Introduced by Committee on Economic Development, Housing and General Affairs
Subject: Economic development; taxation; motion picture production tax credit
Statement of purpose: This bill proposes to establish a tax credit to stimulate the motion picture industry in Vermont.
AN ACT RELATING TO MOTION PICTURE TAX CREDIT
It is hereby enacted by the General Assembly of the State of Vermont:
Sec. 1. 32 V.S.A. § 5930z is added to read:
§ 5930z. MOTION PICTURE TAX CREDIT
(a) For the purposes of this section:
(1) “Commission” means the Vermont film commission.
(2) “Eligible expense” means preproduction, production, and postproduction expenditures directly incurred in Vermont by an eligible production company for the production of a qualified motion picture. This term includes wages and salaries paid to individuals employed in Vermont in the production of the motion picture, but does not include wages or salaries in excess of $1,000,000.00 for any one individual for any one motion picture; and includes expenditures for the following activities: set construction and operation, editing and related services, photography, sound synchronization, lighting, wardrobe, make-up, and accessories, film processing, transfer, mixing, special and visual effects, music, screenplay purchase, location fees, purchase or rental of facilities and equipment, or any other production expense incurred in Vermont that may be determined by the commission to be an eligible expense. This term does not include expenses incurred for marketing or advertising a motion picture or any amounts paid to persons as a result of their participation in profits from the exploitation of the production.
(3) “Eligible production company” means a company, including its subsidiaries, engaged in the business of producing qualified motion pictures; but shall not include any company which is in default, or which is affiliated with, or owned or controlled, in whole or in part, by any person in default, on taxes owed to the state or on a loan made or guaranteed by the state.
(4) “Qualified motion picture” means a feature-length film, video, video game, television series of 22 or more episodes, pilot, video on demand, or commercial made in whole or in part in Vermont, for commercial distribution, theatrical or television viewing, or mobile or wireless platforms. “Qualified motion picture” does not mean a television production featuring news, current events, weather, financial market reports, a sporting event, an award show, a production solely for fundraising, a long-form production primarily intended to market a product or service, or a production containing obscene material.
(5) “Secretary” means the secretary of the agency of commerce and community development.
(6) “State-certified production” means a qualified motion picture certified by the Vermont film commission, pursuant to rules adopted by the commission, and produced by an eligible production company that has signed a viable distribution plan with either a major theatrical exhibitor, a television network, or a cable television program.
(b) Motion picture tax credit. An eligible production company shall be allowed a refundable credit against the income tax imposed under this chapter in the amount of 25 percent of the eligible expenses not to exceed $7,000,000.00 incurred within the state in the taxable year and related to a state-certified production with a total production budget of at least $1,000,000.00, as certified by the secretary. If the eligible production company is a partnership, limited liability company, or S corporation, the credit amount under this section shall be allocated ratably among the owners of the entity.
(c) A film production company allowed a credit under this section shall acknowledge the state of Vermont in the end credits of the film production.
(d) The director of the commission shall determine by rule criteria for
(e) Upon completion of a state-certified production, the secretary shall review the production expenses and certify the amount of expenses qualified for credit under this section.
(f) Any taxpayer applying for the credit shall reimburse the secretary for any audit the secretary determines is required to certify the credit.
Sec. 2. EFFECTIVE DATE
This act shall take effect upon passage and shall apply to any production commenced on or after October 1, 2005 that may be certified by the Vermont film commission.
The Vermont General Assembly
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