Virginia SB 251: Content manufacturing tax credit; removes sunset for the motion picture credit, redesignates credit.

Bill Text

2024SESSION
INTRODUCED
24101615D
1 SENATEBILLNO.251
2 OfferedJanuary10,2024
3 PrefiledJanuary9,2024
4 A BILL to amend and reenact § 58.1-439.12:03 of the Code of Virginia, relating to content
5 manufacturing tax credit.
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Patrons––Hashmi,Craig,BagbyandPillion
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8 ReferredtoCommitteeonFinanceandAppropriations
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10 Be it enacted by the General Assembly of Virginia:
11 1. That §58.1-439.12:03 of the Code of Virginia is amended and reenacted as follows:
12 §58.1-439.12:03. Content manufacturing tax credit.
13 A. For the purposes of this section:
14 "Eligible project" means the production of a motion picture or an episodic television series. "Eligible
15 project" does not include any production that (i) is political advertising, (ii) is a television production of
16 a news program or live sporting event, (iii) contains obscene material, or (iv) is a reality television
17 production.
18 "Episodic television series" means a television program consisting of multiple episodes of a single
19 season. In the case of an episodic television series, an entire season of episodes shall be deemed to be
20 one production.
21 "Physical production infrastructure" means buildings, facilities, and equipment located in the
22 Commonwealth and necessary for the production of eligible projects.
23 "Qualifying expenses" means the sum of the following amounts spent in the Commonwealth by a
24 production company in connection with the production of an eligible project produced in the
25 Commonwealth:
26 1. Goods and services leased or purchased. For goods with a purchase price of $25,000 or more,
27 the amount included in qualifying expenses is the purchase price less the fair market value of the good
28 at the time the production is completed; and
29 2. Compensation and wages, except in the case of each individual who directly or indirectly receives
30 compensation in excess of $1 million for personal services with respect to a single production. In such a
31 case, only the first $1 million of salary shall be considered a qualifying expense. An individual is
32 deemed to receive compensation indirectly when a production company pays a personal service company
33 or an employee leasing company that pays the individual.
34 "Qualifying expenses" does not include any expenses that were exempt from retail sales and use tax
35 pursuant to the provisions of Chapter 6 (§ 58.1-600 et seq.); however, if a taxpayer accrued such
36 expenses at least one year prior to entering into a memorandum of understanding with the Virginia
37 Tourism Authority pursuant to the provisions of subdivision C 3 and such expenses were exempt from
38 retail sales and use tax, such expenses may be counted as qualifying expenses.
39 B. 1. For taxable years beginning on and after January 1, 2011, but prior to January 1, 2027, any
40 motion picture production company with qualifying expenses of at least $250,000 with respect to a
41 motion picture production filmed in Virginia shall be allowed a refundable credit against the taxes
42 imposed by § 58.1-320 or 58.1-400 in an amount equal to 15 percent of the production company's
43 qualifying expenses or 20 percent of such expenses if the production is filmed in an economically
44 distressed area of the Commonwealth. The Virginia Economic Development Partnership Authority shall
45 designate which areas of the Commonwealth are deemed to be economically distressed areas. The credit
46 shall be computed based on all of the taxpayer's qualifying expenses incurred with respect to the
47 production, not just the qualifying expenses incurred during the taxable year. The refundable tax credits
48 allowed under this section are for one tax year only. Where a motion picture production continues for
49 more than one year, a separate application for each tax year the production continues must be made. The
50 grant of a refundable tax credit for a motion picture film production does not create a presumption that
51 the production will receive a refundable tax credit for subsequent tax years. Effective on January 1,
52 2013, for purposes of eligibility for refundable tax credits, a motion picture film production shall include
53 digital interactive media production.
54 "Qualifying expenses" means the sum of the following amounts spent in the Commonwealth by a
55 production company in connection with the production of a motion picture filmed in the
56 Commonwealth:
57 1. Goods and services leased or purchased. For goods with a purchase price of $25,000 or more, the
58 amount included in qualifying expenses is the purchase price less the fair market value of the good at
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59 the time the production is completed.
60 2. Compensation and wages, except in the case of each individual who directly or indirectly receives
61 compensation in excess of $1 million for personal services with respect to a single production. In such a
62 case, only the first $1 million of salary s