Bill Text: IL HB3736 | 2021-2022 | 102nd General Assembly | Introduced

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Bill Title: Amends the Illinois Income Tax Act. Provides that the live theater production credit applies for tax years beginning prior to January 1, 2029 (currently, January 1, 2022). Amends the Live Theater Production Tax Credit Act. Includes commercial Broadway touring productions in the list of accredited productions. Increases the maximum aggregate credit amount from $2,000,000 per fiscal year to $4,000,000 per fiscal year. Provides that, beginning in State fiscal year 2021, $2,000,000 of the $4,000,000 cap shall be reserved for applicants that are operators of qualified production facilities solely in connection with the presentation of commercial Broadway touring shows. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2021-03-27 - Rule 19(a) / Re-referred to Rules Committee [HB3736 Detail]

Download: Illinois-2021-HB3736-Introduced.html

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102ND GENERAL ASSEMBLY State of Illinois 2021 and 2022 HB3736 Introduced , by Rep. Marcus C. Evans, Jr. SYNOPSIS AS INTRODUCED:
35 ILCS 5/222
35 ILCS 17/10-10
35 ILCS 17/10-20
Amends the Illinois Income Tax Act. Provides that the live theater production credit applies for tax years beginning prior to January 1, 2029 (currently, January 1, 2022). Amends the Live Theater Production Tax Credit Act. Includes commercial Broadway touring productions in the list of accredited productions. Increases the maximum aggregate credit amount from $2,000,000 per fiscal year to $4,000,000 per fiscal year. Provides that, beginning in State fiscal year 2021, $2,000,000 of the $4,000,000 cap shall be reserved for applicants that are operators of qualified production facilities solely in connection with the presentation of commercial Broadway touring shows. Effective immediately.
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A BILL FOR
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AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Income Tax Act is amended by
changing Section 222 as follows:
(35 ILCS 5/222)
Sec. 222. Live theater production credit.
(a) For tax years beginning on or after January 1, 2012 and
beginning prior to January 1, 2029 January 1, 2022, a taxpayer
who has received a tax credit award under the Live Theater
Production Tax Credit Act is entitled to a credit against the
taxes imposed under subsections (a) and (b) of Section 201 of
this Act in an amount determined under that Act by the
Department of Commerce and Economic Opportunity.
(b) If the taxpayer is a partnership, limited liability
partnership, limited liability company, or Subchapter S
corporation, the tax credit award is allowed to the partners,
unit holders, or shareholders in accordance with the
determination of income and distributive share of income under
Sections 702 and 704 and Subchapter S of the Internal Revenue
Code.
(c) A sale, assignment, or transfer of the tax credit
award may be made by the taxpayer earning the credit within one

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year after the credit is awarded in accordance with rules
adopted by the Department of Commerce and Economic
Opportunity.
(d) The Department of Revenue, in cooperation with the
Department of Commerce and Economic Opportunity, shall adopt
rules to enforce and administer the provisions of this
Section.
(e) The tax credit award may not be carried back. If the
amount of the credit exceeds the tax liability for the year,
the excess may be carried forward and applied to the tax
liability of the 5 tax years following the excess credit year.
The tax credit award shall be applied to the earliest year for
which there is a tax liability. If there are credits from more
than one tax year that are available to offset liability, the
earlier credit shall be applied first. In no event may a credit
under this Section reduce the taxpayer's liability to less
than zero.
(Source: P.A. 100-415, eff. 1-1-18.)
Section 10. The Live Theater Production Tax Credit Act is
amended by changing Sections 10-10 and 10-20 as follows:
(35 ILCS 17/10-10)
Sec. 10-10. Definitions. As used in this Act:
"Accredited theater production" means a for-profit live
stage presentation in a qualified production facility, as

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defined in this Section, that is either (i) a pre-Broadway
production, or (ii) a long-run production for which the
aggregate Illinois labor and marketing expenditures exceed
$100,000, or (iii) a commercial Broadway touring show.
"Commercial Broadway touring show" means a production
playing in 3 or more markets across North America and
recognized as a commercial Broadway touring show by the
Broadway League, the national trade association for the
Broadway industry.
"Pre-Broadway production" means a live stage production
that, in its original or adaptive version, is performed in a
qualified production facility having a presentation scheduled
for Broadway's Theater District in New York City within 12
months after its Illinois presentation.
"Long-run production" means a live stage production that
is performed in a qualified production facility for longer
than 8 weeks, with at least 6 performances per week, and
includes a production that spans the end of one tax year and
the commencement of a new tax year that, in combination, meets
the criteria set forth in this definition making it a long-run
production eligible for a theater tax credit award in each tax
year or portion thereof.
"Accredited theater production certificate" means a
certificate issued by the Department certifying that the
production is an accredited theater production that meets the
guidelines of this Act.

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"Applicant" means a taxpayer that is a theater producer,
owner, licensee, operator, or presenter that is presenting or
has presented a live stage presentation located within the
State of Illinois who:
(1) owns or licenses the theatrical rights of the
stage presentation for the Illinois production period; or
(2) has contracted or will contract directly with the
owner or licensee of the theatrical rights or a person
acting on behalf of the owner or licensee to provide live
performances of the production.
An applicant that directly or indirectly owns, controls,
or operates multiple qualified production facilities shall be
presumed to be and considered for the purposes of this Act to
be a single applicant; provided, however, that as to each of
the applicant's qualified production facilities, the applicant
shall be eligible to separately and contemporaneously (i)
apply for and obtain accredited theater production
certificates, (ii) stage accredited theater productions, and
(iii) apply for and receive a tax credit award certificate for
each of the applicant's accredited theater productions
performed at each of the applicant's qualified production
facilities.
"Department" means the Department of Commerce and Economic
Opportunity.
"Director" means the Director of the Department.
"Illinois labor expenditure" means gross salary or wages

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including, but not limited to, taxes, benefits, and any other
consideration incurred or paid to non-talent employees of the
applicant for services rendered to and on behalf of the
accredited theater production. To qualify as an Illinois labor
expenditure, the expenditure must be:
(1) incurred or paid by the applicant on or after the
effective date of the Act for services related to any
portion of an accredited theater production from its
pre-production stages, including, but not limited to, the
writing of the script, casting, hiring of service
providers, purchases from vendors, marketing, advertising,
public relations, load in, rehearsals, performances, other
accredited theater production related activities, and load
out;
(2) directly attributable to the accredited theater
production;
(3) limited to the first $100,000 of wages incurred or
paid to each employee of an accredited theater production
in each tax year;
(4) included in the federal income tax basis of the
property;
(5) paid in the tax year for which the applicant is
claiming the tax credit award, or no later than 60 days
after the end of the tax year;
(6) paid to persons residing in Illinois at the time
payments were made; and

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(7) reasonable in the circumstances.
"Illinois production spending" means any and all expenses
directly or indirectly incurred relating to an accredited
theater production presented in any qualified production
facility of the applicant, including, but not limited to,
expenditures for:
(1) national marketing, public relations, and the
creation and placement of print, electronic, television,
billboard, and other forms of advertising; and
(2) the construction and fabrication of scenic
materials and elements; provided, however, that the
maximum amount of expenditures attributable to the
construction and fabrication of scenic materials and
elements eligible for a tax credit award shall not exceed
$500,000 per applicant per production in any single tax
year.
"Qualified production facility" means a facility located
in the State in which live theatrical productions are, or are
intended to be, exclusively presented that contains at least
one stage, a seating capacity of 1,200 or more seats, and
dressing rooms, storage areas, and other ancillary amenities
necessary for the accredited theater production.
"Tax credit award" means the issuance to a taxpayer by the
Department of a tax credit award in conformance with Sections
10-40 and 10-45 of this Act.
"Tax year" means a calendar year for the period January 1

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to and including December 31.
(Source: P.A. 97-636, eff. 6-1-12.)
(35 ILCS 17/10-20)
Sec. 10-20. Tax credit award. Subject to the conditions
set forth in this Act, an applicant is entitled to a tax credit
award as approved by the Department for qualifying Illinois
labor expenditures and Illinois production spending for each
tax year in which the applicant is awarded an accredited
theater production certificate issued by the Department. The
amount of tax credits awarded pursuant to this Act shall not
exceed (i) $2,000,000 in any fiscal year prior to State fiscal
year 2021 and (ii) $4,000,000 per fiscal year beginning in
State fiscal year 2021; provided, however, that beginning in
State fiscal year 2021, $2,000,000 of the $4,000,000 cap shall
be reserved for applicants that are operators of qualified
production facilities solely in connection with the
presentation of commercial Broadway touring shows. Credits
shall be awarded on a first-come, first-served basis.
Notwithstanding the foregoing, if the amount of credits
applied for in any fiscal year exceeds the amount authorized
to be awarded under this Section, the excess credit amount
shall be awarded in the next fiscal year in which credits
remain available for award and shall be treated as having been
applied for on the first day of that fiscal year.
(Source: P.A. 97-636, eff. 6-1-12.)

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Section 99. Effective date. This Act takes effect upon
becoming law.