Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 162 First Substitute (2016GS)

Sponsor

Rep. Peterson, J.

Final action

Governor Signed 3/18/2016

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• phases out corporate and individual income tax credits for motion picture productions in the state; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

MOTION PICTURE TAX CREDIT AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Jeremy A. Peterson
Senate Sponsor: 
____________
LONG TITLE
General Description:
This bill addresses income tax credits.
Highlighted Provisions:
This bill:
▸ phases out corporate and individual income tax credits for motion picture
productions in the state; and
▸ makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
59-7-614.5
, as last amended by Laws of Utah 2015, Chapter 283
59-10-1108
, as last amended by Laws of Utah 2015, Chapter 283
63N-8-103
, as renumbered and amended by Laws of Utah 2015, Chapter 283
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
59-7-614.5
 is amended to read:
59-7-614.5.
Refundable motion picture tax credit.
(1) As used in this section:
(a) "Motion picture company" means a taxpayer that meets the definition of a motion
picture company under Section 
63N-8-102
.
(b) "Office" means the Governor's Office of Economic Development.
(c) "State-approved production" has the same meaning as 
that term is
 defined in
Section 
63N-8-102
.
(2) For 
a
 taxable [
years
] 
year
 beginning on or after January 1, 2009, a motion picture
company may claim a refundable tax credit for a state-approved production 
in accordance with
Section 
63N-8-103
.
(3) The tax credit under this section is the amount listed as the tax credit amount on the
tax credit certificate that the office issues to a motion picture company under Section
63N-8-103
 for the taxable year.
(4) (a) In accordance with any rules prescribed by the commission under Subsection
(4)(b), the commission shall make a refund to a motion picture company that claims a tax
credit under this section if the amount of the tax credit exceeds the motion picture company's
tax liability for a taxable year.
(b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules providing procedures for making a refund to a motion picture
company as required by Subsection (4)(a).
[
(5) (a) On or before October 1, 2014, and every five years after October 1, 2014, the
Revenue and Taxation Interim Committee shall study the tax credit allowed by this section and
make recommendations to the Legislative Management Committee concerning whether the tax
credit should be continued, modified, or repealed.
]
[
(b) For purposes of the study required by this Subsection (5), the office shall provide
the following information to the Revenue and Taxation Interim Committee:
]
[
(i) the amount of tax credit that the office grants to each motion picture company for
each calendar year;
]
[
(ii) the criteria that the office uses in granting the tax credit;
]
[
(iii) the dollars left in the state, as defined in Section 
63N-8-102
, by each motion
picture company for each calendar year;
]
[
(iv) the information contained in the office's latest report to the Legislature under
Section 
63N-8-105
; and
]
[
(v) any other information requested by the Revenue and Taxation Interim Committee.
]
[
(c) The Revenue and Taxation Interim Committee shall ensure that its
recommendations under Subsection (5)(a) include an evaluation of:
]
[
(i) the cost of the tax credit to the state;
]
[
(ii) the effectiveness of the tax credit; and
]
[
(iii) the extent to which the state benefits from the tax credit.
]
Section 2. Section 
59-10-1108
 is amended to read:
59-10-1108.
Refundable motion picture tax credit.
(1) As used in this section:
(a) "Motion picture company" means a claimant, estate, or trust that meets the
definition of a motion picture company under Section 
63N-8-102
.
(b) "Office" means the Governor's Office of Economic Development.
(c) "State-approved production" has the same meaning as 
that term is
 defined in
Section 
63N-8-102
.
(2) For 
a
 taxable [
years
] 
year
 beginning on or after January 1, 2009, a motion picture
company may claim a refundable tax credit for a state-approved production 
in accordance with
Section 
63N-8-103
.
(3) The tax credit under this section is the amount listed as the tax credit amount on the
tax credit certificate that the office issues to a motion picture company under Section
63N-8-103
 for the taxable year.
(4) (a) In accordance with any rules prescribed by the commission under Subsection
(4)(b), the commission shall make a refund to a motion picture company that claims a tax
credit under this section if the amount of the tax credit exceeds the motion picture company's
tax liability for the taxable year.
(b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commission may make rules providing procedures for making a refund to a motion picture
company as required by Subsection (4)(a).
[
(5) (a) On or before October 1, 2014, and every five years after October 1, 2014, the
Revenue and Taxation Interim Committee shall study the tax credit allowed by this section and
make recommendations to the Legislative Management Committee concerning whether the tax
credit should be continued, modified, or repealed.
]
[
(b) For purposes of the study required by this Subsection (5), the office shall provide
the following information to the Revenue and Taxation Interim Committee:
]
[
(i) the amount of tax credit the office grants to each taxpayer for each calendar year;
]
[
(ii) the criteria the office uses in granting a tax credit;
]
[
(iii) the dollars left in the state, as defined in Section 
63N-8-102
, by each motion
picture company for each calendar year;
]
[
(iv) the information contained in the office's latest report to the Legislature under
Section 
63N-8-105
; and
]
[
(v) any other information requested by the Revenue and Taxation Interim Committee.
]
[
(c) The Revenue and Taxation Interim Committee shall ensure that its
recommendations under Subsection (5)(a) include an evaluation of:
]
[
(i) the cost of the tax credit to the state;
]
[
(ii) the effectiveness of the tax credit; and
]
[
(iii) the extent to which the state benefits from the tax credit.
]
Section 3. Section 
63N-8-103
 is amended to read:
63N-8-103.
Motion Picture Incentive Account created -- Cash rebate incentives --
Refundable tax credit incentives.
(1) (a) There is created within the General Fund a restricted account known as the
Motion Picture Incentive Account, which the office shall use to provide cash rebate incentives
for state-approved productions by a motion picture company.
(b) All interest generated from investment of money in the restricted account shall be
deposited in the restricted account.
(c) The restricted account shall consist of an annual appropriation by the Legislature.
(d) The office shall:
(i) with the advice of the board, administer the restricted account; and
(ii) make payments from the restricted account as required under this section.
(e) The cost of administering the restricted account shall be paid from money in the
restricted account.
(2) (a) A motion picture company or digital media company seeking disbursement of
an incentive allowed under an agreement with the office shall follow the procedures and
requirements of this Subsection (2).
(b) The motion picture company or digital media company shall provide the office with
a report identifying and documenting the dollars left in the state [
or
] 
and
 new state revenues
generated by the motion picture company or digital media company for its state-approved
production, including any related tax returns by the motion picture company, payroll company,
digital media company, or loan-out corporation under Subsection (2)(d).
(c) For a motion picture company, an independent certified public accountant shall:
(i) review the report submitted by the motion picture company; and
(ii) attest to the accuracy and validity of the report, including the amount of dollars left
in the state.
(d) The motion picture company, digital media company, payroll company, or loan-out
corporation shall provide the office with a document that expressly directs and authorizes the
State Tax Commission to disclose the entity's tax returns and other information concerning the
entity that would otherwise be subject to confidentiality under Section 
59-1-403
 or Section
6103, Internal Revenue Code, to the office.
(e) The office shall submit the document described in Subsection (2)(d) to the State
Tax Commission.
(f) Upon receipt of the document described in Subsection (2)(d), the State Tax
Commission shall provide the office with the information requested by the office that the
motion picture company, digital media company, payroll company, or loan-out corporation
directed or authorized the State Tax Commission to provide to the office in the document
described in Subsection (2)(d).
(g) Subject to Subsection (3), for a motion picture company the office shall:
(i) review the report from the motion picture company described in Subsection (2)(b)
and verify that it was reviewed by an independent certified public accountant as described in
Subsection (2)(c); and
(ii) based upon the certified public accountant's attestation under Subsection (2)(c),
determine the amount of the incentive that the motion picture company is entitled to under its
agreement with the office.
(h) Subject to Subsection (3), for a digital media company, the office shall:
(i) ensure the digital media project results in new state revenue; and
(ii) based upon review of new state revenue, determine the amount of the incentive that
a digital media company is entitled to under its agreement with the office.
(i) Subject to Subsection (3), if the incentive is in the form of a cash rebate, the office
shall pay the incentive from the restricted account to the motion picture company,
notwithstanding Subsections 
51-5-3
(23)(b) and 
63J-1-104
(4)(c).
(j) If the incentive is in the form of a refundable tax credit under Section 
59-7-614.5
 or
59-10-1108
, the office shall:
(i) issue a tax credit certificate to the motion picture company or digital media
company; and
(ii) provide a duplicate copy of the tax credit certificate to the State Tax Commission.
(k) A motion picture company or digital media company may not claim a motion
picture tax credit under Section 
59-7-614.5
 or 
59-10-1108
 unless the motion picture company
or digital media company has received a tax credit certificate for the claim issued by the office
under Subsection (2)(j)(i).
(l) A motion picture company or digital media company may claim a motion picture
tax credit on its tax return for the amount listed on the tax credit certificate issued by the office.
(m) A motion picture company or digital media company that claims a tax credit under
Subsection (2)(l) shall retain the tax credit certificate and all supporting documentation in
accordance with Subsection 
63N-8-104
(6).
(3) (a) Subject to Subsection (3)(b), the office may issue $6,793,700 in tax credit
certificates under this part [
in
] 
for
 a fiscal year 
beginning on or after July 1, 2009, but ending
on or before June 30, 2017
.
(b) If the office does not issue tax credit certificates in a fiscal year totaling the amount
authorized under Subsection (3)(a), [
it
] 
the office
 may carry over that amount for issuance in 
a
subsequent fiscal [
years
] 
year until the fiscal year ending on June 30, 2020
.
Legislative Review Note
Office of Legislative Research and General Counsel