Chapter 006

2020 -- S 2326 SUBSTITUTE A Enacted 03/17/2020

A N   A C T

RELATING TO TAXATION -- MOTION PICTURE PRODUCTION TAX CREDITS

Introduced By: Senators DiPalma, Miller, Ruggerio, Sosnowski, and Murray

Date Introduced: February 05, 2020

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:

(1) that 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).; or

(2) The motion picture production incurs and pays a minimum of ten million dollars

($10,000,000) in state-certified production costs within a twelve- (12) month (12) period.

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

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. 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. This act shall take effect upon passage.

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LC003974/SUB A

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