2024 -- S 2959

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2024

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A N   A C T

RELATING TO TAXATION -- MOTION PICTURE PRODUCTION TAX CREDITS

     Introduced By: Senators Miller, and Ruggerio

     Date Introduced: April 05, 2024

     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:

     (1) 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-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) for pending projects 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; provided, however, on and after January 1, 2025, the credit shall not exceed ten million

dollars ($10,000,000). 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 pending feature-

length film or television series up to the remaining funds available pursuant to section (e)

subsections (e) through (h) of this section, and after January 1, 2025, may issue a waiver of the ten

million dollars ($10,000,000) tax credit cap up to the remaining funds available pursuant to

subsection (h) of this section. Beginning in tax year 2026, the credit shall not exceed fifteen million

dollars ($15,000,000) 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 fifteen

million dollars ($15,000,000) tax credit cap for any feature-length film or television series up to

the remaining funds available pursuant to subsection (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.

     (f) Exclusively for tax year 2022, the total amount of motion picture tax credits issued

pursuant to this section and/or musical and theatrical production tax credits pursuant to chapter 31.3

of this title shall not exceed thirty million dollars ($30,000,000).

     (g) Exclusively for tax year 2023 and tax year 2024, the total amount of motion picture tax

credits issued pursuant to this section and/or musical and theatrical production tax credits pursuant

to chapter 31.3 of this title shall not exceed forty million dollars ($40,000,000).

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     (h) Beginning in tax year 2025, the total amount of motion picture tax credits issued

pursuant to this section and/or musical and theatrical production tax credits pursuant to chapter 31.3

of this title shall not exceed forty million dollars ($40,000,000). Beginning in tax year 2026, the

total amount of motion picture tax credits issued pursuant to this section and/or musical and

theatrical production tax credits pursuant to chapter 31.3 of this title shall not exceed fifty million

dollars ($50,000,000).

     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, 2027, unless the production has received initial

certification under § 44-31.2-6(a) prior to July 1, 2027.

     SECTION 3. This act shall take effect on January 1, 2025.

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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 increase the motion picture tax credit to ten million dollars ($10,000,000)

for calendar year 2025 and then to fifteen million dollars ($15,000,000) for calendar year 2026.

This act would also increase the total available credits to forty million dollars ($40,000,000) for

calendar year 2025 and fifty million dollars ($50,000,000) for calendar year 2026. This act would

also eliminate the sunset provision.

     This act would take effect on January 1, 2025.

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