General Assembly: 82 (2007 Regular GA) - Chapter 162 - Film, television, and video project promotion program


Published: 2007-05-17

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477 LAWS OF THE EIGHTY-SECOND G.A., 2007 SESSION CH. 162

CH. 162CH. 162

CHAPTER 162

FILM, TELEVISION, AND VIDEO PROJECT PROMOTION PROGRAM

H.F. 892

ANACT creating a film, television, and video project promotion program, providing tax cred- its and income exclusions, and including effective and retroactive applicability dates.

Be It Enacted by the General Assembly of the State of Iowa:

Section 1. NEW SECTION. 15.391 SHORT TITLE. This part shall be known as the “Film, Television, and Video Project Promotion Program”.

Sec. 2. NEW SECTION. 15.392 PURPOSE. The purpose of the film, television, and video project promotion program is to assist legiti-

mate film, television, and video producers in the production of film, television, and video proj- ects in the state and to increase the fiscal impact on the state’s economy of film, television, and video projects produced in the state. The program includes assistance in the production of ad- vertising projects in a film, television, or video medium.

Sec. 3. NEW SECTION. 15.393 FILM, TELEVISION, AND VIDEO PROJECT PROMO- TION PROGRAM — TAX CREDITS AND EXCLUSION. 1. The department shall establish and administer a film, television, and video project

promotion program that provides for the registration of projects to be shot on location in the state. A project that is registered under the program is entitled to the assistance provided in subsection 2. A fee shall not be charged for registering. The department shall not register a project unless the department determines that all of the following are met: a. The project is a legitimate effort to produce an entire film, television, or video episode or

a film, television, or video segment in the state. b. The projectwill include expenditures of at least onehundred thousanddollars in the state

and have an economic impact on the economy of the state or locality sufficient to justify assis- tance under the program. c. The project will further tourism, economic development, and population retention or

growth in the state or locality. d. Other criteria established by rule relating to the economic impact and promotional as-

pects of the project on the state or locality. 2. A project registered with the department under the program is eligible for the following

assistance: a. (1) For tax years beginning on or after January 1, 2007, a qualified expenditure tax credit

shall be allowedagainst the taxes imposed in chapter 422, divisions II, III, andV, and in chapter 432, and against the moneys and credits tax imposed in section 533.24, for a portion of a tax- payer’s qualified expenditures in a project registered under the program. The tax credit shall equal twenty-five percent of the qualified expenditures on a project. An individual may claim a tax credit under this paragraph “a” of a partnership, limited liability company, S corporation, estate, or trust electing to have income taxed directly to the individual. The amount claimed by the individual shall be based upon the pro rata share of the individual’s earnings from the partnership, limited liability company, S corporation, estate, or trust. Any tax credit in excess of the taxpayer’s liability for the tax year may be credited to the tax liability for the following five years or until depleted, whichever is earlier. A tax credit shall not be carried back to a tax year prior to the tax year in which the taxpayer claims the tax credit. (2) A qualified expenditure by a taxpayer is a payment to an Iowa resident or an Iowa-based

business for the sale, rental, or furnishing of tangible personal property or for services directly related to the registered project including but not limited to aircraft, vehicles, equipment, ma- terials, supplies, accounting, animals and animal care, artistic and design services, graphics,1

construction, data and information services, delivery and pickup services, graphics, labor and

___________________

1 The term “graphics” is listed twice in this sentence in the enrolled Act

478LAWS OF THE EIGHTY-SECOND G.A., 2007 SESSIONCH. 162

personnel, lighting, makeup and hairdressing, film, music, photography, sound, video and re- lated services, printing, research, site fees and rental, travel related to Iowa distant locations, trash removal and cleanup, and wardrobe. For the purposes of this subparagraph, “labor and personnel” does not include the director, producers, or cast members other than extras and stand-ins. Thedepartment of revenue, in consultationwith the department of economic devel- opment, shall by rule establish a list of eligible expenditures. (3) After verifying the eligibility for a tax credit under this paragraph “a”, the department

of economic development shall issue a film, television, and video project promotion program tax credit certificate to be attached to the person’s tax return. The tax credit certificate shall contain the taxpayer’s name, address, tax identification number, the date of project comple- tion, the amount of credit, other information required by the department of revenue, and a place for the name and tax identification number of a transferee and the amount of the tax credit being transferred. Tax credit certificates issued under this paragraph “a”may be trans- ferred to any person or entity. Within ninety days of transfer, the transferee shall submit the transferred tax credit certificate to the department of revenue alongwith a statement contain- ing the transferee’s name, tax identification number, and address, and the denomination that each replacement tax credit certificate is to carry and any other information required by the department of revenue. Within thirty days of receiving the transferred tax credit certificate and the transferee’s statement, thedepartment of revenue shall issue oneormore replacement tax credit certificates to the transferee. Each replacement tax credit certificate must contain the information required for the original tax credit certificate andmust have the same expira- tion date that appeared in the transferred tax credit certificate. Tax credit certificate amounts of less than theminimum amount established by rule of the department of economic develop- ment shall not be transferable. A tax credit shall not be claimedbya transfereeunder thispara- graph “a” until a replacement tax credit certificate identifying the transferee as the proper holder has been issued. The transferee may use the amount of the tax credit transferred against the taxes imposed in chapter 422,divisions II, III, andV, and in chapter 432, andagainst the moneys and credits tax imposed in section 533.24, for any tax year the original transferor could have claimed the tax credit. Any consideration received for the transfer of the tax credit shall not be included as income under chapter 422, divisions II, III, and V, under chapter 432, or against the moneys and credits tax imposed in section 533.24. Any consideration paid for the transfer of the tax credit shall not be deducted from income under chapter 422, divisions II, III, and V, under chapter 432, or against the moneys and credits tax imposed in section 533.24. (4) A taxpayer claiming a tax credit under this paragraph “a”, a business in which such tax-

payer has an equity interest, and a business inwhich such taxpayer participates in itsmanage- ment is not eligible to receive the adjusted gross income reduction under paragraph “c”. b. (1) For tax years beginning on or after January 1, 2007, an investment tax credit shall be

allowed against the taxes imposed in chapter 422, divisions II, III, and V, and in chapter 432, and against themoneys and credits tax imposed in section 533.24, for a portion of a taxpayer’s investment in a project registered under the program. The tax credit shall equal twenty-five percent of the investment in the project. An individual may claim a tax credit under this para- graph of a partnership, limited liability company, S corporation, estate, or trust electing to have income taxed directly to the individual. The amount claimed by the individual shall be based upon the pro rata share of the individual’s earnings from the partnership, limited liabili- ty company, S corporation, estate, or trust. Any tax credit in excess of the taxpayer’s liability for the tax yearmay be credited to the tax liability for the following five years or until depleted, whichever is earlier. A tax credit shall not be carried back to a tax year prior to the tax year in which the taxpayer claims the tax credit. A taxpayer shall not claim a tax credit under this paragraph “b” for qualified expenditures forwhicha tax credit is claimedunder paragraph “a”. (2) After verifying the eligibility for a tax credit under this paragraph “b”, the department

of economic development shall issue a film, television, and video project promotion program tax credit certificate to be attached to the person’s tax return. The tax credit certificate shall contain the taxpayer’s name, address, tax identification number, the date of project comple-

479 LAWS OF THE EIGHTY-SECOND G.A., 2007 SESSION CH. 162

tion, the amount of credit, other information required by the department of revenue, and a place for the name and tax identification number of a transferee and the amount of the tax credit being transferred. Tax credit certificates issued under this paragraph “b”may be trans- ferred to any person or entity. Within ninety days of transfer, the transferee shall submit the transferred tax credit certificate to the department of revenue alongwith a statement contain- ing the transferee’s name, tax identification number, and address, and the denomination that each replacement tax credit certificate is to carry and any other information required by the department of revenue. Within thirty days of receiving the transferred tax credit certificate and the transferee’s statement, thedepartment of revenue shall issue oneormore replacement tax credit certificates to the transferee. Each replacement tax credit certificate must contain the information required for the original tax credit certificate andmust have the same expira- tion date that appeared in the transferred tax credit certificate. Tax credit certificate amounts of less than theminimum amount established by rule of the department of economic develop- ment shall not be transferable. A tax credit shall not be claimedbya transfereeunder thispara- graph “b” until a replacement tax credit certificate identifying the transferee as the proper holder has been issued. The transferee may use the amount of the tax credit transferred against the taxes imposed in chapter 422,divisions II, III, andV, and in chapter 432, andagainst the moneys and credits tax imposed in section 533.24, for any tax year the original transferor could have claimed the tax credit. Any consideration received for the transfer of the tax credit shall not be included as income under chapter 422, divisions II, III, and V, under chapter 432, or against the moneys and credits tax imposed in section 533.24. Any consideration paid for the transfer of the tax credit shall not be deducted from income under chapter 422, divisions II, III, and V, under chapter 432, or against the moneys and credits tax imposed in section 533.24. c. For tax years beginning on or after January 1, 2007, a reduction in adjusted gross income

for purposes of taxes imposed in chapter 422, divisions II and III, for payments received from the sale, rental, or furnishing of tangible personal property or services directly related to the production of a project registered under this section whichmeets the criteria of a qualified ex- penditure under paragraph “a”, subparagraph (2). 3. The department shall promote the program and the assistance available under the pro-

gram on an internet website. 4. A project that depicts or describes any obscenematerial, as defined in section 728.1, shall

not be eligible to receive assistance under this section.

Sec. 4. Section 422.7, Code 2007, is amended by adding the following new subsection: NEW SUBSECTION. 50. Subtract, to the extent included, an amount equal to any income

received from the sale, rental, or furnishing of tangible personal property or services directly related to the production of a project registered under section 15.393 whichmeets the criteria of a qualified expenditure under section 15.393, subsection 2, paragraph “a”, subparagraph (2).

Sec. 5. NEW SECTION. 422.11T FILM QUALIFIED EXPENDITURE TAX CREDIT. The taxes imposed under this division, less the credits allowed under sections 422.12 and

422.12B, shall be reduced by a qualified expenditure tax credit authorized pursuant to section 15.393, subsection 2, paragraph “a”.

Sec. 6. NEW SECTION. 422.11U FILM INVESTMENT TAX CREDIT. The taxes imposed under this division, less the credits allowed under sections 422.12 and

422.12B, shall be reduced by an investment tax credit authorized pursuant to section 15.393, subsection 2, paragraph “b”.

Sec. 7. Section 422.33, Code 2007, is amended by adding the following new subsections: NEWSUBSECTION. 24. The taxes imposed under this division shall be reduced by a quali-

fied expenditure tax credit authorized pursuant to section 15.393, subsection 2, paragraph “a”.

480LAWS OF THE EIGHTY-SECOND G.A., 2007 SESSIONCH. 162

NEW SUBSECTION. 25. The taxes imposed under this division shall be reduced by an in- vestment tax credit authorized pursuant to section 15.393, subsection 2, paragraph “b”.

Sec. 8. Section 422.35, Code 2007, is amended by adding the following new subsection: NEW SUBSECTION. 23. Subtract, to the extent included, an amount equal to any income

received from the sale, rental, or furnishing of tangible personal property or services directly related to the production of a project registered under section 15.393 whichmeets the criteria of a qualified expenditure under section 15.393, subsection 2, paragraph “a”, subparagraph (2).

Sec. 9. Section 422.60, Code 2007, is amended by adding the following new subsections: NEWSUBSECTION. 13. The taxes imposed under this division shall be reduced by a quali-

fied expenditure tax credit authorized pursuant to section 15.393, subsection 2, paragraph “a”. NEW SUBSECTION. 14. The taxes imposed under this division shall be reduced by an in-

vestment tax credit authorized pursuant to section 15.393, subsection 2, paragraph “b”.

Sec. 10. NEW SECTION. 432.12J FILM QUALIFIED EXPENDITURE TAX CREDIT. The tax imposed under this chapter shall be reduced by a qualified expenditure tax credit

authorized pursuant to section 15.393, subsection 2, paragraph “a”.

Sec. 11. NEW SECTION. 432.12K FILM INVESTMENT TAX CREDIT. The tax imposed under this chapter shall be reduced by an investment tax credit authorized

pursuant to section 15.393, subsection 2, paragraph “b”.

Sec. 12. Section 533.24, Code 2007, is amended by adding the following new subsections: NEW SUBSECTION. 11. The moneys and credits tax imposed under this section shall be

reduced by a qualified expenditure tax credit authorized pursuant to section 15.393, subsec- tion 2, paragraph “a”. NEW SUBSECTION. 12. The moneys and credits tax imposed under this section shall be

reduced by an investment tax credit authorized pursuant to section 15.393, subsection 2, para- graph “b”.

Sec. 13. EFFECTIVE AND RETROACTIVE APPLICABILITY DATES. This Act, being deemed of immediate importance, takes effect upon enactment and is retroactively applicable to January 1, 2007, for tax years beginning on and after that date.

Approved May 17, 2007