SB1420 - 492R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Repeal

Section 41-1517, Arizona Revised Statutes, is repealed.

Sec. 2. Title 41, chapter 10, article 1, Arizona Revised Statutes, is amended by adding a new section 41-1517, to read:

START_STATUTE41-1517. Motion picture production; tax incentives; definitions

A. From and after December 31, 2010 through December 31, 2015, the department of commerce shall qualify motion PICTURE production companies that produce one or more motion pictures in this state for tax incentives as provided by this section. To qualify, the motion picture production company must meet the following requirements and conditions:

1. At least seventy-five per cent of the total qualified production costs of the production must be incurred in this state.

2. At least fifty per cent of full‑time employees who are working on the production at the soundstage and who are employed by the motion picture production company or its authorized payroll service company must be residents of this state.

3. The motion picture production company must include in the credits for each motion picture, other than a commercial advertisement or a music video, an acknowledgement of the production activities in this state.

B. Only a motion picture production company that demonstrates that it has the lawful right to produce a particular production may apply for qualification under this section with respect to that production.

C. An initial application for qualification must be in a form prescribed by the department of commerce, with the cooperation of the department of revenue. The application is complete on receiving all of the following information:

1. The name, mailing address, telephone number and website of the motion picture production company.

2. The office address, mailing address, e-mail address and telephone number of the production office in this state.

3. The name, office address, mailing address, e-mail address and telephone number of an individual who will maintain records of expenditures in this state.

4. The location of the soundstage, including the office address, mailing address, e-mail address and telephone number of an official representative of the soundstage.

5. The projected first preproduction date and last production date at the soundstage.

6. The estimated total budget of the production.

7. The estimated total expenditures in this state.

8. The estimated total expenditures at the soundstage.

9. The estimated percentage of the total production costs occurring in this state.

10. The estimated percentage of the total production costs occurring at the soundstage.

11. The estimated level of employment of residents of this state in the cast and crew at the soundstage.

12. A script, including a synopsis, the proposed director and a preliminary list of the cast and producer, except that, with respect to:

(a) A television series, other than a pilot production, in lieu of a script the applicant must include:

(i) A synopsis of the general nature of the series.

(ii) A description of the characters and the intended nature of their interaction with each other.

(iii) A description of the locations other than the soundstage.

(iv) A description of the sets.

(v) The intended distribution or broadcast medium with specific television channels, if known.

(b) A music video production, in lieu of a script the applicant must submit a synopsis or storyboard that:

(i) Identifies the artist and song.

(ii) Describes the general content or message to be conveyed.

(iii) Describes the location or locations.

(iv) Describes the sets.

(v) Describes the intended distribution or medium and specific channels, if known.

13. An affirmation signed by any person who will be credited on screen as the producer or producers of the motion picture, not including the executive producers, associate producers, assistant producers or line producers, that:

(a) The motion picture production company agrees to furnish records of expenditures in this state to the department of revenue on request.

(b) Any items purchased with a certificate issued under section 42‑5009, subsection H are intended for use by the applicant directly in the production activities at the soundstage.

14. Any additional information required pursuant to rule.

D. The department of commerce shall:

1. Establish the process by which the department of commerce qualifies and preapproves a company for the tax incentives under this section.

2. Review each application within thirty days after submission of a complete application pursuant to subsection C of this section to determine whether the motion picture production company satisfies all of the criteria prescribed in subsection A of this section. If the department of commerce finds that the application:

(a) Is complete and correct and that the production company satisfies the criteria prescribed in subsection A of this section, the department of commerce shall notify the production company that it is preapproved for tax incentives, subject to any other requirements of this section, issue a written letter of qualification to the company and transmit a copy of the letter to the department of revenue. A letter of qualification is effective for twenty‑four consecutive months as stated in the letter.

(b) Fails to comply fully with the requirements of subsections A, B and C of this section, the department of commerce shall return the application and notify the production company of the deficiency. The production company may thereafter resubmit a corrected or completed application.

E. Within ninety days after the department preapproves a production company's initial application, the company must:

1. Submit notice to the department that production has begun. The department may conduct site visits to the soundstage to verify production activities.

2. Provide at least one of the following:

(a) A copy of a contract, loan out agreement or deal memo with a cameraman and crew.

(b) A copy of the crew call sheet for the first day of production at the soundstage.

(c) Evidence that residents of this state have been paid a total of at least five thousand dollars for work at the soundstage on the motion picture.

(d) A copy of a contract or agreement directly attributable to the production of the motion picture at the soundstage.

F. Preapproval by the department lapses and the application is void if, within ninety days after the date of preapproval, the production company fails to provide documentation of either:

1. Its expenditure in this state of the lesser of:

(a) Ten per cent of the estimated total budgeted production costs budgeted to be spent in this state.

(b) Two hundred fifty thousand dollars.

2. A completion bond, equal to the estimated total budget of the production of the motion picture for which the company was preapproved. For the purposes of this paragraph, "completion bond" means an executed written contract, issued by an insurance company with an insurance industry rating of B+ or better by A.M. Best company guarantying to the financiers of the project that it will be completed according to the terms of the preapproved application.

G. If a preapproved motion picture production company fails to incur production expenditures or file a completion bond as described in subsection F of this section within the ninety‑day period, the company and all persons signing the application for preapproval are disqualified from receiving, or participating in any motion picture production company that applies for or receives, tax incentives pursuant to this section for three years after the original application.

H. Notwithstanding other provisions of this section, the following provisions apply with respect to commercial advertisement and music video productions:

1. The department must review the completed application within fifteen business days.

2. Expenses incurred before the date of submission of a completed application under subsection C of this section do not qualify as production costs.

3. Within sixty days after applying under subsection C of this section, a company that is preapproved for a specific production must notify and provide documentation to the department of the total amount of eligible production expenditures associated with the production.

I. An approved income tax credit offsets tax liability for the taxable year for which the credit was originally approved. The credits must be claimed on a timely filed original income tax return, including extensions.

J. On completion of the motion picture production, a motion picture production company must:

1. Apply to the department of commerce in writing for postapproval of the production and qualification for income tax credits.

2. Submit with its application either:

(a) A viewable copy of the motion picture, except as provided in subsection P of this section.

(b) A letter of credit, payable to the department of revenue, providing that within two business days after the issuer receives a written determination from the department of commerce that the production fails to qualify for the tax credits the issuer will pay to the department of revenue the full face value of the income tax credits in the application. If the department of revenue draws on the letter of credit, the monies shall be transferred to and held in an interest bearing account pending the final outcome of an appeal, if any. The letter of credit may be released on the determination by the department of commerce that the completed production qualifies for the tax credits.

3. Certify the total amount of eligible production costs associated with the project incurred at the soundstage.

K. Notwithstanding subsection J of this section, the department shall deny an application for postapproval if it determines that the motion picture production company does not meet all of the established criteria provided in subsection A of this section.

L. The department of commerce shall provide notice of postapproval to a production company if it has met the eligibility requirements of this section and shall notify the department of revenue that the motion picture production company may claim the tax credits pursuant to sections 43‑1075 and 43‑1163.

M. The department of commerce, with the cooperation of the department of revenue, shall adopt rules and publish and prescribe forms and procedures as necessary to effectuate the purposes of this section.

N. Any information gathered from motion picture production companies for the purposes of this section is considered to be confidential taxpayer information and shall be disclosed only as provided in section 42‑2003, subsection B, paragraph 12, except that the department shall publish the following information in its annual report:

1. The name of each motion picture production company and the amount of income tax credits preapproved during the year for each production.

2. The amount of credits approved during the year with respect to each production.

O. The department shall:

1. Keep annual records of the information provided on applications for motion picture production tax incentives. These records shall reflect a percentage comparison of the annual amount of monies exempted or credited to qualifying motion picture production companies to the estimated amount of monies spent on in-state production costs by motion picture production companies.

2. Maintain annual data on Arizona-based motion picture industry companies and motion picture industry employment and wages.

3. On or before April 30 of each year, prepare and publish a report summarizing the information collected pursuant to this subsection. The department shall make copies of the annual report available to the public on request.

P. For the purposes of this section:

1. "Commercial advertisement" means an advertising message designed for delivery through a motion picture film or video medium to attract the attention of consumers or influence consumers' feelings toward a particular product, service, event or cause.

2. "Motion picture":

(a) Means a single medium or multimedia program, including commercial advertisements documentaries, long-forms, specials, music videos or television series, that:

(i) Is created by production activities conducted in whole or in part in this state.

(ii) Can be viewed or reproduced.

(iii) Is intended for commercial distribution or licensing in the delivery medium used.

(b) Does not include interactive television and video games or any production featuring actual news, current events, weather, locally produced and locally broadcast television productions, financial market reports, concerts, internet broadcasts, talk shows and interviews, game shows, sporting events, award or other gala events, a production whose sole purpose is fund‑raising, a production used for corporate or organizational training or in-house corporate advertising or other similar production activities.

3. "Motion picture production company" or "production company" means any person that is primarily engaged in the business of producing motion pictures and that has a physical business office in this state.

4. "Motion picture production tax incentives" means the tax deductions for transaction privilege and use taxes listed in section 42‑5009, subsection H and the credit against income taxes provided under section 43‑1075 or 43‑1163.

5. "Music video" means a filmed or videotaped rendition of a song or songs, portraying musicians performing the song and visual images set to the lyrics of the song.

6. "Qualified production costs" means, and is limited to, the following expenses:

(a) Expenditures for payroll, including fringe benefits, paid to residents of this state, as defined by section 43‑104, for work actually performed in THIS state.

(b) Purchases in this state of:

(i) Production equipment.

(ii) Production software.

(iii) Postproduction work.

(iv) Postproduction equipment.

(v) Postproduction software.

(vi) Set design and construction.

(vii) Props, lighting, wardrobe, makeup and makeup accessories.

(viii) Special effects, visual effects, audio effects and film processing.

(ix) Catered food, drink and condiment.

(x) Airfare purchased through an in-state travel agency or company.

(xi) Insurance and bonding purchased through an in-state vendor.

(d) Music, photography, sound synchronization, lighting and related costs incurred in this state.

(e) Location fees.

(f) Soundstage and other direct costs incurred by the production company from in-state vendors and used in the production of the motion picture.

7. "Television series":

(a) Means a group of productions that is created or adapted for television broadcast with a common series title, that is related to each other in subject or theme, that is produced seasonally for appearing at scheduled intervals, but subject to discretionary programming and scheduling decisions, and with or without a predetermined number of episodes.

(b) Includes a pilot production for the promotion or introduction of a television series. END_STATUTE

Sec. 3. Section 41-1517.01, Arizona Revised Statutes, is amended to read:

START_STATUTE41-1517.01. Motion picture infrastructure tax incentives; definitions

A. From and after October 31, 2007 through December 31, 2010 2015, the department of commerce shall certify motion picture infrastructure projects in this state for the purpose of tax credits under section 43‑1075.01 or 43‑1163.01. To qualify for certification:

1. A person must apply to the department. The applicant must be the person who will own and operate the infrastructure project and may be a motion picture production company, as defined in section 41‑1517. The application must include:

(a) The applicant's name and contact information mailing address, telephone number and website.

(b) The name, office address, mailing address, e-mail address and telephone number of an individual who will maintain the records of the facility.

(b) (c) A detailed description of the project.

(d) (e) An outline of how the project meets the requirements of this section.

(e) (f) The projected construction start and completion dates.

(f) (g) The name and contact information for the prime contractor, if known.

(g) (h) A copy of the construction contract, if available.

(h) (i) An affirmation signed by an executive representing the applicant that:

(i) The applicant agrees to furnish records of expenditures on infrastructure projects in this state to the department of commerce on request.

(ii) Any items included in its base investment are intended for use by the applicant directly in the infrastructure project.

2. If the application is for a soundstage, after the date the department of commerce approves the application under subsection B of this section, the applicant must spend at least:

(a) Two hundred fifty thousand dollars in this state directly on project expenses within ninety days.

(b) An additional one million dollars in this state directly on project expenses within twelve months.

3. If the application is for support and augmentation facilities, after the date the department of commerce approves the application under subsection B of this section, the applicant must spend at least:

(a) Two hundred fifty thousand dollars in this state directly on project expenses within ninety days.

(b) A total of at least one million dollars in this state directly on project expenses within thirty-six months.

B. Within thirty days after submission, the department of commerce shall review each complete application to determine whether the applicant satisfies all of the criteria required by this section. The department may conduct a site visit as part of the review process. This process shall approve an applicant for tax credits under this section based on:

1. priority placement for credits under this section established by the date the applicant filed its initial application under subsection A of this section.

2. The availability of tax credit amounts under the dollar limits prescribed by subsection C of this section.

C. Subject to the limits prescribed in section 41‑1517, subsection J, The department of commerce shall not certify income tax credits under this section, computed as fifteen per cent of the total base investment, exceeding a total of:

1. Five million dollars for soundstage projects initially certified in 2008.

2. If no soundstage project was initially certified in 2008, five million dollars for soundstage projects initially certified in 2009.

3. If at least one soundstage project was initially certified in 2008:

(a) Five million dollars for soundstage projects initially certified in 2009.

(b) Seven million dollars for support and augmentation facilities initially certified in 2009 that are associated with certified soundstage projects.

4. If no soundstage project was initially certified in 2008 or 2009, five million dollars for soundstage projects initially certified in 2010.

5. If only one soundstage project was initially certified in 2008 or 2009:

(a) Five million dollars for soundstage projects initially certified in 2010.

(b) Nine million dollars for support and augmentation facilities initially certified in 2010 that are associated with the certified soundstage project.

6. If more than one soundstage project was initially certified in 2008 or 2009, or both:

(a) Five million dollars for soundstage projects initially certified in 2010.

(b) Nine million dollars for support and augmentation facilities initially certified in 2010 that are associated with certified soundstage projects.

7. Three million dollars for a support and augmentation facilities project.

D. After October 31 of each year, if the department has preapproved the maximum dollar amount of income tax credits under subsection C of this section for the calendar year, the department may accept initial applications for the next calendar year. The preapproval of any application pursuant to this subsection is not effective before the first business day of the following calendar year.

E. C. Preapproval by the department of commerce under subsection B of this section lapses, and the application is void and the amount of the preapproved incentives does not apply against the dollar limit prescribed by subsection C of this section if:

1. Within ninety days after the department preapproves the company application, the company applicant fails to provide documentation of:

(a) Its expenditure in this state of the lesser of:

(i) Ten per cent of the estimated total base investment amount.

(ii) Two hundred fifty thousand dollars.

(b) A surety bond equal to the estimated total base investment amount for which the company application was preapproved.

2. For soundstage projects, within one year after the department preapproves the company application, the company applicant fails to provide documentation of:

(a) Total expenditure in this state of one million two hundred fifty thousand dollars.

(b) A surety bond equal to the estimated total base investment amount for which the company application was preapproved.

F. D. On completion of the motion picture infrastructure project, an applicant that has been preapproved for income tax credits must apply to the department of commerce in writing for approval of the total base investment in the project. If the applicant has met the eligibility requirements of this section, the department of commerce shall:

1. Approve the total base investment amount, but the calculated income tax credit shall not exceed the preapproved amount under this section.

2. Notify the department of revenue that the applicant may claim the income tax credits pursuant to section 43‑1075.01 or 43‑1163.01 in the amount determined under paragraph 1 of this subsection.

G. The company and all persons signing the application for preapproval may be disqualified from receiving future tax credits pursuant to this section if, within eighteen months after the date of postapproval under subsection F of this section, the applicant fails to submit a report to the department that includes:

1. A list of activities and productions conducted at the project in the twelve months following postapproval.

2. The amount of any additional capital investment.

3. Any changes to or improvements made to the project since the date of postapproval.

H. E. Within sixty months after postapproval under subsection F D of this section, if the department of commerce determines that a person that received a tax credit pursuant to this section failed to comply with any of the requirements prescribed by this section, the department shall terminate, adjust or recapture all or part of the tax credit. The department of commerce shall notify the department of revenue of the conditions of noncompliance. The department of revenue may also terminate the approval of the credit if it obtains information indicating a failure to qualify and comply. The department of revenue may require the person to:

1. File appropriate amended tax returns reflecting the recapture of the amount of the tax credit actually applied to reduce state income tax liability.

2. Pay a penalty of four and one-half per cent of the amount of the applied credit per month elapsing from the date the penalty is assessed until it is paid, except that the total penalty shall not exceed twenty‑five per cent of the full amount of the credit.

I. F. The department of commerce, with the cooperation of the department of revenue, shall adopt rules and publish and prescribe forms and procedures as necessary to effectuate the purposes of this section.

J. G. Any information gathered from applicants for the purposes of this section is considered to be confidential taxpayer information and shall be disclosed only as provided in section 41‑1517, subsection S N and section 42‑2003, subsection B, paragraph 12.

K. H. For the purposes of this section:

1. "Base investment" means the budget for the infrastructure project.

2. "Motion picture" has the same meaning as defined prescribed in section 41‑1517.

3. "Motion picture infrastructure project", "infrastructure project" and or "project":

(a) Means soundstages and support and augmentation facilities that are constructed in this state and primarily used for motion picture production.

(b) Does not include motion picture theaters and other commercial exhibition facilities.

4. "Soundstage" means a permanent facility in this state of one or more sets or stages used primarily for staging and filming motion pictures and any land, permanent buildings or capital equipment that is in or adjacent to, and is necessary for the operation of, a soundstage.

5. "Support and augmentation facilities" means permanent facilities in this state that are used to complement motion picture production needs and complement the motion picture production.

6. "Surety bond" means an executed written contract, issued by an insurance company with an insurance industry rating of B+ or better by A.M. Best company guarantying to the financiers of the project that it will be completed according to the terms of the preapproved application submitted by the production company in its application. END_STATUTE

Sec. 4. Section 42-2003, Arizona Revised Statutes, is amended to read:

START_STATUTE42-2003. Authorized disclosure of confidential information

A. Confidential information relating to:

1. A taxpayer may be disclosed to the taxpayer, its successor in interest or a designee of the taxpayer who is authorized in writing by the taxpayer. A principal corporate officer of a parent corporation may execute a written authorization for a controlled subsidiary.

2. A corporate taxpayer may be disclosed to any principal officer, any person designated by a principal officer or any person designated in a resolution by the corporate board of directors or other similar governing body.

3. A partnership may be disclosed to any partner of the partnership. This exception does not include disclosure of confidential information of a particular partner unless otherwise authorized.

4. An estate may be disclosed to the personal representative of the estate and to any heir, next of kin or beneficiary under the will of the decedent if the department finds that the heir, next of kin or beneficiary has a material interest which will be affected by the confidential information.

5. A trust may be disclosed to the trustee or trustees, jointly or separately, and to the grantor or any beneficiary of the trust if the department finds that the grantor or beneficiary has a material interest which will be affected by the confidential information.

6. Any taxpayer may be disclosed if the taxpayer has waived any rights to confidentiality either in writing or on the record in any administrative or judicial proceeding.

7. The name and taxpayer identification numbers of persons issued direct payment permits may be publicly disclosed.

B. Confidential information may be disclosed to:

1. Any employee of the department whose official duties involve tax administration.

2. The office of the attorney general solely for its use in preparation for, or in an investigation which may result in, any proceeding involving tax administration before the department or any other agency or board of this state, or before any grand jury or any state or federal court.

3. The department of liquor licenses and control for its use in determining whether a spirituous liquor licensee has paid all transaction privilege taxes and affiliated excise taxes incurred as a result of the sale of spirituous liquor, as defined in section 4-101, at the licensed establishment and imposed on the licensed establishments by this state and its political subdivisions.

4. Other state tax officials whose official duties require the disclosure for proper tax administration purposes if the information is sought in connection with an investigation or any other proceeding conducted by the official. Any disclosure is limited to information of a taxpayer who is being investigated or who is a party to a proceeding conducted by the official.

5. The following agencies, officials and organizations, if they grant substantially similar privileges to the department for the type of information being sought, pursuant to statute and a written agreement between the department and the foreign country, agency, state, Indian tribe or organization:

(a) The United States internal revenue service, alcohol and tobacco tax and trade bureau of the United States treasury, United States bureau of alcohol, tobacco, firearms and explosives of the United States department of justice, United States drug enforcement agency and federal bureau of investigation.

(b) A state tax official of another state.

(c) An organization of states, federation of tax administrators or multistate tax commission that operates an information exchange for tax administration purposes.

(d) An agency, official or organization of a foreign country with responsibilities that are comparable to those listed in subdivision (a), (b) or (c) of this paragraph.

(e) An agency, official or organization of an Indian tribal government with responsibilities comparable to the responsibilities of the agencies, officials or organizations identified in subdivision (a), (b) or (c) of this paragraph.

6. The auditor general, in connection with any audit of the department subject to the restrictions in section 42‑2002, subsection D.

7. Any person to the extent necessary for effective tax administration in connection with:

(a) The processing, storage, transmission, destruction and reproduction of the information.

(b) The programming, maintenance, repair, testing and procurement of equipment for purposes of tax administration.

8. The office of administrative hearings relating to taxes administered by the department pursuant to section 42‑1101, but the department shall not disclose any confidential information:

(a) Regarding income tax, withholding tax or estate tax.

(b) On any tax issue relating to information associated with the reporting of income tax, withholding tax or estate tax.

9. The United States treasury inspector general for tax administration for the purpose of reporting a violation of internal revenue code section 7213A (26 United States Code section 7213A), unauthorized inspection of returns or return information.

10. The financial management service of the United States treasury department for use in the treasury offset program.

11. The United States treasury department or its authorized agent for use in the state income tax levy program and in the electronic federal tax payment system.

12. The department of commerce for its use in:

(a) Qualifying motion picture production companies for the tax incentives provided for motion picture production under chapter 5 of this title and sections 43‑1075 and 43‑1163.

(b) Qualifying applicants for the motion picture infrastructure project tax credits under sections 43‑1075.01 and 43‑1163.01.

(d) Fulfilling its annual reporting responsibility pursuant to section 41‑1511, subsections T and U and section 41-1517, subsections S and T N and O.

13. A prosecutor for purposes of section 32‑1164, subsection C.

14. The state fire marshal for use in determining compliance with and enforcing title 41, chapter 16, article 3.1.

C. Confidential information may be disclosed in any state or federal judicial or administrative proceeding pertaining to tax administration pursuant to the following conditions:

1. One or more of the following circumstances must apply:

(a) The taxpayer is a party to the proceeding.

(b) The proceeding arose out of, or in connection with, determining the taxpayer's civil or criminal liability, or the collection of the taxpayer's civil liability, with respect to any tax imposed under this title or title 43.

(c) The treatment of an item reflected on the taxpayer's return is directly related to the resolution of an issue in the proceeding.

(d) Return information directly relates to a transactional relationship between a person who is a party to the proceeding and the taxpayer and directly affects the resolution of an issue in the proceeding.

2. Confidential information may not be disclosed under this subsection if the disclosure is prohibited by section 42‑2002, subsection C or D.

D. Identity information may be disclosed for purposes of notifying persons entitled to tax refunds if the department is unable to locate the persons after reasonable effort.

E. The department, upon the request of any person, shall provide the names and addresses of bingo licensees as defined in section 5‑401, verify whether or not a person has a privilege license and number, a distributor's license and number or a withholding license and number or disclose the information to be posted on the department's web site website or otherwise publicly accessible pursuant to section 42‑1124, subsection F and section 42‑3201, subsection A.

F. A department employee, in connection with the official duties relating to any audit, collection activity or civil or criminal investigation, may disclose return information to the extent that disclosure is necessary to obtain information which is not otherwise reasonably available. These official duties include the correct determination of and liability for tax, the amount to be collected or the enforcement of other state tax revenue laws.

G. If an organization is exempt from this state's income tax as provided in section 43‑1201 for any taxable year, the name and address of the organization and the application filed by the organization upon which the department made its determination for exemption together with any papers submitted in support of the application and any letter or document issued by the department concerning the application are open to public inspection.

H. Confidential information relating to transaction privilege tax, use tax, severance tax, jet fuel excise and use tax and rental occupancy tax may be disclosed to any county, city or town tax official if the information relates to a taxpayer who is or may be taxable by the county, city or town. Any taxpayer information released by the department to the county, city or town:

1. May only be used for internal purposes.

2. May not be disclosed to the public in any manner that does not comply with confidentiality standards established by the department. The county, city or town shall agree in writing with the department that any release of confidential information that violates the confidentiality standards adopted by the department will result in the immediate suspension of any rights of the county, city or town to receive taxpayer information under this subsection.

I. The department may disclose statistical information gathered from confidential information if it does not disclose confidential information attributable to any one taxpayer. In order to comply with the requirements of section 42‑5029, subsection A, paragraph 3, the department may disclose to the state treasurer statistical information gathered from confidential information, even if it discloses confidential information attributable to a taxpayer.

J. The department may disclose the aggregate amounts of any tax credit, tax deduction or tax exemption enacted after January 1, 1994. Information subject to disclosure under this subsection shall not be disclosed if a taxpayer demonstrates to the department that such information would give an unfair advantage to competitors.

K. Except as provided in section 42‑2002, subsection C, confidential information, described in section 42‑2001, paragraph 2, subdivision (a), item (iii), may be disclosed to law enforcement agencies for law enforcement purposes.

L. The department may provide transaction privilege tax license information to property tax officials in a county for the purpose of identification and verification of the tax status of commercial property.

M. The department may provide transaction privilege tax, luxury tax, use tax, property tax and severance tax information to the ombudsman‑citizens aide pursuant to title 41, chapter 8, article 5.

N. Except as provided in section 42‑2002, subsection D, a court may order the department to disclose confidential information pertaining to a party to an action. An order shall be made only upon a showing of good cause and that the party seeking the information has made demand upon the taxpayer for the information.

O. This section does not prohibit the disclosure by the department of any information or documents submitted to the department by a bingo licensee. Before disclosing the information the department shall obtain the name and address of the person requesting the information.

P. If the department is required or permitted to disclose confidential information, it may charge the person or agency requesting the information for the reasonable cost of its services.

Q. Except as provided in section 42‑2002, subsection D, the department of revenue shall release confidential information as requested by the department of economic security pursuant to section 42‑1122 or 46‑291. Information disclosed under this subsection is limited to the same type of information that the United States internal revenue service is authorized to disclose under section 6103(l)(6) of the internal revenue code.

R. Except as provided in section 42‑2002, subsection D, the department of revenue shall release confidential information as requested by the courts and clerks of the court pursuant to section 42‑1122.

S. To comply with the requirements of section 42‑5031, the department may disclose to the state treasurer, to the county stadium district board of directors and to any city or town tax official that is part of the county stadium district confidential information attributable to a taxpayer's business activity conducted in the county stadium district.

T. The department shall release confidential information as requested by the attorney general for purposes of determining compliance with and enforcing section 44‑7101, the master settlement agreement referred to therein and subsequent agreements to which the state is a party that amend or implement the master settlement agreement. Information disclosed under this subsection is limited to luxury tax information relating to tobacco manufacturers, distributors, wholesalers and retailers and information collected by the department pursuant to section 44‑7101(2)(j).

U. For proceedings before the department, the office of administrative hearings, the board of tax appeals or any state or federal court involving penalties that were assessed against a return preparer or electronic return preparer pursuant to section 42‑1103.02 or 42‑1125.01, confidential information may be disclosed only before the judge or administrative law judge adjudicating the proceeding, the parties to the proceeding and the parties' representatives in the proceeding prior to its introduction into evidence in the proceeding. The confidential information may be introduced as evidence in the proceeding only if the taxpayer's name, the names of any dependents listed on the return, all social security numbers, the taxpayer's address, the taxpayer's signature and any attachments containing any of the foregoing information are redacted and if either:

1. The treatment of an item reflected on such return is or may be related to the resolution of an issue in the proceeding.

2. Such return or return information relates or may relate to a transactional relationship between a person who is a party to the proceeding and the taxpayer which directly affects the resolution of an issue in the proceeding.

V. The department may disclose to the attorney general confidential information received under section 44‑7111 and requested by the attorney general for purposes of determining compliance with and enforcing section 44‑7111. The department and attorney general shall share with each other the information received under section 44‑7111, and may share the information with other federal, state or local agencies only for the purposes of enforcement of section 44‑7101, section 44‑7111 or corresponding laws of other states.

W. The department may provide the name and address of qualifying hospitals and qualifying health care organizations, as defined in section 42‑5001, to a business classified and reporting transaction privilege tax under the utilities classification. END_STATUTE

Sec. 5. Section 42-5009, Arizona Revised Statutes, is amended to read:

START_STATUTE42-5009. Certificates establishing deductions; liability for making false certificate

A. A person who conducts any business classified under article 2 of this chapter may establish entitlement to the allowable deductions from the tax base of that business by both:

1. Marking the invoice for the transaction to indicate that the gross proceeds of sales or gross income derived from the transaction was deducted from the tax base.

2. Obtaining a certificate executed by the purchaser indicating the name and address of the purchaser, the precise nature of the business of the purchaser, the purpose for which the purchase was made, the necessary facts to establish the appropriate deduction and the tax license number of the purchaser to the extent the deduction depends on the purchaser conducting business classified under article 2 of this chapter and a certification that the person executing the certificate is authorized to do so on behalf of the purchaser. The certificate may be disregarded if the seller has reason to believe that the information contained in the certificate is not accurate or complete.

B. A person who does not comply with subsection A of this section may establish entitlement to the deduction by presenting facts necessary to support the entitlement, but the burden of proof is on that person.

C. The department may prescribe a form for the certificate described in subsection A of this section. Under such rules as it may prescribe, the department may also describe transactions with respect to which a person is not entitled to rely solely on the information contained in the certificate provided for in subsection A of this section but must instead obtain such additional information as required by the rules in order to be entitled to the deduction.

D. If a seller is entitled to a deduction by complying with subsection A of this section, the department may require the purchaser which caused the execution of the certificate to establish the accuracy and completeness of the information required to be contained in the certificate which would entitle the seller to the deduction. If the purchaser cannot establish the accuracy and completeness of the information, the purchaser is liable in an amount equal to any tax, penalty and interest which the seller would have been required to pay under this article if the seller had not complied with subsection A of this section. Payment of the amount under this subsection exempts the purchaser from liability for any tax imposed under article 4 of this chapter. The amount shall be treated as tax revenues collected from the seller in order to designate the distribution base for purposes of section 42‑5029.

E. If a seller is entitled to a deduction by complying with subsection B of this section, the department may require the purchaser to establish the accuracy and completeness of the information provided to the seller that entitled the seller to the deduction. If the purchaser cannot establish the accuracy and completeness of the information, the purchaser is liable in an amount equal to any tax, penalty and interest that the seller would have been required to pay under this article if the seller had not complied with subsection B of this section. Payment of the amount under this subsection exempts the purchaser from liability for any tax imposed under article 4 of this chapter. The amount shall be treated as tax revenues collected from the seller in order to designate the distribution base for purposes of section 42‑5029.

F. The department may prescribe a form for a certificate used to establish entitlement to the deductions described in section 42‑5061, subsection A, paragraph 47 and section 42‑5063, subsection B, paragraph 3. Under rules the department may prescribe, the department may also require additional information for the seller to be entitled to the deduction. If a seller is entitled to the deductions described in section 42‑5061, subsection A, paragraph 47 and section 42‑5063, subsection B, paragraph 3, the department may require the purchaser who executed the certificate to establish the accuracy and completeness of the information contained in the certificate that would entitle the seller to the deduction. If the purchaser cannot establish the accuracy and completeness of the information, the purchaser is liable in an amount equal to any tax, penalty and interest that the seller would have been required to pay under this article. Payment of the amount under this subsection exempts the purchaser from liability for any tax imposed under article 4 of this chapter. The amount shall be treated as tax revenues collected from the seller in order to designate the distribution base for purposes of section 42‑5029.

G. If a seller claims a deduction under section 42‑5061, subsection A, paragraph 25 and establishes entitlement to the deduction with an exemption letter that the purchaser received from the department and the exemption letter was based on a contingent event, the department may require the purchaser that received the exemption letter to establish the satisfaction of the contingent event within a reasonable time. If the purchaser cannot establish the satisfaction of the event, the purchaser is liable in an amount equal to any tax, penalty and interest that the seller would have been required to pay under this article if the seller had not been furnished the exemption letter. Payment of the amount under this subsection exempts the purchaser from liability for any tax imposed under article 4 of this chapter. The amount shall be treated as tax revenues collected from the seller in order to designate the distribution base for purposes of section 42‑5029. For the purposes of this subsection, "reasonable time" means a time limitation that the department determines and that does not exceed the time limitations pursuant to section 42‑1104.

H. From and after December 31, 2005 through December 31, 2010 2015, the department shall prescribe and issue a form for a certificate used to establish entitlement to the deductions described in section 42‑5061, subsection B, paragraph 23, section 42-5066, subsection B, paragraph 5, section 42‑5070, subsection C, paragraph 2, section 42‑5074, subsection B, paragraph 10, section 42‑5075, subsection B, paragraph 20 and section 42‑5159, subsection B, paragraph 23 relating to motion picture production. The certificate is effective for twelve consecutive calendar months from and after the date of issuance and is subject to the following requirements and conditions:

1. A motion picture production company as defined in section 41‑1517 may use a certificate issued pursuant to this subsection only with respect to qualified production costs, described as defined in section 41‑1517, subsection A, paragraph 2 that are subject to taxation under article 2 or 4 of this chapter.

2. The department shall issue the certificate to a motion picture production company on receiving the company's letter of qualification from the department of commerce, except as otherwise provided in this subsection.

3. The department shall not issue a certificate to a motion picture production company that has a delinquent tax balance owing to the department under this title or title 43.

4. If the department determines that a motion picture production company no longer qualifies for a certificate or has used the certificate for unauthorized purposes, the department shall revoke the certificate and the motion picture production company is liable for an amount equal to the transaction privilege and use taxes that would have been due on taxable transactions during the time the company did not qualify for or improperly used the certificate, with interest and penalties as provided by law.

5. The department shall maintain annual data on the total amount of monies exempted through the use of certificates issued pursuant to this subsection and shall provide those data to the department of commerce on request.

6. The department of revenue, with the cooperation of the department of commerce, shall adopt rules and publish and prescribe forms and procedures as necessary to effectuate the purposes of this subsection.

7. If, after audit, the department determines that a motion picture production company failed to meet any of the requirements prescribed by this subsection, any deductions from taxation from the use of the certificate are subject to recapture and payment by the motion picture production company to the department.

I. The department shall prescribe forms for certificates used to establish the satisfaction of the criteria necessary to qualify the sale of a motor vehicle for the deductions described in section 42-5061, subsection A, paragraph 14, paragraph 28, subdivision (a) and paragraph 45 and subsection U. To establish entitlement to these deductions, a motor vehicle dealer shall retain:

1. A valid certificate as prescribed by this subsection completed by the purchaser and obtained prior to the issuance of the nonresident registration permit authorized by section 28-2154.

2. A copy of the nonresident registration permit authorized by section 28-2154.

3. A legible copy of a current valid driver license issued to the purchaser by another state or foreign country that indicates an address outside of this state. For the sale of a motor vehicle to a nonresident entity, the entity's representative must have a current valid driver license issued by the same jurisdiction as that in which the entity is located.

4. For the purposes of the deduction provided by section 42-5061, subsection A, paragraph 14, a certificate documenting the delivery of the motor vehicle to an out‑of‑state location.

J. Notwithstanding subsection A, paragraph 2 of this section, if a motor vehicle dealer has established entitlement to a deduction by complying with subsection I of this section, the department may require the purchaser who executed the certificate to establish the accuracy and completeness of the information contained in the certificate that entitled the motor vehicle dealer to the deduction. If the purchaser cannot establish the accuracy and completeness of the information, the purchaser is liable in an amount equal to any tax, penalty and interest that the motor vehicle dealer would have been required to pay under this article and under articles IV and V of the model city tax code as defined in section 42-6051. Payment of the amount under this subsection exempts the purchaser from liability for any tax imposed under article 4 of this chapter and any tax imposed under article VI of the model city tax code as defined in section 42-6051. The amount shall be treated as tax revenues collected from the motor vehicle dealer in order to designate the distribution base for purposes of section 42-5029.

K. Notwithstanding any other law, compliance with subsection I of this section by a motor vehicle dealer entitles the motor vehicle dealer to the exemption provided in section 42-6004, subsection A, paragraph 4. END_STATUTE

Sec. 6. Repeal

Section 43‑1075, Arizona Revised Statutes, is repealed.

Sec. 7. Title 43, chapter 10, article 5, Arizona Revised Statutes, is amended by adding a new section 43-1075, to read:

START_STATUTE43-1075. Credit for motion picture production costs; definitions

A. For taxable years beginning from and after December 31, 2010, a credit is allowed against the taxes imposed by this title for motion picture production costs paid during the taxable year by a motion picture production company that are directly attributable to the production of one or more motion pictures. The amount of the credit is equal to twenty per cent of the amount of qualified production costs incurred in production activities as certified by the department of commerce pursuant to section 41-1517, but shall not exceed twenty million dollars with respect to any individual production.

B. The department shall not allow a credit under this section to a taxpayer who has a delinquent tax balance owing to the department under this title or title 42.

C. To qualify for a credit under this section the motion picture production company must receive preapproval and postapproval from the department of commerce pursuant to section 41‑1517.

D. A motion picture production company, at its expense, may voluntarily enter into a limited managed audit agreement pursuant to title 42, chapter 2, article 7 that includes an audit of its production costs and other requirements prescribed by section 41‑1517 and by this section to confirm the amount of qualified production costs with respect to each motion picture production and the amount of any credit under this section. The request to enter into the audit must be made after the motion picture production company receives postapproval for the credit pursuant to section 41‑1517, subsection L. The audit must be conducted by the taxpayer's authorized representative, as defined by section 42‑2301, who is an independent certified public accountant licensed in this state. The certified public accountant and the firm the certified public accountant is affiliated with shall not regularly perform services for the motion picture production company or its affiliates. If the director accepts the findings of the audit and issues a notice of determination pursuant to section 42‑2303 and the taxpayer timely files its income tax return with the appropriate credit claim forms, the credit amount accepted is not subject to recapture, disallowance, reduction or denial with respect to either the motion picture production company or any subsequent transferee of the credit, and subsection G, paragraph 4 of this section does not apply. The director's notice of determination shall include a written certificate to the taxpayer stating the amount of the credit and that the credit is not subject to recapture from a transferee. This subsection does not prohibit the recapture of a credit from a motion picture production company if the company failed to disclose material information during the audit or falsified its books or records or otherwise engaged in an action that prevented an accurate audit.

E. Co-owners of a motion picture production company, including partners in a partnership, members of a limited liability company and shareholders of an S corporation as defined in section 1361 of the internal revenue code, may allocate the credit allowed under this section among the co-owners on any basis without regard to their proportional ownership interest. The total of the credits allowed all such owners of the motion picture production company may not exceed the amount that would have been allowed for a sole owner of the company.

F. If the allowable tax credit for a taxable year exceeds the income taxes otherwise due on the claimant's income, or if there are no state income taxes due on the claimant's income, the amount of the claim not used as an offset AGAINST income taxes shall be paid to the taxpayer in the same manner as a refund under section 42-1118. Refunds made pursuant to this subsection are subject to setoff under section 42-1122.

G. All or part of any unclaimed amount of credit under this section may be sold or otherwise transferred under the following conditions:

1. A single sale or transfer may involve one or more transferees, and a transferee may in turn resell or transfer the credit subject to the same conditions of this subsection.

2. Both the transferor and transferee must submit a written notice of the transfer to the department within thirty days after the sale or transfer. The transferee's notice shall include a processing fee equal to one per cent of the transferee's tax credit balance or two hundred dollars, whichever is less. The notice shall include:

(a) The name of the motion picture production company.

(b) The date of the transfer.

(d) The transferor's tax credit balance before the transfer and the remaining balance after the transfer.

(e) All tax identification numbers for both transferor and transferee.

(f) Any other information required by rule.

3. A sale or transfer of the credit does not extend the time in which the credit can be used.

4. Except as provided by subsection D of this section, if a transferor was not qualified or was disqualified from using the credit at the time of the transfer, the department shall either disallow the credit claimed by a transferee or recapture the credit from the transferee through any authorized collection method. The transferee's recourse is against the transferor.

5. In the case of any failure to comply with this subsection, the department shall disallow the tax credit until the taxpayer is in full compliance.

H. The department of revenue shall maintain annual data on the total amount of monies credited pursuant to this section, and shall provide those data to the department of commerce on request.

I. The department of revenue, with the cooperation of the department of commerce, shall adopt rules and publish and prescribe forms and procedures as necessary to effectuate the purposes of this section.

J. A taxpayer who claims a credit for motion picture production costs under this section shall not claim a credit under section 43‑1075.01 for the same costs.

K. The credit allowed by this section is in lieu of any allowance for state tax purposes of a deduction of those expenses allowed by the internal revenue code.

L. For the purposes of this section, "motion picture", "motion picture production company" and "qualified production costs" have the same meanings prescribed in section 41‑1517. END_STATUTE

Sec. 8. Section 43-1075.01, Arizona Revised Statutes, is amended to read:

START_STATUTE43-1075.01. Credit for motion picture infrastructure projects; definition

A. A credit is allowed against the taxes imposed by this title for investments in motion picture infrastructure projects in this state as provided by section 41‑1517.01. The amount of the credit is fifteen per cent of the total base investment in the project during the taxable year as approved and reported by the department of commerce pursuant to section 41‑1517.01, subsection F D. The taxpayer may apply the credit against income taxes for the taxable year in which the motion picture infrastructure project is completed as provided by section 41‑1517.01, subsection F D.

B. The department shall not allow:

1. Tax credits for any taxable year under this section and section 43‑1163.01 that would violate the aggregate limits prescribed by section 41‑1517.01, subsection C.

2. a tax credit under this section to a taxpayer who has a delinquent tax balance owing to the department under this title or title 42.

C. An applicant, at its expense, may voluntarily enter into a limited managed audit agreement pursuant to title 42, chapter 2, article 7 that includes an audit of its base investment and other requirements prescribed by section 41‑1517.01 and by this section to confirm the amount of base investment and any credit under this section. The request to enter into the audit must be made after the applicant receives approval for the credit pursuant to section 41-1517.01, subsection F D. The audit must be conducted by the applicant's authorized representative, as defined in section 42‑2301, who is an independent certified public accountant licensed in this state. The certified public accountant and the firm the certified public accountant is affiliated with shall not regularly perform services for the taxpayer or its affiliates. If the director accepts the findings of the audit and issues a notice of determination pursuant to section 42‑2303 and the taxpayer timely files its income tax return with the appropriate credit claim forms, the credit amount accepted is not subject to recapture, disallowance, reduction or denial with respect to either the taxpayer or any subsequent transferee of the credit, and subsection F, paragraph 4 of this section does not apply. The director's notice of determination shall include a written certificate to the taxpayer stating the amount of the credit and that the credit is not subject to recapture from a transferee. This subsection does not prevent the recapture of a credit if the taxpayer failed to disclose material information during the audit or falsified its books or records or otherwise engaged in an action that prevented an accurate audit.

D. Co-owners of a business, including partners in a partnership, members of a limited liability company and shareholders of an S corporation as defined in section 1361 of the internal revenue code, may allocate the credit allowed under this section among the co-owners on any basis without regard to their proportional ownership interest. The total of the credits allowed all such owners may not exceed the amount that would have been allowed for a sole owner of the company.

E. If the allowable tax credit for a taxpayer exceeds the taxes otherwise due under this title on the claimant's income, or if there are no taxes due under this title, the taxpayer may carry the amount of the claim not used to offset the taxes under this title forward for not more than five consecutive taxable years' income tax liability the amount of the claim not used as an offset AGAINST income taxes shall be paid to the taxpayer in the same manner as a refund under section 42-1118. Refunds made pursuant to this subsection are subject to setoff under section 42-1122.

F. All or part of any unclaimed amount of credit under this section may be sold or otherwise transferred under the following conditions:

1. A single sale or transfer may involve one or more transferees, and a transferee may in turn resell or transfer the credit subject to the same conditions of this subsection.

(a) The name of the taxpayer.

(b) The date of the transfer.

(d) The transferor's tax credit balance before the transfer and the remaining balance after the transfer.

(e) All tax identification numbers for both transferor and transferee.

(f) Any other information required by rule.

3. A sale or transfer of the credit does not extend the time in which the credit can be used. The carryforward period of time under subsection E of this section for a credit that is sold or transferred begins on the date the credit was originally earned.

4. Except as provided by subsection C of this section, if a transferor was not qualified or was disqualified from using the credit at the time of the transfer, the department shall either disallow the credit claimed by a transferee or recapture the credit from the transferee through any authorized collection method. The transferee's recourse is against the transferor.

5. In the case of any failure to comply with this subsection, the department shall disallow the tax credit until the taxpayer is in full compliance.

G. The department of revenue shall maintain annual data on the total amount of monies credited pursuant to this section, and shall provide that data to the department of commerce on request.

H. The department of revenue, with the cooperation of the department of commerce, shall adopt rules and publish and prescribe forms and procedures as necessary to effectuate the purposes of this section.

I. A taxpayer who claims a credit for motion picture infrastructure projects under this section shall not claim a credit under section 43‑1075 for the same costs.

J. The credit allowed by this section is in lieu of any allowance for state tax purposes of a deduction of those expenses allowed by the internal revenue code.

K. For the purposes of this section, "motion picture infrastructure project" has the same meaning prescribed in section 41‑1517.01. END_STATUTE

Sec. 9. Repeal

Section 43‑1163, Arizona Revised Statutes, is repealed.

Sec. 10. Title 43, chapter 11, article 6, Arizona Revised Statutes, is amended by adding a new section 43-1163, to read:

START_STATUTE43-1163. Credit for motion picture production costs; definitions

B. The department shall not allow a credit under this section to a taxpayer who has a delinquent tax balance owing to the department under this title or title 42.

C. To qualify for a credit under this section the motion picture production company must receive preapproval and postapproval from the department of commerce pursuant to section 41‑1517.

E. Co-owners of a motion picture production company, including corporate partners in a partnership and members of a limited liability company may allocate the credit allowed under this section among the co‑owners on any basis without regard to their proportional ownership interest. The total of the credits allowed all such owners of the motion picture production company may not exceed the amount that would have been allowed for a sole owner of the company.

G. All or part of any unclaimed amount of credit under this section may be sold or otherwise transferred under the following conditions:

1. A single sale or transfer may involve one or more transferees, and a transferee may in turn resell or transfer the credit subject to the same conditions of this subsection.

(a) The name of the motion picture production company.

(b) The date of the transfer.

(d) The transferor's tax credit balance before the transfer and the remaining balance after the transfer.

(e) All tax identification numbers for both transferor and transferee.

(f) Any other information required by rule.

3. A sale or transfer of the credit does not extend the time in which the credit can be used.

5. In the case of any failure to comply with this subsection, the department shall disallow the tax credit until the taxpayer is in full compliance.

H. The department of revenue shall maintain annual data on the total amount of monies credited pursuant to this section, and shall provide those data to the department of commerce on request.

J. A taxpayer who claims a credit for motion picture production costs under this section shall not claim a credit under section 43‑1163.01 for the same costs.

K. The credit allowed by this section is in lieu of any allowance for state tax purposes of a deduction of those expenses allowed by the internal revenue code.

L. For the purposes of this section, "motion picture", "motion picture production company" and "qualified production costs" have the same meanings prescribed in section 41‑1517. END_STATUTE

Sec. 11. Section 43-1163.01, Arizona Revised Statutes, is amended to read:

START_STATUTE43-1163.01. Credit for motion picture infrastructure projects; definition

B. The department shall not allow:

1. Tax credits for any taxable year under this section and section 43‑1075.01 that would violate the aggregate limits prescribed by section 41‑1517.01, subsection C.

2. a tax credit under this section to a taxpayer that has a delinquent tax balance owing to the department under this title or title 42.

C. An applicant, at its expense, may voluntarily enter into a limited managed audit agreement pursuant to title 42, chapter 2, article 7 that includes an audit of its base investment and other requirements prescribed by section 41‑1517.01 and by this section to confirm the amount of base investment and any credit under this section. The request to enter into the audit must be made after the applicant receives approval for the credit pursuant to section 41‑1517.01, subsection F D. The audit must be conducted by the applicant's authorized representative, as defined in section 42‑2301, who is an independent certified public accountant licensed in this state. The certified public accountant and the firm the certified public accountant is affiliated with shall not regularly perform services for the taxpayer or its affiliates. If the director accepts the findings of the audit and issues a notice of determination pursuant to section 42‑2303 and the taxpayer timely files its income tax return with the appropriate credit claim forms, the credit amount accepted is not subject to recapture, disallowance, reduction or denial with respect to either the taxpayer or any subsequent transferee of the credit, and subsection F, paragraph 4 of this section does not apply. The director's notice of determination shall include a written certificate to the taxpayer stating the amount of the credit and that the credit is not subject to recapture from a transferee. This subsection does not prevent the recapture of a credit if the taxpayer failed to disclose material information during the audit or falsified its books or records or otherwise engaged in an action that prevented an accurate audit.

D. Co‑owners of a business, including corporate partners in a partnership and members of a limited liability company, may allocate the credit allowed under this section among the co-owners on any basis without regard to their proportional ownership interest. The total of the credits allowed all such owners may not exceed the amount that would have been allowed for a sole owner of the company.

F. All or part of any unclaimed amount of credit under this section may be sold or otherwise transferred under the following conditions:

1. A single sale or transfer may involve one or more transferees, and a transferee may in turn resell or transfer the credit subject to the same conditions of this subsection.

(a) The name of the taxpayer.

(b) The date of the transfer.

(d) The transferor's tax credit balance before the transfer and the remaining balance after the transfer.

(e) All tax identification numbers for both transferor and transferee.

(f) Any other information required by rule.

5. In the case of any failure to comply with this subsection, the department shall disallow the tax credit until the taxpayer is in full compliance.

G. The department of revenue shall maintain annual data on the total amount of monies credited pursuant to this section, and shall provide that data to the department of commerce on request.

I. A taxpayer that claims a credit for motion picture infrastructure projects under this section shall not claim a credit under section 43‑1163 for the same costs.

J. The credit allowed by this section is in lieu of any allowance for state tax purposes of a deduction of those expenses allowed by the internal revenue code.

K. For the purposes of this section, "motion picture infrastructure project" has the same meaning prescribed in section 41‑1517.01. END_STATUTE

Sec. 12. Effect on preexisting tax credits

This act does not affect the validity of income tax credits granted under prior law. Taxpayers, including transferees, who qualified for credits under sections 41-1517, 41-1517.01, 43-1075, 43-1075.01, 43-1163 and 43‑1163.01, Arizona Revised Statutes, in effect before the effective date of this act, may use any applicable amounts of those credits, including allowed carryovers, against income tax liabilities for subsequent taxable years as provided by law in effect before the effective date of this act.

Sec. 13. Purpose

Pursuant to section 43-223, Arizona Revised Statutes, the legislature enacts sections 43-1075 and 43-1163, Arizona Revised Statutes, as added by this act, to promote and stimulate the production of commercial motion pictures at soundstage facilities in this state.

Sec. 14. Review of income tax credits

Notwithstanding section 43-222, Arizona Revised Statutes, in 2010 the joint legislative income tax credit review committee shall not review the income tax credits in sections 43-1075, 43-1075.01, 43-1163 and 43-1163.01, Arizona Revised Statutes.

Sec. 15. Effective date

Sections 1 through 11 of this act are effective and apply to taxable years beginning from and after December 31, 2010.