ployee during any taxable year if the employer is al-
lowed a credit under this section for any of such 
wages.
‘‘(4) WAGES.—The term ‘wages’ has the same 
meaning as when used in section 51. 
‘‘(5) EMPLOYEE FRINGE BENEFIT EXPENSES.—
The term ‘employee fringe benefit expenses’ means 
the amount allowable as a deduction under this 
chapter to the employer for any taxable year with re-
spect to—
‘‘(A) employer contributions under stock 
bonus, pension, profit-sharing, or annuity plan, 
‘‘(B) employer-provided coverage under 
any accident or health plan for employees, and 
‘‘(C) the cost of life or disability insurance 
provided to employees. 
Any amount treated as wages under paragraph 
(1)(A) shall not be taken into account under this 
subparagraph. 
‘‘(d) QUALIFIED UNITED STATES INDEPENDENT 
FILM AND TELEVISION PRODUCTION.—For purposes of 
this section—
‘‘(1) IN GENERAL.—The term ‘qualified United 
States independent film and television production’ 
means any production of any motion picture (wheth-
er released theatrically or directly to video cassette 
or any other format), television or cable program-
ming, mini series, episodic television, movie of the 
week, or pilot production for any of the preceding 
productions if—
‘‘(A) 75 percent of the total wages of the 
production are qualified wages, 
‘‘(B) the production is created primarily 
for use as public entertainment or for edu-
cational purposes, and 
‘‘(C) the total cost of wages of the produc-
tion is more than $200,000 but less than 
$10,000,000. 
Such term shall not include any production if 
records are required under section 2257 of title 18, 
United States Code, to be maintained with respect 
to any performer in such production (reporting of 
books, films, etc. with sexually explicit conduct). For 
purposes of subparagraph (A), no day of photog-
raphy shall be considered a day of principal photog-
raphy unless the cost of wages for the production for 
that day exceeds the average daily cost of wages for 
such production. 
‘‘(2) 
PUBLIC
ENTERTAINMENT.—The 
term 
‘public entertainment’ includes a motion picture
film, video tape, or television program intended for 
initial broadcast via the public broadcast spectrum 
or delivered via cable distribution, or productions 
that are submitted to a national organization in ex-
istence on July 27, 2001, that rates films for violent 
or adult content. Such term does not include any 
film or tape the market for which is primarily top-
ical, is otherwise essentially transitory in nature, or 
is produced for private noncommercial use. 
‘‘(3) INFLATION ADJUSTMENT.—
‘‘(A) IN
GENERAL.—In the case of any 
taxable year beginning in a calendar year after 
2003, the $10,000,000 amount contained in 
paragraph (1)(C) shall be increased by an 
amount equal to—
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment 
under section 1(f)(3) for the calendar year 
in which the taxable year begins, deter-
mined by substituting ‘calendar year 2002’ 
for ‘calendar year 1992’ in subparagraph 
(B) thereof. 
‘‘(B) ROUNDING.—If any increase deter-
mined under subparagraph (A) is not a multiple
of $500,000, such amount shall be rounded to 
the nearest multiple of $500,000. 
‘‘(e) CONTROLLED GROUPS.—For purposes of this 
section—
‘‘(1) all employers treated as a single employer 
under subsection (a) or (b) of section 52 shall be 
treated as a single employer for purposes of this 
subpart, and 
‘‘(2) the credit (if any) determined under this 
section with respect to each such employer shall be 
its proportionate share of the wages giving rise to 
such credit. 
‘‘(f) APPLICATION OF CERTAIN OTHER RULES.—For 
purposes of this section, rules similar to the rules of sec-
tion 51(k) and subsections (c) and (d) of section 52 shall 
apply.’’. 
(b) CREDIT TREATED AS BUSINESS CREDIT.—Sec-
tion 38(b) of the Internal Revenue Code of 1986 is amend-
ed by striking ‘‘plus’’ at the end of paragraph (14), by 
striking the period at the end of paragraph (15) and in-
serting ‘‘, plus’’, and by adding at the end the following 
new paragraph:
‘‘(16) the United States independent film and 
television production wage credit determined under 
section 45G(a).’’.
(c) NO CARRYBACKS.—Subsection (d) of section 39 
of the Internal Revenue Code of 1986 (relating to 
carryback and carryforward of unused credits) is amended 
by adding at the end the following: 
‘‘(11) NO CARRYBACK OF SECTION 45G CREDIT 
BEFORE EFFECTIVE DATE.—No portion of the un-
used business credit for any taxable year which is 
attributable to the United States independent film 
and television production wage credit determined 
under section 45G may be carried back to a taxable 
year ending before the date of the enactment of sec-
tion 45G.’’. 
(d) DENIAL OF DOUBLE BENEFIT.—Subsection (a) 
of section 280C of the Internal Revenue Code of 1986 is 
amended by inserting ‘‘45G(a),’’ after ‘‘45A(a),’’. 
(e) CONFORMING AMENDMENT.—The table of sec-
tions for subpart D of part IV of subchapter A of chapter 
1 of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new item:
‘‘Sec. 45G. United States independent film and television produc-
tion wage credit.’’.
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts paid or incurred after 
the date of the enactment of this Act in taxable years end-
ing after such date.
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