Illinois-2023-HB5426-Introduced

103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB5426

Introduced , by Rep. Kelly M. Burke

SYNOPSIS AS INTRODUCED:

`35 ILCS 17/10-10`
`35 ILCS 17/10-20`

Amends the Live Theater Production Tax Credit Act. Provides that, for credits awarded in the State fiscal year ending on June 30, 2024, a pre-Broadway production must be performed with the goal of having a presentation scheduled for Broadway's Theater District in New York City after its Illinois presentation (currently, the production must have a presentation scheduled for Broadway's Theater District in New York City within 12 months after its Illinois presentation). Provides that the total amount of tax credits awarded pursuant to the Act for the State fiscal year ending on June 30, 2024 shall not exceed $4,000,000 (currently, $2,000,000). 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 Live Theater Production Tax Credit Act is

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

6 (35 ILCS 17/10-10)

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

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

9 stage presentation in a qualified production facility, as

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

11 production or (ii) a long-run production for which the

12 aggregate Illinois labor and marketing expenditures exceed

13 $100,000. For credits awarded under this Act in State Fiscal

14 Year 2023, "accredited theater production" also includes any

15 commercial Broadway touring show.

16 "Commercial Broadway touring show" means a production that

17 (i) is performed in a qualified production facility and plays

18 in more than 2 other markets in North America outside of

19 Illinois within 12 months of its Illinois presentation and

20 (ii) has Illinois production spending of not less than

21 $100,000, as shown on the applicant's application for the

22 credit.

23 "Pre-Broadway production" means, for credits awarded in

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1 State fiscal years other than the State fiscal year ending on

2 June 30, 2024, a live stage production that, in its original or

3 adaptive version, is performed in a qualified production

4 facility having a presentation scheduled for Broadway's

5 Theater District in New York City within 12 months after its

6 Illinois presentation. "Pre-Broadway production" means, for

7 credits awarded in the State fiscal year ending on June 30,

8 2024, a live stage production that, in its original or

9 adaptive version, is performed in a qualified production

10 facility with the goal of having a presentation scheduled for

11 Broadway's Theater District in New York City after its

12 Illinois presentation.

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

14 is performed in a qualified production facility for longer

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

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

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

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

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

20 year or portion thereof.

21 "Accredited theater production certificate" means a

22 certificate issued by the Department certifying that the

23 production is an accredited theater production that meets the

24 guidelines of this Act.

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

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

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1 has presented a live stage presentation located within the

2 State of Illinois who:

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

4 stage presentation for the Illinois production period; or

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

6 owner or licensee of the theatrical rights or a person

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

8 performances of the production.

9 An applicant that directly or indirectly owns, controls,

10 or operates multiple qualified production facilities shall be

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

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

13 the applicant's qualified production facilities, the applicant

14 shall be eligible to separately and contemporaneously (i)

15 apply for and obtain accredited theater production

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

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

18 each of the applicant's accredited theater productions

19 performed at each of the applicant's qualified production

20 facilities.

21 "Department" means the Department of Commerce and Economic

22 Opportunity.

23 "Director" means the Director of the Department.

24 "Illinois labor expenditure" means gross salary or wages

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

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

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1 applicant for services rendered to and on behalf of the

2 accredited theater production. To qualify as an Illinois labor

3 expenditure, the expenditure must be:

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

5 effective date of the Act for services related to any

6 portion of an accredited theater production from its

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

8 writing of the script, casting, hiring of service

9 providers, purchases from vendors, marketing, advertising,

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

11 accredited theater production related activities, and load

12 out;

13 (2) directly attributable to the accredited theater

14 production;

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

16 paid to each employee of an accredited theater production

17 in each tax year;

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

19 property;

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

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

22 after the end of the tax year;

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

24 payments were made; and

25 (7) reasonable in the circumstances.

26 "Illinois production spending" means any and all expenses

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1 directly or indirectly incurred relating to an accredited

2 theater production presented in any qualified production

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

4 expenditures for:

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

6 creation and placement of print, electronic, television,

7 billboard, and other forms of advertising; and

8 (2) the construction and fabrication of scenic

9 materials and elements; provided, however, that the

10 maximum amount of expenditures attributable to the

11 construction and fabrication of scenic materials and

12 elements eligible for a tax credit award shall not exceed

13 $500,000 per applicant per production in any single tax

14 year.

15 "Qualified production facility" means a facility located

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

17 intended to be, exclusively presented that contains at least

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

19 dressing rooms, storage areas, and other ancillary amenities

20 necessary for the accredited theater production.

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

22 Department of a tax credit award in conformance with Sections

23 10-40 and 10-45 of this Act.

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

25 to and including December 31.

26 (Source: P.A. 102-1112, eff. 12-21-22.)

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1 (35 ILCS 17/10-20)

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

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

4 award as approved by the Department for qualifying Illinois

5 labor expenditures and Illinois production spending for each

6 tax year in which the applicant is awarded an accredited

7 theater production certificate issued by the Department. The

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

9 exceed $2,000,000 in any State fiscal year, except that the

10 amount of tax credits awarded pursuant to this Act for the

11 State fiscal year ending on June 30, 2023 and the State fiscal

12 year ending on June 30, 2024 shall not exceed $4,000,000 in

13 either of those fiscal years. For the State fiscal year ending

14 on June 30, 2023 and the State fiscal year ending on June 30,

15 2024, no more than $2,000,000 in credits may be awarded in

16 either of those fiscal years to accredited theater productions

17 that are not commercial Broadway touring shows, and no more

18 than $2,000,000 in credits may be awarded in either of those

19 fiscal years to commercial Broadway touring shows. Credits

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

21 Notwithstanding the foregoing, if the amount of credits

22 applied for in any fiscal year exceeds the amount authorized

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

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

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

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