HB2514 HFIN FBM 3-20

House Bill 2514 ( Lowering the total amount of tax credits available under the Film Industry Investment Act. )

Mr. Speaker (Mr. Thompson) and Armstead
               [By Request of the Executive]

Date:March 19, 2013
Title:    Ok

Fiscal Note:   Yes

Code:     § 11-13X-5 (amend)

Purpose: The bill would reduce the total amount of tax credits under the Film Industry Investment Act from $10 million to $5 million annually. The bill makes other non-substantive technical corrections.

     The tax credit was created in 2007 for taxes incurred based on the production of qualified film projects in the state of West Virginia. It allows a non-refundable tax credit that could be applied against (in this order) business franchise, corporate net income tax, or personal income tax liability.

     The reimbursable tax credit is calculated on the amount of production and post-production expenditures made in the state that are directly attributable to the production of a qualified project. A taxpayer meeting the criteria may take a 27% credit on the taxes specified. If the taxpayer hires 10 or more resident workers, an additional 4% may be taken.

     The criteria to taking the credit include: 1) recognize the State of West Virginia in the credits, 2) pay all obligations incurred in the state, and 3) that the taxpayer verifies with the Film Office that all the criteria have been met. The Film Office will certify to the State Tax Division that the project is a qualified project and that the taxpayer has met all criteria.

     The credit may be carried forward two years, and may not be carried back unless the taxpayer incurred qualified expenditures for the project in that tax year. Any excess tax credit may be transferred or sold, with the approval of the Film Office and the Tax Commissioner.

     It is the responsibility of the Film Office to keep a total on the amount of credits approved for qualified projects. This bill would reduce the maximum amount of credit the Film Office may approve from $10 million to $5 million annually.

Committee Action: The committee reported a committee substitute that changes the amount of credit from 27% of qualified expenditures to 21%.

Effective Date: Regular