Current Status Bill Number:
3069Ratification Number: 443Act Number: 358Type of Legislation: General Bill GBIntroducing Body: HouseIntroduced Date: 19970114Primary Sponsor: LimehouseAll Sponsors: Limehouse, Seithel, Bailey and WilkesDrafted Document Number: jic\5166htc.97Date Bill Passed both Bodies: 19980603Date of Last Amendment: 19980603Governor's Action: SDate of Governor's Action: 19980609Subject: Income tax credits, investment in film enterprise, motion picture production facility; Taxation, Movies
Body Date Action Description Com Leg Involved ______ ________ _______________________________________ _______ ____________ ------ 19980617 Act No. A358 ------ 19980609 Signed by Governor ------ 19980604 Ratified R443 House 19980603 Concurred in Senate amendment, enrolled for ratification Senate 19980603 Read third time, returned to House with amendment Senate 19980603 Amended Senate 19980528 Read second time, notice of general amendments, carrying over all amendments to third reading Senate 19980521 Recalled from Committee, 06 SF placed on the Calendar Senate 19980519 Recommitted to Committee, 06 SF retaining its place on the Calendar Senate 19980513 Committee report: Favorable with 06 SF amendment Senate 19980505 Introduced, read first time, 06 SF referred to Committee House 19980430 Read third time, sent to Senate House 19980429 Amended, read second time House 19980423 Committee report: Favorable with 30 HWM amendment House 19970114 Introduced, read first time, 30 HWM referred to Committee House 19961218 Prefiled, referred to Committee 30 HWMView additional legislative information at the LPITS web site.
(A358, R443, H3069)
AN ACT TO AMEND ARTICLE 25, CHAPTER 6 OF TITLE 12, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO SOUTH CAROLINA INCOME TAX CREDITS, BY ADDING SECTION 12-6-3510 SO AS TO PROVIDE FOR A NONREFUNDABLE CREDIT IN AN AMOUNT EQUAL TO THIRTY-THREE PERCENT, BUT NOT MORE THAN FIFTEEN THOUSAND DOLLARS, OF A TAXPAYER'S INVESTMENT IN A QUALIFIED MOTION PICTURE PROJECT, PROVIDE FOR A NONREFUNDABLE CREDIT IN AN AMOUNT EQUAL TO THIRTY-THREE PERCENT OF THE VALUE OF A TAXPAYER'S INVESTMENT IN THE CONSTRUCTION OR CONVERSION OR EQUIPPING, OR ANY COMBINATION OF THESE ACTIVITIES, OF A MOTION PICTURE PRODUCTION FACILITY IN SOUTH CAROLINA IN WHICH THE TAXPAYER PURCHASES AN OWNERSHIP INTEREST WITH THE TAXPAYER'S INVESTMENT, AND PROVIDE FOR RELATED AND INCIDENTAL MATTERS; TO REQUIRE THE DEPARTMENT OF REVENUE TO PROVIDE A REPORT TO THE BOARD OF ECONOMIC ADVISORS OF ALL CREDITS EARNED UNDER SECTION 12-6-3510, AND REQUIRE THE BOARD TO CONDUCT A COST-BENEFIT ANALYSIS OF THESE CREDITS AFTER THE FIRST AND THIRD YEARS THE CREDITS ARE ALLOWED AND REPORT ITS FINDINGS TO THE HOUSE WAYS AND MEANS COMMITTEE AND THE SENATE FINANCE COMMITTEE; AND TO PROVIDE FOR THE REPEAL OF SECTION 12-6-3510 EFFECTIVE FOR TAXABLE YEARS BEGINNING AFTER JUNE 30, 2004.
Be it enacted by the General Assembly of the State of South Carolina:
Income tax credits allowed; etc.
SECTION 1. Article 25, Chapter 6, Title 12 of the 1976 Code is amended by adding:
Section 12-6-3510. (A) There is allowed as a nonrefundable credit against any tax imposed pursuant to this chapter an amount equal to thirty-three percent, but not more than fifteen thousand dollars, of a taxpayer's investment in a qualified South Carolina motion picture project. A taxpayer may claim no more than one credit in connection with the production of a single qualified South Carolina motion picture project. This credit is allowed over more than one taxable year but a taxpayer's total credit in all years, toward any such project, may not exceed fifteen thousand dollars. Any unused credit may be carried forward to five succeeding taxable years. For an investment made after the effective date of this section, the credit is allowed for a taxable year after December 31, 1998, beginning in the calendar year the project is registered as a qualified South Carolina motion picture project.
(B) In addition to the credit provided in subsection (A), a nonrefundable credit is allowed against any taxes imposed pursuant to this chapter in an amount equal to thirty-three percent of the value of a taxpayer's investment in the construction or conversion, or equipping, or any combination of these activities, of a motion picture production facility in this State in which the taxpayer purchases an ownership interest with the taxpayer's investment. No credit is allowed unless the total amount invested in the motion picture production facility has been expended directly in this State and is not less than two million dollars, exclusive of land costs, or the total amount invested in a post-production facility has been expended directly in this State and is not less than one million dollars, exclusive of land costs. Documentation sufficient to provide confirmation of this threshold must accompany the application for the credit. Any unused credit may be carried forward to five succeeding taxable years. The total amount of credit, which may be claimed by all taxpayers with respect to the construction, or conversion, or equipping, or any combination of these activities, of a single motion picture production facility may not exceed five million dollars.
(C) Credits allowed under this section are allocated to partners, limited liability company members, and subchapter 'S' corporation shareholders based on the percentage of their interest.
(D) Notwithstanding the amount of the credits allowed by this section, these credits, when combined with any other state income tax credits allowed the taxpayer for a particular taxable year, cannot reduce the taxpayer's South Carolina income tax liability more than fifty percent.
(E) All documentation provided by investors and their agents to the Department of Revenue in connection with claiming the credits allowed by this section is considered a tax return and subject to the penalty provisions of Section 12-54-40(f).
(F) As used in this section:
(1) 'Investment' means cash with respect to subsection (A) of this section, and with respect to subsection (B) of this section cash or real property with any improvements thereon, or any combination of these.
(2) 'Motion picture company' means an enterprise that is in the business of filming or producing motion pictures, or both.
(3) 'Motion picture production facility' means a site that contains soundstages designed for the express purpose of film and television production for both theatrical and video release. Production includes, but is not limited to, motion pictures, made-for-television movies and episodic television. The motion picture production facility site must include production offices, construction shops/mills, prop and costume shops, storage area, parking for production vehicles, all of which complement the production needs and orientation of the overall facility purpose. 'Motion picture facility' also includes a facility designed for the express purpose of accomplishing the post-production stage of film and television production for both theatrical and video release including, but not limited to, the creation of visual effects, editing, and sound mixing for motion picture/television projects. A post-production facility site is not required to contain a soundstage nor be physically located at or near soundstages.
(4) 'Motion picture project' means a product intended for commercial exploitation that incurs at least one million dollars of costs to produce a master negative motion picture for theatrical or television exhibition in the United States.
(5) 'Qualified South Carolina motion picture project' means a motion picture project which has registered by submitting its record of allocation of credits and documentation to the Department of Revenue, certifying that an amount equal to at least fifty percent of the total amount invested by all South Carolina investors in a single motion picture project, multiplied by five, has been expended directly in this State and that at least twenty percent of the total filming days of principal photography but not less than ten filming days, is filmed in this State. Before registration, all documentation of a motion picture project required to meet the credit requirements, must be received by the department.
Report, cost-benefit analysis; etc.
SECTION 2. The Department of Revenue shall provide a report to the Board of Economic Advisors of all credits earned under Section 12-6-3510 of the 1976 Code as added by this act. The board shall conduct a cost-benefit analysis of these credits after the first and third years the credits are allowed and report its findings to the House Ways and Means Committee and the Senate Finance Committee.
Time effective, repealer; exception
SECTION 3. This act takes effect upon approval by the Governor and with respect to qualified motion picture investments made pursuant to Section 12-6-3510 of the 1976 Code giving rise to tax credits and may only be claimed by a taxpayer for tax years beginning after December 31, 1998. This section is repealed effective for taxable years beginning after June 30, 2004, but this repeal shall not affect credits previously earned.
Approved the 9th day of June, 1998.