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 Indiana
economic 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 the
department 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 income
tax 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 a
person, corporation, partnership, limited liability partnership, limited
liability company, or other entity that is engaged in the business of
making 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 combination
of theatrical or television viewing or as a television pilot:
(A) A feature length film, including a short feature, an
independent or studio production, or a documentary.
(B) A television series, program, or feature.
(2) A digital media production that is intended for reasonable
commercial 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 is
obscene (under the standard set forth in IC 35-49-2-1) or television
coverage 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 production
expenditure" means any of the following expenses incurred in
Indiana or expenditures in Indiana made in the direct production of
a qualified media production in Indiana:
(1) The payment of wages, salaries, and benefits to Indiana
residents.
(2) Acquisition costs for a story or scenario used in the
qualified media production.
(3) Acquisition costs for locations, sets, wardrobes, and
accessories.
(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 to
practice law in Indiana.
(10) Any other production expenditure for which taxes are
assessed or imposed by the state.
(b) The term does not include expenditures for payments of
wages, salaries, or benefits to an individual who is a director, a
producer, a screenwriter, or an actor (excluding extras), unless the
individual 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 a
taxpayer'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 under
IC 6-3.1-1-2 are to be applied before the credit provided by this
chapter.
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 the
case of a qualified media production described in section
5(a)(1) of this chapter; or
(B) at least fifty thousand dollars ($50,000), in the case of a
qualified 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 allowed
under this chapter during a state fiscal year for all taxpayers is two
million 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 qualified
production 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 under
this chapter equals the product of:
(1) fifteen percent (15%); multiplied by
(2) the amount of the taxpayer's qualified production
expenditures 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 qualified
production 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's
approval of a tax credit for the taxpayer under section 13 of this
chapter, a taxpayer may claim a tax credit under this chapter that
equals the product of:
(1) the percentage determined by the corporation under section
13 of this chapter; multiplied by
(2) the amount of the taxpayer's qualified production
expenditures 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, a
taxpayer must claim the tax credit on the taxpayer's annual state tax
return or returns in the manner prescribed by the department. The
taxpayer shall submit to the department all information that the
department determines is necessary for the calculation of the credit
provided under this chapter.
(b) In the case of a taxpayer that claims a tax credit under section
11 of this chapter, the taxpayer must also file with the taxpayer's
annual state tax return or returns a copy of the agreement entered into
by the corporation and the taxpayer under section 13 of this chapter
for 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 under
section 11 of this chapter must, before incurring or making the
qualified production expenditures, apply to the corporation for
approval of the tax credit.
(b) After receiving an application under subsection (a), the
corporation may enter into an agreement with the applicant for a tax
credit under section 11 of this chapter if the corporation determines
that:
(1) the applicant's proposed qualified media production:
(A) is economically viable; and
(B) will increase economic growth and job creation in
Indiana; and
(2) the applicant's proposed qualified media production and
qualified production expenditures otherwise satisfy the
requirements of this chapter.
(c) If the corporation and an applicant enter into an agreement
under this section, the agreement must specify the following:
(1) The percentage to be used under section 11(1) of this
chapter in determining the amount of the tax credit. The
percentage may not be more than fifteen percent (15%).
(2) Any requirements or restrictions that the applicant must
satisfy 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 chapter
to a taxpayer in a taxable year exceeds the taxpayer's state tax
liability for that taxable year, the taxpayer is entitled to a refund of
the 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 under
this chapter but does not have state tax liability against which the tax
credit may be applied, a shareholder, partner, or member of the pass
through entity is entitled to a tax credit equal to:
(1) the tax credit determined for the pass through entity for the
taxable year; multiplied by
(2) the percentage of the pass through entity's distributive
income 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 otherwise
transfer 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 under
this chapter for tangible personal property:
(1) that is a qualified production expenditure; and
(2) for which the qualified applicant claims an exemption under
IC 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 any
reciprocity agreements entered into by the state, a taxpayer that is a
corporation or a nonresident person and that claims a tax credit under
this 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 media
production for which the tax credit was granted. Notwithstanding the
income apportionment provisions of IC 6-3 and any rules adopted by
the department of state revenue, in the case of a corporation or a
nonresident person (or any successor in interest in any part of the
corporation or nonresident person), the portion of the income from
the qualified media production that for purposes of taxation under
IC 6-3 is considered to be derived from sources within Indiana is
equal to:
(1) the income of the corporation or nonresident person (or the
successor 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 for
which the tax credit was granted for the qualified media
production; 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, and
forum
Sec. 19. (a) If a taxpayer (or any successor in interest of the
taxpayer) fails to satisfy any condition of this chapter or any
condition in an agreement under section 13 of this chapter, or fails
to file tax returns as required by section 18 of this chapter, the
corporation may:
(1) disallow the use of all or a part of any unused tax credit
granted to the taxpayer (or any successor in interest of the
taxpayer) under this chapter;
(2) recapture all or a part of the tax credit under this chapter that
has been applied to the state tax liability of the taxpayer (or any
successor in interest of the taxpayer); or
(3) both disallow the tax credit under subdivision (1) and
recapture the tax credit under subdivision (2).
(b) A taxpayer may not receive a credit under this chapter unless
the taxpayer:
(1) consents that the taxpayer (and any successor in interest of
the taxpayer) will be subject to the jurisdiction of Indiana
courts;
(2) consents that service of process in accordance with the
Indiana Rules of Trial Procedure is proper service and subjects
the taxpayer (and any successor in interest of the taxpayer) to
the jurisdiction of Indiana courts; and
(3) consents that any civil action related to the provisions of this
chapter and in which the taxpayer (or any successor in interest
of 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 chapter
for a taxable year ending after December 31, 2011.
(b) This chapter expires January 1, 2012.
As added by P.L.235-2007, SEC.2.