,,ii #aaith ,,congress #b;d ,session ,s4 #eeeb ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,september #bd1 #bjbf,mr4 ,scott of ,south ,carolina 7for himself1 ,mr4 ,schiff1 ,mr4 ,cornyn1 and ,mr4 ,warnock7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to provide a tax credit for ,american film and television productions1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,motion ,picture1 ,television1 and ,entertainment ,revitalization ,act4 #b4 ,american film and television production credit 7a7 ,in general ,subpart ,d of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #de;,,bb4 ,american film and television production credit 7a7 ,allowance of credit ,for purposes of section #ch1 in the case of a qualified film or television production1 the ,american film and television production credit for any taxable year is the product of-- 7#a7 the applicable percentage1 and 7#b7 the qualified compensation paid with respect to such qualified film or television production4 7b7 ,qualified film or television production ,for purposes of this section-- 7#a7 ,in general ,the term qualified film or television production means any production-- 7,a7 which is a feature film1 a television pilot1 or a television season1 7,b7 which is produced-- 7i7 in the ordinary course of a trade or business1 and 7ii7 for commercial purposes1 7,c7 which is chargeable to capital account1 7,d7 which is completed during the taxable year1 7,e7 the total cost of which exceeds #a1jjj1jjj1 and 7,f7 #ge percent of the principal photography days of which occur within the ,united ,states4 7#b7 ,exceptions ,such term shall not include-- 7,a7 any production if records are required under section #bbeg of title #ah1 ,united ,states ,code1 to be maintained with respect to any performer in such production1 7,b7 any production which is-- 7i7 talk1 interview1 game1 or award show programming1 7ii7 news programming1 7iii7 live sporting event programming1 7iv7 a radio production1 7v7 gala event programming1 or 7vi7 daytime-drama programming1 7,c7 any production which is a film or program intended primarily for social media platforms1 media sharing1 or blogposts1 or 7,d7 any production which is-- 7i7 an advertising1 marketing1 promotional1 or brand-marketing campaign1 7ii7 intended for fundraising1 or 7iii7 intended primarily for industrial1 corporate1 or institutional end-users4 7#c7 ,location rules for animated productions ,for purposes of paragraph 7#a77;,f71 in the case of an animated production-- 7,a7 the location where the animation production activities1 including keyframe animation1 in-between animation1 animation photography1 and the recording of voice acting performances1 are performed shall be treated as the location of principal photography1 and 7,b7 the percentage of the principal photography shall be based solely on the ratio of total cost of the animation production activities performed in the ,united ,states to the total cost of all animation production activities4 ,a production which incorporates both live action and animation shall be treated as meeting the requirements of paragraph 7#a77;,f7 if such production meets the requirements of such paragraph based either on principal photography days for live filming or on the location of animation production determined under the preceding sentence4 7c7 ,qualified compensation ,for purposes of this section-- 7#a7 ,in general ,the term qualified compensation means1 with respect to any qualified film or television production1 compensation which-- 7,a7 is paid or incurred1 directly or indirectly1 for qualified services performed in the ,united ,states 7including services performed by employees and services performed by contractors or subcontractors71 and 7,b7 is chargeable to capital account4 7#b7 ,qualified services 7,a7 ,in general ,for purposes of subparagraph 7,a77i71 the term qualified services means services 7including services performed with respect to pre-production and post-production activities7 performed by actors1 production personnel1 directors1 and producers4 7,b7 ,production personnel ,the term production personnel means persons who are compensated for providing services directly related to the qualified film or television production1 including writers1 choreographers1 composers1 casting agents1 camera operators1 set designers1 lighting and sound technicians1 make-up artists1 editors1 and visual-effects service providers4 7#c7 ,exception ,the term qualified compensation shall not include participations and residuals 7as defined in section #afg7;g77#g77;,b774 7d7 ,applicable percentage 7#a7 ,in general ,for purposes of this section1 the applicable percentage is #bj percent increased 7but not in excess of #cj percent7 as provided in paragraphs 7#b7 through 7#e74 7#b7 ,increased percentage for productions in rural qualified opportunity zones and disaster areas 7,a7 ,in general ,in the case of a qualified film or television production which meets the requirements of subparagraph 7,b7 or 7,c71 the applicable percentage shall be increased by an amount equal to #e percentage points4 7,b7 ,qualified opportunity zone production ,a qualified film or television production meets the requirements of this subparagraph if not less than #cj percent of the principal photography days of such production are located in qualified opportunity zone 7as defined in section #adjj,z-#a7;a77 7determined as of the first principal photography day7 which is a rural area 7as defined in section #adjj,z-#b7;b77#b77;,c77ii774 7,c7 ,productions in disaster areas ,a qualified film or television production meets the requirements of this subparagraph if-- 7i7 not less than #cj percent of the principal photography days of such production are located in a disaster area with respect to a federally declared disaster 7as such terms are defined in section #afe7;i77#e771 and 7ii7 the first principal photography day for such production begins before the end of the #e-year period beginning on the of the date on which the ,president determined assistance was warranted under the ,robert ,t4 ,stafford ,disaster ,relief and ,emergency ,assistance ,act with respect to such disaster4 7#c7 ,increased percentage for independent productions 7,a7 ,in general ,in the case of a qualified film or television production which is completed by an independent producer1 the applicable percentage shall be increased by an amount equal to #e percentage points4 7,b7 ,independent producer 7i7 ,in general ,for purposes of this paragraph1 the term independent producer means1 with respect to any qualified film or television production1 any taxpayer if-- 7,i7 such taxpayer is not a corporation the stock of which is traded on an established securities market1 and 7,,ii7 a majority of the stock or other ownership interests of such taxpayer are not owned1 directly or indirectly1 by a corporation the stock of which is traded on an established securities market4 7ii7 ,aggregation rule ,for purposes of this subparagraph1 all taxpayers treated as a single employer under subsection 7a7 or 7b7 of section #eb shall be treated as a single taxpayer4 7#d7 ,increased percentage for multi-state producers 7,a7 ,in general ,in the case of a taxpayer which is a multi-,state producer for such taxable year1 the applicable percentage for all qualified film or television productions completed in such taxable year shall be increased by an amount equal to #e percentage points4 7,b7 ,multi-,state producer 7i7 ,in general ,for purposes of this paragraph1 the term multi-,state producer means1 with respect to any taxable year1 any taxpayer if1 during the applicable period1 the taxpayer meets the requirements of clause 7ii7 with respect to #aj or more ,states4 7ii7 ,requirements ,a taxpayer meets the requirements of this clause with respect to a ,state if-- 7,i7 at least #ej percent of the principal photography days of at least one qualified film or television production completed during the applicable period occur in such ,state1 and 7,,ii7 the taxpayer has paid or incurred at least #aj1jjj1jjj in qualified compensation in such ,state with respect to a qualified film or television production completed during the applicable period4 7iii7 ,applicable period ,for purposes of this subparagraph1 the applicable period with respect to any taxable year is the period beginning #ab months before the first day of the taxable year and ending on the last day of the taxable year4 7#e7 ,increased percentage for increased domestic productions 7,a7 ,in general ,in the case of a taxpayer that meets the requirements of subparagraph 7,b7 with respect to a taxable year1 the applicable percentage for all qualified film or television productions completed in such taxable year shall be increased by an amount equal to #e percentage points4 7,b7 ,requirements 7i7 ,in general ,a taxpayer meets the requirements of this subsection if-- 7,i7 the qualified domestic production increase amount is greater or equal to the specified percentage of the foreign base amount1 and 7,,ii7 the foreign base amount is at least #a4 7ii7 ,rounding ,for purposes of clause 7i71 the specified percentage of the foreign base amount shall be rounded to the nearest whole number4 7iii7 ,qualified domestic production increase amount ,for purposes of this subparagraph1 the qualified domestic production increase amount is the excess of the number of qualified film or television productions completed during the taxable year over the number of qualified film and television productions completed in the taxable year immediately preceding the start year4 7iv7 ,foreign base amount ,for purposes of this subparagraph-- 7,i7 ,in general ,the foreign base amount is the average number of applicable foreign productions completed during the #c taxable years preceding the start year4 7,,ii7 ,foreign production ,for purposes of subclause 7,i71 the term applicable foreign production means any production which is not a qualified film or television production but would be so treated if subsection 7b77#a7 were applied without regard to subparagraph 7,f7 thereof4 7v7 ,specified percentage ,the specified percentage shall be-- 7,i7 #cj percent for the start year1 7,,ii7 #dj percent for the first taxable year beginning after the start year1 and 7,,iii7 #ej percent for the second taxable year beginning after the start year and each taxable year thereafter4 7vi7 ,start year ,the term start year means1 with respect to any taxpayer1 the first taxable year beginning after ,december #ca1 #bjbf4 7e7 ,special rules for qualified visual effects productions 7#a7 ,in general ,except as provided in paragraph 7#b71 a qualified visual effects production shall be treated as a qualified film or television production for purposes of this section 7other than subsection 7d77#e77;,b77iii774 7#b7 ,only certain compensation taken into account ,in applying this section to a qualified visual effects production-- 7,a7 qualified compensation shall include only compensation paid or incurred for services performed in the ,united ,states and related to the visual effects of such production1 7,b7 subsection 7d7 shall be applied without regard to paragraphs 7#b7 through 7#e71 and 7,c7 the applicable percentage determined under subsection 7d77#a7 shall be increased by #e percentage points if-- 7i7 at least #cj percent of the total qualified compensation 7determined after application of subparagraph 7,a77 with respect to such production is paid or incurred for services which-- 7,i7 are performed within an area which is qualified opportunity zone 7as defined in section #adjj,z-#a7;a77-- 7aa7 which is a rural area 7as defined in section #adjj,z-#b7;b77#b77;,c77ii771 and 7bb7 for which a designation as a qualified opportunity zone was in effect 7as determined under section #adjj,z-#a7;e77 during the period such services began1 or 7,,ii7 are performed in a disaster area with respect to a federally declared disaster 7as such terms are defined in section #afe7;i77#e77 and began during the #e-year period beginning on the date on which the ,president determined assistance was warranted under the ,robert ,t4 ,stafford ,disaster ,relief and ,emergency ,assistance ,act with respect to such disaster1 or 7ii7 the production with respect to which the services for visual effects are provided is completed by an independent producer 7as defined in subsection 7d77#d77;,b774 7#c7 ,qualified visual effects productions2 visual effects ,for purposes of this subsection-- 7,a7 ,qualified visual effects production ,the term qualified visual effects production means any production with respect to which services are performed relating to visual effects if-- 7i7 such production meets the requirements of subparagraphs 7,a71 7,b71 7,c71 7,d71 and 7,e7 of subsection 7b77#a7 but does not meet the requirement of subsection 7b77#a77;,f71 7ii7 #ge percent of the total cost of visual effects relating to such production are incurred in the ,united ,states1 and 7iii7 such production is not a production described in subsection 7b77#b74 7,b7 ,visual effects ,the term visual effects means the digital or in-camera creation1 alteration1 or enhancement of images1 other than activities that are scientific research and experimental development4 7f7 ,special rules for post-,production activities 7#a7 ,in general ,except as provided in paragraph 7#b71 a qualified post-production project shall be treated as a qualified film or television production for purposes of this section 7other than subsection 7d77#e77;,b77iii774 7#b7 ,only certain compensation taken into account ,in applying this section to a qualified post-production project-- 7,a7 qualified compensation shall include only compensation paid or incurred for services performed in the ,united ,states and related to traditional post-production activities1 7,b7 subsection 7d7 shall be applied without regard to paragraphs 7#b7 through 7#e71 and 7,c7 the applicable percentage determined under subsection 7d77#a7 shall be increased by #e percentage points if-- 7i7 at least #cj percent of the total qualified compensation 7determined after application of subparagraph 7,a77 with respect to such project is paid or incurred for services which-- 7,i7 are performed within an area which is qualified opportunity zone 7as defined in section #adjj,z-#a7;a77-- 7aa7 which is a rural area 7as defined in section #adjj,z-#b7;b77#b77;,c77ii77 and began1 and 7bb7 for which a designation as a qualified opportunity zone was in effect 7as determined under section #adjj,z-#a7;e77 during the period such services began1 or 7,,ii7 are performed in a disaster area with respect to a federally declared disaster 7as such terms are defined in section #afe7;i77#e77 and began during the #e-year period beginning on the of the date on which the ,president determined assistance was warranted under the ,robert ,t4 ,stafford ,disaster ,relief and ,emergency ,assistance ,act with respect to such disaster1 or 7ii7 the production with respect to which the traditional post-production activities are provided is completed by an independent producer 7as defined in subsection 7d77#d77;,b774 7#c7 ,qualified post-production project ,for purposes of this subsection-- 7,a7 ,qualified post-production project ,the term qualified post-production project means any project which provides traditional post-production activities with respect to a production if-- 7i7 such production meets the requirements of subparagraphs 7,a71 7,b71 7,c71 7,d71 and 7,e7 of subsection 7b77#a7 but does not meet the requirement of subsection 7b77#a77;,f71 7ii7 #ge percent of the total cost of traditional post-production activities with respect to such production are incurred in the ,united ,states1 and 7iii7 such production is not a production described in subsection 7b77#b74 7,b7 ,traditional post-production activities ,for purposes of this subsection-- 7i7 ,in general ,the term traditional post-production activities means the final stage of production1 including editing1 ,foley recording1 automatic dialogue replacement1 sound editing1 scoring and music editing1 beginning and end credits1 soundtrack production1 and dubbing4 7ii7 ,exclusions ,such term shall not include visual effects 7as defined in subsection 7e77#c77;,b771 advertising and marketing1 and other promotional activities4 7g7 ,other definitions and special rules ,for purposes of this section-- 7#a7 ,completed ,for purposes of this section1 a production is considered completed on the day on which the process of post-production has been finished and a final composite answer print1 delivery air master1 or digital cinema file of such production is produced4 7#b7 ,television season 7,a7 ,definition ,the term television season means a series of productions which consists of at least #d episodes which-- 7i7 have narrative or thematically related common elements1 and 7ii7 are produced for distribution or broadcast within a period of #ab months of the close of the taxable year in which completed4 7,b7 ,special rule ,for purposes of this section1 all episodes of a television season shall be treated as a single production4 7#c7 ,principal photography day2 principal photograph 7,a7 ,principal photograph day ,the term principal photograph day means any day on which principal photography occurs4 7,b7 ,principal photography ,the term principal photography means the period of time during which the film is shot with the participation of a director1 actor 7unless not required for a scene71 and first unit crew4 ,such term includes re-shoot days with a director1 actors1 and crew4 7#d7 ,basis adjustment to qualified production ,for purposes of this section1 if a credit is determined with respect to any qualified film or television production1 the basis of such property shall be reduced by the amount of the credit so determined4 7h7 ,reports ,the ,secretary may require such reporting as the ,secretary deems necessary with respect to the date and location of principal photography days with respect to any production1 the qualified compensation paid with respect to any production1 and such other matters as the ,secretary determines appropriate to carry out the purposes of this section4 7i7 ,regulations and guidance ,the ,secretary shall issue such regulations or other guidance as the ,secretary determines necessary to carry out the purposes of this section1 including regulations or other guidance-- 7#a7 with respect to productions not eligible for the credit under subsection 7b77#b71 7#b7 with respect to the substantiation of indirect payments of qualified compensation paid on behalf of the taxpayer by a contractor or subcontractor under subsection 7c77#a77;,a71 including simplified or safe harbor procedures1 7#c7 for determining whether a production qualified for an increase in the applicable percentage under paragraphs 7#b71 7#c71 7#d71 or 7#e7 of subsection 7d71 subsection 7e77#b77;,c71 or subsection 7f77#b77;,c71 and 7#d7 to ensure that only the taxpayer that has the benefits and burdens of ownership of a qualified film or television production is eligible for the credit4 4 7b7 ,election ,to transfer credit ,section #fdah7;f77#a77;,a7 of the ,internal ,revenue ,code of #aihf is amended by inserting at the end the following new clause3 7xiii7 ,the ,american film and television production credit determined under section #de;,,bb7a74 4 7c7 ,credit allowed as a general business credit ,section #ch7;b7 of the ,internal ,revenue ,code of #aihf is amended by striking plus at the end of paragraph 7#dj71 by striking the period at the end of paragraph 7#da7 and inserting 1 plus1 and by adding at the end the following new paragraph3 7#db7 ,the ,american film and television production credit determined under section #de;,,bb7a74 4 7d7 ,clerical amendment ,the table of sections for subpart ,d of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new item3 ,sec4 #de;,,bb4 ,american film and television production credit4 4 7e7 ,effective date ,the amendments made by this section shall apply to productions the principal photography 7as defined in section #de;,,bb7g77#c77;,b7 of the ,internal ,revenue ,code of #aihf1 as added subsection 7a77 of which commences in taxable years beginning after ,december #ca1 #bjbf4