AB976: Bill Text

LRB-3234/1

JK:kjf:rs

2003 - 2004 LEGISLATURE

2003 Assembly BILL 976

March 11, 2004 - Introduced by Representatives Wieckert, Hines, Hahn and Freese, cosponsored by Senator Roessler. Referred to Committee on Ways and Means.

AB976,1,4 An Act to amend 71.05 (6) (a) 15., 71.21 (4), 71.26 (2) (a), 71.34 (1) (g), 71.45 (2) (a) 10. and 77.92 (4); and to create 71.07 (3n), 71.10 (4) (gx), 71.28 (3n), 71.30 (3) (eop), 71.47 (3n) and 71.49 (1) (eop) of the statutes; relating to: creating an income and franchise tax credit for expenses related to film production services.

Analysis by the Legislative Reference Bureau

This bill creates an income and franchise tax credit entitled the entertainment, broadcasting, and film economic rebate tax credit (EBERT). The amount of the tax credit is equal to 25 percent of the salary or wages paid to the taxpayer's employees in the taxable year for services rendered in this state to produce a film, video, or television production, as approved by the Department of Revenue, and paid to employees who were residents of this state at the time that they were paid. The total amount of the credit that may be claimed by a taxpayer may not exceed an amount equal to the first $25,000 of salary or wages paid to each of the taxpayer's employees in the taxable year, not including the salary or wages paid to the taxpayer's two highest paid employees in the taxable year. If the total amount of the credit claimed by a taxpayer exceeds the taxpayer's tax liability, the state will not issue a refund, but the taxpayer may carry forward any remaining credit to subsequent taxable years.

For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB976, s. 1 Section 1. 71.05 (6) (a) 15. of the statutes is amended to read:

AB976,2,6 71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (3g), (3n), and (3s) and not passed through by a partnership, limited liability company, or tax-option corporation that has added that amount to the partnership's, company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1) (g).

AB976, s. 2 Section 2. 71.07 (3n) of the statutes is created to read:

AB976,2,9 71.07 (3n) Entertainment, broadcasting, and film economic rebate tax credit. (a) In this subsection:

AB976,2,16 1. "Accredited production" means a film, video, or television production, as approved by the department, for which the aggregate salary and wages included in the cost of the production for the period ending 12 months after the month in which the principal filming or taping of the production begins exceeds $100,000 for a production that is 30 minutes or longer or $50,000 for a production that is less than 30 minutes. "Accredited production" does not include any of the following, regardless of the production costs:

AB976,2,18 a. News, current events, or public programming or a program that includes weather or market reports.

AB976,2,19 b. A talk show.

AB976,2,20 c. A production with respect to a game, questionnaire, or contest.

AB976,2,21 d. A sports event or sports activity.

AB976,3,1 e. A gala presentation or awards show.

AB976,3,2 f. A finished production that solicits funds.

AB976,3,5 g. A production for which the production company is required under 18 U.S.C. 2257 to maintain records with respect to a performer portrayed in a single media or multimedia program.

AB976,3,7 h. A production produced primarily for industrial, corporate, or institutional purposes.

AB976,3,11 2. "Claimant" means a film production company that is operating or has operated an accredited production in this state, if the company owns the copyright in the accredited production or has contracted directly with the copyright owner or a person acting on the owner's behalf.

AB976,3,16 (b) Subject to the limitations provided in this subsection, a claimant may claim as a credit against the tax imposed under s. 71.02 an amount equal to 25 percent of the salary or wages paid to the claimant's employees in the taxable year for services rendered in this state to produce an accredited production and paid to employees who were residents of this state at the time that they were paid.

AB976,3,21 (c) No amount of the salary or wages paid under par. (b) may be the basis for a credit under this subsection unless the salary or wages are paid for services rendered after December 31, 2003, and directly incurred for the production stages of the accredited production, from the final script stage to the end of the post-production stage.

AB976,4,2 (d) The total amount of the credit that may be claimed by a claimant under par. (b) shall not exceed an amount equal to the first $25,000 of salary or wages paid to each of the claimant's employees, as described in par. (b), in the taxable year, not including the salary or wages paid to the claimant's 2 highest paid employees, as described in par. (b), in the taxable year.

AB976,4,5 (e) No credit may be allowed under this subsection unless the claimant files an application with the department, at the time and in the manner prescribed by the department, and the department approves the application.

AB976,4,7 (f) Section 71.28 (4) (e) to (h), as it applies to the credit under s. 71.28 (4), applies to the credit under this subsection.

AB976,4,15 (g) Partnerships, limited liability companies, and tax-option corporations may not claim the credit under this subsection, but the eligibility for, and the amount of, the credit are based on their payment of wages and salaries. A partnership, limited liability company, or tax-option corporation shall compute the amount of credit that each of its partners, members, or shareholders may claim and shall provide that information to each of them. Partners, members of limited liability companies, and shareholders of tax-option corporations may claim the credit in proportion to their ownership interest.

AB976, s. 3 Section 3. 71.10 (4) (gx) of the statutes is created to read:

AB976,4,18 71.10 (4) (gx) Entertainment, broadcasting, and film economic rebate tax credit under s. 71.07 (3n).

AB976, s. 4 Section 4. 71.21 (4) of the statutes is amended to read:

AB976,4,22 71.21 (4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2ds), (2dx), (3g), (3n), and (3s) and passed through to partners shall be added to the partnership's income.

AB976, s. 5 Section 5. 71.26 (2) (a) of the statutes is amended to read:

AB976,5,13 71.26 (2) (a) Corporations in general. The "net income" of a corporation means the gross income as computed under the Internal Revenue Code as modified under sub. (3) minus the amount of recapture under s. 71.28 (1di) plus the amount of credit computed under s. 71.28 (1), (3), (4), and (5) plus the amount of the credit computed under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), and (3g), and (3n) and not passed through by a partnership, limited liability company, or tax-option corporation that has added that amount to the partnership's, limited liability company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1) (g) plus the amount of losses from the sale or other disposition of assets the gain from which would be wholly exempt income, as defined in sub. (3) (L), if the assets were sold or otherwise disposed of at a gain and minus deductions, as computed under the Internal Revenue Code as modified under sub. (3), plus or minus, as appropriate, an amount equal to the difference between the federal basis and Wisconsin basis of any asset sold, exchanged, abandoned, or otherwise disposed of in a taxable transaction during the taxable year, except as provided in par. (b) and s. 71.45 (2) and (5).

AB976, s. 6 Section 6. 71.28 (3n) of the statutes is created to read:

AB976,5,16 71.28 (3n) Entertainment, broadcasting, and film economic rebate tax credit. (a) In this subsection:

AB976,5,23 1. "Accredited production" means a film, video, or television production, as approved by the department, for which the aggregate salary and wages included in the cost of the production for the period ending 12 months after the month in which the principal filming or taping of the production begins exceeds $100,000 for a production that is 30 minutes or longer or $50,000 for a production that is less than 30 minutes. "Accredited production" does not include any of the following, regardless of the production costs:

AB976,5,25 a. News, current events, or public programming or a program that includes weather or market reports.

AB976,6,1 b. A talk show.

AB976,6,2 c. A production with respect to a game, questionnaire, or contest.

AB976,6,3 d. A sports event or sports activity.

AB976,6,4 e. A gala presentation or awards show.

AB976,6,5 f. A finished production that solicits funds.

AB976,6,8 g. A production for which the production company is required under 18 U.S.C. 2257 to maintain records with respect to a performer portrayed in a single media or multimedia program.

AB976,6,10 h. A production produced primarily for industrial, corporate, or institutional purposes.

AB976,6,14 2. "Claimant" means a film production company that is operating or has operated an accredited production in this state, if the company owns the copyright in the accredited production or has contracted directly with the copyright owner or a person acting on the owner's behalf.

AB976,6,19 (b) Subject to the limitations provided in this subsection, a claimant may claim as a credit against the tax imposed under s. 71.23 an amount equal to 25 percent of the salary or wages paid to the claimant's employees in the taxable year for services rendered in this state to produce an accredited production and paid to employees who were residents of this state at the time that they were paid.