House File 2368 - Introduced HOUSE FILE BY PAULSEN Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to a film promotion program to assist film, 2 television, and video projects in the state by providing 3 income tax credits, and providing effective and retroactive 4 applicability dates. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 6323YH 81 7 mg/sh/8 PAG LIN 1 1 Section 1. NEW SECTION. 15.391 FILM PROMOTION PROGRAM. 1 2 This part shall be known as the "film promotion program". 1 3 Sec. 2. NEW SECTION. 15.392 PURPOSE. 1 4 The purpose of the film promotion program is to assist 1 5 legitimate film, television, and video producers in the making 1 6 of film, television, and video projects in the state and to 1 7 increase the fiscal impact on the state's economy of film, 1 8 television, and video projects produced in the state. 1 9 Sec. 3. NEW SECTION. 15.393 PROGRAM == REGISTRATION == 1 10 FILM PRODUCTION TAX CREDIT. 1 11 1. The department shall establish a film promotion program 1 12 that will provide for the registration of film, television, or 1 13 video projects that are to be shot on location in the state. 1 14 A film, television, or video project that is registered under 1 15 the program is entitled to the tax credit provided in 1 16 subsection 3. Registration shall be free. The department 1 17 shall not register a film, television, or video project unless 1 18 the department determines that all of the following are met: 1 19 a. The project is a legitimate effort to produce an entire 1 20 film, television, or video episode or a film, television, or 1 21 video segment in the state. 1 22 b. The project will have an economic impact on the economy 1 23 of the state or locality sufficient to justify assistance 1 24 under the program. 1 25 c. The project will further tourism and population 1 26 retention or growth in the state or locality. 1 27 d. The project budget for activity located in the state 1 28 equals at least two hundred fifty thousand dollars. 1 29 e. Other criteria established by rule relating to the 1 30 economic impact and promotional aspect of the project on the 1 31 state or locality. 1 32 2. A producer of a film, television, or video project 1 33 which has been registered pursuant to subsection 1 shall apply 1 34 to receive the certificate for the tax credit allowed under 1 35 subsection 3. The application shall be submitted upon 2 1 completion of the project's activities in the state. Upon 2 2 verification of the total amount that has been spent on the 2 3 project in the state, which amount must be at least two 2 4 hundred fifty thousand dollars, the department shall issue a 2 5 tax credit certificate in the amount determined pursuant to 2 6 subsection 3. A tax credit certificate shall identify the 2 7 producer claiming the credit and contain the taxpayer's name, 2 8 address, tax identification number, the date of completion of 2 9 the project, the amount of the credit, and other information 2 10 required by the department of revenue. 2 11 3. a. A producer of a film, television, or video project 2 12 which was registered pursuant to subsection 1 may claim a film 2 13 production tax credit equal to ten percent of the amount of 2 14 the project budget for activity located in the state. The tax 2 15 credit shall be allowed against taxes imposed under chapter 2 16 422, division II or III. 2 17 b. Any credit in excess of the tax liability shall be 2 18 refunded. In lieu of claiming a refund, a taxpayer may elect 2 19 to have the overpayment shown on the taxpayer's final, 2 20 completed return credited to the tax liability for the 2 21 following taxable year. 2 22 c. If the producer is a partnership, S corporation, 2 23 limited liability company, or estate or trust electing to have 2 24 the income taxed directly to the individual, an individual may 2 25 claim the tax credit allowed. The amount claimed by the 2 26 individual shall be based upon the pro rata share of the 2 27 individual's earnings of the partnership, S corporation, 2 28 limited liability company, or estate or trust. 2 29 Sec. 4. NEW SECTION. 422.11M FILM PRODUCTION TAX CREDIT. 2 30 The taxes imposed under this division, less the amounts of 2 31 nonrefundable credits allowed under this division, shall be 2 32 reduced by the film production tax credit allowed under 2 33 section 15.393. 2 34 Sec. 5. Section 422.33, Code Supplement 2005, is amended 2 35 by adding the following new subsection: 3 1 NEW SUBSECTION. 20. The taxes imposed under this division 3 2 shall be reduced by a film production tax credit allowed under 3 3 section 15.393. 3 4 Sec. 6. EFFECTIVE AND RETROACTIVE APPLICABILITY DATE. 3 5 This Act, being deemed of immediate importance, takes effect 3 6 upon enactment and applies retroactively to January 1, 2006, 3 7 for tax years beginning on or after that date. 3 8 EXPLANATION 3 9 This bill provides for a film promotion program within the 3 10 department of economic development. The program is designed 3 11 to assist legitimate film, television, and video producers in 3 12 making film, television, and video episodes or segments in the 3 13 state by granting refundable individual and corporate income 3 14 tax credits. The amount of the credit equals 10 percent of 3 15 the program budget spent in the state. The bill provides for 3 16 a minimum program budget for the state of $250,000. 3 17 The bill takes effect upon enactment and applies 3 18 retroactively to tax years beginning on or after January 1, 3 19 2006. 3 20 LSB 6323YH 81 3 21 mg:nh/sh/8