(1) DEFINITIONS.—As used in this section, the term:
(a) “Certified production” means a qualified production that has tax credits allocated to it by the department based on the production’s estimated qualified expenditures, up to the production’s maximum certified amount of tax credits, by the department. The term does not include a production if its first day of principal photography or project start date in this state occurs before the production is certified by the department, unless the production spans more than 1 fiscal year, was a certified production on its first day of principal photography or project start date in this state, and submits an application for continuing the same production for the subsequent fiscal year.
(b) “Digital media project” means a production of interactive entertainment that is produced for distribution in commercial or educational markets. The term includes a video game or production intended for Internet or wireless distribution, an interactive website, digital animation, and visual effects, including, but not limited to, three-dimensional movie productions and movie conversions. The term does not include a production that contains content that is obscene as defined in s. 847.001.
(c) “High-impact digital media project” means a digital media project that has qualified expenditures greater than $4.5 million.
(d) “High-impact television series” means a production created to run multiple production seasons and having an estimated order of at least seven episodes per season and qualified expenditures of at least $625,000 per episode.
(e) “Off-season certified production” means a feature film, independent film, or television series or pilot that films 75 percent or more of its principal photography days from June 1 through November 30.
(f) “Principal photography” means the filming of major or significant components of the qualified production which involve lead actors.
(g) “Production” means a theatrical or direct-to-video motion picture; a made-for-television motion picture; visual effects or digital animation sequences produced in conjunction with a motion picture; a commercial; a music video; an industrial or educational film; an infomercial; a documentary film; a television pilot program; a presentation for a television pilot program; a television series, including, but not limited to, a drama, a reality show, a comedy, a soap opera, a telenovela, a game show, an awards show, or a miniseries production; or a digital media project by the entertainment industry. One season of a television series is considered one production. The term does not include a weather or market program; a sporting event or a sporting event broadcast; a gala; a production that solicits funds; a home shopping program; a political program; a political documentary; political advertising; a gambling-related project or production; a concert production; a local, regional, or Internet-distributed-only news show or current-events show; a sports news or sports recap show; a pornographic production; or any production deemed obscene under chapter 847. A production may be produced on or by film, tape, or otherwise by means of a motion picture camera; electronic camera or device; tape device; computer; any combination of the foregoing; or any other means, method, or device.
(h) “Production expenditures” means the costs of tangible and intangible property used for, and services performed primarily and customarily in, production, including preproduction and postproduction, but excluding costs for development, marketing, and distribution. The term includes, but is not limited to:
1. Wages, salaries, or other compensation paid to legal residents of this state, including amounts paid through payroll service companies, for technical and production crews, directors, producers, and performers.
2. Net expenditures for sound stages, backlots, production editing, digital effects, sound recordings, sets, and set construction.
3. Net expenditures for rental equipment, including, but not limited to, cameras and grip or electrical equipment.
4. Up to $300,000 of the costs of newly purchased computer software and hardware unique to the project, including servers, data processing, and visualization technologies, which are located in and used exclusively in the state for the production of digital media.
5. Expenditures for meals, travel, and accommodations. For purposes of this paragraph, the term “net expenditures” means the actual amount of money a qualified production spent for equipment or other tangible personal property, after subtracting any consideration received for reselling or transferring the item after the qualified production ends, if applicable.
(i) “Qualified expenditures” means production expenditures incurred in this state by a qualified production for:
1. Goods purchased or leased from, or services, including, but not limited to, insurance costs and bonding, payroll services, and legal fees, which are provided by, a vendor or supplier in this state that is registered with the Department of State or the Department of Revenue, has a physical location in this state, and employs one or more legal residents of this state. This does not include rebilled goods or services provided by an in-state company from out-of-state vendors or suppliers. When services provided by the vendor or supplier include personal services or labor, only personal services or labor provided by residents of this state, evidenced by the required documentation of residency in this state, qualify.
2. Payments to legal residents of this state in the form of salary, wages, or other compensation up to a maximum of $400,000 per resident unless otherwise specified in subsection (4). A completed declaration of residency in this state must accompany the documentation submitted to the office for reimbursement.
For a qualified production involving an event, such as an awards show, the term does not include expenditures solely associated with the event itself and not directly required by the production. The term does not include expenditures incurred before certification, with the exception of those incurred for a commercial, a music video, or the pickup of additional episodes of a high-impact television series within a single season. Under no circumstances may the qualified production include in the calculation for qualified expenditures the original purchase price for equipment or other tangible property that is later sold or transferred by the qualified production for consideration. In such cases, the qualified expenditure is the net of the original purchase price minus the consideration received upon sale or transfer.
(j) “Qualified production” means a production in this state meeting the requirements of this section. The term does not include a production:
1. In which, for the first 2 years of the incentive program, less than 50 percent, and thereafter, less than 60 percent, of the positions that make up its production cast and below-the-line production crew, or, in the case of digital media projects, less than 75 percent of such positions, are filled by legal residents of this state, whose residency is demonstrated by a valid Florida driver license or other state-issued identification confirming residency, or students enrolled full-time in a film-and-entertainment-related course of study at an institution of higher education in this state; or
2. That contains obscene content as defined in s. 847.001(10).
(k) “Qualified production company” means a corporation, limited liability company, partnership, or other legal entity engaged in one or more productions in this state.
(l) “Qualified digital media production facility” means a building or series of buildings and their improvements in which data processing, visualization, and sound synchronization technologies are regularly applied for the production of qualified digital media projects or the digital animation components of qualified productions.
(m) “Qualified production facility” means a building or complex of buildings and their improvements and associated backlot facilities in which regular filming activity for film or television has occurred for a period of no less than 1 year and which contain at least one sound stage of at least 7,800 square feet.
(n) “Regional population ratio” means the ratio of the population of a region to the population of this state. The regional population ratio applicable to a given fiscal year is the regional population ratio calculated by the Office of Film and Entertainment using the latest official estimates of population certified under s. 186.901, available on the first day of that fiscal year.
(o) “Regional tax credit ratio” means a ratio the numerator of which is the sum of tax credits awarded to productions in a region to date plus the tax credits certified, but not yet awarded, to productions currently in that region and the denominator of which is the sum of all tax credits awarded in the state to date plus all tax credits certified, but not yet awarded, to productions currently in the state. The regional tax credit ratio applicable to a given year is the regional tax credit ratio calculated by the Office of Film and Entertainment using credit award and certification information available on the first day of that fiscal year.
(p) “Underutilized region” for a given state fiscal year means a region with a regional tax credit ratio applicable to that fiscal year that is lower than its regional population ratio applicable to that fiscal year. The following regions are established for purposes of making this determination:
1. North Region, consisting of Alachua, Baker, Bay, Bradford, Calhoun, Clay, Columbia, Dixie, Duval, Escambia, Franklin, Gadsden, Gilchrist, Gulf, Hamilton, Holmes, Jackson, Jefferson, Lafayette, Leon, Levy, Liberty, Madison, Nassau, Okaloosa, Putnam, Santa Rosa, St. Johns, Suwannee, Taylor, Union, Wakulla, Walton, and Washington Counties.
2. Central East Region, consisting of Brevard, Flagler, Indian River, Lake, Okeechobee, Orange, Osceola, Seminole, St. Lucie, and Volusia Counties.
3. Central West Region, consisting of Citrus, Hernando, Hillsborough, Manatee, Marion, Polk, Pasco, Pinellas, Sarasota, and Sumter Counties.
4. Southwest Region, consisting of Charlotte, Collier, DeSoto, Glades, Hardee, Hendry, Highlands, and Lee Counties.
5. Southeast Region, consisting of Broward, Martin, Miami-Dade, Monroe, and Palm Beach Counties.
(q) “Interactive website” means a website or group of websites that includes interactive and downloadable content, and creates 25 new Florida full-time equivalent positions operating from a principal place of business located within Florida. An interactive website or group of websites must provide documentation that those jobs were created to the Office of Film and Entertainment prior to the award of tax credits. Each subsequent program application must provide proof that 25 Florida full-time equivalent positions are maintained.
(3) APPLICATION PROCEDURE; APPROVAL PROCESS.—
(a) Program application.—A qualified production company producing a qualified production in this state may submit a program application to the Office of Film and Entertainment for the purpose of determining qualification for an award of tax credits authorized by this section no earlier than 180 days before the first day of principal photography or project start date in this state. The applicant shall provide the Office of Film and Entertainment with information required to determine whether the production is a qualified production and to determine the qualified expenditures and other information necessary for the office to determine eligibility for the tax credit.
(b) Required documentation.—The Office of Film and Entertainment shall develop an application form for qualifying an applicant as a qualified production. The form must include, but need not be limited to, production-related information concerning employment of residents in this state, a detailed budget of planned qualified expenditures, and the applicant’s signed affirmation that the information on the form has been verified and is correct. The Office of Film and Entertainment and local film commissions shall distribute the form.
(c) Application process.—The Office of Film and Entertainment shall establish a process by which an application is accepted and reviewed and by which tax credit eligibility and award amount are determined. The Office of Film and Entertainment may request assistance from a duly appointed local film commission in determining compliance with this section. A certified high-impact television series may submit an initial application for no more than two successive seasons, notwithstanding the fact that the successive seasons have not been ordered. The successive season’s qualified expenditure amounts shall be based on the current season’s estimated qualified expenditures. Upon the completion of production of each season, a high-impact television series may submit an application for no more than one additional season.
(d) Certification.—The Office of Film and Entertainment shall review the application within 15 business days after receipt. Upon its determination that the application contains all the information required by this subsection and meets the criteria set out in this section, the Office of Film and Entertainment shall qualify the applicant and recommend to the department that the applicant be certified for the maximum tax credit award amount. Within 5 business days after receipt of the recommendation, the department shall reject the recommendation or certify the maximum recommended tax credit award, if any, to the applicant and to the executive director of the Department of Revenue.
(e) Grounds for denial.—The Office of Film and Entertainment shall deny an application if it determines that the application is not complete or the production or application does not meet the requirements of this section. Within 90 days after submitting a program application, except with respect to applications in the independent and emerging media queue, a production must provide proof of project financing to the Office of Film and Entertainment, otherwise the project is deemed denied and withdrawn. A project that has been withdrawn may submit a new application upon providing the Office of Film and Entertainment proof of financing.
(f) Verification of actual qualified expenditures.— 1. The Office of Film and Entertainment shall develop a process to verify the actual qualified expenditures of a certified production. The process must require:
a. A certified production to submit, in a timely manner after production ends in this state and after making all of its qualified expenditures in this state, data substantiating each qualified expenditure, including documentation on the net expenditure on equipment and other tangible personal property by the qualified production, to an independent certified public accountant licensed in this state;
b. Such accountant to conduct a compliance audit, at the certified production’s expense, to substantiate each qualified expenditure and submit the results as a report, along with the required substantiating data, to the Office of Film and Entertainment; and
c. The Office of Film and Entertainment to review the accountant’s submittal and report to the department the final verified amount of actual qualified expenditures made by the certified production.
2. The department shall determine and approve the final tax credit award amount to each certified applicant based on the final verified amount of actual qualified expenditures and shall notify the executive director of the Department of Revenue in writing that the certified production has met the requirements of the incentive program and of the final amount of the tax credit award. The final tax credit award amount may not exceed the maximum tax credit award amount certified under paragraph (d).
(g) Promoting Florida.—The Office of Film and Entertainment shall ensure that, as a condition of receiving a tax credit under this section, marketing materials promoting this state as a tourist destination or film and entertainment production destination are included, when appropriate, at no cost to the state, which must, at a minimum, include placement of a “Filmed in Florida” or “Produced in Florida” logo in the end credits. The placement of a “Filmed in Florida” or “Produced in Florida” logo on all packaging material and hard media is also required, unless such placement is prohibited by licensing or other contractual obligations. The size and placement of such logo shall be commensurate to other logos used. If no logos are used, the statement “Filmed in Florida using Florida’s Entertainment Industry Financial Incentive,” or a similar statement approved by the Office of Film and Entertainment, shall be used. The Office of Film and Entertainment shall provide a logo and supply it for the purposes specified in this paragraph. A 30-second “Visit Florida” promotional video must also be included on all optical disc formats of a film, unless such placement is prohibited by licensing or other contractual obligations. The 30-second promotional video shall be approved and provided by the Florida Tourism Industry Marketing Corporation in consultation with the Commissioner of Film and Entertainment.
(4) TAX CREDIT ELIGIBILITY; TAX CREDIT AWARDS; QUEUES; ELECTION AND DISTRIBUTION; CARRYFORWARD; CONSOLIDATED RETURNS; PARTNERSHIP AND NONCORPORATE DISTRIBUTIONS; MERGERS AND ACQUISITIONS.—
(a) Priority for tax credit award.—The priority of a qualified production for tax credit awards must be determined on a first-come, first-served basis within its appropriate queue. Each qualified production must be placed into the appropriate queue and is subject to the requirements of that queue.
(b) Tax credit eligibility.— 1. General production queue.—Ninety-four percent of tax credits authorized pursuant to subsection (6) in any state fiscal year must be dedicated to the general production queue. The general production queue consists of all qualified productions other than those eligible for the commercial and music video queue or the independent and emerging media production queue. A qualified production that demonstrates a minimum of $625,000 in qualified expenditures is eligible for tax credits equal to 20 percent of its actual qualified expenditures, up to a maximum of $8 million. A qualified production that incurs qualified expenditures during multiple state fiscal years may combine those expenditures to satisfy the $625,000 minimum threshold.
a. An off-season certified production that is a feature film, independent film, or television series or pilot is eligible for an additional 5 percent tax credit on actual qualified expenditures. An off-season certified production that does not complete 75 percent of principal photography due to a disruption caused by a hurricane or tropical storm may not be disqualified from eligibility for the additional 5 percent credit as a result of the disruption.
b. If more than 45 percent of the sum of total tax credits initially certified and awarded after April 1, 2012, total tax credits initially certified after April 1, 2012, but not yet awarded, and total tax credits available for certification after April 1, 2012, but not yet certified has been awarded for high-impact television series, then no high-impact television series is eligible for tax credits under this subparagraph. Tax credits initially certified for a high-impact television series after April 1, 2012, may not be awarded if the award will cause the percentage threshold in this sub-subparagraph to be exceeded. This sub-subparagraph does not prohibit the award of tax credits certified before April 1, 2012, for high-impact television series.
c. Subject to sub-subparagraph b., first priority in the queue for tax credit awards not yet certified shall be given to high-impact television series and high-impact digital media projects. For the purposes of determining priority between a high-impact television series and a high-impact digital media project, the first position must go to the first application received. Thereafter, priority shall be determined by alternating between a high-impact television series and a high-impact digital media project on a first-come, first-served basis. However, if the Office of Film and Entertainment receives an application for a high-impact television series or high-impact digital media project that would be certified but for the alternating priority, the office may certify the project as being in the priority position if an application that would normally be the priority position is not received within 5 business days.
d. A qualified production for which at least 67 percent of its principal photography days occur within a region designated as an underutilized region at the time that the production is certified is eligible for an additional 5 percent tax credit.
e. A qualified production that employs students enrolled full-time in a film and entertainment-related or digital media-related course of study at an institution of higher education in this state is eligible for an additional 15 percent tax credit on qualified expenditures that are wages, salaries, or other compensation paid to such students. The additional 15 percent tax credit is also applicable to persons hired within 12 months after graduating from a film and entertainment-related or digital media-related course of study at an institution of higher education in this state. The additional 15 percent tax credit applies to qualified expenditures that are wages, salaries, or other compensation paid to such recent graduates for 1 year after the date of hiring.
f. A qualified production for which 50 percent or more of its principal photography occurs at a qualified production facility, or a qualified digital media project or the digital animation component of a qualified production for which 50 percent or more of the project’s or component’s qualified expenditures are related to a qualified digital media production facility, is eligible for an additional 5 percent tax credit on actual qualified expenditures for production activity at that facility.
g. A qualified production is not eligible for tax credits provided under this paragraph totaling more than 30 percent of its actual qualified expenses.
2. Commercial and music video queue.—Three percent of tax credits authorized pursuant to subsection (6) in any state fiscal year must be dedicated to the commercial and music video queue. A qualified production company that produces national or regional commercials or music videos may be eligible for a tax credit award if it demonstrates a minimum of $100,000 in qualified expenditures per national or regional commercial or music video and exceeds a combined threshold of $500,000 after combining actual qualified expenditures from qualified commercials and music videos during a single state fiscal year. After a qualified production company that produces commercials, music videos, or both reaches the threshold of $500,000, it is eligible to apply for certification for a tax credit award. The maximum credit award shall be equal to 20 percent of its actual qualified expenditures up to a maximum of $500,000. If there is a surplus at the end of a fiscal year after the Office of Film and Entertainment certifies and determines the tax credits for all qualified commercial and video projects, such surplus tax credits shall be carried forward to the following fiscal year and are available to any eligible qualified productions under the general production queue.
3. Independent and emerging media production queue.—Three percent of tax credits authorized pursuant to subsection (6) in any state fiscal year must be dedicated to the independent and emerging media production queue. This queue is intended to encourage independent film and emerging media production in this state. Any qualified production, excluding commercials, infomercials, or music videos, which demonstrates at least $100,000, but not more than $625,000, in total qualified expenditures is eligible for tax credits equal to 20 percent of its actual qualified expenditures. If a surplus exists at the end of a fiscal year after the Office of Film and Entertainment certifies and determines the tax credits for all qualified independent and emerging media production projects, such surplus tax credits shall be carried forward to the following fiscal year and are available to any eligible qualified productions under the general production queue.
4. Family-friendly productions.—A certified theatrical or direct-to-video motion picture production or video game determined by the Commissioner of Film and Entertainment, with the advice of the Florida Film and Entertainment Advisory Council, to be family-friendly, based on review of the script and review of the final release version, is eligible for an additional tax credit equal to 5 percent of its actual qualified expenditures. Family-friendly productions are those that have cross-generational appeal; would be considered suitable for viewing by children age 5 or older; are appropriate in theme, content, and language for a broad family audience; embody a responsible resolution of issues; and do not exhibit or imply any act of smoking, sex, nudity, or vulgar or profane language.
(c) Withdrawal of tax credit eligibility.—A qualified or certified production must continue on a reasonable schedule, which includes beginning principal photography or the production project in this state no more than 45 calendar days before or after the principal photography or project start date provided in the production’s program application. The department shall withdraw the eligibility of a qualified or certified production that does not continue on a reasonable schedule.
(d) Election and distribution of tax credits.—
1. A certified production company receiving a tax credit award under this section shall, at the time the credit is awarded by the department after production is completed and all requirements to receive a credit award have been met, make an irrevocable election to apply the credit against taxes due under chapter 220, against state taxes collected or accrued under chapter 212, or against a stated combination of the two taxes. The election is binding upon any distributee, successor, transferee, or purchaser. The department shall notify the Department of Revenue of any election made pursuant to this paragraph.
2. A qualified production company is eligible for tax credits against its sales and use tax liabilities and corporate income tax liabilities as provided in this section. However, tax credits awarded under this section may not be claimed against sales and use tax liabilities or corporate income tax liabilities for any tax period beginning before July 1, 2011, regardless of when the credits are applied for or awarded.
(e) Tax credit carryforward.—If the certified production company cannot use the entire tax credit in the taxable year or reporting period in which the credit is awarded, any excess amount may be carried forward to a succeeding taxable year or reporting period. A tax credit applied against taxes imposed under chapter 212 may be carried forward for a maximum of 5 years after the date the credit is awarded. A tax credit applied against taxes imposed under chapter 220 may be carried forward for a maximum of 5 years after the date the credit is awarded, after which the credit expires and may not be used.
(f) Consolidated returns.—A certified production company that files a Florida consolidated return as a member of an affiliated group under s. 220.131(1) may be allowed the credit on a consolidated return basis up to the amount of the tax imposed upon the consolidated group under chapter 220. (g) Partnership and noncorporate distributions.—A qualified production company that is not a corporation as defined in s. 220.03 may elect to distribute tax credits awarded under this section to its partners or members in proportion to their respective distributive income or loss in the taxable year in which the tax credits were awarded.
(h) Mergers or acquisitions.—Tax credits available under this section to a certified production company may succeed to a surviving or acquiring entity subject to the same conditions and limitations as described in this section; however, they may not be transferred again by the surviving or acquiring entity.