440	9 (C) for productions that begin on or after July 1,
441	441	10 2022 and conclude before July 1, 2025, For productions
442	442	11 commencing on or after July 1, 2022, limited to the
443	443	12 first $500,000 of wages paid or incurred to each
444	444	13 eligible nonresident or resident employee of a
445	445	14 production company or loan out company that provides
446	446	15 in-State services to a production, whether those wages
447	447	16 are paid or incurred by the production company, loan
448	448	17 out company, or both, subject to withholding payments
449	449	18 provided for in Article 7 of the Illinois Income Tax
450	450	19 Act; .
451	451	20 (D) for Category 1 productions that conclude on or
452	452	21 after July 1, 2025, subject to the provisions of
453	453	22 paragraph (9.3): (i) 100% of the wages paid to or
454	454	23 incurred for each person who is an eligible resident
455	455	24 employee of a production company or a loan out company
456	456	25 and who provides in-State services to a production;
457	457	26 plus (ii) the first $500,000 of wages paid to or
458	458
459	459
460	460
461	461
462	462
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464	464
465	465
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467	467	HB2870 - 13 - LRB104 12118 HLH 22217 b
468	468	1 incurred for each person who is an eligible
469	469	2 nonresident employee of a production company and who
470	470	3 provides in-State services to a production; plus (iii)
471	471	4 100% of the wages paid to or incurred for up to 10
472	472	5 people who are eligible nonresident employees of a
473	473	6 loan out company and who provide in-State services to
474	474	7 a production, including, but not limited to,
475	475	8 nonresident actors who are employees of a loan out
476	476	9 company, subject to the limitations of paragraph (9.3)
477	477	10 for the production with respect to actors; if the
478	478	11 total number of eligible nonresident loan out company
479	479	12 employees exceeds 10, in the aggregate, for an
480	480	13 eligible production, then the additional eligible
481	481	14 nonresident loan out company employees who provide
482	482	15 in-State services to the production in excess of 10
483	483	16 such employees may be considered eligible nonresident
484	484	17 employees of the production company, subject to the
485	485	18 provisions set forth in item (ii) of this subparagraph
486	486	19 (D), so long as, after the inclusion of those
487	487	20 additional loan out company employees, the total
488	488	21 number of eligible nonresident employees of the
489	489	22 accredited production does not exceed the number of
490	490	23 eligible nonresident employees allowed for that
491	491	24 accredited production under the provisions of
492	492	25 paragraph (9.3); and
493	493	26 (E) for Category 2 productions that conclude on or
494	494
495	495
496	496
497	497
498	498
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503	503	HB2870 - 14 - LRB104 12118 HLH 22217 b
504	504	1 after July 1, 2025, subject to the provisions of
505	505	2 paragraph (9.4), the first $500,000 of wages paid to
506	506	3 or incurred for each person who is an eligible
507	507	4 nonresident employee of a production company or a loan
508	508	5 out company or a resident employee of a production
509	509	6 company or a loan out company and who provides
510	510	7 in-State services to a production.
511	511	8 Wages paid to a loan out company employee are
512	512	9 considered wages for the purpose of calculating the
513	513	10 production's Illinois labor expenditures regardless of
514	514	11 whether those wages are paid or incurred by the production
515	515	12 company, loan out company, or both, subject to withholding
516	516	13 payments provided for in Article 7 of the Illinois Income
517	517	14 Tax Act.
518	518	15 For purposes of calculating Illinois labor
519	519	16 expenditures for a television series, the eligible
520	520	17 nonresident wage limitations provided under this
521	521	18 subparagraph are applied to the entire season. For the
522	522	19 purpose of this paragraph (5), an eligible nonresident is
523	523	20 a nonresident whose wages qualify as an Illinois labor
524	524	21 expenditure under the provisions of paragraphs paragraph
525	525	22 (9) through (9.4) that apply to that production.
526	526	23 (6) For a production commencing before May 1, 2006,
527	527	24 exclusive of the salary or wages paid to or incurred for
528	528	25 the 2 highest paid employees of the production.
529	529	26 (7) Directly attributable to the accredited
530	530
531	531
532	532
533	533
534	534
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536	536
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539	539	HB2870 - 15 - LRB104 12118 HLH 22217 b
540	540	1 production.
541	541	2 (8) (Blank).
542	542	3 (9) Prior to July 1, 2022, paid to persons resident in
543	543	4 Illinois at the time the payments were made. For a
544	544	5 production commencing on or after July 1, 2022, subject to
545	545	6 the limitations of paragraphs (9.1) through (9.4), paid to
546	546	7 persons resident in Illinois and nonresidents at the time
547	547	8 the payments were made.
548	548	9 (9.1) For purposes of paragraph (9) this subparagraph,
549	549	10 if the production is accredited by the Department before
550	550	11 the effective date of this amendatory Act of the 102nd
551	551	12 General Assembly, only wages paid to nonresidents working
552	552	13 in the following positions shall be considered Illinois
553	553	14 labor expenditures: Writer, Director, Director of
554	554	15 Photography, Production Designer, Costume Designer,
555	555	16 Production Accountant, VFX Supervisor, Editor, Composer,
556	556	17 and Actor, subject to the limitations set forth under this
557	557	18 subparagraph. For an accredited Illinois production
558	558	19 spending of $25,000,000 or less, no more than 2
559	559	20 nonresident actors' wages shall qualify as an Illinois
560	560	21 labor expenditure. For an accredited production with
561	561	22 Illinois production spending of more than $25,000,000, no
562	562	23 more than 4 nonresident actor's wages shall qualify as
563	563	24 Illinois labor expenditures.
564	564	25 (9.2) For purposes of paragraph (9) this subparagraph,
565	565	26 if the production is accredited by the Department on or
566	566
567	567
568	568
569	569
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576	576	1 after the effective date of this amendatory Act of the
577	577	2 102nd General Assembly and the production concludes before
578	578	3 July 1, 2025, wages paid to nonresidents shall qualify as
579	579	4 Illinois labor expenditures only under the following
580	580	5 conditions:
581	581	6 (A) the nonresident must be employed in a
582	582	7 qualified position;
583	583	8 (B) for each of those accredited productions, the
584	584	9 wages of not more than 9 nonresidents who are employed
585	585	10 in a qualified position other than Actor shall qualify
586	586	11 as Illinois labor expenditures;
587	587	12 (C) for an accredited production with Illinois
588	588	13 production spending of $25,000,000 or less, no more
589	589	14 than 2 nonresident actors' wages shall qualify as
590	590	15 Illinois labor expenditures; and
591	591	16 (D) for an accredited production with Illinois
592	592	17 production spending of more than $25,000,000, no more
593	593	18 than 4 nonresident actors' wages shall qualify as
594	594	19 Illinois labor expenditures.
595	595	20 As used in this paragraph (9.2) (9), "qualified
596	596	21 position" means: Writer, Director, Director of
597	597	22 Photography, Production Designer, Costume Designer,
598	598	23 Production Accountant, VFX Supervisor, Editor, Composer,
599	599	24 or Actor.
600	600	25 (9.3) For purposes of paragraph (9), in the case of a
601	601	26 Category 1 production that concludes on or after July 1,
602	602
603	603
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608	608
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611	611	HB2870 - 17 - LRB104 12118 HLH 22217 b
612	612	1 2025, wages paid to nonresidents shall qualify as Illinois
613	613	2 labor expenditures only under the following conditions:
614	614	3 (A) the wages of not more than 13 nonresidents who
615	615	4 are selected by the accredited production and employed
616	616	5 in a position other than Actor shall qualify as
617	617	6 Illinois labor expenditures;
618	618	7 (B) for an accredited production with Illinois
619	619	8 production spending of $20,000,000 or less, no more
620	620	9 than 4 nonresident actors' wages shall qualify as
621	621	10 Illinois labor expenditures;
622	622	11 (C) for an accredited production with Illinois
623	623	12 production spending of more than $20,000,000 and less
624	624	13 than $40,000,000, no more than 5 nonresident actors'
625	625	14 wages shall qualify as Illinois labor expenditures;
626	626	15 and
627	627	16 (D) for an accredited production with Illinois
628	628	17 production spending of $40,000,000 or more, no more
629	629	18 than 6 nonresident actors' wages shall qualify as
630	630	19 Illinois labor expenditures.
631	631	20 (9.4) For purposes of paragraph (9), in the case of a
632	632	21 Category 2 production that concludes on or after July 1,
633	633	22 2025, wages paid to nonresidents shall qualify as Illinois
634	634	23 labor expenditures only under the following conditions:
635	635	24 (A) the wages of not more than 9 nonresidents who
636	636	25 are employed in any position other than Actor shall
637	637	26 qualify as Illinois labor expenditures; those
638	638
639	639
640	640
641	641
642	642
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644	644
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647	647	HB2870 - 18 - LRB104 12118 HLH 22217 b
648	648	1 nonresidents shall be selected by the accredited
649	649	2 production;
650	650	3 (B) for an accredited production with Illinois
651	651	4 production spending of $25,000,000 or less, no more
652	652	5 than 2 nonresident actors' wages shall qualify as
653	653	6 Illinois labor expenditures; and
654	654	7 (C) for an accredited production with Illinois
655	655	8 production spending of more than $25,000,000, no more
656	656	9 than 4 nonresident actors' wages shall qualify as
657	657	10 Illinois labor expenditures.
658	658	11 (10) Paid for services rendered in Illinois.
659	659	12 "Illinois production spending" means the expenses incurred
660	660	13 by the applicant for an accredited production, but does not
661	661	14 include any monetary prize or the cost of any non-monetary
662	662	15 prize awarded pursuant to a production in respect of a game,
663	663	16 questionnaire, or contest. "Illinois production spending"
664	664	17 includes, without limitation, all of the following:
665	665	18 (1) expenses to purchase, from vendors within
666	666	19 Illinois, tangible personal property that is used in the
667	667	20 accredited production;
668	668	21 (2) expenses to acquire services, from vendors in
669	669	22 Illinois, for film production, editing, or processing; and
670	670	23 (2.1) airfare, if purchased from an airline with a
671	671	24 commercial domicile in Illinois; and
672	672	25 (3) for a production commencing before July 1, 2022,
673	673	26 the compensation, not to exceed $100,000 for any one
674	674
675	675
676	676
677	677
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680	680
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684	684	1 employee, for contractual or salaried employees who are
685	685	2 Illinois residents performing services with respect to the
686	686	3 accredited production. For a production commencing on or
687	687	4 after July 1, 2022, the compensation, not to exceed
688	688	5 $500,000 for any one employee, for contractual or salaried
689	689	6 employees who are Illinois residents or nonresident
690	690	7 employees, subject to the limitations set forth under
691	691	8 Section 10 of this Act.
692	692	9 "Loan out company" means a personal service corporation or
693	693	10 other entity that is under contract with the taxpayer to
694	694	11 provide specified individual personnel, such as artists, crew,
695	695	12 actors, producers, or directors for the performance of
696	696	13 services used directly in a production. "Loan out company"
697	697	14 does not include entities contracted with by the taxpayer to
698	698	15 provide goods or ancillary contractor services such as
699	699	16 catering, construction, trailers, equipment, or
700	700	17 transportation.
701	701	18 "Qualified production facility" means stage facilities in
702	702	19 the State in which commercials, television shows, and films
703	703	20 are or are intended to be regularly produced and that meet the
704	704	21 other requirements of this definition applicable to the
705	705	22 accredited production and that contain at least one sound
706	706	23 stage of at least 15,000 square feet.
707	707	24 If the applicant is using the facility for a Category 1
708	708	25 production, then the facility must meet the following
709	709	26 requirements:
710	710
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720	720	1 (1) if construction of the facility was completed
721	721	2 before January 1, 2026, then the facility must contain one
722	722	3 or more sound stages that, in the aggregate, are at least
723	723	4 2,000 square feet; and
724	724	5 (2) if construction of the facility was completed on
725	725	6 or after January 1, 2026, then the qualified production
726	726	7 facility must:
727	727	8 (A) consist of 4 or more soundstages that have an
728	728	9 average square footage of at least 15,000 square feet
729	729	10 each and that are column free with a clear height of at
730	730	11 least 15 feet under a permanent grid;
731	731	12 (B) be composed of one or more contiguous
732	732	13 buildings; and
733	733	14 (C) include production support space, such as
734	734	15 production offices, a mill, backlot, or
735	735	16 post-production facilities.
736	736	17 Notwithstanding the provisions of this definition, the
737	737	18 owner of a facility that qualifies as a qualified production
738	738	19 facility on the effective date of this amendatory Act of the
739	739	20 104th General Assembly may expand its existing facilities or
740	740	21 construct another facility in this State on or after the
741	741	22 effective date of this amendatory Act of the 104th General
742	742	23 Assembly, and that new construction shall be considered a
743	743	24 qualified production facility so long as the additional
744	744	25 facilities contain one or more sound stages of at least 2,000
745	745	26 square feet in the aggregate.
746	746
747	747
748	748
749	749
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756	756	1 For the purposes of this definition of "qualified
757	757	2 production facility", construction of the facility is
758	758	3 considered complete when a certificate of occupancy is issued
759	759	4 for the facility.
760	760	5 Rulemaking authority to implement Public Act 95-1006, if
761	761	6 any, is conditioned on the rules being adopted in accordance
762	762	7 with all provisions of the Illinois Administrative Procedure
763	763	8 Act and all rules and procedures of the Joint Committee on
764	764	9 Administrative Rules; any purported rule not so adopted, for
765	765	10 whatever reason, is unauthorized.
766	766	11 "Total expenditures" means all spending for the accredited
767	767	12 production that occurs in Illinois, including, but not limited
768	768	13 to, spending for labor, goods, and services, regardless of
769	769	14 whether that spending is considered Illinois production
770	770	15 spending or an Illinois labor expenditure.
771	771	16 (Source: P.A. 102-558, eff. 8-20-21; 102-700, eff. 4-19-22;
772	772	17 102-1125, eff. 2-3-23; 103-595, eff. 6-26-24.)
773	773	18 (35 ILCS 16/42)
774	774	19 Sec. 42. Sunset of credits. The application of credits
775	775	20 awarded pursuant to this Act shall be limited by a reasonable
776	776	21 and appropriate sunset date. A taxpayer shall not be awarded
777	777	22 any new credits pursuant to this Act for tax years beginning on
778	778	23 or after January 1, 2039 January 1, 2033.
779	779	24 (Source: P.A. 101-178, eff. 8-1-19; 102-700, eff. 4-19-22;
780	780	25 102-1125, eff. 2-3-23.)
781	781
782	782
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784	784
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