Some details of the incentives bill

This is a portion of the summary of the Visual Content Act of 2006. There is more that you can find through the link in the previous post, but these are the salient parts of the incentives:


Bill Summary for HB3356 / *SB3513

This bill enacts numerous provisions regarding film and video game industries in Tennessee, as follows:

(1) This bill requires a producer of a film or movie in Tennessee to apply for a production permit with the Tennessee film, entertainment, and music commission. The commission would issue a production permit at no charge upon submission of a completed application, and a copy of such permit would be forwarded to the local film commission in the area of production;

(2) Beginning on and after July 1, 2006, except where a film investor tax credit is issued for the same production, the commissioner would refund the total amount of sales and use taxes paid by a motion picture production company;

(3) Present law provides an exemption from sales and use tax, as well as an excise tax credit, for industrial machinery. This bill adds machinery and equipment used primarily in the production and post-production of theatrical and non-theatrical motion pictures for exhibit or sale to that machinery considered industrial machinery for purposes of the tax exemption and credit. Excise tax credits for this equipment would be retroactive to January 1, 2005, for HD equipment purchases only. All other credits would be applicable effective July 1, 2006;

(4) This bill creates a film investor tax credit in regard to franchise tax liability, which would be granted to production companies producing state-certified productions , in the following amounts:
(A) 17 percent of the total certified base investment, if such investment is greater than $500,000 per project in any 12-month period;
(B) 20 percent of the total certified base investment if such investment is greater than $500,000 per project in any 12-month period and, in addition, at least $20,000 per project will be expended in Tennessee on music recorded in Tennessee or created by Tennessee residents; or
(C) 22 percent of the total certified base investment if such investment is greater than $500,000 per project in any 12-month period and at least 25 percent of the cast and crew will be Tennessee residents.

A production company seeking this tax credit would submit an application to the commission. As a condition precedent to receiving any credit, a production company would sign a statement of intent to begin production within 18 months of receiving the tax credit.

The credit would be assignable and transferable between taxpayers. The credit must be used against appropriate tax liabilities arising within five years from the date the credit was issued. The taxpayer would present the original certificate when filing a return and, if the amount of the credit exceeds the taxpayer's liability, the balance remaining could be claimed in the succeeding year, but the balance must be used within five years from the date the credit was originally issued. No refund would be issued for any unused credit or balance of a credit.