§ 8711-D. Definitions
Purdon's Pennsylvania Statutes and Consolidated StatutesTitle 72 P.S. Taxation and Fiscal AffairsEffective: July 8, 2022
Effective: July 8, 2022
72 P.S. § 8711-D
Formerly cited as PA ST 72 P.S. § 8702-D
§ 8711-D. Definitions
<Section 24(4)(iv) of Act 2022, July 8, P.L. 513, No. 53, provides that the amendment of this section by that Act shall apply to fiscal years beginning after June 30, 2022.>
The following words and phrases when used in this subarticle shall have the meanings given to them in this section unless the context clearly indicates otherwise:
“Deteriorated property.” Any blighted, impoverished area containing industrial, commercial or other real property that is abandoned, unsafe, vacant, undervalued, underutilized, overgrown, defective, condemned, demolished or which contains economically undesirable land use.
“Film.” A feature film, a television film, a television talk or game show series, a television commercial or a television pilot or each episode of a television series which is intended as programming for a national audience. The term does not include a production featuring news, current events, weather and market reports, public programming, sports events, awards shows or other gala events, a production that solicits funds, a production containing obscene material or performances as defined in 18 Pa.C.S. § 5903(b) (relating to obscene and other sexual materials and performances) or a production primarily for private, political, industrial, corporate or institutional purposes.
“Film production tax credit district.” A district authorized under section 1716.2-D.1
“Minimum stage filming requirements.” Include:
(1) Taxpayers with a Pennsylvania production expense of less than $30,000,000 per production must:
(i) build at least one set at a qualified production facility;
(ii) shoot for a minimum of ten days at a qualified production facility; and
(iii) spend or incur a minimum of $1,500,000 in direct expenditures relating to the use or rental of tangible property or for performance of services provided by a qualified production facility.
(2) Taxpayers with a Pennsylvania production expense of at least $30,000,000 per production must:
(i) build at least two sets at a qualified production facility;
(ii) shoot for a minimum of 15 days at a qualified production facility; and
(iii) spend or incur a minimum of $5,000,000 in direct expenditures relating to the use or rental of tangible property at or for performance of services provided by a qualified production facility.
“Multifilm production.” A series of separate and distinct films that are produced by the same taxpayer, or directly or indirectly produced by the same taxpayers who have no less than 80% common ownership, over a period of no more than four years from the time of application.
“Pass-through entity.” Any of the following:
(1) A partnership as defined in section 301(n.0).2
(2) A Pennsylvania S corporation as defined in section 301(n.1).
(3) An unincorporated entity subject to section 307.21.3
“Pennsylvania film producer.” A Pennsylvania domiciled film production company that meets the following:
(1) The principal tax jurisdiction is this Commonwealth.
(2) A majority of the taxpayer's owners are Pennsylvania residents.
(3) The taxpayer employs fewer than 15 full-time employees.
“Pennsylvania production expense.” Production expense incurred in this Commonwealth. The term includes:
(1) A payment made by a taxpayer to a person upon which withholding will be made on the payment by the taxpayer as required under Part VII of Article III.4
(2) Payment to a personal service corporation representing individual talent if the tax imposed by Article IV5 will be paid or accrued on the net income of the corporation for the taxable year.
(3) Payment to a pass-through entity representing individual talent for which withholding will be made by the pass-through entity on the payment as required under Part VII or VII-A of Article III.6
(4) The cost of transportation incurred while transporting to or from a train station, bus depot or airport, located in this Commonwealth.
(5) The cost of insurance coverage purchased through an insurance agent based in this Commonwealth.
(6) The purchase of music or story rights if any of the following subparagraphs apply:
(i) The purchase is from a resident of this Commonwealth.
(ii) The purchase is from an entity subject to taxation in this Commonwealth, and the transaction is subject to taxation under Article III, IV or VI.7
(7) The cost of rental of facilities and equipment rented from or through a resident of this Commonwealth or an entity subject to taxation in this Commonwealth.
(8) A qualified postproduction expense.
“Postproduction expense.” A postproduction expense of original content for a film as follows:
(1) The term includes traditional, emerging and new work-flow techniques used in postproduction for any of the following:
(i) Picture, sound and music editorial, rerecording and mixing.
(ii) Visual effects.
(iii) Graphic design.
(iv) Original scoring.
(v) Animation.
(vi) Musical composition.
(vii) Mastering.
(viii) Dubbing.
(ix) The purchase of music rights if the following apply:
(A) The purchase is from a resident of this Commonwealth.
(B) The purchase is from an entity subject to taxation in this Commonwealth and the transaction is subject to taxation under Article III, IV or VI.
(2) The term does not include any of the following:
(i) Editing previously produced content for a film.
(ii) News or current affairs.
(iii) Talk shows.
(iv) Instructional videos.
(v) Content which contains obscene material or performances as defined in 18 Pa.C.S. § 5903(b).
“Production expense.” As follows:
(1) The term includes all of the following:
(i) Compensation paid to an individual employed in the production of the film.
(ii) Payment to a personal service corporation representing individual talent.
(iii) Payment to a pass-through entity representing individual talent.
(iv) The costs of construction, operations, editing, photography, sound synchronization, lighting, wardrobe and accessories.
(v) The cost of leasing vehicles.
(vi) The cost of transportation to or from a train station, bus depot or airport.
(vii) The cost of insurance coverage.
(viii) The costs of food and lodging.
(ix) The purchase of music or story rights.
(x) The cost of rental of facilities and equipment.
(2) The term does not include any of the following:
(i) Deferred, leveraged or profit participation paid or to be paid to individuals employed in the production of the film or paid to entities representing an individual for services provided in the production of the film.
(ii) Development cost.
(iii) Expense incurred in marketing or advertising a film.
(iv) Cost related to the sale or assignment of a film production tax credit under section 1714-D(e).8
“Qualified film production expense.” All Pennsylvania production expenses if Pennsylvania production expenses comprise at least 60% of the film's total production expenses. The term shall not include more than $15,000,000 in the aggregate of compensation paid to individuals or payment made to entities representing an individual for services provided in the production of the film.
“Qualified postproduction expense.” A postproduction expense incurred at a qualified postproduction facility.
“Qualified postproduction facility.” A permanent facility where Pennsylvania postproduction activities are conducted and expenses are incurred to which all of the following apply:
(1) The facility is located in this Commonwealth.
(2) The facility is approved by the department.
(3) The facility employs at least ten full-time employees who reside in this Commonwealth.
(4) There is at least $500,000 of capital investment in the facility.
“Qualified production facility.” A film production facility located within this Commonwealth that contains at least one sound stage with a column-free, unobstructed floor space and meets either of the following criteria:
(1) Has had a minimum of $10,000,000 invested in the film production facility in land or a structure purchased or ground-up, purpose-built new construction or renovation of existing improvement.
(2) Meets at least three of the following criteria:
(i) A sound stage having an industry standard noise criteria rating of 25 or better.
(ii) A permanent grid with a minimum point load capacity of no less than 1,000 pounds at a minimum of 25 points.
(iii) Built-in power supply available at a minimum of 4,000 amps per sound stage without the need for supplemental generators.
(iv) A height from sound stage floor to permanent grid of a minimum of 20 feet.
(v) A sound stage with a sliding or roll-up access door with a minimum height of 14 feet.
(vi) A built-in HVAC capacity during shoot days with a minimum of 50 tons of cooling capacity available per sound stage.
(vii) Perimeter security that includes a 24-hour, seven-days-a-week security presence and use of access control identification badges.
(viii) On-site lighting and grip department with an available inventory stored at the film production facility with a minimum cost of investment of $500,000.
(ix) A sound stage with contiguous production offices with a minimum of 5,000 square feet per sound stage.
“Qualified tax liability.” The liability for taxes imposed under Article III, IV, VI, VII, VIII, IX or XV.9 The term shall not include any tax withheld by an employer from an employee under Article III.
“Start date.” As follows:
(1) For a film:
(i) the first day of principal photography in this Commonwealth; or
(ii) an earlier date approved by the Pennsylvania Film Office.
(2) For a postproduction project, a date approved by the Pennsylvania Film Office.
“Tax credit.” The film production tax credit provided under this subarticle.
“Tax district capital investment.” Investment within a film production tax credit district that may consist of new construction, renovation, real property improvement and a similar investment as well as other economic development expenditures within the Commonwealth arising directly from the investment.
“Taxpayer.” A film production company subject to tax under Article III, IV or VI. The term does not include contractors or subcontractors of a film production company.
Credits
1971, March 4, P.L. 6, No. 2, art. XVII-D, § 1702-D, added 2007, July 25, P.L. 373, No. 55, § 7, imd. effective. Amended 2012, July 2, P.L. 751, No. 85, § 15, imd. effective; 2013, July 9, P.L. 270, No. 52, § 27, imd. effective. Renumbered as § 1711-D and amended 2016, July 13, P.L. 526, No. 84, § 24, imd. effective. Amended 2017, Oct. 30, P.L. 672, No. 43, § 32, effective in 60 days [Dec. 29, 2017]; 2019, June 28, P.L. 50, No. 13, § 10.8, effective July 1, 2019; 2021, June 30, P.L. 124, No. 25, § 15, effective in 30 days [July 30, 2021]; 2022, July 8, P.L. 513, No. 53, § 8, imd. effective.
Footnotes
72 P.S. § 8716.2-D.
72 P.S. § 7301.
72 P.S. § 7307.21.
72 P.S. § 7316 et seq.
72 P.S. § 7401 et seq.
72 P.S. §§ 7316 et seq., 7324 et seq.
72 P.S. §§ 7301 et seq., 7401 et seq., 7601 et seq. (expired).
72 P.S. § 8714-D.
72 P.S. §§ 7301 et seq., 7401 et seq., 7601 et seq. (expired), 7701 et seq., 7801 et seq., 7901 et seq., 8501 et seq.
72 P.S. § 8711-D, PA ST 72 P.S. § 8711-D
Current through Act 11 of the 2024 Regular Session. Some statute sections may be more current, see credits for details.
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