COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:0617H.01I Bill No.:HB 239 Subject:Tax Credits; Entertainment, Sports and Amusements; Department of Revenue;
Department of Economic Development; Economic Development; Tourism
Type:Original Date:January 12, 2023Bill Summary:This Act establishes the Show Missouri Film and Digital Media Act.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2024FY 2025FY 2026
General Revenue
Fund
($97,543)
Up to ($1,608,085) to
($4,605,313)
Up to ($1,609,895) to
($4,607,123)
Total Estimated Net
Effect on General
Revenue
($97,543)
Up to ($1,608,085) to
($4,605,313)
Up to ($1,609,895) to
($4,607,123)
*Oversight notes the range in the fiscal impact stems from the five (5) year average amount of
Film Tax Credit(s) issued (as it was administered before sunsetting on November 28, 2013) - to
the tax credit cap ($4.5 million annually) beginning FY 2025. Additionally, the fiscal note does
not reflect the possibility that some of the tax credits could be utilized against insurance premium
taxes.
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net
Effect on Other State
Funds $0$0$0
Numbers within parentheses: () indicate costs or losses. L.R. No. 0617H.01I
Bill No. HB 239
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January 12, 2023
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ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2024FY 2025FY 2026Total Estimated Net
Effect on All Federal
Funds $0$0$0
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2024FY 2025FY 2026General Revenue1 FTE1 FTE1 FTETotal Estimated Net
Effect on FTE1 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 2024FY 2025FY 2026Local Government$0$0$0 L.R. No. 0617H.01I
Bill No. HB 239
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January 12, 2023
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FISCAL ANALYSIS
ASSUMPTION
Officials from the Office of Administration – Budget & Planning DivisionB&P) state this
proposal reestablishes a tax credit for tax years beginning on or after January 1, 2024, equal to
twenty-five percent of qualifying in-state expenses and ten percent of qualifying out-of-state
expenses. An additional five percent may be earned for both qualifying in-state expenses and
qualifying out-of-state expenses if at least fifty percent of the qualified film production project is
filmed in Missouri. An additional five percent may be earned for both qualifying in-state
expenses and qualifying out-of-state expenses if the DED determines that the script of the
qualified film production project positively markets a city or region of the state, the entire state,
or a tourist attraction located in the state.
The cap on the tax credits for all tax years beginning on or after January 1, 2008, is $4,500,000.
This proposal could therefore lower general and total state revenues by $4,500,000 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 Department of Economic Development (DED) note:
135.750, RSMo creates the “Show Missouri Film and Digital Media Act”.
135.750.2 (1) lowers threshold amount for highly compensated individual from $1M to $250,000
135.750.2 (2) adds requirement for Qualified film production project to include a statement or
logo designated by the department of economic development in the credits of the film indicating
that the project was filmed in Missouri.
135.750.2 (3) adds “in-state” to definition for Qualifying expenses
135.750.2 (4) adds definition for “Qualifying out-of-state expenses”
135.750.3 (3) for all tax years beginning on or after January 1, 2024, a taxpayer shall be allowed
a tax credit equal to 25% of qualifying in-state expenses and 10% of qualifying out-of-state
expenses. An additional 5% may be earned for both qualifying in-state expenses and qualifying
out-of-state expenses if at least 50% of the qualified film production project is filmed in
Missouri. An additional 5% may be earned for both qualifying in-state expenses and qualifying
out-of-state expenses if the department of economic development determines that the script of
the qualified film production project positively markets a city or region of the state, the entire
state, or a tourist attraction located in the state. L.R. No. 0617H.01I
Bill No. HB 239
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January 12, 2023
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The program will automatically sunset on 12/31/2030 unless reauthorized by an act of the
general assembly.
Reauthorizing the film tax credit will likely reduce annual TSR by up to the existing annual cap
in the amount of $4,500,000 per year. DED will need to hire 1.0 FTE to administer the program.
Oversight assumes this proposal will have a direct fiscal impact on their organization.
Therefore, Oversight will note the cost from provided by DED, for 1 FTE Economic Division
Specialist (at $ 63,192 annually) in the fiscal note beginning in FY 2024.
Officials from the Missouri Department of Revenue (DOR) assume this proposed legislation
modifies the Film Production Tax Credit Program. The proposed legislation updates the
definition of “Qualified Film Production Project,” and adds the definition of “Qualifying Out-of -
State Expenses.”
This proposal states that for all tax years beginning on or after January 1, 2024, a taxpayer shall
be allowed a tax credit equal to twenty-five percent (25%) of qualifying in-state expenses and ten
percent (10%) of qualifying out-of-state expenses. An additional five percent (5%) may be
earned for both qualifying in-state expenses and qualifying out-of-state expenses if at least fifty
percent of the qualified film production project is filmed in Missouri. Another five percent (5%)
may be earned for both qualifying in-state and qualifying out-of-stat expenses if the Department
of Economic Development determines the film positively markets a city or region of the state.
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 proposed legislation could potentially decrease Total State Revenue, specific to General
Revenue by an estimated $4.5 million per year. DOR notes this tax credit begins January 1, 2024
and therefore, the first tax returns will be filed starting in January 2025.
Fiscal Year Decrease to Total State Revenue - General Revenue
FY 2024 $0
FY 2025 ($4,500,000)
FY 2026 ($4,500,000)
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. L.R. No. 0617H.01I
Bill No. HB 239
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YearAuthorizedIssued Total Redeemed
FY 2022$0.00$0.00$0.00FY 2021$0.00$0.00$0.00FY 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$2,375,651.00FY 2016$0.00$0.00$6,832.00FY 2015$0.00$2,387,097.38$389,942.00FY 2014$2,927,000.00$386,000.00$119,800.00FY 2013$639,772.00$0.00$56,665.00FY 2012$139,070.00$1,390,070.00$4,839,216.79TOTALS$3,705,842.00$4,163,167.38$7,788,779.17
The Department already has this credit on the MO-TC form, in their individual income computer
system, as well as on their website. So making changes to these items is not expected to have a
fiscal impact. However, based on the number of returns they receive claiming the credit, they
may need additional FTE to handle the processing of those returns. The Department assumes it
would ask for that additional FTE during the regular appropriation process should the need be
there based on the following redemptions. DOR needs FTE to process tax credits if the following
number of items are received.
DOR anticipates the need for one (1) FTE Associate Customer Service Representative for every
6,000 tax credits redeemed, one (1) FTE Associate Customer Service Representative for every
4,000 tax credit transfers with CISCO phones and licenses, one (1) FTE Associate Customer
Service Representative for every 7,600 errors/correspondence generated.
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 Issued2010 42011 52012 22013 02014 1 L.R. No. 0617H.01I
Bill No. HB 239
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Therefore, for purposes of this fiscal note, Oversight assumes DOR can absorb the
responsibilities of the tax credit program with existing resource. 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.
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:
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) issued was $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, 2024. Oversight notes Tax Year 2024 tax returns
claiming the credit will not be filed until after January 1, 2025 (Fiscal Year 2025)
Oversight notes this proposed legislation states that the tax credits certified shall not exceed a
total of four million five hundred thousand dollars ($4,500,000) 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 $4,500,000 (tax credit cap) beginning in Fiscal Year 2025.
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 L.R. No. 0617H.01I
Bill No. HB 239
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each of these funds may be impacted by tax credits each year and which insurers will qualify for
the tax credit.
DCI will require minimal contract computer programming to add this new tax credit to the
premium tax database and can do so under existing appropriation. However, should multiple bills
pass that would require additional updates to the premium tax database, the department may need
to request more expense and equipment appropriation through the budget process.
Oversight notes the Missouri Department of Commerce and Insurance assumes the contract
computer programming can be absorbed with existing resources. Oversight does not have any
information to the contrary. However, should multiple bills pass, the Missouri Department of
Commerce and Insurance may seek additional equipment and expense appropriation through the
appropriation process.
Additionally, DCI assumes the fiscal note does not reflect the possibility that some of the tax
credits could be utilized by insurance companies against insurance premium taxes. If this occurs,
the loss in tax revenue would be split between the General Revenue Fund and the County
Foreign Insurance Fund, which ultimately goes to local school districts.
Rule Promulgation
Officials from the Joint Committee on Administrative Rules assume this proposal is not
anticipated to cause a fiscal impact beyond its current appropriation.
Officials from the Office of the Secretary of State (SOS) note many bills considered by the
General Assembly include provisions allowing or requiring agencies to submit rules and
regulations to implement the act. The SOS is provided with core funding to handle a certain
amount of normal activity resulting from each year's legislative session. The fiscal impact for
this fiscal note to the SOS for Administrative Rules is less than $5,000. The SOS recognizes that
this is a small amount and does not expect that additional funding would be required to meet
these costs. However, the SOS also recognizes that many such bills may be passed by the
General Assembly in a given year and that collectively the costs may be in excess of what the
office can sustain with its core budget. Therefore, the SOS reserves the right to request funding
for the cost of supporting administrative rules requirements should the need arise based on a
review of the finally approved bills signed by the governor. L.R. No. 0617H.01I
Bill No. HB 239
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FISCAL IMPACT – State
Government
FY 2024
(10 Mo.)
FY 2025FY 2026GENERAL REVENUE FUNDRevenue Reduction- Section
135.750 Tax Credit For
Expenses For Production Of
Qualified Film Production
Projects p.6
$0Up to
($1,502,772) to
($4,500,000)
Up to
($1,502,772) to
($4,500,000)
Cost – DED 1 FTE – Section
135.750 p.4
$0 or $0 or $0 or Personal Service($52,660)($64,456)($65,745) Fringe Benefits($29,983)($36,403)($36,835) Equip & Exp.($14,900)($4,454)($4,543)Total Cost - (97,543) ($105,313) ($107,123) FTE Change - 0 or 1FTE1 FTE1 FTE1 FTEESTIMATED NET EFFECT
ON GENERAL REVENUE
FUND($97,543)
Up to
($1,608,085) to
($4,605,313)
Up to
($1,609,895) to
($4,607,123)
Estimated Net FTE Change on
General Revenue1 FTE1 FTE1 FTE
Note: The fiscal note does not reflect the possibility that some of the tax credits could be utilized
against insurance premium taxes. If this occurs, the loss in tax revenue would be split between
the General Revenue Fund and the County Foreign Insurance Fund, which ultimately goes to
local school districts.
FISCAL IMPACT – Local GovernmentFY 2024
(10 Mo.)
FY 2025FY 2026$0$0$0
FISCAL IMPACT – Small Business
This proposed legislation could positively impact any small business that qualifies for the tax
credit under this proposed legislation as such small business could reduce or eliminate such small
business’s state tax liability. L.R. No. 0617H.01I
Bill No. HB 239
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January 12, 2023
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FISCAL DESCRIPTION
This bill establishes the "Show Missouri Film And Digital Media Act". The bill reauthorizes a
tax credit for certain expenses related to the production of qualified film production projects, as
defined in the bill. Tax credits for such expenses under previous law expired on November 28,
2013.
Beginning with all tax years on or after January 1, 2024, this bill authorizes a tax credit equal to
25% of qualifying in-state expenses, as defined in the bill, and 10% of qualifying out-of-state
expenses, as defined in the bill, associated with the production of a qualified film production
project. An additional 5% tax credit may be awarded for both in-state and out-of-state qualifying
expenses if at least 50% of the qualifying film project is filmed in Missouri. An additional 5%
tax credit may be awarded if the Department of Economic Development determines that the
script of the qualifying film project reflects positively on certain aspects of Missouri.
The bill sunsets 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
Missouri Department of Commerce and Insurance
Missouri Department of Revenue
Department of Economic Development
Office of the Secretary of State
Joint Committee on Administrative Rules
Julie MorffRoss StropeDirectorAssistant DirectorJanuary 12, 2023January 12, 2023