SF 2455

as introduced - 87th Legislature (2011 - 2012) Posted on 03/15/2012 09:04am

A bill for an act
relating to taxation; income; providing for a film investment credit; proposing coding for new law in Minnesota Statutes, chapter 290.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [290.0682] FILM PRODUCTION INVESTMENT CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Credit allowed. new text end

new text begin An individual or corporate taxpayer is allowed a
credit against the tax due under this chapter equal to 25 percent of the qualified investment
in a qualifying film production made during the taxable year.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin For the purposes of this section, the following terms have
the meanings given.
new text end

new text begin (a) "Qualifying film production" means a motion picture that is certified by the
Minnesota Film and TV Board as made wholly in Minnesota.
new text end

new text begin (b) "Qualified investment" means an amount of cash used to pay qualified production
expenses that is provided by an investor who does not have any financial interest in the
motion picture or the production company responsible for filming the motion picture.
new text end

new text begin (c) "Motion picture" means a feature length film, whether shot on film or digital
video, or a television series with a national distribution agreement, for theatrical or
television viewing or as a television pilot, but does not include television coverage of
news and athletic events.
new text end

new text begin (d) "Qualified production expenses" means preproduction, production, and
postproduction expenditures incurred in Minnesota that are directly used in a qualifying
film production, including, without limitation, set construction and operation; wardrobes,
make-up, accessories, and related services; costs associated with photography and sound
synchronization, lighting, and related services and materials; editing and related services;
rental of facilities and equipment; leasing of vehicles; costs of food and lodging; digital or
tape editing, film processing, transfer of film to tape or digital format, sound mixing, and
special and visual effects; total aggregate payroll; and music, if performed, composed, or
recorded by a Minnesota musician or released or published by a Minnesota-domiciled
and headquartered company. The following are not included: (1) postproduction costs for
marketing and distribution; (2) any amounts that are later reimbursed; (3) any costs related
to the transfer of credits; and (4) any amounts paid to persons or entities as a result of their
participation in profits from the exploitation of the production.
new text end

new text begin Subd. 3. new text end

new text begin Certification of credits. new text end

new text begin (a) Before making a qualified investment,
taxpayers must apply to the Minnesota Film and TV Board for a film production investment
credit certificate. The application must be in the form and made under the procedures
specified by the Minnesota Film and TV Board. The Minnesota Film and TV Board must
only issue credit certificates for qualifying investments in qualifying film productions.
new text end

new text begin (b) The Minnesota Film and TV Board may not issue certificates for more than
$5,000,000 in film production investment credits per year.
new text end

new text begin (c) By January 31 of each year, the Minnesota Film and TV Board must report to the
commissioner of revenue the number, amount, and taxpayers to whom film production
investment credit certificates were issued during the preceding taxable year, and must
provide verification that the taxpayers issued credit certificates made the full amount of
the investment required by the certificate.
new text end

new text begin Subd. 4. new text end

new text begin Carryover. new text end

new text begin The credit is limited to the liability for tax, as computed under
this chapter for the taxable year. If the amount of the credit determined under this section
for any taxable year exceeds this limitation, the excess is a film investment credit carryover
to each of the five succeeding taxable years. The entire amount of the excess unused credit
for the taxable year is carried first to the earliest of the taxable years to which the credit
may be carried and then to each successive year to which the credit may be carried. The
amount of the unused credit which may be added under this subdivision shall not exceed
the taxpayer's liability for tax, less the film investment credit for the taxable year.
new text end

new text begin Subd. 5. new text end

new text begin Transfers. new text end

new text begin After 180 days from the date of the qualified investment,
an individual or corporate taxpayer may transfer credits to another person or corporate
taxpayer who is subject to tax, and must notify the commissioner of revenue within 30
days of the transfer on the form prescribed by the commissioner. A person or corporate
taxpayer must not transfer a credit more than once in a 12-month period. A credit acquired
by transfer is subject to the limitations prescribed in this section. Any transfer of credits
does not affect the time schedule for claiming the credit.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2011.
new text end