SB3592 104TH GENERAL ASSEMBLY

LRB104 16424 HLH 33844 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB3592

Introduced 2/5/2026, by Sen. Elgie R. Sims, Jr.

SYNOPSIS AS INTRODUCED:

35 ILCS 5/222
35 ILCS 17/10-10
35 ILCS 17/10-20

Amends the Live Theater Production Tax Credit Act. Provides that a pre-Broadway production must have a presentation scheduled for Broadway's Theater District in New York City no later than 18 months after its Illinois presentation (currently, must have a goal of having a presentation scheduled for Broadway's Theater District in New York City after its Illinois presentation). Provides that, if, in any State fiscal year, less than $2,000,000 in credits are awarded for long-run productions and pre-Broadway productions under the Act, then the difference between $2,000,000 and the amount of credits awarded for long-run productions and pre-Broadway productions in that fiscal year may be added to the $2,000,000 in credits allowed to be awarded for commercial Broadway touring shows in that State fiscal year. Amends the Illinois Income Tax Act. Extends the sunset of the live theater production credit until January 1, 2039 (currently, January 1, 2027). Effective immediately.

A BILL FOR

AN ACT concerning revenue.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Income Tax Act is amended by changing Section 222 as follows:

(35 ILCS 5/222)

Sec. 222. Live theater production credit.

(a) For tax years beginning on or after January 1, 2012 and beginning prior to January 1, 2039, January 1, 2027, a taxpayer who has received a tax credit award under the Live Theater Production Tax Credit Act for a long-run production, a pre-Broadway production, or a commercial Broadway touring show is entitled to a credit against the taxes imposed under subsections (a) and (b) of Section 201 of this Act in an amount determined under that Act by the Department of Commerce and Economic Opportunity.

(b) For taxable years ending before December 31, 2023, if the taxpayer is a partnership, limited liability partnership, limited liability company, or Subchapter S corporation, the tax credit award is allowed to the partners, unit holders, or shareholders in accordance with the determination of income and distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code. For taxable years ending on or after December 31, 2023, if the taxpayer is a partnership or Subchapter S corporation, then the provisions of Section 251 apply.

(c) A sale, assignment, or transfer of the tax credit award may be made by the taxpayer earning the credit within one year after the credit is awarded in accordance with rules adopted by the Department of Commerce and Economic Opportunity.

(d) The Department of Revenue, in cooperation with the Department of Commerce and Economic Opportunity, shall adopt rules to enforce and administer the provisions of this Section.

(e) The tax credit award may not be carried back. If the amount of the credit exceeds the tax liability for the year, the excess may be carried forward and applied to the tax liability of the 5 tax years following the excess credit year. The tax credit award shall be applied to the earliest year for which there is a tax liability. If there are credits from more than one tax year that are available to offset liability, the earlier credit shall be applied first. In no event may a credit under this Section reduce the taxpayer's liability to less than zero.

(Source: P.A. 102-16, eff. 6-17-21; 103-396, eff. 1-1-24; 103-592, eff. 6-7-24.)

Section 10. The Live Theater Production Tax Credit Act is amended by changing Sections 10-10 and 10-20 as follows:

(35 ILCS 17/10-10)

Sec. 10-10. Definitions. As used in this Act:

"Accredited theater production" means a for-profit live stage presentation in a qualified production facility, as defined in this Section, that is either (i) a pre-Broadway production or (ii) a long-run production for which the aggregate Illinois labor and marketing expenditures exceed $100,000. For credits awarded under this Act on or after July 1, 2022, "accredited theater production" also includes any commercial Broadway touring show. For credits awarded under this Act on or after July 1, 2024, "accredited theater production" also includes non-profit theater productions.

"Commercial Broadway touring show" means a production that (i) is performed in a qualified production facility and plays in more than 2 other markets in North America outside of Illinois within 12 months of its Illinois presentation and (ii) has Illinois production spending of not less than $100,000, as shown on the applicant's application for the credit.

"Pre-Broadway production" means a live stage production that, (i) in its original or adaptive version, is performed in a qualified production facility and has with the goal of having a presentation scheduled for Broadway's Theater District in New York City no later than 18 months after its Illinois presentation and (ii) has Illinois production spending of not less than $100,000, as shown on the applicant's application for the credit.

"Long-run production" means a live stage production that is performed in a qualified production facility for longer than 8 weeks, with at least 6 performances per week, and includes a production that spans the end of one tax year and the commencement of a new tax year that, in combination, meets the criteria set forth in this definition making it a long-run production eligible for a theater tax credit award in each tax year or portion thereof.

"Non-profit theater production" means a live stage production that is at least 75 minutes in length with a written script that (i) is produced by a 501(c)3 non-profit registered in the State of Illinois for at least 5 years, (ii) has Illinois production spending of not less than $10,000, as shown on the applicant's application for the credit, and (iii) has a minimum annual operating budget of $25,000 or more, as shown on the applicant's application for the credit.

"Accredited theater production certificate" means a certificate issued by the Department certifying that the production is an accredited theater production that meets the guidelines of this Act.

"Applicant" means a theater producer, owner, licensee, operator, or presenter that is presenting or has presented a live stage presentation located within the State of Illinois who:

(1) owns or licenses the theatrical rights of the stage presentation for the Illinois production period; or

(2) has contracted or will contract directly with the owner or licensee of the theatrical rights or a person acting on behalf of the owner or licensee to provide live performances of the production.

An applicant that directly or indirectly owns, controls, or operates multiple qualified production facilities shall be presumed to be and considered for the purposes of this Act to be a single applicant; provided, however, that as to each of the applicant's qualified production facilities, the applicant shall be eligible to separately and contemporaneously (i) apply for and obtain accredited theater production certificates, (ii) stage accredited theater productions, and (iii) apply for and receive a tax credit award certificate for each of the applicant's accredited theater productions performed at each of the applicant's qualified production facilities.

"Department" means the Department of Commerce and Economic Opportunity.

"Director" means the Director of the Department.

"Illinois labor expenditure" means gross salary or wages including, but not limited to, taxes, benefits, and any other consideration incurred or paid to non-talent employees of the applicant for services rendered to and on behalf of the accredited theater production. To qualify as an Illinois labor expenditure, the expenditure must be:

(1) incurred or paid by the applicant on or after the effective date of the Act for services related to any portion of an accredited theater production from its pre-production stages, including, but not limited to, the writing of the script, casting, hiring of service providers, purchases from vendors, marketing, advertising, public relations, load in, rehearsals, performances, other accredited theater production related activities, and load out;

(2) directly attributable to the accredited theater production;

(3) limited to the first $100,000 of wages incurred or paid to each employee of an accredited theater production in each tax year;

(4) included in the federal income tax basis of the property;

(5) paid in the tax year for which the applicant is claiming the tax credit award, or no later than 60 days after the end of the tax year;

(6) paid to persons residing in Illinois at the time payments were made; and

(7) reasonable in the circumstances.

"Illinois production spending" means any and all expenses directly or indirectly incurred relating to an accredited theater production presented in any qualified production facility of the applicant, including, but not limited to, expenditures for:

(1) national marketing, public relations, and the creation and placement of print, electronic, television, billboard, and other forms of advertising; and

(2) the construction and fabrication of scenic materials and elements; provided, however, that the maximum amount of expenditures attributable to the construction and fabrication of scenic materials and elements eligible for a tax credit award shall not exceed $500,000 per applicant per production in any single tax year.

"Qualified production facility" means a facility located in the State in which live theatrical productions are, or are intended to be, exclusively presented that contains at least one stage, a seating capacity of 1,200 or more seats or, if the live theater production is a non-profit theater production, a seating capacity of 50 or more seats, and dressing rooms, storage areas, and other ancillary amenities necessary for the accredited theater production.

"Tax credit award" means the issuance to a taxpayer by the Department of a tax credit award in conformance with Sections 10-40 and 10-45 of this Act.

"Tax year" means a calendar year for the period January 1 to and including December 31.

(Source: P.A. 102-1112, eff. 12-21-22; 103-592, eff. 6-7-24.)

(35 ILCS 17/10-20)

Sec. 10-20. Tax credit award. Subject to the conditions set forth in this Act, an applicant is entitled to a tax credit award as approved by the Department for qualifying Illinois labor expenditures and Illinois production spending for each tax year in which the applicant is awarded an accredited theater production certificate issued by the Department. The amount of tax credits awarded pursuant to this Act shall not exceed $2,000,000 in any State fiscal year ending on or before June 30, 2022. The amount of tax credits awarded pursuant to this Act for the State fiscal year ending on June 30, 2023 or the State fiscal year ending on June 30, 2024 shall not exceed $4,000,000. For the State fiscal year ending on June 30, 2023 and the State fiscal year ending on June 30, 2024, no more than $2,000,000 in credits may be awarded in either of those fiscal years to accredited theater productions that are not commercial Broadway touring shows, and no more than $2,000,000 in credits may be awarded in either of those fiscal years to commercial Broadway touring shows. For State fiscal years ending on or after June 30, 2025, the amount of tax credits awarded under this Act shall not exceed $6,000,000, with no more than $2,000,000 in credits awarded for long-run productions and pre-Broadway productions, no more than $2,000,000 in credits awarded for commercial Broadway touring shows, and no more than $2,000,000 in credits awarded for non-profit theater productions. If, in any State fiscal year, less than $2,000,000 in credits under this Act are awarded for long-run productions and pre-Broadway productions, then the difference between $2,000,000 and the amount of credits awarded for long-run productions and pre-Broadway productions in that fiscal year may be added to the $2,000,000 in credits allowed to be awarded for commercial Broadway touring shows in that State fiscal year.

The $2,000,000 in credits that may be awarded for non-profit theater productions under this Act in a State fiscal year shall be allocated as follows:

(1) no credits may be awarded for non-profit theater productions that have an annual operating budget of less than $25,000;

(2) no more than $225,000 in credits may be awarded, in the aggregate, for non-profit theater productions that have an annual operating budget of $25,000 or more but less than $250,000;

(3) no more than $225,000 in credits may be awarded, in the aggregate, for non-profit theater productions that have an annual operating budget of $250,000 or more but less than $1,000,000;

(4) no more than $250,000 in credits may be awarded, in the aggregate, for non-profit theater productions that have an annual operating budget of $1,000,000 or more but less than $2,500,000;

(5) no more than $300,000 in credits may be awarded, in the aggregate, for non-profit theater productions that have an annual operating budget of $2,500,000 or more but less than $5,000,000;

(6) no more than $300,000 in credits may be awarded, in the aggregate, for non-profit theater productions that have an annual operating budget of $5,000,000 or more but less than $10,000,000; and

(7) no more than $700,000 in credits may be awarded, in the aggregate, for non-profit theater productions that have an annual operating budget of $10,000,000 or more.

Credits shall be awarded on a first-come, first-served basis. Notwithstanding the foregoing, if the amount of credits applied for in any fiscal year exceeds the amount authorized to be awarded under this Section, the excess credit amount shall be awarded in the next fiscal year in which credits remain available for award and shall be treated as having been applied for on the first day of that fiscal year.

(Source: P.A. 102-700, eff. 4-19-22; 102-1112, eff. 12-21-22; 103-592, eff. 6-7-24; 103-1055, eff. 12-20-24.)

Section 99. Effective date. This Act takes effect upon becoming law.