Amendment ID: S3018-20

Amendment 20

Live Theater Tax Credit

Messrs. Tarr, Moore and O'Connor, Ms. Edwards, Ms. Lovely and Messrs. Fattman and Brady move that the proposed new text be amended by inserting after section _ the following:-

"SECTION _. Said section 6 of said chapter 62 of the General Laws, as so amended, is hereby further amended by adding the following subsection:-

(aa)(1) As used in this subsection, the following words shall, unless the context clearly requires otherwise, have the following meanings:

“Advertising and public relations expenditure”, a cost incurred within the commonwealth by an eligible theater production for goods or services related to the marketing, public relations, creation and placement of print, electronic, television, billboards or other forms of advertising to promote the eligible theater production.

“Eligible theater production”, a live stage musical, dance or theatrical production or tour being presented in a qualified production facility that is either: (a) a pre-Broadway production; (b) a pre-off Broadway production; or (c) a national tour launch.

“Eligible theater production certificate”, a final certificate issued by the office, in consultation with the commissioner, certifying that a production is an eligible theater production that meets the rules or regulations of the office.

“National tour launch”, a live stage production that, in its original or adaptive version, is performed in a qualified production facility and opens its national tour in the commonwealth.

“Office”, the office of travel and tourism established in section 13E of chapter 23A.

“Payroll”, all salaries, wages, fees and other compensation, including, but not limited to, taxes, benefits and any other consideration incurred or paid to talent and non-talent employees of the applicant for services rendered within the commonwealth to and on behalf of an eligible theater production; provided, that the payroll expenditure shall be incurred or paid by the applicant for services related to any portion of an eligible theater production from its pre-production stages, including, but not limited to: (a) the writing of the script, (b) casting, (c) hiring of service providers, (d) purchases from vendors, (e) marketing, (f) advertising, (g) public relations, (h) load in, (i) rehearsals, (j) performances, (k) other eligible theater production related activities, and (l) load out; and provided further, that the payroll expenditure shall be directly attributable to the eligible theater production and shall be limited to the first $100,000 of wages incurred or paid to each employee of an eligible theater production in each tax year.

“Pre-Broadway production”, a live stage production that, in its original or adaptive version, is performed in a qualified production facility having a presentation scheduled for New York City’s Broadway theater district within 24 months after its presentation in the commonwealth.

“Pre-off Broadway production”, a live stage production that, in its original or adaptive version, is performed in a qualified production facility having a presentation scheduled for New York City’s off-Broadway theater district within 24 months after its presentation in the commonwealth.

“Production and performance expenditures”, a contemporaneous exchange of cash or cash equivalent for goods or services related to development, production, performance or operating expenditures incurred in the commonwealth for a qualified theater production, including, but not limited to, expenditures for design, construction and operation, including sets, special and visual effects, costumes, wardrobes, make-up, accessories, costs associated with sound, lighting, staging, advertising and public relations expenditures, facility expenses, rentals, per diems, accommodations and other related costs.

“Qualified production facility”, a facility located in the commonwealth in which live theater productions are, or are intended to be, exclusively presented that contains at least 1 stage, a seating capacity of not less than 175 seats, dressing rooms, storage areas and other ancillary amenities necessary for the eligible theater production.

“Transportation expenditures”, expenditures for the packaging, crating and transportation both to the commonwealth for use in a qualified theater production of sets, costumes or other tangible property constructed or manufactured out of state, or from the commonwealth after use in a qualified theater production of sets, costumes or other tangible property constructed or manufactured in the commonwealth and the transportation of the cast and crew to and from the commonwealth; provided, that “transportation expenditures” shall include the packaging, crating and transporting of property and equipment used for special and visual effects, sound, lighting and staging, costumes, wardrobes, make-up and related accessories and materials and any other performance or production-related property and equipment.

(2) Any taxpayer that receives an eligible theater production certificate shall be allowed a tax credit against taxes imposed by this chapter. The credit shall be equal to 35 per cent of the total in-state payroll costs and 25 per cent of the production and performance expenditures and transportation expenditures and all out of state payroll costs for the eligible theater production directly attributable to activities in the commonwealth. The credit shall not be greater than $5,000,000 and shall be limited to (i) in-state payroll costs, (ii) production and performance expenditures, (iii) transportation expenditures, and (iv) all out of state payroll costs, directly attributable to activities in the commonwealth. The eligible theater production budget shall be not less than $100,000.

(3) Not more than $5,000,000 in total may be issued for any tax year for tax credits pursuant to this subsection. If the total amount of allocated credits applied for in any particular year exceeds the aggregate amount of tax credits allowed for such year, the excess shall be treated as having been applied on the first day of the subsequent year.

(4) The tax credit shall be allowed against the tax for the taxable period in which the credit is  issued and any amount of the tax credit that exceeds the tax due for a taxable year may be carried forward for not more than 5 succeeding tax years.

(5) If a taxpayer has not claimed the tax credits in whole or part, a taxpayer eligible for the tax credits may assign, transfer or convey the tax credits, in whole or in part, by sale or otherwise to any individual or entity and such assignee of the tax credits that have not claimed the tax credits, in whole or in part, may assign, transfer or convey the tax credits, in whole or in part, by sale or otherwise to any individual or entity. The assignee of the tax credits may use acquired credits to offset up to 100 per cent of the tax liabilities otherwise imposed pursuant to this chapter. The assignee may apply the tax credits against taxes imposed on the assignee for not more than 5 succeeding tax years from the date an eligible theater production certificate is first issued by the office. The assignor shall perfect the transfer by notifying the commissioner, in writing, within 30 calendar days following the effective date of the transfer and shall provide any information as may be required by the commissioner to administer and carry out this subsection.

(6) Any assignment or sales of proceeds received by the assignor for its assignment or sale of the tax credits allowed pursuant to this subsection shall be exempt from tax under this chapter.

(7) Upon determination by the office, in consultation with the commissioner, that the taxpayer qualifies for an eligible theater production certificate the commissioner shall issue to the taxpayer a tax credit in an amount in accordance with paragraph (2).

(8) The commissioner shall promulgate such rules and regulations necessary for the administration of this subsection."