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:

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

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

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

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

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

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

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

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

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

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

pursuant to § 44-31.2-6(c).

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

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

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

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

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

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

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

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

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

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

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

earned.

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

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

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

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

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

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

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

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

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

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

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

amount shall be set aside for either type of production.

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

"Motion Picture Production Tax Credits" is hereby repealed.

     44-31.2-11. Sunset.

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

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

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

and Theatrical Production Tax Credits" is hereby repealed.

     44-31.3-4. Sunset.

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

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

     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

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

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

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

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

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

     This act would take effect upon passage.

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