SF 4634
Introduction - 94th Legislature (2025 - 2026)
Posted on 03/24/2026 10:20 a.m.
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A bill for an act
relating to economic development; modifying the film production credit; amending
Minnesota Statutes 2024, section 116U.27, subdivisions 1, 4, 5; Minnesota Statutes
2025 Supplement, section 116U.27, subdivision 2.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2024, section 116U.27, subdivision 1, is amended to read:
Subdivision 1.
Definitions.
(a) For purposes of this section, the following terms have
the meanings given.
(b) "Allocation deleted text begin certificatedeleted text end new text begin letternew text end " means a deleted text begin certificatedeleted text end new text begin letternew text end issued by the commissioner
to a taxpayer upon receipt and approval of an initial application for a credit for a project
that has not yet been completed.
(c) "Application" means the application for a credit under subdivision 4.
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(d) "Below-the-line crew position" means a position that handles the technical execution
of film production, including camera operators, sound technicians, grips, electricians, and
other specialized crafts positions.
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deleted text begin (d)deleted text end new text begin (e) new text end "Credit certificate" means a certificate issued by the commissioner upon receipt
and approval of the cost verification report in subdivision 4, paragraph (e).
deleted text begin (e)deleted text end new text begin (f)new text end "Director" means the director of Explore Minnesota.
deleted text begin (f)deleted text end new text begin (g)new text end "Eligible production costs" means eligible production costs as defined in section
116U.26, paragraph (b), clause (1), incurred in Minnesota that are directly attributable to
the production of a film project in Minnesota.
deleted text begin (g)deleted text end new text begin (h)new text end "Film" has the meaning given in section 116U.26, paragraph (b), clause (2).
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(i) "Key creative role" means a project director, producer, showrunner, editor, actor,
writer, director of photography, production designer, cinematographer, or equivalent project
role.
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(j) "Minnesota script or screenplay production" means a script or screenplay created by
a Minnesota resident that is produced into a film.
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deleted text begin (h)deleted text end new text begin (k)new text end "Project" means a filmnew text begin , including television programmingnew text end :
(1) that includes the promotion of Minnesota;
(2) for which the taxpayer has expended at least deleted text begin $1,000,000deleted text end new text begin $400,000new text end in any consecutive
12-month period beginning after expenditures are first paid in Minnesota for eligible
production costs; and
(3) to the extent practicable, that employs Minnesota residents.
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Television commercials are exempt from the requirement under clause (1).
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Project also includes a television commercial or Minnesota script or screenplay production
for which the taxpayer has expended at least $150,000 in any consecutive 12-month period
beginning after expenditures are first paid in Minnesota for eligible production costs and,
to the extent practicable, that employs Minnesota residents.
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deleted text begin (i)deleted text end new text begin (l)new text end "Promotion of Minnesota" or "promotion" means visible display of a static or
animated logo, approved by the director, that promotes Minnesota within its presentation
in the end credits for the life of the project.
Sec. 2.
Minnesota Statutes 2025 Supplement, section 116U.27, subdivision 2, is amended
to read:
Subd. 2.
Credit allowed.
new text begin (a) new text end A taxpayer is eligible for a credit up to deleted text begin 25deleted text end new text begin 40new text end percent of
eligible production costs paid in any consecutive 12-month period as described in subdivision
1, paragraph deleted text begin (h)deleted text end new text begin (i)new text end . A taxpayer may only claim a credit if the taxpayer was issued a credit
certificate under subdivision 4.
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(b) A taxpayer is eligible for an additional five percent credit totaling up to 45 percent
if the project meets the requirements of paragraph (a), and:
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(1) employs a Minnesota resident in a key creative role;
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(2) films outside of the seven-county metro area, as defined in section 473.121,
subdivision 2; or
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(3) hires a majority of Minnesota residents in below-the-line crew positions.
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Sec. 3.
Minnesota Statutes 2024, section 116U.27, subdivision 4, is amended to read:
Subd. 4.
Applications; allocations.
(a) To qualify for a credit under this section, a
taxpayer must submit to the director an application for a credit in the form prescribed by
the director, in consultation with the commissioner of revenue.
(b) Upon approving an application for a credit that meets the requirements of this section,
the director shall issue allocation deleted text begin certificatesdeleted text end new text begin lettersnew text end that:
(1) verify eligibility for the credit;
(2) state the amount of credit anticipated for the eligible project, with the credit amount
up to deleted text begin 25deleted text end new text begin 45new text end percent of eligible project costs; and
(3) state the taxable year in which the credit is allocated.
(c) The director must not issue allocation deleted text begin certificatesdeleted text end new text begin lettersnew text end for more than $24,950,000
of credits each year. If the entire amount is not allocated in that taxable year, any remaining
amount is available for allocation for the four following taxable years until the entire
allocation has been made. The director must not award any credits for taxable years beginning
after December 31, 2030, and any unallocated amounts cancel on that date.
(d) The director must allocate credits on a first-come, first-served basis.
(e) Upon completion of a project, the taxpayer shall submit to the director a report
prepared by an independent certified public accountant licensed in the state of Minnesota
to verify the amount of eligible production costs related to the project. The report must be
prepared in accordance with generally accepted accounting principles. Upon receipt and
approval of the cost verification report and other documents required by the director, the
director shall determine the final amount of eligible production costs and issue a credit
certificate to the taxpayer. The credit may not exceed the anticipated credit amount on the
allocation deleted text begin certificatedeleted text end new text begin letternew text end . If the credit is less than the anticipated amount on the allocation
credit, the difference is returned to the amount available for allocation under paragraph (c).
To claim the credit under section 290.06, subdivision 39, or 297I.20, subdivision 4, a taxpayer
must include a copy of the credit certificate as part of the taxpayer's return.
Sec. 4.
Minnesota Statutes 2024, section 116U.27, subdivision 5, is amended to read:
Subd. 5.
Report required.
By January 15, 2025, the commissioner of revenue, in
consultation with the director, must provide a report to the chairs and ranking minority
members of the legislative committees with jurisdiction over economic development and
taxes. The report must comply with sections 3.195 and 3.197, and must detail the following:
(1) the amount of credit certifications issued annually;
(2) the number of applications submitted, the number of allocation deleted text begin certificatesdeleted text end new text begin lettersnew text end
issued, the amount of allocation deleted text begin certificatesdeleted text end new text begin lettersnew text end issued, the number of reports submitted
upon completion of a project, and the number of credit certificates issued;
(3) the types of projects eligible for the credit;
(4) the total economic impact of the credit in Minnesota, including the calendar year
over calendar year percentage changes in the number of jobs held by Minnesota residents
in businesses having a primary North American Industry Classification System code of
512110 as reported to the commissioner, for calendar years 2019 through 2023;
(5) the number of taxpayers per tax type which are assignees of credit certificates under
subdivision 3;
(6) annual Minnesota taxes paid by businesses having a primary North American Industry
Classification System code of 512110, for taxable years beginning after December 31, 2018,
and before January 1, 2024; and
(7) any other information the commissioner of revenue, in consultation with the director,
deems necessary for purposes of claiming and administering the credit.
Sec. 5. new text begin EFFECTIVE DATE.
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Sections 1 to 4 are effective July 1, 2026.
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