ARIZONA HOUSE OF REPRESENTATIVES

Fifty-fourth Legislature

Second Regular Session

 

HB 2385: TPT; reimbursement; motion picture production.

Sponsor:  Representative Blackman, LD 6

Committee on Ways & Means

Overview

Directs the Arizona Commerce Authority (ACA) to evaluate applications submitted by a motion picture production company to receive a transaction privilege tax (TPT) and use tax reimbursement for qualified production expenses.

History

Statute states that the retail TPT classification is comprised of the business of selling tangible personal property at retail. The tax base for the retail classification is the gross proceeds of sales or gross income derived from the business (A.R.S. § 42-5061).

Use tax is a levy on items purchased in other states that are then brought into Arizona for storage, use or consumption and for which no tax has been paid in another state (A.R.S. § 42-5160).

Provisions

Application for Reimbursement

1.    ☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal NoteDirects the ACA to evaluate applications that are submitted by motion picture production companies to receive a TPT and use tax reimbursement for qualified production expenses. (Sec. 1)

2.    Requires the ACA to certify to the Department of Revenue (DOR) the name, reimbursement amount and other relevant information relating to each applicant. (Sec. 1)

3.    Requires a motion picture production company to file an application with the ACA within 90 days after the completion of a production project in order to be eligible for reimbursement. (Sec. 1)

4.    Specifies that the application must include:

a)    The applicant's name, address and federal tax identification number;

b)    The date the production project was completed;

c)    A detailed list of actual production expenses and the amount of TPT and use tax applied to those expenses; and

d)    Any additional information required by the ACA. (Sec. 1)

Approval of Application for Reimbursement

5.    Instructs the ACA, within 90 days of receiving the application, to review and determine whether the motion picture production company and the submitted production expenses are eligible for reimbursement. (Sec. 1)

6.    Authorizes the ACA to request additional information from the applicant in order to make an informed decision regarding the applicant's eligibility. (Sec. 1)

7.    Requires the ACA to notify DOR of the approval of an application and provide any necessary information. (Sec. 1)

8.    Prohibits the ACA from approving reimbursement that exceeds an unspecified amount in any calendar year. (Sec. 1)

9.    Stipulates that reimbursement is on a first-come, first-serve basis according to the date of application. (Sec. 1)

10.  States that an approved amount applies against the dollar amount for the year in which the application was submitted. (Sec. 1)

11.  Specifies that if, at the end of the year, there is an unused balance, the balance must be reallocated for the same purpose in the following year. (Sec. 1)

Reimbursement of Funds

12.  Requires DOR to pay the TPT and use tax reimbursement to the motion picture production company after receiving notice from the ACA that an application was approved. (Sec. 2)

13.  Subjects the reimbursement amount to liability setoff. (Sec. 2)

14.  Establishes the Qualified Motion Picture Production Reimbursement Fund (Fund) to be used for the reimbursement of qualified production expenses. (Sec. 2)

15.  Specifies that the Fund consists of legislative appropriations and is to be administered by DOR. (Sec. 2)

16.  Requires the reimbursement to be paid from the Fund on a first-come, first-serve basis. (Sec. 2)

17.  Exempts Fund monies from lapsing. (Sec. 2)

Miscellaneous

18.  Defines motion picture production company as any person that is primarily engaged in the business of producing entertainment content created in whole or in part in Arizona (Sec. 1)

19.  Defines qualified production expense as specific expenses that occur in Arizona and are directly related to a production by a motion picture production company. (Sec. 1)

20.  Requires the ACA and DOR to collaborate when adopting any necessary rules for administration. (Sec. 1)

 

 

 

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Initials VP/EB                    Ways & Means

 

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