COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:4643H.02C Bill No.:HCS for HB 2106 Subject:Tax Credits; Entertainment, Sports and Amusements; Tourism; Taxation and
Revenue - General; Department of Revenue; Economic Development; Department
of Economic Development
Type:Original Date:March 6, 2022Bill Summary:This proposal establishes the “Show MO Act”.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2023FY 2024FY 2025General Revenue
Fund $0
Up to ($1,582,610) to
($16,079,838)
Up to ($1,583,910) to
($16,081,138)
Total Estimated Net
Effect on General
Revenue $0
Up to ($1,582,610) to
($16,079,838)
Up to ($1,583,910) to
($16,081,138)
*Oversight notes the range in the fiscal impact stems from the five (5) year average amount of
Film Production Companies Tax Credit(s) issued (as it was administered before sunsetting
November 28, 2013) to the annual cap of the Show Mo tax credit cap ($16 million annually - $8
million for film production and $8 million for series production).
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2023FY 2024FY 2025Total Estimated Net
Effect on Other State
Funds $0$0$0
Numbers within parentheses: () indicate costs or losses. L.R. No. 4643H.02C
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ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2023FY 2024FY 2025Total Estimated Net
Effect on All Federal
Funds $0$0$0
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2023FY 2024FY 2025General Revenue
Fund
0 FTE1 FTE1 FTETotal Estimated Net
Effect on FTE0 FTE1 FTE1 FTE
☒ Estimated Net Effect (expenditures or reduced revenues) expected to exceed $250,000 in any
of the three fiscal years after implementation of the act or at full implementation of the act.
☐ Estimated Net Effect (savings or increased revenues) expected to exceed $250,000 in any of
the three fiscal years after implementation of the act or at full implementation of the act.
ESTIMATED NET EFFECT ON LOCAL FUNDSFUND AFFECTEDFY 2023FY 2024FY 2025Local Government$0$0$0 L.R. No. 4643H.02C
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FISCAL ANALYSIS
ASSUMPTION
Officials from the Office of Administration – Budget & Planning Division (B&P) state this
proposal reestablishes a tax credit for tax years beginning on or after January 1, 2023, equal to
twenty percent of qualifying expenses by a production company in connection with a qualified
motion media production project. This could be increased for the following reasons:
• An additional five percent may be earned for qualifying expenses if at least fifty percent of the
qualified motion media production project is filmed in Missouri.
• An additional five percent may be earned for the qualifying expenses if at least fifteen percent
of the qualified motion media production project that is filmed in Missouri takes place in a rural
or blighted area in Missouri.
• An additional five percent may be earned for qualifying expenses if at least three departments
of the qualified motion media production hire a Missouri resident ready to advance to the next
level in a specialized craft position or learn a new skillset.
• An additional five percent may be earned for qualifying expenses if the DED determines that
the script of the qualified motion media production project positively markets a city or region of
the state, the entire state, or a tourist attraction located in the state, and the qualified motion
media production provides no less than five high resolution photographs containing cast with the
rights cleared for promotional use by the Missouri film commission, accompanied by a list with
the title of production, location, names, and titles of the individuals shown in the photography
and photographer credit.
• The total dollar amount of tax credits authorized pursuant to subdivision (1) of 135.750.3 shall
be increased by ten percent for qualified film production project is located in a county of the
second, third, or fourth class.
A qualified motion media production project shall not be eligible for tax credits unless such
project employs a number of Missouri registered apprentices or veterans residing in Missouri
with transferable skills, as outlined in 135.750.4.
There is a five year carry forward, provided all such credits shall be claimed within ten tax
periods following the tax period in which the qualified motion media production or production-
related activities for which the credits are certified by the department occurred.
The cap on the tax credits for all tax years beginning on or after January 1, 2023, is $8,000,000
for film production and the total amount of all tax credits authorized for series production is
$8,000,000. This proposal could therefore lower general and total state revenues by $16,000,000 L.R. No. 4643H.02C
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per fiscal year, beginning in FY24. To the extent this proposal encourages other economic
activity, general and total state revenue may increase, but B&P cannot estimate the induced
revenues.
This proposal could impact the calculation pursuant to Article X, Section 18(e).
Officials from the Missouri Department of Revenue (DOR) assume this proposal modifies the
Film Production tax credit program. It updates the definitions of “
Project".
This proposal states that for all tax years beginning on or after January 1, 2023, a taxpayer shall
be allowed a tax credit equal to twenty percent of qualifying expenses as defined by subsection
2. An additional five percent may be earned if at least fifty percent of the qualified motion media
production project is filmed in Missouri. An additional five percent may be earned for qualifying
expenses if at least fifteen percent of the qualified motion media production project that is filmed
in Missouri takes place in a rural or blighted area in Missouri. An additional five percent may be
earned for qualifying expenses if at least three departments of the qualified motion media
production hire a Missouri resident ready to advance to the next level in a specialized craft
position or learn a new skillset. An additional five percent may be earned for qualifying expenses
if the department of economic development determines that the script of the qualified motion
media production positively markets a city or region of the state, the entire state, or a tourist
attraction located in the state, and the motion media production provides no less than five high
resolution photographs containing cast with the rights cleared for promotional use by the
Missouri film commission, among other requirements. The total dollar amount of tax credits of
subdivision (1) of subsection 3 shall be increased by ten percent for qualified film projects
located in a county of the second, third, or fourth class.
This proposal provides that a qualified motion media production shall not be eligible for the tax
credit of this section unless it employs a sufficient number of Missouri registered apprentices or
veterans residing in Missouri. The amount of people required to be employed scales based on the
qualifying expenses of the production.
This proposal states that this credit shall sunset on December 31, 2030, and further states that this
section shall terminate on September first of the calendar year immediately following the
calendar year in which the program is sunset.
This proposal shall be in effect for all tax years beginning on or after January 1, 2023.
Furthermore, the total amount of the tax credits authorized for film production shall not exceed
$8 million per year, and the total of all tax credits authorized for the series production credit shall
not exceed a total of $8 million per year. DOR notes these tax credits begin January 1, 2023, and
therefore, the first tax returns will be filed starting in January 2024.
Fiscal Year Decrease to Total State Revenue - General Revenue L.R. No. 4643H.02C
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FYDecrease to GRFY 2022$0FY 2023$0FY 2024($16,000,000)FY 2025($16,000,000)
For informational purposes, the Department notes this Film Production tax credit program was
created in 1998 and sunset in 2013. Its original cap was $1.5 million which was increased to $4.5
million in 2008. Below is information on the authorization, issuance and redemption of the
credits over the last few years.
The Department would need to add these credits to the MO-TC form and to the individual
income computer system as well as update their website with this credit. These items are
estimated to cost $7,193. Additionally, the DOR may need the following FTE should the number
of redemptions justify the additional FTE.
• 1 FTE Revenue Processing Technician for every 6,000 credits redeemed
• 1 FTE Revenue Processing Technician 1 for every 4,000 tax credit transfers with CISCO
phones and license.
• 1 FTE Revenue Processing Technician for every 7,600 errors/correspondence generated
Adding a tax credit to RP= 10 hours @ $160 an hour (included in the $7,193).
Oversight assumes, for purpose of this fiscal note, the Missouri Department of Revenue can
absorb the responsibilities of the tax credit program with existing resources. Should a significant
increase in tax credit redemptions, tax credit transfers, and/or errors/correspondence occur, the
Missouri Department of Revenue may seek additional FTE through the appropriation process.
Officials from the Department of Economic Development (DED) note this proposal creates the
“Show MO Act” which allows eligible taxpayers to receive a tax credit for qualifying expenses.
YearAuthorizedIssued
Total
Redeemed
FY 2021$0.00$0.00$0.00
FY 2020$0.00$0.00$0.00FY 2019$0.00$0.00$0.00FY 2018$0.00$0.00$672.38FY 2017$0.00$0.00$2,375,651FY 2016$0.00$0.00$6,832.00FY 2015$0.00$2,387,097$389,942FY 2014$2,927,000$386,000$119,800FY 2013$639,772$0.00$56,665FY 2012$139,070$1,390,070$4,839,217 L.R. No. 4643H.02C
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The percentage of credit allowed can be increase if certain conditions are met. The Show MO
Act is to be administered by the Department of Economic Development (DED). DED is
responsible for reviewing: applications, economic impact of project, job hiring, qualifying
expenses, percentage of credit available, and compliance with the program requirements;
therefore, 2.0 FTE are needed to implement the program.
135.750.6. The total amount of tax credits shall not exceed $16M per fiscal year. ($8M for film
production and $8M for series production).
The program will automatically sunset on 12/31/2030 unless reauthorized by an act of the
general assembly.
This legislation will likely reduce annual TSR by up to the annual cap for film production in the
amount of $8M and by up to the annual cap for series production in the amount of $8M, for a
total of $16M.
Oversight notes that DED authorized 3 projects on average per year (15 projects / 5 years) as
seen in the “Film Tax Credit (Sunset November 28, 2013)” tables. Therefore, Oversight will
assume the need for DED’s (1) FTE in the fiscal note.
Oversight notes, per the Tax Credit Analyses submitted for Fiscal Year’s 2013 & 2014, the
following number of certificates were issued each of the following fiscal years for the Film Tax
Credit Program:
Fiscal
Year
Number of Certificates
Issued
2010 42011 52012 22013 02014 1
Oversight notes, per the Tax Credit Analyses from Fiscal Year(s) 2010 – 2014, the Film Tax
Credit recognized the following activity as it was administered before it sunset November 28,
2013: L.R. No. 4643H.02C
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Film Tax Credit (Sunset November 28, 2013)Fiscal Year20102011201220132014Certificates
Issued (#)
45201
Projects (#)42333Amount
Authorized
$1,768,989 $38,041 $139,070 $639,772 $2,927,000 Amount Issued$5,181,512 $1,807,030 $139,070 $0 $386,000
Amount
Redeemed
$1,925,158 $1,563,218 $4,839,217 $56,665 $119,800
Oversight notes the five (5) average amount of Film Tax Credit(s) issuances totals $1,502,722.
Oversight notes the tax credit program put forth under this proposed legislation would begin for
all tax years beginning on or after January 1, 2023. Tax Year 2023 tax returns claiming the credit
will not be filed until after January 1, 2024 (Fiscal Year 2024). Oversight notes the Film
Production Companies Tax Credit (sunset in 2013) and the “Show Mo Act” are different;
however, the previous program is the best estimate we have of future program usage.
Oversight notes this proposed legislation states that the tax credits certified shall not exceed a
total of sixteen million dollars ($16,000,000) per year.
Therefore, for purposes of this fiscal note, Oversight will report a revenue reduction to GR by an
amount equal to “Up to $1,502,722” (average amount of Film Tax Credit issued before sunset on
November 28, 2013) to $16,000,000 (tax credit cap) beginning in Fiscal Year 2024.
Officials from the Missouri Department of Commerce and Insurance (DCI) anticipate a
potential unknown decrease of premium tax revenues (up to the tax credit limit established in the
bill) as a result of the creation of the Show Missouri Film and Digital Media Act Tax Credit.
Premium tax revenue is split 50/50 between General Revenue and County Foreign Insurance
Fund except for domestic Stock Property and Casualty Companies who pay premium tax to the
County Stock Fund. The County Foreign Insurance Fund is later distributed to school districts
throughout the state. County Stock Funds are later distributed to the school district and county
treasurer of the county in which the principal office of the insurer is located. It is unknown how
each of these funds may be impacted by tax credits each year and which insurers will qualify for
the tax credit.
Officials from the DCI assume the proposal will have no administrative impact on their
organization. Oversight does not have any information to the contrary. Therefore, Oversight will
reflect a zero impact in the fiscal note for this agency. L.R. No. 4643H.02C
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Oversight notes this fiscal note does not reflect any indirect positive fiscal benefits that would
occur if companies utilized the program and made films or series in the state.
FISCAL IMPACT – State GovernmentFY 2023
(10 Mo.)
FY 2024FY 2025GENERAL REVENUERevenue Reduction- Tax Credit For
Expenses For Production Of Qualified
Film Production Projects (p. 4&6)$0
Up to
($1,502,772) to
($16,00,000)
Up to
($1,502,772) to
($16,00,000)
Cost – DED – Section 135.750 3. (5)
continuity and compliance (p. 5)
Salary$0($44,437)($45,326) Fringe Benefits$0($29,692)($29,990) Equipment & Expense$0($5,708)($5,822)Total Cost – DED (p.6)$0($79,838)($81,138)FTE Change – DED0 FTE1 FTE1 FTE
ESTIMATED NET EFFECT ON
GENERAL REVENUE FUNE
Up to
($1,582,610) to
($16,079,838)
Up to
($1,583,910) to
($16,081,138)
Estimated Net FTE Change on General
Revenue
0 FTE1 FTE1 FTEFISCAL IMPACT – Local GovernmentFY 2023
(10 Mo.)
FY 2024FY 2025$0$0$0
FISCAL IMPACT – Small Business
This proposed legislation could impact small business that benefit from film production or series
production in Missouri. L.R. No. 4643H.02C
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FISCAL DESCRIPTION
This bill establishes the "Show MO Act".
This bill reauthorizes a tax credit for certain expenses related to the production of qualified
motion media production projects, as defined in the bill. Tax credits for such expenses under
previous law expired on November 28, 2013.
For all tax years beginning on or after January 1, 2023, this bill authorizes a tax credit equal to
20% of qualifying expenses, as defined in the bill, associated with the production of a qualified
motion media production project. An additional 5% may be awarded for each of the following
conditions if they are met:
(1) At least 50% of the qualified film production project is filmed in Missouri;
(2) At least 15% of the project takes place in a rural or blighted area;
(3) At least three departments of the production hire a Missouri resident ready to advance to the
next level in a specialized craft position or learn a new skillset;
(4) The Department of Economic Development determines that the script for such project
positively markets a city or region of the state, the entire state, or a tourist attraction located in
the state, and the production provides certain advertising materials, as described in the bill.
The total dollar amount of tax credits awarded to a qualified film production project may be
increased by 10% if such project is located in a county of the second, third, or fourth class.
A qualified motion media production project shall not be eligible for tax credits pursuant to this
bill unless such project employs the following number of Missouri registered apprentices or
veterans residing in Missouri with transferable skills:
(1) If the qualifying expenses are less than $5 million, two;
(2) If the qualifying expenses are at least $5 million but less than $10 million, three;
(3) If the qualifying expenses are at least $10 million but less than $15 million, six; or
(4) If the qualifying expenses are at least $15 million, eight.
Final applications for the tax credit shall be accompanied by a report by a certified public
accountant located and licensed by the state of Missouri, prepared at the expense of the
applicant, attesting that the amounts in the final application are qualifying expenses. L.R. No. 4643H.02C
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The total amount of tax credits authorized by this bill for film production shall not exceed $8
million per year and the total amount of tax credits for series production authorized by this bill
shall not exceed $8 million per year.
This bill shall sunset on December 31, 2030.
This legislation is not federally mandated, would not duplicate any other program, and would not
require additional capital improvements or rental space.
SOURCES OF INFORMATION
Office of Administration – Budget & Planning Division
Department of Economic Development
Missouri Department of Commerce and Insurance
Missouri Department of Revenue
Julie MorffRoss StropeDirectorAssistant DirectorMarch 6, 2022March 6, 2022