Bill Text: IL SB1286 | 2011-2012 | 97th General Assembly | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Amends the Illinois Income Tax Act. Makes a technical change in a Section concerning tax checkoff explanations.

Spectrum: Moderate Partisan Bill (Democrat 8-2)

Status: (Passed) 2012-07-13 - Public Act . . . . . . . . . 97-0796 [SB1286 Detail]

Download: Illinois-2011-SB1286-Amended.html

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Sen. Mike Jacobs

Filed: 4/5/2011

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AMENDMENT TO SENATE BILL 1286
AMENDMENT NO. ______. Amend Senate Bill 1286 by replacing
everything after the enacting clause with the following:
"Section 5. The Film Production Services Tax Credit Act of
2008 is amended by changing Sections 10 and 40 and by adding
Section 42 as follows:
(35 ILCS 16/10)
Sec. 10. Definitions. As used in this Act:
"Accredited production" means: (i) for productions
commencing before May 1, 2006, a film, video, or television
production that has been certified by the Department in which
the aggregate Illinois labor expenditures included in the cost
of the production, in the period that ends 12 months after the
time principal filming or taping of the production began,
exceed $100,000 for productions of 30 minutes or longer, or
$50,000 for productions of less than 30 minutes; and (ii) for

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productions commencing on or after May 1, 2006, a film, video,
or television production that has been certified by the
Department in which the Illinois production spending included
in the cost of production in the period that ends 12 months
after the time principal filming or taping of the production
began exceeds $100,000 for productions of 30 minutes or longer
or exceeds $50,000 for productions of less than 30 minutes.
"Accredited production" does not include a production that:
(1) is news, current events, or public programming, or
a program that includes weather or market reports;
(2) is a talk show;
(3) is a production in respect of a game,
questionnaire, or contest;
(4) is a sports event or activity;
(5) is a gala presentation or awards show;
(6) is a finished production that solicits funds;
(7) is a production produced by a film production
company if records, as required by 18 U.S.C. 2257, are to
be maintained by that film production company with respect
to any performer portrayed in that single media or
multimedia program; or
(8) is a production produced primarily for industrial,
corporate, or institutional purposes.
"Accredited production" includes an accredited animated
production.
"Accredited animated production" means fully animated

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feature with a pre-production and production period totaling
more than 12 months but less than 48 months.
"Accredited production certificate" means a certificate
issued by the Department certifying that the production is an
accredited production that meets the guidelines of this Act.
"Applicant" means a taxpayer that is a film production
company that is operating or has operated an accredited
production located within the State of Illinois and that (i)
owns the copyright in the accredited production throughout the
Illinois production period or (ii) has contracted directly with
the owner of the copyright in the accredited production or a
person acting on behalf of the owner to provide services for
the production, where the owner of the copyright is not an
eligible production corporation.
"Credit" means:
(1) for an accredited production approved by the
Department on or before January 1, 2005 and commencing
before May 1, 2006, the amount equal to 25% of the Illinois
labor expenditure approved by the Department. The
applicant is deemed to have paid, on its balance due day
for the year, an amount equal to 25% of its qualified
Illinois labor expenditure for the tax year. For Illinois
labor expenditures generated by the employment of
residents of geographic areas of high poverty or high
unemployment, as determined by the Department, in an
accredited production commencing before May 1, 2006 and

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approved by the Department after January 1, 2005, the
applicant shall receive an enhanced credit of 10% in
addition to the 25% credit; and
(2) for an accredited production commencing on or after
May 1, 2006, the amount equal to:
(i) 20% of the Illinois production spending for the
taxable year; plus
(ii) 15% of the Illinois labor expenditures
generated by the employment of residents of geographic
areas of high poverty or high unemployment, as
determined by the Department; and
(3) for an accredited production commencing on or after
January 1, 2009, other than an accredited animated
production qualifying under item (4), the amount equal to:
(i) 30% of the Illinois production spending for the
taxable year; plus
(ii) 15% of the Illinois labor expenditures
generated by the employment of residents of geographic
areas of high poverty or high unemployment, as
determined by the Department; and .
(4) for an accredited animated production commencing
on or after January 1, 2010:
(i) 30% of the anticipated Illinois production
spending for the entire production period; plus
(ii) 15% of the anticipated Illinois labor
expenditures generated by the employment of residents

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of geographic areas of high poverty or high
unemployment, as determined by the Department, during
the entire production period.
The credits awarded for an accredited animated
production commencing on or after January 1, 2010 shall be
awarded as provided in Section 42.
"Department" means the Department of Commerce and Economic
Opportunity.
"Director" means the Director of Commerce and Economic
Opportunity.
"Illinois labor expenditure" means salary or wages paid to
employees of the applicant for services on the accredited
production;
To qualify as an Illinois labor expenditure, the
expenditure must be:
(1) Reasonable in the circumstances.
(2) Included in the federal income tax basis of the
property.
(3) Incurred by the applicant for services on or after
January 1, 2004.
(4) Incurred for the production stages of the
accredited production, from the final script stage to the
end of the post-production stage.
(5) Limited to the first $25,000 of wages paid or
incurred to each employee of a production commencing before
May 1, 2006 and the first $100,000 of wages paid or

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incurred to each employee of a production commencing on or
after May 1, 2006.
(6) For a production commencing before May 1, 2006,
exclusive of the salary or wages paid to or incurred for
the 2 highest paid employees of the production.
(7) Directly attributable to the accredited
production.
(8) Except for expenditures paid with respect to an
accredited animated production, paid Paid in the tax year
for which the applicant is claiming the credit or no later
than 60 days after the end of the tax year.
(9) Paid to persons resident in Illinois at the time
the payments were made.
(10) Paid for services rendered in Illinois.
"Illinois production spending" means the expenses incurred
by the applicant for an accredited production, including,
without limitation, all of the following:
(1) expenses to purchase, from vendors within
Illinois, tangible personal property that is used in the
accredited production;
(2) expenses to acquire services, from vendors in
Illinois, for film production, editing, or processing; and
(3) the compensation, not to exceed $100,000 for any
one employee, for contractual or salaried employees who are
Illinois residents performing services with respect to the
accredited production.

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"Qualified production facility" means stage facilities in
the State in which television shows and films are or are
intended to be regularly produced and that contain at least one
sound stage of at least 15,000 square feet.
Rulemaking authority to implement this amendatory Act of
the 95th General Assembly, if any, is conditioned on the rules
being adopted in accordance with all provisions of the Illinois
Administrative Procedure Act and all rules and procedures of
the Joint Committee on Administrative Rules; any purported rule
not so adopted, for whatever reason, is unauthorized.
(Source: P.A. 95-720, eff. 5-27-08; 95-1006, eff. 12-15-08.)
(35 ILCS 16/40)
Sec. 40. Amount and duration of the credit. The amount of
the credit awarded under this Act is based on the amount of the
Illinois labor expenditure and Illinois production spending
approved by the Department for the production as set forth
under Section 10. The duration of the credit may not exceed (i)
one taxable year for productions other than accredited animated
productions or (ii) for accredited animated productions, the
period beginning with the taxable year in which the production
commences and ending with the taxable year in which the final
audit required under Section 42 is complete.
(Source: P.A. 95-720, eff. 5-27-08.)
(35 ILCS 16/42 new)

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Sec. 42. Accredited animated productions. Each applicant
requesting credits for an accredited animated production
commencing on or after January 1, 2010 must enter into an
agreement with the Department detailing (i) the applicant's
anticipated Illinois production spending for the entire
production period and (ii) the anticipated Illinois labor
expenditures generated by the employment of residents of
geographic areas of high poverty or high unemployment. The
accredited production certificate for an accredited animated
production shall list those amounts. An applicant that is
awarded a credit for an accredited animated production is
entitled to take (i) 25% of the total credit awarded in the
taxable year in which Stage 1 of the production is completed,
(ii) 25% of the total credit awarded in the taxable year in
which Stage 2 of the production is completed, (iii) 25% of the
total credit awarded in the taxable year in which Stage 3 of
the production is completed, and (iv) 25% of the total credit
awarded in the taxable year in which Stage 4 of the production
is completed, including the final audit. An applicant that was
awarded a credit for an accredited animated production
commencing on or after January 1, 2010 but prior to the
effective date of this amendatory Act may enter into a new
agreement with the Department for the purpose of claiming
unused credit amounts in the manner provided in this Section.
For the purposes of this Section:
Stage 1 of the production is considered complete upon

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review and approval by the Department of an animatic reel in
QuickTime format (with watermark). "Animatic reel" means a
timed and edited compilation of images/storyboard
pre-visualising the final feature from first to last scene,
including dialogue from the first pass voice recording or
"scratch track". The completion of Stage 1 is the end of
pre-production and includes the culmination of the following:
(1) conclusion of the screenplay;
(2) conclusion of the initial dialogue record;
(3) asset design (2D); and
(4) conclusion of the storyboard stage.
Stage 2 of the production is considered complete upon
review and approval by the Department of a
pre-visualization/blocking reel in QuickTime format (with
watermark). "Pre-visualization/blocking reel" means a timed
and edited compilation of rendered 3D pre-visualization from
the first to last scene, including any and all motion capture.
The completion of Stage 2 includes the completion of asset
modeling and asset rigging.
Stage 3 of the production is considered complete upon
review and approval by the Department of the first animation
pass in QuickTime format (with watermark). "First animation
pass" means a timed and edited compilation of rendered
animation from the first to last scene, including the second
dialogue pass. The completion of Stage 3 means the completion
of asset surfacing: color and texture,

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pre-visualization/motion capture, and the progress of
animation stage.
Stage 4 of the production is considered complete upon
review and approval by the Department of a final rendered
feature in QuickTime format (with watermark). The completion of
Stage 4 includes the completion of the entire post-production
process.
Upon the completion of Stage 4, the applicant shall submit
to a final audit by the Department. If the Department finds
that the actual Illinois production spending is less than the
applicant's anticipated Illinois production spending, as set
forth in the agreement with the Department, then the final tax
credit award shall be reduced accordingly.
Section 99. Effective date. This Act takes effect upon
becoming law.".