Full Text of HB2482 095th General Assembly
HB2482enr 95TH GENERAL ASSEMBLY
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| AN ACT concerning revenue.
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| Be it enacted by the People of the State of Illinois, | 3 |
| represented in the General Assembly:
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| Section 1. Short title. This Act may be cited as the Film
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| Production Services Tax Credit Act of 2008.
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| Section 5. Purpose. The General Assembly finds that the | 7 |
| Illinois economy is highly vulnerable to other states and | 8 |
| nations that have major financial incentive programs targeted | 9 |
| to the motion picture industry. Because of the incentive | 10 |
| programs of these competitor locations, Illinois must move | 11 |
| aggressively with new business development investment tools so | 12 |
| that Illinois is more competitive in site location | 13 |
| decision-making for film productions. In an increasingly | 14 |
| global economy, Illinois' long-term development will benefit | 15 |
| from rational, strategic use of State resources in support of | 16 |
| film production development and growth. It is the purpose of | 17 |
| this Act to preserve and expand the existing human | 18 |
| infrastructure for the motion picture industry in Illinois. It | 19 |
| shall be the policy of this State to promote and encourage the | 20 |
| training and hiring of Illinois residents who represent the | 21 |
| diversity of the Illinois population through the creation and | 22 |
| implementation of training, education, and recruitment | 23 |
| programs organized in cooperation with Illinois colleges and |
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| universities, labor organizations, and the motion picture | 2 |
| industry.
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| Section 10. Definitions. As used in this Act:
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| "Accredited production" means: (i) for productions | 5 |
| commencing before May 1, 2006, a film, video, or television | 6 |
| production that
has been certified by the Department in which | 7 |
| the aggregate Illinois labor
expenditures
included in the cost | 8 |
| of the production, in the period that ends 12 months after
the | 9 |
| time principal filming or taping of the production began, | 10 |
| exceed $100,000
for productions of 30 minutes or longer, or | 11 |
| $50,000 for productions of less
than 30
minutes; and (ii) for | 12 |
| productions commencing on or after May 1, 2006, a film, video, | 13 |
| or television production that has been certified by the | 14 |
| Department in which the Illinois production spending included | 15 |
| in the cost of production in the period that ends 12 months | 16 |
| after the time principal filming or taping of the production | 17 |
| began exceeds $100,000 for productions of 30 minutes or longer | 18 |
| or exceeds $50,000 for productions of less than 30 minutes. | 19 |
| "Accredited production" does not include a production that:
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| (1) is news, current events, or public programming, or | 21 |
| a program that
includes weather or market reports;
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| (2) is a talk show;
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| (3) is a production in respect of a game, | 24 |
| questionnaire, or contest;
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| (4) is a sports event or activity;
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| (5) is a gala presentation or awards show;
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| (6) is a finished production that solicits funds;
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| (7) is a production produced by a film production | 4 |
| company if records, as
required
by 18
U.S.C. 2257, are to | 5 |
| be maintained by that film production company with respect
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| to any
performer portrayed in that single media or | 7 |
| multimedia program; or
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| (8) is a production produced primarily for industrial, | 9 |
| corporate, or
institutional purposes.
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| "Accredited production certificate" means a certificate | 11 |
| issued by the
Department certifying that the production is an | 12 |
| accredited production that
meets the guidelines of this Act.
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| "Applicant" means a taxpayer that is a film production | 14 |
| company that is
operating or has operated an accredited | 15 |
| production located within the State of
Illinois and that
(i) | 16 |
| owns the copyright in the accredited production throughout the
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| Illinois production period or (ii)
has contracted directly with | 18 |
| the owner of the copyright in the
accredited production
or a | 19 |
| person acting on behalf of the owner
to provide services for | 20 |
| the production, where the owner
of the copyright is not an | 21 |
| eligible production corporation.
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| "Credit" means:
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| (1) for an accredited production approved by the | 24 |
| Department on or before January 1, 2005 and commencing | 25 |
| before May 1, 2006, the amount equal to 25% of the Illinois | 26 |
| labor
expenditure approved by the Department.
The |
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| applicant is deemed to have paid, on its balance due day | 2 |
| for the year, an
amount equal to 25% of its qualified | 3 |
| Illinois labor expenditure for the tax
year. For Illinois | 4 |
| labor expenditures generated by the employment of | 5 |
| residents of geographic areas of high poverty or high | 6 |
| unemployment, as determined by the Department, in an | 7 |
| accredited production commencing before May 1, 2006 and
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| approved by the Department after January 1, 2005, the | 9 |
| applicant shall receive an enhanced credit of 10% in | 10 |
| addition to the 25% credit; and | 11 |
| (2) for an accredited production commencing on or after | 12 |
| May 1, 2006, the amount equal to: | 13 |
| (i) 20% of the Illinois production spending for the | 14 |
| taxable year; plus | 15 |
| (ii) 15% of the Illinois labor expenditures | 16 |
| generated by the employment of residents of geographic | 17 |
| areas of high poverty or high unemployment, as | 18 |
| determined by the Department.
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| "Department" means the Department of Commerce and Economic | 20 |
| Opportunity.
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| "Director" means the Director of Commerce and Economic | 22 |
| Opportunity.
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| "Illinois labor expenditure" means
salary or wages paid to | 24 |
| employees of the
applicant for services on the accredited
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| production;
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| To qualify as an Illinois labor expenditure, the |
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| expenditure must be:
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| (1) Reasonable in the circumstances.
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| (2) Included in the federal income tax basis of the | 4 |
| property.
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| (3) Incurred by the applicant for services on or after | 6 |
| January 1, 2004.
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| (4) Incurred for the production stages of the | 8 |
| accredited production, from
the final
script stage to the | 9 |
| end of the post-production stage.
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| (5) Limited to the first $25,000 of wages paid or | 11 |
| incurred to each
employee of a production commencing before | 12 |
| May 1, 2006 and the first $100,000 of wages paid or | 13 |
| incurred to each
employee of
a production commencing on or | 14 |
| after May 1, 2006.
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| (6) For a production commencing before May 1, 2006, | 16 |
| exclusive of the salary or wages paid to or incurred for | 17 |
| the 2 highest
paid
employees of the production.
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| (7) Directly attributable to the accredited | 19 |
| production.
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| (8) Paid in the tax year
for which the applicant is | 21 |
| claiming the credit
or no later than 60 days after the end | 22 |
| of the tax
year.
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| (9) Paid to persons resident in Illinois at the time | 24 |
| the payments were
made.
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| (10) Paid for services rendered in Illinois.
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| "Illinois production spending" means the expenses incurred |
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| by the applicant for an accredited production, including, | 2 |
| without limitation, all of the following: | 3 |
| (1) expenses to purchase, from vendors within | 4 |
| Illinois, tangible personal property that is used in the | 5 |
| accredited production; | 6 |
| (2) expenses to acquire services, from vendors in | 7 |
| Illinois, for film production, editing, or processing; and | 8 |
| (3) the compensation, not to exceed $100,000 for any | 9 |
| one employee, for contractual or salaried employees who are | 10 |
| Illinois residents performing services with respect to the | 11 |
| accredited production. | 12 |
| "Qualified production facility" means stage facilities in | 13 |
| the State in which television shows and films are or are | 14 |
| intended to be regularly produced and that contain at least one | 15 |
| sound stage of at least 15,000 square feet.
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| Section 15. Powers of the Department. The Department, in | 17 |
| addition to those
powers granted under the Civil Administrative | 18 |
| Code of Illinois, is granted and
has all the powers necessary | 19 |
| or convenient to carry out and effectuate the
purposes and | 20 |
| provisions of this Act, including, but not limited to, power | 21 |
| and
authority to:
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| (a) Adopt rules deemed necessary and appropriate for the | 23 |
| administration of
the tax credit program; establish forms for | 24 |
| applications, notifications,
contracts, or any other | 25 |
| agreements; and accept applications at any time during
the |
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| year.
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| (b) Assist applicants pursuant to the provisions of this | 3 |
| Act
to promote, foster, and
support film production and its | 4 |
| related job creation or retention within the
State.
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| (c) Gather information and conduct inquiries, in the manner | 6 |
| and by the
methods as it deems desirable, including any | 7 |
| information required for the Department to comply with Section | 8 |
| 45 and, without limitation, gathering
information with respect | 9 |
| to applicants for the purpose of making any
designations or | 10 |
| certifications necessary or desirable or to gather information
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| to assist the Department with any recommendation or guidance in | 12 |
| the furtherance
of the purposes of this Act, including, but not | 13 |
| limited to, information as to
whether the applicant | 14 |
| participated in training, education, and recruitment
programs | 15 |
| that are organized in cooperation with Illinois colleges and
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| universities, labor organizations, and the motion picture | 17 |
| industry, and are
designed to promote and encourage the | 18 |
| training and hiring of Illinois residents
who represent the | 19 |
| diversity of the Illinois population.
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| (d) Provide for sufficient personnel to permit | 21 |
| administration, staffing,
operation, and related support | 22 |
| required to adequately discharge its duties and
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| responsibilities described in this Act from funds as may be | 24 |
| appropriated by the
General Assembly for the administration of | 25 |
| this Act.
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| (e) Require applicants, upon written request, to issue any |
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| necessary
authorization to the appropriate federal, state, or | 2 |
| local authority for the
release of information concerning a | 3 |
| project being considered under the
provisions of this Act, with | 4 |
| the information requested to include, but not be
limited to, | 5 |
| financial reports, returns, or records relating to the
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| applicant or the accredited production.
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| (f) Require that an applicant must at all times keep proper | 8 |
| books of record
and account in accordance with generally | 9 |
| accepted accounting principles
consistently applied, with the | 10 |
| books, records, or papers related to the
accredited production | 11 |
| in the custody or control of the taxpayer open for
reasonable
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| Department inspection and audits, and including, without | 13 |
| limitation, the making
of copies of the books, records, or | 14 |
| papers, and the inspection or appraisal of
any of the
assets of | 15 |
| the applicant or the accredited production.
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| (g) Take whatever actions are necessary or appropriate to | 17 |
| protect the
State's interest in the event of bankruptcy, | 18 |
| default, foreclosure, or
noncompliance with the terms and | 19 |
| conditions of financial assistance or
participation required | 20 |
| under this Act, including the power to sell, dispose,
lease, or | 21 |
| rent, upon terms and conditions determined by the Director to | 22 |
| be
appropriate, real or personal property that the Department | 23 |
| may receive as a
result of these actions.
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| Section 20. Tax credit awards. Subject to the conditions | 25 |
| set forth in this Act, an applicant is entitled to a credit as |
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| approved by the Department under Section 40 of this Act.
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| Section 25. Application for certification of accredited | 3 |
| production.
Any applicant proposing a film or television | 4 |
| production located or
planned to be located in Illinois may | 5 |
| request an accredited production
certificate
by formal | 6 |
| application to the Department.
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| Section 30. Review of application for accredited | 8 |
| production certificate.
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| (a) In
determining whether to issue an accredited | 10 |
| production certificate,
the Department must determine that a | 11 |
| preponderance of the following conditions
exist:
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| (1) The applicant's production intends to make the | 13 |
| expenditure in the
State required for certification.
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| (2) The applicant's production is economically sound | 15 |
| and will benefit the
people of the State of Illinois by | 16 |
| increasing opportunities for employment and
strengthen the | 17 |
| economy of Illinois.
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| (3) The applicant has filed a diversity plan with the | 19 |
| Department outlining specific goals (i) for hiring | 20 |
| minority persons and females, as defined in the Business | 21 |
| Enterprise for Minorities, Females, and Persons with | 22 |
| Disabilities Act, and (ii) for using vendors receiving | 23 |
| certification under the Business Enterprise for | 24 |
| Minorities, Females, and Persons with Disabilities Act; |
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| the Department has approved the plan as meeting the | 2 |
| requirements established by the Department; and the | 3 |
| Department has verified that the applicant has met or made | 4 |
| good-faith efforts in achieving those goals. The | 5 |
| Department must adopt any rules that are necessary to | 6 |
| ensure compliance with the provisions of this item (3) and | 7 |
| that are necessary to require that the applicant's plan | 8 |
| reflects the diversity of this State.
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| (4) The applicant's production application
indicates | 10 |
| whether the applicant intends to participate in training, | 11 |
| education,
and
recruitment programs that are organized in | 12 |
| cooperation with Illinois colleges
and
universities,
labor | 13 |
| organizations, and the motion picture industry and are | 14 |
| designed to
promote
and
encourage the training and hiring | 15 |
| of Illinois residents who represent the
diversity of the
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| Illinois population.
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| (5) That, if not for the credit, the applicant's | 18 |
| production would not
occur in
Illinois, which may be | 19 |
| demonstrated by any means including, but not limited to,
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| evidence that the applicant has multi-state or | 21 |
| international location options
and could reasonably and | 22 |
| efficiently locate outside of the State, or
demonstration | 23 |
| that at least one other state or nation is being considered | 24 |
| for
the production, or evidence that the receipt of the | 25 |
| credit is a major factor in
the
applicant's decision and | 26 |
| that without the credit the applicant likely would
not |
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| create or retain jobs in Illinois, or demonstration that | 2 |
| receiving the
credit is essential to the applicant's | 3 |
| decision to create or retain new jobs in
the State.
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| (6) Awarding the credit will result in an overall | 5 |
| positive impact
to the State, as determined by the | 6 |
| Department using the best available
data.
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| (b) If any of the provisions in this Section conflict with | 8 |
| any existing
collective
bargaining agreements, the terms and | 9 |
| conditions of those collective bargaining
agreements shall | 10 |
| control.
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| Section 35. Issuance of Tax Credit Certificate.
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| (a) In order to qualify for a tax credit under this Act, an | 13 |
| applicant must
file an application, on forms prescribed by the | 14 |
| Department, providing
information necessary to calculate the | 15 |
| tax credit, and any additional
information as required by the | 16 |
| Department.
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| (b) Upon satisfactory review of the application, the | 18 |
| Department shall issue a
Tax Credit Certificate stating the | 19 |
| amount of the tax credit to which the
applicant is entitled.
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| Section 40. Amount and duration of the credit. The amount | 21 |
| of the credit awarded under this Act is based on the amount of | 22 |
| the Illinois labor expenditure and Illinois production | 23 |
| spending approved by the Department for the production as set | 24 |
| forth under Section 10. The duration of the credit may not |
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| exceed one taxable year.
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| Section 43. Training programs for skills in critical | 3 |
| demand. To accomplish the purposes of this Act, the Department | 4 |
| may use the training programs provided for Illinois under | 5 |
| Section 605-800 of the Department of Commerce and Economic | 6 |
| Opportunity Law of the Civil Administrative Code of Illinois.
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| Section 45. Evaluation of tax credit program; reports to | 8 |
| the General Assembly. | 9 |
| (a) The Department shall evaluate the tax credit program. | 10 |
| The evaluation must include an assessment of the effectiveness | 11 |
| of the program in creating and retaining new jobs in Illinois | 12 |
| and of the revenue impact of the program, and may include a | 13 |
| review of the practices and experiences of other states or | 14 |
| nations with similar programs. Upon completion of this | 15 |
| evaluation, the Department shall determine the overall success | 16 |
| of the program, and may make a recommendation to extend, | 17 |
| modify, or not extend the program based on this evaluation. | 18 |
| (b) At the end of each fiscal quarter, the Department must | 19 |
| submit to the General Assembly a report that includes, without | 20 |
| limitation, the following information: | 21 |
| (1) the economic impact of the tax credit program,
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| including the number of jobs created and retained, | 23 |
| including whether the job positions are entry level, | 24 |
| management, talent-related, vendor-related, or |
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| production-related; | 2 |
| (2) the amount of film production spending brought to
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| Illinois, including the amount of spending and type of | 4 |
| Illinois vendors hired in connection with an accredited | 5 |
| production; and | 6 |
| (3) an overall picture of whether the human
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| infrastructure of the motion picture industry in Illinois | 8 |
| reflects the geographical, racial and ethnic, gender, and | 9 |
| income-level diversity of the State of Illinois.
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| (c) At the end of each fiscal year, the Department must
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| submit to the General Assembly a report that includes, without | 12 |
| limitation, the following information: | 13 |
| (1) an identification of each vendor that provided
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| goods or services that were included in an accredited | 15 |
| production's Illinois production spending; | 16 |
| (2) the amount paid to each identified vendor by the
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| accredited production; | 18 |
| (3) for each identified vendor, a statement as to
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| whether the vendor is a minority owned business or a female | 20 |
| owned business, as defined under Section 2 of the Business | 21 |
| Enterprise for Minorities, Females, and Persons with | 22 |
| Disabilities Act; and | 23 |
| (4) a description of any steps taken by the
Department | 24 |
| to encourage accredited productions to use vendors who are | 25 |
| a minority owned business or a female owned business. |
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| Section 50. Program terms and conditions.
Any documentary | 2 |
| materials or data made available or received by
any agent or | 3 |
| employee of the
Department are confidential and are not public | 4 |
| records to the extent that the
materials or data consist of | 5 |
| commercial or financial information
regarding the operation of | 6 |
| the production of the applicant for or
recipient of any tax | 7 |
| credit under this Act.
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| Section 90. Continuation of prior law. This Act replaces | 9 |
| and is intended to be a continuation of the Film
Production | 10 |
| Services Tax Credit Act, which was repealed on January 1, 2008. | 11 |
| Section 95. Repeal. This Act is repealed on January 1, | 12 |
| 2009.
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| Section 905. The Illinois Income Tax Act is amended by | 14 |
| changing Section 213 as follows:
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| (35 ILCS 5/213)
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| Sec. 213. Film production services credit. For tax years | 17 |
| beginning on or
after January 1, 2004, a taxpayer who has been | 18 |
| awarded a tax credit under the
Film Production Services Tax | 19 |
| Credit Act or under the Film Production Services Tax Credit Act | 20 |
| of 2008 is entitled to a credit against the
taxes imposed under | 21 |
| subsections (a) and (b) of Section 201 of this Act in an
amount | 22 |
| determined by the Department of Commerce and Economic |
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| Opportunity under those Acts the
Film Production Services Tax | 2 |
| Credit Act . If the taxpayer is a partnership or
Subchapter S | 3 |
| corporation, the credit is allowed to the partners or | 4 |
| shareholders
in accordance with the determination of income and | 5 |
| distributive share of income
under Sections 702 and 704 and | 6 |
| Subchapter S of the Internal Revenue Code. | 7 |
| A transfer of this credit may be made by the taxpayer | 8 |
| earning the credit within one year after the credit is awarded | 9 |
| in accordance with rules adopted by the Department of Commerce | 10 |
| and Economic Opportunity.
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| The
Department, in cooperation with the Department of | 12 |
| Commerce and Economic Opportunity, must prescribe rules to | 13 |
| enforce and administer the provisions of this
Section. This | 14 |
| Section is exempt from the provisions of Section 250 of this
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| Act.
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| The credit may not be carried back. If the amount of the | 17 |
| credit exceeds the tax liability for the year, the
excess may | 18 |
| be carried forward and applied to the tax liability of the 5 | 19 |
| taxable
years following the excess credit year. The credit
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| shall be applied to the earliest year for which there is a tax | 21 |
| liability. If
there are credits from more than one tax year | 22 |
| that are available to offset a
liability, the earlier credit | 23 |
| shall be applied first. In no event shall a credit
under this | 24 |
| Section reduce the taxpayer's
liability to less than
zero.
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| (Source: P.A. 93-543, eff. 1-1-04; 94-171, eff. 7-11-05.)
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| Section 999. Effective date. This Act takes effect upon |
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| becoming law.
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