35 ILCS 19/ Music and Musicians Tax Credit and Jobs Act.

(35 ILCS 19/Art. 5 heading) ARTICLE 5.(Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 6-7-24; text omitted.)

(35 ILCS 19/Art. 10 heading) ARTICLE 10.(The Workforce Development through Charitable Loan Repayment Act is compiled at 110 ILCS 998/)(Source: P.A. 103-592, eff. 6-7-24.)

(35 ILCS 19/Art. 15 heading) ARTICLE 15.(Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 6-7-24; text omitted.)

(35 ILCS 19/Art. 20 heading) ARTICLE 20.(Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 6-7-24; text omitted.)

(35 ILCS 19/Art. 25 heading) ARTICLE 25.(Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 1-1-25; text omitted.)

(35 ILCS 19/Art. 30 heading) ARTICLE 30.(Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 6-7-24; text omitted.)

(35 ILCS 19/Art. 35 heading) ARTICLE 35.(Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 6-7-24; text omitted.)

(35 ILCS 19/Art. 40 heading) ARTICLE 40.(Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 6-7-24.)

(35 ILCS 19/Art. 45 heading) ARTICLE 45.(Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 6-7-24; text omitted.)

(35 ILCS 19/Art. 50 heading) ARTICLE 50. (Source: P.A. 103-592, eff. 6-7-24.)

(35 ILCS 19/50-1)

Sec. 50-1. Short title. This Act may be cited as the Music and Musicians Tax Credit and Jobs Act. References in this Article to "this Act" mean this Article.

(Source: P.A. 103-592, eff. 6-7-24.)

(35 ILCS 19/50-5)

Sec. 50-5. Purpose. The State's economy depends heavily on music, professional musicians, music teachers, and educators. Illinois is a cultural crown jewel of the United States. Illinois and Chicago boast a robust history and community of creative artists, writers, musicians, architects, orchestras, live music and entertainment venues, civic operas, recording studios, and universities. The COVID-19 pandemic and the economic fallout that ensued brought on especially difficult circumstances for the live entertainment industry at large. Throughout the State, this has meant the closure of and overall decrease in culturally engaging aspects of Illinois cities from Cairo to Chicago.

According to the Americans for the Arts Action Fund, arts and culture represent 3.1% of the State's gross domestic product and 190,078 jobs. In fact, in 2020, Illinois arts and culture was larger than the State's agriculture industry. In 2015, nonprofit arts organizations in the State generated $4,000,000,000 in economic activity that supported 111,068 jobs and generated $478,500,000 in State and local government revenue. In Chicago specifically, nonprofit arts groups generated $3,200,000,000 in total economic activity and $336,500,000 in State and local government revenue. Audiences exceeded 36,000,000 people.

Yet, during the COVID-19 pandemic, the arts suffered. As a result, Illinois arts and culture value added decreased by 9% between 2019 and 2020 and employment decreased by 12%. Ultimately, $3,200,000,000 and 26,644 jobs were lost. Even as live performances have resumed, audience sizes remain below pre-pandemic levels. Regional theaters, local orchestras, opera houses, and performing arts organizations are reporting persistent drops in attendance.

It is the policy of this State to promote and encourage the training and hiring of Illinois residents who represent the diversity of the Illinois population through the creation and implementation of training, education, and recruitment programs organized in cooperation with Illinois colleges and universities, labor organizations, and the commercial for-profit music industry.

(Source: P.A. 103-592, eff. 6-7-24.)

(35 ILCS 19/50-10)

Sec. 50-10. Definitions.

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

"Expenditure in the State" means (i) an expenditure to acquire, from a source within the State, property that is subject to tax under the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, or the Retailers' Occupation Tax Act or (ii) an expenditure for compensation for services performed within the State that is subject to State income tax under the Illinois Income Tax Act.

"Illinois labor expenditure" means gross salary or wages, including, but not limited to, taxes, benefits, and any other consideration incurred or paid to artist employees of the applicant for services rendered to and on behalf of the qualified music company, provided that the expenditure is:

(1) incurred or paid by the applicant on or after the effective date of this Act for services related to any portion of a qualified music company from rehearsals, performances, and any other qualified music company related activities;

(2) limited to the first $100,000 of wages incurred or paid to each employee of a qualified music production in each tax year;

(3) paid in the tax year for which the applicant is claiming the tax credit award;

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

(5) reasonable under the circumstances.

"Qualified music company" means an entity that (i) is authorized to do business in Illinois, (ii) is engaged directly or indirectly in the production, distribution, or promotion of music, (iii) is certified by the Department as meeting the eligibility requirements of this Act, and (iv) has executed a contract with the Department providing the terms and conditions for its participation.

"Qualified music company payroll" or "QMC payroll" means wages reported by the qualified music company in box 1 of each W-2 form prepared for an employee of the qualified music company who is an Illinois resident.

"Resident copyright" means the copyright of a musical composition written by an Illinois resident or owned by an Illinois-domiciled music company, as evidenced by documents of ownership, including, but not limited to, registration with the United States Copyright Office.

"Sound recording" means a recording of music, poetry, or a spoken-word performance made, in whole or in part, in Illinois. "Sound recording" does not include the audio portions of dialogue or words spoken and recorded as part of television news coverage or athletic events.

"Sound recording production company" means a company engaged in the business of producing sound recordings. "Sound recording production company" does not include any person or company, or any company owned, affiliated, or controlled, in whole or in part, by any company or person, that is in default on a loan made by the State or a loan guaranteed by the State, nor which has ever declared bankruptcy under which an obligation of the company or person to pay or repay public funds or moneys was discharged as a part of the bankruptcy.

"State-certified production" means a sound recording production, or a series of productions, including but not limited to master and demonstration recordings, occurring over the course of a 12-month period, and the base production-related investment that is approved by the Department within 180 days after receipt by the Department of a complete application for initial certification of a production. If the production is not approved within 180 days, the Department shall provide a written report to the Senate Executive Committee and the House Executive Committee that states the reason why the production has not been approved.

"Tax credit award" means the issuance to a taxpayer by the Department of a tax credit award against the taxes imposed by subsections (a) and (b) of Section 201 of the Illinois Income Tax Act as provided in this Act.

(Source: P.A. 103-592, eff. 6-7-24.)

(35 ILCS 19/50-15)

Sec. 50-15. Powers of the Department. The Department, in addition to those powers granted under the Civil Administrative Code of Illinois, is granted and has all the powers necessary or convenient to carry out and effectuate the purposes and provisions of this Act, including, but not limited to, the power and authority to:

(1) adopt rules that are necessary and appropriate for the administration of this Act;

(2) establish forms for applications, notifications, contracts, or any other agreements with respect to tax credits under this Act and to accept applications for tax credits under this Act at any time during the year;

(3) assist applicants for tax credits under this Act to promote, foster, and support sound recording and live theater development and production and its related job creation or retention within the State;

(4) gather information and conduct inquiries, as provided in this Act, required for the Department to comply with the provisions of this Act and, without limitation, to obtain information with respect to applicants for the purpose of making any designations or certifications necessary or desirable to assist the Department with any recommendation or guidance in the furtherance of the purposes of this Act and relating to applicants' participation in training, education, and recruitment programs that are organized in cooperation with Illinois colleges and universities or labor organizations designed to promote and encourage the training and hiring of Illinois residents who represent the diversity of the Illinois population;

(5) provide for sufficient personnel to permit administrative, staffing, operating, and related support required to adequately discharge the Department's duties and responsibilities under this Act from funds as may be appropriated by the General Assembly for the administration of this Act; and

(6) require that the applicant at all times keep proper books and records of accounts relating to the tax credit award, in accordance with generally accepted accounting principles consistently applied, and make those books and records available for reasonable Department inspection and audit, upon reasonable written request by the Department, during the applicant's normal business hours. Any documents or data made available to the Department or received by the Department from the applicant by any agent, employee, officer, or service provider shall be deemed confidential and shall not constitute public records to the extent that the documents or data consist of commercial or financial information regarding the operation by the applicant of any theater or any accredited theater production or any recipient of any tax credit award under this Act.

(Source: P.A. 103-592, eff. 6-7-24.)

(35 ILCS 19/50-20)

Sec. 50-20. Application for certification of qualified music company. Any applicant that operates a qualified music company located in the State or is proposing to operate a qualified music company in the State may apply to the Department to have the qualified music company certified by the Department as a qualified music company.

(Source: P.A. 103-592, eff. 6-7-24.)

(35 ILCS 19/50-25)

Sec. 50-25. Review of applications for qualified music company certificates.

(a) The Department shall issue a qualified music company certificate to an applicant if it finds that a preponderance of the following conditions exists:

(1) the applicant is engaged directly or indirectly in the production, distribution, and promotion of music;

(2) the applicant intends to make the expenditure in the State required for certification of the qualified music company;

(3) the applicant's qualified music company is economically sound and will benefit the people of the State of Illinois by increasing opportunities for employment and will strengthen the economy of Illinois;

(4) the following requirements related to the implementation of a diversity plan have been met:

(A) the applicant has filed with the Department a diversity plan outlining specific goals for hiring Illinois labor expenditure eligible minority persons and women, as defined in the Business Enterprise for Minorities, Women, and Persons with Disabilities Act, and for using vendors receiving certification under the Business Enterprise for Minorities, Women, and Persons with Disabilities Act;

(B) the Department has approved the plan as meeting the requirements established by the Department and verified that the applicant has met or made good faith efforts in achieving those goals; and

(C) the Department has adopted any rules that are necessary to ensure compliance with the provisions set forth in this paragraph (4) and any rules that are necessary to show that the applicant's plan reflects the diversity of the population of this State;

(5) the applicant's qualified music company application indicates whether the applicant intends to participate in training, education, and recruitment programs that are organized in cooperation with Illinois colleges and universities, labor organizations, and the holders of qualified music company certificates and are designed to promote and encourage the training and hiring of Illinois residents who represent the diversity of Illinois; and

(6) the tax credit award will result in an overall positive impact to the State, as determined by the Department using the best available data.

(b) If any of the provisions in this Section conflict with any existing collective bargaining agreements, the terms and conditions of those collective bargaining agreements shall control.

(c) The Department shall act expeditiously regarding approval of applications for qualified music companies so as to accommodate the operations and needs of those companies.

(Source: P.A. 103-592, eff. 6-7-24.)

(35 ILCS 19/50-30)

Sec. 50-30. Training programs for skills in critical demand. To accomplish the purposes of this Act, the Department may use the training programs provided under Section 605-800 of the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois.

(Source: P.A. 103-592, eff. 6-7-24.)

(35 ILCS 19/50-35)

Sec. 50-35. Issuance of tax credit award certificate.

(a) In order to qualify for a tax credit award under this Act, an applicant must file an application for each qualified music company at each of the applicant's qualified facilities, on forms prescribed by the Department, providing information necessary to calculate the tax credit award and any additional information as reasonably required by the Department.

(b) Upon satisfactory review of the application, the Department shall issue a tax credit award certificate stating the amount of the tax credit award to which the applicant is entitled for that tax year and shall contemporaneously notify the applicant and the Department of Revenue.

(c) For tax years beginning on or after January 1, 2025, a taxpayer who has been awarded a tax credit under paragraph (b) of this Section is entitled to a credit against the taxes imposed under subsections (a) and (b) of Section 201 of the Illinois Income Tax Act.

(Source: P.A. 103-592, eff. 6-7-24.)

(35 ILCS 19/50-40)

Sec. 50-40. Amount and payment of the tax credit award.

(a) For taxable years beginning on or after January 1, 2025, the Department may award tax credit awards to qualified music companies. The award may not exceed 10% of the Illinois labor expenditures for the State-certified production if the QMC payroll of the qualified music company for the taxable year does not exceed $150,000 or 15% of the Illinois labor expenditures for the State-certified production if the QMC payroll of the qualified music company for the taxable year exceeds $150,000, plus all of the following:

(1) an additional 15% of the Illinois labor expenditures for the State-certified production generated by the employment of Illinois residents in geographic areas of high poverty or high unemployment in each tax year, as determined by the Department; and

(2) an additional 7% of the Illinois labor expenditures for the State-certified production generated by the employment of individuals who are employed at a wage of no less than the general prevailing hourly rate as paid for work of a similar character in the locality in which the work is performed; and

(3) an additional 7% of the Illinois labor expenditures for the State-certified production incurred by a qualified music company and spent on post-production sound recording for television or film work completed in Illinois.

(b) To the extent that the base investment by a qualified music company is expended on a sound recording production of a resident copyright, the investor shall be allowed an additional 10% increase in the base investment rate.

(c) The aggregate amount of credits certified for all investors pursuant to this Section during any calendar year shall not exceed $2,000,000. No more than $200,000 in tax credits may be granted per calendar year for any single qualified music company.

(d) A business is eligible for participation in the program if the business meets all of the following criteria:

(1) The business is engaged directly or indirectly in the production, distribution, and promotion of music.

(2) The business is approved by the Director of Commerce and Economic Opportunity.

(e) Upon approval of a tax credit award under this Act, the Department shall issue a tax credit certificate to the applicant.

(Source: P.A. 103-592, eff. 6-7-24.)

(35 ILCS 19/50-45)

Sec. 50-45. Qualified music program evaluation and reports.

(a) The Department's qualified music program tax credit award evaluation must include:

(1) an assessment of the effectiveness of the program in creating and retaining new jobs in Illinois;

(2) an assessment of the revenue impact of the program;

(3) in the discretion of the Department, a review of the practices and experiences of other states or nations with similar programs; and

(4) an assessment of the overall success of the program.

The Department may make a recommendation to extend, modify, or not extend the program based on the evaluation.

(b) At the end of each fiscal quarter, the Department shall submit to the General Assembly a report that includes, without limitation:

(1) an assessment of the economic impact of the program, including the number of jobs created and retained, and whether the job positions are entry level, management, vendor, or production related;

(2) the amount of qualified music company spending brought to Illinois, including the amount of spending and type of Illinois vendors hired in connection with a qualified music company; and

(3) a determination of whether those receiving qualifying Illinois labor expenditure salaries or wages reflect the geographic, racial and ethnic, gender, and income level diversity of the State of Illinois.

(c) At the end of each fiscal year, the Department shall submit to the General Assembly a report that includes, without limitation:

(1) the identification of each vendor that provided goods or services that were included in a qualified music company's Illinois spending;

(2) a statement of the amount paid to each identified vendor by the qualified music program and whether the vendor is a minority-owned or women-owned business as defined in Section 2 of the Business Enterprise for Minorities, Women, and Persons with Disabilities Act; and

(3) a description of the steps taken by the Department to encourage qualified music company to use vendors who are minority-owned or women-owned businesses.

(Source: P.A. 103-592, eff. 6-7-24.)

(35 ILCS 19/50-50)

Sec. 50-50. Program terms and conditions. Any documentary materials or data made available or received from an applicant by any agent or employee of the Department are confidential and are not public records to the extent that the materials or data consist of commercial or financial information regarding the operation of or the production of the applicant or recipient of any tax credit award under this Act.

(Source: P.A. 103-592, eff. 6-7-24.)

(35 ILCS 19/Art. 52 heading) ARTICLE 52. (Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 6-7-24; text omitted.)

(35 ILCS 19/Art. 55 heading) ARTICLE 55. (Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 6-7-24; text omitted.)

(35 ILCS 19/Art. 60 heading) ARTICLE 60. (Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 6-7-24; text omitted.)

(35 ILCS 19/Art. 65 heading) ARTICLE 65. (Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 7-1-24; text omitted.)

(35 ILCS 19/Art. 70 heading) ARTICLE 70. (Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 6-7-24; text omitted.)

(35 ILCS 19/Art. 75 heading) ARTICLE 75. (Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 1-1-25; text omitted.)

(35 ILCS 19/Art. 80 heading) ARTICLE 80. (Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 1-1-25; text omitted.)

(35 ILCS 19/Art. 85 heading) ARTICLE 85. (Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 6-7-24; text omitted.)

(35 ILCS 19/Art. 90 heading) ARTICLE 90. (Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 6-7-24; text omitted.)

(35 ILCS 19/Art. 95 heading) ARTICLE 95.(Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 6-7-24; text omitted.)

(35 ILCS 19/Art. 100 heading) ARTICLE 100.(Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 6-7-24; text omitted.)

(35 ILCS 19/Art. 105 heading) ARTICLE 105.(Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 6-7-24; text omitted.)

(35 ILCS 19/Art. 110 heading) ARTICLE 110.(Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 6-7-24; text omitted.)

(35 ILCS 19/Art. 115 heading) ARTICLE 115.(Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 6-7-24; text omitted.)

(35 ILCS 19/Art. 120 heading) ARTICLE 120.(Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 6-7-24; text omitted.)

(35 ILCS 19/Art. 130 heading) ARTICLE 130.(Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 6-7-24; text omitted.)

(35 ILCS 19/Art. 135 heading) ARTICLE 135.(Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 1-1-25; text omitted.)

(35 ILCS 19/Art. 140 heading) ARTICLE 140.(Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 1-1-25; text omitted.)

(35 ILCS 19/Art. 145 heading) ARTICLE 145.(Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 6-7-24; text omitted.)

(35 ILCS 19/Art. 150 heading) ARTICLE 150.(The Interchange Fee Prohibition Act is compiled at 815 ILCS 151/)(Source: P.A. 103-592, eff. 7-1-25.)

(35 ILCS 19/Art. 155 heading) ARTICLE 155.(Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 6-7-24; text omitted.)

(35 ILCS 19/Art. 160 heading) ARTICLE 160.(Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 6-7-24; text omitted.)

(35 ILCS 19/Art. 165 heading) ARTICLE 165.(Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 6-7-24; text omitted.)

(35 ILCS 19/Art. 170 heading) ARTICLE 170.(The Illinois Gives Tax Credit Act is compiled at 35 ILCS 60/)(Source: P.A. 103-592, eff. 6-7-24.)

(35 ILCS 19/Art. 175 heading) ARTICLE 175.(Amendatory provisions; text omitted)(Source: P.A. 103-592, eff. 6-7-24; text omitted.)

(35 ILCS 19/Art. 999 heading) ARTICLE 999.

(Source: P.A. 103-592, eff. 6-7-24.)

(35 ILCS 19/999-95)

Sec. 999-95. No acceleration or delay. Where this Act makes changes in a statute that is represented in this Act by text that is not yet or no longer in effect (for example, a Section represented by multiple versions), the use of that text does not accelerate or delay the taking effect of (i) the changes made by this Act or (ii) provisions derived from any other Public Act.

(Source: P.A. 103-592, eff. 6-7-24.)

(35 ILCS 19/999-97)

Sec. 999-97. Severability. The provisions of this Act are severable under Section 1.31 of the Statute on Statutes.

(Source: P.A. 103-592, eff. 6-7-24.)

(35 ILCS 19/999-99)

Sec. 999-99. Effective date. This Act takes effect upon becoming law, except that Article 65 takes effect July 1, 2024, Articles 25, 75, 80, 93, 125, 135, and 140 take effect January 1, 2025, and Article 150 takes effect July 1, 2025.

(Source: P.A. 103-592, eff. 6-7-24.)