H*3069(Rat #0443, Act #0358 of 1998)  General Bill, By Limehouse, Bailey, 
Seithel and Wilkes

Similar(H 3698)
 A BILL TO AMEND ARTICLE 25, CHAPTER 6 OF TITLE 12, CODE OF LAWS OF SOUTH
 CAROLINA, 1976, RELATING TO SOUTH CAROLINA INCOME TAX CREDITS, BY ADDING
 SECTION 12-6-3510 SO AS TO PROVIDE FOR A NONREFUNDABLE CREDIT IN AN AMOUNT
 EQUAL TO THIRTY-THREE PERCENT, BUT NOT MORE THAN FIFTEEN THOUSAND DOLLARS, OF
 A TAXPAYER'S INVESTMENT IN A QUALIFIED MOTION PICTURE PROJECT, PROVIDE FOR A
 NONREFUNDABLE CREDIT IN AN AMOUNT EQUAL TO THIRTY-THREE PERCENT OF THE VALUE
 OF A TAXPAYER'S INVESTMENT IN THE CONSTRUCTION OR CONVERSION OR EQUIPPING, OR
 ANY COMBINATION OF THESE ACTIVITIES, OF A MOTION PICTURE PRODUCTION FACILITY
 IN SOUTH CAROLINA IN WHICH THE TAXPAYER PURCHASES AN OWNERSHIP INTEREST WITH
 THE TAXPAYER'S INVESTMENT, AND PROVIDE FOR RELATED AND INCIDENTAL MATTERS; TO
 REQUIRE THE DEPARTMENT OF REVENUE TO PROVIDE A REPORT TO THE BOARD OF ECONOMIC
 ADVISORS OF ALL CREDITS EARNED UNDER SECTION 12-6-3510, AND REQUIRE THE BOARD
 TO CONDUCT A COST-BENEFIT ANALYSIS OF THESE CREDITS AFTER THE FIRST AND THIRD
 YEARS THE CREDITS ARE ALLOWED AND REPORT ITS FINDINGS TO THE HOUSE WAYS AND
 MEANS COMMITTEE AND THE SENATE FINANCE COMMITTEE; AND TO PROVIDE FOR THE
 REPEAL OF SECTION 12-6-3510 EFFECTIVE FOR TAXABLE YEARS BEGINNING AFTER JUNE
 30, 2004.-AMENDED TITLE

   12/18/96  House  Prefiled
   12/18/96  House  Referred to Committee on Ways and Means
   01/14/97  House  Introduced and read first time HJ-36
   01/14/97  House  Referred to Committee on Ways and Means HJ-36
   04/23/98  House  Committee report: Favorable with amendment Ways
                     and Means HJ-46
   04/29/98  House  Debate interrupted HJ-30
   04/29/98  House  Amended HJ-39
   04/29/98  House  Read second time HJ-43
   04/30/98  House  Read third time and sent to Senate HJ-10
   05/05/98  Senate Introduced and read first time SJ-8
   05/05/98  Senate Referred to Committee on Finance SJ-8
   05/13/98  Senate Committee report: Favorable with amendment
                     Finance SJ-21
   05/19/98  Senate Retaining place on calendar recommitted to
                     Committee on Finance SJ-55
   05/21/98  Senate Recalled from Committee on Finance SJ-3
   05/28/98  Senate Read second time SJ-44
   05/28/98  Senate Ordered to third reading with notice of
                     amendments SJ-44
   06/03/98  Senate Amended
   06/03/98  Senate Read third time and returned to House with amendments
   06/03/98  House  Concurred in Senate amendment and enrolled HJ-105
   06/04/98         Ratified R 443
   06/09/98         Signed By Governor
   06/09/98         Effective date 06/09/98
   06/09/98         See act for exception to or explanation of
                     effective date
   06/19/98         Copies available
   06/19/98         Act No. 358

AN ACT TO AMEND ARTICLE 25, CHAPTER 6 OF TITLE 12, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO SOUTH CAROLINA INCOME TAX CREDITS, BY ADDING SECTION 12-6-3510 SO AS TO PROVIDE FOR A NONREFUNDABLE CREDIT IN AN AMOUNT EQUAL TO THIRTY-THREE PERCENT, BUT NOT MORE THAN FIFTEEN THOUSAND DOLLARS, OF A TAXPAYER'S INVESTMENT IN A QUALIFIED MOTION PICTURE PROJECT, PROVIDE FOR A NONREFUNDABLE CREDIT IN AN AMOUNT EQUAL TO THIRTY-THREE PERCENT OF THE VALUE OF A TAXPAYER'S INVESTMENT IN THE CONSTRUCTION OR CONVERSION OR EQUIPPING, OR ANY COMBINATION OF THESE ACTIVITIES, OF A MOTION PICTURE PRODUCTION FACILITY IN SOUTH CAROLINA IN WHICH THE TAXPAYER PURCHASES AN OWNERSHIP INTEREST WITH THE TAXPAYER'S INVESTMENT, AND PROVIDE FOR RELATED AND INCIDENTAL MATTERS; TO REQUIRE THE DEPARTMENT OF REVENUE TO PROVIDE A REPORT TO THE BOARD OF ECONOMIC ADVISORS OF ALL CREDITS EARNED UNDER SECTION 12-6-3510, AND REQUIRE THE BOARD TO CONDUCT A COST-BENEFIT ANALYSIS OF THESE CREDITS AFTER THE FIRST AND THIRD YEARS THE CREDITS ARE ALLOWED AND REPORT ITS FINDINGS TO THE HOUSE WAYS AND MEANS COMMITTEE AND THE SENATE FINANCE COMMITTEE; AND TO PROVIDE FOR THE REPEAL OF SECTION 12-6-3510 EFFECTIVE FOR TAXABLE YEARS BEGINNING AFTER JUNE 30, 2004.

Be it enacted by the General Assembly of the State of South Carolina:

Income tax credits allowed; etc.

SECTION 1. Article 25, Chapter 6, Title 12 of the 1976 Code is amended by adding:

Section 12-6-3510. (A) There is allowed as a nonrefundable credit against any tax imposed pursuant to this chapter an amount equal to thirty-three percent, but not more than fifteen thousand dollars, of a taxpayer's investment in a qualified South Carolina motion picture project. A taxpayer may claim no more than one credit in connection with the production of a single qualified South Carolina motion picture project. This credit is allowed over more than one taxable year but a taxpayer's total credit in all years, toward any such project, may not exceed fifteen thousand dollars. Any unused credit may be carried forward to five succeeding taxable years. For an investment made after the effective date of this section, the credit is allowed for a taxable year after December 31, 1998, beginning in the calendar year the project is registered as a qualified South Carolina motion picture project.

(B) In addition to the credit provided in subsection (A), a nonrefundable credit is allowed against any taxes imposed pursuant to this chapter in an amount equal to thirty-three percent of the value of a taxpayer's investment in the construction or conversion, or equipping, or any combination of these activities, of a motion picture production facility in this State in which the taxpayer purchases an ownership interest with the taxpayer's investment. No credit is allowed unless the total amount invested in the motion picture production facility has been expended directly in this State and is not less than two million dollars, exclusive of land costs, or the total amount invested in a post-production facility has been expended directly in this State and is not less than one million dollars, exclusive of land costs. Documentation sufficient to provide confirmation of this threshold must accompany the application for the credit. Any unused credit may be carried forward to five succeeding taxable years. The total amount of credit, which may be claimed by all taxpayers with respect to the construction, or conversion, or equipping, or any combination of these activities, of a single motion picture production facility may not exceed five million dollars.

(C) Credits allowed under this section are allocated to partners, limited liability company members, and subchapter 'S' corporation shareholders based on the percentage of their interest.

(D) Notwithstanding the amount of the credits allowed by this section, these credits, when combined with any other state income tax credits allowed the taxpayer for a particular taxable year, cannot reduce the taxpayer's South Carolina income tax liability more than fifty percent.

(E) All documentation provided by investors and their agents to the Department of Revenue in connection with claiming the credits allowed by this section is considered a tax return and subject to the penalty provisions of Section 12-54-40(f).

(F) As used in this section:

(1) 'Investment' means cash with respect to subsection (A) of this section, and with respect to subsection (B) of this section cash or real property with any improvements thereon, or any combination of these.

(2) 'Motion picture company' means an enterprise that is in the business of filming or producing motion pictures, or both.

(3) 'Motion picture production facility' means a site that contains soundstages designed for the express purpose of film and television production for both theatrical and video release. Production includes, but is not limited to, motion pictures, made-for-television movies and episodic television. The motion picture production facility site must include production offices, construction shops/mills, prop and costume shops, storage area, parking for production vehicles, all of which complement the production needs and orientation of the overall facility purpose. 'Motion picture facility' also includes a facility designed for the express purpose of accomplishing the post-production stage of film and television production for both theatrical and video release including, but not limited to, the creation of visual effects, editing, and sound mixing for motion picture/television projects. A post-production facility site is not required to contain a soundstage nor be physically located at or near soundstages.

(4) 'Motion picture project' means a product intended for commercial exploitation that incurs at least one million dollars of costs to produce a master negative motion picture for theatrical or television exhibition in the United States.

(5) 'Qualified South Carolina motion picture project' means a motion picture project which has registered by submitting its record of allocation of credits and documentation to the Department of Revenue, certifying that an amount equal to at least fifty percent of the total amount invested by all South Carolina investors in a single motion picture project, multiplied by five, has been expended directly in this State and that at least twenty percent of the total filming days of principal photography but not less than ten filming days, is filmed in this State. Before registration, all documentation of a motion picture project required to meet the credit requirements, must be received by the department.

Report, cost-benefit analysis; etc.

SECTION 2. The Department of Revenue shall provide a report to the Board of Economic Advisors of all credits earned under Section 12-6-3510 of the 1976 Code as added by this act. The board shall conduct a cost-benefit analysis of these credits after the first and third years the credits are allowed and report its findings to the House Ways and Means Committee and the Senate Finance Committee.

Time effective, repealer; exception

SECTION 3. This act takes effect upon approval by the Governor and with respect to qualified motion picture investments made pursuant to Section 12-6-3510 of the 1976 Code giving rise to tax credits and may only be claimed by a taxpayer for tax years beginning after December 31, 1998. This section is repealed effective for taxable years beginning after June 30, 2004, but this repeal shall not affect credits previously earned.

Approved the 9th day of June, 1998.