Rep. Norm Thurston — Voting Record

Bill

Number

S.B. 49 Second Substitute (2022GS)

Sponsor

Sen. Winterton, R.

Final action

Became Law w/o Governor Signature 3/24/2022

Outcome

Became Law w/o Governor Signature

Summary

What it does

• This bill:
• defines terms;
• exempts certain rural film productions from limits on the total amount of refundable motion picture tax credit incentives the Governor's Office of Economic Opportunity may issue each fiscal year; and
• makes technical changes.

Every vote on this bill

Bill text

STATE FILM PRODUCTION INCENTIVES AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Ronald M. Winterton
House Sponsor: 
Stephen G. Handy
LONG TITLE
Committee Note:
The Economic Development and Workforce Services Interim Committee recommended
this bill.
Legislative Vote: 9 voting for 0 voting against 7 absent
General Description:
This bill modifies provisions related to motion picture incentives.
Highlighted Provisions:
This bill:
▸ defines terms;
▸ exempts certain rural film productions from limits on the total amount of refundable
motion picture tax credit incentives the Governor's Office of Economic Opportunity
may issue each fiscal year; and
▸ makes technical changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
63N-8-102
, as last amended by Laws of Utah 2021, Chapter 282
63N-8-103
, as last amended by Laws of Utah 2021, Chapters 282 and 436
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
63N-8-102
 is amended to read:
63N-8-102.
Definitions.
As used in this chapter:
(1) "Digital media company" means a company engaged in the production of a digital
media project.
(2) "Digital media project" means all or part of a production of interactive
entertainment or animated production that is produced for distribution in commercial or
educational markets, which shall include projects intended for Internet or wireless distribution.
(3) "Dollars left in the state" means expenditures made in the state for a state-approved
production, including:
(a) an expenditure that is subject to:
(i) a corporate franchise or income tax under Title 59, Chapter 7, Corporate Franchise
and Income Taxes;
(ii) an individual income tax under Title 59, Chapter 10, Individual Income Tax Act;
and
(iii) a sales and use tax under Title 59, Chapter 12, Sales and Use Tax Act,
notwithstanding any sales and use tax exemption allowed by law; or
(iv) a combination of Subsections (3)(a)(i), (ii), and (iii);
(b) payments made to a nonresident only to the extent of the income tax paid to the
state on the payments, the amount of per diems paid in the state, and other direct
reimbursements transacted in the state; and
(c) payments made to a payroll company or loan-out corporation that is registered to do
business in the state, only to the extent of the amount of withholding under Section 
59-10-402
.
(4) "Loan-out corporation" means a corporation owned by one or more artists that
provides services of the artists to a third party production company.
(5) "Motion picture company" means a company engaged in the production of:
(a) motion pictures;
(b) television series; or
(c) made-for-television movies.
(6) "Motion picture incentive" means either a cash rebate from the Motion Picture
Incentive Account or a refundable tax credit under Section 
59-7-614.5
 or 
59-10-1108
.
(7) "New state revenues" means:
(a) incremental new state sales and use tax revenues generated as a result of a digital
media project that a digital media company pays under Title 59, Chapter 12, Sales and Use Tax
Act;
(b) incremental new state tax revenues that a digital media company pays as a result of
a digital media project under:
(i) Title 59, Chapter 7, Corporate Franchise and Income Taxes;
(ii) Title 59, Chapter 10, Part 1, Determination and Reporting of Tax Liability and
Information;
(iii) Title 59, Chapter 10, Part 2, Trusts and Estates;
(iv) Title 59, Chapter 10, Part 4, Withholding of Tax; or
(v) a combination of Subsections (7)(b)(i), (ii), (iii), and (iv);
(c) incremental new state revenues generated as individual income taxes under Title
59, Chapter 10, Part 1, Determination and Reporting of Tax Liability and Information, paid by
employees of the new digital media project as evidenced by payroll records from the digital
media company; or
(d) a combination of Subsections (7)(a), (b), and (c).
(8) "Payroll company" means a business entity that handles the payroll and becomes
the employer of record for the staff, cast, and crew of a motion picture production.
(9) "Refundable tax credit" means a refundable motion picture tax credit authorized
under Section 
63N-8-103
 and claimed under Section 
59-7-614.5
 or 
59-10-1108
.
(10) "Restricted account" means the Motion Picture Incentive Account created in
Section 
63N-8-103
.
(11) "Rural production" means a state-approved production in which a majority of the
production occurs within a county of the third, fourth, fifth, or sixth class.
[
(11)
] 
(12)
 "State-approved production" means a production under Subsections (2) and
(5) that is:
(a) approved by the office and ratified by the GO Utah board; and
(b) produced in the state by a motion picture company.
[
(12)
] 
(13)
 "Tax credit amount" means the amount the office lists as a tax credit on a
tax credit certificate for a taxable year.
[
(13)
] 
(14)
 "Tax credit certificate" means a certificate issued by the office that:
(a) lists the name of the applicant;
(b) lists the applicant's taxpayer identification number;
(c) lists the amount of tax credit that the office awards the applicant for the taxable
year; and
(d) may include other information as determined by the office.
Section 2. 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 GO Utah 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
an incentive request form, provided by the office, identifying and documenting the dollars left
in the state and new state revenues generated by the motion picture company or digital media
company for 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 incentive request form submitted by the motion picture company; and
(ii) provide a report on the accuracy and validity of the incentive request form,
including the amount of dollars left in the state, in accordance with the agreed upon procedures
established by the office by rule.
(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 incentive request form from the motion picture company described in
Subsection (2)(b) and verify that the incentive request form was reviewed by an independent
certified public accountant as described in Subsection (2)(c); and
(ii) based upon the independent certified public accountant's report under Subsection
(2)(c), determine the amount of the incentive that the motion picture company is entitled to
under the motion picture company's 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 revenues; and
(ii) based upon review of new state revenues, determine the amount of the incentive
that a digital media company is entitled to under the digital media company's 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-1-105
(6).
(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 digital record 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 the motion picture company's or the digital media company's 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 Subsections (3)(b) [
and (c)
] 
through (d)
, the office may issue
$6,793,700 in tax credit certificates under this part in each fiscal year.
(b) For the fiscal year ending June 30, 2022, the office may issue $8,393,700 in tax
credit certificates under this part.
(c) If the office does not issue tax credit certificates in a fiscal year totaling the amount
authorized under Subsections (3)(a) and (b), the office may carry over that amount for issuance
in subsequent fiscal years.
(d) The limitations described in Subsections (3)(a) and (b) do not apply to a tax credit
certificate issued for a rural production.