Illinois-2021-HB3736-Introduced

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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1 AN ACT concerning revenue.

2 Be it enacted by the People of the State of Illinois,

3 represented in the General Assembly:

4 Section 5. The Illinois Income Tax Act is amended by

5 changing Section 222 as follows:

6 (35 ILCS 5/222)

7 Sec. 222. Live theater production credit.

8 (a) For tax years beginning on or after January 1, 2012 and

9 beginning prior to January 1, 2029 ~~January 1, 2022~~, a taxpayer

10 who has received a tax credit award under the Live Theater

11 Production Tax Credit Act is entitled to a credit against the

12 taxes imposed under subsections (a) and (b) of Section 201 of

13 this Act in an amount determined under that Act by the

14 Department of Commerce and Economic Opportunity.

15 (b) If the taxpayer is a partnership, limited liability

16 partnership, limited liability company, or Subchapter S

17 corporation, the tax credit award is allowed to the partners,

18 unit holders, or shareholders in accordance with the

19 determination of income and distributive share of income under

20 Sections 702 and 704 and Subchapter S of the Internal Revenue

21 Code.

22 (c) A sale, assignment, or transfer of the tax credit

23 award may be made by the taxpayer earning the credit within one

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1 year after the credit is awarded in accordance with rules

2 adopted by the Department of Commerce and Economic

3 Opportunity.

4 (d) The Department of Revenue, in cooperation with the

5 Department of Commerce and Economic Opportunity, shall adopt

6 rules to enforce and administer the provisions of this

7 Section.

8 (e) The tax credit award may not be carried back. If the

9 amount of the credit exceeds the tax liability for the year,

10 the excess may be carried forward and applied to the tax

11 liability of the 5 tax years following the excess credit year.

12 The tax credit award shall be applied to the earliest year for

13 which there is a tax liability. If there are credits from more

14 than one tax year that are available to offset liability, the

15 earlier credit shall be applied first. In no event may a credit

16 under this Section reduce the taxpayer's liability to less

17 than zero.

18 (Source: P.A. 100-415, eff. 1-1-18.)

19 Section 10. The Live Theater Production Tax Credit Act is

20 amended by changing Sections 10-10 and 10-20 as follows:

21 (35 ILCS 17/10-10)

22 Sec. 10-10. Definitions. As used in this Act:

23 "Accredited theater production" means a for-profit live

24 stage presentation in a qualified production facility, as

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1 defined in this Section, that is either (i) a pre-Broadway

2 production, ~~or~~ (ii) a long-run production for which the

3 aggregate Illinois labor and marketing expenditures exceed

4 $100,000, or (iii) a commercial Broadway touring show.

5 "Commercial Broadway touring show" means a production

6 playing in 3 or more markets across North America and

7 recognized as a commercial Broadway touring show by the

8 Broadway League, the national trade association for the

9 Broadway industry.

10 "Pre-Broadway production" means a live stage production

11 that, in its original or adaptive version, is performed in a

12 qualified production facility having a presentation scheduled

13 for Broadway's Theater District in New York City within 12

14 months after its Illinois presentation.

15 "Long-run production" means a live stage production that

16 is performed in a qualified production facility for longer

17 than 8 weeks, with at least 6 performances per week, and

18 includes a production that spans the end of one tax year and

19 the commencement of a new tax year that, in combination, meets

20 the criteria set forth in this definition making it a long-run

21 production eligible for a theater tax credit award in each tax

22 year or portion thereof.

23 "Accredited theater production certificate" means a

24 certificate issued by the Department certifying that the

25 production is an accredited theater production that meets the

26 guidelines of this Act.

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1 "Applicant" means a taxpayer that is a theater producer,

2 owner, licensee, operator, or presenter that is presenting or

3 has presented a live stage presentation located within the

4 State of Illinois who:

5 (1) owns or licenses the theatrical rights of the

6 stage presentation for the Illinois production period; or

7 (2) has contracted or will contract directly with the

8 owner or licensee of the theatrical rights or a person

9 acting on behalf of the owner or licensee to provide live

10 performances of the production.

11 An applicant that directly or indirectly owns, controls,

12 or operates multiple qualified production facilities shall be

13 presumed to be and considered for the purposes of this Act to

14 be a single applicant; provided, however, that as to each of

15 the applicant's qualified production facilities, the applicant

16 shall be eligible to separately and contemporaneously (i)

17 apply for and obtain accredited theater production

18 certificates, (ii) stage accredited theater productions, and

19 (iii) apply for and receive a tax credit award certificate for

20 each of the applicant's accredited theater productions

21 performed at each of the applicant's qualified production

22 facilities.

23 "Department" means the Department of Commerce and Economic

24 Opportunity.

25 "Director" means the Director of the Department.

26 "Illinois labor expenditure" means gross salary or wages

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1 including, but not limited to, taxes, benefits, and any other

2 consideration incurred or paid to non-talent employees of the

3 applicant for services rendered to and on behalf of the

4 accredited theater production. To qualify as an Illinois labor

5 expenditure, the expenditure must be:

6 (1) incurred or paid by the applicant on or after the

7 effective date of the Act for services related to any

8 portion of an accredited theater production from its

9 pre-production stages, including, but not limited to, the

10 writing of the script, casting, hiring of service

11 providers, purchases from vendors, marketing, advertising,

12 public relations, load in, rehearsals, performances, other

13 accredited theater production related activities, and load

14 out;

15 (2) directly attributable to the accredited theater

16 production;

17 (3) limited to the first $100,000 of wages incurred or

18 paid to each employee of an accredited theater production

19 in each tax year;

20 (4) included in the federal income tax basis of the

21 property;

22 (5) paid in the tax year for which the applicant is

23 claiming the tax credit award, or no later than 60 days

24 after the end of the tax year;

25 (6) paid to persons residing in Illinois at the time

26 payments were made; and

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1 (7) reasonable in the circumstances.

2 "Illinois production spending" means any and all expenses

3 directly or indirectly incurred relating to an accredited

4 theater production presented in any qualified production

5 facility of the applicant, including, but not limited to,

6 expenditures for:

7 (1) national marketing, public relations, and the

8 creation and placement of print, electronic, television,

9 billboard, and other forms of advertising; and

10 (2) the construction and fabrication of scenic

11 materials and elements; provided, however, that the

12 maximum amount of expenditures attributable to the

13 construction and fabrication of scenic materials and

14 elements eligible for a tax credit award shall not exceed

15 $500,000 per applicant per production in any single tax

16 year.

17 "Qualified production facility" means a facility located

18 in the State in which live theatrical productions are, or are

19 intended to be, exclusively presented that contains at least

20 one stage, a seating capacity of 1,200 or more seats, and

21 dressing rooms, storage areas, and other ancillary amenities

22 necessary for the accredited theater production.

23 "Tax credit award" means the issuance to a taxpayer by the

24 Department of a tax credit award in conformance with Sections

25 10-40 and 10-45 of this Act.

26 "Tax year" means a calendar year for the period January 1

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1 to and including December 31.

2 (Source: P.A. 97-636, eff. 6-1-12.)

3 (35 ILCS 17/10-20)

4 Sec. 10-20. Tax credit award. Subject to the conditions

5 set forth in this Act, an applicant is entitled to a tax credit

6 award as approved by the Department for qualifying Illinois

7 labor expenditures and Illinois production spending for each

8 tax year in which the applicant is awarded an accredited

9 theater production certificate issued by the Department. The

10 amount of tax credits awarded pursuant to this Act shall not

11 exceed (i) $2,000,000 in any fiscal year prior to State fiscal

12 year 2021 and (ii) $4,000,000 per fiscal year beginning in

13 State fiscal year 2021; provided, however, that beginning in

14 State fiscal year 2021, $2,000,000 of the $4,000,000 cap shall

15 be reserved for applicants that are operators of qualified

16 production facilities solely in connection with the

17 presentation of commercial Broadway touring shows. Credits

18 shall be awarded on a first-come, first-served basis.

19 Notwithstanding the foregoing, if the amount of credits

20 applied for in any fiscal year exceeds the amount authorized

21 to be awarded under this Section, the excess credit amount

22 shall be awarded in the next fiscal year in which credits

23 remain available for award and shall be treated as having been

24 applied for on the first day of that fiscal year.

25 (Source: P.A. 97-636, eff. 6-1-12.)

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1 Section 99. Effective date. This Act takes effect upon

2 becoming law.