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S.F. No. 419 - Film production credit (as proposed to be amended by the A-4 delete everything amendment)
Author: Senator Karin Housley
Prepared By: Nora Pollock, Senate Counsel (651/297-8066)
Date: March 13, 2019


This bill provides a nonrefundable credit for a portion of qualifying film production expenses in Minnesota. The credit may be carried forward and is transferable.

Section 1. Film Production Credit.

           Subd. 1. Definitions. Provides definitions for applicable terms in the credit. “Eligible production costs” and “film” are defined in current law. A project eligible for the credit must have at least $1 million in eligible production costs and must visibly display “produced in Minnesota” or “filmed in Minnesota” in the film.

           Subd. 2. Credit allowed; transferable. Authorizes a credit equal to 25% of eligible expenditures made in a tax year. Taxpayers qualifying for the credit may transfer, sell, or assign all or part of the credit amount to another taxpayer for not less than 80% of the credit amount. The credit may be claimed or transferred only after approval and certification by the commissioner of DEED.

           Subd. 3. Limitation; carryover. Provides that the credit is nonrefundable and may be carried forward for up to five years. Credits allowed to a pass-through entity must be passed to owners, partners, members, or shareholders on a pro-rata basis according to ownership interest in the entity. The commissioner of revenue may exercise audit and examination powers authorized under current law to verify taxpayers’ eligibility for the credit or credit transfer. Credits for nonresidents must be apportioned as provided under current law.

           Subd. 4. Applications; allocations. Requires taxpayers to apply to the commissioner of DEED for certification of eligibility for the credit. The application must indicate if the application is for a credit or credit transfer or a combination of both and designate the taxpayer seeking certification for the credit or credit transfer. The commissioner of DEED must issue credit certificates to qualifying applicants or credit transfer recipients on a first-come, first-served basis. Authorizes allocations of up to $50 million in credits for tax years 2019 and 2020; $60 million in 2021 and 2022; and $75 million in tax year 2023 and after. Amounts not allocated in a tax year may be rolled over to the following year.

           Subd. 5. Report required. Requires the commissioner of DEED, in consultation with the commissioner of Revenue, to issue a report to the legislative committees on taxes and economic development by March 15, 2021 that includes:

  • amount of credits claimed in each tax year;
  • number of applications received and approved;
  • types of projects eligible for the credit; and
  • other information the commissioners find necessary for claiming and administering the credit.

Section 2. Film production credit. Authorizes the credit, including the carryforward, transfer, and allocation provisions from section 1 in the income tax chapter.

The bill is effective beginning in tax year 2019.


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