The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Commerce and Tourism
BILL: SB 704
INTRODUCER: Senator Gruters and others
SUBJECT: Entertainment Industry
DATE: February 12, 2021 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Reeve McKay CM Favorable
2. ATD
3. AP
I. Summary:
SB 704 creates the Film, Television, and Digital Media Targeted Rebate Program (program)
within the Department of Economic Opportunity in order to broaden the entertainment industry’s
impact, enhance tourism, and encourage more family-friendly productions to be produced in
Florida.
The program gives rebates on qualified expenditures to film, television, and digital media
production projects that, among other requirements, employ a crew of which at least 60 percent
are Florida residents and spend at least 70 percent of their production days in Florida. A project
may only receive a rebate after it has completed production and its expenditures have been
verified by the Office of Film and Entertainment.
The program is subject to legislative appropriation, but the bill does not contain any
appropriation of state funds.
The bill takes effect upon becoming law.
II. Present Situation:
The Florida Office of Film and Entertainment (OFE) within the Department of Economic
Opportunity (DEO) develops, markets, promotes, and provides services to the state’s
entertainment industry.1 The Florida Film and Entertainment Advisory Council (council) serves
as an advisory body to the DEO and OFE to provide industry insight and expertise related to the
state’s entertainment industry.2
1
Section 288.1251, F.S.
2
Section 288.1252, F.S.
BILL: SB 704 Page 2
Entertainment Industry Sales Tax Exemption
The Entertainment Industry Sales Tax Exemption (tax exemption program), administered by the
OFE, offers a sales and use tax certificate of exemption to production companies that create
qualified productions in Florida.3 The tax exemption program offers exemptions from taxes
levied under ch. 212, F.S., for the following:
 Lease or rental of real property used as an integral part of the performance of qualified
production services, including photography, casting, location scouting, stage support, and
wardrobe;4
 Fabrication labor when a producer is using his or her own equipment and personnel to
produce a qualified motion picture;5
 Purchase or lease of motion picture or video equipment and sound recording equipment used
in Florida for motion picture or television production or for the production of master tapes
and master records;6 and
 Purchase, lease, storage, or use of blank master tapes, records, films, or video tapes.7
To qualify for these tax exemptions, production companies must submit an application to the
Department of Revenue (DOR) which must then be approved by the OFE. If a company has
operated a business in Florida at a permanent address for at least 12 consecutive months, it is
eligible for a one-year certificate of exemption. Companies that do not qualify for a one-year
certificate are eligible for a 90-day certificate of exemption.
The OFE has estimated that qualified production companies have received $46.3 million in
exemptions between Fiscal Years 2016-2017 and 2018-2019.8
Entertainment Industry Financial Incentive Program
The Entertainment Industry Financial Incentive Program (incentive program) was created to
encourage the use of Florida as a site for filming, for the digital production of films, and to
develop and sustain the workforce and infrastructure for film, digital media, and entertainment
production.9 The incentive program offered transferrable tax credits for qualified expenditures
relating to filming and media production activities in Florida, including wages, equipment,
rentals, and other expenditures made to Florida vendors for qualified entertainment industry
productions. Qualified productions that completed their projects and had their expenses verified
by the OFE could receive between 20 and 30 percent of their qualified expenditures in tax
credits, capped at $8 million in tax credits awarded per project.10 Recipients were permitted to
3
Section 288.1258, F.S.
4
Section 212.039(1)(a)9., F.S.
5
Section 212.06(1)(b), F.S.
6
Section 212.08(5)(f), F.S.
7
Section 212.08(12)(a), F.S.
8
Office of Economic and Demographic Research, Return on Investment for the Entertainment Industry Incentive Programs,
7 (2021), available at http://edr.state.fl.us/Content/returnoninvestment/EntertainmentIndustryIncentivePrograms2021.pdf
(last visited Feb. 12, 2021).
9
Section 288.1254(2), F.S.
10
Florida Office of Film and Entertainment, Fiscal Year 2017-2018 Annual Report 5 (2018), available at
https://filminflorida.com/wp-content/uploads/2018/11/Office-of-Film-and-Entertainment-Annual-Report-FY-2017-
2018_FINAL.pdf (last visited Feb. 12, 2021)
BILL: SB 704 Page 3
apply their tax credits to their corporate income taxes, sales taxes, or both; alternately, recipients
could sell their tax credits on the market or back to the state at a reduced rate.11
The incentive program began on July 1, 2010, and sunset on June 30, 2016.12
Local Incentive Programs
Several local governments in Florida offer their own film and entertainment production
incentives, including:13
 Miami-Dade County’s TV, Film, and Entertainment Production Incentive, a performance-
based program that grants up to $100,000 to productions that spend at least $1 million in the
county if at least 70 percent of the hired vendors are county registered businesses;
 Hillsborough County’s rebate program, which offers a rebate of up to 10% on expenditures
within the county in excess of $100,000; and
 Duval County’s Jacksonville Film and Television Job and Business Creation Program, a
performance-based program that offers a 10% rebate upon spending at least $50,000 on
qualified expenditures and hiring Duval County residents.
Other States’ Incentives
The popularity of entertainment industry incentives has decreased among state legislatures. In
2009, 44 states offered some form of incentive, compared to only 31 states that offered an
incentive in 2018.14 Of states considered competitive to Florida, Georgia offers one of the most
generous incentive programs; the state continues to fund its tax credit program at the level of
demand by placing no cap on tax credits that can be earned.15
III. Effect of Proposed Changes:
The bill creates the Film, Television, and Digital Media Targeted Rebate Program (program)
within the DEO, to be supervised by the Commissioner of Film and Entertainment
(commissioner). The program gives rebates to film, television, and digital media production
projects that provide high returns on investment and economic benefit to the state in order to
broaden the entertainment industry’s impact, enhance tourism, and encourage more family-
friendly productions to be produced in Florida.
Upon completion, a project is eligible to receive a rebate of up to 23 percent of its qualified
expenditures, or $2 million, whichever is less. A project’s qualified expenditures must be
verified before the project may receive a rebate, and rebates are subject to repayment if a project
submits fraudulent information.
11
Supra note 8, at 5 and 6.
12
Id.
13
Film Florida, Local Incentive Programs, available at https://filmflorida.org/state-resources/ (last visited Feb. 12, 2021).
14
National Conference of State Legislatures, State Film Production Incentives and Programs (February 2018), available at
https://www.ncsl.org/research/fiscal-policy/state-film-production-incentives-and-programs.aspx (last visited Feb. 12, 2021).
15
Georgia Department of Economic Development, Film, Television, and Digital Entertainment Tax Credit, available at
https://www.georgia.org/industries/film-entertainment/georgia-film-tv-production/production-incentives (last visited Feb. 12,
2021).
BILL: SB 704 Page 4
General Requirements
A project is eligible for a rebate under the program if it:
 Is a film, television, or digital media project that is not obscene, as defined in s. 847.001,
F.S.;
 Has projected qualified expenditures of at least $1.5 million if the project is a film or digital
media project, or at least $500,000 per episode if the project is a television show;
 Employs a crew of which at least 60 percent are Florida residents and at least one is a
military veteran;
 Is projected to spend at least 70 percent of its total production days in the state;
 Will not receive a sales tax exemption through the Florida entertainment sales tax exemption
established under s. 288.1258, F.S.;
 Makes a good faith effort to use existing Florida providers of infrastructure or equipment and
to employ cast and crew who are Florida residents;
 Agrees to include marketing that promotes Florida tourism or Florida’s film and
entertainment industry on its project, including, at minimum, placing a “Filmed in Florida” or
“Produced in Florida” logo in its end credits;
 Permits the commissioner or an affiliate and at least two guests to visit the project’s
production site; and
 Provides at least five photos of the production to the commissioner for use in promoting
Florida as a film, television, or digital media production location or tourist destination.
Application Process
To become a qualified project that is eligible to receive a rebate, an applicant must submit an
application to the commissioner. There are two application windows for the rebate program per
fiscal year, the start date of which will be determined by the commissioner. The first window
may begin before, and must end no later than 5 business days after, July 1. The second window
must end no later than 5 business days after December 1.
An applicant may submit an application for no more than five projects in any one fiscal year.
Except in the case of a television pilot and the television series the pilot is based on being
certified in the same fiscal year, however, only one project per applicant may be certified within
a fiscal year. A proposed project must begin production within 6 months of July 1 if applying in
the first application window, or within 6 months of January 1, if applying in the second window.
Application
In addition to an affidavit signed by the applicant that the information on the application is
correct and the applicant’s Florida tax identification number, applications must include a film,
television, or digital media project’s:
 Proof of funding;
 Employment information, including employment numbers for Florida residents;
 Line-item budget and detailed qualified expenditures budget;
 Distribution plan to assist in determining the project’s potential economic impact in the state;
 Expected total qualified expenditures for wages paid to Florida residents;
 Expected total qualified and nonqualified expenditures in the state;
BILL: SB 704 Page 5
 Latest script, a production schedule, a Day Out of Days report, and a list of the expected
shooting locations, if the project is a film or a pilot episode of a television project;
 Latest scripts for at least two episodes, a production schedule, a Day Out of Days report, and
a list of the expected shooting locations, if the project is a television project; and
 Game design document, including a production schedule, if the project is a digital media
project.
Scoring Criteria
The commissioner and the council must devise, before the first application window opens, a
priority order and scoring system that qualified projects will be evaluated based on. In addition to
other criteria the council may deem necessary, the scoring system must include consideration of
a project’s:
 Overall qualified expenditures;
 Full-time equivalent jobs created;
 Length of employment and wages paid to Florida residents, in addition to pension, health,
and welfare benefits;
 Estimated direct and indirect tourism benefit;
 Production in an underutilized area;
 Status as a family-friendly production;
 Employment of a Florida resident as a writer, producer, or star;
 Use of a Florida film, television, or digital media school’s assistance;
 Leadership team’s track record;
 Employment of veterans who are residents of Florida; and
 Employment of graduates of Florida film schools.
Review
Within a reasonable period of time after an application window’s last day, the commissioner
must complete a review of the applications. The commissioner must then submit to the council a
package detailing each applicant’s:
 Eligibility for the rebate program;
 Expected qualified expenditures;
 Maximum rebate amount;
 Status as a family friendly project;16
 Percent of production proposed to occur in an underutilized area,17 if any; and
 Registration as a corporation in the state.
16
The bill defines “family friendly” as having cross-generational appeal; being appropriate in theme, content, and language
for a broad family audience; embodying a responsible resolution of issues; not containing any act of drunkenness, illicit drug
use, sex, nudity, gratuitous violence, or vulgar or profane language; and not portraying smoking any substance in a positive
light.
17
The bill defines “underutilized area” as any county within the state other than Broward, Miami-Dade, Orange, or Seminole
County.
BILL: SB 704 Page 6
The commissioner may contact each applicant with questions and gather any additional
information as necessary and must notify the council of the date and time the council must
convene to score each qualified project.18 The council may meet in person or by conference call.
Using its scoring system, the council will determine a score for each qualified project; the
highest scores must be applied to projects determined to provide the best economic impact and
return on investment to the state. The commissioner makes the final decision on certifying or
rejecting each qualified project.
Award of Rebates and Verification of Expenditures
After the council scores a project, the commissioner must make a determination on whether to
certify or reject each project and send a notice of the decision to each applicant. The
commissioner must include in a certified project’s notice the specific percentage of qualified
expenditures for which it is eligible and the maximum rebate it may receive.
The commissioner must also give the DEO a list of certified projects19 and each project’s
maximum allowance in order for the DEO to set aside enough money to fund the total maximum
rebates that may be awarded. However, when setting aside funds for applications submitted and
certified during the first application window, the DEO may not use more than 60 percent of the
funds appropriated to the program or rolled-over from any fiscal year. Any funds not set aside
for the first application window roll over for use in the next application window. If all funds are
set aside for certified projects, additional applications cannot be accepted until more funds
become available. Funds appropriated to the rebate program are not subject to reversion.
Rebate Allowances
Under the bill, qualified projects may receive a rebate of up to 20 percent of its verified qualified
expenditures. A project may receive an additional 3 percent rebate if 75 percent of the project’s
production takes place in an underutilized area or of its content is deemed family friendly. A
project may not receive more than one bonus, and rebates may not exceed $2 million.
The bill defines “qualified expenditures” to mean expenditures made in the s