130th MAINE LEGISLATURE
FIRST REGULAR SESSION-2021
Legislative Document No. 1334
H.P. 985 House of Representatives, March 30, 2021
An Act To Promote Economic Development through Increased Film
Incentives
Reference to the Committee on Taxation suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative SALISBURY of Westbrook.
Cosponsored by Senator DAUGHTRY of Cumberland and
Representatives: FECTEAU of Augusta, ROEDER of Bangor, TERRY of Gorham, WHITE of
Waterville, WILLIAMS of Bar Harbor, Senators: BAILEY of York, CHIPMAN of
Cumberland, POULIOT of Kennebec.
Printed on recycled paper
 1 Be it enacted by the People of the State of Maine as follows:
2 Sec. 1. 5 MRSA §13090-L, sub-§2-A, ¶C-1 is enacted to read:
3 C-1. "Principal photography" means a period in which a visual media production is
4 filmed, shot or recorded. "Principal photography" does not include preproduction or
5 postproduction periods.
6 Sec. 2. 5 MRSA §13090-L, sub-§2-A, ¶F, as enacted by PL 2009, c. 470, §1, is
7 amended to read:
8 F. "Visual media production expense" means an expense directly incurred in this State
9 for preproduction, production or postproduction of a visual media production certified
10 under this section. "Visual media production expense" includes wages and salaries of
11 individuals employed in the production on which taxes have been paid or accrued if
12 those wages do not exceed $50,000 per individual and payments to a temporary
13 employee-leasing company, as defined in Title 36, section 6901, subsection 3-A, and
14 other contractual payments for the services of individuals working in the State if those
15 payments do not exceed $50,000 per individual providing services in the production.
16 "Visual media production expense" includes the cost of construction; operations;
17 editing and related services; music, photography and film processing, including
18 transferring film to tape or a digital format; sound recording, mixing and
19 synchronization; lighting, makeup, wardrobe and accessories; transportation, not
20 including airfare, per diem or lodging; catering and food and lodging for cast members,
21 staff and crew; local insurance and bonding; and the rental of facilities and equipment,
22 including location fees; and fees collected by a temporary employee-leasing company
23 as defined in Title 36, section 6901, subsection 3-A. "Visual media production
24 expense" does not include certified production wages, as defined in Title 36, section
25 6901, subsection 2, or expenses incurred in marketing or advertising a visual media
26 production or in printing or disseminating a visual media production.
27 Sec. 3. 5 MRSA §13090-L, sub-§3, as amended by PL 2009, c. 470, §1, is further
28 amended to read:
29 3. Requirements for visual media production certificate. Applications for a visual
30 media production certificate must be made on a form prescribed and furnished by the
31 department. The applicant must:
32 A. Provide the names of the principals involved in the visual media production and
33 contact information for them;
34 B. Provide a certificate of insurance for the visual media production;
35 C. Provide financial information that demonstrates that the visual media production is
36 fully financed and that at least $75,000 $25,000 of visual media production expense
37 will be incurred for the visual media production certified in accordance with this
38 subsection;
39 D. Provide data reasonably demonstrating that the visual media production will benefit
40 the people of the State by increasing opportunities for employment and will strengthen
41 the economy of the State;
42 E. Agree to include, in the certified visual media production, an on-screen credit for
43 the State of Maine. The exact wording and size of that credit must be determined in
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1 rules adopted by the Maine State Film Office and the department. The Maine State
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2 Film Office or the department may, at its discretion, exempt visual media productions
46
3 from this requirement. Rules adopted pursuant to this paragraph are routine technical
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4 rules as defined in chapter 375, subchapter 2‑A;
5 F. Provide evidence that the visual media production company is not owned by,
6 affiliated with or controlled by, in whole or in part, a person that is in default on a loan
7 made by the State or a loan guaranteed by the State;
8 G. Provide any other information required by the department; and
9 H. Provide a projected schedule for preproduction, production and postproduction of
10 the visual media production that shows that the production the first day of principal
11 photography will begin within 60 days a reasonable time after certification pursuant to
12 this subsection.; and
13 I. Agree to withhold, in accordance with Title 36, chapter 827, 6% of all payments
14 made to an out-of-state entity known as a loan-out corporation or personal service
15 corporation, created to hire out the services of one individual, including an actor or
16 artist, to a 3rd party.
17 To qualify for a visual media production certificate, a visual media production company
18 must demonstrate to the satisfaction of the commissioner that the visual media production
19 company has met, or will meet, the requirements of this subsection. If the department
20 determines that the applicant does not qualify for a visual media production certificate, it
21 must inform the applicant of that determination in writing within 4 weeks of receiving the
22 application. As soon as practicable, the department shall issue a visual media production
23 certificate for a visual media production that qualifies. The department shall include with
24 the certificate information regarding the tax credit report under subsection 4 and procedures
25 for claiming reimbursement under Title 36, chapter 919-A and the credit under Title 36,
26 section 5219-Y.
27 Sec. 4. 5 MRSA §13090-L, sub-§4, as amended by PL 2011, c. 285, §1, is further
28 amended to read:
29 4. Certified visual media production report reports. No later than 4 8 weeks after
30 completion of principal photography for a certified visual media production, the visual
31 media production company shall report, in a format specified by the Maine State Film
32 Office or the department, its compliance with the requirements of subsection 3 with respect
33 to the certified visual media production to the Maine State Film Office. No later than 8
34 weeks after completion of the postproduction period for a certified visual media production,
35 a visual media production company seeking credit for visual media production expenses
36 incurred in the postproduction period shall report to the Maine State Film Office, in a
37 format specified by the Maine State Film Office or the department, its compliance with the
38 requirements of subsection 3 with respect to the certified visual media production.
39 Sec. 5. 36 MRSA §5219-Y, as amended by PL 2011, c. 240, §37, is further amended
40 to read:
41 §5219-Y. Certified visual media production credit
42 1. Credit allowed. A visual media production company, as defined in Title 5, section
43 13090-L, subsection 2-A, paragraph E, is allowed a credit against the taxes imposed by this
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1 Part in an amount equal to 5% 25% of its nonwage visual media production expenses, as
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2 defined in Title 5, section 13090-L, subsection 2-A, paragraph F, incurred with respect to
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3 a certified visual media production as defined in section 6901, subsection 1, if the visual
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4 media production company has visual media production expenses of $75,000 $25,000 or
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5 more with respect to that certified visual media production. For purposes of this section,
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6 "nonwage visual media production expenses" means visual media production expenses as
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7 defined in Title 5, section 13090‑L, subsection 2-A, paragraph F, except that "nonwage
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8 visual media production expenses" does not include certified production wages as defined
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9 in section 6901, subsection 2 or any amount that would be included in certified production
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10 wages but for the $50,000 limit provided by section 6901, subsection 2.
11 A visual media production company is allowed the following additional credits against the
12 taxes imposed by this Part if it demonstrates in the certified visual media production report
13 required under Title 5, section 13090-L, subsection 4 that it has satisfied the requirements
14 for the additional credit:
15 A. A 3% credit if a portion of the filming occurred in Aroostook County, Franklin
16 County, Kennebec County, Oxford County, Penobscot County, Piscataquis County,
17 Somerset County or Washington County;
18 B. A 2% credit if the screenplay or story is set in the State; or
19 C. A 2% credit if the lead cast member, writer or director is a resident of the State.
20 A visual media production company may not receive additional credits in excess of 5% of
21 the visual media production expenses for a certified visual media production and the
22 cumulative credit allowed under this section may not exceed 30% of the visual media
23 production expenses incurred with respect to a certified visual media production.
24 2. Limitation. The credit allowed by this section may not reduce the tax otherwise
25 due under this Part below zero and may be used only is nontransferable and may not be
26 carried forward to subsequent taxable years. The credit is refundable in an amount equal
27 to 95% of the amount of the credit otherwise available for the taxable year in which the
28 certified visual media production, as defined in section 6901, subsection 1, is completed.
29 Taxpayers claiming a credit under section 5219-W are not eligible for this credit.
30 A visual media production company may not receive cumulative credits under this section
31 and section 6902 for visual media production expenses incurred and certified production
32 wages paid with respect to a certified visual media production in excess of $500,000 for
33 taxable years beginning prior to January 1, 2023, $750,000 for taxable years beginning
34 prior to January 1, 2026 and $1,000,000 for taxable years beginning after January 1, 2026.
35 Sec. 6. 36 MRSA §6901, sub-§2, as amended by PL 2013, c. 546, §16, is further
36 amended to read:
37 2. Certified production wages. "Certified production wages" means wages subject
38 to withholding under section 5250, subsection 1 that are paid by a visual media production
39 company through a payroll company for work on a certified visual media production, an
40 amount paid to a temporary employee-leasing company for personal services rendered in
41 this State by a leased employee in connection with a certified visual media production, an
42 amount paid for the services of a performing artist working in the State in connection with
43 a certified visual media production and other contractual payments for the services of
44 individuals working in the State in connection with a certified visual media production.
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1 "Certified production wages" includes only the first $50,000 $75,000 paid to or with respect
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2 to a particular individual for personal services rendered in connection with a particular
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3 certified visual media production. "Certified production wages" includes wages paid
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4 through an entity known as a loan-out corporation or personal service corporation, created
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5 to hire out the services of one individual, including an actor or artist, to a 3rd party.
6 Sec. 7. 36 MRSA §6902, sub-§1, as amended by PL 2011, c. 240, §46, is further
7 amended to read:
8 1. Generally. A visual media production company is allowed a reimbursement in the
9 form of a tax credit equal to 12% of certified production wages paid to or with respect to
10 an individual who is a resident of Maine and 10% of certified production wages paid to or
11 with respect to an individual who is not a resident of Maine.:
12 A. Twenty-five percent of certified production wages paid to or with respect to above-
13 the-line personnel who are residents of Maine;
14 B. Twenty-five percent of certified production wages paid to or with respect to below-
15 the-line personnel who are residents of Maine; and
16 C. Twenty percent of certified production wages paid to or with respect to below-the-
17 line personnel who are not residents of Maine, except that this credit is reduced to: 15%
18 of wages paid within the taxable year beginning January 1, 2023, 10% of wages paid
19 within the taxable year beginning January 1, 2024 and 5% of wages paid within the
20 taxable year beginning January 1, 2025. This credit is not available for wages paid
21 after the taxable year beginning January 1, 2026.
22 For the purposes of this subsection, "above-the-line personnel" means producers, directors,
23 writers and cast members and "below-the-line personnel" means individuals who are not
24 above-the-line personnel, including production and postproduction staff and background
25 performers.
26 The credit allowed by this section is nontransferable and may not be carried forward. The
27 credit is refundable in an amount equal to 95% of the amount of the credit otherwise
28 available for the taxable year in which the certified visual media production is completed.
29 Taxpayers claiming a credit under section 5219-W are not eligible for this credit.
30 A visual media production company may not receive cumulative credits under this section
31 and section 5219-Y for certified production wages paid and visual media production
32 expenses incurred with respect to a certified visual media production in excess of $500,000
33 for taxable years beginning prior to January 1, 2023, $750,000 for taxable years beginning
34 prior to January 1, 2026 and $1,000,000 for taxable years beginning after January 1, 2026.
35 Sec. 8. Application. This Act applies to visual media productions certified by the
36 Department of Economic and Community Development on or after the effective date of
37 this Act.
38 SUMMARY
39 This bill makes multiple changes to the tax credits available to visual media production
40 companies operating in the State. The bill makes the available tax credits refundable,
41 increases the credits for certain expenses incurred in Maine and for hiring residents of
42 Maine and offers additional credits for visual media productions that are located in certain
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1 Maine counties, are set in Maine or have a lead cast member, writer or director who is a
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2 Maine resident. The bill also reduces the total expenditures needed to qualify for the
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3 credits, extends the time period for visual media production companies to certify with the
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4 Department of Economic and Community Development and sets a $500,000 limit on the
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5 total value of the tax credits that increases to $1,000,000 after January 1, 2026. The bill
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6 makes other changes necessary for these provisions.
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Statutes affected:
Bill Text LD 1334, HP 985: 5.13090, 36.5219, 36.6901, 36.6902