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HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
1st Session of the 60th Legislature (2025)
COMMITTEE SUBSTITUTE
FOR
HOUSE BILL NO. 2374 By: Hill of the House
and
Thompson of the Senate
COMMITTEE SUBSTITUTE
An Act relating to revenue and taxation; amending 68
O.S. 2021, Sections 3632, as last amended by Section
44, Chapter 59, O.S.L. 2024, 3633, and 3637 (68 O.S.
Supp. 2024, Section 3632), which relate to the Filmed
in Oklahoma Act of 2021; modifying definitions;
prescribing procedures for withholding tax;
prescribing income tax treatment; providing for set
aside amount for economic impact reviews; providing
for codification; providing an effective date; and
declaring an emergency.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 3632, as
last amended by Section 44, Chapter 59, O.S.L. 2024 (68 O.S. Supp.
2024, Section 3632), is amended to read as follows:
Section 3632. As used in the Film ed in Oklahoma Act of 2021:
1. "Above-the-line personnel" means producers, principal cast,
screenwriters, and directors who work on production of films or
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television series. The qualifying salary of above -the-line
personnel may be included as crew, as de fined in paragraph 3 of this
section, if the salaries are paid to loan -out corporations and
limited liability companies registered to do business in this state
or the salaries are paid to Oklahoma -based above-the-line personnel.
The qualifying salary of a bove-the-line personnel shall not comprise
more than twenty-five percent (25%) of total expenditures as defined
in paragraph 5 of this section. For purposes of this paragraph,
"Oklahoma-based" means a compa ny or individual with an Oklahoma
income tax requirement;
2. "Apprentice" means a person who works for a skilled or
qualified person in order to learn a trade or profession for an
agreed-upon period of time. An apprentice may work in any of the
trades recognized by the Oklahoma Department of Commerce a s
necessary for a film production. An apprentice shall be required to
complete safety training appropriate for the duties to be performed
in connection with a qualified project and also to complete a course
related to and with the objective of preventing workplace
misbehavior, such as bullying and sexual harassment;
3. "Crew" means any person who works on preproduction,
principal photography and post -production, with the exception of
above-the-line personnel;
4. "Eligible television series" means a proje ct if either
seventy-five percent (75%) of the series season is filmed within the
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state or, for an episodic television pilot , if more than seventy -
five percent (75%) of the pilot is filmed within the state ;
5. "Expenditure" or "production cost" includes b ut is not
limited to:
a. wages or salaries of persons who are residents of this
state or who are enrolled as full -time students at a
college or university located in the state offering an
undergraduate degree program or who are on active
military duty and stationed in Oklahoma or involved in
a restorative workforce program and who have earned
income from working on a film in this state including
payments to personal services corporations with
respect to the services of qualified performing
artists, pursuant to the provisions of the Internal
Revenue Code, 26 U.S.C., Section 62(a)(2),
b. the cost of construction and operations, wardrobe,
accessories and related services,
c. the cost of photography, sound synchronization,
lighting and related services,
d. the cost of editing and related services,
e. rental of facilities and equipment,
f. other direct costs of producing a film, and
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g. the wages and salaries of persons who are defined and
registered as an Oklahoma E xpatriate by the Oklahoma
Film and Music Office;
6. "Film" means a professional single media, multimedia program
or feature, which is not child sexual abuse material as defined in
subsection A of Section 1024.1 of Title 21 of the Oklahoma Statutes
or obscene material as defined in paragraph 1 of subsect ion B of
Section 1024.1 of Title 21 of the Oklahoma Statutes including, but
not limited to, animation, commercials, documentaries, feature
films, game shows, pilots, reality television, scripted television,
talk shows, national advertising messages that ar e broadcast on a
national affiliate or cable network, fixed on film or digital video,
which can be viewed or reproduced and which is exhibited in
theaters, licensed for exhibition by individual television stations,
groups of stations, networks, cable telev ision stations or other
means or licensed for home viewing markets. The term shall also
include filming for interactive and video gaming including, but not
limited to, green screen, motion capture and simil ar production
techniques;
7. "Live audience episodic television" means episodic
television filmed in front of a live audience intended for broadcast
on network television, cable and streaming platforms. The audience
should consist of a minimum of fifty (50) people;
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8. “Loan-out corporation” or “loan -out company” means a
corporation or limited liability company actively registered with
the Oklahoma Secretary of State to do business in this state as a
foreign or domestic entity used by above -the-line personnel and crew
to report payments received from th e production as Oklahoma earnings
for the personnel or crew member;
9. "Multi-film deal" means a project in which a production
company films at least seventy -five percent (75%) of main crew
principal photography for three (3) or more films in this state
within three (3) years or where the third film starts main crew
principal photography within the three -year period;
8. 10. "Nonresident crew member" means a person who is not an
Oklahoma resident, hired for a qualifying production project
occurring within the state and who is subject to the payment of
Oklahoma employment taxes;
9. 11. "Production company" means a person, producer or company
who produces film for exhibition in theaters, on television or
elsewhere;
10. 12. "Qualified production expenditure amount" means an
expenditure defined pursuant to paragraph 5 of this section; and
11. 13. "Qualified soundstage facility" means a state -certified
industry standard soundstage facility having not less than s even
thousand five hundred (7,500) square feet of combined soundstage
space and with a total state rental cost to the production company
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equal to at least three percent (3%) of the qualifying Oklahoma
expenditures with respect to a production.
SECTION 2. AMENDATORY 68 O.S. 2021, Section 3633, is
amended to read as follows:
Section 3633. A. There is hereby created an incentive rebate
program for certain film projects and eligible television series
projects filmed or produced in Ok lahoma who meet the requirements of
this act.
B. The rebate program shall be administered by the Oklahoma
Department of Commerce and the Oklahoma Tax Commission.
C. By October 1 of each year, the Oklahoma Department of
Commerce shall submit an annual report to the Speaker of the House
of Representatives, the President Pro Tempore of the Senate, the
Chair of the Appropriations and Budget Committee of the House of
Representatives, the Chair of the Appropriations Committee of the
Senate and the Director of t he Legislative Office of Fiscal
Transparency detailing the program and incentive rebate payments.
D. The Oklahoma Department of Commerce and the Oklahoma Tax
Commission may promulgate rules to implement the provisions of this
act.
E. To be eligible for a rebate payment a production company
shall:
1. Submit an application and documentation to the Oklahoma
Department of Commerce as required by the Department;
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2. Have filed any Oklahoma tax returns and tax documents
required by law;
3. Provide evidence th at all Oklahoma crew and local vendors
have been paid and that there are no pending liens against the
production company in this state;
4. Provide evidence of financing for production prior to the
commencement of principal photography;
5. Provide evidence of a certificate of general liability
insurance with a minimum coverage of One Million Dollars
($1,000,000.00) and a workers' compensation policy in compliance
with law, which shall include coverage of employer's liability; and
6. Provide evidence, as r equired by the Department, that the
projects pursuant to this act are completed ; and
7. The production company, or its payroll service provider,
shall withhold Oklahoma income tax at the highest percentage rate
found in the withholding statutes, on all payments to loan -out
companies for services perform ed in Oklahoma. The amounts so
withheld shall be allocated to the loan -out company's employees
based on the payments made to the loan -out company's employees for
services performed in Oklahoma. The loan -out company employees
performing services in Oklaho ma shall be considered taxable and the
loan-out company shall be subject to income taxation in the taxable
year in which the loan -out company's employees perform services in
Oklahoma.
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F. A production company shall not be eligible to receive both a
rebate payment pursuant to the provisions of this act and an
exemption from sales tax pursuant to the provisions of paragraph 23
of section Section 1357 of Title 68 of the Oklahoma Statutes. If a
production company has received the exemption from sales taxes and
submits a claim for rebate pursuant to the provisions of this act,
the company shall be required to fully repay the amount of the
exemption to the Tax Commission. A claim for a rebate shall include
documentation from the Tax Commission that repayment has been made
as required in this subsection or shall include an affidavit from
the production company that the company has not received an
exemption from sales tax pursuant to the provisions of paragraph 23
of Section 1357 of Title 68 of the Oklahoma Statute s.
G. The Department of Commerce shall approve or disapprove all
claims for rebate and shall notify the Tax Commission subject to the
limitations set forth in Section 4 of this act. Upon notification
of approval from the Department, the Commission shall issue payment
for all approved claims from funds held in the Filmed in Oklahoma
Program Revolving Fund created pursuant to Section 9 of this act and
subject to the limitations set forth in Section 4 of this act. If
the amount of approved claims exceeds th e balance of the revolving
fund, payments shall be made in the order the claims are approved by
the Department. If an approved claim is not paid in whole, the
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unpaid claim or unpaid portion of the claim shall be paid upon the
availability of funds.
SECTION 3. AMENDATORY 68 O.S. 2021, Section 3637, is
amended to read as follows:
Section 3637. To qualify for the maximum twenty percent (20%)
base incentive payment authorized for Oklah oma production projects
pursuant to subsection A of Section 5 of this act, the production
project shall utilize the services of apprentices according to the
following requirements:
1. For a production with Oklahoma expenditures of Seven Million
Five Hundred Thousand Dollars ($7,500,000.00) or less, two (2)
apprentices;
2. For a production with Oklahoma expenditures greater than
Seven Million Five Hundred Thousand Dollars ($7,500,000.00) and
Fifteen Million Dollars ($15,000,000.00) or less, four (4)
apprentices;
3. For a production with Oklahoma expenditures greater than
Fifteen Million Dollars ($15,000,000.00) and Twenty -five Million
Dollars ($25,000,000.00) or less, eight (8) apprentices; and
4. For a production with Oklahoma expenditures greater than
Twenty-five Million Dollars ($25,000,000.00), sixt een (16)
apprentices.
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SECTION 4. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 3642 of Title 68, unless there
is created a duplication in numbering, reads as follows:
Every fiscal year the program s hall designate Thirty -five
Thousand Dollars ($35,000.00) from the top tier for the purpose of
economic impact reviews of the program.
SECTION 5. This act shall become effective July 1, 2025.
SECTION 6. It being immediately necessary for the preservation
of the public peace, health or safety, an emergency is hereby
declared to exist, by reason whereof this act shall take effect and
be in full force from and after its passage a nd approval.
COMMITTEE REPORT BY: COMMITTEE ON A PPROPRIATIONS AND BUDGET, dated
03/06/2025 - DO PASS, As Amended and Coauthored.