1.1 	A bill for an act
1.2 	relating to taxation; income tax; providing a film production tax credit; 
1.3 	appropriating money; amending Minnesota Statutes 2004, section 290.06, by 
1.4 	adding a subdivision.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. Minnesota Statutes 2004, section 290.06, is amended by adding a 
1.7 	subdivision to read:
1.8 		Subd. 32.Film production credit. (a) A taxpayer is allowed a credit against the 
1.9 	taxes due under this chapter equal to 15 percent of film production expenditures made 
1.10 	in Minnesota that are directly attributable to film production in Minnesota. For purposes 
1.11 	of this subdivision, "film" means a movie, television show, documentary, music video, 
1.12 	or television commercial, whether on film or video; and "film production" means all the 
1.13 	activities related to (i) the preparation for shooting, (ii) the shooting, including processing, 
1.14 	and (iii) the editing and finishing of a film. For purposes of this subdivision, the following 
1.15 	is not a "film":
1.16 	(1) news, current events, or public programming or a program that includes weather 
1.17 	or market reports;
1.18 	(2) a talk show;
1.19 	(3) a production with respect to a questionnaire or contest;
1.20 	(4) a sports event or sports activity;
1.21 	(5) a gala presentation or awards show;
1.22 	(6) a finished production that solicits funds; or
2.1 	(7) a production for which the production company is required under United States 
2.2 	Code, title 18, section 2257, to maintain records with respect to a performer portrayed 
2.3 	in a single media or multimedia program.
2.4 	(b) Expenditures that qualify for the credit under this subdivision must be subject to 
2.5 	taxation in Minnesota and include:
2.6 	(1) payment of wages, fringe benefits, or fees for talent, management, or labor to a 
2.7 	person who is a Minnesota resident for purposes of this chapter;
2.8 	(2) payment to personal services corporations for the services of a performing artist, 
2.9 	if the performing artist receiving payments from the personal services corporation pays 
2.10 	Minnesota income tax; and 
2.11 	(3) any of the following provided by a vendor:
2.12 	(i) the story and scenario to be used for a film;
2.13 	(ii) set construction and operations, wardrobe, accessories, and related services;
2.14 	(iii) photography, sound synchronization, lighting, and related services;
2.15 	(iv) editing and related services;
2.16 	(v) rental of facilities and equipment;
2.17 	(vi) leasing of vehicles; and 
2.18 	(vii) food and lodging.
2.19 	(c) If the amount of the credit under this subdivision exceeds the taxpayer's tax 
2.20 	liability under this chapter for the taxable year, the amount of the excess must be refunded 
2.21 	to the taxpayer.  The amount necessary to pay the refunds is appropriated annually from 
2.22 	the general fund to the commissioner of revenue.

2.23 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
2.24 	December 31, 2005.