CAST & CREW ENTERTAINMENT SERVICES

FRIDAY, NOVEMBER 20, 2015

In this Issue

PROPOSED LEGISLATION

New Jersey (A 2474)

Pennsylvania (S 1050)

MISCELLANEOUS

IN THE NEWS

QUICK LINKS

Archived TIP Newsletters

PROPOSED LEGISLATION

Still in the House or Senate

New Jersey (A 2474)

Assembly Bill 2474, which was introduced in February 2014, has been amended. The bill re-establishes the film production tax credit program. The highlights are as follows:

Creates a transferable tax credit equal to 20% of on qualified production expenditures:
Allows for a credit equal to 22% of qualified production expenses purchased from businesses located in or for services performed by residents of an enterprise zone;
Allows for a credit equal to 40% of qualified production expenses incurred in an eligible municipality during production or post production;

An eligible municipality is defined as a municipality in the state that has experienced the closure of at least two casino hotel facilities that had been licensed and operated within the boundaries of the municipality;

Creates an annual cap of $50 million per fiscal year (July 1 - June 30) for the film production tax credit and $10 million per fiscal year for the digital media production tax credit;
Requires withholding of 6.37% on payments to loan outs and independent contractors;
Requires applicants to enter into a partnership with a four-year public institution of higher education to provide industry employment opportunities for students enrolled in media and fine arts programs;
Requires applicants to demonstrate a net positive benefit to the state at the time of application;
Creates a minimum requirement of 60% of total production expenses to be incurred in the state;
Includes in the definition for "film" a feature film, television series, or a television show of 22 minutes or more that is intended for a national or regional audience including, but not limited, to a game show, award show, or other gala event filmed and produced at a nonprofit arts and cultural venue receiving state funding;
Requires principal photography to commence the earlier of 180 days from the date of the original application or 150 days from the date of the application's approval;
Requires screen credit to be provided; and,
Creates a sunset date of July 1, 2022.

Pennsylvania (S 1050)

Senate Bill 1050 proposes to amend the film production tax credit program as follows:

Increases the funding cap from $60 million to $75 million per fiscal year (July 1 - June 30);
Creates a post production only credit of 25% of qualified post production expenses incurred at a qualified post production facility in the state;
Creates an additional 5% credit for post production only projects that conducts at least 50% of all qualified post production expenses at a qualified post production facility;
Allows productions that qualify for the production tax credit to earn a 30% tax credit on any post production work in the state; and,
Allows for a reissuance of tax credits in the amount of the difference between what a production was qualified for upon application and what a production is certified for upon completion.

MISCELLANEOUS

California

The California Film and TV Tax Credit Program 2.0's upcoming application window for TV Projects (Non-transferable tax credit) is November 30 - December 6. The on-line application portal will go live Monday, November 30th at 8:00 a.m. PST. Applications are ranked within categories (TV Project vs. other TV Projects; Relocating TV vs. other Relocating TV) based upon their "jobs ratio" score. Projects that rank in the top 200% (double the number of projects for which funding is available) will be notified by Dec. 7th to submit Phase II documents. For details click here.

Illinois

On November 11, 2015, Illinois Governor, Bruce Rauner, announced that he will be re-instituting the Film Tax Credit approvals. Initial approval of productions was deferred on June 2, in anticipation of the state's fiscal year budget impasse. Accredited Production Certificates will be issued for qualifying applications affected by the deferral.

The Illinois Tax Credit is a statutory program administered by the Department of Commerce and Economic Opportunity. The accredited production certificate issued to approved applicants does not require appropriation authorization and obligates the state to pay the credit pursuant to the terms and conditions set forth in said statute and after internal and legal review of qualifying expenditures provided in the independent audit of the production.

At the completion of the project, productions have up to 2 years to provide the Illinois Film Office (IFO) with an audit performed by an independent CPA of all qualified expenditures. The (transferable) tax credit to the certified accredited production is issued when the audit has been verified by the IFO tax and legal team.