Massachusetts 2023-2024 Regular Session

Massachusetts Senate Bill S1764 Compare Versions

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

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2	2	SENATE DOCKET, NO. 1397 FILED ON: 1/19/2023
3	3	SENATE . . . . . . . . . . . . . . No. 1764
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	Nick Collins
8	8	_________________
9	9	To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
10	10	Court assembled:
11	11	The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
12	12	An Act creating a pilot program to enhance economic and community development through live
13	13	theatrical arts.
14	14	_______________
15	15	PETITION OF:
16	16	NAME:DISTRICT/ADDRESS :Nick CollinsFirst Suffolk 1 of 9
17	17	SENATE DOCKET, NO. 1397 FILED ON: 1/19/2023
18	18	SENATE . . . . . . . . . . . . . . No. 1764
19	19	By Mr. Collins, a petition (accompanied by bill, Senate, No. 1764) of Nick Collins for legislation
20	20	to create a pilot program to enhance economic and community development through live
21	21	theatrical arts. Revenue.
22	22	[SIMILAR MATTER FILED IN PREVIOUS SESSION
23	23	SEE SENATE, NO. 1816 OF 2021-2022.]
24	24	The Commonwealth of Massachusetts
25	25	_______________
26	26	In the One Hundred and Ninety-Third General Court
27	27	(2023-2024)
28	28	_______________
29	29	An Act creating a pilot program to enhance economic and community development through live
30	30	theatrical arts.
31	31	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
32	32	of the same, as follows:
33	33	1 Section 6 of Chapter 62 of the General Laws, as appearing in the 2008 Official Edition, is
34	34	2further amended by adding the following subsection:
35	35	3 Section 38DD. There shall be established a pilot program for a live theater tax credit
36	36	4program under which a live theater company doing business with a Massachusetts based theater
37	37	5venue, theater company, theater presenter or producer may be eligible. The credit may be
38	38	6claimed against the taxes due pursuant to this chapter. The credit shall be established to support
39	39	7the expansion of pre-Broadway, National Tour launches of off-Broadway shows and pre off-
40	40	8Broadway live theater and Broadway tour launches and shall assist in the development of long
41	41	9run show development and growth. 2 of 9
42	42	10 (a) As used in this section the following words shall, unless the context clearly requires
43	43	11otherwise, have the following meanings:
44	44	12 “Commissioner”, the commissioner of revenue.
45	45	13 “Eligible theater production” means a live stage musical, dance or theatrical production
46	46	14or tour being presented in a qualified production facility, as defined in this chapter that is either:
47	47	15(a) a Pre-Broadway production, or (b) a pre off-Broadway production, or (c) a National Tour
48	48	16Launch.
49	49	17 “Eligible theater production certificate” means a certificate issued by the Massachusetts
50	50	18Office of Travel and Tourism certifying that the production is an eligible theater production that
51	51	19meets the guidelines of this chapter.
52	52	20 “Advertising and public relations expenditure” means costs incurred within the state by
53	53	21the Eligible theater productions for goods or services related to the marketing, public relations,
54	54	22creation and placement of print, electronic, television, billboards and other forms of advertising
55	55	23to promote the Eligible theater production.
56	56	24 “Office” means the Massachusetts Office of Travel and Tourism.
57	57	25 "Payroll" means all salaries, wages, fees, and other compensation wages including, but
58	58	26not limited to, taxes, benefits, and any other consideration incurred or paid to talent and non-
59	59	27talent employees of the applicant for services rendered within this state to and on behalf of an
60	60	28eligible theater production. The expenditure shall be incurred or paid by the applicant for
61	61	29services related to any portion of an eligible theater production from its pre-production stages,
62	62	30including, but not limited to, (a) the writing of the script, (b) casting, (c) hiring of service 3 of 9
63	63	31providers, (d) purchases from vendors, (e) marketing, (f) advertising, (g) public relations, (h)
64	64	32load in, (i) rehearsals, (j) performances, (k) other eligible theater production related activities, (l)
65	65	33load out; provided further, said labor expenditure shall be directly attributable to the eligible
66	66	34theater production and shall be limited to the first $100,000 of wages incurred or paid to each
67	67	35employee of an eligible theater production in each tax year.
68	68	36 “Pre-Broadway Production” means a live stage production that, in its original or adaptive
69	69	37version, is performed in a qualified production facility having a presentation scheduled for New
70	70	38York City’s Broadway theater district within (24) months after its Massachusetts presentation.
71	71	39 “Pre-Off Broadway Production” means a live stage production that, in its original or
72	72	40adaptive version, is performed in a qualified production facility having a presentation scheduled
73	73	41for New York City’s Off-Broadway s theater district within (24) months after its Massachusetts
74	74	42presentation.
75	75	43 “National Tour Launch” means a live stage production that, in its original or adaptive
76	76	44version, is performed in a qualified production facility and opens its National tour in
77	77	45Massachusetts.
78	78	46 “Production and Performance Expenditures” means a contemporaneous exchange of cash
79	79	47or cash equivalent for goods or services related to development, production, performance or
80	80	48operating expenditures incurred in this state for a qualified theater production including, but not
81	81	49limited to, expenditures for design, construction and operation, including sets, special and visual
82	82	50effects, costumes, wardrobes, make-up, accessories, costs associated with sound, lighting,
83	83	51staging, payroll, transportation expenditures, advertising and public relations expenditures,
84	84	52facility expenses, rentals, per diems, accommodations and other related costs. 4 of 9
85	85	53 “Qualified Production Facility” means a facility located in the State of Massachusetts in
86	86	54which live theatrical productions are, or are intended to be, exclusively presented that contains at
87	87	55least one stage, a seating capacity of one hundred seventy-five (175) or more seats, and dressing
88	88	56rooms, storage areas, and other ancillary amenities necessary for the Eligible theater production.
89	89	57 “Massachusetts Office of Travel and Tourism” means the office within the secretariat of
90	90	58economic development that has been established in order to market Massachusetts as a leisure
91	91	59travel destination in order to generate state and local tax revenues, create jobs, and support
92	92	60travel-related businesses.
93	93	61 “Transportation expenditures” means expenditures for the packaging, crating, and
94	94	62transportation both to the state for use in a qualified theater production of sets, costumes, or other
95	95	63tangible property constructed or manufactured out of state, and/or from the state after use in a
96	96	64qualified theater production of sets, costumes, or other tangible property constructed or
97	97	65manufactured in this state and the transportation of the cast and crew to and from the state. Such
98	98	66term shall include the packaging, crating, and transporting of property and equipment used for
99	99	67special and visual effects, sound, lighting, and staging, costumes, wardrobes, make-up and
100	100	68related accessories and materials, as well as any other performance or production-related
101	101	69property and equipment.
102	102	70 (b) Any person, firm, partnership, corporation, trust, estate or other entity that receives an
103	103	71eligible theater production certificate shall be allowed a tax credit equal to thirty-five percent
104	104	72(35%) of the total in state labor costs and twenty five percent (25%) of the production and
105	105	73performance expenditures and transportation expenditures as well as all out of state labor costs
106	106	74for the eligible theater production and to be computed as provided in this chapter against a tax 5 of 9
107	107	75imposed by this chapter. Said credit shall not exceed five million dollars ($5,000,000) and shall
108	108	76be limited to certified production cost directly attributable to activities in the state and
109	109	77transportation expenditures defined above. The total production budget shall be a minimum of
110	110	78one hundred thousand dollars ($100,000).
111	111	79 (c) No more than five million dollars ($5,000,000) in total may be issued for any tax year
112	112	80for musical and theatrical production tax credits pursuant to this chapter. If the total amount of
113	113	81allocated credits applied for in any particular year exceeds the aggregate amount of tax credits
114	114	82allowed for such year under this chapter, such excess shall be treated as having been applied for
115	115	83on the first day of the subsequent year.
116	116	84 (d) The tax credit shall be allowed against the tax for the taxable period in which the
117	117	85credit is earned and can be carried forward for not more than five (5) succeeding tax years.
118	118	86 (e) Credits allowed to a company, which is a subchapter S corporation, partnership, or a
119	119	87limited liability company that is taxed as a partnership, shall be passed through respectively to
120	120	88persons designated as partners, members or owners of such companies on a pro rata basis or
121	121	89pursuant to an executed agreement among such persons designated as subchapter S corporation
122	122	90shareholders, partners, or members documenting an alternate distribution method without regard
123	123	91to their sharing of other tax or economic attributes of such entity.
124	124	92 (f) If the company has not claimed the tax credits in whole or part, taxpayers eligible for
125	125	93the tax credits may assign, transfer or convey the tax credits, in whole or in part, by sale or
126	126	94otherwise to any individual or entity and such assignee of the tax credits that have not claimed
127	127	95the tax credits in whole or part may assign, transfer or convey the tax credits, in whole or in part,
128	128	96by sale or otherwise to any individual or entity. The assignee of the tax credits may use acquired 6 of 9
129	129	97credits to offset up to one hundred percent (100%) of the tax liabilities otherwise imposed
130	130	98pursuant to this chapter. The assignee may apply the tax credit against taxes imposed on the
131	131	99assignee for not more than five (5) succeeding tax years. The assignor shall perfect the transfer
132	132	100by notifying the commissioner of revenue, in writing, within thirty (30) calendar days following
133	133	101the effective date of the transfer and shall provide any information as may be required by the
134	134	102commissioner to administer and carry out the provisions of this section.
135	135	103 (g) For purposes of this chapter, any assignment or sales proceeds received by the
136	136	104assignor for its assignment or sale of the tax credits allowed pursuant to this section shall be
137	137	105exempt from tax under this title.
138	138	106 (h) In the case of a corporation, this credit is only allowed against the tax of a corporation
139	139	107included in a consolidated return that qualifies for the credit and not against the tax of other
140	140	108corporations that may join in the filing of a consolidated tax return, provided, however, that in
141	141	109the case of a corporation that files a consolidated return with one or more other corporations with
142	142	110operations in Massachusetts, the credit will be allowed to be included in a consolidated return
143	143	111with respect to such corporations with operations in Massachusetts only.
144	144	112 (i) The applicant or applicants shall properly prepare, sign and submit to the
145	145	113Massachusetts office of travel and tourism an application for initial certification of the theater
146	146	114production. The application shall include such information and data as the office deems
147	147	115reasonably necessary for the proper evaluation and administration of said application, including,
148	148	116but not limited to, any information about the theater production company or their related
149	149	117partners/presenters and a specific Massachusetts live theater or musical production. The office
150	150	118shall review the completed applications and determine whether it meets the requisite criteria and 7 of 9
151	151	119qualifications for the initial certification for the production and/or presentation. If the initial
152	152	120certification is granted, the office shall issue a notice of initial certification of the eligible theater
153	153	121production and/or presentation to the theater production company, co-producer or presenter and
154	154	122to the commissioner. The notice shall state that, after appropriate review, the initial application
155	155	123meets the appropriate criteria for conditional eligibility. The notice of initial certification will
156	156	124provide a unique identification number for the production/presentation and is only a statement of
157	157	125conditional eligibility for the production/presentation and, as such, does not grant or convey any
158	158	126Massachusetts tax benefits.
159	159	127 (j) Upon completion of an eligible theater production, the applicant or applicants shall
160	160	128properly prepare, sign and submit to the office an application for final certification of the eligible
161	161	129theater production. The final application shall also contain a cost report and an accountant’s
162	162	130certification. The office and commissioner may rely without independent investigation, upon the
163	163	131accountant s certification, in the form of an opinion, confirming the accuracy of the information
164	164	132included in the cost report. Upon review of a duly completed and filed application and upon no
165	165	133later than thirty (30) days of submission thereof, the commissioner will make a determination
166	166	134pertaining to the final certification of the eligible theater production and the resultant tax credits.
167	167	135 (k) Upon determination that the company qualifies for final certification and the resultant
168	168	136tax credits, the commissioner shall issue to the company: (1) an eligible theater production
169	169	137certificate; and (2) a tax credit certificate in an amount in accordance with section (b) hereof. A
170	170	138musical and theatrical production company is prohibited from using state funds, state loans or
171	171	139state guaranteed loans to qualify for the live theater tax credit. All documents that are issued by
172	172	140the office pursuant to this section shall reference the identification number that was issued to the
173	173	141production as part of its initial certification. 8 of 9
174	174	142 (l) The Massachusetts office of travel and tourism, in consultation as needed with the
175	175	143commissioner of revenue, shall promulgate such rules and regulations as are necessary to carry
176	176	144out the intent and purposes of this chapter in accordance with the general guidelines provided
177	177	145herein for the certification of the production and the resultant production credit.
178	178	146 (m) If information comes to the attention of the Massachusetts Office of Travel and
179	179	147Tourism that is materially inconsistent with representations made in an application, the office
180	180	148may deny the requested certification. In the event that tax credits or a portion of tax credits are
181	181	149subject to recapture for ineligible costs and such tax credits have been transferred, assigned
182	182	150and/or allocated, the state will pursue its recapture remedies and rights against the applicant of
183	183	151the theater production tax credits. No redress shall be sought against assignees, sellers,
184	184	152transferees or allocates of such credits.
185	185	153 (n) No credits shall be issued on or after January 1, 2026 unless the production has
186	186	154received initial certification under this section prior to January 1, 2026.
187	187	155 (o) The secretary of housing and economic development, in conjunction with the
188	188	156commissioner of revenue, shall make a report on the impact of the live theater pilot program and
189	189	157deliver report to the president of the state senate, the senate committee on ways and means, the
190	190	158speaker of the house of representatives, the house committee on ways and means and the joint
191	191	159committee on economic development and emerging technologies by December 31, 2025. The
192	192	160secretary and commissioner shall collaborate with the live theater industry to collect the relevant
193	193	161data for the report. Said report shall include but not be limited to the following information
194	194	162regarding live theater in Massachusetts during the pilot program:
195	195	163 1.) The number of shows that have come to Massachusetts since passage of this section. 9 of 9
196	196	164 2.) The number of live show days since passage of this section.
197	197	165 3.) Analysis of the number of shows and live show days after passage of this section as
198	198	166compared to before passage of this section.
199	199	167 4.) Total spending by live theater productions on local businesses and vendors including
200	200	168supplies, hotels, car rental, food and beverage, and items related to the live theater production.
201	201	169 5.) Total spending on local labor to set-up, support and take down each production
202	202	170including total work hours.
203	203	171 6.) The number of ticket orders from outside Massachusetts.
204	204	172 7.) The number of ticket orders from outside the United States.
205	205	173 8.) The impact on local businesses in proximity to live theaters including hotel room
206	206	174nights and restaurants.