Illinois Administrative Code › Title 14 - COMMERCE › Part 528 - ILLINOIS FILM PRODUCTION SERVICES TAX CREDIT PROGRAM › Section 528.20 - Definitions

Current through Register Vol. 48, No. 28, July 12, 2024
The following definitions are applicable to this Part:
"Accredited Production" means:
for productions commencing before May 1, 2006
,
a film, video, commercial, or television production that has been
				certified by the Department in which the aggregate Illinois labor expenditures
				included in the cost of the production exceed $100,000 for productions of 30
				minutes or longer, or $50,000 for productions of less than 30
				minutes;
for
productions commencing on or after May 1,
				2006
,
a film, video, commercial, or television production that
				has been certified by the Department in which the aggregate Illinois production
				spending included in the cost of the production exceeds $100,000 for
				productions of 30 minutes or longer, or $50,000 for productions of less than 30
				minutes.
"Accredited Production" does
not include a production
				that:
is news, current events, or public programming, or a
				program that includes weather or market reports;
is a talk show;
is a production in respect of a game, questionnaire, or
				contest;
is a sports event or
live
activity;
is a gala presentation or awards show;
is a finished production that solicits
				funds;
is a production produced by a film production company
				if records, as required by 18 U.S.C. 2257, are to be
				maintained by that film production company with respect to any performer
				portrayed in that single media or multimedia program; or
is a production produced primarily for industrial,
				corporate, or institutional purposes.
(Section 10 of the Act)
"Accredited Production Certificate" means a certificate
				issued by the Department certifying that the production is an accredited
				production that meets the guidelines of the Act.
(Section 10 of the
				Act)
"Act" means the Film Production Services Tax Credit Act
				[35 ILCS
				16 ].
"Applicant" means a taxpayer that is a film production
				company
or a taxpayer working in association with a film production
				company
that is operating or has operated an accredited production
				located within the State of Illinois and that:
owns the copyright in the accredited production
				throughout the Illinois production period; or
has contracted directly with the owner of the copyright
				in the accredited production or a person acting on behalf of the owner to
				provide services for the accredited production, when the owner of the copyright
				is not an eligible production corporation.
(Section 10 of the
				Act)
"Business Owned by a Person with a Disability" means a
				business concern that is at least 51% owned by one or more persons with a
				disability and the management and daily business operation of which are
				controlled by one or more of the persons with disabilities who own it. A
				not-for-profit agency for persons with disabilities that is exempt from
				taxation under section 501 of the Internal Revenue Code of 1986 is also
				considered a "business owned by a person with a disability".
[30 ILCS
				575/2(A) (4.1) ]
"Commencement or Start of Principal Filming or Taping" means
				the date on which filming, taping, or photographing of principal actors or
				action of an accredited production commences. In the case of an animated
				production, the commencement or start of filming or taping is the date on which
				the creation of artwork to be used in actual frames of the film begins.
"Commercial Domicile" means the principal place from which the
				trade or business of a person is directed or managed.
"Credit"
or "Tax Credit"
means, for an
				accredited production commencing on or after January 1, 2009, the amount equal
				to:
30% of the Illinois production spending for the taxable
				year; plus
15% of the Illinois labor expenditures generated by the
				employment of residents of geographic areas of
high unemployment
				determined by census tracts where the unemployment rate is at least 150 percent
				of the State's annual average.
"Department" means the Illinois Department of Commerce and
				Economic Opportunity.
"Director" means the Director of the Department.
"Diversity Data or Information" means data pertaining to
				gender, race, ethnicity and of all employees of the applicant.
"Diversity Plan" means a written document through which the
				applicant assures the Department that minorities and females will have equal
				opportunities in recruitment, selection, appointment, promotion, training, and
				related employment areas in the accredited production. The diversity plan must
				also describe the manner in which the applicant plans on hiring vendors
				certified by the Business Enterprise Council under the Business Enterprise for
				Minorities, Females, and Persons with Disabilities Act [30 ILCS
				575 ] with respect to the accredited production. The
				diversity plan must also detail the manner in which the applicant proposes to
				achieve its goals to ensure employment of protected classes to achieve a
				diverse workforce, rather than merely to assure nondiscrimination.
"Economic Impact Data" means data pertaining to the types of
				jobs (production, talent and vendor) created and retained in Illinois, as well
				as the total amount an applicant spends in Illinois on the accredited
				production.
"Employee of the Applicant" or "Employee", for accredited
				productions commencing on or after May 1, 2006, means only an individual who is
				an employee of the applicant for purposes of employment taxes imposed under
				subtitle C of the Internal Revenue Code (26 U.S.C. subtitle C).
"Entry Level Positions" means the lowest level of a hierarchy
				in a production, including untrained or unskilled labor working on a
				production, such as a production assistant.
"Illinois Labor Expenditure" means salary or wages paid
				to employees of the applicant for services on the accredited production. To
				qualify as an Illinois labor expenditure, the expenditure must
				be:
reasonable in the circumstances;
included in the federal income tax basis of the
				property.
For purposes of this provision, an expenditure that is
				immediately expensed as an advertising cost under Treasury Regulations section
				1.162 -1(a) (26 CFR
				1.162-1(a)) or as a
				qualified film, television or commercial production cost under section 181 of
				the Internal Revenue Code (26 U.S.C. 181) shall be treated as
				included in the federal income tax basis of the accredited production if the
				expenditure would be required to be capitalized under section 263A of the
				Internal Revenue Code (26
				U.S.C. 263A) if that section applied to the
				accredited production
;
incurred by the applicant for services on or after
				January 1, 2004;
incurred for the production stages of the accredited
				production, from the final script stage to the end of the post-production
				stage;
limited to the first $25,000 of wages paid or incurred
				to each employee of an
accredited
production commencing before
				May 1, 2006 and the first $100,000 of wages paid or incurred to each employee
				of an
accredited
production commencing on or after May 1, 2006
				and prior to July 1, 2022. For productions commencing on or after July 1, 2022,
				limited to the first $500,000 of wages paid or incurred to each nonresident or
				resident employee of a production company or loan out company that provides
				in-State services to a production, whether those wages are paid or incurred by
				the production company, loan out company, or both, subject to withholding
				payments provided for in Article 7 of the Illinois Income Tax Act. For purposes
				of calculating Illinois labor expenditures for a television series, the
				nonresident wage limitations provided under this subparagraph are applied to
				the entire season
;
for an
accredited
production
				commencing before May 1, 2006, exclusive of Illinois gross wages and benefits
				paid to or incurred for the 2 highest paid employees of the accredited
				production;
directly attributable to the accredited
				production;
Prior to July 1, 2022, paid to persons
residing
in Illinois at the time the payments were made. For a
				production commencing on or after July 1, 2022, paid to persons resident in
				Illinois and nonresidents at the time the payments were made. For purposes of
				this subparagraph, only wages paid to nonresidents working in the following
				positions shall be considered Illinois labor expenditures: Writer, Director,
				Director of Photography, Production Designer, Costume Designer, Production
				Accountant, VFX Supervisor, Editor, Composer, and Actor, subject to the
				limitations set forth under this subparagraph. For an accredited Illinois
				production spending $25,000,000 or less, no more than 2 nonresident actors'
				wages shall qualify as an Illinois labor expenditure. For an accredited
				production with Illinois production spending of more than $25,000,000, no more
				than 4 nonresident actor's wages shall qualify as Illinois labor expenditures;
				and
paid for services rendered in Illinois.
(Section 10 of the Act)
"Illinois Production Spending" means the expenses
				incurred by the applicant
that are reasonable under the circumstances
				and directly attributable to the a
ccredited production, including,
				without limitation, all of the following
:
expenses to purchase, from vendors within Illinois,
				tangible personal property that is used in the accredited production
in Illinois;
expenses to acquire services, from vendors in Illinois,
				for film production and
post-production (which includes editing and
				processing) in Illinois;
and
for a production commencing before July 1, 2022,
				compensation, not to exceed $100,000 for any one employee of the applicant, for
				contractual or salaried employees who are Illinois residents performing
				services with respect to the accredited production
in Illinois.
				(Section 10 of the Act) For a production commencing on or after July 1, 2022,
				the compensation, not to exceed $500,000 for any one employee, for contractual
				or salaried employees who are Illinois residents or nonresident employees,
				subject to the limitations set forth under Section 10 of the Act.
"Illinois Resident" means an individual who is domiciled in
				this State during the accredited production. Except in a case in which the
				applicant has actual knowledge, as shown in its books and records, that an
				individual is not an Illinois resident, the possession by an individual of a
				driver's license or other identification issued by this State prior to the
				commencement of work by the individual on the accredited production shall be
				sufficient proof that the individual is an Illinois resident and the address on
				the license or identification shall be deemed correct.
"Jobs Created and Retained" shall be measured in full-time
				equivalent jobs. In the case of a person hired as an "extra", each person hired
				for each day shall be deemed a full-time equivalent job for that day, based on
				the film industry standard equivalency of a "hire", which is a per day, per
				person standard. In other words, when the film industry hires an "extra" it
				considers each "extra" position to be a one day job that was created to fill a
				particular position for a particular purpose for a particular time.
"Loan Out Company" means a personal service corporation
				or other entity that is under contract with the taxpayer to provide specified
				individual personnel, such as artists, crew, actors, producers, or directors
				for the performance of services used directly in a production, but does not
				include entities contracted with by the taxpayer to provide goods or ancillary
				contractor services such as catering, construction, trailers, equipment, or
				transportation.
(Section 10 of the Act)
"Management Position" means anyone in a supervisory or
				managerial position who has control over other employees who report to that
				individual. Management roles include, but are not limited to, coordinators,
				directors, managers, supervisors, producers, masters and department
				heads.
"Minority"
means a person who is a citizen or lawful
				permanent resident of the United States and who is:
American Indian or Alaska Native (a person having
				origins in any of the original peoples of North and South America, including
				Central America, and who maintains tribal affiliation or community
				attachment).
Asian (a person having origins in any of the original
				peoples of the Far East, Southeast Asia, or the Indian Subcontinent, including,
				but not limited to, Cambodia, China, India, Japan, Korea, Malaysia, Pakistan,
				the Philippine Islands, Thailand, and Vietnam);
Black or African American (a person having origins in
				any of the black racial groups of Africa);
Hispanic or Latino (a person of Cuban, Mexican, Puerto
				Rican, South or Central American, or other Spanish culture or origin,
				regardless of race); or
Native Hawaiian or Other Pacific Islander (a person
				having origins in any of the original peoples of Hawaii, Guam, Samoa, or other
				Pacific Islands).
[30 ILCS
				575/2(A)(1) ].
"Minority Owned Business" means a
business
concern:
that is at least 51% owned by one or more minority
				persons; or
in the case of a corporation, at least 51% of the stock
				in which is owned by one or more minority persons; and
the management and daily business operations of which
				are controlled by one or more of the minority individuals who own it.
[30 ILCS
				575/2(A)(3) ].
"Personal Service Corporation" means a corporation the
				principal activity of which is the performance of personal services and such
				services are substantially performed by employee-owners.
''Production Staff and Crew" means office and production staff,
				including, but not limited to, accountants, coordinators, secretaries, camera,
				casting, construction, costume, electric, grip, location, hair, make-up, props,
				swing gang, set decorating, sound, and transportation.
"Post-Production" means editing or processing of original
				content employing traditional, emerging or new editing or processing techniques
				used for picture, sound and music editorial, rerecording and mixing, visual
				effects, graphic design, original scoring, animation, and musical
				composition.
"Post-Production Staff and Crew" means post-production staff,
				including, but not limited to, film editor, post-production supervisor,
				colorist, visual effects producer, visual effects creative director, visual
				effects supervisor, visual effects editor, compositor, rotoscope artists, matte
				painter, sound designer, dialogue editor, sound editor, re-recording mixer,
				music supervisor, composer, foley artist, mixer, and music editor.
"State" means the State of Illinois.
"Talent Related Positions" means any speaking, background or
				extra roles that appear in front of the camera. Talent refers to on screen
				performers holding these positions.
"Tax Credit Certificate" means the tax credit certificate
				issued by the Department to the applicant certifying that it has complied with
				all statutory requirements of the Act and this Part and that it is entitled to
				a credit under the Act.
"Taxpayer" means any person defined by, and subject to, the tax
				imposed by the Illinois Income Tax Act [35 ILCS 5/1501(a)(18) and
				(a)(24) ].
"Treasury Regulations" means the rules of the U.S. Internal
				Revenue Service published at Title 26 of the Code of Federal
				Regulations.
"Vendor in Illinois". Expenditures for purchases of tangible
				personal property or services from a vendor in Illinois shall mean:
Purchases of tangible personal property for use in Illinois on
				an accredited production from a person who is registered under the Illinois
				Retailers' Occupation Tax Act (ROTA) [35 ILCS 120
				]. A copy of the purchase receipt showing that the purchase was made at an
				Illinois location and that Illinois Retailers' Occupation Tax was paid shall be
				sufficient proof that the purchase was made from a vendor in Illinois. For
				tangible personal property ordered by mail, telephone or internet, a copy of
				the seller's ROTA registration certificate, along with a receipt showing that
				Illinois Use Tax was collected by the vendor, shall be sufficient proof that
				the purchase was made from a vendor in Illinois. Documentation that shows that
				Illinois Use Tax was collected by the vendor, but either does not show an
				Illinois address for the sale or is not accompanied by a ROTA registration
				certificate, shall not be sufficient proof that the purchase was made from a
				vendor in Illinois.
The lease or rental of real property located in Illinois for
				use in an accredited production, including hotels or other lodging for
				employees working on the accredited production.
The lease or rental of an automobile (as defined in the
				Illinois Automobile Renting Occupation and Use Tax Act [35 ILCS
				155 ]) for use in an accredited production on which
				the rentor collects the Illinois Automobile Renting Occupation and Use Tax from
				the rentee.
The lease or rental of other tangible personal property for use
				in an accredited production if the owner of the property has paid Illinois Use
				Tax on the property. A copy of the invoice or receipt for the lease or rental
				showing an Illinois address for the lessor, and showing that no other state's
				sales tax is collected from the lessee, shall be sufficient proof that the
				transaction was with a vendor in Illinois.
The purchase of financial services (including insurance and the
				borrowing of funds) from a lender or insurer whose commercial domicile is in
				this State.
The purchase of other services with respect to an accredited
				production from an Illinois resident or from a person whose commercial domicile
				is in this State. For purposes of this provision only, the commercial domicile
				of a person is their business address (as shown in the records of the
				applicant) in this State.
A vendor in Illinois that is a corporation, limited
				partnership, limited liability company, or limited liability partnership must
				register and remain an entity in good standing with the Illinois Secretary of
				State, Department of Business Services, throughout the duration of the
				production.
"Vendor Related Positions" means jobs obtained or created
				through a subcontractor, which includes but is not limited to security,
				janitorial, printing, florist, dry cleaners, and limousine services.
"Wages" means all compensation paid for services rendered by an
				employee in connection with an accredited production, including health, life,
				and disability insurance premiums, FICA taxes, pension contributions, expense
				reimbursement, and accrued vacation and sick pay.
"Woman" means a person who is a citizen or lawful
				permanent resident of the United States and who is of the female
				gender.
[30 ILCS
				575/2(A)(2) ]
"Women Owned Business" means a business
				concern:
that is at least 51% owned by one or more women;
				or
in the case of a corporation, at least 51% of the stock
				in which is owned by one or more women; and
the management and daily business operations of which
				are controlled by one or more of the women who own it
. [30 ILCS
				575/2(A)(4) ]