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REFERENCE TITLE: TPT; reimbursement; motion picture production |
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State of Arizona House of Representatives Fifty-fifth Legislature First Regular Session 2021
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HB 2873 |
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Introduced by Representatives Chávez: Dalessandro, Epstein, Hernandez A, Hernandez D, Jermaine, Longdon, Meza, Pawlik, Schwiebert, Sierra
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AN ACT
Amending Title 41, chapter 10, article 1, Arizona Revised Statutes, by adding section 41-1509; amending Title 42, chapter 5, article 1, Arizona Revised Statutes, by adding section 42-5045; relating to motion picture production companies.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 41, chapter 10, article 1, Arizona Revised Statutes, is amended by adding section 41-1509, to read:
41-1509. Motion picture production; transaction privilege and use tax; reimbursement; rules; definitions
A. The authority shall receive and evaluate applications that are submitted by motion picture production companies to receive a transaction privilege and use tax reimbursement pursuant to section 42-5045 for qualified production expenses made by the motion picture production company. The authority shall certify to the department of revenue the name, reimbursement amount and other relevant information relating to each applicant.
B. To be eligible for the transaction privilege and use tax reimbursement pursuant to this section and section 42-5045, a motion picture production company shall file an application with the authority within ninety days after a production project is completed. The application, on a form prescribed by the authority, must include:
1. The applicant's name, address and federal tax identification number.
2. The date the production project was completed.
3. A detailed list of actual production expenses and the amount of transaction privilege and use tax applied to those expenses.
4. Any additional information that the authority requires.
C. Within ninety days after receiving the application, the authority shall review and determine whether the motion picture production company and the submitted production expenses are eligible for reimbursement. The authority may request additional information from the applicant in order to make an informed decision regarding the eligibility of the motion picture production company and the submitted production expenses.
D. If the authority approves the application, the authority shall notify the department of revenue of the approval and provide the department of revenue necessary information required to administer this section and section 42-5045.
E. The authority may not approve reimbursements exceeding a total of $_________ in any calendar year. A reimbursement is allowed on a first-come, first-served basis according to the date of application. An approved amount applies against the dollar amount for the year in which the application was submitted. If, at the end of the year, an unused balance occurs under the dollar limit prescribed by this subsection, the balance shall be reallocated for the purposes of this section in the following year.
F. The authority and the department of revenue shall collaborate in adopting rules that are necessary to administer this section and section 42-5045.
G. For the purposes of this section:
1. "Motion picture production company":
(a) Means any person that is primarily engaged in the business of producing entertainment content created in whole or in part within this state, including motion pictures, documentaries, long-form productions, specials, series, miniseries, sound recordings, videos and music videos and interstitials, television programming, interactive television, interactive games, videogames, commercials, infomercials, any format of digital media, including an interactive website, created to distribute or exhibit to the general public, and any trailer, pilot, video teaser or demo created primarily to stimulate the sale, marketing, promotion or exploitation of future investment in either a product or a qualified production by any means and media in any digital format, film or videotape.
(b) Does not include any ongoing television program created primarily as news, weather or financial market reports, a production featuring current events, sporting events and awards show or another gala event, a production whose sole purpose is fund-raising, a production used for corporate training or in-house corporate advertising or other similar productions for which records are required to be maintained under 18 United States code section 2257.
2. "Qualified production expense" means the following expenses that are directly related to a production by a motion picture production company:
(a) Material purchased from a vendor located in this state to construct sets and for special effects and other purposes.
(b) Equipment rented or leased from a vendor located in this state.
(c) Equipment acquired or otherwise purchased from a vendor located in this state.
(d) Facilities leased from a lessee located in this state for preproduction, production and postproduction in this state.
(e) Hotel and lodging in this state.
(f) Food expenses, including catering, purchased in this state.
(g) Location fees in this state.
(h) Postproduction expenses in this state.
(i) Vehicles rented in this state.
Sec. 2. Title 42, chapter 5, article 1, Arizona Revised Statutes, is amended by adding section 42-5045, to read:
42-5045. Qualified motion picture production companies; expenses; reimbursement; fund; exemption; definition
A. After receiving notice from the Arizona commerce authority that the authority approved an application under section 41-1509, the department shall pay the transaction privilege and use tax reimbursement to the motion picture production company in the amount determined and authorized by the Arizona commerce authority as provided in section 41-1509.
B. The reimbursement shall be paid from the qualified motion picture production reimbursement fund established by this section on a first-come, first-served basis in the same manner as refunds granted under section 42-1118. The reimbursement amount is subject to setoff as provided by section 42-1122.
C. The qualified motion picture production reimbursement fund is established consisting of legislative appropriations. The department of revenue shall administer the fund. Monies in the fund are subject to legislative appropriation. Monies in the fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations.
D. For the purposes of this section, "motion picture production company" has the same meaning prescribed in section 41-1509.