2020 -- H 7501

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2020

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A N   A C T

RELATING TO TAXATION -- STUDENT LOAN TAX CREDIT

     Introduced By: Representatives Nardone, Chippendale, Quattrocchi, Price, and Roberts

     Date Introduced: February 07, 2020

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 44 of the General Laws entitled "TAXATION" is hereby amended by

adding thereto the following chapter:

CHAPTER 70

STUDENT LOAN TAX CREDIT ACT

     44-70-1. Short title.

     This chapter shall be known and may be cited as the "Student Loan Tax Credit Act".

     44-70-2. Tax credit.

     A taxpayer that is a resident of the state, and obligated for a student loan that is non-

dischargeable in bankruptcy, attending a college, university, or other post-secondary school

within the state, and working within the state, shall be allowed a tax credit up to one thousand

dollars ($1,000).

     44-70-3. Qualification of tax credit.

     (a) The taxpayer shall apply to the division of taxation between January 1 and April 15 of

the prior tax year, and the division of taxation shall issue a tax voucher, not to exceed one

thousand dollars ($1,000), to be filed with the taxpayer’s state income tax return for the following

tax year following the application.

      (b) The taxpayer, when applying for the tax credit in accordance with subsection (a) of

this section, shall submit documentation showing the taxpayer payments to the lender of the

applicable student loan.

     (c) The approved tax credit shall be paid directly to the taxpayer's lender. The division of

taxation shall make available suitable forms with instructions for claiming the credit.

     40-70-4. Implementation of tax credit.

     The motion picture production tax credits pursuant to chapter 31.2 of title 44, shall be

reduced in order to provide the student loan tax credit in accordance with this chapter. In the

event the amount of tax credits allocated to chapter 31.2 of title 44, is reduced, for any tax year,

the amount of tax credits available for the student loan tax credit pursuant to this chapter shall be

reduced on a prorata basis.

     40-70-5. Administration.

     The division of taxation shall promulgate rules and regulations as may be necessary to

implement the provisions of this chapter.

     SECTION 2. 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) of this section, 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) of this section.

     (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

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) in total may be issued for any tax

year beginning after December 31, 2007, 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. After

December 31, 2019, no more than twenty million dollars ($20,000,000) in total may be issued for

any tax year for motion picture tax credits pursuant to this chapter and/or musical and theater

production tax credits pursuant to chapter 31.3 of this title. After December 31, 2021, any tax

credit issued pursuant to this chapter shall be reduced to allow for the issuance of tax credits by

the division of taxation in accordance with chapter 70 of title 44. 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 3. This act shall take effect on January 1, 2021.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION -- STUDENT LOAN TAX CREDIT

***

     This act would allow for a tax credit up to one thousand dollars ($1,000) for any resident

of the state that is obligated for a student loan which is non-dischargeable in bankruptcy, who is

attending a college, university, or other post-secondary school in the state, and working within the

state.

     This act would take effect on January 1, 2021.

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