2019 -- S 0288

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LC001369

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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A N   A C T

RELATING TO TAXATION - MOTION PICTURE PRODUCTION TAX CREDITS

     

     Introduced By: Senator Joshua Miller

     Date Introduced: February 13, 2019

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 44-31.2-5 of the General Laws in Chapter 44-31.2 entitled "Motion

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Picture Production Tax Credits" is hereby amended to read as follows:

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     44-31.2-5. Motion picture production company tax credit.

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     (a) A motion picture production company shall be allowed a credit to be computed as

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provided in this chapter against a tax imposed by chapters 11, 14, 17, and 30 of this title. The

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amount of the credit shall be thirty percent (30%) of the state certified production costs incurred

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directly attributable to activity within the state, provided that the primary locations are within the

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state of Rhode Island and the total production budget as defined herein is a minimum of one

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hundred thousand dollars ($100,000). The credit shall be earned in the taxable year in which

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production in Rhode Island is completed, as determined by the film office in final certification

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pursuant to § 44-31.2-6(c).

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     (b) For the purposes of this section: "total production budget" means and includes the

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motion picture production company's pre-production, production, and post-production costs

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incurred for the production activities of the motion picture production company in Rhode Island

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in connection with the production of a state-certified production. The budget shall not include

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costs associated with the promotion or marketing of the film, video, or television product.

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     (c) Notwithstanding subsection (a), the credit shall not exceed seven million dollars

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($7,000,000) and shall be allowed against the tax for the taxable period in which the credit is

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earned and can be carried forward for not more than three (3) succeeding tax years. Pursuant to

 

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rules promulgated by the tax administrator, the administrator may issue a waiver of the seven

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million dollars ($7,000,000) tax credit cap for any feature-length film or television series up to

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the remaining funds available pursuant to section (e) from the taxable period in which the credit is

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earned.

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     (d) Credits allowed to a motion picture production company, which is a subchapter S

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corporation, partnership, or a limited-liability company that is taxed as a partnership, shall be

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passed through respectively to persons designated as partners, members, or owners on a pro rata

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basis or pursuant to an executed agreement among such persons designated as subchapter S

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corporation shareholders, partners, or members documenting an alternate distribution method

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without regard to their sharing of other tax or economic attributes of such entity.

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     (e) No more than fifteen million dollars ($15,000,000) twenty-five million dollars

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($25,000,000) in total may be issued for any tax year beginning after December 31, 2007

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December 31, 2019, for motion picture tax credits pursuant to this chapter and/or musical and

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theatrical production tax credits pursuant to chapter 31.3 of this title. Said credits shall be equally

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available to motion picture productions and musical and theatrical productions. No specific

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amount shall be set aside for either type of production.

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     SECTION 2. Section 44-31.2-11 of the General Laws in Chapter 44-31.2 entitled

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"Motion Picture Production Tax Credits" is hereby repealed.

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     44-31.2-11. Sunset.

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     No credits shall be issued on or after July 1, 2024, unless the production has received

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initial certification under § 44-31.2-6(a) prior to July 1, 2024.

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     SECTION 3. Section 44-31.3-4 of the General Laws in Chapter 44-31.3 entitled "Musical

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and Theatrical Production Tax Credits" is hereby repealed.

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     44-31.3-4. Sunset.

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     No credits shall be issued on or after July 1, 2019 unless the production has received

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initial certification under subsection 44-31.3-2(c) prior to July 1, 2019.

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     SECTION 4. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION - MOTION PICTURE PRODUCTION TAX CREDITS

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     This act would allow the motion picture production company tax credit to be carried

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forward for not more than three (3) succeeding tax years from the taxable period in which the

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credit is earned and would remove the seven million dollars ($7,000,000) limit. The act would

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increase the total credits that may be issued up to twenty-five million dollars ($25,000,000) for

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any tax year beginning after December 31, 2019, for motion picture tax credits pursuant to this

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chapter and/or musical and theatrical production tax credits pursuant to chapter 31.3 of this title.

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     This act would take effect upon passage.

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