MBT: LIMIT FILM CREDITS S.B. 1535 (S-1):
FLOOR SUMMARY
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Senate Bill 1535 (Substitute S-1 as reported)
Sponsor: Senator Tom George
Committee: Finance
CONTENT
The bill would amend the Michigan Business Tax (MBT) Act to set an annual limit of $50.0 million on the total amount of credits claimed by film companies issued postproduction certificates of completion.
Under the Act, the Michigan Film Office, with the concurrence of the State Treasurer, may enter into an agreement with an eligible production company providing it with a credit against the MBT or against the income tax. To qualify for the credit, the company must spend at least $50,000 in Michigan for the development, preproduction, production, and postproduction costs of a State-certified qualified production. The company also must enter into an agreement with the Michigan Film Office; receive a postproduction certificate of completion from the Office; and submit the certificate to the Department of Treasury.
Under the bill, the Michigan Film Office, with the concurrence of the State Treasurer, could enter into a limited number of agreements during each calendar year. For the 2008 calendar year and each subsequent calendar year, the total of all credits for all postproduction certificates of completion issued during the calendar year could not exceed $50.0 million.
Currently, the Office must process a request for a postproduction certificate within 60 days after the request is complete. Under the bill, if the total amount of all credits for which postproduction certificates of completion were requested in a single tax year exceeded $50.0 million, the Office would not have to process those requests and issue those postproduction certificates of completion that exceeded $50.0 million until the first day of the next tax year.
MCL 208.1455 Legislative Analyst: Craig Laurie
FISCAL IMPACT
The bill would increase General Fund revenue by an unknown and potentially significant amount. The May 2008 Consensus Revenue Estimating Conference forecasted that certificates issued and claimed for credits during FY 2008-09 would total $118.2 million. Assuming that estimate is correct and overlooking the timing differences between calendar year certificate approvals and fiscal year tax credit claims, the bill would increase FY 2008-09 revenue by approximately $68.2 million. The most recent information indicates that projects totaling a potential of $148.8 million in credits have already been approved this year, suggesting the bill could increase revenue by approximately $98.8 million.
Date Completed: 10-1-08 Fiscal Analyst: David Zin
floor\sb1535 Analysis available @ http://www.michiganlegislature.org
This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.
Analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent. sb1535/0708