An Act To Promote Tourism and Foster Economic Development
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 5 MRSA §13090-L, as amended by PL 2011, c. 285, §1, is further amended to read:
§ 13090-L. Visual media production and major visual media production certification
1. Generally. A visual media production company that intends to undertake a visual media production in this State may apply to the department to have the production, or a portion of the production, certified under subsection 3 3-B for purposes of the visual media production reimbursement pursuant to Title 36, chapter 919-A and the credit under Title 36, section 5219-Y. A major visual media production company that intends to undertake a major visual media production in this State may apply to the department to have the production, or a portion of the production, certified under subsection 3-B for the purpose of the major visual media production credit under Title 36, section 5219-NN.
2-A. Definitions. As used in this section, unless the context otherwise indicates, the following terms have the following meanings.
A. "Digital media project" means visual and audio content on an electronic, digital medium and created, referred to and distributed electronically. "Digital media project" includes publicly accessible websites, computer multimedia, video and computer games and digital video discs.
B. "Maine State Film Office" means the Maine State Film Office established in the Office of Tourism pursuant to section 13090-I.
B-1. "Major visual media production" means a visual media production with an overall budget, as defined in rules adopted by the department, that is greater than $1,000,000.
B-2. "Major visual media production company" means a person engaged in the business of producing a major visual media production.
B-3. "Major visual media production expense" means an expense directly incurred in this State for preproduction, production or postproduction of a major visual media production certified under this section. "Major visual media production expense" includes major visual media production wages, payments to a temporary employee-leasing company, as defined in Title 36, section 6901, subsection 3-A, and other contractual payments for the services of individuals working in the State. "Major visual media production expense" includes the cost of construction; operations; editing and related services; music, photography and film processing, including transferring film to tape or a digital format; sound recording, mixing and synchronization; lighting, makeup, wardrobe and accessories; transportation; food and lodging for cast and crew; insurance and bonding; and the rental of facilities and equipment, including location fees. "Major visual media production expense" does not include expenses incurred in marketing or advertising a major visual media production or in printing or disseminating a major visual media production.
B-4. "Major visual media production wages" means wages and salaries paid to below-the-line personnel on which taxes have been paid or accrued. For purposes of this paragraph, “below-the-line personnel” means nonstarring cast members and the technical preproduction, production and postproduction staff of the major visual media production, including, but not limited to, staff for hair, makeup, wardrobe, accessories, lighting, rigging, electric, camera operations, photography, composing and editing, but not including the director, starring cast, writers and producers of the major visual media production.
C. "Person" has the same meaning as in Title 36, section 111, subsection 3.
D. "Visual media production" means a single-medium or multimedia feature film, television show or series, video, digital media project or photographic project intended for a local, regional, national or international audience and fixed on film, videotape, computer disk, laser disc or other delivery medium , including the Internet, that can be viewed or reproduced and that is exhibited in theaters or by individual television stations or groups of stations, television networks or cable television stations or via other means or licensed for home viewing or use. "Visual media production" does not include:
(1) A news, current events or public programming show or a program that includes weather or market reports;
(2) A talk show;
(3) A sports event or activity;
(4) A gala presentation or awards show;
(5) A finished production that solicits funds; or
(6) A production for which records are required to be maintained by 18 United States Code, Section 2257.
E. "Visual media production company" means a person engaged in the business of producing a visual media production.
F. "Visual media production expense" means an expense directly incurred in this State for preproduction, production or postproduction of a visual media production certified under this section. "Visual media production expense" includes wages and salaries of individuals employed in the production on which taxes have been paid or accrued if those wages do not exceed $50,000 per individual and payments to a temporary employee-leasing company, as defined in Title 36, section 6901, subsection 3-A, and other contractual payments for the services of individuals working in the State if those payments do not exceed $50,000 per individual providing services in the production. "Visual media production expense" includes the cost of construction; operations; editing and related services; music, photography and film processing, including transferring film to tape or a digital format; sound recording, mixing and synchronization; lighting, makeup, wardrobe and accessories; transportation; food and lodging for cast and crew; insurance and bonding; and the rental of facilities and equipment, including location fees. "Visual media production expense" does not include expenses incurred in marketing or advertising a visual media production or in printing or disseminating a visual media production.
3. Requirements for visual media production certificate. Applications for a visual media production certificate must be made on a form prescribed and furnished by the department. The applicant must:
A. Provide the names of the principals involved in the visual media production and contact information for them;
B. Provide a certificate of insurance for the visual media production;
C. Provide financial information that demonstrates that the visual media production is fully financed and that at least $75,000 of visual media production expense will be incurred for the visual media production certified in accordance with this subsection 3-B;
D. Provide data demonstrating that the visual media production will benefit the people of the State by increasing opportunities for employment and will strengthen the economy of the State;
E. Agree to include, in the certified visual media production, an on-screen credit for the State of Maine. The exact wording and size of that credit must be determined in rules adopted by the Maine State Film Office and the department. The Maine State Film Office or the department may, at its discretion, exempt visual media productions from this requirement. Rules adopted pursuant to this paragraph are routine technical rules as defined in chapter 375, subchapter 2-A;
F. Provide evidence that the visual media production company is not owned by, affiliated with or controlled by, in whole or in part, a person that is in default on a loan made by the State or a loan guaranteed by the State;
G. Provide any other information required by the department; and
H. Provide a projected schedule for preproduction, production and postproduction of the visual media production that shows that the production will begin within 60 days after certification pursuant to this subsection . 3-B; and
I. Provide any other information required to demonstrate to the satisfaction of the commissioner that the visual media production company has met, or will meet, the requirements of this subsection.
To qualify for a visual media production certificate, a visual media production company must demonstrate to the satisfaction of the commissioner that the visual media production company has met, or will meet, the requirements of this subsection. If the department determines that the applicant does not qualify for a visual media production certificate, it must inform the applicant of that determination in writing within 4 weeks of receiving the application. As soon as practicable, the department shall issue a visual media production certificate for a visual media production that qualifies. The department shall include with the certificate information regarding the tax credit report under subsection 4 and procedures for claiming reimbursement under Title 36, chapter 919-A and the credit under Title 36, section 5219-Y.
3-A. Requirements for major visual media production certificate. An application for a major visual media production certificate must be made on a form prescribed and furnished by the department. An applicant shall:
A. Provide payment for a nonrefundable application fee equal to 0.2% of the estimated amount of the tax credit for which the major visual media production company is requesting certification, which may not be less than $200 or more than $5,000;
B. Provide the names of the principals involved in the major visual media production and contact information for them;
C. Provide a certificate of insurance for the major visual media production;
D. Provide financial information that demonstrates that the major visual media production is fully financed and has an overall budget of at least $1,000,000 if applying for the 25% credit under Title 36, section 5219-NN, subsection 1;
E. Provide projections of the number of positions required for the major visual media production, the number of residents of the State to be employed and the economic impact on the State;
F. Provide evidence that the major visual media production company is not owned by, affiliated with or controlled by, in whole or in part, a person that is in default on a loan made by the State or a loan guaranteed by the State;
G. Provide a projected schedule for preproduction, production and postproduction of the major visual media production that shows that the production will begin within 60 days after certification pursuant to subsection 3-B;
H. Demonstrate, by certifying in writing, that the major visual media production would not occur within the State absent the availability of the tax credit for which the major visual media production company is requesting certification;
I. Include, in the certified major visual media production, an on-screen credit for the State of Maine as described in subsection 3, paragraph E; and
J. Provide any other information required to demonstrate to the satisfaction of the commissioner that the major visual media production company has met, or will meet, the requirements of this subsection.
3-B. Issuance of certificate. The department shall issue a visual media production certificate for a visual media production that qualifies under subsection 3 or a major visual media production certificate for a major visual media production that qualifies under subsection 3-A within 4 weeks of receipt of the application or deny the application in writing. The department may deny a certificate for any reason. The department may not approve a certificate that qualifies the visual media production or major visual media production for a tax credit under Title 36, section 5219-Y or 5219-NN, respectively, in excess of the funds appropriated for those purposes. The department shall include with the certificate information regarding the tax credit report under subsection 4 and procedures for claiming reimbursement under Title 36, chapter 919-A and the credits under Title 36, sections 5219-Y and 5219-NN.
4. Certified report. No later than 4 weeks after completion of a certified visual media production or major visual media production, the visual media production company or major visual media production company shall report, in a format specified by the Maine State Film Office or the department, its compliance with the requirements of subsection 3 with respect to the certified visual media production or 3-A to the Maine State Film Office.
5. Department to provide information to State Tax Assessor. The department shall provide to the State Tax Assessor copies of the visual media production certificate or major visual media production certificate issued pursuant to subsection 3 3-B, together with any other information reasonably required by the State Tax Assessor for the administration of visual media production reimbursement under Title 36, chapter 919-A and the credit credits under Title 36, section sections 5219-Y and 5219-NN.
6. Rulemaking. The department shall develop rules as necessary to administer this section in cooperation with the State Tax Assessor. Rules adopted pursuant to this section are routine technical rules as defined in chapter 375, subchapter 2-A.
7. Report. The Maine State Film Office shall submit a report by January 15th annually to the joint standing committee of the Legislature having jurisdiction over taxation matters regarding the certification and reporting process pursuant to this section and . The report must include information on the visual media production tax credit and reimbursement activities pursuant to under Title 36, section 5219-Y and Title 36, chapter 919-A and the major visual media production tax credit under Title 36, section 5219-NN. The report must include a description of any rule-making activity related to the implementation of the credit credits and reimbursement activities, outreach efforts to visual media production companies and major visual media production companies, the number of applications for the visual media production credit and tax reimbursement, the number of applications for the major visual media production credit, the number of credits and reimbursements granted, the revenue loss associated with the credit credits and reimbursement and the amount of visual media production expenses and major visual media production expenses generated in the State as a result of the credit credits and reimbursement.
Sec. 2. 36 MRSA §5219-NN is enacted to read:
§ 5219-NN. Certified major visual media production credit
1. Credit allowed. A major visual media production company, as defined in Title 5, section 13090-L, subsection 2-A, paragraph B-2, is allowed a credit against the taxes imposed by this Part in an amount equal to a percentage of major visual media production expenses, as defined in Title 5, section 13090-L, subsection 2-A, paragraph B-3, up to 25% of major visual media production expenses.
2. Limitation. Taxpayers claiming a credit under section 5219-W or 5219-Y are not eligible for the credit under this section. The credit allowed by this section may be used only for the taxable year in which the major visual media production, as defined in Title 5, section 13090-L, subsection 2-A, paragraph B-1, is completed.
3. Refundable. The credit allowed under this section is fully refundable.
Sec. 3. Application. This Act applies to tax years beginning on or after January 1, 2015.
summary
This bill provides a fully refundable income tax credit for expenses and wages directly incurred in Maine by a major visual media production company, including for content that is produced for the Internet, in an amount of up to 25% of production expenses if the overall budget is greater than $1,000,000, not including wages for starring cast or the director, writer or producers. The credit must be claimed in the taxable year in which the major visual media production is completed.
A major visual media production company must submit a nonrefundable application fee, which is 0.2% of the estimated tax credit, but may be no less than $200 and no more than $5,000. The Department of Economic and Community Development may deny a certificate for a visual media production or a major visual media production for any reason. The department is required to deny a certificate if it would qualify the production for tax credits in excess of the funds appropriated for that purpose.