CHAPTER 32. MEDIA PRODUCTION EXPENDITURE TAX CREDIT
IC 6-3.1-32
Chapter 32. Media Production Expenditure Tax Credit
IC 6-3.1-32-1
"Corporation"
Sec. 1. As used in this chapter, "corporation" refers to the Indianaeconomic development corporation.
As added by P.L.235-2007, SEC.2.
IC 6-3.1-32-2
"Department"
Sec. 2. As used in this chapter, "department" refers to thedepartment of state revenue.
As added by P.L.235-2007, SEC.2.
IC 6-3.1-32-3
"Pass through entity"
Sec. 3. As used in this chapter, "pass through entity" means:
(1) a corporation that is exempt from the adjusted gross incometax under IC 6-3-2-2.8(2);
(2) a partnership;
(3) a limited liability company; or
(4) a limited liability partnership.
As added by P.L.235-2007, SEC.2.
IC 6-3.1-32-4
"Qualified applicant"
Sec. 4. As used in this chapter, "qualified applicant" means aperson, corporation, partnership, limited liability partnership, limitedliability company, or other entity that is engaged in the business ofmaking qualified media productions in Indiana.
As added by P.L.235-2007, SEC.2.
IC 6-3.1-32-5
"Qualified media production"
Sec. 5. (a) As used in this chapter, "qualified media production"refers to the following:
(1) Any of the following that is produced for any combinationof theatrical or television viewing or as a television pilot:
(A) A feature length film, including a short feature, anindependent or studio production, or a documentary.
(B) A television series, program, or feature.
(2) A digital media production that is intended for reasonablecommercial exploitation.
(3) An audio recording or a music video.
(4) An advertising message broadcast on radio or television.
(5) A media production concerning:
(A) training; or
(B) external marketing or communications.
(b) The term includes preproduction, production, and
postproduction work.
(c) The term does not include a production in any medium that isobscene (under the standard set forth in IC 35-49-2-1) or televisioncoverage of news or athletic events.
As added by P.L.235-2007, SEC.2.
IC 6-3.1-32-6
"Qualified production expenditure"
Sec. 6. (a) As used in this chapter, "qualified productionexpenditure" means any of the following expenses incurred inIndiana or expenditures in Indiana made in the direct production ofa qualified media production in Indiana:
(1) The payment of wages, salaries, and benefits to Indianaresidents.
(2) Acquisition costs for a story or scenario used in thequalified media production.
(3) Acquisition costs for locations, sets, wardrobes, andaccessories.
(4) Expenditures for materials used to make sets, wardrobes,and accessories.
(5) Expenditures for photography, sound synchronization,lighting, and related services.
(6) Expenditures for editing and related services.
(7) Facility and equipment rentals.
(8) Food and lodging.
(9) Legal services if purchased from an attorney licensed topractice law in Indiana.
(10) Any other production expenditure for which taxes areassessed or imposed by the state.
(b) The term does not include expenditures for payments ofwages, salaries, or benefits to an individual who is a director, aproducer, a screenwriter, or an actor (excluding extras), unless theindividual is a resident of Indiana.
As added by P.L.235-2007, SEC.2.
IC 6-3.1-32-7
"State tax liability"
Sec. 7. As used in this chapter, "state tax liability" means ataxpayer's total tax liability that is incurred under:
(1) IC 6-3-1 through IC 6-3-7 (the adjusted gross income tax);
(2) IC 6-5.5 (the financial institutions tax); and
(3) IC 27-1-18-2 (the insurance premiums tax);
as computed after the application of the credits that underIC 6-3.1-1-2 are to be applied before the credit provided by thischapter.
As added by P.L.235-2007, SEC.2.
IC 6-3.1-32-8
"Taxpayer"
Sec. 8. As used in this chapter, "taxpayer" means an individual or
entity that has any state tax liability.
As added by P.L.235-2007, SEC.2.
IC 6-3.1-32-9
Credit; qualified applicant; maximum amount of credits allowed
Sec. 9. (a) Subject to subsection (b), a qualified applicant that:
(1) incurs or makes qualified production expenditures of:
(A) at least one hundred thousand dollars ($100,000), in thecase of a qualified media production described in section5(a)(1) of this chapter; or
(B) at least fifty thousand dollars ($50,000), in the case of aqualified media production described in section 5(a)(2),5(a)(3), 5(a)(4), or 5(a)(5) of this chapter; and
(2) satisfies the requirements of this chapter;
may claim a refundable tax credit as provided in this chapter.
(b) The maximum amount of tax credits that may be allowedunder this chapter during a state fiscal year for all taxpayers is twomillion five hundred dollars ($2,500,000).
As added by P.L.235-2007, SEC.2. Amended by P.L.131-2008,SEC.18; P.L.182-2009(ss), SEC.208.
IC 6-3.1-32-10
Amount of credit; expenditures less than $6,000,000
Sec. 10. This section applies to a taxpayer that claims qualifiedproduction expenditures of less than six million dollars ($6,000,000)in a taxable year for purposes of the tax credit under this chapter.The amount of the tax credit to which a taxpayer is entitled underthis chapter equals the product of:
(1) fifteen percent (15%); multiplied by
(2) the amount of the taxpayer's qualified productionexpenditures in the taxable year.
As added by P.L.235-2007, SEC.2.
IC 6-3.1-32-11
Amount of credit; expenditures of at least $6,000,000
Sec. 11. (a) This section applies to a taxpayer that claims qualifiedproduction expenditures of at least six million dollars ($6,000,000)in a taxable year for purposes of the tax credit under this chapter.
(b) Subject to section 9(b) of this chapter and the corporation'sapproval of a tax credit for the taxpayer under section 13 of thischapter, a taxpayer may claim a tax credit under this chapter thatequals the product of:
(1) the percentage determined by the corporation under section13 of this chapter; multiplied by
(2) the amount of the taxpayer's qualified productionexpenditures in the taxable year.
As added by P.L.235-2007, SEC.2. Amended by P.L.131-2008,SEC.19.
IC 6-3.1-32-12 Claiming the credit
Sec. 12. (a) To receive the tax credit provided by this chapter, ataxpayer must claim the tax credit on the taxpayer's annual state taxreturn or returns in the manner prescribed by the department. Thetaxpayer shall submit to the department all information that thedepartment determines is necessary for the calculation of the creditprovided under this chapter.
(b) In the case of a taxpayer that claims a tax credit under section11 of this chapter, the taxpayer must also file with the taxpayer'sannual state tax return or returns a copy of the agreement entered intoby the corporation and the taxpayer under section 13 of this chapterfor the tax credit.
As added by P.L.235-2007, SEC.2.
IC 6-3.1-32-13
Applying for the credit; credit agreement
Sec. 13. (a) A taxpayer that proposes to claim a tax credit undersection 11 of this chapter must, before incurring or making thequalified production expenditures, apply to the corporation forapproval of the tax credit.
(b) After receiving an application under subsection (a), thecorporation may enter into an agreement with the applicant for a taxcredit under section 11 of this chapter if the corporation determinesthat:
(1) the applicant's proposed qualified media production:
(A) is economically viable; and
(B) will increase economic growth and job creation inIndiana; and
(2) the applicant's proposed qualified media production andqualified production expenditures otherwise satisfy therequirements of this chapter.
(c) If the corporation and an applicant enter into an agreementunder this section, the agreement must specify the following:
(1) The percentage to be used under section 11(1) of thischapter in determining the amount of the tax credit. Thepercentage may not be more than fifteen percent (15%).
(2) Any requirements or restrictions that the applicant mustsatisfy before the applicant may claim the tax credit.
As added by P.L.235-2007, SEC.2. Amended by P.L.131-2008,SEC.20.
IC 6-3.1-32-14
Credit is refundable
Sec. 14. If the amount of the tax credit provided under this chapterto a taxpayer in a taxable year exceeds the taxpayer's state taxliability for that taxable year, the taxpayer is entitled to a refund ofthe excess.
As added by P.L.235-2007, SEC.2.
IC 6-3.1-32-15 Pass through entity; distribution of credit
Sec. 15. If a pass through entity is entitled to a tax credit underthis chapter but does not have state tax liability against which the taxcredit may be applied, a shareholder, partner, or member of the passthrough entity is entitled to a tax credit equal to:
(1) the tax credit determined for the pass through entity for thetaxable year; multiplied by
(2) the percentage of the pass through entity's distributiveincome to which the shareholder, partner, or member is entitled.
As added by P.L.235-2007, SEC.2.
IC 6-3.1-32-16
Transfer of credit prohibited
Sec. 16. A taxpayer may not sell, assign, convey, or otherwisetransfer a tax credit provided under this chapter.
As added by P.L.235-2007, SEC.2.
IC 6-3.1-32-17
Double benefit not allowable
Sec. 17. A qualified applicant is not entitled to a tax credit underthis chapter for tangible personal property:
(1) that is a qualified production expenditure; and
(2) for which the qualified applicant claims an exemption underIC 6-2.5-5-41.
As added by P.L.235-2007, SEC.2.
IC 6-3.1-32-18
Additional conditions
Sec. 18. Notwithstanding any other provision, including anyreciprocity agreements entered into by the state, a taxpayer that is acorporation or a nonresident person and that claims a tax credit underthis chapter (or any successor in interest in any part of the taxpayer)must file an Indiana income tax return for at least the first five (5)years that the taxpayer has income from the qualified mediaproduction for which the tax credit was granted. Notwithstanding theincome apportionment provisions of IC 6-3 and any rules adopted bythe department of state revenue, in the case of a corporation or anonresident person (or any successor in interest in any part of thecorporation or nonresident person), the portion of the income fromthe qualified media production that for purposes of taxation underIC 6-3 is considered to be derived from sources within Indiana isequal to:
(1) the income of the corporation or nonresident person (or thesuccessor in interest of the corporation or nonresident person)from the qualified media production; multiplied by
(2) a percentage equal to:
(A) the amount of qualified production expenditures forwhich the tax credit was granted for the qualified mediaproduction; divided by
(B) the total production expenditures for the qualified media
production.
As added by P.L.235-2007, SEC.2.
IC 6-3.1-32-19
State remedies; consent to service of process, jurisdiction, andforum
Sec. 19. (a) If a taxpayer (or any successor in interest of thetaxpayer) fails to satisfy any condition of this chapter or anycondition in an agreement under section 13 of this chapter, or failsto file tax returns as required by section 18 of this chapter, thecorporation may:
(1) disallow the use of all or a part of any unused tax creditgranted to the taxpayer (or any successor in interest of thetaxpayer) under this chapter;
(2) recapture all or a part of the tax credit under this chapter thathas been applied to the state tax liability of the taxpayer (or anysuccessor in interest of the taxpayer); or
(3) both disallow the tax credit under subdivision (1) andrecapture the tax credit under subdivision (2).
(b) A taxpayer may not receive a credit under this chapter unlessthe taxpayer:
(1) consents that the taxpayer (and any successor in interest ofthe taxpayer) will be subject to the jurisdiction of Indianacourts;
(2) consents that service of process in accordance with theIndiana Rules of Trial Procedure is proper service and subjectsthe taxpayer (and any successor in interest of the taxpayer) tothe jurisdiction of Indiana courts; and
(3) consents that any civil action related to the provisions of thischapter and in which the taxpayer (or any successor in interestof the taxpayer) is a party will be heard in an Indiana court.
As added by P.L.235-2007, SEC.2.
IC 6-3.1-32-20
No credit awarded after December 31, 2011
Sec. 20. (a) A tax credit may not be awarded under this chapterfor a taxable year ending after December 31, 2011.
(b) This chapter expires January 1, 2012.
As added by P.L.235-2007, SEC.2.