HOUSE BILL NO. 6204
November 26, 2024, Introduced by Rep. Skaggs and referred to the Committee on Economic
Development and Small Business.
A bill to amend 2007 PA 36, entitled
"Michigan business tax act,"
by amending section 455 (MCL 208.1455), as amended by 2011 PA 77.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 Sec. 455. (1) The Michigan film office, with the concurrence
2 of the state treasurer, may enter into an agreement with an
3 eligible production company providing the company with a credit
4 against the tax imposed by this act as provided under this section.
5 To qualify for the credit under this section, a company shall meet
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1 all of the following requirements:
2 (a) Spend at least $50,000.00 in this state for the
3 development, preproduction, production, or postproduction costs of
4 a state certified qualified production.
5 (b) Enter into an agreement as provided in this section.
6 (c) Receive a postproduction certificate of completion from
7 the office under subsection (5).
8 (d) Submit the postproduction certificate of completion issued
9 by the office under subsection (5) to the department under
10 subsection (8).
11 (e) Shall not be delinquent in a tax or other obligation owed
12 to this state or be owned or under common control of an entity that
13 is delinquent in a tax or other obligation owed to this state.
14 (2) For direct production expenditures or qualified personnel
15 expenditures made after February 29, 2008 and before the effective
16 date of the amendatory act that added this language, July 12, 2011,
17 an agreement under this section may provide for an eligible
18 production company to claim a tax credit equal to 42% of direct
19 production expenditures for a state certified qualified production
20 in a core community, 40% of direct production expenditures for a
21 state certified qualified production in part of this state other
22 than a core community, and 30% for qualified personnel
23 expenditures. For direct production expenditures or qualified
24 personnel expenditures made on and after the effective date of the
25 amendatory act that added this language, July 12, 2011, an
26 agreement under this section may provide for an eligible production
27 company to claim a tax credit as determined by the Michigan film
28 office, with the concurrence of the state treasurer, of up to 42%
29 for each separate direct production expenditure for a state
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1 certified qualified production in a core community, up to 40% for
2 each separate direct production expenditure for a state certified
3 qualified production in part of this state other than a core
4 community, and up to 30% for each separate qualified personnel
5 expenditure. A taxpayer shall not claim a credit under this section
6 for any of the following:
7 (a) A direct expenditure, or qualified personnel expenditure,
8 for which the company claims a credit under section 459.
9 (b) A direct expenditure, or qualified personnel expenditure,
10 for which the company claims a credit under former section 367 of
11 the income tax act of 1967, 1967 PA 281. , MCL 206.367.
12 (c) A direct expenditure, or qualified personnel expenditure,
13 for which another taxpayer claims a credit under this section, a
14 credit under section 459, or a credit under former section 367 of
15 the income tax act of 1967, 1967 PA 281. , MCL 206.367.
16 (3) An eligible production company intending to produce a
17 qualified production in this state, or that initiated production of
18 a qualified production after February 29, 2008 and before April 8,
19 2008, may submit an application to enter into an agreement under
20 this section to the Michigan film office. Except for a qualified
21 production for which production was initiated after February 29,
22 2008 and before April 8, 2008, direct production expenditures and
23 qualified personnel expenditures incurred prior to before approval
24 of an agreement under this section are not eligible for the credit
25 under this section. The request shall must be submitted in a form
26 prescribed by the Michigan film office and shall must be
27 accompanied by a $100.00 application fee and all of the information
28 and records requested by the office. An application fee received by
29 the office under this subsection shall must be deposited in the
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1 Michigan film promotion fund. The office shall not process the
2 application until it is complete. As part of the application, the
3 company shall estimate direct production expenditures and qualified
4 personnel expenditures for an identified qualified production. If
5 the office, with the concurrence of the state treasurer, determines
6 to enter into an agreement under this section, the agreement shall
7 provide for all of the following:
8 (a) A requirement that the eligible production company
9 commence work in this state on the identified qualified production
10 within 90 days of the date of the agreement or else the agreement
11 shall expire. However, upon on request submitted by the company
12 based on good cause, the office may extend the period for
13 commencement of work in this state for up to an additional 90 days.
14 (b) A statement identifying the company and the qualified
15 production that the company intends to produce in whole or in part
16 in this state.
17 (c) A unique number assigned to the qualified production by
18 the office.
19 (d) A requirement that the qualified production not depict
20 obscene matter or an obscene performance.
21 (e) If the qualified production is a long-form narrative film
22 production, a requirement that the qualified production include an
23 acknowledgement that the qualified production was filmed in this
24 state.
25 (f) A requirement that the company provide the office with the
26 information and independent certification the office and the
27 department deem necessary to verify direct production expenditures,
28 qualified personnel expenditures, and eligibility for the credit
29 under this section.
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1 (g) If determined to be necessary by the office and the state
2 treasurer, a provision for addressing expenditures in excess of
3 those identified in the agreement.
4 (4) In determining whether to enter into an agreement under
5 this section, the Michigan film office and the state treasurer
6 shall consider all of the following:
7 (a) The potential that in the absence of the credit the
8 qualified production will be produced in a location other than this
9 state.
10 (b) The extent to which the qualified production may have the
11 effect of promoting this state as a tourist destination.
12 (c) The extent to which the qualified production may have the
13 effect of promoting economic development or job creation in this
14 state.
15 (d) The extent to which the credit will attract private
16 investment for the production of qualified productions in this
17 state.
18 (e) The record of the eligible production company in
19 completing commitments to engage in a qualified production.
20 (5) If the Michigan film office determines that an eligible
21 production company has complied with the terms of an agreement
22 entered into under this section, the office shall issue a
23 postproduction certificate of completion to the company. The
24 company shall submit a request to the office for a postproduction
25 certificate of completion on a form prescribed by the office, along
26 with any information or independent certification the office or the
27 department deems necessary. The office shall process each request
28 within 60 days after the request is complete. However, the office
29 may request additional information or independent certification
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1 before issuing a postproduction certificate of completion and need
2 not issue the postproduction certificate of completion until
3 satisfied that direct production expenditures, qualified personnel
4 expenditures, and eligibility are adequately established. The
5 additional information requested may include a report of direct
6 production expenditures and qualified personnel expenditures for
7 the qualified production audited and certified by an independent
8 certified public accountant. Each postproduction certificate of
9 completion shall must be signed by the Michigan film commissioner
10 and shall must include the following information:
11 (a) The name of the eligible production company.
12 (b) The name of the certified production produced in whole or
13 in part in this state.
14 (c) The eligible production company's direct production
15 expenditures and qualified personnel expenditures for the qualified
16 production.
17 (d) The eligible production company's credit amount.
18 (e) The date of completion for the qualified production in
19 this state.
20 (f) The unique number assigned to the qualified production
21 project by the Michigan film office under subsection (3).
22 (g) The eligible production company's federal employer
23 identification number or Michigan treasury number.
24 (h) Any independent certification required by the department
25 or the Michigan film office.
26 (6) Information, records, or other data received, prepared,
27 used, or retained by the Michigan film office under this section
28 that are submitted by an eligible production company and considered
29 by the taxpayer and acknowledged by the office as confidential
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1 shall is not be subject to the disclosure requirements of the
2 freedom of information act, 1976 PA 442, MCL 15.231 to 15.246.
3 Information, records, or other data shall may only be considered
4 confidential to the extent that the information or records describe
5 the commercial and financial operations or intellectual property of
6 the company, the information or records have not been publicly
7 disseminated at any time, and disclosure of the information or
8 records may put the company at a competitive disadvantage. For
9 purposes of this subsection, information or records that describe
10 commercial and financial operations do not include that portion of
11 information or records that include any expenses that qualify under
12 this section as qualified personnel expenditures or direct
13 production expenditures and for which a credit may be claimed.
14 (7) The Michigan film office shall, on January 15 and July 15
15 in each year, make available on its website a detailed semiannual
16 report that includes, at a minimum, all of the following:
17 (a) The number of applications received for a credit under
18 this section in the immediately preceding 6 months, including the
19 name of the eligible production company that submitted the
20 application and a brief description of the proposed qualified
21 production, including the locations in this state to be used in the
22 production and the proposed amount of money to be expended by the
23 eligible production company to produce the qualified production in
24 this state.
25 (b) The number of applications approved during the immediately
26 preceding 6 months.
27 (c) The number of postproduction certificates of completion
28 issued during the immediately preceding 6 months and the total
29 amount of credits certified under those postproduction certificates
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1 of completion.
2 (8) An eligible production company shall submit a
3 postproduction certificate of completion issued under subsection
4 (5) to the department. The Michigan film office shall forward a
5 copy of each postproduction certificate of completion issued
6 pursuant to this subsection to the governor, the president of the
7 Michigan strategic fund, the chairperson of the senate finance
8 committee, the chairperson of the house tax policy committee, the
9 director of the senate fiscal agency, and the director of the house
10 fiscal agency. If the credit allowed under this section exceeds the
11 tax liability of the company for the tax year or if the company
12 claiming the credit does not have a tax liability under this act
13 for the tax year, the department shall refund the excess or pay the
14 amount of the credit to the company. The department shall, as soon
15 as the information is available, annually report to the governor,
16 the president of the Michigan strategic fund, the chairperson of
17 the senate finance committee, the chairperson of the house tax
18 policy committee, the director of the senate fiscal agency, and the
19 director of the house fiscal agency the total amount of the credits
20 certified under this section that exceed the taxpayer's tax
21 liability for the most recent year that tax information is
22 available and for which returns have cleared and been processed.
23 The credit under this section shall must be claimed after all other
24 credits under this act.
25 (9) An eligible production company may assign all or a portion
26 of a credit under this section to any assignee. An assignee may
27 subsequently assign a credit or any portion of a credit assigned
28 under this subsection to 1 or more assignees. A company may claim a
29 portion of a credit and assign the remaining credit amount. A
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1 credit assignment under this subsection is irrevocable. The credit
2 assignment under this subsection shall must be made on a form
3 prescribed by the department. The qualified taxpayer shall send a
4 copy of the completed assignment form to the department in the tax
5 year in which the assignment is made and shall attach a copy of the
6 form to the return on which the credit is claimed.
7 (10) The amount of the credit under this section shall must be
8 reduced by a credit application and redemption fee equal to 0.5% of
9 the credit claimed, which shall must be deducted from the credit
10 otherwise payable to the taxpayer claiming the credit and be
11 deposited by the department in the Michigan film promotion fund.
12 (11) A taxpayer that willfully submits information under this
13 section that the taxpayer knows to be fraudulent or false shall, in
14 addition to any other penalties provided by law, be liable for a
15 civil penalty equal to the amount of the taxpayer's credit under
16 this section. A penalty collected under this section shall must be
17 deposited in the Michigan film promotion fund.
18 (12) Not later than March 1 of each year after 2008, the
19 Michigan film office shall submit to the governor, the president of
20 the Michigan strategic fund, the chairperson of the senate finance
21 committee, the chairperson of the house tax policy committee, the
22 director of the senate fiscal agency, and the director of the house
23 fiscal agency an annual report concerning the operation and
24 effectiveness of the credit under this section. The requirements of
25 section 28(1)(f) of 1941 PA 122, MCL 205.28, do not apply to
26 disclosure of tax information required by this subsection. The
27 report shall must include all of the following:
28 (a) A brief assessment of the overall effectiveness of the
29 credit under this section at attracting qualified productions to
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1 this state during the immediately preceding calendar year.
2 (b) The number of qualified productions for which the eligible
3 production company applied for a tax credit under this section
4 during the immediately preceding year, the names of the qualified
5 productions produced in this state for which credits were begun or
6 completed in the immediately preceding year, and the locations in
7 this state that were used in the production of qualified
8 productions in the immediately preceding calendar year.
9 (c) The amount of money spent by each eligible production
10 company identified in subdivision (b) to produce each qualified
11 production in this state and a breakdown of all production spending
12 by all companies classified as goods, services, or salaries and
13 wages in the immediately preceding calendar year.
14 (d) The number of below the line crew employed in this state
15 by eligible production companies that qualified for the credit
16 under this section in the immediately preceding calendar year, how
17 many of those persons employed were residents of this state and not
18 included in qualified personnel expenditures, and the total number
19 of hours worked on the qualified production for which a credit is
20 granted.
21 (e) For requests for postproduction certificates of completion
22 submitted after January 2, 2011, the num