MISSISSIPPI LEGISLATURE
2019 Regular Session
To: Finance
By: Senator(s) Chassaniol, Horhn, Gollott, Blackmon, Dearing, Carter, Butler, Burton, Jackson (32nd), Moran, Jordan, Wiggins, Whaley, Harkins
AN ACT TO AMEND SECTION 57-89-3, MISSISSIPPI CODE OF 1972, TO REVISE THE DEFINITION OF THE TERMS "BASE INVESTMENT," "FRINGES" AND "STATE-CERTIFIED PRODUCTION" UNDER THE MISSISSIPPI MOTION PICTURE INCENTIVE ACT; TO AMEND SECTION 57-89-7, MISSISSIPPI CODE OF 1972, TO REVISE CERTAIN PROVISIONS REGARDING REBATES UNDER THE MISSISSIPPI MOTION PICTURE INCENTIVE ACT; TO REVISE THE AMOUNT OF CERTAIN EXPENSES FOR WHICH REBATES MAY BE MADE; TO PROVIDE THAT A REBATE MAY BE ASSIGNED TO A THIRD PARTY, PROVIDED THAT THE THIRD PARTY IS A MISSISSIPPI ENTITY; TO PROVIDE THAT THE DEPARTMENT OF REVENUE MAY APPROVE APPLICATIONS FOR CERTAIN REBATES UNDER THE MISSISSIPPI MOTION PICTURE INCENTIVE ACT UNTIL JULY 1, 2022; TO PROVIDE TIME PERIODS WITHIN WHICH THE DEPARTMENT OF REVENUE MUST ISSUE REBATES UNDER THE MISSISSIPPI MOTION PICTURE INCENTIVE ACT; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 57-89-3, Mississippi Code of 1972, is amended as follows:
57-89-3. As used in this chapter, the following terms shall have the meanings ascribed in this section unless the context clearly indicates otherwise:
(a) "Base investment" means the actual investment made and expended in Mississippi by a motion picture production company, or an employee of that company, in connection with the production of a state-certified production in the state. The term "base investment" includes amounts expended in Mississippi by a motion picture production company as per diem and housing allowances in connection with the production of a state-certified production in the state. The term "base investment" shall not include payroll.
(b) "Employee" means an individual directly involved in the physical production and/or post-production of a motion picture produced in the state and who is employed by a:
(i) Motion picture production company that is directly involved in the physical production and/or post-production of a motion picture in the state;
(ii) Personal service corporation retained by a motion picture production company to provide persons used directly in the physical production and/or post-production of a motion picture in the state; or
(iii) Payroll service or loan-out company that is retained by a motion picture production company to provide employees who work directly in the physical production and/or post-production of a motion picture in the state.
(c) "Fringes" means costs paid by a motion picture production company on or after September 1, 2013, for employee benefits that are not subject to state income tax. Fringes may include, but are not limited to, payments by an employer for unemployment insurance, Federal Insurance Contribution Act (FICA), workers' compensation insurance, pension and welfare benefits and health insurance premiums, and other payments to industry guilds and unions that are related to employment.
(d) "Motion picture" means a nationally distributed feature-length film, video, DVD, television program or series, commercial, or computer or video game made in Mississippi, in whole or in part, for theatrical or DVD release or television viewing or as a television pilot or viewing through streaming video or Internet delivery, or for playing on a video game console, personal computer or handheld device. The term "motion picture" shall not include the production of television coverage of news and athletic events, or a film, video, DVD, television program, series, or commercial that contains any material or performance defined in Section 97-29-103.
(e) "Motion picture production company" means a company and employees of the company engaged in the business of producing nationally distributed motion pictures, videos, DVDs, television programs or series, commercials, or computer or video games intended for a theatrical release, for television viewing or for playing on a video game console, personal computer or handheld device. The term "motion picture production company" includes a company engaged in the business of making such productions through the use of animation, interactive media, preproduction and post-production 3D applications, video game cinematics, virtual production, visual effects, and motion capture within the fields of feature film, television, commercials and games. The term "motion picture production company" shall not mean or include any company owned, affiliated, or controlled, in whole or in part, by any company or person which is in default on a loan made by the state or a loan guaranteed by the state, or any company or person who has ever declared bankruptcy under which an obligation of the company or person to pay or repay public funds or monies was discharged as a part of such bankruptcy.
(f) "Payroll" means salary, wages or other compensation including related benefits paid to employees upon which Mississippi income tax is due and has been withheld.
(g) "Resident" or "resident of Mississippi" means a natural person, and for the purpose of determining eligibility for the rebate provided by Section 57-89-7, any person domiciled in the State of Mississippi and any other person who maintains a permanent place of abode within the state and spends in the aggregate more than six (6) months of each year within the state.
(h) "State" means the State of Mississippi.
(i) "State-certified production" means a motion picture project approved by the Mississippi Development Authority produced by a motion picture production company in the state. An application for approval as a state-certified production must be submitted to the Mississippi Development Authority before production of the project begins. Certification is the responsibility of the Mississippi Development Authority and revisions to the certification may be made at any time during production at the discretion of the Mississippi Development Authority.
SECTION 2. Section 57-89-7, Mississippi Code of 1972, is amended as follows:
57-89-7. (1) (a) A Mississippi-based motion picture production company that expends at least Fifty Thousand Dollars ($50,000.00) in base investment, payroll and/or fringes, or other motion picture production company that expends at least One Hundred Thousand Dollars ($100,000.00) in base investment, payroll and/or fringes, in the state shall be entitled to a rebate of a portion of the base investment made by the motion picture production company. Subject to the provisions of this section, the amount of the rebate shall be equal to twenty-five percent (25%) of the base investment made by the motion picture production company. The portion of base investment attributable to costs for producers, directors and/or cast that is eligible for a rebate cannot exceed forty-five percent (45%) of the base investment.
If the base investment attributable to costs for producers, directors and/or cast exceeds forty-five percent (45%) of the base investment, the rebate is authorized only for the that is eligible for the rebate cannot exceed forty-five percent (45%) o
(b) In addition to the
rebates authorized under paragraphs (a), (c) and (d) of this subsection, a
motion picture production company may receive a rebate equal to * * * twenty
percent (20%) of payroll and fringes
paid for any employee who is not a resident and whose wages are subject to the
Mississippi Income Tax Withholding Law of 1968. However, if the payroll and fringes paid for an employee exceeds * * * Three
Million Dollars ($3,000,000.00), then the rebate is authorized only for the
first * * * Three Million Dollars ($3,000,000.00)
of such payroll and fringes.
(c) In addition to the
rebates authorized under paragraphs (a), (b) and (d) of this subsection, a
motion picture production company may receive a rebate equal to * * * thirty-five percent
(35%) of payroll and fringes paid for
any employee who is a resident and whose wages are subject to the Mississippi
Income Tax Withholding Law of 1968. However, if the payroll and fringes paid for an employee exceeds * * * Three
Million Dollars ($3,000,000.00), then the rebate is authorized only for the
first * * * Three Million Dollars ($3,000,000.00)
of such payroll and fringes.
(d) In addition to the rebates authorized in paragraphs (a), (b) and (c) of this subsection, a motion picture production company may receive an additional rebate equal to five percent (5%) of the payroll and fringes paid for any employee who is an honorably discharged veteran of the United States Armed Forces and whose wages are subject to the Mississippi Income Tax Withholding Law of 1968.
(e) If a motion picture has physical production activities and/or post-production activities both inside and outside the state, then the motion picture production company shall be required to provide an itemized accounting for each employee regarding such activities inside and outside the state for the purposes of proration of eligible payroll based on the percentage of activities performed in the state.
(f) The total amount of rebates authorized for a motion picture project shall not exceed Ten Million Dollars ($10,000,000.00) in the aggregate.
(g) The total amount of rebates authorized in any fiscal year shall not exceed Twenty Million Dollars ($20,000,000.00) in the aggregate.
(h) Rebates authorized for a motion picture project may be assigned to a third party, provided that the third party is a Mississippi entity.
(2) (a) A motion
picture production company desiring a rebate under this section must submit a
rebate request to the Department of Revenue * * * no later than ninety (90) days after
completion of the project. The request must include a detailed accounting of
the base investment made by the motion picture production company and any other
information required by the Department of Revenue. Subject to the
provisions of this subsection (2), a rebate must be made by the Department of
Revenue within ninety (90) business days after the receipt of all relevant,
required and requested documents. Rebates made by the Department of
Revenue under this section shall be made from current income tax collections.
The Department of Revenue shall not approve any application for a rebate under
subsection (1)(b) of this section after July 1, * * * 2022.
(b) (i) A third-party audit or pre-audit is authorized at the expense of the motion picture production company. The Department of Revenue will annually prepare a list of firms and auditors approved for such purposes.
(ii) If a third party is used for an audit, the third party performing the audit must deliver the report to the Department of Revenue within forty-five (45) business days after the receipt of all relevant documents. The Department of Revenue must issue a rebate within forty-five (45) business days after the receipt of such report.
(iii) If a third party is not used for an audit, and the audit is performed by the Department of Revenue, the department must deliver the first review of the production expenditure submission within ninety (90) business days after the receipt of the rebate request. Any subsequent review by the Department of Revenue must be completed within fifteen (15) business days after the receipt of all relevant, required and requested documents.
(3) The Department of Revenue shall have all powers necessary to implement and administer the provisions of this section, and the Department of Revenue shall promulgate rules and regulations, in accordance with the Mississippi Administrative Procedures Law, necessary for the implementation of this section.
(4) The State Auditor may conduct performance and compliance audits under this chapter according to Section 7-7-211(o) and may bill the oversight agency.
SECTION 3. This act shall take effect and be in force from and after July 1, 2019.